NACO

National Association of Charterboat Operators

Limitations on Use of Quota Share and the Individual Fishing Quota Program

NMFS proposes to amend the hired master regulations of the Individual Fishing Quota Program (IFQ Program) for the fixed-gear commercial Pacific halibut and sablefish fisheries in the Bering Sea and Aleutian Islands (BSAI) and the Gulf of Alaska (GOA). The IFQ Program allows initial recipients of catcher vessel halibut and sablefish quota share (QS) to hire a vessel master to harvest an annual allocation of individual fishing quota (IFQ) derived from the QS. If this action is approved, an initial QS recipient would not be allowed to use a hired master to harvest IFQ derived from catcher vessel QS that they received by transfer after February 12, 2010, with a limited exception for small amounts of QS. This action is necessary to maintain a predominantly owner-operated fishery. In addition, this action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the Northern Pacific Halibut Act of 1982, the Fishery Management Plan for Groundfish of the BSAI, the Fishery Management Plan for Groundfish of the GOA, and other applicable law

Comments must be received no later than 5 p.m., Alaska local time, on May 28, 2013.

 ADDRESSES: You may submit comments on this document, identified by FDMS 
Docket Number NOAA-NMFS-2012-0185, by any of the following methods:
     Electronic Submission: Submit all electronic public 
comments via the Federal e-Rulemaking Portal Web site at 
www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2012-0185, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
     Mail: Submit written comments to Glenn Merrill, Assistant 
Regional Administrator, Sustainable Fisheries Division, Alaska Region, 
NMFS, Attn: Ellen Sebastian. P.O. Box 21668, Juneau, AK 99802-1668.
     Fax: (907) 586-7557; Attn: Ellen Sebastian.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by NMFS. All comments received are a part of the 
public record and will generally be posted for public viewing on 
www.regulations.gov without change. All personal identifying 
information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. NMFS will accept anonymous 
comments (enter ``N/A'' in the required fields if you wish to remain 
anonymous). Attachments to electronic comments will be accepted in 
Microsoft Word, Excel, or Adobe PDF file formats only.
    An electronic copy of the Regulatory Impact Review/Initial 
Regulatory Flexibility Analysis (RIR/IRFA) for this proposed regulatory 
amendment is available from http://www.regulations.gov or from the NMFS 
Alaska Region Web site at http://alaskafisheries.noaa.gov.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
proposed rule may be submitted to NMFS and by email to This email address is being protected from spambots. You need JavaScript enabled to view it. or fax to (202) 395-7285.
FOR FURTHER INFORMATION CONTACT: Peggy Murphy, (907) 586-7228.
SUPPLEMENTARY INFORMATION: 
Background
    NMFS proposes to modify the hired master regulations for management 
of the IFQ Program for the fixed-gear commercial fisheries for Pacific 
halibut and sablefish in waters off Alaska (IFQ Program). The IFQ 
Program is a limited access system for managing the fixed-gear halibut 
(Hippoglossus stenolepis) and sablefish (Anoplopoma fimbria) fisheries 
off Alaska. The IFQ Program was recommended by the North Pacific 
Fishery Management Council (Council) in 1992 and implementing rules 
were published by NMFS on November 9, 1993 (58 FR 59375). Fishing under 
the program began on March 15, 1995.
    The IFQ Program for the halibut fishery is implemented by Federal 
regulations at 50 CFR part 300, subpart
[[Page 24708]]
E, and 50 CFR part 679 under the authority of the Northern Pacific 
Halibut Act of 1982 (Halibut Act). Fishing for Pacific halibut is 
managed by the International Pacific Halibut Commission (IPHC) and the 
Council under the Halibut Act. Section 773(c) of the Halibut Act 
authorizes the Council to develop regulations that are in addition to, 
and not in conflict with, approved IPHC regulations. Such Council-
recommended regulations may be implemented by NMFS only after approval 
by the Secretary of Commerce (Secretary).
    The IFQ Program for the sablefish fishery is implemented by the 
Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP), 
the Fishery Management Plan for Groundfish of the Bering Sea and 
Aleutian Islands Management Area (BSAI FMP), and Federal regulations at 
50 CFR part 679 under the authority of the Magnuson-Stevens Fishery 
Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 
et seq.). The Council recommended and NMFS approved the GOA FMP in 1978 
and the BSAI FMP in 1982. Regulations implementing the FMPs and general 
regulations governing the IFQ Program appear at 50 CFR part 679.
