**REGULATORY IMPACT REVIEW FOR THE PROPOSED RULE SPECIFYING**

**THE NUMBER OF TRIPS ALLOWED INTO THE CLOSED AREA II YELLOWTAIL
FLOUNDER SPECIAL ACCESS PROGRAM**

**Prepared by the Sustainable Fisheries Division, National Marine
Fisheries Service, Northeast Region**

**August 2007**

**Table of Contents**

1.0 Introduction [3](#introduction)

2.0 Economic Analysis for Compliance with E.O. 12866 and the Regulatory
Flexibility Act
[3](#economic-analysis-for-compliance-with-e.o.-12866-and-the-regulatory-flexibility-act)

2.1 Management Objectives [4](#management-objectives)

2.2 Description of Affected Entities
[5](#description-of-affected-entities)

2.3 Description of Alternatives [5](#description-of-alternatives)

2.4 Brief Summary of the Problem and Economic Impacts of the Proposed
Action
[6](#brief-summary-of-the-problem-and-economic-impacts-of-the-proposed-action)

> 2.4.1 Definitions for Lessor, Lessee, Transferor, and Tranferee
> [6](#definitions-for-lessor-lessee-transferor-and-tranferee)
>
> 2.4.2 NE Multispecies VMS Notification Requirement
> [6](#ne-multispecies-vms-notification-requirement)
>
> 2.4.3 Gulf of Maine (GOM) Grate Raised Footrope Trawl Exempted Whiting
> Fishery Prohibitions
> [8](#gulf-of-maine-gom-grate-raised-footrope-trawl-exempted-whiting-fishery-prohibitions)
>
> 2.4.4 In-season Action Prohibition [8](#in-season-action-prohibition)
>
> 2.4.5 Georges Bank (GB) Seasonal Closure Area Applicability
> [8](#georges-bank-gb-seasonal-closure-area-applicability)
>
> 2.4.6 DAS Leasing Program Application Requirements
> [9](#das-leasing-program-application-requirements)
>
> 2.4.7 VMS Positional Polling Rates for U.S./Canada Management Area
> [9](#vms-positional-polling-rates-for-u.s.canada-management-area)
>
> 2.4.8 Haddock TAC in the CA I Hook Gear I Haddock SAP
> [10](#haddock-tac-in-the-ca-i-hook-gear-i-haddock-sap)
>
> 2.4.9 Corrections to the White Hake Trip Limit
> [11](#corrections-to-the-white-hake-trip-limit)
>
> 2.4.10 Approval of Sector Applications
> [12](#approval-of-sector-applications)
>
> 2.4.11 Recreational Fish Size Restrictions
> [12](#recreational-fish-size-restrictions)

2.5 Economic Impacts of the No Action Alternative
[13](#economic-impacts-of-the-no-action-alternative)

3.0 Evaluation of Significance Under E.O. 12866
[14](#evaluation-of-significance-under-e.o.-12866)

3.1 Certification Determination Under RFA
[15](#certification-determination-under-rfa)

# 1.0 Introduction

Pursuant to the authority in Section 305(d) of the Magnuson-Stevens
Fishery Conservation and Management Act (Magnuson-Stevens Act), the
National Marine Fisheries Service (NMFS) is proposing to correct and
clarify regulations implemented by Framework Adjustment (FW) 42 to the
NE Multispecies FMP and other recent actions. Regulatory actions for
federally managed species implemented by NMFS must adhere to a number of
applicable laws, including the Regulatory Flexibility Act (RFA) and
Executive Order (E.O.) 12866, among others. Both the RFA and E.O. 12866
focus on the economic impacts of proposed regulatory actions and impose
similar analytical requirements. NMFS prepares a Regulatory Impact
Review (RIR) to assess the economic impacts of proposed regulatory
actions in order to fulfill the requirements of both the RFA and E.O.
12866. The RIR provides a comprehensive review of the changes in net
economic benefits to society associated with proposed regulatory
actions, reviews the problems and policy objectives prompting the
regulatory proposals, evaluates the major alternatives that could be
used to solve the problems, and determines whether the proposed action
will have a significant economic impact on a substantial number of small
entities. The purpose of this analysis is to ensure that the regulatory
agency systematically and comprehensively considers all available
alternatives so that the public welfare can be enhanced in the most
efficient and cost-effective way.

