Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone Pacific halibut and sablefish; individual fishing quota program; modified hired skipper requirements,
[Federal Register: December 16, 1998 (Volume 63, Number 241)]
[Proposed Rules]
[Page 69256-69259]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de98-30]
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 679
[Docket No. 980923246-8246-01; I.D. 071598A]
RIN 0648-AK20
Fisheries in the Exclusive Economic Zone Off Alaska; Modified Hired Skipper Requirements for the Individual Fishing Quota Program
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
ACTION: Proposed rule; request for comments.
SUMMARY: NMFS proposes a regulatory amendment to the Individual Fishing Quota (IFQ) Program for fixed gear Pacific halibut and sablefish fisheries in and off of Alaska. This action would require an initial recipient of certain categories of quota share (QS) who wishes to hire a skipper to fish the IFQ derived from that QS to own a minimum of 20- percent interest in the harvesting vessel. This 20-percent minimum ownership requirement
[[Page 69257]]
would not apply to a QS holder who hired a skipper prior to April 17, 1997, continues to own that vessel at no less percentage of ownership interest than was held on April 17, 1997, and has not acquired additional QS through transfer after September 23, 1997. This action is necessary to promote the Council's intent to provide for an owner- operator catcher vessel fleet in the halibut and sablefish fixed gear fisheries off Alaska and is intended to further the objectives of the IFQ Program.
DATES: Comments on the proposed rule and supporting documents must be received by January 15, 1999.
ADDRESSES: Comments must be sent to Sue Salveson, Assistant Regional Administrator for Sustainable Fisheries, Alaska Region, NMFS, Room 453, 709 West 9th Street, Juneau, AK 99801, or P.O. Box 21668, Juneau, AK 99802, Attention: Lori J. Gravel. Copies of the Regulatory Impact Review/Initial Regulatory Flexibility Analysis (RIR/IRFA) prepared for this proposed action also may be obtained from the same address.
FOR FURTHER INFORMATION CONTACT: James Hale, 907-586-7228.
SUPPLEMENTARY INFORMATION:
Background
The IFQ Program is a limited access system for managing the fixed gear Pacific halibut (Hippoglossus stenolepis) and sablefish (Anoplopoma fimbria) fisheries in waters of the Exclusive Economic Zone off of Alaska. The North Pacific Fishery Management Council (Council), under authority of the Magnuson-Stevens Fishery Conservation and Management Act and the Northern Pacific Halibut Act of 1982, recommended the IFQ Program, which NMFS implemented in 1995. The IFQ Program is designed to reduce excessive fishing capacity, while maintaining the social and economic character of the fixed gear fishery and the coastal communities where many of these fishermen are based. To this end, various program constraints limit consolidation of QS and ensure that those who actually harvest the resource retain harvesting privileges. The Fishery Management Plan for Groundfish of the Gulf of Alaska and the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area (FMPs) and IFQ implementing regulations prohibit all leasing of IFQ derived from QS in categories B, C, and D (QS that authorizes the harvest but not the processing of IFQ species on board the vessel). Further, they require that holders of such QS be aboard the vessel harvesting IFQ species during all fishing operations.
An exception to this owner-aboard provision allows initial recipients of B, C, or D category QS to employ a hired skipper to fish his or her IFQ provided that the QS holder owns the vessel on which the IFQ is being fished. This exception was created to allow fishermen who had operated their fishing businesses in this manner before the IFQ Program was implemented to have some flexibility to continue operating this way under the IFQ Program. While the IFQ Program promotes an owner-operator fixed gear fishery for sablefish and halibut, this exception allows initial recipients of QS to remain ashore while a hired skipper harvests their IFQ. By limiting this exception to initial recipients, the Council designed the hired skipper provision to expire with the eventual transfer of all QS out of the possession of initial recipients.
