[Federal Register: December 12, 2002 (Volume 67, Number 239)]
[Proposed Rules]
[Page 76329-76344]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12de02-17]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 020424095-2095-01, I.D. 032801B]
RIN 0648-AP25
Fishing Capacity Reduction Program for the Crab Species Covered
by the Fishery Management Plan for the Bering Sea/Aleutian Islands King
and Tanner Crabs
AGENCY: National Marine Fisheries Service, National Oceanic and
Atmospheric Administration, Commerce.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The National Marine Fisheries Service (NMFS) proposes
regulations for a fishing capacity reduction program in the fishery for
the crab species managed under the Bering Sea/Aleutian Islands King and
Tanner Crabs Fishery Management Plan. This proposed rule would
establish a program to reduce excess capacity and promote economic
efficiency in the crab fishery. It is put forth under both special
legislation and existing NMFS regulations governing fishing capacity
reduction programs. The program's objectives include: increasing
harvesting productivity for post-reduction fishermen (i.e., those
harvesters remaining in the fishery after capacity is reduced), helping
conserve and manage fishery resources, and encouraging rationalization
of harvesting effort. Participation in the program would be voluntary;
and payments would be made for withdrawing vessels from fishing,
revoking fishing licenses, and surrendering fishing histories. NMFS
would finance the program's $100 million cost with a 30-year loan to be
repaid by post-reduction fishermen.
DATES: NMFS must receive comments by January 27, 2003.
ADDRESSES: Mail or fax written comments about this proposed rule to
Michael L. Grable. The mailing address is: Michael L. Grable, Chief,
Financial Services Division, National Marine Fisheries Service, 1315
East-West Highway, Silver Spring, MD 20910-3282. The fax number is
(301) 713-1306. NMFS will not accept e-mail or internet comments.
If a comment involves any aspect of the proposed rule's collection
of information requirements, send the comment both to Michael L. Grable
and to the National Oceanic and Atmospheric Administration Desk
Officer, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, D.C. 20503. Anyone may obtain, from
Michael L. Grable, the Environmental Assessment, Regulatory Impact
Review, and Initial Regulatory Flexibility Analysis for this proposed
rule.
Anyone wishing to contact the Restricted Access Management Program
(which issues crab species fishing licenses) may do so at this address:
Restricted Access Management Program, National Marine Fisheries
Service, P.O. Box 21668, Juneau Alaska 99802-1668. The fax number is
(907) 586-7354.
FOR FURTHER INFORMATION CONTACT: Michael L. Grable,(301)713-2390.
SUPPLEMENTARY INFORMATION:
Statutory and Regulatory Background
The Consolidated Appropriations Act 2001 (Pub. L. 106-554, section
144) directed the Secretary of Commerce to establish a $100 million
fishing capacity reduction program (crab program) in the Bering Sea/
Aleutian Islands king and Tanner crab fishery. Subsequently, that law
was amended twice (Pub. L. 107-20, section 2201; and Pub. L. 107-117,
section 205) to further clarify the pool of vessels eligible to
participate in the crab fishery, and change the crab program's funding
from a $50 million appropriation and a $50 million loan to a $100
million loan (reduction loan). NMFS authority to make this loan resides
in sections 1111 and 1112 of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1279f and 1279g)(MMA)(Title XI).
The Fishery Management Plan for Bering Sea/Aleutian Islands King
and Tanner Crabs (crab FMP) was developed by the North Pacific Fishery
Management Council and approved and implemented by NMFS under the
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C.
1801 et seq.)(MSA). The Council also developed Amendment 10 to the crab
FMP which further defined the eligibility criteria for crab license
limitation program (LLP) licenses. Regulations implementing the crab
FMP govern management of this fishery.
Fishing capacity reduction programs, generally, are governed by
subpart L to 50 CFR part 600, a framework rule promulgated pursuant to
section 312 of the MSA (16 U.S.C. 1861a(b)-(e)). NMFS proposes this
rule as a new Sec. 600.1018 appearing immediately after the framework
rule's last existing section.
Primary Statutory Objective
Section 144 established the crab program's primary objective as
reducing ``the fishing capacity in the BSAI crab fisheries by
permanently reducing the number of license limitation program crab
licenses . . . .''
Key Steps
The proposed crab program is complicated and the following listing
of key steps is intended to facilitate understanding by the public.
NMFS would:
(a) Propose the regulations;
(b) Publish final regulations;
(c) Invite crab program bids;
(d) Receive and tally the bids;
(e) Accept the bids;
(f) Conduct a referendum on the results of the bidding;
(g) Notify referendum voters and accepted bidders of the referendum
results;
(h) Make reduction payments under reduction contracts; and
(i) Collect reduction loan repayment fees.
Note: Any time the word ``we'' is used in this document, it refers
to NMFS.
[[Page 76330]]
I. Crab Program Overview
$100 million would be available to pay crab license holders to
relinquish their crab fishing capacity. NMFS would issue an invitation
to bid for reduction payments totaling up to $100 million. Qualifying
crab license holders who wanted to relinquish their crab fishing
capacity would choose the dollar amounts for which they were willing to
do so. They would then bid in a reverse auction by offering to
relinquish their crab fishing capacity in return for reduction payments
equal to their bid amounts.
NMFS would express each bid amount as a percentage of the value of
each bidder's crab harvests during a certain period. NMFS would use
this percentage to determine which bids to accept. NMFS would first
accept the bid with the lowest percentage, and then successively accept
each bid with the next lowest percentage until the entire $100 million
had been paid out or there were no further bids to accept. Bid
acceptances would create irrevocable reduction contracts between the
United States and the accepted bidders, subject only to a referendum
approving a post-reduction crab landing fee for repaying the reduction
loan.
After determining how much of the prospective reduction loan each
of the crab area/species endorsement fisheries would have to repay,
NMFS would hold a referendum in which qualifying crab license holders
vote to approve or disapprove the landing fee. If at least two thirds
of the votes cast were in favor of the fee, the referendum would be
successful, and the fee would be approved.
After a successful referendum, NMFS would make the reduction
payments to the accepted bidders and finalize the relinquishment of
their crab fishing capacity. Post-reduction harvesters would pay a fee
up to 5% of the value of their future crab landings. Persons who must,
under the State of Alaska's reporting requirements, complete and file
fish tickets for harvested crab would collect the fee and forward all
fee revenue to NMFS. The fee revenue is applied to repaying the 30-year
reduction loan.
The reduction loan's original principal amount would be the total
of all reduction payments. The reduction loan's interest rate would be
2 percent higher than the rate at which NMFS would pay interest on the
money it borrowed from the U.S. Treasury to make reduction payments.
The reduction loan's interest rate would be fixed, and its term would
be 30 years. There would be no prepayment penalty.
II. Program Specifics
A. Reduction Component Requirements
Each crab program bidder would offer to relinquish these reduction
components:
1. A non-interim crab LLP license issued under 50 CFR 679.4(k)(5)
(crab reduction permit);
2. The fishing history that gave rise to the crab license (crab
reduction history);
3. Any non-crab fishing license or permit derived from the
reduction vessel's fishing history (non-crab reduction permit);
4. The fishing history that gave rise to the non-crab reduction
permit (non-crab reduction history);
5. Every other worldwide fishing privilege (reduction vessel
privilege) of the crab fishing vessel whose fishing history gave rise
to the crab reduction permit (reduction vessel); and
6. Every other claim associated with the reduction components that
could qualify anyone for any present or future limited access system
fishing license or permit in any U.S. fishery (reduction claim). The
reduction claim would include any harvesting privilege or quota
allocation under any present or future individual fishing quota system.
Crab Reduction Permit Requirements
The crab reduction permit that each bid offers would have to be a
crab license that is non-interim at the time of bidding. The crab
reduction permit would have to be endorsed for one or more of the six
crab area/species endorsements other than the area/species endorsement
for Norton Sound red king and blue king crab (Norton Sound fishery). A
permit endorsement allows fishing for a specific species of king or
Tanner crab in specific geographical areas in the crab fishery.
Although the reduction permit may be endorsed for the Norton Sound
fishery, reduction permits endorsed solely for the Norton Sound fishery
may not be included in a bid because only the six reduction endorsement
fisheries constitute the reduction fishery.
With two exceptions, the crab reduction permit must have been
derived from the fishing history accrued on the reduction vessel during
the general qualification period (GQP), endorsement qualification
period (EQP), and recent participation period (RPP). The GQP, EQP, and
RPP are the time periods used under the license limitation program to
determine license eligibility on the basis of catch history. The
existing NMFS regulations implementing Amendment 10 to the crab FMP
require that the crab fishing history giving rise to a crab license be
earned on a single crab fishing vessel.
The first exception provided in (50 CFR 679.4(k)(5)(iii)(B)(3))
applies to persons whose vessel was used to meet the GQP and EQP crab
harvest requirement but could not be used to meet the RPP crab harvest
requirement because the vessel had been lost or destroyed and was
unavailable during the RPP. In this case, persons may meet the RPP
requirement by making a documented harvest of crab at any time during
the period after a vessel was lost or destroyed through January 1,
2000.
Anyone making such a documented crab harvest could have used either
a vessel salvaged and returned to service after the RPP, or a different
vessel. If the documented harvest was made from a salvaged vessel, (1)
the salvaged vessel would be the reduction vessel and (2) the crab
reduction history would be the salvaged vessel's documented harvest of
crab. If made from a different vessel, however, (1) the reduction
vessel would be the different vessel and (2) the crab reduction history
would be the total of the lost or destroyed vessel's documented harvest
of crab through the date of the vessel's loss or destruction plus the
different vessel's documented harvest of crab after that date.
The second exception provided for in (50 CFR 679.4(k)(5)(iv))
applies to persons (1) whose vessel made a documented harvest of crab
during the RPP period (January 1, 1996, through February 7, 1998), and
(2) who obtained a different vessel's crab fishing history which met
the GQP and EQP documented crab harvest requirements or--by 8:36 A.M.,
Pacific standard time, on October 10, 1998--entered into a contract to
do so.
In this case, (1) the reduction vessel would be the vessel from
which the documented crab harvest was made during the RPP and (2) the
crab reduction history would be the total of that vessel's documented
harvest of crab after December 31, 1994 (i.e., the date on which the
EQP ended), plus the acquired documented harvest of crab through
December 31, 1994.
Crab Reduction History Requirements
The crab reduction history would have to be the complete crab
fishing history of the reduction vessel, including the crab fishing
history during the GQP, EQP, and RPP that gave rise to the crab
reduction permit.
Non-Crab Reduction Permit Requirements
The non-crab reduction permit offered would be any fishing license
or permit for any species other than crab (1) that
[[Page 76331]]
was derived from the fishing history of the bidder's reduction vessel,
and (2) held on the date that this rule is effective.