    The IFQ Program was intended primarily to reduce excessive fishing 
capacity in the commercial halibut and sablefish fixed-gear fisheries. 
The Council and NMFS designed the IFQ Program to maintain the social 
and economic character of the fixed-gear fisheries and the coastal 
communities where many of these fisheries are based. Access to the 
halibut and sablefish fisheries is limited to those persons holding QS. 
The QS holder is the person authorized to exercise the harvesting 
privilege in specific regulatory areas. Under the program, NMFS 
initially issued QS to qualified applicants (initial recipients) that 
owned or leased a vessel that made fixed-gear landings of halibut or 
sablefish during the qualifying period from 1984 to 1990 for halibut, 
and from 1985 to 1990 for sablefish. Initial recipients received QS 
allocations based on their harvest during the qualifying period, the 
area of the harvest, and the type of vessel used to land the harvest. 
Quota shares equate to individual harvesting privileges that are given 
effect on an annual basis through the issuance of IFQ permits. An 
annual IFQ permit authorizes the permit holder to harvest a specified 
amount of IFQ halibut or sablefish in a regulatory area.
    All QS are categorized according to the size of the vessel (A, B, 
C, or D) from which IFQ halibut and sablefish may be fished and whether 
that IFQ halibut or sablefish may be processed aboard the vessel. The 
vessel categories were designed to ensure that the IFQ Program did not 
radically change the structure of the fleet in place at the time the 
IFQ Program was implemented. These vessel size restrictions prevent the 
fishery from being dominated by large vessels or by any particular 
vessel category. A description of the specific vessel size categories 
is provided in regulation at 50 CFR part 679 and is not repeated here.
    Quota share is transferrable from one person to another. To limit 
consolidation and maintain diversity of the IFQ fleet, the Council 
recommended and NMFS implemented limits on the transfer (sale and 
purchase) and use of QS. For example, the IFQ Program only allows 
persons who were originally issued catcher vessel QS (category B, C, 
and D halibut QS and category B and C sablefish QS), or persons who 
qualify as IFQ crew members, to hold and transfer catcher vessel QS.
    As the IFQ Program developed, the Council recommended, and NMFS 
implemented, provisions such as QS use caps, vessel use caps, and a 
block program to limit QS acquisitions. These provisions were intended 
to maintain a diverse owner-operated fleet and to prevent excessive 
consolidation of QS. The QS use caps limit the amount of QS that a 
person may hold, while the vessel use cap limits the total amount of 
IFQ pounds that can be landed from a vessel during a season. 
Additionally, all initially issued QS that yielded relatively small 
amounts of IFQ annually was ``blocked'' or issued as an inseparable 
unit. Quota share blocks preserve small amounts of QS that are 
available at a relatively low cost to promote purchase of QS by crew 
members and new entrants to the IFQ fisheries. The block program also 
includes a ``sweep-up'' (consolidation) provision designed to minimize 
the number of very small blocks of QS that yield such a small amount of 
IFQ that they are economically disadvantageous to harvest. The 
consolidation provision allows small individual QS blocks to be 
permanently consolidated into larger QS blocks as long as the resulting 
QS block does not exceed consolidation limits specified in regulation.
    The IFQ program also requires IFQ holders to be onboard the catcher 
vessel to maintain a predominantly ``owner-operated'' fishery with a 
narrow exemption for vessel category A QS holders and initial 
recipients of QS category B, C, and D QS. Vessel category A QS 
(catcher/processor QS) are not subject to the owner-operated 
requirement.
    Vessel category A QS allows operators who had caught and processed 
catch at-sea during the QS qualifying years to continue to operate as 
catcher/processors. These catcher/processor vessels were not 
historically owner-operated prior to the implementation of the IFQ 
Program. Therefore, the IFQ Program did not seek to change the nature 
of operations in the catcher/processor fleet to limit the use of hired 
masters. Overall, only a small proportion of all QS is issued as vessel 
category A QS.
