[Code of Federal Regulations]
[Title 50, Volume 9]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 50CFR679.30]

[Page 450-454]
 
                    TITLE 50--WILDLIFE AND FISHERIES
 
                   DEPARTMENT OF COMMERCE (CONTINUED)
 
PART 679_FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA--Table of 
 
      Subpart C_Western Alaska Community Development Quota Program
 
Sec.  679.30  General CDQ regulations.


    (a) Application procedure. The CDQ program is a voluntary program. 
Allocations of CDQ and PSQ are made to CDQ groups and not to vessels or 
processors fishing under contract with any CDQ group. Any vessel or 
processor harvesting or processing CDQ or PSQ on behalf of a CDQ group 
must comply with all other requirements of this part. Allocations of CDQ 
and PSQ are harvest privileges that expire upon the expiration of the 
CDP. When a CDP expires, further CDQ allocations are not implied or 
guaranteed, and a qualified applicant must re-apply for further 
allocations on a competitive basis with other qualified applicants. The 
CDQ allocations provide the means for CDQ groups to complete their CDQ 
projects. A qualified applicant may apply for CDQ and PSQ allocations by 
submitting a proposed CDP to the State during the CDQ application period 
that is announced by the State. A proposed CDP must include the 
following information:
    (1) Community development information. Community development 
information includes:
    (i) Project description. A detailed description of all proposed CDQ 
projects, including the short-and long-term benefits to the qualified 
applicant from the proposed CDQ projects. CDQ projects should not be 
designed with the expectation of CDQ allocations beyond those requested 
in the proposed CDP.
    (ii) Project schedule. A schedule for the completion of each CDQ 
project with measurable milestones for determining the progress of each 
CDQ project.
    (iii) Employment. The number of individuals to be employed through 
the CDP projects, and a description of the nature of the work and the 
career advancement potential for each type of work.
    (iv) Community eligibility. A list of the participating communities. 
Each participating community must be listed in Table 7 to this part or 
meet the criteria for an eligible community under Sec.  679.2.
    (v) Community support. A demonstration of each participating 
community's support for the qualified applicant and the managing 
organization through an official letter approved by the governing body 
of each such community.
    (2) Managing organization information. A proposed CDP must include 
the following information about the managing organization:
    (i) Structure and personnel. A description of the management 
structure and key personnel of the managing organization, such as 
resumes and references, including the name, address, fax number, and 
telephone number of the qualified applicant's CDQ representative.
    (ii) Management qualifications. A description of how the managing 
organization is qualified to carry out the CDP projects in the proposed 
CDP, and a demonstration that the managing organization has the 
management, technical expertise, and ability to manage CDQ allocations 
and prevent exceeding a CDQ or PSQ.
    (iii) Legal relationship. Documentation of the legal relationship 
between the qualified applicant and the managing organization (if the 
managing organization is different from the qualified applicant) clearly 
describing the responsibilities and obligations of each party as 
demonstrated through a contract or other legally binding agreement.
    (iv) Board of directors. The name, address, and telephone number of 
each member of the board of directors of the qualified applicant. If a 
qualified applicant represents more than one community, the board of 
directors of the qualified applicant must include at

[[Page 451]]