In compliance with the RFA and E.O. 12866, this RIR was prepared to
evaluate the impacts of a proposed rule to correct inadvertent errors
and omissions found in the existing regulations, including some that
cause the current regulations to be inconsistent with the measures
adopted by the New England Fishery Management Council (Council) and
approved by the Secretary of Commerce, in Amendment 13, FW 41, FW 42,
and other recent groundfish actions.

# 2.0 Economic Analysis for Compliance with E.O. 12866 and the Regulatory Flexibility Act

NMFS's guidelines for the development of economic analysis of fisheries
management actions identify analytical elements and issues that need to
be addressed during economic analysis prepared to meet the requirements
of the RFA and E.O. 12866. Elements required include an assessment of
the following components:

-   Potential changes in prices, quantities produced or consumed,
    fishing trips, etc. as a result of changing supply and demand
    conditions in the marketplace;

-   Changes in revenues and operating costs for fisheries entities in
    response to changes in the market, biological conditions, and
    fishery management regulations;

-   The affect of management regulations on fishing fleet size and
    composition;

-   The response of the stock or stocks of living marine resources to
    the proposed regulation; and

-   Assessment of impacts on small entities in order to prevent
    unnecessary adverse effects from Federal actions.

Each of these components has been assessed for each of the alternatives
considered under this action to determine the economic effects of these
alternatives on the NE multispecies fishery, as described in detail in
Section 2.4 below.

# 2.1 Management Objectives

Amendment 13 was developed by the New England Fishery Management Council
(Council) to end overfishing and rebuild stocks managed by the NE
Multispecies FMP under the authority of the Magnuson-Stevens Fishery
Conservation and Management Act. Amendment 13 includes a complex array
of provisions designed to conserve fisheries resources managed under the
NE Multispecies FMP and to provide opportunities for the fishing
industry to offset some of the adverse economic and social impacts
associated with the provisions implemented. Upon the implementation of
Amendment 13 in May 2004, the Council continued to refine specific
aspects of the Amendment 13 management regime, including developing
additional management programs to increase opportunities to target
healthy groundfish stocks without undermining rebuilding efforts of
overfished stocks. Such refinements were implemented through a series of
framework actions (FW 40A, FW 40B, and FW 41). The measures implemented
by these actions are necessary to ensure that the NE multispecies
fishery achieves the objectives of the FMP, consistent with the
Magnuson-Stevens Act.

Amendment 13 established a biennial adjustment process where the fishery
would be evaluated to determine if rebuilding objectives were being met.
The first such adjustment process called for a stock assessment in 2005,
followed by any necessary adjustments implemented by May 2006. The 2005
groundfish stock assessment indicated that fishing mortality on several
groundfish stocks needed to be reduced to maintain the Amendment 13
rebuilding programs. FW 42 was intended to reduce fishing mortality on
those stocks to achieve the rebuilding objectives of the FMP. FW 42
included additional effort controls in the form of DAS and trip limit
reductions, among other provisions. However, the development of FW 42
was delayed, necessitating emergency action on the part of the Secretary
of Commerce to ensure that adjustments to management measures would be
implemented by May 1, 2006. As a result, an emergency final rule
implementing many of the measures adopted by the Council in FW 42 was
implemented on May 1, 2006. These measures continued to remain in effect
until superseded by measures implemented by the FW 42 final rule on
November 22, 2007. Analysis for both of these actions indicated that the
measures implemented by these actions should achieve the necessary
mortality reductions and maintain the Amendment 13 rebuilding programs.