Non-crab Reduction History Requirements
The non-crab reduction history offered would be the complete
fishing history of the reduction vessel that gave rise to any non-crab
reduction permit.
Reduction Vessel Privilege Requirements
The reduction vessel privilege offered would have to include:
1. The reduction vessel's fisheries trade endorsement under the
Merchant Marine Act, 1936 (46 U.S.C.A. 12108);
2. The reduction vessel's qualification for any present or future
U.S. Government approval under section (9)(c)(2) of the Shipping Act,
1916 (46 U.S.C. App. 808(c)(2)) for placement under foreign registry or
operation under the authority of a foreign country; and
3. Any other privilege to ever use the reduction vessel to fish
anywhere in the world.
The reduction vessel in each bid would have to be in existence at
the time of bidding.
B. Qualifying Bidders and Co-Bidders
The persons qualified to bid for reduction payments (qualifying
bidders) would be the holders of record of the crab reduction permits.
NMFS regulations do not, however, require crab license holders
either to own the crab fishing vessels used with their crab licenses or
to retain the vessels' crab fishing histories. Theoretically the
licenses, vessels, and histories can be conveyed independently of each
other; and different persons may own, hold, or retain them.
Consequently, it is possible that some bidders may not own the
reduction vessels, hold the non-crab reduction permits, or retain
either the crab or non-crab reduction histories that this proposed
action would require bids to offer. By making provision for co-bidders
who own or hold some of the required reduction components, this
proposed rule would accommodate these circumstances.
If the qualifying bidder owned, held, or retained at the time of
bidding each of the reduction components, the qualifying bidder would
bid alone (i.e., there would be no co-bidder).
If, however, a person other than the qualifying bidder owned or
held at the time of bidding either the required reduction vessel or the
required non-crab reduction permit, that person could be a co-bidder.
In this case, the qualifying bidder and the co-bidder would bid
together.
The proposed rule would not, however, allow a co-bidder for the
crab reduction permit or for the crab or non-crab reduction histories.
In summary:
1. A qualifying bidder bidding alone would have to own, hold, or
retain all of the bid's reduction components;
2. A co-bidder bidding together with a qualifying bidder could own
or hold only the bid's reduction vessel or non-crab reduction permit;
and
3. A qualifying bidder bidding together with a co-bidder would
still have to hold or retain the bid's crab reduction permit and the
bid's crab and non-crab reduction histories.
C. Qualifying Referendum Voters
The persons qualified to vote in the crab program fee referendum
(qualifying voters) would be the holders of record at the time of
voting of either interim or non-interim crab licenses endorsed for one
or more of the reduction endorsement fisheries. The crab licenses could
also be endorsed for the Norton Sound fishery, but no person whose
license was endorsed solely for the Norton Sound fishery could be a
qualifying voter.
D. Summary of How Crab Licenses Qualify Bidders and Voters
Each person who is the record holder of a non-interim crab license
endorsed for one or more reduction endorsement fisheries would be both
a qualifying bidder and a qualifying voter. Each such person could bid
and vote. For bidding purposes, however, the person's crab license
would also have to meet the reduction crab permit requirements.
Each person who is the record holder of an interim crab license
endorsed for one or more reduction endorsement fisheries would be a
qualifying voter but not a qualifying bidder. Each such person could
vote but not bid.
Each person who is the record holder of a crab license endorsed
solely for the Norton Sound fishery would be neither a qualifying
bidder nor a qualifying voter and could neither bid nor vote.
Qualifying bidders must be the record holder of their crab
reduction permits at the time of bidding, and qualifying voters must be
the record holders of their crab licenses at the time of voting.
III. Reduction Process Overview
If NMFS adopted this proposed rule, we would begin the reduction
process by publishing a notification in the Federal Register listing
the crab license holders who, on the notification's date, appear to be
qualifying bidders, qualifying voters, or both.
By publishing in the Federal Register an invitation to bid and
mailing the invitation to bid to each qualifying bidder, we would next
invite the qualifying bidders to submit bids. Qualifying bidders could
then bid by irrevocably offering to the United States their reduction
components, in the manner that this proposed rule would require, in
return for reduction payments from the United States in amounts that
the bidders would have determined. We would score the bid offers, rank
them in a reverse auction, and accept the bid offers with the lowest
scores until either the maximum reduction cost ($100 million) were
committed or there were no additional acceptable bids. Our acceptance
of bid offers would create binding reduction contracts between the
accepted bidders and the United States.
Bid acceptance would establish the amount of capacity that the
accepted bids would reduce, the cost of reducing that capacity, and the
reduction loan sub-amounts that each reduction endorsement fishery
would have to repay. Based on these data, NMFS would next hold a
referendum to determine whether qualifying voters would approve the
post-reduction landing fee necessary to repay the reduction loan.
An unsuccessful referendum would excuse the performance of all
reduction contracts, and the crab program would cease, unless NMFS
decided to later issue another invitation to bid and hold another
referendum. A successful referendum, however, would be followed by
publishing a notification in the Federal Register, after which NMFS
would tender reduction payments, effect relinquishment of the reduction
components, and disburse the reduction payments. With the exception of
post-reduction license holders subsequently repaying the reduction
loan, reduction payment tender and disbursement would conclude the crab
program.
Upon reduction payment tender, NMFS would permanently revoke the
surrendered crab reduction permits and non-crab reduction permits. The
Secretary of Transportation would permanently revoke the reduction
vessels' fisheries endorsements and make the reduction vessels
ineligible to transfer to foreign flags. The reduction vessels would be
permanently ineligible to participate in any fishery worldwide, and the
bidders would have contractually agreed to permanently operate the
reduction vessels only under the U.S. flag. NMFS would ensure that the
bidders and the reduction vessels
[[Page 76332]]
forever relinquish any claim based on the reduction components that
might otherwise qualify any person or the reduction vessels for any
future limited access system fishing permits in U.S. fisheries. This
would include any fishing privilege or quota allocation under any
present or future quota allocation system.
IV. Process Specifics
A. Notification to Crab License Holders
If any person held multiple crab licenses, we would list that
person once for each crab license. NMFS would also list the name and
business mailing address of record of each of these crab license
holders. NMFS would not list persons who then held crab licenses that
were endorsed solely for the Norton Sound fishery. We would use the
crab license database of our Restricted Access Management (RAM) Program
as the basis of these notification lists.
In addition to the Federal Register notification, NMFS would also
mail the notification to each crab license holder of record at the
holder's business mailing address of record, as well as post the
notification at NMFS' headquarters and Alaska Region web sites.
The public would have 30 days to comment about any notification
aspect, including: persons we listed, but should not have listed, as
license holders (and vice-versa); licenses we listed as non-interim but
should have listed as interim (and vice-versa); and incorrect license
holder names and/or business mailing addresses.
Any person on this list who is not prospectively a qualifying
bidder because the person's crab license is then interim may,
nevertheless, subsequently become a prospectively qualifying bidder by
changing the person's crab license status from interim to non-interim
before submitting a bid. Although NMFS would appropriately update the
qualifying bidder list, we would not republish the notification. NMFS
would update the list of prospectively qualifying bidders immediately
before mailing the invitation to bid and update the list of
prospectively qualifying voters immediately before mailing the
referendum ballots.
Inclusion on the notification list as a prospectively qualifying
bidder would not mean that a bid from that bidder would be one that we
could accept. NMFS could not at the time we publish the notification
determine whether a later bid from a prospectively qualifying bidder
would meet all the crab program's bidding requirements. NMFS could make
this determination only after we receive and analyze bids.
B. Correcting the RAM Program's License Records
NMFS would use the RAM Program's license records for all
notification and other crab program purposes, including business
mailing addresses for all crab program communications. Accordingly, we
recommend that any person needing to correct or update the RAM
Program's license records consider doing so as soon as possible.
C. Invitation to Bid and Bids
The crab program invitation to bid would specify the exact
contractual terms and conditions under which qualifying bidders may
make, and NMFS may accept, bid offers. Each bid would have to specify
the dollar amount of the reduction payment in return for which the
bidder would offer the reduction components in the manner that this
proposed rule would require and otherwise fully comply with all the
crab program's bidding requirements.
NMFS would publish the bid invitation in the Federal Register. We
would concurrently mail the bid invitation and a bidding package
(including a bidding form) to the address of record of each person on
the prospectively qualifying bidder list.
The bid invitation would, among other things, specify:
1. The first date on which bidders could submit bids;
2. The exact manner in which they would have to do so;
3. The last date by which NMFS would have to receive bids; and
4. The bid expiration date upon which each bid would automatically
expire if NMFS had not accepted the bid before that date.
The bid invitation would contain the reduction contract's entire
terms and conditions. Each qualifying bidder who responded by
submitting a bid would make an irrevocable reduction offer under the
bid invitation's terms and conditions. These terms and conditions would
be neither negotiable nor subject to modification.
Although bidders could not revoke their bid offers, any bid offers
that NMFS did not accept before the bid expiration date would
automatically expire on that date.
All potential bidders should note that NMFS would, among other
things, require each bid to include a copy of each reduction vessel's
official document (which the National Vessel Documentation Center
issues for Federally documented vessels) and a copy of each crab and
non-crab reduction permit (which, with the exception of reduction
permits issued for non-Alaskan fisheries, the RAM Program issues). NMFS
recommends that all potential bidders arrange to have on hand, well
before NMFS would issue the invitation to bid, an exact copy of these
documents and otherwise be fully prepared to provide all other required
bidding information.
Each bidder responding to the bid invitation would have to offer
the reduction components in the manner that this proposed rule would
require. This would include permanently:
1. Surrendering and revoking the crab reduction permit;
2. Relinquishing the crab reduction history;
3. Surrendering and revoking the non-crab reduction permit;
4. Relinquishing the non-crab reduction history;
5. Revoking the reduction vessel privilege;
6. Agreeing, in the reduction contract, that the owner of the
reduction vessel would operate it under U.S. flag or else scrap it; and
7. Relinquishing the reduction claim.
This proposed rule would not require the surrender and revocation
of any non-crab licenses or permits (or the fishing histories upon
which they were based) that accepted bidders did not hold on the
effective date of a final crab program rule. Similarly, accepted
bidders would not have to surrender any licenses or permits they might
hold that were based on the fishing histories of vessels other than the
reduction vessels.
Regardless of its ownership, no reduction vessel could ever again
fish for any species anywhere in the world under any conditions. As
long as the owner of any Federally-documented reduction vessel abided
by the crab program restrictions, NMFS would not require scrapping the
reduction vessel. Each post-reduction vessel owner could continue using
its reduction vessel for any legal purpose except fishing and could
transfer the vessel, subject to all the crab program restrictions, to a
new owner. These restrictions would run with the reduction vessel's
title and apply to whomever might own the reduction vessel. Any
reduction vessel that was not Federally documented would, however, have
to be scrapped.