least one member from each of the communities represented.
    (3) Business information. A proposed CDP must include the following 
business information:
    (i) Business relationships. A description of all business 
relationships between the qualified applicant and all individuals who 
have a financial interest in a CDQ project or subsidiary venture, 
including, but not limited to, any arrangements for management and audit 
control and any joint venture arrangements, loans, or other partnership 
arrangements, including the distribution of proceeds among the parties.
    (ii) Profit sharing. A description of all profit sharing 
arrangements.
    (iii) Funding. A description of all funding and financing plans.
    (iv) General budget for implementing the CDP. A general account of 
estimated income and expenditures for each CDQ project for the total 
number of calendar years that the CDP is in effect.
    (v) Financial statement for the qualified applicant. The most recent 
audited income statement, balance sheet, cash flow statement, management 
letter, and agreed upon procedures report.
    (vi) Organizational chart. A visual representation of the qualified 
applicant's entire organizational structure, including all divisions, 
subsidiaries, joint ventures, and partnerships. This chart must include 
the type of legal entity for all divisions, subsidiaries, joint 
ventures, and partnerships; state of registration of the legal entity; 
and percentage owned by the qualified applicant.
    (4) Request for CDQ and PSQ allocations. A list of the percentage of 
each CDQ reserve and PSQ reserve, as described at Sec.  679.31 that is 
being requested. The request for allocations of CDQ and PSQ must 
identify percentage allocations requested for CDQ fisheries identified 
by the primary target species of the fishery as defined by the qualified 
applicant and the gear types of the vessels that will be used to harvest 
the catch.
    (5) Harvesting plans. A narrative description of how the CDQ group 
intends to harvest and process its CDQ allocations, including a 
description of the target fisheries, the types of vessels and processors 
that will be used, the locations and methods of processing, and the CDQ 
group's proposed partners.
    (6) CDQ planning--(i) Transition plan. A proposed CDP must include 
an overall plan and schedule for transition from reliance on CDQ 
allocations to self-sufficiency in fisheries. The plan for transition to 
self-sufficiency must be based on the qualified applicant's long-term 
revenue stream without CDQs.
    (ii) Post-allocation plan. [Reserved]
    (b) Public hearings on CDQ application. When the CDQ application 
period has ended, the State must hold a public hearing to obtain 
comments on the proposed CDPs from all interested persons. The hearing 
must cover the substance and content of proposed CDPs so that the 
general public, particularly the affected parties, have a reasonable 
opportunity to understand the impact of the proposed CDPs. The State 
must provide reasonable public notification of hearing date and 
location. At the time of public notification of the hearing, the State 
must make available for public review all State materials pertinent to 
the hearing.
    (c) Council consultation. Before the State sends its recommendations 
for approval of proposed CDPs to NMFS, the State must consult with the 
Council and make available, upon request, the proposed CDPs that are not 
part of the State's recommendations.
    (d) Review and approval of proposed CDPs. The State must transmit 
the proposed CDPs and its recommendations for approval of each of the 
proposed CDPs to NMFS, along with the findings and the rationale for the 
recommendations, by October 15 of the year prior to the first year of 
the proposed CDP, except in 1998, when CDPs for the 1998 through 2000 
multispecies groundfish CDQs must be submitted by July 6, 1998. The 
State shall determine in its recommendations for approval of the 
proposed CDPs that each proposed CDP meets all applicable requirements 
of this part. Upon receipt by NMFS of the proposed CDPs and the State's 
recommendations for approval, NMFS will review the proposed CDPs and 
approve

[[Page 452]]

