[Federal Register: July 18, 2003 (Volume 68, Number 138)]
[Rules and Regulations]
[Page 42613-42643]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18jy03-26]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 030509119-3168-02; I.D. 032603D]
RIN 0648-AQ99
Magnuson-Stevens Act Provisions; Fishing Capacity Reduction
Program; Pacific Coast Groundfish Fishery; California, Washington, and
Oregon Fisheries for Coastal Dungeness Crab and Pink Shrimp
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration, Commerce.
ACTION: Final notice of proposed fishing capacity reduction program.
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SUMMARY: NMFS issues this final notice about a voluntary fishing
capacity reduction program in the Pacific Coast groundfish fishery.
After a successful referendum, harvesters accepted to participate would
be paid to surrender their fishing permits and restrict their vessels.
A loan, which would be repaid by fishermen remaining in the fishery,
will finance the majority of the program's cost. The program will
invite bids from owners of groundfish trawl permits (except those
harvesting whiting and processing it at sea) that are willing to
surrender their fishing privileges, score the bids in a reverse auction
against the value of bidders' harvests, and then conduct a referendum
regarding repayment of the loan. If the referendum is successful,
accepted bidders must relinquish their California, Oregon, and
Washington fishing licenses for coastal Dungeness crab and pink shrimp.
Accepted bidders must also surrender their Federal groundfish permits,
as well as all other Federal fishing licenses, fishery permits, area
and species endorsements, and any other fishery privileges issued to
vessels named in their bids (or to persons on the basis of their
operation or ownership of those vessels). The fishing vessels involved
will never again be eligible to fish. If the referendum is not
successful, bidders are excused from all such obligations. The
groundfish program aims to increase the remaining harvesters'
productivity, help financially stabilize the fishery, and help conserve
and manage its fish. This notice also contains the groundfish program's
invitation to bid and bidding document.
DATES: The final notice is effective July 18, 2003.
ADDRESSES: Copies of the environmental assessment and regulatory impact
review are available from NMFS upon request from Michael L. Grable,
Chief, Financial Services Division, National Marine Fisheries Service,
1315 East-West Highway, Silver Spring, MD 20910-3282. Comments
involving the reporting burden estimates or any other aspects of the
collection of information requirements should be sent both to Michael
L. Grable at the above address and to the National Oceanic and
Atmospheric Administration Desk Officer, Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503. Comments sent by Internet or e-mail will not be accepted.
FOR FURTHER INFORMATION CONTACT: Michael L. Grable, (301) 713-2390.
SUPPLEMENTARY INFORMATION:
I. General
Enacted on February 20, 2003, Section 212 of Division B, Title II,
of Pub. L. 108-7 (section 212) authorizes a fishing capacity reduction
program (program) for that portion of the limited entry trawl fishery
under the Pacific Coast Groundfish Fishery Management Plan whose
permits, excluding those registered to whiting catcher-processors, are
endorsed for trawl gear operation (reduction fishery). The program's
objective is to reduce the number of vessels and permits endorsed for
the operation of groundfish trawl gear. Vessels that catch and process
whiting at sea are ineligible to participate. The program also involves
corollary fishing capacity reduction in the California, Oregon, and
Washington fisheries for coastal Dungeness crab and pink shrimp (fee-
share fisheries). Sections 1111 and 1112 of the Merchant Marine Act,
1936 (46 App. U.S.C. 1279f and 1279g) (Title XI) authorize loans for
financing the cost of fishing capacity reduction programs (reduction
loans).
The program has two appropriations. A $10 million appropriation,
authorized by section 501(b) of Division N, Title V, of Public Law 108-
7, directly funds part of the program's cost. The second, a $0.5
million appropriation, included in Pub. L. 107-206, funds the Federal
Credit Reform Act cost of authorizing a $36 million reduction loan.
Section 212 supersedes some of the provisions of both the fishing
capacity reduction framework regulations (50 CFR 600.1000 et seq.) and
the Magnuson-Stevens Act fishing capacity reduction provisions (16
U.S.C. 1861a(b)-(e)).
When fishing capacity reduction is undertaken pursuant to the
Magnuson-Stevens Act provisions, NMFS implements each reduction program
by adding an implementing section to the framework regulations. Section
212, however, renders some of the Magnuson-Stevens Act provisions and
the framework regulations inapplicable. Among other things, the
groundfish program applies to more than one fishery. Section 212 also
requires NMFS to implement the groundfish program by publishing a
notification and an invitation to bid in the Federal Register rather
than by promulgating additional regulations. In addition, section 212
supersedes one provision of Title XI, by extending the reduction loan's
term to 30 years.