D. Non-crab Reduction Permits Limited
Section 144(d)(1)(B) is ambiguous about which non-crab licenses or
permits the crab program must revoke. One interpretation is that the
crab program must revoke each non-crab license or permit that may ever
have
[[Page 76333]]
been issued based on a reduction vessel's fishing history even though a
bidder may no longer hold the license or permit. An alternative
interpretation is that the crab program need revoke only those non-crab
licenses and permits that a bidder still holds at the time we implement
the crab program.
This proposed rule adheres to the latter interpretation.
Consequently, the reduction components would include only those non-
crab reduction permits that were based on reduction vessels' fishing
histories and which the bidders still held on the effective date that
NMFS adopts a final rule implementing the crab program. This would be
equally true for all non-crab reduction histories.
E. Reverse Auction
To obtain the maximum capacity reduction at the least cost, NMFS
would use a reverse auction to determine which bid offers we would
accept. NMFS would calculate a bid score for each bid and then accept
the bid offer with the lowest bid score, followed by each successive
bid offer with the next lowest bid score until either there were no
more acceptable bids or acceptance of the bid with the next lowest bid
score would cause the reduction cost to exceed $100 million.
F. Bid Scoring
NMFS would calculate each bid score by dividing the value of each
reduction vessel's documented crab harvest for crab program purposes
(bid crab) by each bid amount.
The bid amount for each bid would be the dollar amount for which
each bidder offers the reduction components under the bid invitation's
contractual terms and conditions.
The bid crab for each bid would be each reduction vessel's
documented harvest of crab during the most recent 5 years of a 10-year
period beginning on January 1, 1990, and ending on December 31, 1999,
during which each of the reduction endorsement fisheries and the Norton
Sound fishery were open, for any length of time, for directed crab
fishing. If, for example, a reduction vessel did not fish for crab in
one of the reduction endorsement fisheries during one of the most
recent 5 years of this period in which that fishery was open for
directed crab fishing, the reduction vessel's documented crab harvest
value for that year in that reduction endorsement fishery would be
zero.
NMFS would determine bid crab value by multiplying each pound of
each reduction vessel's bid crab by the average annual price per pound
for each crab species from each of the reduction endorsement fisheries
and from the Norton Sound fishery during each year applicable to the
reduction vessel's bid crab. We would use the fish ticket poundage data
that the State of Alaska maintains and the average ex-vessel crab
prices that the State of Alaska annually publishes.
NMFS would exclude several categories of crab from bid crab, for
example:
1. Triangle tanner crab, grooved tanner crab, and other
commercially insignificant crab species not named in the various crab
license area/species endorsement categories;
2. Discarded crab;
3. Crab caught for personal use;
4. Unspecified crab; and
5. Any other crab to which, for whatever reason, NMFS could not
assign a poundage or dollar value.
Here is a bid scoring example. If a bid amount were $0.75 million
and the bid crab value were $4.5 million, the bid score would be 0.1667
(i.e., $0.75 million divided by $4.5 million). This means that the bid
amount would be 16.67 percent of the reduction vessel's bid crab value.
NMFS would accept bid offers with bid scores lower than the 0.1667
in this example before we accepted a bid offer with the 0.1667 bid
score. NMFS would accept bid offers with bid scores higher than the
0.1667 in this example after we accepted a bid offer with the 0.1667
bid score.
Bid crab value and bid amount are the only two variables in each
bid score. If two or more bid amounts were identical, NMFS would accept
the bid with the higher bid crab value because the bid amount would in
that bid be a lower percentage of the bid crab value. Persons whose
reduction vessels have lower bid crab values should recognize that a
combination of higher bid amounts and lower bid crab values could make
their bids noncompetitive.
For example, a reduction vessel with a $2.5 million bid crab value
would require a bid amount no higher than $499,999.99 (i.e., a bid
score of 0.19999) in order to have a better chance of bid acceptance
than a reduction vessel with a $5 million bid crab value and a bid
amount of $1 million (i.e., a bid score of 0.2).
If two or more bid scores were identical, NMFS would first accept
the bid that we first received.
G. Confidentiality of Fish Ticket Data
The State of Alaska's fish ticket data are confidential. Our data-
sharing agreement with Alaska requires NMFS to maintain Alaska's data
confidentiality requirements. With certain exceptions, Alaska law
allows divulging these data only to, or upon the authority of, the
harvesting individuals who signed the fish tickets.
Those who sign fish tickets on behalf of the harvesters are
sometimes neither crab license holders nor crab vessel owners.
Consequently, NMFS could not divulge bid crab poundage to any bidders
who did not sign the fish tickets on which those data were based.
Instead, NMFS could only divulge the bid crab values and the bid
scores. Potential bidders who wish to confirm their bid crab poundage
during the bid scoring period would have to make their own arrangements
with the State of Alaska (or with the persons who signed the fish
tickets on behalf of the harvesting parties).
H. Bid Rejection
NMFS would reject any bid that:
1. Attempted to negotiate or modify any of the bid invitation's
terms and conditions or otherwise did not conform to those conditions;
2. Included any crab or non-crab reduction permit holder or
reduction vessel owner that was an entity legally different from the
permit's holder of record or the vessel's owner of record at the time
of bidding;
3. Included any crab or non-crab reduction history that NMFS would
have reason to believe a person other than the bidder retained;
4. Included any reduction component that NMFS would have reason to
believe was different from those that the crab program would require;
or
5. Did not otherwise meet all of the crab program's bidding and
other requirements.
NMFS would use the RAM Program's crab license records to determine
crab license holders of record (except for permits or licenses that any
of our other Regional Offices may have issued) and to determine whether
crab licenses qualify as crab reduction permits. NMFS would use the
records of the U.S. Coast Guard's National Vessel Documentation Center
to determine reduction vessel owners of record. Anyone with a potential
crab program interest who needs to correct any of these records in any
of these respects should consider doing so as soon as possible.
NMFS would mail a bid rejection notification to each bidder whose
bid we rejected but not to any bidder whose bid offer we neither
rejected nor accepted. NMFS bid rejection determinations would
constitute final agency action.
I. Bid Acceptance
NMFS bid acceptances would, like bid offers, be subject to the bid
[[Page 76334]]
invitation's exact contractual terms and conditions.
After accepting bid offers with the lowest bid scores, NMFS would
mail acceptance notifications to the accepted bidders and conduct the
post-bidding fee referendum.
NMFS bid acceptance determinations would constitute final agency
action.
All bid offers that NMFS had neither accepted nor rejected would
automatically expire on the bid expiration date.
The RAM Program would not process the transfer of any crab or non-
crab reduction permits included in the bids that NMFS had accepted
unless and until the Chief of our Financial Services Division advised
the RAM Program that the resulting reduction contracts were no longer
in effect because a referendum failed to approve the reduction loan
repayment fee.
J. Reduction Contracts
NMFS acceptance of bid offers would create binding reduction
contracts between the United States and the accepted bidders.
Nevertheless, reduction contract performance would be conditioned on a
post-bidding referendum approving the reduction loan repayment fee.
Each reduction contract would, otherwise, be unconditional at the time
NMFS accepted each bid offer.
A post-bidding referendum's approval or disapproval of the
reduction loan repayment fee would be an event that neither the
accepted bidders nor NMFS could control. A referendum's disapproval of
the fee would fully excuse the United States and all accepted bidders
from reduction contract performance and would fully discharge all
reduction contract rights, privileges, duties, and obligations. This
excuse from performance would not apply to any new reduction contracts
that might subsequently result from issuing another invitation to bid
and accepting other bids.
The period between inviting bids and conducting a referendum would
be as short as possible. Accepted bidders could, however, continue
fishing as they normally would have fished until NMFS tendered the
reduction payments to the accepted bidders. All fishing would have to
cease when NMFS tendered the reduction payments, except that accepted
bidders could continue fishing in any crab area/species endorsement
fishery that was open when NMFS tendered the reduction payments until
that fishery first closed after NMFS tendered the reduction payments.
Money damages not being an adequate substitute for actual reduction
contract performance, NMFS would pursue any remedy, including the
specific performance of reduction contracts, available to us for any
attempt to breach a reduction contract. If an accepted bidder breached
or attempted to breach a reduction contract, NMFS would nevertheless
abide by the reduction contract's terms by making reduction payment and
permanently:
1. Revoking the crab and non-crab reduction permits;
2. Effecting relinquishment of the crab and non-crab reduction
histories;
3. Revoking the reduction vessel's fisheries trade endorsement;
4. Making the reduction vessel ineligible for placement under
foreign registry or operation under a foreign country's authority;
5. Otherwise restricting the reduction vessel in accordance with
the crab program's requirements; and
6. Effecting relinquishment of the reduction claim.
NMFS might also seize the reduction vessel and scrap it at the
accepted bidder's expense.
K. Referendum
Each referendum voter would have one vote for each qualifying crab
license that the voter held. NMFS would mail a referendum ballot and
full referendum instructions to each person on our prospectively
qualifying voter list. Each voter would get a separate ballot in a
separate mailing for each qualifying crab license the voter held. The
referendum instructions would include, among other things, the required
manner of voting and the last date by which NMFS must receive
responsive ballots for them to qualify as referendum votes.
NMFS would also include with each referendum ballot:
1. The total gross revenue during the bid scoring period of the
crab reduction permits and reduction vessels that the crab program
would prospectively remove from each reduction endorsement fishery;
2. The reduction loan sub-amounts for each reduction endorsement
fishery's prospective repayment; and
3. The number of the reduction vessel privileges and the crab and
non-crab reduction permits that the crab program would prospectively
restrict or revoke.
Because of the need to keep the period between bidding and
referendum as short as possible, NMFS would not issue any form of
referendum notification other than mailing ballots and voting
instructions to persons on the prospectively qualifying voter list.
NMFS would, however, post bid acceptance and referendum ballot mailing
advices on our headquarters and Alaska Region web sites.
NMFS would neither accept nor count ballots completed or submitted
in a manner inconsistent with the referendum instructions. NMFS would
be the sole referendum judge, and our referendum determinations would
constitute final agency action.
After tallying referendum votes, NMFS would mail the referendum
results to all persons who received ballots. The results would include:
1. The number of prospectively qualifying voters;
2. The number of qualifying voters who returned ballots;
3. The number of returned ballots that qualified to be counted as
referendum votes;
4. The number of qualified votes for and against the reduction loan
repayment fee; and
5. Whether the referendum was successful and approved the reduction
loan repayment fee or was unsuccessful and disapproved the fee.
If the referendum were successful, this mailing would also notify
accepted bidders that the binding reduction contracts between them and
the United States would then be final, unconditional, and subject to
full and specific performance.