Because of inadvertent errors and omissions in both the final rules
implementing the emergency action and measures approved under FW 42, the
current regulations do not accurately reflect measures previously
adopted by the Council and approved by the Secretary of Commerce in
recent groundfish actions. Further examination of the existing
regulations revealed the need to revise other regulations to clarify the
administration of several measures and ensure that the fishery continues
to meet the FMP goals and objectives outlined in Amendment 13. A summary
of the measures included in this proposed action are described in
Section 2.4 below.

# 2.2 Description of Affected Entities

Entities affected by the proposed action include those vessels that have
currently been issued an active limited access NE multispecies DAS
(i.e., Category A, D, E, or F) permit, an open access NE multispecies
Category K permit, or an open access NE multispecies charter/party
permit. Data from the NE Regional Office permit database indicate that,
as of July 11, 2007, a total of 2,910 vessels would be affected by this
action, including 1,301 vessels issued a limited access NE multispecies
DAS permit, 1,029 vessels issued an open access Category K permit, and
781 vessels issued an open access NE multispecies charter/party permit.

The Small Business Administration (SBA) size standard for small
commercial fishing entities is \$4 million in gross sales, while the
size standard for small party/charter operators is \$6.5

million. According to analysis in the environmental assessment (EA)
prepared for FW 42, available data based on FY 2004 gross sales show
that the maximum gross for any single commercial fishing vessel was
\$1.8 million and the maximum gross sales for any

affected party/charter vessel was \$1.0 million. This analysis
acknowledges that an entity may own multiple vessels, but that
"available data make it difficult to determine which vessels may be
controlled by a single entity." As a result, each vessel is treated as a
single entity for purposes of size determination and impact assessment
and all of the vessels affected by this action are considered to be
small entities according to the definition provided by the SBA. A full
description of the fishery, including the entities affected by the
proposed action, is contained in Section 6.0 of the EA prepared for FW
42 to the NE Multispecies FMP.

# 2.3 Description of Alternatives

The administrative nature of the revisions to the regulations proposed
under this action do not facilitate the development of alternatives to
this action. Alternatives to the provisions revised through this action
have previously been developed as part of Amendment 13; FW 40-A; FW 41;
the May 1, 2006, emergency action; and FW 42 to the NE Multispecies FMP.
Therefore, no further alternatives have been developed that would
support the objectives of this action. When assessing the economic
impacts of this action, comparison is made to the regulations currently
in place. The current regulations could be considered a no action
alternative under this action.

This action is not expected to change any of the impacts analyzed under
any previous groundfish action. However, if this action is not
implemented, some adverse economic impacts may result as described for
several provisions specified below in Section 2.5 under the assessment
of the no action alternative. Because of the inadvertent errors and
omissions outlined below, some of the adverse economic impacts discussed
below represent impacts that were not intended or previously considered
in the economic analysis prepared for the associated management actions.

# 2.4 Brief Summary of the Problem and Economic Impacts of the Proposed Action

As stated in Section 2.1 above, the May 1, 2006, emergency final rule
and the final rule implementing measures approved under FW 42 contained
several inadvertent errors and omissions that cause the current
regulations to be inconsistent with the measures adopted by the Council
and approved by the Secretary of Commerce in recent management actions,
including Amendment 13, FW 40-A, FW 41, and FW 42. Further, there is a
need to clarify specific regulations to facilitate the administration
and enforcement of existing provisions.

Because this action is intended to correct errors and to revise
administrative measures to ensure the current regulations are
administered and enforced consistent with Council intent, this action
does not materially affect the economic analysis developed under
previous management actions. In fact, this action would increase the
likelihood that the anticipated affects of management measures are
realized. For a complete description of the economic impacts resulting
from the provisions contained within Amendment 13, refer to Section 5.4
of the FSEIS. A complete description of the economic impacts for
measures contained within Framework 40-A can be found in Section 7.2.4
of the EA. The economic impacts of measures implemented by FW 41, the
emergency action, and FW 42 can be found in Section 6.3.4, Section
8.1.5, and Section 7.2.4 of the EAs prepared for these actions,
respectively.

