Fisheries Off West Coast States; Pacific Coast Groundfish Fishery; Trawl Rationalization Program; Cost Recovery, 75268-75283 [2013-29546]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Rules and Regulations]
[Pages 75268-75283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29546]



[[Page 75268]]

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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 110708376-3995-02]
RIN 0648-BB17


Fisheries Off West Coast States; Pacific Coast Groundfish 
Fishery; Trawl Rationalization Program; Cost Recovery

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

ACTION: Final rule.

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SUMMARY: This action implements a cost recovery program for the Pacific 
coast groundfish trawl rationalization program, as required by the 
Magnuson-Stevens Fishery Conservation and Management Act (MSA). This 
action includes regulations that affect all trawl rationalization 
program sectors (Shorebased Individual Fishing Quota (IFQ) Program, 
Mothership Cooperative Program, and Catcher/Processor Cooperative 
Program) managed under the Pacific Coast Groundfish Fishery Management 
Plan (FMP).

DATES: Effective January 10, 2014.

ADDRESSES: NMFS prepared a Final Regulatory Flexibility Analysis 
(FRFA), which is summarized in the Classification section of this final 
rule. NMFS also prepared an Initial Regulatory Flexibility Analysis 
(IRFA) for the proposed rule. Copies of the IRFA, FRFA and the Small 
Entity Compliance Guide are available from William W. Stelle, Jr., 
Regional Administrator, West Coast Region, NMFS, 7600 Sand Point Way 
NE., Seattle, WA 98115-0070; or by phone at 206-526-6150. Copies of the 
Small Entity Compliance Guide are also available on the West Coast 
Region's Web site at https://www.westcoast.fisheries.noaa.gov/.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to William W. Stelle, Jr., Regional 
Administrator, West Coast Region, NMFS, 7600 Sand Point Way NE., 
Seattle, WA 98115-0070, and to OMB by email to OIRA_Submission@omb.eop.gov, or fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT: Jamie Goen, 206-526-4656; (fax) 206-
526-6736; jamie.goen@noaa.gov.

SUPPLEMENTARY INFORMATION:

Background

    In January 2011, NMFS implemented a trawl rationalization program, 
a type of limited access privilege program (LAPP), for the Pacific 
coast groundfish fishery's trawl fleet. The trawl rationalization 
program is also referred to as the trawl ``catch share'' program. The 
program was adopted through Amendment 20 to the FMP and consists of 
three sectors: an IFQ program for the shorebased trawl fleet (including 
whiting and non-whiting fisheries); and cooperative (coop) programs for 
the at-sea mothership (MS) and catcher/processor (C/P) trawl fleets 
(whiting only). Allocations to the limited entry trawl fleet for 
certain species were developed through a parallel process with 
Amendment 21 to the FMP.
    Since implementation, the Pacific Fishery Management Council 
(Council) and NMFS have been working to address additional regulatory 
requirements associated with the trawl rationalization program. One 
such requirement is cost recovery, where NMFS collects fees from the 
fishing industry to cover part of its costs of management, data 
collection, and enforcement of the trawl rationalization program. This 
rule creates a cost recovery program for the trawl rationalization 
program in compliance with the requirements of the MSA, and based upon 
a recommended methodology developed in coordination with the Council.
    In accordance with the MSA, 16 U.S.C. 1853(c), 1853a(e), 1854(b), 
1854(d)(2), 1855(d), NMFS shall collect mandatory fees of up to three 
percent of the ex-vessel value of groundfish by sector (Shorebased IFQ 
Program, MS Coop Program, and C/P Coop Program). The Council discussed 
the structure and methodology of cost recovery over its April, June, 
and September 2011 meetings, with final Council recommendations to NMFS 
during the September 2011 Council meeting. In addition, NMFS received 
further guidance on these issues from the Council at its September 2012 
meeting.
    This final rule implements the cost recovery program as proposed at 
78 FR 7371 (February 1, 2013), with the exception of the minor changes 
described under ``Changes from the Proposed Rule'' later in this 
preamble. Generally, this final rule will require fish buyers to 
collect cost recovery fees from fish sellers beginning January 2014. 
Fish buyers will remit those fees to NMFS via online payments through 
Pay.gov.
    Fees will be collected during the 2014 calendar year to recover 
NMFS estimated costs from the previous fiscal year. NMFS costs from 
2011 and 2012 will not be collected retroactively.

Fee Percentage by Sector for 2014

    As described in the proposed rule, during the last quarter of the 
calendar year, NMFS will announce in a Federal Register document the 
next year's applicable fee percentages and the applicable MS pricing 
for the C/P Coop Program. NMFS will calculate and announce the fee 
percentage after each fiscal year ends, and before the fee would go 
into effect on January 1 of the following year. For 2014, NMFS is 
announcing the fee percentages for each sector in this final rule 
preamble.
    NMFS will calculate the actual fee percentage by sector using the 
best available information, not to exceed three percent of the ex-
vessel value of fish harvested. As explained further below, the fee 
percentages for the first year of cost recovery are low because NMFS 
only included the incremental costs of employees' time in the fee 
percentage calculation rather than all incremental costs of management, 
data collection, and enforcement.
    For 2014, the fee percentages by sector are:
     3.0 percent for the Shorebased IFQ Program,
     2.4 percent for the MS Coop Program
     1.1 percent for the C/P Coop Program.
    To calculate the fee percentage by sector, NMFS used the formula 
specified in regulation at Sec.  660.115(b)(1), where the fee 
percentage by sector equals the lower of three percent or direct 
program costs (DPC) for that sector divided by total ex-vessel value 
(V) for that sector multiplied by 100.

 Shorebased IFQ Program--
    3.0% = the lower of 3% or (($1,877,752.00/$48,182,167) x 100)
 MS Coop Program--
    2.4% = the lower of 3% or (($274,936.05/$11,453,663) x 100)
 C/P Coop Program--
    1.1% = the lower of 3% or (($176,460.05/$16,763,066) x 100)

    ``DPC'', as defined in the regulations at Sec.  660.115(b)(1)(i), 
are the actual incremental costs for the previous fiscal year directly 
related to the management, data collection, and enforcement of each 
sector (Shorebased IFQ Program, MS Coop Program, and C/P Coop Program). 
Actual incremental costs means those net costs that would not have been 
incurred but for the implementation of the trawl rationalization 
program, including both increased costs for new

[[Page 75269]]

requirements of the program and reduced costs resulting from any 
program efficiencies. For 2014, the first year of cost recovery, NMFS 
only included the cost of employees' time (salary and benefits) spent 
working on the program in calculating DPC because of limited agency 
resources and time to calculate additional incremental costs. While 
employees' time spent working on the trawl rationalization program has 
been coded and tracked since 2011, not all additional categories of 
incremental costs have been tracked in a manner that can be quickly 
compiled. For example, the incremental costs of travel, rent, and 
equipment will require research and documentation before they can be 
adequately accounted for. That additional work could not be completed 
in time for the final rule to be effective in January 2014. Therefore, 
the DPC for 2014 underestimates costs compared to all incremental costs 
of management, data collection, and enforcement.
    NMFS expects that for 2015 and beyond, DPC will include all NMFS 
incremental costs, potentially including some federal costs resulting 
from duties performed by the states, as well. Between the proposed and 
final rule for the cost recovery program, NMFS discussed with the 
states of Washington, Oregon, and California whether the costs of some 
state-performed activities resulting from the trawl rationalization 
program are costs that could be recovered, consistent with the 
requirements of the MSA. While NMFS did not include federal costs 
incurred by the states in the calculation of DPC for the 2014 fee 
percentage, NMFS will continue to work with the states for 2015 and 
beyond to determine what federal costs being borne by the states might 
be included.
    NMFS will work with the Council to review the costs included in the 
calculation for 2014 and to determine additional incremental costs to 
be included for 2015 and beyond. For additional incremental costs, NMFS 
will consider the Council recommendation to use Appendix B of the Cost 
Recovery Committee (CRC) Report from the September 2011 Council meeting 
(Agenda Item G.6.b) as guidance in calculating incremental costs 
associated with the program.
    ``V'', as specified in Sec.  660.115(b)(1)(ii), is the total ex-
vessel value for each sector from the previous calendar year. The ex-
vessel value for each sector is further described in the definition 
section at Sec.  660.111, and includes the total ex-vessel value for 
all groundfish species. For 2014, NMFS used the ex-vessel value for 
2012 as reported in Pacific Fisheries Information Network (PacFIN) from 
electronic fish tickets to determine V. The electronic fish ticket data 
in PacFIN is for the Shorebased IFQ Program. Therefore, the ex-vessel 
value for both the MS Coop Program and the C/P Coop Program is a proxy 
based on the Shorebased IFQ Program ex-vessel price and on the retained 
catch estimates (weight) from the observer data for the MS and C/P Coop 
Programs. NMFS is using data from PacFIN and not the ex-vessel values 
reported on buyback forms (IFQ and MS submit buyback forms) because 
that data is not readily available in a database. NMFS will announce 
the details of the calculation and the data used in the NMFS annual 
report (released with the final rule in fall 2013 and for 2015 and 
beyond, in the spring each year). See ``Changes from the Proposed 
Rule'' for an explanation of calculating ex-vessel value from the 
previous calendar year instead of from the previous fiscal year.

MS Pricing for C/P Coop Program Fee Amount in 2014

    ``MS pricing'' is the MS Coop Program's average price per pound 
from the previous complete calendar year. The MS pricing will be used 
by the C/P Coop Program to determine their fee amount due (MS pricing 
multiplied by the value of the aggregate pounds of all groundfish 
species harvested by the vessel registered to a C/P-endorsed limited 
entry trawl permit, multiplied by the C/P fee percentage, equals the 
fee amount due). However, because the MS Coop Program's average price 
per pound as reported on the cost recovery form is not yet available, 
the MS pricing for the first year of cost recovery is based on the 
average price per pound of Pacific whiting as reported in PacFIN from 
the Shorebased IFQ Program. In other words, data from the IFQ fishery 
is used as a proxy for the MS average price per pound to determine the 
``MS pricing'' used in the calculation for the C/P sector's fee amount 
due. For 2015 and beyond, NMFS may either continue to calculate MS 
pricing from PacFIN, or may use values derived from those reported on 
the MS Coop Program cost recovery form from the previous calendar year, 
depending on what NMFS determines is the best information available. As 
described in the proposed rule, NMFS will announce the next year's 
applicable MS pricing for the C/P Coop Program along with the fee 
percentage for all sectors in a Federal Register notice during the last 
quarter of the calendar year. However, for 2014, NMFS is announcing the 
MS pricing in this final rule preamble as follows:
     $ 0.14/lb for Pacific whiting.