II. Reduction Cost
The amount paid to harvesters in exchange for relinquishing their
fishery privileges (reduction cost) may equal, but may not exceed, $46
million. A $10 million appropriation will fund part of the reduction,
and future harvesters will finance any remainder.
III. Summary of Comments
NMFS received comments from nine entities. Comments from both
individuals and organizations represent the views of many parties. Most
of the comments supported fishing capacity reduction in the reduction
fishery, although some comments disagreed
[[Page 42614]]
with some aspects of the proposed notice.
Comment 1: Three comments suggested that NMFS offer flat permit-
relinquishment payments to groundfish reduction permit owners who own
no reduction vessel.
Response: This was not specifically contemplated in the statute and
therefore NMFS does not have the authority to implement such a payment
scheme.
Comment 2: Three comments suggested that NMFS allow entities that
own reduction vessels to be co-bidders with other entities that own
groundfish reduction permits but not reduction vessels.
Response: NMFS agrees and has expanded the definition of bidder to
allow co-bidder participation. A bid can include multiple parties
owning or holding the different reduction components required for a
bid.
Comment 3: One comment requested that NMFS change ``Dungeness
crab'' to ``ocean Dungeness crab'' to ensure that Dungeness crab inside
Puget Sound is excluded from this program.
Response: NMFS agrees that Puget Sound Dungeness crab should be
excluded as a fee-share fishery and has added the term ``coastal'' to
clarify the Dungeness crab eligible for this program. This term is
intended to encompass California, Oregon, and Washington state's
description of Dungeness crab fisheries and permit systems outside of
Puget Sound.
Comment 4: Two comments requested that NMFS remove the provisions
requiring relinquishment of fee-share reduction permits not registered
to reduction vessels.
Response: NMFS agrees and has clarified the language to require
that only fee-share permits registered to a reduction vessel be
relinquished.
Comment 5: Two comments state that NMFS' request for information
regarding catch history as a requirement of the bid is unnecessary
because such information on how fishermen got their permits is
irrelevant.
Response: NMFS agrees and has made the appropriate revisions.
Comment 6: One comment suggested clarifying that relinquishing
Federal permits other than the groundfish reduction permit is
restricted to Federal permits registered to the reduction vessel.
Response: NMFS agrees and has made the appropriate revision.
Comment 7: One comment suggests that bid scoring should include the
average landings values of only those fee-share fisheries that match
the bidder's fee-share reduction permits.
Response: NMFS agrees and has clarified that such values should
correspond to the bidder's fee-share reduction permits.
Comment 8: Two comments requested that NMFS allow bidders to
document alternative landings values higher than those in the official
fish-ticket databases.
Response: In order to provide a fair opportunity for all bidders to
document their landings, NMFS determined the best evidence of landings
is the official fish-ticket databases.
Comment 9: One comment suggested that in situations involving bids
with identical scores, where accepting both would exceed funding
levels, NMFS should accept the bid with the lowest value first rather
than the bid first received.
Response: NMFS agrees that the process for accepting bids with
identical scores should be revised. However, to be consistent with the
purposes of the Program, where there is not sufficient reduction
funding to accept all bids, NMFS will accept the bid that removes the
greatest amount of capacity without exceeding funding limits. If both
bids remove the same amount of capacity, the bid received first will be
accepted.
Comment 10: One comment suggested that NMFS delay notifying bidders
that bids have been accepted until after a successful referendum.
Response: NMFS agrees and will notify accepted bidders after the
referendum.
Comment 11: One comment suggested that NMFS clarify that the loan
sub-amount calculation's dividend is derived from the bid-scoring
period landing values of the accepted bidders.
Response: NMFS agrees and has changed the notice accordingly.
Comment 12: One comment suggests that NMFS establish a specific
time for every accepted bidder to stop fishing, as opposed to the
proposed notice and addenda provisions that each accepted bidder must
stop fishing upon receipt of NMFS' request for payment instructions.
The suggestion is that fishing cease 30 days after the certification of
referendum results.