those that it determines meet all applicable requirements. NMFS shall 
approve or disapprove the State's recommendations within 45 days of 
their receipt. In the event of approval of the CDP, NMFS will notify the 
State in writing that the proposed CDP is approved by NMFS and is 
consistent with all requirements for CDPs. If NMFS finds that a proposed 
CDP does not comply with the requirements of this part, NMFS must so 
advise the State in writing, including the reasons thereof. The State 
may submit a revised proposed CDP along with revised recommendations for 
approval to NMFS.
    (e) Transfers--(1) Transfer of annual CDQ and PSQ. CDQ groups may 
request that NMFS transfer CDQ or PSQ from one group to another group by 
each group submitting a completed transfer request as described in Sec.  
679.5(n)(3). NMFS will approve the transfer request if the CDQ group 
transferring quota to another CDQ group has sufficient quota available 
for transfer. If NMFS approves the request, NMFS will make the requested 
transfer(s) by decreasing the account balance of the CDQ group from 
which the CDQ or PSQ species is transferred and by increasing the 
account balance of the CDQ group receiving the transferred CDQ or PSQ 
species. NMFS will not approve transfers to cover overages of CDQ or 
PSQ. The CDQ or PSQ will be transferred as of the date NMFS approves the 
transfer request and is effective only for the remainder of the calendar 
year in which the transfer occurs.
    (2) Transfer of CDQ and PSQ allocation. CDQ groups may request that 
some or all of one group's CDQ or PSQ allocation, as defined at Sec.  
679.2, be transferred by NMFS to another group by each group filing an 
amendment to its respective CDP through the CDP substantial amendment 
process set forth at paragraph (g)(4) of this section. The CDQ or PSQ 
allocation will be transferred as of January 1 of the calendar year 
following the calendar year NMFS approves the amendments of both groups 
and is effective for the duration of the CDPs. Transfers of CDQ and PSQ 
allocations must be in whole integer percentages.
    (f) CDQ group responsibilities. A CDQ group's responsibilities 
include, but are not limited to, the following:
    (1) Direct and supervise all activities of the managing 
organization;
    (2) Maintain the capability to communicate with all vessels 
harvesting its CDQ and PSQ at all times;
    (3) Monitor the catch of each CDQ or PSQ;
    (4) Submit the CDQ catch report described at Sec.  679.5(n)(2);
    (5) Ensure that no CDQ, halibut PSQ, or crab PSQ is exceeded;
    (6) Comply with all requirements of this part.
    (g) Monitoring of CDPs--(1) Annual progress report. (i) The State 
must submit to NMFS, by October 31 of each year, an annual progress 
report for the previous calendar year for each CDP.
    (ii) Annual progress reports must be organized on a project-by-
project basis and include information for each CDQ project in the CDP 
describing how each scheduled milestone in the CDP has been met, and an 
estimation by the State of whether each of the CDQ projects in the CDP 
is likely to be successful.
    (iii) The annual report must include a description by the State of 
any problems or issues in the CDP that the State encountered during the 
annual report year.
    (2) Annual budget report. (i) Each CDQ group must submit to NMFS an 
annual budget report by December 15 preceding the year for which the 
annual budget applies.
    (ii) An annual budget report is a detailed estimate of the income 
from the CDQ project and of the expenditures for each subsidiary, 
division, joint venture, partnership, investment activity, or CDQ 
project as described in paragraph (a)(1)(i) of this section for a 
calendar year. A CDQ group must identify the administrative costs for 
each CDQ project. The CDQ group's total administrative costs will be 
considered a separate CDQ project.
    (iii) An annual budget report is approved upon receipt by NMFS, 
unless disapproved by NMFS in writing by December 31. If disapproved, 
the annual budget report will be returned to the CDQ group for revision 
and resubmittal to NMFS.

[[Page 453]]