How and Where To Pay Cost Recovery Fees

    During the last quarter of the calendar year, NMFS will publish in 
the Federal Register information on how and where to pay cost recovery 
fees, in addition to the applicable fee percentages and MS pricing. 
This final rule's preamble includes that information for 2014.
    Cost recovery fees can only be paid online through the Federal 
Government's online payment system, Pay.gov. Users can access the 
Pay.gov Web site directly or click on the link to Pacific Coast 
Groundfish Cost Recovery for their sector (IFQ, MS, or C/P): https://pay.gov/paygov/agencySearchForms.html?nc=1375298963306&agencyDN=ou%3DFA_National+Oceanic+and+Atmospheric+Administration%2Cou%3DFA_Department+of+Commerce%2Cou%3DFA_Executive+Branch%2Cou%3DFederal+Agency%2Cou%3DTreasury+Web+Application+Infrastructure%2Cou%3DFiscal+Service%2Cou%3DDepartment+of+the+Treasury%2Co%3DU.S.+Government%2Cc%3DUS&alphabet=N.
    Users can also access Pay.gov through a link on our West Coast 
Region trawl catch share program Web site at: 
http:[sol][sol]www.westcoast.fisheries.noaa.gov/fisheries/groundfish_
catch_shares/.
    For the Shorebased IFQ Program, the IFQ first receiver (first 
receiver site license holder), as the fish buyer, must collect the fee 
from each catcher vessel (fish seller) at the time of landing 
groundfish in the IFQ fishery, or in the case of post-delivery payment, 
at the time of payment. Each fish buyer (IFQ first receiver) is 
required to maintain a segregated account at a federally insured 
financial institution for the sole purpose of depositing collected fee 
revenue and disbursing the fee revenue directly to NMFS. This account 
is called a ``deposit account.'' Each fish buyer, no less frequently 
than at the end of each month, must deposit all fees collected, not 
previously deposited, that the fish buyer collects through a date not 
more than two calendar days before the date of deposit. Neither the 
deposit account nor the principal amount of deposits in the account may 
be pledged, assigned, or used for any purpose other than aggregating 
collected fee revenue for disbursement to NMFS. The fish buyer is 
entitled, at any time, to withdraw deposit interest, if any, but never 
deposit principal, from the deposit account for the fish buyer's own 
use and purposes. The fish buyer is responsible

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for remitting payment to NMFS on a monthly basis at the same time the 
buyback fee is due (i.e., no later than the 14th of each month, or more 
frequently if the amount in the account exceeds the account limit for 
insurance purposes). Payment to NMFS must be the full amount of deposit 
principal from the deposit account. For any post-delivery payments by 
the first receiver to the vessel, the first receiver must withhold the 
fee from such payments at the time of payment and remit that fee to 
NMFS in the upcoming month's payment.
    For the MS Coop Program, the structure of fee payment and 
collection is the same as for the Shorebased IFQ Program, except that 
the fish buyer and fish seller are defined differently and, because the 
fleet operates at sea, there is no ``landing.'' For the MS Coop 
Program, each catcher vessel (fish seller, including vessels registered 
to an MS/CV-endorsed limited entry trawl permit and any limited entry 
trawl permits without an MS/CV endorsement while they are participating 
in the MS Coop Program) is charged the fee at the time of delivery to 
the mothership (fish buyer--defined as the owner of a vessel registered 
to an MS permit, the operator of a vessel registered to an MS permit, 
and the owner of the MS permit registered to that vessel). The fish 
buyer must then remit payment to NMFS monthly in coordination with the 
buyback fee (i.e., no later than the 14th of each month). For any post-
delivery payments by the mothership to the catcher vessel, the 
mothership must withhold the fee from such payments at the time of 
payment and remit that fee to NMFS in the upcoming month's payment. In 
addition, the MS Coop Program is subject to the same deposit account 
requirements as the Shorebased IFQ Program.
    For the C/P Coop Program, the structure of fee payment and 
collection is different than the Shorebased IFQ and MS Coop Programs. 
In the C/P Coop Program, the C/P (fish buyer--defined as the owner of a 
vessel registered to a C/P-endorsed limited entry trawl permit, the 
operator of a vessel registered to a C/P-endorsed limited entry trawl 
permit, and the owner of the C/P-endorsed limited entry trawl permit 
registered to that vessel) is responsible for paying the full fee in 
the last quarter of the calendar year and by December 31 each year. The 
fee is for the harvests of groundfish for the calendar year by each 
vessel registered to a C/P-endorsed limited entry trawl permit. For the 
purposes of cost recovery, the C/P is described as both the fish buyer 
and fish seller. Unlike the Shorebased IFQ Program and the MS Coop 
Program, fish buyers in the C/P Coop Program are not required to 
maintain segregated deposit accounts because the fish seller and the 
fish buyer are always the same entity and they only make one payment to 
NMFS per year.

Comments and Responses

    NMFS solicited public comment on the cost recovery proposed rule 
(78 FR 7371, February 1, 2013). The comment period as published in the 
proposed rule Federal Register notice ended March 18, 2013. However, 
regulations.gov did not accept public comment submitted through their 
Web site after March 17, 2013. Because of the mistake in 
regulations.gov, NMFS accepted comments received via email, fax, or 
mail a day beyond the comment period, through March 19, 2013. Because 
the proposed rule also included a collection-of-information requirement 
subject to review and approval under the Paperwork Reduction Act (PRA), 
the responses to public comments in this section of the preamble 
address the proposed rule and the PRA submission. NMFS received eleven 
letters of comments on the proposed rule submitted by individuals or 
organizations.

Timing of Implementation

    Comment 1. Cost recovery should be delayed until the start of a 
calendar year and until January 1, 2014, at the earliest. Implementing 
cost recovery mid-year in 2013, as proposed, could create inequity in 
the fleet, penalizing fishermen who primarily fish later in the year.
    Response. NMFS agrees that starting cost recovery at the beginning 
of a calendar year will affect all sectors (IFQ, MS, C/P) equally. In 
light of the public comment and the need for NMFS to complete 
additional internal steps necessary for the operation of the cost 
recovery program, NMFS delayed implementation of cost recovery until 
January 2014 at the earliest.
    Comment 2. NMFS should prioritize additional, or ``trailing,'' 
amendments to the trawl rationalization program that continue to move 
the fleet toward environmental conservation and economic sustainability 
before cost recovery. NMFS should prioritize those trawl trailing 
actions that are immediately beneficial to the fleet, such as quota 
share trading, decreasing monitoring costs (electronic monitoring), 
gear-related issues (where, when, and with what gear fishermen can 
fish), and other important trailing actions that improve the fleet's 
efficiency and access to target species. ``Left-over'' restrictions on 
where and how to fish from fishery management actions before trawl 
rationalization are limiting access to target species (and limiting 
revenues) and are no longer relevant with 100% accountability. 
Prioritizing trailing actions that improve the fleet's flexibility and 
economic efficiency will enhance the trawl rationalization program's 
durability, and will improve the fleet's profitability and ability to 
pay cost recovery fees in later years. Industry was aware that 
downsizing of the fleet would be an outcome of the trawl 
rationalization program, but NMFS should take steps to avoid 
accelerating that outcome. Cost recovery should not be implemented 
before economic benefits have been adequately realized and while 
fishermen are struggling to pay operating costs, including high fuel 
prices. The trawl rationalization program has produced no net gains and 
has increased costs.
    Response. NMFS has prioritized trailing amendments to the trawl 
rationalization program that continue to move the fleet toward 
environmental conservation, economic sustainability, and increased 
flexibility, along with cost recovery. NMFS has prioritized the 
following trawl trialing actions: (1) Response to litigation; (2) 
original trawl rationalization program provisions not yet implemented 
(e.g. QS trading, cost recovery, new observer providers); and (3) items 
that increase flexibility and economic efficiency. Items under (3) must 
have been recommended through the Council process and have appropriate 
analysis before NMFS can implement them. NMFS has set these priorities 
in light of the approaching MSA-required 5-year review for LAPPs, with 
the goal of fully implementing the trawl rationalization program and 
then maximizing its potential.
    For the trawl rationalization program, NMFS spent much of 2012 and 
early 2013 responding to litigation (priority 1). NMFS is now in the 
process of implementing rulemakings for priorities 2 and 3, including: 
chafing gear, observer and catch monitor provisions, cost recovery, and 
additional program improvement and enhancements (PIE) such as QS 
trading. The chafing gear rule proposes to revise gear requirements for 
midwater trawlers. The observer and catch monitor rule proposes 
permitting requirements for observer providers to allow new providers 
to enter the fishery (potentially reducing observer costs) and revised 
observer safety requirements. The PIE 2 rule (the second PIE rule since 
the trawl rationalization program was implemented in 2011, referred to 
as ``PIE 2'') will allow QS trading, remove

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the ban on QP transfers from December 15 through 31, liberalize the 
opt-out requirements, reduce the frequency of first receiver site 
inspections, and remove double filing of coop reports (final rule 
published in the Federal Register November 15, 2013). This cost 
recovery rule implements an original program provision that has been 
delayed since 2011.
    In addition to these rulemakings, which are expected to be 
implemented in 2014, NMFS and the Council are developing the Adaptive 
Management Program (AMP), an original program provision, and are 
exploring whether monitoring costs could be decreased through 
electronic monitoring.
    NMFS agrees it is important to implement trailing actions that 
improve the fleet's efficiency and access to target species. In 
addition to the rulemakings listed above that are already in 
development, NMFS would like to work with stakeholders through the 
Council process to develop a comprehensive rulemaking that would 
improve the fleet's flexibility by addressing gear-related issues 
(where, when, and with what gear fishermen can fish) and ``left-over'' 
regulations from the management structure before the trawl 
rationalization program that may no longer be necessary. NMFS agrees 
that this increased flexibility should help the fleet's economic 
efficiency. NMFS introduced the concept for a ``trawl flexibility'' 
rulemaking, which would address these issues, at the Council's June and 
September 2013 meetings.
    NMFS appreciates the comments that cost recovery should be delayed 
until other trawl trailing actions have been implemented and the fleet 
is profitable, and NMFS has delayed cost recovery implementation so 
that additional work on trailing actions could be accomplished. As 
mentioned above, other trailing actions that will improve the fleet's 
flexibility and economic efficiency are in development or will be 
implemented near the start of January 2014. The fleet has benefitted 
from the delayed implementation of cost recovery since 2011, and NMFS 
will not be collecting retroactive fees. In addition, while NMFS 
appreciates that there is always room to improve profitability, the 
fleet has already started realizing the benefits of the trawl 
rationalization program. Preliminary data from the mandatory economic 
data collection program compares data from 2009 and 2010 (pre-trawl 
rationalization) versus 2011 (post-trawl rationalization) (see Agenda 
Item F.2 from the Council's June 2013 meeting), and shows that when 
looking at net revenue, the fleet is still profitable even with 
increased costs (e.g., high fuel prices, observer costs). However, with 
only one year of data post-trawl rationalization, it is too early to 
make conclusions on the economic benefits of the program.
    NMFS understands that some in the fleet do not want to accelerate 
consolidation, which is an expected outcome of the trawl 
rationalization program; but at the same time, the program should 
continue to be implemented as intended. NMFS, the Council, and 
stakeholders were aware that downsizing, or consolidation, of the fleet 
was expected and implemented some mitigation measures that could help 
address that, namely the Adaptive Management Program (AMP), the 
flexibility to form risk pools, accumulation limits, and a quota share 
trading moratorium for the first years of program. The AMP has been 
delayed through 2014 and the quota pounds associated with AMP are being 
issued to current quota share holders while AMP is in development. Risk 
pools, where quota share or quota pound holders work together in 
sharing arrangements, have been forming since the trawl rationalization 
program started and seem to be effective at mitigating risk, especially 
for participants that might not be operational alone.
    Comment 3. Fishermen are already paying fees to the buyback 
program, paying state landing taxes, and increasing costs for 100 
percent human observer coverage. Adding cost recovery at this time is a 
burden on the sustainability of some businesses. The industry has been 
working through a broad 3-state coalition of harvesters and processors 
to refinance the buyback loan down from the current five percent of the 
annual gross revenues. While the industry has paid back some of the 
money borrowed, there is still no end in sight with the industry still 
owing more than it borrowed. Industry expects that the loan will be 
refinanced during the 2013 legislative session. Cost recovery should 
not be implemented before refinancing the buyback loan.
    Response. NMFS is aware that fishermen already have costs 
associated with buyback, state landing taxes, and observer coverage, 
and understands that adding cost recovery is an additional burden. As 
described in the response to comment 2, participants in the trawl 
rationalization program have already started realizing the benefits of 
the program even with these costs. In addition, NMFS, the Council, and 
stakeholders were aware that there would be consolidation of the fleet 
under the program as the less economically efficient vessels left the 
fishery. When the program was implemented, predictions were that the 
fleet would consolidate down from approximately 120 vessels to 
approximately 60 vessels (Rationalization of the Pacific Coast 
Groundfish Limited Entry Trawl Fishery final environmental impact 
statement, June 2010, Table 4-46). The final rule, dated October 1, 
2010 (``initial issuance'' final rule) (75 FR 60868), which among other 
things announced approval of the trawl rationalization program and 
implemented an application processes, acknowledged in response to 
comment 19 that consolidation was expected and necessary. In approving 
and implementing the program, NMFS and the Council balanced 
consolidation to generate benefits of the program with the adverse 
impacts of consolidation. The response to comment also described many 
of the measures NMFS and the Council implemented to mitigate for some 
of the adverse impacts, including an Adaptive Management Program, 
accumulation limits, and quota share trading moratorium for first years 
of program.
    NMFS acknowledges that while it is a cost to industry, the 
harvesters that remained and are now in the Shorebased IFQ or MS Coop 
Programs have benefitted from the buyback program. The industry has 
also benefitted from cost recovery being delayed for three years since 
implementation. Cost recovery is required under the MSA. NMFS will 
implement cost recovery for the trawl rationalization program beginning 
January 2014. The commenter should also be aware that bills have been 
introduced to both the House of Representatives and the Senate, titled 
``Revitalizing the Economy of Fisheries in the Pacific Act,'' H.R. 2646 
and S.1275 respectively, that would refinance the buyback loan 
extending the term of the loan and capping the fee rate at three 
percent of ex-vessel value, down from five percent.