The discussion below includes a brief description of the problem
addressed by each measure contained in this proposed action along with a
qualitative description of the potential economic impacts for each
proposed revision under this action. For a more thorough description of
the problem addressed by each proposed provision below, refer to the
proposed rule for this action.

## 

## 2.4.1 Definitions for Lessor, Lessee, Transferor, and Tranferee 

The DAS Leasing and Transfer Programs implemented by Amendment 13
include provisions that specifically apply to either the vessel giving
or receiving DAS. While the regulations refer to these vessels as the
lessor/transferor and lessee/transferee for both of these programs,
respectively, the Amendment 13 final rule never explicitly defined these
terms. As a result, this rule would define each of these terms at 50 CFR
648.2 to clarify the applicability of specific provisions for each of
these programs. This measure is purely administrative in nature and
would have no economic impacts and would not affect fleet size, fleet
composition, operating costs, profitability, or the availability of
fishery resources.

## 2.4.2 NE Multispecies VMS Notification Requirement 

The final rule implementing measures approved under FW 42 required all
NE multispecies vessels fishing under a NE multispecies DAS to use VMS.
However, the FW 42 final rule did not include any regulations
specifically requiring all NE multispecies vessel operators to declare
the vessel's intended activity via VMS prior to leaving port, as
required by special management programs and other fisheries. Instead,
permit holders were provided instructions on how to declare a vessel's
intended activity. This action would clarify the VMS notification
requirements at § 648.10(b)(5) to codify that vessel operators must
declare the vessel's intended fishing activity prior to leaving port on
each fishing trip to facilitate enforcement and administration of
existing management measures and ensure that the fishery continues to
meet the objectives of the FMP.

The overall economic impacts associated with a mandatory VMS requirement
implemented under FW 42 are described in Section 7.2.4.7 of the EA
prepared for that action. This analysis focuses on the purchase,
installation, and positional polling of VMS units. The costs for
declaring a vessel's intended activity prior to each trip are not
explicitly described in this analysis, as the expected costs would be
highly dependent upon the expected VMS messaging costs of each vessel. A
better assessment of the costs associated with this provision is
provided in the analysis conducted to comply with the Paperwork
Reduction Act (PRA) for the measures included in FW 42 (available at:
http://www.cio.noaa.gov/itmanagement/0549sub.pdf). Assuming that the
submission of each VMS activity code costs approximately \$0.50 and that
approximately 30,000 trips under a NE multispecies DAS would be taken
each year (a conservative estimate, as only 25,000 such trips have been
taken in recent years), this analysis estimates that the total cost of
VMS declarations under FW 42 total \$15,000 yearly. Obviously, the cost
to each individual vessel will vary based upon the vessel's DAS
allocation and the expected number of trips taken each year.

In summary, this action would not affect the mandatory VMS requirement
implemented under FW 42, or the requirement to declare a vessel's VMS
activity code prior to each trip. Instead, this action would merely
codify VMS user instructions provided in recent permit holder letters.
Therefore, the economic impacts of such VMS requirements have previously
been analyzed. This action would not affect participation in the NE
multispecies fishery, minimize returns to vessels, or increase operating
costs or reporting burdens beyond those which have been previously
analyzed.

## 2.4.3 Gulf of Maine (GOM) Grate Raised Footrope Trawl Exempted Whiting Fishery Prohibitions 

The FW 38 final rule implemented the GOM Grate Raised Footrope Trawl,
but did not update the prohibitions at § 648.14(a)(35) and (43) to
include this new exempted fishery. This action would include reference
to the GOM Grate Raised Footrope Trawl Exempted Whiting Fishery at §
648.80(a)(16) into these prohibitions to facilitate enforcement of these
exempted fisheries.