    The requirement that individual holders of catcher vessel QS 
(vessel categories B, C, or D) be onboard the vessel during all IFQ 
fishing ensures that QS remain largely in the hands of active 
fishermen. However, the IFQ Program allows all initial recipients of 
QS, including individuals and non-individual entities, to hire masters 
to fish the IFQ derived from their QS. Prior to the implementation of 
the IFQ Program, many individual fishermen had conducted their fishing 
businesses by hiring masters to skipper their fishing vessels. The IFQ 
Program allows initial recipients of catcher vessel QS to continue to 
employ hired masters to fish their IFQ, but only if the initial 
recipient maintains a minimum ownership interest in the vessel on which 
the IFQ halibut and sablefish are harvested. By limiting this exception 
to initial recipients, the Council anticipated that individual initial 
recipients would eventually retire from fishing and that non-individual 
initial recipients would dissolve or change composition over time. 
Eventually, QS would be transferred to other qualified individuals and 
the IFQ fisheries would become almost entirely owner-operated.
Need for Action
    In February 2010, the Council received public testimony indicating 
that some QS initial recipients were increasingly using hired masters 
rather than continuing to personally operate their vessels when fishing 
with QS. In addition, the Council received information that initial 
recipients were purchasing increasing amounts of QS, and the IFQ 
derived from that purchased QS was being fished by hired masters. The 
Council was concerned about the apparent QS consolidation and reduced 
opportunity for new entrants to the fishery. The Council determined 
that the transition to a predominantly owner-operated fishery has been 
unreasonably delayed because the ability to hire a master applies to 
the QS holder and not the QS itself. This allows initial recipients to 
hire masters to harvest IFQ derived not only from
[[Page 24709]]
their initially issued QS, but also IFQ derived from any QS received by 
transfer after initial issuance.
    At subsequent meetings, the Council examined IFQ Program data 
detailing the use of hired masters, changes in QS holdings of initial 
recipients, QS transfers, and the rate of new entry into the fishery. 
Section 5.2 of the RIR/IRFA prepared for this proposed action (see 
ADDRESSES) indicates the use of hired masters has increased 
significantly above levels that existed at the start of the IFQ 
Program. Between 1998 and 2009, the number of individual initial 
recipients who hire masters in the halibut fishery increased from 110 
to 210 (a 91 percent increase), while in the sablefish fishery the 
number of individual initial recipients using hired masters increased 
from 46 to 91 (a 98 percent increase). The percentage of halibut IFQ 
landed by hired masters increased from 7.9 percent of the total IFQ 
landings in 1998 to 19.3 percent in 2009. Similarly, the percentage of 
sablefish IFQ landed by hired masters increased from 7.7 percent of the 
total IFQ landings in 1998 to 15.0 percent in 2009. Table 50 in section 
5.2 of the RIR/IRFA also shows that QS is being consolidated among 
individual and non-individual initial recipients in most halibut and 
sablefish management areas. The number of initial recipients has 
decreased in the past 10 years, while the average holdings of those QS 
holders have increased. Thus, QS has consolidated among fewer QS 
holders who hire masters to fish their QS. In addition, some initial 
recipients that had not previously hired a master are now doing so, and 
some that had previously hired a master have increased the amount of QS 
they hold for use by a hired master or are using masters for a higher 
percentage of their landings. Finally, section 5.2 of the RIR/IRFA 
shows that the rates at which initial recipients of halibut and 
sablefish QS are divesting themselves of QS and exiting the fishery 
have declined over the last 5 years.
    After receiving public testimony and reviewing the analysis at its 
April 2011 meeting, the Council determined that it is likely that 
several factors are inhibiting new entrants from acquiring QS and 
slowing the transition to a predominantly owner-operated fishery. These 
factors include the increased use of hired masters, increased holdings 
of QS by initial recipients, and decreased numbers of initial QS 
recipients divesting their QS holdings. The Council determined that 
evolution to an owner-operated program is occurring at a slower pace 
than was originally envisioned and is therefore inhibiting achievement 
of the Council's objectives for the IFQ Program. The Council determined 
that the absence of a limitation on the use of hired masters could 
further delay this evolution. To address this concern, the Council 
recommended, and this proposed rule would implement, regulations that 
would prohibit the use of a hired master to fish IFQ halibut or 
sablefish derived from vessel category B, C, or D QS received by 
transfer after February 12, 2010, with some exceptions described later 
in this proposed rule.
    At final action, the Council set February 12, 2010, as the date 
because it is the date that the Council adopted its problem statement 
for the proposed action. At final action, the Council concluded that 
this date would reduce an initial recipient's incentive to purchase 
additional QS that could be fished by hired masters. The Council was 
concerned that QS purchases occurring before the proposed action's 
implementation would frustrate rather than support the progress toward 
an owner-operated fleet.