Cost Recovery for Trawl Rationalization by Sector

    Comment 4. Several commenters supported calculating and collecting 
the cost recovery fee on a sector by sector basis as NMFS proposed 
because of the differential incremental costs to NMFS for each sector.
    Response. NMFS calculated the cost recovery fee percentage 
separately for each sector- Shorebased IFQ Program, MS Coop Program, 
and C/P Coop Program. NMFS will also collect fees separately for each 
sector.

[[Page 75272]]

    Comment 5. Before requiring the C/P Coop Program to pay cost 
recovery fees, NMFS should provide the legal basis for defining the C/P 
Coop Program as a LAPP, including why other U.S. sector-based, 
cooperative management programs are not defined as LAPPs. NMFS should 
explain why its LAPP guidance document, ``The Design and Use of Limited 
Access Privilege Programs,'' describes the C/P sector as not 
technically a LAPP (p. 110).
    Response. NMFS and the Council decided that the C/P Coop Program 
was a LAPP during implementation of Amendment 20, not through this 
rule. During implementation of the trawl rationalization program 
through Amendment 20, NMFS described the legal basis for defining the 
C/P Coop Program as a LAPP. Consistent with the definition of a 
``limited access privilege'' in the MSA (16 U.S.C. 1802 (26)), the C/P 
Coop Program is a LAPP under the MSA (16 U.S.C. 1853a) because it 
requires a Federal permit for exclusive use by the coop to harvest a 
portion of the total allowable catch. In addition, if the coop 
dissolves, the individual permit owners would be issued IFQ. All three 
sectors of the trawl rationalization program receive LAPs and gain the 
benefits of exclusive use of a public resource.
    The C/P Coop Program is distinct from other U.S. sector-based, 
cooperative management programs. When determining whether a program is 
a LAPP, the unique facts for each program must be considered. In 
contrast to the C/P Coop Program, NMFS determined the northeast sector 
program is not a LAPP because the sectors are not issued a Federal 
permit that allows them to harvest a portion of the total allowable 
catch for their exclusive use. NMFS is implementing cost recovery for 
several fisheries in Alaska and is evaluating whether the American 
Fisheries Act (AFA) catcher processors are subject to cost recovery.
    While not as dramatic of a change as the IFQ or MS sectors, the C/P 
cooperative changed with implementation of the trawl rationalization 
program and has benefitted from that change. Now the C/P Coop Program 
is allocated not only Pacific whiting, but also key bycatch species; 
providing dedicated access to a public resource and more protection 
from being closed by harvest in other sectors. Under the new program, a 
C/P coop permit is required for this sector to operate as a coop. If 
the coop dissolves, each individual limited entry, C/P-endorsed permit 
owner would be allocated quota share under an IFQ program, creating an 
incentive to maintain the coop. The C/P Coop Program now has C/P 
endorsements on limited entry permits, providing a closed number of 
participants access to a public resource and allowing them protections 
to develop their own coop. The C/P Coop Program provides flexibility 
regarding when participants in the sector can fish their allocation. 
The C/P Coop Program now includes other provisions that enhance 
management, data, and enforcement of the program, such as a mandatory 
economic data collection, mandatory observer program with collection of 
estimates of operational or other discards, coop agreements, and annual 
coop reports.
    NMFS acknowledges that generally the C/P Coop Program management 
costs are less than those of the other sectors. The decision to 
implement cost recovery on a sector by sector basis, where the costs of 
managing the C/P sector are calculated separately from other sectors, 
addresses this issue.
    NMFS also clarifies for the commenter that NMFS' LAPP technical 
memorandum titled, ``The Design and Use of Limited Access Privilege 
Programs,'' was published in 2007, before implementation of the trawl 
rationalization program, and describes the C/P cooperative as it 
existed before it was a LAPP under the trawl rationalization program.

Fee Percentage Calculation, Including Incremental Costs

    Comment 6. In evaluating whether there should be a common fee or a 
fee that varies by sector, the commenter requested that further 
analyses be conducted before NMFS implements a cost recovery program 
that will no doubt eliminate many small boats that help stabilize 
coastal communities. A fee schedule comparative analysis should be 
conducted based on: (1) The volume of harvest by sector; (2) the value 
of harvest by sector; (3) number of communities that are benefited by 
sector; and (4) the benefit received by the sector because of the 
program.
    Response. NMFS recognizes that there may be different impacts of 
cost recovery on businesses. The classification section of the proposed 
rule preamble provided a summary of the IRFA (see ADDRESSES). The 
summary discusses the economic impact of the proposed action, including 
impacts on small versus large businesses, and acknowledges that, 
``While the cost recovery fees may be affordable for the average 
fisherman, for other fishermen the cost recovery fee may not be 
affordable given the other costs they incur. Many fishermen, 
particularly shorebased fishermen, have voiced concerns that paying for 
costs of state landing taxes, the buyback fees, the costs of observers, 
and cost recovery fees will be challenging.'' The summary also noted 
that most of the Shorebased IFQ Program participants and catcher 
vessels in the MS Coop Program are small businesses, while most of the 
at-sea processors in the MS and C/P Coop Programs are large businesses. 
The classification section of this final rule includes a summary of the 
FRFA.
    While there may be different impacts of cost recovery on small 
versus large businesses, the cost recovery provisions of the MSA (16 
U.S.C. 1854(d)(2)(B)) do not differentiate between the fee percentage 
that must be charged for small versus large businesses. Fees are 
calculated on the costs of management, data collection, and enforcement 
for each sector of the trawl rationalization program and must not 
exceed three percent of the ex-vessel value of fish harvested in that 
sector.
    NMFS did not draft a fee schedule comparative analysis requested by 
the commenter because much of the information is already publicly 
available. An estimate of the ex-vessel value of harvest by sector was 
provided in the summary of the initial regulatory flexibility analysis 
in the classification section of the proposed rule preamble and is 
again summarized in the classification section of this final rule. For 
the Shorebased IFQ Program, information on the volume and value of 
harvest by sector, port, and gear type is available in the Annual Catch 
Report for the Pacific Coast Groundfish, Shorebased IFQ Program posted 
on NMFS Web site at https://www.westcoast.fisheries.noaa.gov/fisheries/groundfish_catch_shares/ifq_analytical_documents.html. At the June 
2013 Council meeting, NMFS released a draft report on the economic data 
collection program for all sectors of the trawl rationalization program 
(IFQ, MS, and C/P), which covers pre-trawl rationalization years 2009 
and 2010, and the first year post-trawl rationalization, 2011. While 
this report is still in draft form, it includes industry-reported 
information on volume and value of harvest by sector, port, and gear 
type. It also provides insight to the benefits received by sector 
because of the program. However, with only one year of data post-trawl 
rationalization, it is too early to make conclusions on the economic 
benefits of the program.
    Also, as discussed in the Amendment 20 Environmental Impact 
Statement and Record of Decision, providing for a profitable groundfish 
fishery and minimizing adverse economic impacts

[[Page 75273]]

on communities were some of the objectives guiding development of the 
trawl rationalization program. During the development of Amendment 20, 
NMFS considered the impacts of the program on communities in detail and 
minimized adverse economic impacts to the extent practicable. NMFS 
implemented mechanisms to address concerns about communities, including 
an Adaptive Management Program, a moratorium on QS transfers for the 
first years of the program, accumulation limits, and a five-year 
review.
    Comment 7. Some commenters said that NMFS should implement the 
Council's recommendation to cap the fee percentage at one percent for 
C/P, two percent for MS, and three percent for IFQ rather than using a 
formula (DPC/V x 100) to determine the actual fee percentage by sector 
up to the MSA three percent cap. A commenter noted that the MSA 
(section 303A(e)) provides authority to the Council to develop a cost 
recovery program, but does not provide discretion to NMFS to change the 
Council action. Another commenter said the Council's recommendation of 
one percent for C/P, two percent for MS, and three percent for IFQ was 
arbitrarily derived based on the number of boats in a sector (i.e., 
more boats must equal more costs). The Council did not analyze other 
options, except for whether the fee percentage should be calculated and 
paid based on all sectors combined or by each sector individually (IFQ, 
MS, and C/P). One commenter said the proposed rule states that for the 
first year the cost recovery fee percentage would be limited to one 
percent for the C/P sector, but then up to the MSA maximum of three 
percent thereafter without providing any justification for why the 
interim period ends after the first year of cost recovery. Other 
commenters requested that NMFS clarify what it intends to do.
    Response. The proposed rule preamble explained NMFS' proposed 
approach to the fee percentage calculation (78 FR 7371, p.7375). NMFS 
calculated the actual fee percentage by sector between the proposed and 
final rule using the best available information and following the 
process explained in the preamble to the final rule at ``Fee Percentage 
by Sector for 2014.''
    NMFS considered the Council's September 2011 recommendation to cap 
the fee percentage at two percent for the MS Coop Program and one 
percent for the C/P Coop Program. However, NMFS decided that the two 
percent and one percent caps were not consistent with the MSA, which 
requires that the Secretary of Commerce collect fees to ``recover the 
actual costs directly related to the management, data collection, and 
enforcement'' of any LAPP, (16 U.S.C. 1854(d)(2)), but caps the fee at 
three percent of the ex-vessel value. Under the MSA, the Council's role 
in cost recovery is to ``(1) develop a methodology and the means to 
identify and assess the management, data collection and analysis, and 
enforcement programs that are directly related to and in support of the 
program; and (2) provide, under section 304(d)(2), for a program of 
fees paid by limited access privilege holders that will cover the costs 
of management, data collection and analysis, and enforcement 
activities.'' (16 U.S.C. Sec.  1853a(e)). In other words, the Council 
develops the cost recovery program and its methodology (e.g. calculate 
fee by sector, coordinate with the buyback program, etc.), but NMFS has 
the authority, and the requirement, to recover actual costs up to the 
three percent cap.
    Comment 8. The alternate approach of calculating the cost recovery 
fee for the C/P Coop Program described by NMFS in the proposed rule is 
not specific enough to determine how it would function and how it would 
be more cost effective. NMFS should meet with participants in the C/P 
Coop Program to discuss both approaches.
    Response. In the preamble to the proposed rule (78 FR 7371, p.7376) 
under the section titled ``Fee Payment and Collection,'' NMFS described 
two methods of calculating the cost recovery fee amount for the C/P 
Coop Program. One is similar to the other sectors (IFQ and MS), in that 
the fee amount is calculated by multiplying the ex-vessel value by a 
percentage. This was the method of calculation that NMFS proposed. In 
the alternate approach, the fee amount would have been calculated by 
determining NMFS' costs from the previous fiscal year and directly 
billing the C/P sector (as long as the amount was below the three 
percent cap). To clarify for the commenter, the alternate approach of 
direct billing was not expected to be more cost effective, but rather 
was expected to result in fewer adjustments for over and under charges 
between years. Because NMFS did not get public comment supporting the 
alternate approach, NMFS is implementing the method as described in the 
proposed rule and in Sec.  660.115(d)(2) of this final rule. This issue 
is also mentioned under the section of the preamble titled ``Items NMFS 
Requested Comment on in the Proposed Rule.''
    Comment 9. The cost recovery fee should be based on fish sold by a 
harvester to a fish buyer, not on how much fish is harvested. NMFS does 
not need to rely on discard estimates and 100 percent observer coverage 
in order to determine the volume of groundfish for cost recovery fee 
collection.
    Response. NMFS agrees that the fee amount should be based on the 
value of fish sold by a harvester and not on discards. The regulations 
in both the proposed and final rule reflect that. The fee amount due to 
NMFS is a percentage of the ex-vessel value (as specified at Sec.  
660.115(c) and reflected on the cost recovery form). Ex-vessel value is 
defined at Sec.  660.111 for each sector (IFQ, MS, and C/P) and 
includes the value of fish harvested. Where NMFS relies on information 
from observer coverage is for the at-sea sectors (MS and C/P), for NMFS 
to verify that appropriate cost recovery fees are paid.
    For the Shorebased IFQ Program, fish are harvested and retained 
catch is delivered to shorebased facilities and documented on an 
electronic fish ticket. The weight and ex-vessel value of the harvested 
and retained catch is documented on the electronic fish ticket. NMFS 
can use the electronic fish ticket to verify that the cost recovery 
fees paid are appropriate. For the at-sea sectors, fish are not 
documented on electronic fish tickets. Fish are harvested and retained 
catch is processed at sea. Observers collect data to determine species 
composition and to estimate retained and discarded catch by species. 
The observer data can be effectively used by NMFS to verify the cost 
recovery fees paid are appropriate by reviewing the observer data on 
retained catch.
    Comment 10. For NMFS to be transparent, before the fee percentages 
are set for the year, NMFS should provide the Council and industry 
representatives a chance to review. The Council should have an 
opportunity to ask questions, request more data, request clarification, 
and resolve any questions to the Council's satisfaction. NMFS detailed 
accounting should be made public with time for public review to verify 
recoverable costs. In 2011, NMFS provided a general budget of costs, 
but has not yet provided detailed information on its pre and post trawl 
rationalization program costs, including what constitutes incremental 
costs. NMFS should provide line items by category. For example, not 
lump sums for salaries and benefits, but salaries broken down and to 
what category of employee they are assigned. Another commenter noted 
that to determine recoverable costs, NMFS should provide a detailed 
comparison of trawl fishery management costs prior to 2004 and at the 
present time. If there is