If the referendum were unsuccessful, NMFS would decide whether to
issue a new invitation to bid, whose bidding results would require
another referendum. The objective of any new invitation to bid would be
bidding results that reduce more capacity for less cost than the
previous bidding results, thus increasing the likelihood of a
subsequent referendum approving the necessary loan repayment fee. If
NMFS decided to issue another invitation to bid, we would repeat the
previous bid invitation and referendum process.
Referendum approval of the fee would require at least two-thirds of
the votes actually cast in the referendum to have been cast in favor of
the fee. If, for example, only three qualifying voters actually cast
referendum votes and two of them cast their votes in favor of the fee,
the referendum would have been successful and the fee would have been
approved.
L. Reduction Payment Tender
NMFS would not tender reduction payments following a successful
referendum until at least 30 days after we had published a reduction
payment tender notification in the Federal Register. This
notification's purpose would be to allow the public to identify, for
our subsequent resolution, any issue about: any aspect of any accepted
[[Page 76335]]
bidder's eligibility to bid, any accepted bidder's legal authority to
have offered any of the reduction components in its bid, or any other
aspect of any reduction contract.
Registries exist for reduction vessels, and the holders of crab and
non-crab reduction permits are known to NMFS. There are, however, no
registries for crab and non-crab reduction histories, and the persons
who retain these histories are not known to NMFS. No one records the
conveyance of these histories. Disputes could, consequently, exist
about the ownership of these histories. Moreover, creditors may have
secured or other interests in reduction vessels or reduction permits.
This notification would, consequently, inform the public about:
1. The ownership, holding, or retaining representations upon which
accepted bidders based their bid offers; and
2. NMFS' intention to tender reduction payments in return for the
surrender and revocation of the crab and non-crab reduction permits,
the restriction of the reduction vessel privileges, and the
relinquishment of the crab and non-crab reduction histories.
If NMFS received any notice of a claim or other dispute about any
ownership, holding, or retention claims that conflict with any accepted
bidder's representations, we might not tender reduction payment under
that reduction contract until the claim or dispute was successfully
resolved.
Creditors or other parties with secured or other interests in
reduction vessels or in the crab or non-crab reduction permits are
responsible for making their own arrangements with accepted bidders.
NMFS would disburse reduction payments to accepted bidders without
regard to creditors or other interested parties, unless accepted
bidders, in their responses to NMFS reduction payment tenders, choose
to provide us with explicit written payment instructions that
accommodated creditors' or other persons' interests and authorized NMFS
to disburse reduction payments in accordance with those instructions.
As soon as practicable after the 30-day reduction payment tender
notice, NMFS would tender reduction payments to accepted bidders by
requesting from them specific, written payment instructions. As soon as
NMFS receives these payment instructions, we would immediately disburse
reduction payments in accordance with the reduction contracts and the
payment instructions.
Upon NMFS' tender of each reduction payment, we would:
1. Revoke the crab and non-crab reduction permits (subject to the
one previously noted exception about continuing to fish in any
reduction endorsement fishery that was open at the time of reduction
payment tender);
2. Effect the relinquishment of the crab and non-crab reduction
histories by noting in the RAM Program's records (or such other records
as may be appropriate for reduction permits issued elsewhere) that
these histories have been relinquished and would never again be
available to anyone for any fisheries purpose;
3. Notify the U.S. Coast Guard's National Vessel Documentation
Center so that it could revoke reduction vessels' fisheries trade
endorsements;
4. Notify the U.S. Maritime Administration so that it could make
reduction vessels ineligible for the approval of requests to place them
under foreign registry or operate them under a foreign country's
authority; and
5. Effect all other crab program requirements.
The U.S. Maritime Administration has already issued a final rule
(66 FR 55595, December 3, 2001) that makes reduction vessels ineligible
for the approval of requests to place them under foreign registry or
operate them under a foreign country's authority. That rule amends 46
CFR 221.15.
With the one previously noted exception, each reduction vessel
would, concurrently with reduction payment tender, have to permanently
cease all further fishing anywhere in the world for any species. Each
reduction vessel would, however, have to immediately retrieve all its
fixed fishing gear that might remain deployed in any fishery other than
the excepted one.
For each accepted bid that involves a co-bidder, NMFS would tender
reduction payment jointly to the qualifying bidder and each co-bidder.
NMFS would not specify a reduction payment sub-amount for either the
qualifying bidder or any co-bidder. This would be a matter of private
contract between each qualifying bidder and any co-bidder; and these
parties should, before bidding, have written contracts between them
that specify the amount of the reduction payment to which each of them
would be entitled.
M. Reduction Loan Terms
The reduction loan's original principal amount could not exceed
$100 million, but would be less if the reduction cost were less.
The loan's repayment term would be 30 years.
The loan's interest rate would be the U.S. Treasury's cost of
borrowing equivalent maturity funds plus two percent. We would
determine the loan's initial interest rate when we borrowed from the
U.S. Treasury the funds with which to disburse reduction payments. The
initial interest rate would change to a final interest rate at the end
of the Federal fiscal year in which NMFS borrowed the funds from the
U.S. Treasury. The final interest rate would be two percent plus a
weighted average, throughout that fiscal year, of the U.S. Treasury's
cost of borrowing equivalent maturity funds. The final interest rate
would be fixed, and would not vary over the rest of the loan's 30-year
term. There would be no pre-payment penalty.
N. Apportioning Reduction Loan Sub-Amounts to Each Reduction
Endorsement Fishery
The reduction endorsement fisheries are these six crab area/species
endorsements, each of which is further specified in Sec.
679.4(k)(5)(ii)(A)-(F) of this chapter:
1. Aleutian Islands brown king crab;
2. Aleutian Islands red king crab;
3. Bristol Bay red king crab;
4. Bering Sea and Aleutian Islands Area Chionocetes opilio and C.
bairdi crab;
5. Pribilof red king and blue king crab; and
6. St. Matthew blue king crab.
The Norton Sound fishery is not a reduction endorsement fishery.
The formula for determining the reduction loan sub-amount for each
reduction endorsement fishery's repayment would be:
1. The bid crab value for all reduction vessels in each reduction
endorsement fishery;
2. Divided by the bid crab value for all reduction vessels in all
reduction endorsement fisheries;
3. Equals the total bid crab value in each reduction endorsement
fishery as a percentage of the total dollar value of bid crab in all
reduction endorsement fisheries; and
4. Each of these percentages applied to the total reduction loan
amount equals the reduction loan subamount apportioned to each
reduction endorsement fishery to which each percentage relates.We would
not apportion any of the reduction loan amount to the Norton Sound
fishery because that fishery would not be part of the reduction
fishery.
O. Reduction Loan Repayment Fee
Revenues from the post-reduction crab landings fee in each
reduction
[[Page 76336]]
endorsement fishery would repay the reduction loan sub-amount
apportioned to each reduction endorsement fishery. Post-reduction crab
landings in the Norton Sound fishery would not be subject to the fee.
Although the fee would be up to 5 percent of the ex-vessel value of
all post-reduction crab landings in each reduction endorsement fishery,
the fee in any reduction endorsement fishery would be less than 5
percent if we projected that a lesser rate could amortize that
fishery's reduction loan sub-amount over the reduction loan's 30-year
term.
Some reduction endorsement fisheries may not open during some
years. Consequently, those reduction endorsement fisheries would not
during those years produce fee revenue with which to service the
reduction loan sub-amounts apportioned to those reduction endorsement
fisheries. However, interest would continue to accrue on the sub-amount
principal balances. When this happens, if these reduction endorsement
fisheries' fee rates are not already at the maximum 5 percent, NMFS
generally would increase the fisheries' fee rates to the maximum 5
percent, apply all subsequent fee revenue first to the payment of
accrued interest, and continue the maximum fee rates until all
principal and interest payments were current. Once all principal and
interest payments were current, NMFS would generally make a
determination about adjusting these fee rates.
P. Fee Payment, Collection, and Reporting
There would be three categories of fish sellers and fish buyers who
would have to pay the fee, collect the fee, or both pay and collect the
fee.
The first category is fish sellers who would have to pay the fee.
Any person who harvests any post-reduction crab in any reduction
endorsement fishery, but whom the State of Alaska's fisheries reporting
requirements do not require to record and submit an Alaska Department
of Fish and Game fish ticket for that crab, would be a fish seller for
the purpose of paying any fee on that crab and otherwise complying with
the requirements of Sec. 600.1013 of this subpart.
The second category is fish buyers who would have to collect the
fee. Any person whom the State of Alaska's fisheries reporting
requirements require to record and submit an Alaska Department of Fish
and Game fish ticket for any crab that another person harvested would
be a fish buyer for the purpose of collecting the fee on that crab and
otherwise complying with the requirements of Sec. 600.1013 of this
subpart.
The third category is persons who would be both fish sellers and
fish buyers and who would both have to pay and collect the fee. Any
person who harvests any crab, and whom the State of Alaska's fisheries
reporting requirements require to also record and submit an Alaska
Department of Fish and Game fish ticket for that crab, would be both a
fish seller and a fish buyer for the purpose of paying and collecting
the fee on that crab and otherwise complying with the requirements of
Sec. 600.1013 of this subpart.
Fish buyers would have to collect the fee by deducting it from the
gross ex-vessel proceeds of all post-reduction crab landings before the
fish buyers pay the proceeds' remainder to fish sellers.
No less frequently than at the end of each business week, fish
buyers would have to deposit collected fee receipts in a segregated
account at a Federally insured financial institution. On the last
business day of each month, fish buyers would have to disburse all
deposited fee receipts to a depository that NMFS would have specified.
Fish buyers could retain all interest, if any, earned on deposited
fee collections during the time between depositing collected fees and
disbursing them to our depository.
In addition to the collected fee deposit and disbursement
requirements (further specified in this subpart's Sec. 600.1014), fish
buyers would also be subject to certain records maintenance and annual
reporting requirements (also specified in this subpart's Sec.
600.1014). All activities associated with fee collection would be
subject to our audit.
We would notify all fish sellers and fish buyers, of whom we have
knowledge, in each reduction endorsement fishery:
1. When fee payment and collection commence and at what rate;
2. When fee rates change, either up or down; and
3. When fee payment and collection cease.
Fee rates could vary from time-to-time and from one reduction
endorsement fishery to another. NMFS would set the fee rate for each
reduction endorsement fishery at the level, not to exceed 5 percent of
the gross ex-vessel value of post-reduction crab landings, that we from
time-to-time projected was required to repay the principal and interest
of each reduction loan sub-amount within 30 years.
If any reduction loan sub-amount were not fully repaid at the end
of 30 years, the fee would continue in the fishery for as many
additional years as were required to fully repay that reduction loan
sub-amount.
