December 12, 2005

The Honorable Ted Stevens

Chairman, Committee on Commerce,

Science, and Transportation

United States Senate

Washington, D.C. 20510-6125

Dear Mr. Chairman:

This letter provides the views of the Department of Commerce on S. 2012,
the "Magnuson-Stevens Fishery Conservation and Management
Reauthorization Act of 2005." We are very pleased that S. 2012
incorporates many of the provisions and proposals included in the Bush
Administration's version of the reauthorization of the Magnuson-Stevens
Act. Overall, the Administration strongly supports the objectives of S.
2012, and we have suggestions related to four high-priority areas that
could be further strengthened to achieve these objectives. We also have
some additional suggested improvements and clarifications, which are
detailed below.

The main goal of the Administration's proposal is to give the Secretary
of Commerce (Secretary) and the Regional Fishery Management Councils
(Councils) the tools needed to effectively sustain living marine
resources. S. 2012 shares this objective. In many cases, the same or
similar approach is taken regarding: requirements of fishery management
plans, the role of the Secretary, market-based approaches to fishery
management, the environmental review process, emergency provisions in
Section 108, social and economic information, a nationally coordinated
registration program for saltwater recreational fishermen, an improved
definition of the role of confidential data in managing fisheries, and a
strengthened role of the Councils' Scientific and Statistical Committee.

We also support several S. 2012 provisions that, while not included in
the Administration's proposal, would provide the Secretary and Councils
additional useful tools, such as: the habitat restoration study, catch
limits in all federally managed fisheries, National Standard 8
revisions, cumulative impacts, and incentives programs to reduce
bycatch, bycatch mortality and post-release mortality.

The Administration, however, has some suggestions related to four
high-priority issues. First, it is critically important that we revise
the Magnuson-Stevens Act

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provisions that govern overfishing and rebuilding our fish stocks. We
strongly recommend that the Senate add to its Magnuson-Stevens bill
provisions that require more timely and definitive actions to end
overfishing, and to amend the rebuilding time frames to better conform
to the life history of the overfished stocks. The objective is to modify
the rebuilding provisions so that mandatory actions better reflect the
capabilities of the

Councils and the Secretary, and rebuilding goals and timetables
adequately take into account the unique features of different federally
managed fisheries.

Second, the Administration appreciates the Committee's clear expression
of support for a wider use of market-based management approaches through
the Limited Access Privilege (LAP) programs. The Administration also
strongly supports wider use of market-based management approaches, and
is, therefore, concerned about provisions in S. 2012 that would
seriously jeopardize the successful implementation of LAP programs. S.
2012 imposes petition and referendum requirements that are duplicative
of existing scoping and public participation processes. Current law
ensures harvester concerns are addressed in the decisionmaking process.
The new provisions would be costly and administratively burdensome and
would exclude important fishing community and public stakeholders from a
critical management decision point. The Senate bill also does not modify
the current 3 percent cost recovery cap. Recent experience suggests that
implementation and monitoring costs of future LAP programs may easily
exceed that cap. While other provisions of S. 2012 expand the list of
recoverable costs, the bill does not provide the legal authority to
collect sufficient revenues to pay the additional costs of LAP programs,
or any portion of the costs of non-LAP programs as proposed by the
Administration. Failure to adequately cover the costs of proposed
fishery management actions could preclude Secretarial approval, and
severely limit the expanded use of LAP programs.

Third, we strongly recommend that S. 2012 be amended to incorporate the
enforcement improvements contained in the Administration's legislative
proposal to deter illegal harvesting and strengthen the incentive for
compliance. These improvements include: increasing the maximum civil
administrative penalty amount from \$130,000 to \$240,000 per violation,
authorizing civil judicial penalties of up to \$300,000 for more serious
violations, and allowing the imposition of criminal fines and/or
imprisonment of up to five years for the most egregious violations.