Response: NMFS agrees that this provision should be modified so
that all accepted bidders will cease fishing at the same time. The
provision has been revised so that the bidder must have stopped fishing
and must have retrieved all fishing gear previously deployed from the
reduction vessel 30 days after the publication of the reduction payment
tender notice.
Comment 13: Two comments suggest that NMFS revise the notice and
addenda language which holds accepted bidders accountable for the
actions of new owners to whom accepted bidders may, after buyback,
transfer reduction vessels.
Response: NMFS agrees that accepted bidders cannot be held
responsible for the future actions of unrelated third parties to whom
they transfer these vessels. Any violations by the new owners will be
addressed under existing statutory authority.
Comment 14: One comment questioned if ``inside waters'' fishing
count for bid scoring purposes.
Response: All landings, including in inside waters, associated with
the management of federal groundfish and with state coastal fisheries
for pink shrimp and Dungeness crab will be used for bid scoring
purposes.
Comment 15: One commenter questioned if accepted bidders may fish a
reduction vessel in ``inside waters'' or sell the vessel to Mexico or
Alaska.
Response: A reduction vessel may not be fished anywhere. It may not
be sold into any foreign registry or operation but can be sold to an
Alaska resident, although it cannot fish there or anywhere else.
Comment 16: One comment asked NMFS to establish the ``basic trawl
permit price without a past harvest''.
Response: Congress established a bidding formula, which requires
past harvest revenues.
Comment 17: One comment asked if NMFS buys back only his permit, if
he could fish his reduction vessel in inside waters.
Response: This capacity reduction program compensates fishermen for
relinquishing not only the reduction permits but the fishery
endorsement of the reduction vessel. Therefore, the reduction vessel
cannot fish anywhere. If the reduction vessel is a state registered
vessel, it must be scrapped.
Comment 18: One comment asked what to do with a reduction vessel.
Response: The owner of a reduction vessel may do whatever he
chooses with a reduction vessel as long as he does not fish with the
reduction vessel or move it into a foreign registry or operation,
except for non-Federally registered vessels which must be scrapped.
Comment 19: One comment suggested that a reduction vessel be
saleable into a foreign fishery because this is most beneficial to the
buyback.
Response: The authorizing statute prohibits such a sale.
Comment 20: One comment asked if a reduction vessel can be used for
tendering and for the definition of ``fishing''.
Response: The definition of ``fishing'' is contained in the
Magnuson-Stevens
[[Page 42615]]
Act and would preclude a reduction vessel from tendering.
Comment 21: One comment asked if income from NMFS fisheries
research charters can be included in landings for bid scoring.
Response: Yes, but only the income from the sale of the groundfish
recorded on fish tickets.
Comment 22: One comment asked what happens to fish in deployed gear
at the time of tender, when fishing must cease.
Response: Any fish caught within the 30 day time period may be
legally retained and sold. After that date, the gear should have been
pulled up and no longer fishing.
Comment 23: One comment implies that coastal Dungeness crab and
pink shrimp gear should be included in the capacity reduction program.
Response: No statutory authority exists to buy back fishing gear.
Comment 24: One comment implies that accepted bidders should be
prevented from using their reduction payments to buy existing coastal
Dungeness crab or pink shrimp permits and crab or shrimp gear and
leasing them to vessels already in these fisheries.
Response: No statutory authority exists to make this change.
Comment 25: One comment implies that the existence of latent
permits in coastal Dungeness crab and pink shrimp fisheries exacerbates
problems described in comments (23) and (24).
Response: Latent permits in these fisheries is an issue that should
be addressed by state fisheries managers.
Comment 26: One comment implies that accepted bidders should,
themselves, be prevented from ever fishing again.
Response: No statutory authority exists to make this change.
Comment 27: One comment suggested that all reduction vessels should
be scrapped.
Response: The authorizing statute allows for retention of the
reduction vessel as long as the fishery endorsement is cancelled. This
affords more capacity removal from the targeted fisheries at less cost.
Comment 28: One comment stated that neither the notice nor its
addenda indicate whether a reduction vessel which has a multi-year NMFS
trawl-survey charter can continue with the charter after the buyback.
Response: The vessel's fishery endorsement will have been withdrawn
and therefore the vessel can no longer fish. However, NMFS will work
internally to ensure that any fishermen who is bought out will not be
subject to a Governmental action for breach of contract based on
inability to fish due to the buyback.