    The Council acknowledged that selecting this date to limit the use 
of hired masters might affect some individual and non-individual QS 
holders who may have been unaware of the Council's action or who may 
have been unable to complete their purchase of QS prior to February 12, 
2010. The Council considered alternate dates after February 12, 2010. 
The Council rejected these alternatives because dates after February 
12, 2010, could allow initial recipients to further consolidate their 
holdings of QS, obstructing the goals of the Council to limit further 
increases in the amount of IFQ harvested by hired masters. The Council 
also considered alternatives to delay implementation for the proposed 
action to provide additional time for affected QS holders to evaluate 
how it would affect their individual business plans. The Council 
rejected these alternatives, noting that delaying the implementation of 
this regulation would also frustrate the Council's overall policy goal 
of encouraging a transition from initial QS recipients using hired 
masters to an owner-operated fishery.
    The Council determined that the elapsed time between its 
recommendation and the implementation of the proposed action would 
provide a sufficient grace period for initial QS recipients to make any 
necessary changes to their business plans. The Council noted that under 
the proposed action, initial QS recipients would have options for using 
QS received by transfer after February 12, 2010. Specifically, initial 
recipients who received catcher vessel QS after February 12, 2010, 
could choose to sell those QS to other halibut and sablefish IFQ 
fishery participants, or to new entrants into the fishery. Other than 
selling the QS, the options and associated impacts differ between 
individual and non-individual initial recipients. An individual initial 
recipient who receives catcher vessel QS after February 12, 2010, could 
choose to fish the IFQ derived from that QS as an owner onboard. A non-
individual initial recipient who received catcher vessel QS by transfer 
after February 12, 2010, could also choose to fish the resulting IFQ 
using a hired master, but only until the effective date of this action. 
After the effective date, a non-individual initial recipient would be 
prohibited from fishing QS received by transfer after February 12, 
2010, using a hired master, but could, as noted above, sell those QS. 
Alternatively, a non-individual initial recipient could continue to 
hold that QS, but the resulting IFQ could not be used because a non-
individual entity must hire a master to harvest the IFQ. Section 5.2 of 
the RIR/IRFA provides additional information on the amount of QS 
received by initial recipients after February 12, 2010, and the 
potential effects of this action on those initial recipients.
    The Council anticipated that its recommendation could reduce the 
economic incentive for initial recipients to increase their QS holdings 
above the amount they held as of February 12, 2010. This would support 
the Council's IFQ program objectives by (1) preventing further increase 
in the use of hired masters while minimizing disruption to operations 
of small businesses that have historically used hired masters, and (2) 
discouraging further consolidation of QS among initial recipients who 
use hired masters. The Council did not expect this action to disrupt 
existing hired master arrangements because persons who currently 
qualify for the hired master exemption could continue to use a hired 
master for QS held on or before February 12, 2010.
    The Council also clarified how the proposed action would affect 
catcher vessel QS transferred to an initial recipient and consolidated 
into a block after February 12, 2010. The Council recommended that:
     if catcher vessel QS is consolidated into a QS block 
between February 12, 2010 and the effective date of the proposed 
action, the IFQ resulting from that consolidated QS block could be 
fished by a hired master, and
[[Page 24710]]
     if catcher vessel QS is consolidated into a QS block after 
the effective date of the proposed action, the IFQ resulting from that 
consolidated QS block could not be fished by a hired master, and the QS 
holder would be required to be onboard the vessel harvesting the IFQ 
derived from those QS.
    As discussed in section 5.2 of the RIR/IRFA, the Council 
recommended these QS block provisions because it would be 
administratively burdensome to track and separate QS blocks 
consolidated prior to the implementation of this proposed action. NMFS 
reported to the Council at the February 2011 meeting that a relatively 
small amount of QS had been transferred to initial recipients and then 
consolidated into blocks since February 12, 2010. NMFS anticipates that 
additional QS may be consolidated into blocks by both individual and 
non-individual initial recipients until the proposed action is 
implemented. Tracking these QS is administratively burdensome because 
once a new block of QS is formed, NMFS cannot differentiate what 
portion of that QS block should be attributed to QS with the hired 
master privilege as opposed to that without the hired master privilege. 