[[Page 75274]]

approximately $2.5 million per year in incremental costs as stated in 
the proposed rule, then there should be at least 20 more employees now 
who spend 100 percent of their time on catch shares and do not 
duplicate any of the work being done by employees prior to 2004. 
Providing an annual report after the fact is not adequate.
    Response. NMFS will continue to be transparent in implementation of 
cost recovery. As described further in the preamble under ``Fee 
Percentage by Sector for 2014,'' NMFS is including only the cost of 
NMFS employees' time for work on the trawl rationalization program in 
the calculation of the fee percentage for 2014. These are costs that 
would not have been incurred but for the trawl rationalization program. 
NMFS will publish further details on the fee percentage calculation for 
2014 in the annual report. The annual report is expected to be 
published in the spring each year. However, for initial implementation 
of cost recovery, NMFS will publish an annual report in the fall of 
2013.
    NMFS is only including the cost of employees' time in the 
calculation for 2014 because of NMFS' limited resources and time to 
determine the additional incremental costs. After January 2014, and 
once cost recovery is implemented, NMFS would like to work with the 
Council to identify additional incremental costs to be used in the fee 
percentage calculation in future years. As described in the preamble to 
the proposed rule (78 FR 7371, p.7375), the Council's Cost Recovery 
Committee (CRC) is tasked with assisting NMFS to identify specific 
incremental costs on a sector-by-sector basis, and to identify any 
opportunities for long-term cost efficiencies within the program. The 
Council recommended using Appendix B of the CRC Report from the 
September 2011 Council meeting (Agenda Item G.6.b) as guidance in 
calculating incremental costs associated with the program. The Council 
emphasized the need for transparency within cost accounting procedures, 
and ensuring that the Council has an ongoing, periodic role in 
reviewing fee percentages. NMFS is committed to transparent cost 
accounting practices and would like to work with the Council to 
identify incremental costs that are in addition to the cost of 
employees' time spent on management, data collection, and enforcement 
of the program.

Notification of the Fee Percentage and MS Pricing

    Comment 11. NMFS proposed to notify the public of the upcoming 
year's fee percentage through publication of a Federal Register notice. 
In addition, NMFS should directly notify those fish buyers who will be 
responsible for collecting fees to ensure proper fees are collected and 
avoid additional collection costs.
    Response. NMFS will not directly mail notification of the fee 
percentage changes to fish buyers. NMFS has moved away from paper 
mailing where possible to save money and resources and, instead, 
provides electronic notification. In addition to publishing a Federal 
Register notice in the last quarter of the calendar year to announce 
the upcoming year's fee percentage, NMFS will notify fish buyers and 
the general public of the fee percentage through a public notice 
emailed to the groundfish email list and posted on NMFS' Web site. The 
fee percentage will also be automatically updated on the cost recovery 
form that is filled out on Pay.gov with fee payments. Public notices 
are posted on the following Web site along with information on how to 
join the groundfish email list to receive public notices via email: 
https://www.westcoast.fisheries.noaa.gov/publications/fishery_management/groundfish/public_notices/recent_public_notices.html. 
Federal Register documents are posted on NMFS Web site at: https://www.westcoast.fisheries.noaa.gov/publications/frn/groundfish_frns.html.

Fee Payment and Collection

    Comment 12. Several commenters support NMFS coordinating the fee 
payment structure for cost recovery with the groundfish buyback loan to 
reduce the burden on fish buyers as fee collectors. Some commenters 
noted that NMFS should use separate forms with payment of buyback fees 
versus cost recovery fees because they are different programs. NMFS 
should keep the online reporting as simple and straight-forward as 
possible given the disparity of online capabilities of fish buyers and 
that not all have access to high speed internet. NMFS should revise the 
buyback regulations to provide an online reporting option for fish 
buyers collecting buyback fees.
    Response. NMFS will use separate forms for buyback versus cost 
recovery. In addition, NMFS will use separate cost recovery forms for 
each sector (IFQ, MS, C/P). During implementation of cost recovery and 
its corresponding Pay.gov application, NMFS became more aware of the 
accounting and reconciliation procedures within the agency. As part of 
that, and in order to maintain good accounting practices, NMFS has 
decided to use separate forms for payment of buyback versus cost 
recovery. Similarly, because cost recovery fees are charged for each 
sector of the fishery, and in order to keep payment, tracking, and 
accounting for each sector distinct, NMFS has created a separate cost 
recovery form for each sector. One form would be submitted with each 
payment and a fish buyer may only make payments for one sector's fees 
at a time. In order to reduce the burden of these additional forms on 
the public, NMFS has made the cost recovery forms similar in structure 
and format to the buyback forms. In addition, once the fish buyer 
establishes an online account with Pay.gov, certain fields on the form, 
such as name and address, will auto-populate. Also, links to buyback 
and cost recovery forms will be available on Pay.gov and through the 
West Coast Region trawl catch share Web site.
    NMFS has designed the online fee payment system to be similar to 
buyback, and to be as simple and straight-forward as possible, while 
maintaining clear tracking and accounting of fees paid. Finally, NMFS 
would like to clarify for the commenter that the buyback program does 
provide for online reporting and payment of buyback fees.
    This issue is also mentioned under the section of the preamble 
titled ``Items NMFS Requested Comment on in the Proposed Rule.''
    Comment 13. Instead of requiring fish buyers to have a separate 
bank account for cost recovery and buyback, fish buyers should have the 
option to use the same federally insured bank account for both buyback 
and cost recovery, as long as all records are clearly kept as required 
by regulation. This would be simpler for fish buyers, would still be 
subject to audit, and is enforceable because of the recordkeeping 
requirements.
    Response. With this final rule, NMFS is maintaining the requirement 
for fish buyers in the IFQ and MS sectors to have a segregated account 
at a federally insured financial institution for the sole purpose of 
depositing collected fee revenue for cost recovery, called a ``deposit 
account'' in regulation at Sec.  660.115(d)(1)(ii). Fish buyers in the 
C/P sector are not required to have segregated accounts because the 
fish seller and the fish buyer is always the same entity, and they only 
make one payment to NMFS per year. NMFS believes this requirement 
ensures clear accounting. In addition, the buyback regulations (Sec.  
600.1014(a)) require a segregated account for the collection of buyback 
fees, which means the cost recovery fees could not be kept in a

[[Page 75275]]

buyback account without changing the buyback regulations. The buyback 
regulations apply to other U.S. fisheries than just the Pacific coast 
groundfish fisheries. This final rule is not revising the national 
buyback regulations. However, if the buyback regulations are revised 
through a future rulemaking, the possibility of a joint buyback and 
cost recovery deposit account could be explored and, if adopted, would 
need to include a revision to the Pacific coast groundfish regulations.
    Comment 14. NMFS should clarify how the prohibition at Sec.  
660.112(a)(6)(iii) applies to the C/P Coop Program. The C/P Coop 
Program neither collects nor disburses cost recovery fees from fish 
sellers.
    Response. With this final rule, NMFS clarifies the prohibition at 
Sec.  660.112(a)(6)(iii) to only apply to the Shorebased IFQ and MS 
Coop Programs, and not to C/P Coop Program. Because vessels in the C/P 
Coop Program act as both the harvester and the processor, they are not 
required to collect fees from themselves, keep a segregated bank 
account, and then disburse payments to NMFS from the segregated bank 
account. The C/P Coop Program would still be required to make timely 
fee payments to NMFS and subject to the other prohibitions in Sec.  
660.112(a)(6). This issue is also mentioned under the section of the 
preamble titled ``Changes from the Proposed Rule.''

Recordkeeping, Reporting, and Auditing

    Comment 15. NMFS should not require an annual cost recovery report 
from the C/P cooperative participants for the reasons listed in the 
preamble to the proposed rule (78 FR 7371, February 1, 2013): the fish 
buyer and fish seller are the same entity, only pay at end of year, are 
not be required to have a deposit account, and are not paying the fee 
amount based on their own ex-vessel value (they pay based on MS ex-
vessel value). The public reporting burden for an annual report from 
fish buyers in the C/P Coop Program is unreasonable and unnecessary.
    Response. NMFS agrees and with this final rule has removed the 
requirement for an annual report in the C/P Coop Program at Sec.  
660.113(d)(5)(i) and at Sec.  660.115(d)(4)(ii). This issue is 
described in more detail under the section of the preamble titled 
``Items NMFS Requested Comment on in the Proposed Rule,'' and is 
mentioned under the section of the preamble titled ``Changes from the 
Proposed Rule.''
    Comment 16. NMFS should clarify how the reporting and recordkeeping 
requirements regarding ex-vessel value and the collection of fees 
proposed at Sec.  660.113(d)(5)(i) and (ii) apply to the C/P Coop 
Program.
    Response. NMFS requires fish buyers to submit a cost recovery form 
with the fish buyer's fee payment to NMFS. The cost recovery form 
requires certain information to be completed by the fish buyer, 
including the ex-vessel value and the fee collected, as specified at 
Sec.  660.113(d)(5)(i). The ex-vessel value is defined at Sec.  
660.111. For the C/P Coop Program, the ex-vessel value reported on the 
cost recovery form should be the value of the aggregate pounds of all 
groundfish species harvested by the vessel registered to a C/P-endorsed 
limited entry trawl permit, multiplied by the MS Coop Program average 
price per pound. The field on the cost recovery form to record the fee 
collected is the fee due to NMFS. The amount of fee due to NMFS is 
determined by multiplying the amount in the ex-vessel value field by 
the applicable fee percent. In addition to reporting the ex-vessel 
value and the fee collected on the cost recovery form, the fish buyer 
is required to maintain their own records of these items, as specified 
at Sec.  660.113(d)(5)(ii).
    NMFS revised the term ``fee collected'' on the cost recovery form 
and in the records maintained by fish buyers to read ``fee due'' to 
NMFS. NMFS revised the term to reduce confusion and distinguish between 
the fee collected by fish buyers from fish sellers versus the fee due 
to NMFS from fish buyers. With this final rule, regulations at Sec.  
660.113(b)(5)(i), (c)(5)(i), and (d)(5)(i) have been revised from ``fee 
collected'' to ``fee due.'' This issue is also mentioned under the 
section of the preamble titled ``Changes from the Proposed Rule.''
    Comment 17. Participants in the C/P Coop Program should be exempt 
from the audit provisions proposed at Sec.  660.115(d)(4)(iii). 
Provisions to ensure accurate accounting and reporting of transactions 
between buyers and sellers do not apply to C/P cooperative 
participants.
    Response. NMFS disagrees that the C/P Coop Program should be exempt 
from the audit provisions at Sec.  660.115(d)(4)(iii). Any fish buyer 
or fish seller in the trawl rationalization program required to 
directly or indirectly pay fees to the Federal government may be 
subject to an audit to ensure compliance with cost recovery.