Q. Penalties for Prohibited Activities
There would be substantial penalties for (among other things):
1. Any bidder whose bid offered a reduction component that the
bidder was not legally entitled to offer in the manner that the bid
invitation and this proposed rule would require. These penalties would
be in addition to bid rejection, and might also apply to other actions
that interfered with or hindered the bidding process;
2. Any bidder who submitted a non-performable bid offer or took any
post-bid action (including, but not limited to, any post-bidding
conveyance of any reduction component) that prevented or otherwise
hindered the specific performance of any reduction contract;
3. Any referendum voter who submitted a false or unauthorized
referendum ballot or any person who otherwise interfered with,
hindered, or otherwise unduly or unlawfully influenced the referendum
process; and
4. Any fish seller who failed properly to pay the fee and any fish
buyer who failed properly to collect, deposit, and disburse the fee as
well as to maintain the records and submit the reports that this
proposed rule would require.
All persons who might be subject to any of these penalties if NMFS
adopted this proposed rule should inform themselves fully about the
penalties. For further details about the penalties, see this subpart's
Sec. 600.1017 and this proposed Sec. 600.1018(u).
R. Administering Offices
The Financial Services Division in our Silver Spring, MD, central
office (see ADDRESSES) would be responsible for implementing and
administering the crab program. The Financial Services Division would:
1. Issue all notifications and mailings that the proposed rule
requires;
2. Prepare and issue the invitation to bid;
3. Receive bids;
4. Reject bids;
5. Score bids;
6. Accept bids;
7. Prepare and issue referendum ballots;
8. Receive referendum ballots;
9. Tally referendum ballots;
10. Determine referendum success or failure;
11. Tender and disburse reduction payments;
12. Administer reduction contracts;
13. Administer fees and reduction loan repayment; and
[[Page 76337]]
14. Discharge all other crab program management and administration
functions.
Upon the Financial Services Division's advice, the RAM Program in
our Alaska Regional Office (see ADDRESSES) would, for fishing licenses
under the jurisdiction of the Alaska Regional Office (and such other of
our offices as may be appropriate for other fishing licenses or
permits), revoke the crab and non-crab reduction permits and effect the
relinquishment of the crab and non-crab reduction histories.
The Financial Services Division would advise the U.S. Coast Guard's
National Vessel Documentation Center, the U.S. Maritime Administration,
such other agency or agencies as may be involved, or all of them to
revoke reduction vessels' fisheries trade endorsements and otherwise
restrict reduction vessels in accordance with this proposed rule. Those
agencies would be responsible for acting on this advice.
V. Guidance
A. Reading the Proposed Rule in Conjunction with the Framework Rule
This proposed rule would establish which framework rule provisions
(this subpart's Sec. 600.1000 through Sec. 600.6017) would not apply
to the crab program. Consequently, a comprehensive understanding
requires reading the proposed rule in conjunction with the remaining
framework rule provisions that would continue to apply to the crab
program. NMFS recommends that all interested persons carefully read the
former in close conjunction with the latter.
B. Summary of Crab Program Notices and Mailings
This table summarizes, in chronological order, key crab program
actions that would involve our providing notice to affected persons:
------------------------------------------------------------------------
Method
--------------------------------------
Action FEDERAL
REGISTER Mailing Website
------------------------------------------------------------------------
Final rule X ........... X
Bidder and voter notice X X X
Invitation to bid X X X
Bid rejection and acceptance ........... X ...........
Referendum ballots ........... X X
Referendum results ........... X X
Reduction contracts unconditional ........... X ...........
Reduction payment tender notice X ........... ...........
Reduction payment tender ........... X ...........
Fee payment and collection ........... X X
------------------------------------------------------------------------
This is what we would mail in each notice and to whom we would mail
it:
------------------------------------------------------------------------
Action NMFS would mail:
------------------------------------------------------------------------
Bidder and voter notice A notice to each crab
license holder who is
prospectively a qualifying
bidder, voter, or both.
Invitation to bid An invitation to bid to each
crab license holder who is
on our prospectively
qualifying bidder list.
Bid rejection and acceptance Our rejection to each bidder
whose bid we reject and our
acceptance to each bidder
whose bid we accept.
Referendum ballots A referendum ballot and
instructions to each crab
license holder who is on
our prospectively
qualifying voter list.
Referendum results The results of the
referendum to each crab
license holder.
Reduction Contracts Unconditional Advice, to each accepted
bidder, that a successful
referendum has fulfilled
the one condition to
performance of the
reduction contracts.
Reduction payment tender After a successful
referendum and a reduction
payment tender notice, a
tender of reduction payment
to each accepted bidder.
Fee payment and collection notice A notice to each fish seller
and each fish buyer of the
initial fee payment and
collection requirement and
each subsequent change in
this requirement.
------------------------------------------------------------------------
All website postings would be solely for the public's convenience
and our failure or inability to post anything on a website would not
affect the rights, privileges, duties, or obligations of any person
involved.
Classification
The Assistant Administrator for Fisheries, National Marine
Fisheries Service, determined that this proposed rule is consistent
with the Magnuson-Stevens Fishery Conservation and Management Act and
other applicable laws.
In compliance with the National Environmental Policy Act, we
prepared an environmental assessment for this proposed rule. The
assessment discusses the impact of this proposed rule on the natural
and human environment and integrates a Regulatory Impact Review and an
Initial Regulatory Flexibility Analysis. NMFS will send the assessment,
the review and analysis to anyone who requests us to do so (see
ADDRESSES).
We determined that this proposed rule is significant for purposes
of Executive Order 12866.
In compliance with the Regulatory Flexibility Act, NMFS prepared an
analysis that describes the economic impact this proposed rule, if
adopted, would have on small entities. In this proposed rule's
preamble, we described
[[Page 76338]]
the proposed rule, why we are proposing it, and its legal basis. NMFS
intends the analysis to aid us in considering all reasonable regulatory
alternatives that could minimize the economic impact on affected small
entities.
This proposed rule's effect on post-reduction crab harvesters would
depend on the crab program's nature and size. Our assessment, review,
and analysis considered:
1. The effect of three alternatives:
a. The status quo,
b. Uniform reduction loan repayment fees, and
c. Weighted reduction loan repayment fees; and
2. Based on five potential magnitudes of revoked crab licenses and
vessels:
a. 30,
b. 45,
c. 60,
d. 75, and
e. 90.
The preferred alternative, weighted reduction loan repayment fees,
provides the most equitable method for allocating reduction loan
repayment, and this is the reduction loan repayment method that section
144 requires.
The proposed rule's impact would be positive for both bidders whose
bid offers NMFS accepts and post-reduction harvesters whose landing
fees repay the reduction loan because the bidders and harvesters would
have voluntarily assumed the impact:
1. Bidders would have volunteered to make bid offers at bid amounts
of their own choice. Presumably, no bidder would volunteer to make a
bid offer with a bid amount that is inconsistent with the bidder's
interest; and
2. Reduction loan repayment landing fees would be authorized, and
we could complete the crab program, only if at least two-thirds of crab
license holders voting in a post-bidding fee referendum voted in favor
of the fee. Presumably, crab license holders who are not accepted
bidders would not vote in favor of the fee unless they concluded that
the crab program's prospective capacity reduction was sufficient to
enable them to increase their post-reduction revenues enough to justify
the fee.
NMFS believes that this proposed action would affect neither
authorized crab harvest levels nor crab harvesting practices.
This proposed rule contains information collection requirements
subject to the Paperwork Reduction Act (PRA). The Office of Management
and Budget (OMB) approved this information collection under OMB control
number 0648-0376. NMFS estimates that the public reporting burden for
this information collection would average 4 hours for bidding and 4
hours for voting in a referendum. Persons affected by this proposed
rule would also be subject to other collection-of-information
requirements referred to in the proposed rule and also approved under
OMB control number 0648-0376. These requirements and their associated
response times are: completing and filing a fish ticket (10 minutes),
submitting monthly fish buyer reports (2 hours), submitting annual fish
buyer reports (4 hours), and fish buyer/fish seller reports when a
person fails either to pay or to collect the loan repayment fee (2
hours).
This proposed rule also contains a new collection-of-information
requirement that NMFS has submitted to OMB for approval (under the same
OMB control number). The provision allows the public 30 days to advise
us of any license or permit holder or vessel owner claims that conflict
with accepted bidders' representations about holding, owning, or
retaining any of the crab or non-crab reduction permits, the reduction
vessels, or the crab or non-crab reduction histories. Responses are
voluntary, but we estimate the public reporting burden for this
collection of information would be 1 hour per response.
These response estimates include the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
information collection. Interested persons may send comments regarding
this burden estimate, or any other aspect of this data collection,
including suggestions for reducing the burden, to both NMFS and OMB
(see ADDRESSES).
Notwithstanding any other provision of law, no person is required
to respond to, and no person is subject to a penalty for failure to
comply with, an information collection subject to the PRA requirements
unless that information collection displays a currently valid OMB
control number.
In addition to public comment about the proposed rule's substance,
NMFS also seeks public comment on any ambiguity or unnecessary
complexity arising from the language used in this proposed rule.
This action would not result in any adverse effects on endangered
species or marine mammals.
List of Subjects in 50 CFR Part 600
Fisheries, Fishing capacity reduction, Fishing permits, Fishing
vessels, Intergovernmental relations, Loan programs--business,
Reporting and recordkeeping requirements.
Dated: December 4, 2002.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
For the reasons in the preamble, the National Marine Fisheries
Service proposes to amend 50 CFR part 600 as follows:
PART 600--MAGNUSON-STEVENS ACT PROVISIONS
1. The authority citation for part 600 is revised to read as
follows:
Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C.
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d)
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20,
and section 205 of Pub. L. 107-117.
2. Section 600.1018 is added to subpart L to read as follows:
Sec. 600.1018 Crab species program.
(a) Purpose. This section's purpose is to implement the program
that Section 144(d) of Division B of Pub. L. 106-554, as amended by
section 2201 of Pub. L. 107-20 and section 205 of Pub. L. 107-117,
enacted for crab species.
(b) Terms. Unless otherwise defined in this section, the terms
defined in Sec. 600.1000 expressly apply to the program for crab.
Likewise, the terms defined in Sec. 679.2 of this chapter also apply
to terms not otherwise defined in either Sec. 600.1000 or this
section. The following terms used in this section have the following
meanings for the purpose of this section:
Acceptance means NMFS' acceptance, on behalf of the United States,
of a bid.
Bid means a bidder's irrevocable offer, in response to an
invitation to bid under this section, to surrender, to have revoked, to
have restricted, to relinquish, to have withdrawn, or to have
extinguished by other means, in the manner that this section requires,
the bidder's reduction fishing interest.
Bid amount means the dollar amount of each bidder's bid.