The current regulations do not specify any minimum ownership interest that must be acquired before the QS holder may hire a skipper to harvest the IFQ. An initial recipient of B, C, or D category QS who acquires even a nominal ownership of a vessel may hire a skipper to fish his or her IFQ on that vessel. In the first 2 years of the IFQ Program, the hired skipper provision occasionally has been used by initial allocation QS holders who may not have employed hired skippers prior to the IFQ Program but who acquire as little as 0.1 percent ownership interest in a vessel expressly for the purpose of hiring a skipper. This practice, if unchecked, would compromise the Council's intent to have an owner-operator fishery in which the QS holders actively participate in harvesting operations.
In November 1995, the IFQ Industry Implementation Team recommended that the current regulations be revised to require initial recipients of QS to hold a minimum of 51 percent or a controlling interest in a vessel in order to take advantage of the hired skipper provisions. In April 1997, and again in June 1997, the Council reviewed analyses of various options and alternatives including requiring minimum vessel interest of 5, 20, 49, or 51 percent. At its meeting in September 1997, the Council took final action to recommend this proposed action.
If NMFS approves this proposed action, initial recipients of B, C, or D category QS who wish to hire skippers to fish the IFQ derived from their QS would be required to own a minimum of 20 percent interest in the vessel on which the IFQ species are being harvested. This minimum vessel ownership interest would not be required of QS holders who have hired skippers prior to April 17, 1997, the date of the Council's first review of the analysis of this issue, provided that the QS holder's percentage of vessel ownership does not fall below the percentage held April 17, 1997, and the QS holder has not acquired additional QS through transfer after September 23, 1997, the date of the Council's final action to recommend this regulatory change.
The rationale for setting the minimum percentage of vessel ownership at 20 percent is to allow for most equal-interest partnerships, such as those between spouses. Joint ownership by several parties each holding a substantial equal interest in the vessel would put each owner below the 51 percent controlling interest originally proposed by the IFQ Industry Implementation Team. However, the analysis for this issue suggests that some instances of vessel ownership below 20 percent may also represent business arrangements in which the QS holder has acquired a substantial ownership interest in the vessel on which the IFQ is to be harvested. Therefore, the Council includes the grandfather provision in this proposed action that would allow percentages of vessel ownership existing prior to April 17, 1997, to continue with regard to the hired skipper provisions.
The grandfather provision itself would carry restrictions. By requiring QS holders who held lower percentages of vessel interest prior to April 17, 1997, to continue to hold at least the percentage held prior to that date, the Council intends to prevent those grandfathered under this proposed action from divesting themselves of all but nominal interest in a vessel. Moreover, because an initial recipient of QS may hire a skipper to fish not only the QS acquired as an initial allocation but also any QS acquired through transfer, the proposed action would limit the maximum amount of QS that could be used under the grandfather provision to levels held prior to September 23, 1997-the date of the Council's final action on this proposal. This restriction would assure that exemption from the 20 percent requirement would be granted only to pre-existing arrangements regarding levels of both vessel ownership and QS holdings.
Examples
(1) If an initial allocation QS holder owns 15 percent interest in a vessel and hired a skipper to fish his IFQ on that
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vessel prior to April 17, 1997, then the QS holder may continue to hire a skipper to fish his IFQ on that vessel provided that the QS holder's percentage of ownership in that particular vessel does not fall below 15 percent. If the QS holder's percentage of ownership in that vessel falls, for example, to 14 percent, the QS holder would no longer be allowed to hire a skipper to fish his IFQ on that vessel. The QS holder would be required either to be on board the vessel harvesting his IFQ during all fishing operations or to acquire additional ownership interest amounting to a total minimum of 20 percent interest in the vessel. By allowing his ownership interest in the vessel to fall below the percentage held prior to April 17, 1997, the QS holder would relinquish his grandfathered status under this provision.