Comment 29: One comment stated that NMFS lacks legal authority
regarding the coastal Dungeness crab and pink shrimp fisheries noting
that they are managed by the respective states.
Response: NMFS acknowledges that these are state-managed fisheries
and will work with the states to implement this voluntary program as
directed by the authorizing legislation to revoke the fee-share fishery
reduction permits. Nevertheless, this does not affect fee payment and
collection.
Comment 30: One comment questioned NMFS' legal authority regarding
processors of trawl groundfish noting that there are no Federal
requirements for permits or reporting groundfish landings.
Response: The Fishery Management Plan for Pacific Coast Groundfish
incorporates by reference state requirements to record landings on
state fish tickets.
Comment 31: One comment stated that Congress intended for NMFS to
follow existing practices for fee collection.
Response: The authorizing legislation provides an option for the
U.S. may enter into agreements with California, Oregon, and Washington
to collect the fees that repay the reduction loan. Unless and until
NMFS arranges to do so, however, fish sellers will pay the fees and
fish buyers will collect the fees in accordance with the framework
regulations.
Comment 32: One comment states that the volume and size of fish
buyers dictates special circumstances to avoid an administrative
nightmare for NMFS.
Response: NMFS believes that the fee collection system currently in
place should be adequate.
Comment 33: One comment strongly suggests that NMFS enter into fee
collection arrangements with the States.
Response: Because of specific statutory time constraints, NMFS must
defer this matter's resolution until after the buyback, at which time
we will explore optional state fee collection.
Comment 34: One comment states that the program's Environmental
Assessment and Regulatory Impact Review (EA/RIR) does not estimate how
many small businesses may be required to participate in the fee
collection process.
Response: Section 3.6 or the EA/RIR discusses the processing sector
by reviewing data on the 1,780 purchasers of fish from West coast
harvesters during 2000. Fish buyers are categorized according to
``large'' and ``small'' buyers based on the amount of fish purchased.
However, available analyses on the diversity and size of the processing
sector as well as state participation in the fee collection process
precludes NMFS from developing definitive estimates of processor
involvement. According to SBA (See Section 6.6), a ``large'' processor
is a processor with more than 500 employees. NMFS does not have
complete data on processing employment by processing site or by
company. (Some companies control several sites). However, based on
available descriptions of companies and ownership, NMFS believes that
almost all of the processors on the West Coast would be considered
``small'' under the SBA definition. Sections 3.6 and 6.6 of the EA/RIR
will be revised accordingly.
Comment 35: One comment questioned the analysis undertaken in
Section 4.2 of the EA/RIR to show the remaining fishermen the benefit
of the program will outweigh the program costs passed on to them.
Response: The program is statutorily mandated but participation is
voluntary. It is difficult to quantify the effects of a capacity
reduction program before it occurs due to many unknown variables.
However, the success of a fishing capacity reduction program depends
upon certain assumptions such as the number of fish after a reduction
remaining constant, preventing new capacity from replacing retired
capacity, and fish prices remaining constant. If these assumptions are
true then revenue for the remaining participants after fee payment
would likely increase. A majority of those voting in the referendum
would need to support it in order for the industry fee system to be
approved.
Comment 36: One comment asserted that the analysis in Section 4.8
of the EA/RIR repeats an untrue assumption that removing permits from
the coastal Dungeness crab and pink shrimp fisheries will benefit
fishermen by increasing access to a greater portion of management
quotas and trip limits.
Response: The appropriate sections of the EA/RIR will be clarified
to reflect that trip limits and quotas are not used in the management
of coastal Dungeness Crab and Pink Shrimp. However, NMFS maintains that
in general terms, these fisheries would benefit because fewer fishermen
would remain fishing for the same amount of fish. In addition, if the
Buyback Program provides conservation benefits to the groundfish fish
stocks, current groundfish bycatch restrictions on the non-groundfish
fisheries, particularly the Pink Shrimp fisheries may be relaxed.
However, the
[[Page 42616]]
commenter raises valid issues in noting that benefits to non-groundfish
fee share fisheries may be limited by the extent that latent capacity
is activated, purchased capacity is replace through the issuance of new
state permits, or effort is increased as the result of buyback program.