Bid crab means the crab that NMFS determines each bidder's
reduction vessel harvested, according to the State of Alaska's records
of the documented harvest of crab, from each reduction endorsement
fishery and from the Norton Sound fishery during the most recent 5
calendar years in which each reduction endorsement fishery was for any
length of time open for directed crab fishing during a 10-calendar-year
period beginning on January 1, 1990, and ending on December 31, 1999.
[[Page 76339]]
Bidder means either a qualifying bidder bidding alone or a
qualifying bidder and a co-bidder bidding together who at the time of
bidding holds the reduction fishing interests specified at Sec.
600.1018(e).
Bid score means the criterion by which NMFS decides in what order
to accept bids in the reverse auction specified in this section.
Co-bidder means a person who is not a qualifying bidder but who at
the time of bidding owns the reduction vessel, holds the non-crab
reduction permit, or both owns the reduction vessel and holds the non-
crab reduction permit that this section requires to be included in a
bid and who is bidding together with a qualifying bidder.
Crab means the crab species covered by the Fishery Management Plan
for the Bering Sea/Aleutian Islands King and Tanner Crabs pursuant to
Sec. 679.2 of this chapter.
Crab license means a License Limitation Program license for crab
issued pursuant to Sec. 679.4(k)(5) of this chapter.
Crab reduction permit means a non-interim crab license endorsed for
one or more reduction endorsement fisheries, regardless of whether it
is also endorsed for the Norton Sound fishery.
FSD means NMFS' Financial Services Division, located in NMFS'
Silver Spring, MD, headquarters office.
Norton Sound fishery means the non-reduction fishery defined in
Sec. 679.2 of this chapter as the area/species endorsement for Norton
Sound red king and Norton Sound blue king crab.
NVDC means the U.S. Coast Guard's National Vessel Documentation
Center located in Falling Waters, WV.
Qualifying bidder means a person who at the time of bidding is the
license holder of record of a crab reduction permit.
Qualifying voter means a person who at the time of voting in a
referendum is the license holder of record either of an interim or a
non-interim crab license, except a crab license whose sole area/species
endorsement is for the Norton Sound fishery.
RAM Program means NMFS' Restricted Access Management Program
located in NMFS' Juneau, AK, regional office.
Reduction fishing interest means, for each bid, the bidder's:
(1) Reduction vessel fishing privilege;
(2) Crab reduction permit;
(3) Non-crab reduction permit;
(4) Reduction vessel fishing history; and
(5) Any other claim that could in any way qualify the owner,
holder, or retainer of any of the reduction components, or any person
claiming under such owner, holder, or retainer, for any present or
future limited access system fishing license or permit in any United
States fishery (including, but not limited to, any harvesting privilege
or quota allocation under any present or future individual fishing
quota system).
Reduction endorsement fishery means any of the seven fisheries that
Sec. 679.2 of this chapter defines as area/species endorsements except
the area/species endorsement for the Norton Sound fishery.
Reduction fishery means the fishery for all crab covered by the
Bering Sea/Aleutian Islands King and Tanner Crabs Fishery Management
Plan under all area/species endorsements that section 679.2 of the
chapter defines, except the area/species endorsement for the Norton
Sound fishery.
Reduction loan sub-amount means the portion of the original
principal amount of this program's reduction loan that each reduction
endorsement fishery must repay with interest.
Reduction vessel fishing history means, for each bid, the reduction
vessel's complete history of documented harvest upon any part of which
NMFS based issuance of the bidder's crab reduction permit and non-crab
reduction permit.
Referendum means a referendum under this section to determine
whether voters approve the fee required to repay this program's
reduction loan.
(c) Relationship to this subpart--(1) Provisions that apply. The
provisions of Sec. 600.1000 through Sec. 600.1017 of this subpart
apply to this program except as paragraph (c)(2) of this section
provides; and
(2) Provisions that do not apply. The following sections, or
portions of them, of this subpart do not apply to this program:
(i) All of:
(A) Section 600.1001,
(B) Section 600.1002,
(C) Section 600.1003,
(D) Section 600.1004,
(E) Section 600.1005,
(F) Section 600.1006, and
(G) Section 600.1007,
(ii) The portions of Sec. 600.1008:
(A) Pertaining to an implementation plan,
(B) Pertaining to a 60-day comment period for a proposed
implementation regulation,
(C) Pertaining to public hearings in each State that the this
program affects,
(D) Pertaining to basing the implementation regulation on a
business plan,
(E) Within paragraphs (d)(1)(ii) through (viii),
(F) Within paragraph (d)(2)(ii),
(G) Within paragraph (e), and
(H) Within paragraph (f) and pertaining to fishing capacity
reduction specifications and a subsidized program,
(iii) The portions of Sec. 600.1009:
(A) Pertaining to fishing capacity reduction specifications,
(B) Within paragraph (a)(4),
(C) Pertaining to a reduction amendment,
(D) Within paragraph (a)(5)(ii), to the extent that the paragraph
is inconsistent with the requirements of this section,
(E) Within paragraph (b)(i), and
(F) Pertaining to an implementation plan,
(iv) The portions of Sec. 600.1010:
(A) Within paragraph (b),
(B) Pertaining to fishing capacity reduction specifications,
(C) Within paragraph (d)(1), and
(D) Within paragraphs (d)(4))(iv) through (vii),
(v) The portions of Sec. 600.1011:
(A) That comprise the last sentence of paragraph (a),
(B) Within paragraph (d), and
(C) Within paragraph (e)(2),
(vi) The portions of Sec. 600.1012:
(A) Within paragraph (b)(3) following the word ``subpart'', and
(B) Within paragraph (b)(3), and
(vii) The last sentence of Sec. 600.1014(f).
(d) Reduction cost financing. NMFS will use the proceeds of a
reduction loan, authorized for this purpose, to finance 100 percent of
the reduction cost. The original principal amount of the reduction loan
will be the total of all reduction payments that NMFS makes under
reduction contracts. This amount shall not exceed $100 million.
(e) Who constitutes a bidder. A person or persons who hold all of
the following three reduction components constitutes a bidder:
(1) License or permit holder of record and person otherwise fully
and legally entitled to offer, in the manner that this section
requires, the bid's crab reduction permit and the bid's non-crab
reduction permit;
(2) Reduction vessel owner, title holder of record, and person
otherwise fully and legally entitled to offer, in the manner that this
section requires, the bid's reduction vessel fishing privilege; and
(3) Retainer and person otherwise fully and legally entitled to
offer, in the manner that this section requires, the bid's reduction
vessel fishing history.
(f) How crab licenses determine qualifying bidders and qualifying
voters--(1) Non-interim crab licenses. Each person who is the record
holder of
[[Page 76340]]
a non-interim crab license endorsed for one or more reduction
endorsement fisheries is both a qualifying bidder and a qualifying
voter and can both bid and vote;
(2) Interim crab licenses. Each person who is the record holder of
an interim crab license endorsed for one or more reduction endorsement
fisheries is a qualifying voter but not a qualifying bidder and can
vote but not bid;
(3) Crab licenses endorsed solely for the Norton Sound Fishery.
Each person who is the record holder of any crab license endorsed
solely for the Norton Sound fishery is neither a qualifying bidder nor
a qualifying voter and can neither bid nor vote; and
(4) Time at which qualifying bidders and voters must hold required
crab licenses. A qualifying bidder must be the record holder of the
required crab license at the time the qualifying bidder submits its
bid. A qualifying voter must be the record holder of the required crab
license at the time the qualifying voter submits its referendum ballot.
(g) Qualifying bidders and co-bidders--(1) Qualifying bidders
bidding alone. There is no co-bidder when a qualifying bidder owns,
holds, or retains all the required components of the reduction fishing
interest;
(2) Qualifying bidders bidding together with co-bidders. When a
qualifying bidder does not own the reduction vessel or does not hold
the non-crab reduction permit, the person who does own the reduction
vessel or does hold the non-crab reduction permit may be the qualifying
bidder's co-bidder; and
(3) Minimum reduction components that qualifying bidders must hold
or retain when bidding with co-bidders. At a minimum, a qualifying
bidder must hold the crab reduction permit and retain the reduction
vessel fishing history. The reduction vessel may be owned and the non-
crab reduction permit may be held, however, by another person who is a
co-bidder.
(h) Reduction fishing interest--(1) General requirements. Each
bidder must:
(i) In its bid, offer to surrender, to have revoked, to have
restricted, to relinquish, to have withdrawn, or to have extinguished
by other means, in the manner that this section requires, the reduction
fishing interest,
(ii) At the time of bidding, hold, own, or retain the reduction
fishing interest and be fully and legally entitled to offer, in the
manner that this section requires, the reduction fishing interest, and
(iii) Continuously thereafter hold, own, or retain the reduction
fishing interest and remain fully and legally entitled to offer, in the
manner that this section requires, the reduction fishing interest
until:
(A) The bid expires without NMFS first having accepted the bid,
(B) NMFS notifies the bidder that NMFS rejects the bid,
(C) NMFS notifies the bidder that a reduction contract between the
bidder and the United States no longer exists, or
(D) NMFS tenders reduction payment to the bidder;
(2) Reduction vessel requirements. Except as otherwise provided in
paragraph (h) of this section, the reduction vessel in each bid must:
(i) Be the same vessel upon whose documented harvest of crab during
the GQP, EQP, and RPP NMFS issued the crab reduction permit that the
bidder includes in its bid, and
(ii) Be neither lost nor destroyed at the time of bidding;
(3) Reduction vessel fishing privilege requirements. The reduction
vessel fishing privilege in each bid must be the reduction vessel's:
(i) Fisheries trade endorsement under the Merchant Marine Act, 1936
(46 U.S.C.A. 12108),
(ii) Qualification for any present or future U.S. Government
approval under section (9)(c)(2) of the Shipping Act, 1916 (46 U.S.C.
App. 808(c)(2)) for placement under foreign registry or operation under
the authority of a foreign country, and
(iii) Any other privilege to fish anywhere in the world;
(4) Crab reduction permit requirements. (i) Except as otherwise
provided in paragraph (h) of this section, the crab reduction permit
must in each bid:
(A) Be the crab license that NMFS issued on the basis of the
documented harvest of crab during the GQP, EQP, and RPP of the same
reduction vessel that the bidder includes in its bid,
(B) Be non-interim at the time each bidder submits its bid, and
(C) Include an area/species endorsement for any one or more
reduction endorsement fisheries,
(ii) Although the Norton Sound fishery is not a reduction
endorsement fishery, an area/species endorsement for the Norton Sound
fishery occurring on a crab reduction permit must be surrendered and
revoked (and all fishing history involving it relinquished) in the same
manner as all other reduction endorsement fisheries occurring on the
crab reduction permit; and
(5) Non-crab reduction permit requirements. The non-crab reduction
permit must in each bid be every license, permit, or other harvesting
privilege that:
(i) NMFS issued on the basis of the reduction vessel fishing
history of the same reduction vessel that the bidder includes in its
bid, and
(ii) For which the bidder was the license holder of record on the
effective date of this section; and
(6) Reduction vessel fishing history requirements. Except as
otherwise provided in paragraph (h) of this section, the reduction
vessel fishing history in each bid must be the whole of the reduction
vessel fishing history upon any part of which NMFS based issuance of
the crab reduction permit and the non-crab reduction permit that the
bidder includes in its bid.