These improvements are necessary because, under the existing Act, most
violations are subject only to civil administrative penalties of no more
than \$130,000 per violation, permit sanctions and/or forfeiture.
Criminal fines are not available for any substantive harvesting
violations regardless of the circumstances. As such, the existing
enforcement authorities are inadequate to deter violations of the Act's
prohibitions. A successful fishing trip for blue fin tuna off Cape Cod
can result in a harvest worth up to \$230,000, and a successful fishing
trip for Atlantic sea scallops could result in a catch

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worth as much as \$300,000. The high profits realized from unlawful
harvesting can make the existing maximum civil penalty amount of
\$130,000 per violation no more than a cost of doing business. That
civil sanction does not have the deterrent effect created by the
possibility of imprisonment for knowing illegal conduct. Unlawful
harvesting places the vast majority of fishermen who do comply with the
Act at an unfair competitive disadvantage, and contributes to the
depletion of our nation's valuable fishing stocks.

Fourth, the Administration supports continued work toward ecosystem
approaches to fisheries management. Progress has already been made by
including elements of ecosystem approaches in "conventional" Fishery
Management Plans (FMP). In recent years, FMPs have been substantially
modified and expanded to incorporate ecosystem principles. We support
language that would build on the current efforts and provide the
Councils overall direction and discretionary authority rather than
mandating actions that, in some cases, may not be necessary or may
exceed the current capabilities of ecosystem science.

Finally, there are a few provisions in the Senate bill that the
Administration would recommend adding or amending:

\(1\) Fisheries Conservation and Management Fund. While the goals of
this new fund are laudable, we believe they duplicate other activities
carried out under this Act, which are more appropriately considered
through the annual appropriations process. Moreover, we note with
serious concern that this fund would effectively eliminate the civil
asset forfeiture fund. Monies collected from civil penalties, fines and
forfeitures would be redirected from their current use for enforcement
efforts to funding different activities. Congress established the
current program 15 years ago to provide essential funding for
enforcement efforts under all the statutes that we administer. We are
opposed to any language that would modify or limit use of the current
fund for enforcement purposes.

\(2\) International Fisheries Issues. We are concerned with the
appointment and policy-making processes associated with the Western and
Central Pacific Fisheries Commission. We believe the provisions related
to bycatch of protected resources may reduce the effectiveness of recent
agreements. In addition, flag-state (rather than port- or market-state)
approaches are increasingly ineffective in addressing illegal,
unreported and unregulated fishing since it may occur in areas with no
applicable international management measures or agreements. Further, the
provisions for the application of trade sanctions to enforce the Act's
provisions concerning overfishing and bycatch could raise concerns by
our trading partners concerning United States compliance with our trade
obligations.

\(3\) Bycatch and Seabirds. Reducing the bycatch of protected species,
including seabirds, is one of our major objectives, and we strongly
recommend that the Senate add

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to its Magnuson-Stevens Act proposal a revised definition of bycatch
that includes seabirds.

\(4\) Broaden Council Membership. Achieving balanced representation on
the Regional Fisheries Management Councils is one of our objectives. We
recommend that the Senate add to its Magnuson-Stevens Act proposal terms
that require governors to submit a slate of nominees that represents a
balanced apportionment in marine fisheries in their respective States.

\(5\) Fisheries Finance. The amendments broaden the use of the fisheries
finance program to include technology upgrades and marketing plan
development. These are not desirable uses of federal credit as there is
no apparent capital market imperfection that would prevent these
beneficiaries from obtaining a loan in the private capital market.
Moreover, it is not clear that credit is the most efficient way of
providing assistance, given that the subsidized activities would not
necessarily generate revenue to repay the loan in the future. As such we
would expect the appropriated loan subsidy to be substantial and request
that these provisions be removed.

The Department appreciates the opportunity to present its views on S.
2012. We believe that carefully crafted amendments based on language
from the Administration's proposal will give the Secretary and the
Councils needed additional flexibility to fulfill their
responsibilities. This legislation includes many provisions which are
highly technical in nature. Some of these provisions will require
further clarification. We look forward to working with you on these
provisions and those noted above as the bill moves through the
legislative process.

We have been advised by the Office of Management and Budget that there
is no objection to the submission of this letter from the viewpoint of
the Administration's program.

Sincerely,

/s/

Carlos M. Gutierrez

cc: The Honorable Daniel K. Inouye

Ranking Member