(2) If the same QS holder in example (1) acquires an ownership interest in an additional vessel after April 17, 1997, then the QS holder must own a minimum of 20 percent interest in that particular vessel in order to hire a skipper to fish the IFQ on that vessel. The QS holder may continue to hire a skipper to fish for IFQ on the vessel in example (1) provided the QS holder continues to hold no less percentage of ownership in that vessel than he or she held on April 17, 1997. The grandfathered status is specific both to the vessel and to percentage of ownership owned on April 17, 1997.
(3) If an initial allocation QS holder owned a 15 percent interest in a vessel and hired a skipper to fish his IFQ on that vessel prior to April 17, 1997, but relinquishes ownership in that particular vessel and acquires ownership interest in another vessel after April 17, 1997, then the QS holder must own a minimum of 20 percent interest in the newly acquired vessel to hire a skipper to fish the IFQ on that vessel.
(4) If an initial allocation QS holder owned 15 percent interest in a vessel and hired a skipper to fish his IFQ on that vessel prior to April 17, 1997, but acquired additional QS through transfer after September 23, 1997, then that QS holder must acquire an additional ownership interest in that same vessel of at least 5 percent, for a total ownership interest of at least 20 percent, to hire a skipper to fish his IFQ on that vessel.
A corporation or partnership that received an initial allocation of QS assigned to categories B, C, or D may fish the IFQ resulting from that QS and any additional QS acquired within the limitations of Sec. 679.42 provided the corporation or partnership owns a minimum of 20 percent interest in the vessel on which its IFQ is being fished, and it is represented on the vessel by a master employed by the corporation or partnership that received the initial allocation of QS. This authorization to fish IFQ is not transferrable. It is noted that the QS assigned to categories B, C, and D for halibut in IFQ regulatory area 2C or for sablefish in the IFQ regulatory area east of 140 deg. W. long. must be to an individual pursuant to Sec. 679.41 (c) of this part and be used pursuant to Sec. 679.41 (c) and (i).
The additional restrictions that this proposed action would impose on those wishing to hire skippers to fish IFQ do not deny or prevent initial recipients of category B, C, or D QS from enjoying the benefits of the IFQ derived from their QS. A QS holder who does not want to comply with the minimum ownership requirements can simply be on board the vessel himself for the harvesting of his IFQ, in which case the QS holder would not have to possess any ownership interest in a vessel. An ``owner-on-board'' IFQ fishery remains the basic intent of the Council for category B, C, and D QS.
Classification
This proposed rule has been determined to be not significant for purposes of E.O. 12866.
NMFS prepared an IRFA that describes the impact this proposed rule, if adopted, would have on small entities. The IRFA identifies the small entities affected by this action and analyzes the economic impact on these small entities.
This proposed action would potentially affect approximately 5,000 persons who continue to hold initial allocations of category B, C, or D QS, all of which are classified as small entities as well as skippers who hire themselves out to operate fishing vessels. For purposes of the Regulatory Flexibility Act, NMFS generally considers a ``substantial number'' to mean 20 percent of the affected small entities; in this instance, initial allocation QS holders and hired skippers. Primarily, this rule would affect those who hired skippers after April 17, 1997, and who did not possess the minimum 20 percent of ownership interest in their vessel. In 1997, out of a total number of 221 applications by QS owners claiming vessel ownership for purposes of hiring a skipper, the 49 vessel owners claiming vessel ownership less than 20 percent represent the vessel owners that would be chiefly impacted by this action.
The acquisition of additional QS represents a substantial financial investment. No data are available on how many, if any, additional holders of initially allocated QS might have planned to hire skippers in the future. Nor are data available concerning what percentages of vessel ownership such QS holders might have. Fishermen for whom vessel ownership is either financially prohibitive or would entail a substantial increase in capital costs may, as is intended by the Council, harvest their IFQ themselves, rather than hire skippers. However, NMFS has no information on whether it would be possible or practical for these QS holders to do so. If the QS holders who hired skippers in the past and need to acquire more vessel ownership to continue to hire skippers do acquire additional vessel ownership interest, the number of hired skippers would not change. If some QS holders do not acquire more ownership to continue to hire skippers, the services of some skippers may not be retained. NMFS has no information on the potential number of skippers available for hire or the potential number of QS holders who may acquire additional vessel interest and so not retain the services of hired skippers. For these reasons, it is possible that this action could result in a decrease of more than 5 percent in annual gross revenues for skippers whose services are not retained; it is also possible that this action could result in an increase of more than 5 percent in total costs of production or increases in compliance or capital costs for 20 percent or more of the affected small entities for any QS holders who decide to acquire ownership interest in a vessel rather than fish their IFQ themselves.