(i) Exceptions to the reduction fishing interest requirements--(1)
Lost or destroyed vessel salvaged. When a bidder has salvaged a lost or
destroyed vessel and has made from the salvaged vessel the documented
harvest of crab that Sec. 679.4(k)(5)(iii)(B)(3) of this chapter
requires:
(i) The reduction vessel is the salvaged vessel, and
(ii) The crab portion of the reduction vessel fishing history is
the salvaged vessel's documented harvest of crab; and
(2) Lost or destroyed vessel not salvaged. When a bidder has not
salvaged the lost or destroyed vessel but has made from an alternative
vessel the documented harvest of crab that Sec. 679.4(k)(5)(iii)(B)(3)
of this chapter requires:
(i) The reduction vessel is the alternative vessel,
(ii) The crab portion of the reduction vessel fishing history is
the total of the lost or destroyed vessel's documented harvest of crab
through the date of such vessel's loss or destruction plus the
alternative vessel's documented harvest of crab after such date, and
(iii) For the purposes of this program, the lost or destroyed
vessel's documented harvest of crab merges with, and becomes a part of,
the alternative vessel's documented harvest of crab; and
(3) Acquired crab fishing history. When a bidder, in the manner
that Sec. 679.4(k)(5)(iv) of this chapter requires, has made a
documented harvest of crab from one vessel and has acquired another
vessel's documented harvest of crab:
(i) The reduction vessel is the vessel from which the bidder made
the documented harvest of crab that Sec. 679.4(k)(5)(iv) of this
chapter requires,
(ii) The crab portion of the reduction vessel fishing history is
the total of the acquired documented harvest of crab
[[Page 76341]]
through December 31, 1994, plus the documented harvest of crab after
December 31, 1994, of the vessel from which the bidder made the
documented crab harvest that Sec. 679.4(k)(5)(iv) of this chapter
requires, and
(iii) For the purposes of this program, the acquired documented
harvest of crab merges with, and becomes a part of, the non-acquired
documented harvest of crab.
(j) Determining value of reduction vessels' bid crab--(1) In each
fishery. NMFS will determine the dollar value of each reduction
vessel's bid crab in each reduction endorsement fishery and in the
Norton Sound Fishery by multiplying each reduction vessel's number of
pounds of each species of bid crab by the average ex-vessel price per
pound that the State of Alaska annually publishes for each crab species
in the bid crab; and
(2) In all fisheries. NMFS will determine the dollar value of each
reduction vessel's bid crab in all reduction endorsement fisheries and
in the Norton Sound fishery by adding each of the products of the
multiplications in paragraph (i)(1) of this section; and
(3) Crab excluded from bid crab. A reduction vessel's bid crab may
not include, to the extent that NMFS has knowledge:
(i) Triangle tanner crab, grooved tanner crab, and any other crab
not involved in the various area/species endorsements,
(ii) Discarded crab,
(iii) Crab caught for personal use,
(iv) Unspecified crab, and
(v) Any other crab whose dollar value NMFS cannot, for whatever
reason, determine.
(k) Determining bid score. NMFS will determine each bid score by
dividing each bid amount by the sum in paragraph (i)(2) of this
section.
(l) Determining reduction loan sub-amount--(1) Value of all bid
crab in each fishery. NMFS will add the dollar value of bid crab of all
accepted bidders' reduction vessels in each reduction endorsement
fishery;
(2) Value of all bid crab in all fisheries. NMFS will add the
dollar value of bid crab of all accepted bidders' reduction vessels in
all reduction endorsement fisheries plus the Norton Sound fishery;
(3) Each fishery as a percentage of all fisheries. NMFS will divide
each of the sums in paragraph (k)(1) of this section by the sum in
paragraph (k)(2) of this section. The result of this calculation will
be the dollar value of all bid crab in each reduction endorsement
fishery as a percentage of the dollar value of all bid crab in all
reduction endorsement fisheries plus the Norton Sound fishery;
(4) Applying percentages to loan amount. NMFS will multiply the
reduction loan's full original principal amount by each of the yields
in paragraph (k)(3) of this section; and
(5) Loan sub-amount. Each of the amounts resulting from the
calculation in paragraph (k)(4) of this section will be the reduction
loan subamount that a reduction endorsement fishery must repay.
(m) Prospectively qualifying bidder and voter notification--
(1)General. At the appropriate point before issuing an invitation to
bid, NMFS will publish a notification in the Federal Register listing
all persons who at the time of publishing the notification
prospectively are qualifying bidders and qualifying voters;
(2) Qualifying bidder list. The prospectively qualifying bidder
list will include the names and addresses of record of each license
holder of record for all non-interim crab licenses except only crab
licenses whose sole area/species endorsement is for the Norton Sound
fishery;
(3) Qualifying voter list. The prospectively qualifying voter list
will include the names and addresses of record of each license holder
of record for all non-interim and interim crab licenses except only
crab licenses whose sole area/species endorsement is for the Norton
Sound fishery;
(4) Basis of lists. NMFS will base both the lists on the RAM
Program's license holder records for crab licenses meeting the
requirements of Sec. 679.4(k)(5) of this chapter as well as the
requirements of this section;
(5) Purpose. The purpose of the notification is to provide the
public notice of:
(i) The prospectively qualifying bidders from whom NMFS, by mailing
to them the invitation to bid, will invite bids if the bidders
otherwise meet this section's requirements, and
(ii) The prospectively qualifying voters to whom NMFS will mail
referendum ballots if the voters otherwise meet this section's
requirements; and
(6) Public comment. Any person who wants to comment about the
notification has 30 days from the notification's publication date to do
so. Persons should send their comments to both FSD and the RAM Program
(at addresses that the notification will specify). Comments may
address:
(i) Persons who appear on one or more lists but should not,
(ii) Persons who do not appear on one or more lists but should, and
(iii) Persons who believe their names and/or business mailing
addresses appearing on one or more lists are incorrect.
(n) Invitation to bid--(1) Notification. At the appropriate point
after issuing the notification in paragraph (l) of this section, NMFS
will publish the invitation to bid in the Federal Register notification
further specified in Sec. 600.1009(c) of this subpart. No person may,
however, bid at this stage;
(2) Notification contents. The invitation to bid notification will
state all applicable bid submission requirements and procedures
(including, but not limited to, those included in this section). In
particular, the invitation to bid notification will, among other
things:
(i) State the date on which NMFS will invite bids by mailing an
invitation to bid to each person on the prospectively qualifying bidder
list,
(ii) State a bid opening date, before which a bidder may not bid,
and a bid closing date, after which a bidder may not bid,
(iii) State a bid expiration date after which each bidder's bid
expires unless NMFS, before that date, accepts the bid by mailing a
written acceptance notice to the bidder at the bidder's address of
record,
(iv) State the manner of bid submission and the information each
bidder must submit for NMFS to deem a bid responsive,
(v) State any other information required for bid submission, and
(vi) Include a facsimile of the invitation to bid, containing the
entire terms and conditions of the reduction contract under which each
bidder who bids must bid and under which NMFS must accept each bid that
NMFS accepts; and
(3) Mailing. On the date specified in this notification, NMFS will
invite bids by mailing the invitation to bid and a bidding package,
including a bidding form and full bidding instructions, to each person
then on the prospectively qualifying bidder list. NMFS will not mail
the invitation to bid to any potential co-bidder because NMFS will not
then know which bids may include a co-bidder. Each qualifying bidder is
solely responsible to have any required co-bidder properly complete the
bid. No person may bid before receiving the invitation to bid and the
bidding package that NMFS mailed to that person.
(o) Bids--(1) Content. Each invitation to bid that NMFS mails to a
qualifying bidder will have a bid form that requires each bid to:
[[Page 76342]]
(i) Identify, by name, regular mail address, telephone number, and
(if available) electronic mail address, the qualifying bidder and each
co-bidder,
(ii) State the bid amount in U.S. dollars,
(iii) Identify, by crab license number, the qualifying bidder's
crab reduction permit and include an exact copy of this crab license
(which the RAM Program issued),
(iv) Identify, by vessel name and official number, the bidder's
reduction vessel, and include an exact copy of this vessel's official
document (which NVDC issued),
(v) Identify, by license or permit number, each of the bidder's
non-crab reduction permits; and include an exact copy of each of these
licenses or permits (which the RAM Program issued for licenses or
permits involving species under the jurisdiction of NMFS' Alaska Region
and which other NMFS offices issued for licenses or permits involving
species under those offices' jurisdiction),
(vi) Identify, separately for crab and for each other species:
(A) The qualifying bidder's reduction vessel fishing history,
(B) The dates that each portion of this reduction vessel fishing
history encompasses, and
(C) If the qualifying bidder acquired any reduction vessel fishing
history from another person, the name of the person from which the
qualifying bidder acquired this reduction vessel fishing history and
the date on which the qualifying bidder did so,
(vii) State, declare, and affirm that the qualifying bidder holds
the crab reduction permit and retains the complete reduction vessel
fishing history, and is fully and legally entitled to offer both in the
manner that this section requires,
(viii) State, declare, and affirm that either the qualifying bidder
or the co-bidder owns the reduction vessel and holds the non-crab
reduction permit and is fully and legally entitled to offer both in the
manner that this section requires, and
(ix) Provide any other information or materials that NMFS believes
is necessary and appropriate; and
(2) Rejection. NMFS, regardless of bid scores, will reject any bid
that NMFS believes is unresponsive to the invitation to bid. All bid
rejections will constitute final agency action as of the date of
rejection. Before rejection, NMFS may, however, contact any bidder to
attempt to correct a bid deficiency if NMFS, in its discretion,
believes the attempt warranted.
(p) Acceptance--(1) Reverse auction. NMFS will determine which
responsive bids NMFS accepts by using a reverse auction in which NMFS
first accepts the responsive bid with the lowest bid score and
successively accepts each additional responsive bid with the next
lowest bid score until either there are no more responsive bids to
accept or acceptance of the last responsive bid with the next lowest
bid score would cause the reduction cost to exceed $100 million. If two
or more responsive bid scores are exactly the same, NMFS will first
accept the bid that NMFS first received;
(2) Notification. NMFS will, in the manner that Sec.