Failure To Pay

    Comment 18. NMFS should use the same penalty structure for cost 
recovery as is required for buyback. NMFS' proposed penalty to not 
renew a mothership permit if payment is not received by the deadline is 
too harsh.
    Response. This issue was discussed at the Council's June and 
September 2011 meetings, and the Council made a final recommendation to 
NMFS to include non-renewal of a permit for failure to pay cost 
recovery fees. At the Council's June 2011 meeting, the Council asked 
that options for ensuring payment be analyzed, and that NMFS indicate a 
preferred option and rationale (in reference to Question 4 in the June 
2011 Agenda Item E.7.b Supplemental NMFS Report 2 on what type of 
linkage should exist between payment of the cost recovery fee and 
permitting requirements). At the September 2011 meeting, the Council 
reviewed Agenda Item G.6.b, Supplemental NMFS Report 2, which analyzed 
the pros and cons of different approaches and noted NMFS preferred 
option. NMFS' preferred option, Option 4, linked failure to pay the 
assessed cost recovery fee to permit or IFQ first receiver site license 
renewal, but did not require proof of fee payment as part of a complete 
renewal application. With this approach, the primary compliance 
incentive is an administrative link between failure to pay the 
appropriate cost recovery fee and permit/license renewal. Potential 
enforcement action would remain an option in some cases. This rule 
incorporates a permit link to ensure compliance while minimizing the 
associated administrative burden to both NMFS and industry. The way the 
Council had already recommended structuring the cost recovery program 
would create incentives that lead to a high compliance rate. However, 
success of the trawl rationalization program is tied to successful cost 
recovery. Due to the reasons listed above, reliance on enforcement 
actions alone would likely not provide sufficient compliance 
incentives. Additionally, NMFS noted that including a permit link was 
most consistent with NMFS policy on permits issuance under the Debt 
Collection Improvement Act. Ultimately, the Council recommended Option 
4 from Agenda Item G.6.b, Supplemental NMFS Report 2, September 2011. 
The Council's advisory bodies, including the Groundfish Advisory 
Subpanel and the Enforcement Consultants, supported this recommendation 
for effective implementation and enforcement of cost recovery. With 
this final rule, NMFS has implemented the Council's recommendation to 
include a permit linkage for failure to pay.

[[Page 75276]]

Items NMFS Requested Comment on in the Proposed Rule

    NMFS specifically requested comment on several items in the 
proposed rule. Below, NMFS identifies each issue where NMFS 
specifically requested public comments, and indicates whether comments 
were received. In instances where NMFS made changes to the proposed 
rule, NMFS identified these changes in the section titled ``Changes 
from the Proposed Rule.''

 Coordinating Cost Recovery With Buyback

    In the proposed rule, NMFS specifically requested comment on using 
one form to submit two payments, one payment to each program (cost 
recovery and buyback). However, NMFS proposed a separate cost recovery 
form, in part because NMFS found several drawbacks to using one 
combined form for both programs. The drawbacks to one combined form for 
both programs included the potential for increased misreporting/
mispayment, different consequences for misreporting/mispayment (late 
fee versus nonrenewal of permit/license), and increased time to correct 
errors, potentially harming business operations.
    In an effort to further coordinate the cost recovery program with 
the buyback program, NMFS will use the same online portal for payment 
as the buyback program, Pay.gov. By using the same portal, users are 
able to go to one place to make payments, maintain a user profile, and 
click on a link to pay either buyback fees or cost recovery fees. The 
forms submitted with payment for each fee are contained in each link. 
The cost recovery form on the Pay.gov link has been designed to look 
very similar to the buyback form, with the addition of a box to fill 
out the weight (in lbs) and fees paid based on the cost recovery 
program fee percentage (which is different than the buyback fee 
percentage). In addition, certain fields on the form will auto-populate 
for users with existing Pay.gov accounts. With this system, NMFS 
expects that the ex-vessel value reported on the cost recovery form 
should match that reported on the buyback form, because both forms 
report based on the value of all groundfish species. NMFS solicited 
public comment on the benefits and drawbacks of one form versus two, 
and received comments (see Comment 12 in the ``Comments and Responses'' 
section). After considering the comments, NMFS will use separate forms 
for cost recovery and buyback. While no regulatory changes were made 
from the proposed rule, NMFS decided to split the cost recovery form in 
to one for each sector (IFQ, MS, and C/P) as described further in the 
response to comment 12.

 Fee Amount; Fee Payment and Collection

    In the proposed rule, NMFS specifically requested comment on an 
alternate approach to calculating the cost recovery fee amount for the 
C/P Coop Program. Instead of multiplying the ex-vessel value (using MS 
pricing) by the fee percentage to get the fee amount, NMFS could have 
directly billed the sector in the last quarter of the year so long as 
the value for DPC of the C/P Coop Program in the fee percentage 
calculation for the previous fiscal year was an amount equal to or less 
than three percent of the ex-vessel value of the fishery (using MS 
pricing). Under this alternate approach, NMFS would have calculated the 
fee percentage using information from the previous fiscal year in order 
to ensure that the fee did not exceed three percent. NMFS would have 
also announced the amount due from the C/P Coop Program in the fall 
before the fishing year in which the fee amount would have been 
applied. This way, the C/P Coop Program would have known at the start 
of the fishing year how much money would be due to NMFS for cost 
recovery at the end of the year. Under this alternate approach, the C/P 
Coop would have been responsible for figuring out which ``fish 
buyers,'' as defined for the cost recovery program, were responsible 
for which portion of the payment and for notifying NMFS. NMFS would 
have then billed each fish buyer accordingly. This alternate approach 
would have resulted in more accurate payment and less adjustments for 
over or under payment between years. NMFS received comments on this 
proposal (see Comment 8 in the ``Comments and Responses'' section), and 
made no changes from the proposed rule.

 Recordkeeping, Reporting, and Auditing

    In the proposed rule, NMFS specifically requested comment on 
additional reporting requirements for the at-sea whiting sectors (MS 
and C/P) to verify information reported on the cost recovery form. In 
order to hold the three sectors (IFQ, MS, and C/P) to similar standards 
and to ensure fair and accurate fee payment among the sectors, NMFS 
proposed an annual report for both of the at-sea sectors. However, 
there are some distinctions between the at-sea sectors (MS and C/P). 
Because in the C/P Coop Program the fish buyer and fish seller are the 
same entity, because they would only pay at end of year, because they 
would not be required to have a deposit account, and because they are 
not paying the fee amount based on their own ex-vessel value (they pay 
based on MS ex-vessel value), NMFS solicited public comment on the need 
for an annual report in the C/P Coop Program. Comments were received 
(see Comment 15 in the ``Comments and Responses'' section), and this 
rule changes the requirements at Sec.  660.113(d)(5)(i) and at Sec.  
660.115(d)(4)(ii) to remove the requirement for an annual report from 
fish buyers in the C/P Coop Program. See also ``Changes from the 
Proposed Rule.''

Changes From the Proposed Rule

    In this final rule, NMFS has made several small changes from the 
proposed rule. NMFS revised the definition of ``ex-vessel value'' at 
Sec.  660.111 to say ``. . . or for any goods or services . . .'' 
instead of ``or for any goods for services.'' NMFS clarified the 
prohibition at Sec.  660.112(a)(6)(iii) on deposit accounts and fee 
collection to only apply to the Shorebased IFQ and MS Coop Programs, 
and not to C/P Coop Program--see response to Comment 14. NMFS revised 
Sec.  660.115(d)(3)(i)(A)(4) by adding ``failing or'' to the following 
phrase ``failing or refusing to collect'' to clarify the conditions of 
the requirement. NMFS revised the name of the Regional Office from 
``Northwest'' to ``West Coast'' at Sec.  660.115(d)(3)(i)(B) and 
(d)(3)(ii)(B) to reflect the new regional name following the merger of 
NMFS Northwest and Southwest Regional Offices. NMFS removed the 
requirement for an annual report from fish buyers in the C/P Coop 
Program at Sec.  660.113(d)(5)(i) and at Sec.  660.115(d)(4)(ii)--see 
response to Comment 15. NMFS revised the term ``fee collected'' to 
``fee due'' on the cost recovery form and in regulations at Sec.  
660.113(b)(5)(i), (c)(5)(i), and (d)(5)(i)--see response to Comment 16. 
NMFS also revised Sec.  660.113(b)(5)(i), (c)(5)(i), and (d)(5)(i) to 
clarify terms (using ``fish buyer'' which is defined at Sec.  660.111 
instead of ``fee collector'') and make them more specific to each 
sector (e.g., reporting only the year of harvest for C/P versus month 
and year of landings/deliveries for IFQ and MS).
    NMFS revised regulations at Sec.  660.115(b)(1)(ii) to calculate 
ex-vessel value based on the previous calendar year rather than fiscal 
year. Ex-vessel value for the Shorebased IFQ Program is reported in 
PacFIN from fish ticket data. PacFIN groups data and reports by 
calendar year. In addition, PacFIN

[[Page 75277]]

reports may have a time delay. Therefore, pulling accurate data based 
on a fiscal year, right after the fiscal year has closed, may not be 
possible.