Implementation of this action requires all QS to be separated into QS 
with the hired master privilege and QS without the hired master 
privilege. To avoid the administrative burden of reversing these 
consolidations, the Council recommended that initial recipients be 
allowed to retain the hired master exemption for those QS consolidated 
into blocks after February 12, 2010, but before the effective date of 
the amendment. Following the effective date of the proposed action, 
initial recipients could continue to use the QS block consolidation 
provision. However, the IFQ derived from the consolidated QS block 
could not be fished by a hired master.
    The proposed action would not apply under the following 
circumstances in the IFQ Program:
     Category A (catcher/processor) QS are excluded from this 
action because this vessel category of QS is not subject to owner-
operator requirements.
     Individual (persons who, for example, are not corporations 
or partnerships) initial recipients in IPHC Area 2C (halibut) and the 
Southeast region (sablefish) are excluded from this action because 
existing regulations at Sec.  679.42(i)(3) prohibit individuals who are 
initial recipients from using hired masters to harvest their IFQ 
halibut or sablefish in these areas.
     Catcher vessel QS held by Community Development Quota 
(CDQ) groups are excluded from this action. CDQ groups are not subject 
to owner-operator requirements.
Proposed Action
    Three regulatory amendments would be necessary to implement the 
Council's recommendation for the proposed action. The first two 
amendments would add regulations at Sec.  679.42(i)(6) and (j)(10) to 
specify that a hired master could not be used to fish IFQ halibut or 
sablefish derived from catcher vessel QS that was received by transfer 
after February 12, 2010, unless the QS was consolidated into a block 
prior to the effective date of the proposed action. Third, NMFS 
proposes to add regulations under Sec.  679.41(c)(11) specifying that 
NMFS would not approve a transfer of catcher vessel QS to a 
corporation, partnership, association, or other non-individual entity 
at any time. NMFS proposes these regulatory changes to make the 
regulations consistent with the Council's intent to discourage further 
consolidation of catcher vessel QS among initial recipients who use 
hired masters.
    Under these proposed regulatory changes, IFQ derived from catcher 
vessel QS received by transfer after February 12, 2010, must not be 
harvested by a hired master. Because a non-individual entity must hire 
a master to harvest its IFQ, the proposed change to Sec.  679.41(c)(11) 
would prevent non-individual entities, such as corporations, from 
receiving additional catcher vessel QS by transfer after the effective 
date, with one exception. That exception, found at Sec.  679.41(g)(3), 
provides that an individual initial catcher vessel QS recipient may 
transfer initially issued QS to a corporation that is solely owned by 
the same individual. Otherwise, individuals may not transfer QS 
received after initial issuance into a solely-owned corporation. NMFS 
proposes no changes to this existing exception. This exception allows 
individuals to transfer initially received QS to a solely-owned 
corporation for tax purposes, limiting liability, or for other business 
purposes.
    To implement the proposed action, NMFS would redesignate catcher 
vessel QS as ``eligible to be fished by a hired master'' if the QS was 
(1) held by an initial recipient on or before February 12, 2010, or (2) 
received by transfer and consolidated into a QS block held by an 
initial recipient prior to the effective date of the proposed action. 
All other QS that did not meet these requirements would be designated 
``not eligible to be fished by a hired master'', including (1) category 
A QS, 2) CDQ QS, (2) individual initial recipient QS designated for 
areas 2C (halibut) and Southeast (sablefish), (3) individual and non-
individual QS not held by an initial recipient, (4) unblocked QS 
transferred to an initial recipient after February 12, 2010, and (5) 
blocked QS transferred to an initial recipient after the effective 
date. Following the redesignation of QS, two types of annual IFQ 
permits would be issued by NMFS. Quota share designated as eligible to 
be fished by a hired master would yield IFQ that may be harvested by a 
hired master. Quota share designated as not eligible to be fished by a 
hired master would yield IFQ that may not be harvested by a hired 
master. NMFS proposes to redesignate QS and issue the new types of IFQ 
permits prior to the beginning of the IFQ fishing year following 
implementation of this proposed action. The IFQ Program relies on an 
annual cycle to distribute QS, issue IFQ permits, arrange transfers and 
adjust IFQ holdings for a previous year's overages and underages. 
Implementing the proposed action at the beginning of the IFQ fishing 
season is necessary to avoid a large administrative burden for NMFS and 
affected participants. Mid-year implementation of the proposed action 
would require the reissuance of thousands of IFQ permits, increasing 
the costs of administering the IFQ Program and potentially causing 
considerable confusion in enforcement of regulations. Therefore, this 
action, if approved by the Secretary, would not be implemented until 
the beginning of the next fishing season following publication of the 
final rule.