    (3) Annual budget reconciliation report. A CDQ group must reconcile 
its annual budget by May 30 of the year following the year for which the 
annual budget applied. Reconciliation is an accounting of the annual 
budget's estimated income and expenditures with the actual income and 
expenditures, including the variance in dollars and variance in 
percentage for each CDQ project that is described in paragraph (a)(1)(i) 
of this section.
    (4) Substantial amendments. A CDP is a working business plan and 
must be kept up to date.
    (i) Substantial amendments to a CDP require a written request by the 
CDQ group to the State and NMFS for approval of the amendment. The State 
must forward the amendment to NMFS with a recommendation as to whether 
it should be approved.
    (ii) NMFS will notify the State in writing of the approval or 
disapproval of the amendment within 30 days of receipt of both the 
amendment and the State's recommendation. Once a substantial amendment 
is approved by NMFS, the amendment will be effective for the duration of 
the CDP.
    (iii) If NMFS determines that the CDP, if changed, would no longer 
meet the requirements of this subpart, NMFS will notify the State in 
writing of the reasons why the amendment cannot be approved.
    (iv) For the purposes of this section, substantial amendments are 
defined as changes in a CDP, including, but not limited to:
    (A) Any change in the list of communities comprising the CDQ group 
or replacement of the managing organization.
    (B) A change in the CDP applicant's harvesting or processing 
partner.
    (C) Funding a CDP project in excess of $100,000 that is not part of 
an approved general budget.
    (D) More than a 20-percent increase in the annual budget of an 
approved CDP project.
    (E) More than a 20-percent increase in actual expenditures over the 
approved annual budget for administrative operations.
    (F) A change in the contractual agreement(s) between the CDQ group 
and its harvesting or processing partner or a change in a CDP project, 
if such change is deemed by the State or NMFS to be a material change.
    (G) Any transfer of a CDQ allocation or a PSQ allocation.
    (v) The request for approval of a substantial amendment to a CDP 
shall include the following information:
    (A) The background and justification for the amendment that explains 
why the proposed amendment is necessary and appropriate.
    (B) An explanation of why the proposed change to the CDP is a 
substantial amendment.
    (C) A description of the proposed amendment, explaining all changes 
to the CDP that result from the proposed amendment.
    (D) A comparison of the original CDP text, with the text of the 
proposed changes to the CDP, and the revised pages of the CDP for 
replacement in the CDP binder. The revised pages must have the revision 
date noted, with the page number on all affected pages. The table of 
contents may also need to be revised to reflect any changes in 
pagination.
    (E) Identification of any NMFS findings that would need to be 
modified if the amendment is approved, along with the proposed modified 
text.
    (F) A description of how the proposed amendment meets the 
requirements of this subpart. Only those CDQ regulations that are 
affected by the proposed amendment need to be discussed.
    (5) Technical amendments. Any change to a CDP that is not considered 
a substantial amendment under paragraph (g)(4)(iv) of this section is a 
technical amendment.
    (i) The CDQ group must notify the State in writing of any technical 
amendment. Such notification must include a copy of the pages of the CDP 
that would be revised by the amendment, with the text highlighted to 
show the proposed deletions and additions, and a copy of the CDP pages 
as they would be revised by the proposed amendment for insertion into 
the CDP binder. All revised CDP pages must include the revision date, 
amendment identification number, and CDP page number. The table of 
contents may also need to be revised to reflect any changes in 
pagination.

[[Page 454]]

    (ii) The State must forward the technical amendment to NMFS with its 
recommendations for approval or disapproval of the amendment. A 
technical amendment is approved by NMFS and is effective when, after 
review, NMFS notifies the State in writing of the technical amendment's 
receipt and approval.
    (h) Suspension or termination of a CDP. An annual progress report, 
required under paragraph (g)(1) of this section, will be used by the 
State to review each CDP to determine whether the CDP, CDQ, and PSQ 
allocations thereunder should be continued, decreased, partially 
suspended, suspended, or terminated under the following circumstances:
    (1) If the State determines that the CDP will successfully meet its 
goals and objectives, the CDP may continue without any Secretarial 
action.
    (2) If the State recommends to NMFS that an allocation be decreased, 
the State's recommendation for decrease will be deemed approved if NMFS 
does not notify the State in writing within 30 days of receipt of the 
State's recommendation.
    (3) If the State determines that a CDP has not successfully met its 
goals and objectives or appears unlikely to become successful, the State 
may submit a recommendation to NMFS that the CDP be partially suspended, 
suspended, or terminated. The State must set out, in writing, the 
reasons for recommending suspension or termination of the CDP.
    (4) After review of the State's recommendation and reasons thereof, 
NMFS will notify the Governor, in writing, of approval or disapproval of 
the recommendation within 30 days of its receipt. In the case of 
suspension or termination, NMFS will publish notification in the Federal 
Register, with reasons thereof.

[63 FR 30403, June 4, 1998, as amended at 64 FR 3882, Jan. 26, 1999; 64 
FR 20214, Apr. 26, 1999; 65 FR 45318, July 21, 2000; 67 FR 4148, Jan. 
28, 2002; 70 FR 15013, Mar. 24, 2005]