Classification

    The NMFS Assistant Administrator has determined that this final 
rule is consistent with the Pacific Coast Groundfish FMP, other 
provisions of the MSA, and other applicable law. To the extent that the 
regulations in this final rule differ from what was deemed by the 
Council, NMFS invokes its independent authority under 16 U.S.C. 
1855(d).
    The Council prepared a final environmental impact statement (EIS) 
for Amendment 20 and Amendment 21 to the Pacific Coast Groundfish FMP. 
The Amendment 20 and 21 EISs are available on the Council's Web site at 
https://www.pcouncil.org/. The regulatory changes in this rule were 
categorically excluded from the requirement to prepare a NEPA analysis.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The preamble to the proposed rule (78 FR 7371, February 1, 2013) 
included a detailed summary of the analyses contained in the IRFA. 
NMFS, pursuant to section 604 of the Regulatory Flexibility Act (RFA), 
prepared a FRFA in support of this final rule. 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 copy 
of the FRFA is available from NMFS (see ADDRESSES) and a summary of the 
FRFA, per the requirements of 5 U.S.C. 604(a), follows:
    This rulemaking affects participants in the trawl rationalization 
program. Cost recovery for the trawl rationalization program requires 
the fish sellers to pay the fee and all parties making the first ex-
vessel purchase of groundfish (i.e., the fish buyers) to collect the 
fee, account for, and forward the fee revenue to NMFS (Note: In the C/P 
Coop Program, a cooperative of vessels that both harvest and process 
whiting at-sea, the fish seller and the fish buyer are the same 
entity).
    Each vessel account holder, mothership catcher vessel, mothership 
processor, and catcher-processor must apply to participate in the trawl 
rationalization program. There are 144 vessel accounts, 36 mothership-
endorsed limited entry permits, 6 mothership permits, 10 catcher-
processor permits, and 51 first receiver site licenses. In many 
instances, one entity may own several permits or accounts. As part of 
the application process, applicants were asked if they considered 
themselves a ``small'' business based on a review of the Small Business 
Administration (SBA) size criteria.
    On June 20, 2013, the SBA issued a final rule revising the small 
business size standards for several industries effective July 22, 2013 
(78 FR 37398; June 20, 2013). This change affects the classification of 
vessels that harvest groundfish under this program. The rule increased 
the size standard for Finfish Fishing from $4.0 to 19.0 million, 
Shellfish Fishing from $4.0 to 5.0 million, and Other Marine Fishing 
from $4.0 to 7.0 million (Id. at 37400-Table 1). Prior to SBA's recent 
changes to the size standards for commercial harvesters, a business 
involved in both the harvesting and processing of seafood products, 
also referred to as a catcher/processor (C/P), was considered a small 
business if it met the $4.0 million criterion for commercial fish 
harvesting operations. In light of the new size standards for 
commercial harvesters, NMFS is reviewing the size standard for C/Ps. 
However, for purposes of this rulemaking, NMFS is applying the $19 
million standard because whiting C/Ps are involved in the commercial 
harvest of finfish. The size standards for entities that process were 
not changed. 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.
    Based on the new finfish size standard ($19 million), NMFS 
reassessed those businesses previously considered large under the old 
size standard ($4 million) based on information provided by these 
companies under the NMFS Northwest Fisheries Science Center's Economic 
Data Collection Program. This reassessment also included adjustments 
for entities that own multiple accounts and or permits. Based on the 
new size standard ($19 million) and after taking into account NWFSC 
economic data, NMFS permit and ownership information, and affiliation 
between entities, NMFS estimates that there are 145 fishery-related 
entities directly affected by these regulations, of which 102 are 
``small'' businesses.
    Using the fee rate by sector for 2014 and 2012 calendar year 
revenues, for the Shorebased IFQ Program, would lead to the following 
projected collections: Shorebased IFQ Program, $1.44 million ($48 
million x 0.030); MS Coop Program, approximately $264,000 ($11 million 
x 0.024); and for the C/P Coop Program, approximately $187,000 ($17 
million x 0.011). Using this example, NMFS would recover approximately 
$1.9 million by implementing cost recovery.
    Overall, as discussed above NMFS received 11 public comments on the 
groundfish trawl rationalization cost recovery proposed rule. No 
significant issues were raised by the public comments in response to 
the IRFA. However, Comment 6 above does raise ``small boat'' issues. 
The comment period ended March 18, 2013.
    Generally, the comments acknowledged the MSA requirement for cost 
recovery. Many commenters requested that implementation be delayed to 
January 1, 2014 at the earliest. Some of these commenters noted that 
mid-year implementation would unfairly disadvantage fishermen who fish 
later in the year. Other commenters requested that it be delayed until 
the trawl rationalization fishery has gained more economic stability, 
namely after the buyback loan has been refinanced, NMFS identifies and 
shares a detailed budget of incremental costs, and trawl trailing 
amendments have been implemented (e.g., electronic monitoring, more 
flexibility in where and with what gear fishermen can fish, widow 
rockfish reallocation, etc). Some commenters felt NMFS should 
prioritize these trailing actions that would benefit the program and 
the fleet before implementing cost recovery. These trailing actions 
would make the fleet more profitable and thus, better able to afford 
the cost recovery fee.
    The impacts on both small and large entities are the fees being 
collected--up to three percent of ex-vessel revenues or the mothership 
and catch processor equivalents. As discussed in the proposed rule (78 
FR 7371, February 1, 2013), fishermen have been paying state landing 
taxes for years. The buyback fees, on the other hand, are associated 
with a reduction of the fleet that has significantly increased the 
amount of fish that the post buyback fishermen were able to harvest 
under the trip limit regime (prior to trawl rationalization) or 
received as QS that fishermen now receive under trawl rationalization. 
(Buyback history was equally divided among all shorebased groundfish 
permits.) Fishermen are now petitioning Congress for a reduction in the 
interest rate associated with the $36 million buyback loan. While the 
costs of observers may be high, NMFS and the Council are looking at the 
feasibility of electronic monitoring to lower administrative and 
fishermen costs. The costs of paying the cost recovery fees

[[Page 75278]]

can be reduced by developing a lower cost administrative system or by 
increased revenues as fishermen develop techniques to reduce bycatch so 
they can increase their target catch. The effects of all factors on 
current and future individual and industry profits are hard to assess, 
particularly as QS trading is not allowed until 2014. When QS trading 
is initiated, it is expected that the number of participants in the 
Shorebased IFQ Program will be reduced. A reduction in the number of 
participants may lower administrative costs while raising average 
revenues per participant.
    Because cost recovery is mandatory under the MSA, the ``no action'' 
alternative is not a viable alternative. All of the other alternatives 
would have the same expected effects among each other because the MSA 
requires fees of up to three percent of the ex-vessel value to be 
collected. Implementation costs were reduced by adapting the existing 
buyback fee collection processes and by adjusting these processes to 
each sector.
    While there may be different impacts of cost recovery on small and 
large businesses, the cost recovery provisions of the MSA (16 U.S.C. 
1854(d)(2)(B)) do not differentiate between the fee percentage charged 
for small versus large businesses. Cost recovery was originally 
approved as part of Amendment 20, and is required under the MSA for 
LAPPs like the trawl rationalization program. NMFS delayed 
implementation of cost recovery for the first three years of the trawl 
rationalization program. In response to public comments, NMFS decided 
to continue the delay until January 2014.
    No Federal rules have been identified that duplicate, overlap, or 
conflict with the alternatives. Public comment is hereby solicited, 
identifying such rules.
    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. As part of 
this rulemaking process, a small entity compliance guide (the guide) 
was prepared. Copies of this final rule are available from the West 
Coast Regional Office, and the guide will be sent to all permit owners 
and first receiver license holders for the fishery. The guide and this 
final rule will also be available on the West Coast Region's Web site 
(see ADDRESSES) and upon request.
    This final rule contains a collection-of-information requirement 
subject to the Paperwork Reduction Act (PRA), and which has been 
approved by OMB under control number 0648-0663. NMFS received three 
letters of comment on the proposed rule regarding this information 
collection. In the ``Comments and Responses'' section of the preamble, 
comments 12 through 16 address aspects of the information collection. 
The comments generally sought to reduce the burden on fish buyers as 
collection agents, keep online reporting simple, use separate forms for 
cost recovery and buyback, not require a segregated bank account, not 
require an annual report for the C/P Coop Program, and clarify the ex-
vessel value and fee due on the cost recovery form for the C/P Coop 
Program. Based on these comments on the information collection, NMFS 
made several changes between the proposed and final rule, as noted in 
the preamble section ``Changes from the Proposed Rule.'' Public 
reporting burden for the cost recovery form is estimated to average 1 
hour per response. Public reporting burden for a failure to pay report 
is estimated to average 4 hours per response. Public reporting burden 
for the annual report for the MS Coop Program is estimated to average 1 
hour per response. These public reporting burden estimates include the 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments on these or any other 
aspects of the collection of information, including suggestions for 
reducing the burden, to NMFS, West Coast Region 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.
    This final rule was developed after meaningful collaboration, 
through the Council process, with the tribal representative on the 
Council. The regulations have no direct effect on the tribes; these 
regulations were deemed by the Council as ``necessary or appropriate'' 
to implement the FMP as amended.

List of Subjects in 50 CFR Part 660

    Fisheries, Fishing, and Indian fisheries.

    Dated: December 6, 2013.
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 stated in the preamble, 50 CFR Chapter VI is 
amended as follows:

PART 660--FISHERIES OFF WEST COAST STATES

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

    Authority: 16 U.S.C. 1801 et seq., 16 U.S.C. 773 et seq., and 16 
U.S.C. 7001 et seq.


0
2. In Sec.  660.11, add the definition for ``Fiscal year'' and ``Fund'' 
in alphabetical order to read as follows:


Sec.  660.11  General definitions.

* * * * *
    Fiscal year means the year beginning at 0001 local time on October 
1 and ending at 2400 local time on September 30 of the following year.
* * * * *
    Fund means, for the purposes of subparts C through G of this part, 
the U.S. Treasury's Limited Access System Administration Fund (LASAF) 
established by the Magnuson-Stevens Act, 16 U.S.C. 1855(h)(5)(B), 
specifically the LASAF subaccounts associated with the PCGFMP cost 
recovery programs.
* * * * *

0
3. In Sec.  660.25, as added at 78 FR 68767, November 15, 2013, 
effective January 1, 2014, is revised to read as follows:


Sec.  660.25  Permits.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (G) An MS permit or a limited entry permit with a C/P endorsement 
will not be renewed, if it was the permit owner that failed to pay, 
until payment of all cost recovery program fees required pursuant to 
Sec.  660.115 has been made. The IAD, appeals, and final decision 
process for the cost recovery program is specified at Sec.  
660.115(d)(3)(ii).
* * * * *

0
4. In Sec.  660.111, add the definition for ``Ex-vessel value,'' ``fish 
buyer,'' ``Fish seller,'' and ``Net ex-vessel value'' in alphabetical 
order to read as follows:


Sec.  660.111  Trawl fishery--definitions.

* * * * *

[[Page 75279]]

    Ex-vessel value means, for the purposes of the cost recovery 
program specified at Sec.  660.115, all compensation (based on an arm's 
length transaction between a buyer and seller) that a fish buyer pays 
to a fish seller in exchange for groundfish species (as defined in 
Sec.  660.11), and includes the value of all in-kind compensation and 
all other goods or services exchanged in lieu of cash. Ex-vessel value 
shall be determined before any deductions are made for transferred or 
leased allocation, or for any goods or services.
    (1) For the Shorebased IFQ Program, the value of all groundfish 
species (as defined in Sec.  660.11) from IFQ landings.
    (2) For the MS Coop Program, the value of all groundfish species 
(as defined in Sec.  660.11) delivered by a catcher vessel to an MS-
permitted vessel.
    (3) For the C/P Coop Program, the value as determined by the 
aggregate pounds of all groundfish species (as defined in Sec.  660.11) 
harvested by the vessel registered to a C/P-endorsed limited entry 
trawl permit, multiplied by the MS Coop Program average price per pound 
as announced pursuant to Sec.  660.115(b)(2).
    Fish buyer means, for the purposes of the cost recovery program 
specified at Sec.  660.115,
    (1) For the Shorebased IFQ Program, the IFQ first receiver as 
defined in Sec.  660.111.
    (2) For the MS Coop Program, the owner of a vessel registered to an 
MS permit, the operator of a vessel registered to an MS permit, and the 
owner of the MS permit registered to that vessel. All three parties 
shall be jointly and severally responsible for fulfilling the 
obligations of a fish buyer.
    (3) For the C/P Coop Program, the owner of a vessel registered to a 
C/P-endorsed limited entry trawl permit, the operator of a vessel 
registered to a C/P-endorsed limited entry trawl permit, and the owner 
of the C/P-endorsed limited entry trawl permit registered to that 
vessel. All three parties shall be jointly and severally responsible 
for fulfilling the obligations of a fish buyer.
    Fish seller means the party who harvests and first sells or 
otherwise delivers groundfish species (as defined in Sec.  660.11) to a 
fish buyer.
* * * * *
    Net ex-vessel value means, for the purposes of the cost recovery 
program specified at Sec.  660.115, the ex-vessel value minus the cost 
recovery fee.
* * * * *

0
5. In Sec.  660.112, add paragraph (a)(6) to read as follows:


Sec.  660.112  Trawl fishery--prohibitions.