The Council considered a range of alternatives for addressing the issue of nominal or minimal vessel ownership by QS holders who hire skippers. Minimum ownership percentages of 5 percent, 20 percent, 49 percent, and 51 percent were analyzed and reviewed, before recommending the present proposed action. The Council decided to recommend a 20 percent minimum because a 5 percent minimum would continue to allow minimal vessel ownership and not solve the problem, and options for requiring minimum ownership of 49 and 51 percent would have solved the problem but would have been more burdensome to industry, and disallowing the use of hired skippers by all or many QS holders who own vessels in equal partnerships.
This action, if approved, could have a significant economic impact on a substantial number of small entities for purposes of the Regulatory Flexibility Act, and an Initial Regulatory Flexibility
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Analysis has been prepared. A copy of this analysis is available from NMFS (see ADDRESSES).
List of Subjects in 50 CFR Part 679
Alaska, Fisheries, Reporting and recordkeeping requirements.
Dated: December 10, 1998. Andrew Rosenberg, Deputy Assistant Administrator for Fisheries, National Marine Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 679 is proposed to be amended as follows:
PART 679--FISHERIES IN THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA
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The authority citation for part 679 continues to read as follows:
Authority: 16 U.S.C. 773 et seq., 1801 et seq., and 3631 et seq.
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In Sec. 679.42, paragraph (i)(1) and the heading and the first sentence of the introductory text of paragraph (j) are revised and paragraph (j)(5) is added to read as follows:
Sec. 679.42 Limitations on use of QS and IFQ.
* * * * *
(i) * * *
(1) An individual who received an initial allocation of QS assigned to categories B, C, or D does not have to be on board the vessel on which his or her IFQ is being fished or sign IFQ landing reports if that individual owns at least a 20 percent interest in the vessel, and is represented on the vessel by a master employed by that individual. This minimum 20 percent ownership requirement does not apply to any individual who received an initial allocation of QS assigned to categories B, C, or D and who, prior to April 17, 1997, employed a master to fish any of the IFQ issued to that individual, provided the individual continues to own the vessel from which the IFQ is being fished at no lesser percentage of ownership interest than was held on April 17, 1997, and provided that individual has not acquired additional QS through transfer after September 23, 1997. * * * * *
(j) Use of IFQ resulting from QS assigned to vessel categories B, C, or D by corporations and partnerships. Except as provided in paragraph (j)(5) of this section, a corporation or partnership that received an initial allocation of QS assigned to categories B, C, or D may fish the IFQ resulting from that QS and any additional QS acquired within the limitations of this section provided the corporation or partnership owns at least a 20 percent interest in the vessel on which its IFQ is being fished, and it is represented on the vessel by a master employed by the corporation or partnership that received the initial allocation of QS. * * * * * * * *
(5) A corporation or partnership that received an initial allocation of QS assigned to categories B, C, or D and that, prior to April 17, 1997, employed a master to fish any of the IFQ issued to that corporation or partnership may continue to employ a master to fish its IFQ on a vessel owned by the corporation or partnership provided that the corporation or partnership continues to own the vessel from which the IFQ is being fished at no lesser percentage of ownership interest than was held on April 17, 1997, and provided that corporation or partnership did not acquire additional QS through transfer after September 23, 1997. * * * * *
[FR Doc. 98-33319Filed12-15-98; 8:45 am]
BILLING CODE 3510-22-F