The Commenter estimates that at least 100 of the the Oregon Dungeness
Crab fishery permits are latent permits. As described in the EA/RIR,
the Oregon Pink shrimp fishery has a requirement that if the number of
active permits falls below 150, a lottery is to be held to return the
number of issued permits to 150. Currently, there are 186 Oregon
permits issued. Therefore, depending on the state fishery, the benefits
will be hard to assess until it is known what permits are to be
purchased and how the States are to respond to the statutory language
that states: ``It is the sense of Congress that the States of
Washington, Oregon, and California should revoke all relinquishment
permits in each of the fee-share fisheries immediately after the
reduction payment, and otherwise to implement appropriate State
fisheries management and conservation provisions in each of the fee-
share fisheries that establishes a program that meets the requirements
of 16 U.S.C. 141861a(b)(1)(B) as if it were applicable to fee-share
fisheries.''
IV. Summary of Revisions
The following sections of this final notice revise the proposed
notice.
(1) The term co-bidder has been added to include third parties who
own and/or hold reduction components and will participate in the
bidding with the qualifying bidder.
(2) Bid-scoring includes the average landings values of only those
fee-share fisheries that match the bidder's fee-share reduction permits
included in the bid.
(3) For identical bid scores where there is not sufficient
reduction funding to accept both, NMFS will accept the bid that removes
the greatest amount of capacity without exceeding funding limits or if
both bids remove identical amounts of capacity, the first received.
(4) Notification of accepted bidders will occur after the
referendum.
(5) Accepted bidders must have stopped fishing and must have
retrieved all fishing gear previously deployed from the reduction
vessel 30 days after NMFS publishes the reduction payment tender notice
in the Federal Register.
V. Program Summary
NMFS will mail to each ``permit owner'' (as 50 CFR 660.302 defines
the term ``permit owner'') of a groundfish permit endorsed for trawl
gear operation (other than those issued to whiting catcher-processors)
an advance notice that NMFS will formally invite bids for capacity
reduction by mailing them a bidding package. Such notice and the
bidding package will be mailed to the permit owner at the owner's
permit address of record.
The bidding package will contain, among other things, an invitation
to bid and a bidding document. The invitation to bid will specify the
terms and conditions under which bids are made and accepted. If the
Secretary formally accepts a bid, the bidding document, in conjunction
with the invitation to bid, will constitute a reduction contract
between the bidder and the United States.
No bidder may bid before receiving the bidding package. Bidders
must submit bids on provided forms and in strict conformance with the
requirements of the invitation to bid. NMFS will reject any
nonconforming bids.
The invitation to bid and bidding document will be similar to the
pro forma invitation to bid and bidding document (see addenda to this
notification). What follows is a general summary of the relevant
provisions.
To submit a bid, bidders must mail or otherwise deliver their bids
to NMFS at the address specified in the invitation to bid. Each bidder
is responsible for ensuring that NMFS receives his or her bid before
the specified bid closing date. NMFS will reject any bid that arrives
after the bid closing date; such a bid will be deemed unresponsive to
the invitation to bid. All terms and conditions of the invitation to
bid or the bidding document are final at the time NMFS mails the
bidding package. Thereafter, NMFS will not alter or negotiate any term
or condition.
Each bid must specify:
(a) The exact bid price (also referenced as Reduction Payment),
(b) The reduction vessel the bidder proposes to remove from fishing
(reduction vessel),
(c) The groundfish reduction permit,
(d) Any other Federal permits registered to or used on the
reduction vessel,
(e) All California, Oregon, or Washington issued permits for
coastal Dungeness crab or pink shrimp registered to or used on the
reduction vessel (fee-share reduction permits).
Parties other than the qualifying groundfish permit owner who hold
or own the other different components required for a bid may be co-
bidders. Between them, bidders or co-bidders must own or hold all
required bid components. The groundfish reduction permit must be
registered for use on the reduction vessel. The bidder must also
include in the bid all Federal fishery licenses, fishery permits, area
and species endorsements, and any other fishing privileges issued to a
reduction vessel or to the bidder co-bidder on the basis of its
operation or ownership of the reduction vessel.
By completing and submitting a bidding document to NMFS, each
bidder makes an irrevocable offer to the United States. No bidder, once
having submitted a bid to NMFS, is entitled to withdraw or in any way
amend the bid.