The economic impacts of FW 38 are specified in Section 6.4 of the EA
prepared for that action. Because this action would simply update
existing prohibitions to include the GOM Grate Raised Footrope Trawl
Exempted Whiting Fishery, this action is administrative in nature and
would not would not affect vessel participation or fleet composition in
this fishery, modify costs or revenue streams, increase reporting
burdens, or change the availability of fishery resources. As a result,
this action would not alter the economic impacts previously analyzed in
FW 38 and would not impose additional economic impacts on affected
entities.

## 2.4.4 In-season Action Prohibition 

Recent groundfish actions have provided the Regional Administrator with
the authority to implement in-season adjustments to management measures.
However, despite the authority to implement such in-season actions,
there is no specific prohibition that would make it illegal for a vessel
to violate the provisions of an in-season action. Therefore, this action
would implement a general provision at § 648.14(a)(78) that would
prohibit vessels from violating the requirements of an in-season action,
as specified in a corresponding permit holder letter, to facilitate
enforcement of such actions.

Insertion of a prohibition is a purely administrative action that would
not affect vessel participation or fleet composition, modify costs or
revenue streams, increase reporting burdens, or change the availability
of fishery resources. Accordingly, this action would not affect the
economic impacts analyzed in recent groundfish management actions,
specifically Amendment 13, FW 40-A, FW 41, and FW 42.

## 2.4.5 Georges Bank (GB) Seasonal Closure Area Applicability 

Vessels participating in the Eastern U.S./Canada Haddock SAP were
previously exempted from the GB Seasonal Closure Area, as originally
intended with the adoption of measures included in FW 40-A. However, FW
42 delayed the start of the SAP until after this closure area ends on
May 31, eliminating the need for the exemption from this closure area.
This action would remove the exemption at § 648.81(g)(2)(iv) from the
current regulations.

The economic impacts associated with the FW 42 revisions to the Eastern
U.S./Canada Haddock SAP regulations are specified in Section 7.2.4.3.3
of the EA prepared for that action. This analysis indicates that a
delayed start date for the SAP would result in positive economic impacts
for several reasons. First, delaying the SAP until August would allow
participating vessels to avoid low-quality recently spawned fish and
land higher quality fish later in the summer that command a higher
prices. In addition, the delayed opening would decrease the catch rates
of cod, prolonging access to this SAP and allowing participating vessels
greater opportunity to fully harvest available haddock resources.

This action would remove the GB Seasonal Closure Area exemption for
vessels participating in the Eastern U.S./Canada Haddock SAP to ensure
that the economic impacts estimated during the development of FW 42
would be realized. This exemption is no longer necessary given that FW
42 delayed the SAP until after the area expires on May 31. Thus, this is
a purely administrative action that would not affect vessel
participation in the SAP, operating costs, profitability, reporting
burdens, or the availability of resources.

## 2.4.6 DAS Leasing Program Application Requirements 

The FW 42 final rule revised the introductory text of the DAS Leasing
Program regulations at § 648.82(k)(3). However, instead of specifying
that only the introductory text of this paragraph was revised, the
amendatory instructions in the classification section of that rule final
rule inadvertently and incorrectly indicated that the entire paragraph
was revised in that rule. Because of this oversight, the regulations
contained at § 648.82(k)(3)(i) through (iii) were removed from the
current regulations. This action would reinsert the provisions at §
648.82(k)(3)(i) through (iii) to preserve the DAS Leasing Program
application requirements and the authority of the Regional Administrator
to approve/disapprove DAS leasing applications, as originally
established in Amendment 13.