Effects of the Proposed Action
    The proposed action would affect the hired master privileges 
granted to initial recipients of catcher vessel QS. Under the proposed 
action, a number of options remain for initial recipients to maintain 
active and viable businesses in the halibut and sablefish fisheries. 
Initial recipients could continue to hire a master to harvest IFQ 
derived from QS held on or before February 12, 2010. Individual initial 
recipients who acquire QS after February 12, 2010, would need to decide 
whether to be onboard the vessel fishing the IFQ or transfer the QS to 
another person eligible to hold QS. Individual initial recipients could 
continue to purchase additional QS provided they are onboard to harvest 
the resulting IFQ. Non-individual initial recipients of QS would be 
prohibited from acquiring additional catcher vessel QS because the 
proposed regulation would prohibit non-individual entities from using a 
hired master for QS received by transfer after February 12, 2010. Given 
the opportunities for initial
[[Page 24711]]
recipients to continue to use hired masters for QS held before February 
12, 2010, NMFS does not expect the proposed action to significantly 
disrupt existing business operations.
    NMFS does not anticipate that the proposed action would 
significantly affect market availability or price of B, C, or D QS. It 
is difficult to predict the outcome of the action because the response 
of each QS holder will be different; some may choose not to purchase 
additional QS, some would be unable to purchase additional QS, and 
others may choose to finance QS purchases by crew or purchase more QS 
and be onboard to harvest the IFQ. The proposed action could increase 
opportunities for persons to purchase QS. Provisions of the action 
recognize business models developed since the inception of the IFQ 
Program while furthering the original goal of the IFQ program to move 
towards a predominantly owner-operated fishery.
Classification
    Pursuant to sections 304(b)(1)(A) and 305(d) of the Magnuson-
Stevens Act, the NMFS Assistant Administrator has determined that this 
proposed rule is consistent the with the GOA FMP, the BSAI FMP, other 
provisions of the Magnuson-Stevens Act, the Halibut Act, and other 
applicable laws, subject to further consideration after public comment.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
Regulatory Impact Review and Initial Regulatory Flexibility Analysis
    A Regulatory Impact Review (RIR) and Initial Regulatory Flexibility 
Analysis (IRFA) were prepared for this action. The RIR assesses all 
costs and benefits of available regulatory alternatives. The RIR 
considers all quantitative and qualitative measures. The IRFA was 
prepared as required by section 603 of the Regulatory Flexibility Act 
(RFA). The IRFA describes the economic impact this proposed rule, if 
adopted, would have on small entities. The RFA recognizes and defines a 
business involved in fish harvesting as a small business if it is 
independently owned and operated and not dominant in its field of 
operation (including affiliates) and if it has combined annual gross 
receipts not in excess of $4 million for all its affiliated operations 
worldwide.
    A copy of this analysis is available from NMFS (see ADDRESSES). The 
IRFA describes the action, why this action is being proposed, the 
objectives and legal basis for the proposed rule, the type and number 
of small entities to which the proposed rule would apply, and the 
reporting, recordkeeping, and other compliance requirements of the 
proposed rule. The description of the proposed action, its purpose, and 
its legal basis are described in the preamble and are not repeated 
here.
    The proposed action could directly regulate a maximum of 1,447 
entities holding halibut QS and sablefish QS, which are eligible to 
hire masters. However, the actual number of such entities that may be 
directly regulated is expected to be much smaller because many of these 
participants fish their own IFQ, without a hired master; and some have 
not and will not acquire additional QS. For purposes of providing a 
numerical estimate, had the rule been in effect in 2009, as few as 91 
eligible entities that transferred QS for use by hired masters after 
February 12, 2009, would have been directly regulated.
    Small entities regulated by the proposed action may be divided into 
two mutually exclusive groups to estimate their size relative to the $4 
million threshold. There are operations that harvest both halibut and 
groundfish (sablefish is considered a groundfish species, while halibut 
is not) for which gross revenue data exist. There are also operations 
that harvest halibut, but not groundfish, for which gross receipts data 
exist. These entities may also harvest species such as herring or 
salmon.