600.1009(e)(3) of this subpart requires, notify bidders whose bids NMFS
accepted; and
(3) Post-acceptance reduction permit transfer. After NMFS has
accepted bids, neither the RAM Program (nor any other NMFS office) will
transfer to other persons any reduction permits that accepted bidders
included in the accepted bids unless and until FSD advises the RAM
Program (or some other NMFS office) that the resulting reduction
contracts are no longer in effect because a referendum failed to
approve the fee that this section requires to repay this program's
reduction loan.
(q) Reduction contracts subject to successful post-bidding
referendum condition. Although this program involves no fishing
capacity reduction specifications under this subpart, each bid, each
acceptance, and each reduction contract is nevertheless subject to the
successful post-bidding referendum condition that Sec. 600.1009(a)(3)
of this subpart specifies for bidding results that do not conform to
the fishing capacity reduction specifications.
(r) Post-bidding referendum--(1) Purpose. NMFS will conduct a post-
bidding referendum whose sole purpose is to determine whether, based on
the bidding results, qualifying voters who cast referendum ballots in
the manner that this section requires authorize the fee required to
repay this program's reduction loan;
(2) Manner of conducting. NMFS will mail a referendum ballot to
each person then on the prospectively qualifying voter list for each
crab license that the person holds and otherwise conduct the referendum
as specified in Sec. 600.1010 of this subpart;
(3) One vote per crab license. Each qualifying voter may cast only
one vote for each crab license that each qualifying voter holds;
(4) Crab License Numbers on Ballots. Each referendum ballot that
NMFS mails will contain the license number of the prospectively
qualifying voter's crab license to which the ballot relates;
(5) Potential reduction results stated. Each referendum ballot that
NMFS mails will state the aggregate potential reduction results of all
the bids that NMFS accepted, including:
(i) The amount of reduction that all accepted bids potentially
effect, including:
(A) The number of crab reduction permits, together with each area/
species endorsement for which each of these licenses is endorsed,
(B) The number of reduction vessels, and
(C) The aggregate and average dollar value of bid crab (together
with the number of pounds of bid crab upon which NMFS based the dollar
value), in each reduction endorsement fishery and in the reduction
fishery, for all reduction vessels during the period for which NMFS
calculates the dollar value of bid crab,
(ii) The reduction loan sub-amount that each reduction endorsement
fishery must repay if a referendum approves the fee, and
(iii) Whatever other useful information (if any) NMFS may then have
about the potential sub-fee rate initially necessary in each reduction
endorsement fishery to repay each reduction loan sub-amount; and
(6) Notice that condition fulfilled. If the referendum is
successful, NMFS will notify accepted bidders, in the manner that Sec.
600.1010(d)(6)(iii) of this subpart specifies, that a successful
referendum has fulfilled the reduction contracts' successful post-
bidding referendum condition specified in paragraph (p) of this
section.
(s) Reduction method. In return for each reduction payment, NMFS
will permanently:
(1) Revoke each crab reduction permit;
(2) Revoke each non-crab reduction permit;
(3) Revoke each reduction vessel fishing privilege (which
revocation will run with the reduction vessel's title in the manner
that Sec. 600.1009(a)(5)(ii)(A) of this subpart requires and in
accordance with 46 U.S.C. 12108(d));
(4) Effect relinquishment of each reduction vessel fishing history
for the purposes specified in this section by noting in the RAM Program
records (or such other records as may be appropriate for reduction
permits issued elsewhere) that the reduction vessel fishing history has
been relinquished under this section and will never again be available
to anyone for any fisheries purpose; and
[[Page 76343]]
(5) Otherwise restrict in accordance with this subpart each
reduction vessel and fully effect the surrender, revocation,
restriction, relinquishment, withdrawal, or extinguishment by other
means of all components of each reduction fishing interest.
(t) Reduction payment tender and disbursement--(1) Fishing
continues until tender. Each accepted bidder may continue fishing as it
otherwise would have absent the program until NMFS, after a successful
referendum, tenders reduction payment to the accepted bidder;
(2) Notification to the public. Immediately after a successful
referendum and before tendering reduction payment, NMFS will publish a
notification in the Federal Register listing all proposed reduction
payments and putting the public on notice:
(i) Of the crab reduction permits, the reduction vessels, the
reduction vessel fishing histories, and the non-crab reduction permits
upon whose holding, owning, retaining, or other legal authority
representations accepted bidders based their bids and NMFS based its
acceptances, and
(ii) That NMFS intends, in accordance with the reduction contracts,
to tender reduction payments in return for the actions specified in
paragraph (r) of this section;
(3) Public response. The public has 30 days after the date on which
NMFS publishes the reduction payment tender notification to advise NMFS
in writing of any holding, owning, or retaining claims that conflict
with the representations upon which the accepted bidders based their
bids and on which NMFS based its acceptances;
(4) Tender and disbursement parties. NMFS will tender reduction
payments only to accepted bidders. Unless accepted bidders responding
to NMFS' reduction payment tenders provide NMFS with explicit written
payment instructions and authorizations to the contrary, NMFS will also
disburse reduction payments only to accepted bidders (including, in the
instance of co-bidders, joint disbursement to qualifying bidders and
their co-bidders). Creditors or other parties with secured or other
interests in reduction vessels or reduction permits are responsible to
make their own arrangements with accepted bidders;
(5) Time of tender. At the end of the reduction payment tender
notification period, NMFS will tender reduction payments to accepted
bidders, unless NMFS then knows of a material dispute about an accepted
bidder's authority to enter into the reduction contract with respect to
any one or more components of the reduction fishing interest that
warrants, in NMFS' discretion, an alternative course of action;
(6) Method of tender and disbursement. NMFS will tender reduction
payment by requesting from each accepted bidder specific, written
instructions for paying the reduction payments. Upon receipt of these
payment instructions, NMFS will immediately disburse reduction payments
in accordance with the payment instructions; and
(7) Effect of tender. Concurrently with NMFS' tender of reduction
payment to each accepted bidder:
(i) All fishing activity for any species anywhere in the world in
any way associated with each accepted bidder's reduction fishing
interest must forever cease--with the sole exception that each
reduction vessel may continue fishing in any reduction endorsement
fishery, for which the accepted bidder's crab reduction permit is
endorsed, that is still open for directed crab fishing at the time of
reduction payment tender until such fishery thereafter first closes,
(ii) Each accepted bidder must retrieve all fixed fishing gear for
whose deployment the accepted bidder's reduction vessel was
responsible, and
(iii) NMFS will fully exercise its reduction contract rights with
respect to the reduction fishing interest by taking the actions
specified in paragraph (r) of this section.
(u) Fee payment and collection--(1) Fish sellers who pay the fee.
Any person who harvests any crab, but whom ADF&G's fisheries reporting
requirements do not require to record and submit an ADF&G fish ticket
for that crab, is a fish seller for the purpose of paying any fee on
that crab and otherwise complying with the requirements of Sec.
600.1013 of this subpart;
(2) Fish buyers who collect the fee. Any person whom ADF&G's
fisheries reporting requirements require to record and submit an ADF&G
fish ticket for any crab that another person harvested is a fish buyer
for the purpose of collecting the fee on that crab and otherwise
complying with the requirements of Sec. 600.1013 of this subpart; and
(3) Persons who are both fish sellers and fish buyers and both pay
and collect the fee. Any person who harvests any crab, and whom ADF&G's
fisheries reporting requirements require to record and submit an ADF&G
fish ticket for that crab, is both a fish seller and a fish buyer for
the purpose of paying and collecting the fee on that crab and otherwise
complying with the requirements of Sec. 600.1013 of this subpart.
(v) Fishing prohibition and penalties--(1) General. Fishing, for
the purpose of this section, includes the full range of activities
defined in the term ``fishing'' in the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1801),
(2) Prohibitions. Concurrently with NMFS' tender of each reduction
payment, and with the sole exception in paragraph (s)(7)(i) of this
section, no person whatsoever may, and it is unlawful for any person
to:
(i) Fish with or attempt to fish with, or allow others to fish with
or attempt to fish with, the reduction vessel anywhere in the world for
any species under any conditions and regardless of the reduction
vessel's ownership or registry for so long as the reduction vessel
exists. This prohibition includes, but is not limited to, fishing on
the high seas or in the jurisdiction of any foreign country while
operating under U.S. flag,
(ii) Place or attempt to place, or allow others to place or attempt
to place, the reduction vessel under foreign flag or registry,
(iii) Operate or attempt to operate, or allow others to operate or
attempt to operate, the reduction vessel under the authority of a
foreign country,
(iv) Otherwise avoid or attempt to avoid, or allow others to avoid
or attempt to avoid, the revocation of the reduction vessel fishing
privilege with respect to any reduction vessel, and
(v) Make any claim or attempt to make any claim, or allow others to
claim or attempt to make any claim, for any present or future limited
access fishing license or permit in any U.S. fishery (including, but
not limited to, any quota allocation under any present or future
individual quota allocation system) based in any way on any portion of
a reduction fishing interest surrendered, revoked, restricted,
relinquished, withdrawn, or extinguished by other means under this
section; and
(3) Penalties. The activities that this paragraph prohibits are
subject to the full penalties provided in Sec. 600.1017 of this
subpart, and immediate cause for NMFS to take action to, among other
things:
(i) At the reduction vessel owner's expense, seize and scrap the
reduction vessel, and
(ii) Pursue such other remedies and enforce such other penalties as
may be applicable.
(w) Program administration--(1) FSD responsibilities. FSD is
responsible for implementing and administering this program. FSD will:
(i) Issue all notifications and mailings that this section
requires,
[[Page 76344]]
(ii) Prepare and issue the invitation to bid,
(iii) Receive bids,
(iv) Reject bids,
(v) Score bids,
(vi) Make acceptances,
(vii) Prepare and issue referendum ballots,
(viii) Receive referendum ballots,
(ix) Tally referendum ballots,
(x) Determine referendum success or failure,
(xi) Tender and disburse reduction payments,
(xii) Administer reduction contracts,
(xiii) Administer fees and reduction loan repayment, and
(xiv) Discharge all other management and administration functions
that this section requires;
(2) RAM Program responsibilities. Upon FSD's advice, the RAM
Program (for fishing licenses under the jurisdiction of NMFS's Alaska
Region) and any other appropriate NMFS authority (for fishing licenses
under the jurisdiction of any other NMFS office) will revoke reduction
permits and effect the surrender of fishing histories in accordance
with this section; and
(3) NVDC and U.S. Maritime Administration responsibilities. FSD
will advise NVDC, the U.S. Maritime Administration, such other agency
or agencies as may be involved, or all of them to revoke reduction
vessels' fisheries trade endorsements and otherwise restrict reduction
vessels in accordance with this section.
(x) Reduction loan and reduction loan sub-amounts. [Reserved]
[FR Doc. 02-31218 Filed 12-11-02; 8:45 am]
BILLING CODE 3510-22-S