Each bidder must offer to relinquish all of his or her Federal
permits and any state permits for pink shrimp or coastal Dungeness
crab. Additionally, each person submitting a bid must offer to
relinquish the reduction vessel's legal authority to participate in any
fishery, by offering to permanently:
(a) Allow imposition of title restrictions that remove the
reduction vessel's fisheries endorsement,
(b) Relinquish eligibility 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 of the reduction vessel under
foreign registry or operation under the authority of a foreign country,
and
(c) Relinquish any other present or future reduction vessel fishing
privilege or fishery eligibility claim of any kind, including any based
on the reduction vessel's catch history.
If a reduction vessel is registered only under state jurisdiction
(i.e., it is not Federally documented), it must be scrapped.
After bidding, the bidder must continue to hold all reduction
permits and own the reduction vessel until: NMFS notifies the bidder
that NMFS rejects the bid, the bid expires without NMFS having accepted
or rejected it, NMFS notifies the bidder that a reduction contract
between the bidder and the United States no longer exists, or NMFS
tenders reduction payment to the bidder and the bidder relinquishes all
reduction permits and the reduction vessel's fishing privileges.
NMFS will determine which bids it accepts by using a reverse
auction. Upon receipt of each bid, NMFS will determine a bid score by
dividing each bid amount by the average annual total ex-vessel dollar
value of the Pacific groundfish, coastal Dungeness crab, and pink
shrimp landed by the bidder's reduction vessel that corresponds to the
bidder's fee-share reduction permits. NMFS will average the three
highest total annual revenues from groundfish,
[[Page 42617]]
coastal Dungeness crab, and pink shrimp during 1998, 1999, 2000, or
2001.
NMFS will accept the responsive bid with the lowest bid score and
then successively accept each additional responsive bid with the next
lowest bid score until either there are no more bids to accept or
acceptance of the bid with the next lowest bid score would cause the
reduction cost to exceed the maximum reduction cost. If any two or more
bid scores are exactly the same and there is not sufficient reduction
funding to accept both, NMFS will accept the bid that removes the
greatest amount of capacity, or in the event more that one such bid
removes the same amount of capacity, the bid it received first.
NMFS will accept or reject each bid but will notify bidders
accordingly only after a successful referendum occurs. NMFS' acceptance
of a bid offer will form a fully binding reduction contract between the
bidder (and any co-bidders) and the United States. Each party's
obligation to perform in accordance with the terms and conditions of
any reduction contract will, however, be subject to a successful fee
referendum.
After bids are formally accepted, NMFS will establish up to seven
reduction loan sub-amounts, one for the reduction fishery and one for
each of the fee share fisheries. A reduction sub-amount is a fishery's
share of the reduction loan and is in proportion to the fishery's share
of the total ex-vessel dollar value of the groundfish, coastal
Dungeness crab, and pink shrimp which all reduction vessels landed
during the four-year period from 1998 through 2001. Post-reduction fees
from each of these fisheries will repay its respective reduction loan
sub-amount.
Specifically, NMFS will calculate each reduction loan sub-amount as
follows. NMFS will separately add the total ex-vessel values of the
accepted bidders landings, for the four-year period from 1998 through
2001, for the reduction fishery (i.e., groundfish trawl fishery) and
the fee-share fisheries (the three coastal Dungeness crab fisheries and
the three pink shrimp fisheries). Then NMFS will divide each of the
seven totals by the aggregate value of all of the landings from all
seven fisheries to derive seven quotients. NMFS will then multiply the
reduction loan amount by each of the quotients to determine the loan
sub-amount that each of these fisheries must repay.
NMFS will conduct the referendum as soon as practicable. The
referendum's sole purpose will be to determine whether the voters who
cast referendum ballots authorize the fee required to repay the
reduction loan.
NMFS will mail referendum information, voting instructions, and a
referendum ballot(s) to the permit owner of each groundfish permit in
the reduction fishery and to the person who is the holder of record of
each state-issued pink shrimp or coastal Dungeness crab permit
(collectively, eligible voters). NMFS will include information about
the following bid acceptance results:
(a) The program's reduction cost,
(b) The seven reduction loan sub-amounts,
(c) The number of permits that will be relinquished,
(e) The number of reduction vessels, and
(f) The total ex-vessel dollar values of reduction vessel landings
in the reduction fishery and in each of the six fee-share fisheries,
during each year from 1998 through 2001.
NMFS will mail eligible voters a separate referendum ballot for
each groundfish permit they own and every pink shrimp or coastal
Dungeness crab permit they hold. In other words, eligible voters will
have one ballot for every such permit they hold.