    Section 6 of the RIR/IRFA estimates that in 2009 the total gross 
revenues for fixed-gear catcher vessels by entity, from all sources off 
Alaska, were not more than $4 million in gross revenues, which has been 
the case since 2003. The average gross revenue for the small fixed-gear 
catcher vessels has been about $500,000. Thus, all of the entities that 
harvest both halibut and groundfish are under the threshold. This 
includes all of the entities that harvest any sablefish. Since the IFQ 
Program limits the amount of annual IFQ that any single vessel may use 
to harvest halibut and sablefish and the maximum number of QS units an 
entity may use, NMFS believes that few vessels that harvest halibut, 
but not groundfish, would exceed the $4 million threshold, either. 
Based upon gross receipts data for the halibut fishery, and more 
general information concerning the probable economic activity of 
vessels in this IFQ fishery, no entity (or at most a de minimis number) 
directly regulated by these restrictions could have been used to land 
fish worth more than $4.0 million in combined gross receipts in 2010. 
Therefore, all halibut and sablefish vessels have been assumed to be 
``small entities'' for purposes of the IRFA. This simplifying 
assumption may overestimate the number of small entities, since it does 
not take into account vessel affiliations, owing to an absence of 
reliable data on the existence and nature of these relationships.
    Based on the low revenues for the average groundfish vessel and the 
low cap on maximum halibut and sablefish revenues, additional revenues 
from herring, salmon, crab, or shrimp likely would be relatively small 
for most of this class of vessels. Therefore, the available data and 
analysis suggest that there are few, if any, large entities among the 
directly regulated entities subject to the proposed action.
    The RIR reviews Alternative 1, the status quo, and Alternative 2, 
the preferred alternative. The Council did not identify any other 
alternatives that would have been substantially less burdensome. 
Alternative 1 would maintain the current regulations that allow all 
initial recipients of catcher vessel QS to hire a master to harvest 
their IFQ permits for any catcher vessel QS they hold. Current 
regulations enable initial QS recipients to continue to acquire QS up 
to IFQ Program caps and harvest accumulated IFQ with a hired master. 
This has resulted in increased amounts of IFQ being harvested by hired 
masters, which is contrary to the Council's objectives for the IFQ 
Program. Under Alternative 2, the preferred alternative, an initial QS 
recipient would not be allowed to use a hired master to harvest IFQ 
derived from catcher vessel QS that they received by transfer after 
February 12, 2010, with a limited exception for small amounts of QS. 
The preferred alternative may result in a loss of fishing opportunity 
for hired masters to harvest IFQ pounds. The proposed changes from this 
alternative would have distributional effects on initial recipients and 
hired masters, but will not affect production from the fisheries. Under 
Alternative 2, net benefits to the nation may increase, to the extent 
that the Council's objectives for an ``owner-operated'' fishery are 
more fully realized through this action.
    There were no significant alternatives to the proposed rule 
identified that would achieve the Council's objectives for the action 
and minimize adverse impacts on small entities. The Council considered 
alternative dates after which the use of hired masters would be 
prohibited. Although those alternative dates could have allowed more 
small entities to use hired masters, or to use hired masters for more 
of the QS they now hold or could acquire before
[[Page 24712]]
another date, the use of hired masters is not necessary to harvest 
halibut and sablefish IFQ derived from QS held by individuals. None of 
the alternatives considered would limit the ability of small entities 
to receive QS by transfer and fish the resulting IFQ as owner-
operators. The Council also considered and rejected an alternative to 
eliminate the hired master exemption from the IFQ Program, but 
determined that this would not sufficiently accommodate the existing 
business plans of initial catcher vessel QS recipients that use hired 
masters to harvest IFQ or their hired masters.
    No Federal rules that might duplicate, overlap, or conflict with 
this proposed action have been identified.
Collection-of-Information Requirements
    This proposed rule contains a collection-of-information, OMB 
Control No. 0648-0272. The IFQ Program requirements are mentioned in 
this proposed rule; however, the public reporting burden for this 
collection-of-information is not directly affected by this proposed 
rule.
    Public reporting burden includes the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Public comment is sought regarding: whether 
this proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; the accuracy of the burden 
estimate; ways to enhance the quality, utility, and clarity of the 
information to be collected; and ways to minimize the burden of the 
collection of information, including through the use of automated 
collection techniques or other forms of information technology. Send 
comments on these or any other aspects of the collection of information 
to NMFS at the ADDRESSES above, and email to This email address is being protected from spambots. You need JavaScript enabled to view it., 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.

 

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