* * * * *
    (a) * * *
    (6) Cost recovery program. (i) Fail to fully pay or collect any fee 
due under the cost recovery program specified at Sec.  660.115 and/or 
otherwise avoid, decrease, interfere with, hinder, or delay any such 
payment or collection.
    (ii) Convert, or otherwise use any paid or collected fee for any 
purpose other than the purposes specified in this subpart.
    (iii) For the Shorebased IFQ Program and the MS Coop Program, fail 
to deposit on time the full amount of all fee revenue collected under 
the cost recovery program specified at Sec.  660.115 into a deposit 
account, or fail to timely disburse the full amount of all deposit 
principal to the Fund.
    (iv) Fail to maintain records as required by Sec.  660.113 and/or 
fail to make reports to NMFS as required under Sec.  660.113.
    (v) Fail to advise NMFS of any fish buyer's failure to collect any 
fee due and payable under the cost recovery program specified at Sec.  
660.115.
    (vi) Refuse to allow NMFS employees, agents, or contractors to 
review and audit all records and other information required to be 
maintained as set forth in Sec.  660.113, and/or Sec.  660.115.
    (vii) Make any false statement to NMFS, including any NMFS 
employee, agent or contractor, concerning a matter related to the cost 
recovery program described in this subpart.
    (viii) Obstruct, prevent, or delay, or attempt to obstruct, 
prevent, or delay, any audit or investigation NMFS employees, agents, 
or contractors conduct, or attempt to conduct, in connection with any 
of the matters in the cost recovery program described in this subpart.
* * * * *

0
6. In Sec.  660.113, add paragraphs (b)(5), (c)(5), and (d)(5) to read 
as follows:


Sec.  660.113  Trawl fishery--recordkeeping and reporting.

* * * * *
    (b) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the Shorebased IFQ Program, is required to comply with the 
following recordkeeping and reporting requirements:
    (i) Reporting. The fish buyer must submit a cost recovery form at 
the time cost recovery fees are paid to NMFS as specified at Sec.  
660.115. The cost recovery form requires providing information that 
includes, but is not limited to, fish buyer's name, address, phone 
number, first receiver site license number, month and year of landings, 
weight of landings, ex-vessel value, and fee due.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all deliveries of groundfish that the fish buyer buys from 
each fish seller:
    (1) The date of delivery,
    (2) The fish seller's identity,
    (3) The weight of each species of groundfish delivered,
    (4) Information sufficient to specifically identify the fishing 
vessel which delivered the groundfish,
    (5) The ex-vessel value of each species of groundfish,
    (6) The net ex-vessel value of each species of groundfish,
    (7) The identity of the payee to whom the net ex-vessel value is 
paid, if different than the fish seller,
    (8) The date the net ex-vessel value was paid,
    (9) The total fee amount collected as a result of all groundfish.
    (B) For all fee collection deposits to and disbursements from the 
deposit account:
    (1) The date of each deposit in to the deposit account required at 
Sec.  660.115(d)(1)(ii)(A),
    (2) The total amount deposited in to the deposit account,
    (3) The date of each disbursement,
    (4) The total amount disbursed,
    (5) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits.
    (c) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the MS Coop Program, is required to comply with the 
following recordkeeping and reporting requirements:
    (i) Reporting. (A) Cost recovery form. The fish buyer must submit a 
cost recovery form at the time cost recovery fees are paid to NMFS as 
specified at Sec.  660.115. The cost recovery form requires providing 
information that includes, but is not limited to, fish buyer's name, 
address, phone number, MS permit number, vessel name, USCG vessel 
documentation number, month and year of deliveries, weight of 
deliveries, ex-vessel value, and fee due.
    (B) Annual report. By March 31 each year, each fish buyer must 
submit to NMFS a report containing the following information from the 
preceding calendar year for all groundfish each fish buyer purchases 
from fish sellers:
    (1) Total weight bought,
    (2) Total ex-vessel value paid,
    (3) Total fee amounts collected,

[[Page 75280]]

    (4) Total fee collection amounts deposited by month,
    (5) Dates and amounts of monthly disbursements to the Fund.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all deliveries of groundfish that the fish buyer buys from 
each fish seller:
    (1) The date of delivery,
    (2) The fish seller's identity,
    (3) The weight of each species of groundfish delivered,
    (4) Information sufficient to specifically identify the fishing 
vessel which delivered the groundfish,
    (5) The ex-vessel value of each species of groundfish,
    (6) The net ex-vessel value of each species of groundfish,
    (7) The identity of the payee to whom the net ex-vessel value is 
paid, if different than the fish seller,
    (8) The date the net ex-vessel value was paid,
    (9) The total fee amount collected as a result of all groundfish.
    (B) For all fee collection deposits to and disbursements from the 
deposit account:
    (1) The date of each deposit in to the deposit account required at 
Sec.  660.115(d)(1)(ii)(A),
    (2) The total amount deposited in to the deposit account,
    (3) The date of each disbursement,
    (4) The total amount disbursed,
    (5) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits.
    (d) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the C/P Coop Program, is required to comply with the 
following recordkeeping and reporting requirements:
    (i) Reporting. The fish buyer must submit a cost recovery form at 
the time cost recovery fees are paid to NMFS as specified at Sec.  
660.115. The cost recovery form requires providing information that 
includes, but is not limited to, fish buyer's name, address, phone 
number, C/P-endorsed limited entry permit number, vessel name, USCG 
vessel documentation number, year of harvest, weight, ex-vessel value, 
and fee due.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all groundfish:
    (1) The date of harvest,
    (2) The weight of each species of groundfish harvested,
    (3) Information sufficient to specifically identify the fishing 
vessel which harvested the groundfish,
    (4) The ex-vessel value of each species of groundfish,
    (5) The net ex-vessel value of each species of groundfish,
    (6) The total fee amount collected as a result of all groundfish.
    (B) For all disbursements to NMFS:
    (1) The date of each disbursement,
    (2) The total amount disbursed.

0
7. Section 660.115 is added to read as follows:


Sec.  660.115  Trawl fishery--cost recovery program.

    (a) General. The cost recovery program collects mandatory fees of 
up to three percent of the ex-vessel value of fish harvested by sector 
under the trawl rationalization program in accordance with the 
Magnuson-Stevens Act. NMFS collects the fees to recover the actual 
costs directly related to the management, data collection, and 
enforcement of the trawl rationalization program. In addition to the 
requirements of this section, the following groundfish regulations also 
apply:
    (1) Regulations set out in the following sections of subpart C: 
Sec.  660.11 Definitions and Sec.  660.25 Permits.
    (2) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Definitions, Sec.  660.112 Trawl fishery prohibitions, 
Sec.  660.113 Trawl fishery recordkeeping and reporting, Sec.  660.140 
Shorebased IFQ Program, Sec.  660.150 MS Coop Program, and Sec.  
660.160 C/P Coop Program.
    (b) Fee percentage by sector. The annual fee percentage by sector 
is calculated as described in paragraph (b)(1) of this section. NMFS 
will establish the fee percentage each year and will announce the fee 
percentage by sector in accordance with paragraph (b)(2) of this 
section. The fee percentage must not exceed three percent of the ex-
vessel value of fish harvested by sector under the trawl 
rationalization program pursuant to the Magnuson-Stevens Act at 16 
U.S.C. 1854(d)(2)(B).
    (1) Calculation. In the last quarter of each calendar year, NMFS 
will calculate the fee percentage by sector based on information from 
the previous fiscal year (defined at Sec.  660.11). The fee percentage 
will be rounded to the nearest 0.1 percent and must not exceed three 
percent for each sector (Shorebased IFQ Program, MS Coop Program, and 
C/P Coop Program). NMFS will use the following equation to annually 
determine the fee percentage by sector: Fee percentage = the lower of 
3% or (DPC/V) x 100, where:
    (i) ``DPC,'' or direct program costs, are the actual incremental 
costs for the previous fiscal year directly related to the management, 
data collection, and enforcement of each sector (Shorebased IFQ 
Program, MS Coop Program, and C/P Coop Program). Actual incremental 
costs means those net costs that would not have been incurred but for 
the implementation of the trawl rationalization program, including 
additional costs for new requirements of the program and reduced trawl 
sector related costs resulting from efficiencies as a result of the 
program. If the amount of fees collected by NMFS is greater or less 
than the actual net incremental costs incurred, the DPC will be 
adjusted accordingly for calculation of the fee percentage in the 
following year.
    (ii) ``V'' is, for each applicable sector, the total ex-vessel 
value, as defined at Sec.  660.111, from the previous calendar year 
attributable to that sector of the trawl rationalization program 
(Shorebased IFQ Program, MS Coop Program, and C/P Coop Program).
    (2) Notification of the fee percentage and MS average pricing. 
During the last quarter of each calendar year, NMFS will announce the 
following through a Federal Register notice:
    (i) The fee percentage to be applied by fish buyers and fish 
sellers, for each sector, that will be in effect for the upcoming 
calendar year, and
    (ii) The average MS price per pound from the previous fiscal year 
as reported for the MS Coop Program to be used in the C/P Coop Program 
to calculate the fee amount for the upcoming calendar year as specified 
in paragraph (c) of this section.
    (iii) Information on how to pay in to the Fund subaccount as 
specified at paragraph (d) of this section.
    (c) Fee amount. The fee amount is the ex-vessel value, as defined 
at Sec.  660.111, for each sector multiplied by the fee percentage for 
that sector as announced in accordance with paragraph (b)(2) of this 
section.
    (d) Fee payment and collection--(1) Fee payment and collection in 
the Shorebased IFQ Program and MS Coop Program. Payment of fees at the 
fee percentage rate announced in paragraph (b)(2) of this section 
begins January 1 and continues without interruption through December 31 
each year.
    (i) Between the fish seller and fish buyer. Except as described 
below, the full fee is due and payable at the time of fish landing/
delivery. Each fish buyer must collect the fee at the time of fish 
landing/delivery by deducting the fee from the ex-vessel value before 
paying the net ex-vessel value to the fish seller. Each fish seller 
must pay the fee at the time of fish landing/delivery by receiving from 
the fish buyer the net ex-vessel value, as defined at Sec.  660.111.
    (A) In the event of any post-delivery payment for fish, the fish 
seller must

[[Page 75281]]