Immediately after the deadline for NMFS' receipt of ballots, NMFS
will tally votes, fishery by fishery, and multiply each tally by the
quotients used in calculating the reduction loan sub-amounts. The
products of this multiplication will be the vote tallies for the
respective fisheries weighted in proportion to each fishery's reduction
loan sub-amount.
If the weighted total of approving votes is greater than the
weighted total of disapproving votes, the referendum is successful. The
referendum is unsuccessful if the weighted total of disapproving votes
is the same as or exceeds the weighted total of approving votes. NMFS
will mail each eligible voter a notice about the referendum's outcome.
If the referendum is successful, NMFS will mail to each bidder a bid
acceptance or rejection notice.
If the referendum is unsuccessful, the fee will not be approved;
and NMFS will mail a notice to each bidder that neither the bidder nor
the United States has any further obligation under any reduction
contract.
If the referendum is successful, NMFS will request, from each
accepted bidder, specific and written payment instructions for
disbursing the reduction payment. Within thirty days after the
publication in the Federal Register of the reduction payment tender
notice (which notifies the bidder that NMFS intends to pay the bidder
and needs payment instructions), the bidder must have stopped fishing
and must retrieve all fishing gear previously deployed from the
reduction vessel. The bidder must also certify that they have complied
with the requirements of the reduction contract.
NMFS will:
(a) Revoke all groundfish permits and all other federal reduction
permits,
(b) Notify California, Oregon, and Washington that accepted bidders
have relinquished their fee-share reduction permits,
(c) Request the Secretary under whom the U.S. Coast Guard operates
to revoke the fisheries endorsements of all Federally-documented
reduction vessels, and
(d) Request the Secretary under whom the U.S. Maritime
Administration operates to make all Federally-documented reduction
vessels permanently ineligible 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 of a reduction vessel under
foreign registry or operation under the authority of a foreign country.
These reduction vessel revocations and restrictions run with the
vessels' titles and apply to all subsequent owners.
The bidder must immediately scrap any state-registered reduction
vessel and allow NMFS to observe and certify the scrapping.
After receiving a bidder's payment instructions and certification
of compliance, NMFS will disburse the reduction payment unless NMFS has
reason to believe that the bidder has not performed in accordance with
his or her reduction contract duties and obligations. NMFS will
disburse reduction payments only to accepted bidders, unless they
explicitly instruct NMFS to do otherwise. If a reduction vessel needs
to be scrapped, NMFS will withhold funds sufficient to cover the cost
of such scrapping until its completion.
VI. Program Process
The following table outlines, in chronological order, the program's
process:
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STEP ACTION
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One........................................... NMFS publishes a final
notice in the Federal
Register, together with
the final draft of the
invitation to bid and
bidding document.
Two........................................... NMFS mails each permit
owner of a groundfish
trawl permit (other
than those issued to
whiting catcher-
processors) a notice
that NMFS will
subsequently mail him
or her a bidding
package.
Three......................................... NMFS formally invites
each qualified bidder
to bid by mailing to
him or her a bidding
package that also
informs him or her that
a referendum will occur
after NMFS has accepted
bids.
Four.......................................... NMFS mails a notice to
persons holding any fee-
share fishery
permit(other than those
to whom NMFS sent the
mailing in step three)
that NMFS has invited
bids. The notice will
also state that NMFS
will, without further
notice, mail him or her
a referendum ballot(s)
and voting instructions
after NMFS has accepted
bids.
Five.......................................... Bidders submit bids.
Six........................................... NMFS receives bids until
the bid closing date.
Seven......................................... NMFS scores and tallies
the bids.
Eight......................................... NMFS mails to each
person eligible to vote
in the referendum a
ballot(s) and voting
instructions.
Nine.......................................... The referendum occurs.
Ten........................................... NMFS receives votes
until the vote receipt
deadline and afterwards
tallies the votes.
Eleven (A).................................... If the referendum fails:
(a) NMFS mails to each
eligible voter a notice
that the referendum is
unsuccessful, and
(b) NMFS mails to each
bidder a notice that
the reduction bids are
without force and/or
effect.