The Amendment 13 final rule first implemented the DAS Leasing Program
for a period of two years. FW 42 extended this program indefinitely. The
most recent evaluation of the economic impacts of the DAS Leasing
Program are included in Section 7.2.4.5 of the EA prepared to support FW
42. This analysis concludes that the DAS Leasing Program is having a
positive economic impact on the fishery, allowing vessels to obtain the
DAS necessary to continue to fish. This action does not propose any
changes to previously-approved provisions for this program, but would
simply reinsert administrative provisions of the DAS Leasing Program, as
originally outlined in Amendment 13, that were inadvertently removed by
the FW 42 final rule. Thus, this action would not revise any of the
economic impacts previously analyzed for the DAS Leasing Program and
would not affect vessel participation in this program, operating costs,
profitability, reporting burdens, or the availability of resources.

## 2.4.7 VMS Positional Polling Rates for U.S./Canada Management Area 

The Amendment 13 final rule indicated that a vessel participating in the
U.S./Canada Management Area would have its VMS position polled at a rate
of two polls per hour. However, while the National Marine Fisheries
Service (NOAA Fisheries Service) Office of Law Enforcement (OLE) can
request a vendor to temporarily increase the VMS positional polling rate
on individual vessels at the Agency's expense to facilitate enforcement
operations, VMS vendors do not have the capacity to automatically modify
the VMS positional polling rate for individual vessels based upon the
vessel's declared VMS activity code. This action would remove references
to an increased VMS positional polling rate for vessels participating in
the U.S./Canada Management Area from the regulations at §
648.10(b)(2)(iii) and § 648.85(a)(3)(i) to maintain consistency with the
current capacity to implement the U.S./Canada Management Area VMS
requirements established by Amendment 13.

Economic impacts associated with the U.S./Canada Management Area and its
associated SAPs are included in the DSEIS prepared for Amendment 13 and
the EAs prepared for FW 40-A and FW 42. Costs associated with VMS
positional polling rates, however, are not specifically included in
these analyses. Instead, they are included in analyses prepared to
comply with the PRA for the associated actions. The most recent
assessment of the costs associated with VMS positional polling were
included in the FW 40-A PRA analysis (available at:
http://www.cio.noaa.gov/itmanagement/0501ren05.pdf ). This analysis
assumes that vessels would be polled once per hour and incorporates such
polling into an estimate of the overall monthly VMS operational costs.
Based upon an assumption that each vessel allocated NE multispecies DAS
would use them and, therefore, be required to use VMS, the yearly VMS
operational costs, including VMS positional polling, is estimated to be
\$1.7 million. Because previous analyses of the reporting burden and
costs assumed one VMS positional poll per hour, this action would revise
the existing regulations to remove an inaccurate provision and ensure
that the regulations accurately reflect the current administration of
the fishery. Thus, this action would not modify the reporting burdens or
costs previously analyzed for this provision and would ensure that the
previously economic impacts would be realized.

## 2.4.8 Haddock TAC in the CA I Hook Gear I Haddock SAP 

The FW 41 final rule split the CA I Hook Gear Haddock SAP into two
seasons, distributing the haddock total allowable catch (TAC)
accordingly. In FW 42, the Council modified the manner in which the
haddock TAC for this SAP is calculated, but did not revise the season or
the distribution of the haddock TAC. However, the FW 42 final rule
revised the calculation of the haddock TAC, but inadvertently omitted
the provisions that distributed the haddock TAC among the two seasons,
including the authority of the Regional Administrator to adjust the
quota to each season to account for under- or over-harvest of the
haddock TAC during the first season of the SAP. This action would revise
the regulations at § 648.85(b)(7)(iv)(F) to reinsert the FW 41
provisions that were inadvertently removed upon the implementation of
the FW 42 final rule.

The economic impacts of the CA I Hook Gear Haddock SAP are included in
Section 6.3.4 of the EA prepared to support FW 42. This action would not
affect the measures implemented by FW 41 or its associated analysis, but
would ensure that the measures implemented by that action would be
reinserted into the current regulations and that the economic impacts
previously analyzed would be realized. This action would ensure that
vessels participating in the second season of this SAP would have an
equal opportunity to harvest the haddock TAC specified for that season
by preventing vessels participating in the first season from
overharvesting their TAC, thereby reducing the TAC, and potential
additional fishing revenue, available to the second season. This
preserves economic benefits associated with TACs assigned to each season
and does not result in the unintended and unfair distribution of
accessing the haddock resource. In addition, this Therefore, this action
would preserve opportunities for vessels to participate in this SAP and
would not affect fleet demographics, impose any further operational
costs, reduce fishing revenue and profitability, or decrease resource
availability.