pay, and the fish buyer must collect, at the time the amount of such 
post-landing/delivery payment, the fee that would otherwise have been 
due and payable at the time of initial fish landing/delivery.
    (B) When the fish buyer and fish seller are the same entity, that 
entity must comply with the requirements for both the fish seller and 
the fish buyer as specified in this section.
    (ii) Between the fish buyer and NMFS--(A) Deposit accounts. Each 
fish buyer shall maintain a segregated account at a federally insured 
financial institution for the sole purpose of depositing collected fee 
revenue from the cost recovery program specified in this section and 
disbursing the deposit principal directly to NMFS in accordance with 
paragraph (d)(1)(ii)(C) of this section.
    (B) Fee collection deposits. Each fish buyer, no less frequently 
than at the end of each month, shall deposit, in the deposit account 
established under paragraph (d)(1)(ii)(A) of this section, all fees 
collected, not previously deposited, that the fish buyer collects 
through a date not more than two calendar days before the date of 
deposit. The deposit principal may not be pledged, assigned, or used 
for any purpose other than aggregating collected fee revenue for 
disbursement to the Fund in accordance with paragraph (d)(1)(ii)(C) of 
this section. The fish buyer is entitled, at any time, to withdraw 
deposit interest, if any, but never deposit principal, from the deposit 
account for the fish buyer's own use and purposes.
    (C) Deposit principal disbursement. Not later than the 14th 
calendar day after the last calendar day of each month, or more 
frequently if the amount in the account exceeds the account limit for 
insurance purposes, the fish buyer shall disburse to NMFS the full 
deposit principal then in the deposit account. The fish buyer shall 
disburse deposit principal by electronic payment to the Fund subaccount 
to which the deposit principal relates. NMFS will announce information 
about how to make an electronic payment to the Fund subaccount in the 
notification on fee percentage specified in paragraph (b)(2) of this 
section. Each disbursement must be accompanied by a cost recovery form 
provided by NMFS. Recordkeeping and reporting requirements are 
specified in paragraph (d)(4) of this section and at Sec.  
660.113(b)(5) for the Shorebased IFQ Program and Sec.  660.113(c)(5) 
for the MS Coop Program. The cost recovery form will be available on 
the pay.gov Web site.
    (2) Fee payment and collection in the C/P Coop Program. Payment of 
fees for the calendar year at the fee percentage rate announced in 
paragraph (b)(2) of this section is due in the last quarter of the 
calendar year and no later than December 31 each year. The fish buyer 
is responsible for fee payment to NMFS. The fish seller and the fish 
buyer, as defined at Sec.  660.111, are considered the same entity in 
the C/P Coop Program. The fish buyer shall disburse to NMFS the full 
fee amount for the calendar year by electronic payment to the Fund 
subaccount. NMFS will announce information about how to make an 
electronic payment to the Fund subaccount in the notification on fee 
percentage specified in paragraph (b)(2) of this section. Each 
disbursement must be accompanied by a cost recovery form provided by 
NMFS. Recordkeeping and reporting requirements are specified in 
paragraph (d)(4) of this section and at Sec.  660.113(d)(5) for the C/P 
Coop Program. The cost recovery form will be available on the pay.gov 
Web site.
    (3) Failure to pay or collect--(i) Responsibility to notify NMFS. 
(A) If a fish buyer fails to collect the fee in the amount and manner 
required by this section, the fish seller shall then advise the fish 
buyer of the fish seller's fee payment obligation and of the fish 
buyer's cost recovery fee collection obligation. If the fish buyer 
still fails to properly collect the fee, the fish seller, within the 
next 7 calendar days, shall forward the fee to NMFS. The fish seller at 
the same time shall also advise NMFS in writing at the address in 
paragraph (d)(3)(i)(C) of this section of the full particulars, 
including:
    (1) The fish buyer's and fish seller's name, address, and telephone 
number,
    (2) The name of the fishing vessel from which the fish seller made 
fish delivery and the date of doing so,
    (3) The weight and ex-vessel value of each species of fish that the 
fish seller delivered, and
    (4) The fish buyer's reason, if known, for failing or refusing to 
collect the fee in accordance with this subpart;
    (B) Notifications must be mailed or faxed to: National Marine 
Fisheries Service, West Coast Region, Office of Management and 
Information, ATTN: Cost Recovery Notification, 7600 Sand Point Way NE., 
Seattle, WA 98115; Fax: 206-526-6426; or delivered to National Marine 
Fisheries Service at the same address.
    (ii) IAD, appeals, and final decision. If NMFS determines the fish 
buyer or other responsible party has not submitted a complete cost 
recovery form and corresponding payment by the due date specified in 
paragraphs (d)(1) and (2) of this section, NMFS will at any time 
thereafter notify the fish buyer or other responsible party in writing 
via an initial administrative determination (IAD) letter.
    (A) IAD. In the IAD, NMFS will state the discrepancy and provide 
the person 30 calendar days to either pay the specified amount due or 
appeal the IAD in writing.
    (B) Appeals. If the fish buyer appeals an IAD, the appeal must be 
postmarked, faxed, or hand delivered to NMFS no later than 30 calendar 
days after the date on the IAD. If the last day of the time period is a 
Saturday, Sunday, or Federal holiday, the time period will extend to 
the close of business on the next business day. The appeal must be in 
writing, must allege credible facts or circumstances, and must include 
any relevant information or documentation to support the appeal. 
Appeals must be mailed, faxed, or hand-delivered to: National Marine 
Fisheries Service, West Coast Region, Office of Management and 
Information, ATTN: Cost Recovery Appeals, 7600 Sand Point Way NE., 
Seattle, WA 98115; Fax: 206-526-6426; or delivered to National Marine 
Fisheries Service at the same address.
    (C) Final decision--(1) Final decision on appeal. For the appeal of 
an IAD, the Regional Administrator shall appoint an appeals officer. 
After determining there is sufficient information and that all 
procedural requirements have been met, the appeals officer will review 
the record and issue a recommendation on the appeal to the Regional 
Administrator, which shall be advisory only. The recommendation must be 
based solely on the record. Upon receiving the findings and 
recommendation, the Regional Administrator, acting on behalf of the 
Secretary of Commerce, will issue a written decision on the appeal 
which is the final decision of the Secretary of Commerce.
    (2) Final decision if there is no appeal. If the fish buyer does 
not appeal the IAD within 30 calendar days, NMFS will notify the fish 
buyer or other responsible party in writing via a final decision 
letter. The final decision will be from the Regional Administrator 
acting on behalf of the Secretary of Commerce.
    (3) If the final decision determines that the fish buyer is out of 
compliance, the final decision will require payment within 30 calendar 
days. If such payment is not received within 30 calendar days of 
issuance of the final decision, NMFS will refer the matter to the 
appropriate authorities for purposes of collection. As of the date of 
the final decision if the fish buyer is out of compliance, NMFS will 
not approve a permit renewal for an MS permit or a C/

[[Page 75282]]

P-endorsed limited entry trawl permit until all cost recovery fees due 
have been paid as specified at Sec.  660.25(b)(4)(i)(G); or reissue an 
IFQ first receiver site license until all cost recovery fees due have 
been paid, as specified at Sec.  660.140(f)(4).
    (4) Recordkeeping, reporting, and audits--(i) Recordkeeping. Each 
fish buyer and fish seller shall retain records in accordance with 
Sec.  660.113(a). In addition, fish buyers shall retain records in 
accordance with the following paragraphs: Sec.  660.113(b)(5) for the 
Shorebased IFQ Program, Sec.  660.113(c)(5) for the MS Coop Program, 
and Sec.  660.113(d)(5) for the C/P Coop Program.
    (ii) Reporting, including annual report. Each fish buyer shall 
submit reports in accordance with the following paragraphs: Sec.  
660.113(b)(5) for the Shorebased IFQ Program, Sec.  660.113(c)(5) for 
the MS Coop Program, and Sec.  660.113(d)(5) for the C/P Coop Program. 
The fish buyer must submit a cost recovery form along with fee payment 
to NMFS. By March 31 each year, fish buyers in the MS Coop Program must 
submit an annual report to NMFS containing information from the 
preceding calendar year as specified at Sec.  660.113(c)(5).
    (iii) Audits. NMFS or its agents may audit, in whatever manner NMFS 
determines reasonably necessary for the duly diligent administration of 
the cost recovery program, the financial records of fish buyers and 
fish sellers in order to ensure proper fee payment, collection, 
deposit, disbursement, accounting, recordkeeping, and reporting. Fish 
buyers and fish sellers must respond to any inquiry by NMFS or a NMFS 
agent within 20 calendar days of the date of issuance of the inquiry, 
unless an extension is granted by NMFS. Fish buyers and fish sellers 
shall make all relevant records available to NMFS or NMFS' agents at 
reasonable times and places and promptly provide all requested 
information reasonably related to these records. NMFS may employ a 
third party agent to conduct the audits. The NMFS auditor may review 
and request copies of additional data provided by the submitter, 
including but not limited to, previously audited or reviewed financial 
statements, worksheets, tax returns, invoices, receipts, and other 
original documents substantiating the data submitted.

0
8. In Sec.  660.140:
0
a. Revise paragraph (a)(2);
0
b. Add paragraphs (b)(1)(x) and (b)(2)(ix);
0
c. Add text to reserved paragraph (e)(8);
0
d. Revise paragraphs (f)(4) and (6); and
0
d. Add paragraph (f)(10).
    The revisions and additions read as follows:


Sec.  660.140  Shorebased IFQ Program.

    (a) * * *
    (2) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (x) Fish sellers must pay cost recovery program fees, as specified 
at Sec.  660.115.
    (2) * * *
    (ix) Collect and remit to NMFS cost recovery program fees, as 
specified at Sec.  660.115.
* * * * *
    (e) * * *
    (8) Cost recovery. The fish seller, as defined at Sec.  660.111, is 
subject to the cost recovery program specified at Sec.  660.115.
    (f) * * *
    (4) Initial administrative determination. For all complete 
applications, NMFS will issue an IAD that either approves or 
disapproves the application. If approved, the IAD will include a first 
receiver site license. If disapproved, the IAD will provide the reasons 
for this determination. NMFS will not reissue a first receiver site 
license until the required cost recovery program fees, as specified at 
Sec.  660.115, have been paid. The IAD, appeals, and final decision 
process for the cost recovery program is specified at Sec.  
660.115(d)(3)(ii).
* * * * *
    (6) Reissuance in subsequent years. Existing license holders must 
reapply annually. If the existing license holder fails to reapply, the 
first receiver's site license will expire as specified in paragraph 
(f)(5) of this section. The IFQ first receiver will not be authorized 
to receive IFQ species from a vessel if their first receiver site 
license has expired. NMFS will not reissue a first receiver site 
license until all required cost recovery program fees, as specified at 
Sec.  660.115, associated with that license have been paid.
* * * * *
    (10) Cost recovery. The first receiver site license holder is 
considered the fish buyer as defined at Sec.  660.111, and must comply 
with the cost recovery program specified at Sec.  660.115.
* * * * *

0
9. In Sec.  660.150:
0
a. Revise paragraphs (a)(4) and (b)(1)(ii)(A);
0
b. Add paragraphs (b)(1)(ii)(D) and (b)(2)(ii)(C);
0
c. Remove paragraph (d)(5);
0
d. Revise paragraph (f)(6); and
0
e. Add paragraph and (g)(7).
    The revisions and additons read as follows:


Sec.  660.150  Mothership (MS) Coop Program.

    (a) * * *
    (4) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (A) Recordkeeping and reporting. Maintain a valid declaration as 
specified at Sec.  660.13(d); maintain records as specified at Sec.  
660.113(a); and maintain and submit all records and reports specified 
at Sec.  660.113(c) including, economic data, scale tests records, 
cease fishing reports, and cost recovery.
* * * * *
    (D) Cost recovery program. Collect and remit to NMFS cost recovery 
program fees as specified at Sec.  660.115.
* * * * *
    (2) * * *
    (ii) * * *
    (C) Cost recovery program. Vessel must pay cost recovery program 
fees, as specified at Sec.  660.115.
* * * * *
    (f) * * *
    (6) Cost recovery. The owner of a vessel registered to an MS 
permit, the operator of a vessel registered to an MS permit, and the 
owner of the MS permit registered to that vessel, are considered to be 
the fish buyer as defined at Sec.  660.111, and must comply with the 
cost recovery program specified at Sec.  660.115.
    (g) * * *
    (7) Cost recovery. The fish seller, as defined at Sec.  660.111, is 
subject to the cost recovery program specified at Sec.  660.115.
* * * * *

0
10. In Sec.  660.160:

[[Page 75283]]

0
a. Revise paragraphs (a)(4) and (b)(1)(ii)(A);
0
b. Add paragraph (b)(1)(ii)(D);
0
c. Remove paragraph (d)(5);
0
d. Add paragraph (e)(5); and
0
e. Remove paragraph (e)(6).
    The revisions and additions read as follows:


Sec.  660.160  Catcher/processor (C/P) Coop Program.

    (a) * * *
    (4) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (A) Recordkeeping and reporting. Maintain a valid declaration as 
specified at Sec.  660.13(d); maintain records as specified at Sec.  
660.113(a); and maintain and submit all records and reports specified 
at Sec.  660.113(d) including, economic data, scale tests records, 
cease fishing reports, and cost recovery.
* * * * *
    (D) Cost recovery program. Collect and remit to NMFS cost recovery 
program fees, as specified at Sec.  660.115.
* * * * *
    (e) * * *
    (5) Cost recovery. The owner of a vessel registered to a C/P-
endorsed limited entry trawl permit, the operator of a vessel 
registered to a C/P-endorsed limited entry trawl permit, and the owner 
of the C/P-endorsed limited entry trawl permit registered to that 
vessel, are considered both the fish buyer and the fish seller as 
defined at Sec.  660.111, and must comply with the cost recovery 
program specified at Sec.  660.115.
* * * * *
[FR Doc. 2013-29546 Filed 12-10-13; 8:45 am]
BILLING CODE 3510-22-P