Eleven (B).................................... If the referendum is
successful:
(a) NMFS mails to each
bidder a notice that
the referendum is
successful, the bid is
either accepted or
rejected, and reminds
accepted bidders that
he or she must perform
the reduction contract
duties and obligations,
(b) NMFS mails to each
person who voted a
notice indicating that
the referendum was
successful,
(c) NMFS publishes a
reduction payment
tender notification in
the Federal Register,
(d) NMFS tenders
reduction payments to
each accepted bidder by
requesting the bidder's
written payment
instructions,
(e) Accepted bidders
relinquish their
reduction permits and
reduction vessel
fishing privileges, and
(f) Accepted bidders
certify their
compliance with their
contractual obligations
Twelve........................................ NMFS disburses reduction
payments upon its
receipt of payment
instructions and
certification of
compliance.
Thirteen...................................... NMFS undertakes a
separate rulemaking
about fee payment and
collection.
Fourteen...................................... NMFS establishes fee
amounts.
Fifteen....................................... (a) NMFS mails fish
sellers and fish buyers
a reduction loan fee
payment and collection
notice.
(b) Fish sellers begin
paying the fees, and
fish buyers begin
collecting and
disbursing the fees to
NMFS, and
(c) NMFS receives
collected-fee
disbursements from fish
buyers.
------------------------------------------------------------------------
VII. Reduction Loan
The reduction loan's repayment maturity will be 30 years. Its
principal amount will be the total of all reduction payments made under
this program, less $10 million. NMFS will determine the reduction
loan's interest rate in accordance with the framework regulations at 50
CFR 600.1012.
VIII. Fee Payment and Collection
Section 212 provides that the United States may enter into
agreements with California, Oregon, and Washington to collect the fees
that repay the reduction loan. Unless and until NMFS arranges to do so,
however, fish sellers will pay the fees and fish buyers will collect,
deposit, disburse, record, and report on the fees in accordance with
the applicable portions of the framework regulations and the Magnuson-
Stevens Act.
NMFS will establish any fee rates necessary for fish sellers to
repay the reduction loan sub-amount applicable to the reduction fishery
and to each of the six fee-share fisheries. NMFS will undertake a
separate rulemaking to do this. The fee rates may not exceed five
percent of the delivery value of fee fish from each of these fisheries,
but will be less if NMFS determines that smaller percentages are
sufficient to amortize the respective reduction loan sub-amounts over
the 30-year reduction loan's term.
IX. Invitation To Bid and Bidding Document
The addenda to this notification are sample pro forma invitation to
bid and bidding document.
Classification
The Assistant Administrator for Fisheries, NMFS, determined that
this action is consistent with Public Law 107-206, Public Law 108-7,
the Magnuson-Stevens Fishery Conservation and Management Act, and other
applicable laws.
In compliance with the National Environmental Policy Act, NMFS
prepared an environmental assessment for this action. The assessment
discusses the program's impact on the natural and human environment.
NMFS will send the assessment to anyone who requests NMFS to do so (see
ADDRESSES).
The Office of Management and Budget has determined that this notice
is significant under Executive Order 12866. NMFS has prepared a
Regulatory Impact Review (RIR) for this action (see ADDRESSES).
NMFS believes any Federalism implications arising from this notice
are highly unlikely, however, consultations with the States of
Washington, Oregon, and California are ongoing.
This notice contains collection-of-information requirements subject
to the Paperwork Reduction Act (PRA). The Office of Management and
Budget (OMB) has approved these information collections under OMB
control number 0648-0376. NMFS estimates that the public reporting
burden for these requirements will average 4 hours for submitting a
bid, 4 hours for voting in a referendum, and 1 hour for advice (if any)
about a conflict on a vessel ownership or permit claim. Persons
affected by this action would also be subject to other collection-of-
information requirements referred to in this action and also approved
under 0648-0376. These requirements and their associated response times
are 10 minutes for completing and filing a fish
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ticket, 2 hours for submitting a monthly fish buyer report, 4 hours for
submitting an annual fish buyer report, and 2 hours for making a fish
buyer/fish seller report when one party fails to either pay or collect
the fee.
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. 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 requirements of
the PRA unless that information collection displays a currently valid
OMB control number.
NMFS has determined that this notice will not significantly affect
the coastal zone of any state with an approved coastal zone management
program. This determination has been submitted for review by the States
of Washington, Oregon, and California.
Authority: Pub. L. 107-206, Pub. L. 108-7, 16 U.S.C. 1861a (b-
e), and 50 CFR 600.1000 et seq.
Dated: July 15, 2003.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
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[FR Doc. 03-18344 Filed 7-17-03; 8:45 am]
BILLING CODE 3510-22-C