## 2.4.9 Corrections to the White Hake Trip Limit

## 

Early in the development of FW 42, the Council considered adopting a 500
lb per DAS, up to 5,000 lb per trip limit for white hake. Both the
proposed and final rules to implement emergency measures reflected this
trip limit. However, the Council later adopted a white hake trip limit
of 1,000 lb per DAS, up to 10,000 lb per trip. The emergency final rule
was corrected to reflect the white hake trip limits adopted by the
Council, but both the FW 42 proposed and final rules inadvertently
included the earlier white hake trip limits. Therefore, this action
would correct the white hake trip limits found at § 648.86(e) to
accurately reflect the white hake trip limits adopted by the Council in
FW 42.

The economic impacts of commercial fishing measures implemented or
revised by FW 42 are summarized in Section 7.2.4.1 of the EA prepared
for that action. This analysis included a white hake trip limit of 1,000
lb/DAS, up to 10,000 lb/trip. Because that analysis uses a model which
incorporates effort controls, including DAS reductions, closures, and
species trip limits, it is not possible to isolate the economic impacts
associated with just the white hake trip limits. In general, the
implementation of a trip limit for a species previously unregulated by
trip limits will result in decreased revenue for vessels landing this
species. However, the impacts of a white hake trip limit of 500 lb/DAS,
up to 5,000 lb/trip were never analyzed as part of FW 42 and would
constitute further adverse economic impacts to vessels if not corrected
by this action.

This action would not modify the white hake trip limit previously
analyzed in FW 42, but would correct the regulations to accurately
reflect the white hake trip limit adopted by the Council and analyzed in
FW 42. Thus, this action would ensure that the economic impacts analyzed
in FW 42 would be realized and would impose no further economic impacts
and would not modify vessel behavior, increase operational costs,
decrease vessel revenue or profitability, or modify resource
availability.

## 2.4.10 Approval of Sector Applications 

The procedure to review and approve sector allocations established by
the Amendment 13 final rule required NOAA Fisheries Service to seek
public comment on proposed sector operations plans through the
publication of a proposed rule in the [Federal]{.underline}
[Register]{.underline}. Based upon the existing procedures and
associated time lines, the requirement to develop a proposed rule has
contributed to delaying the effectiveness of proposed sector operations
beyond the start of the fishing year on May 1 for the two sectors
currently approved. To improve the timeliness and effectiveness of the
sector operations plan review and approval process, this action would
revise the existing sector approval regulations at § 648.87(c)(1) and
(2) by removing the requirement to develop a proposed rule and inserting
language that indicates NMFS would seek public comment "consistent with
the Administrative Procedure Act," and that NMFS would approve sector
operations plans "through a "temporary rule consistent with the
Administrative Procedure Act."

This measure is purely administrative in nature and would not impose any
economic impacts.

## 2.4.11 Recreational Fish Size Restrictions 

The regulations implemented by the Amendment 5 final rule clearly
outline the minimum fish size provisions for commercial vessels at §
648.83, including the skin-on provision in paragraph (a)(2) of that
section. However, the Amendment 5 final rule did not specify that the
skin on provision would also apply to the recreational minimum fish size
requirements at § 648.89. At several Council meetings in 2006, it was
interpreted that the skin-on provision does apply to charter/party and
private recreational vessels. Because the charter/party regulations at §
648.89 do not specifically indicate that the skin-on provisions applies
to recreational vessels, this action would copy the skin-on provision
outlined at § 648.83(a)(2) and insert it under § 648.89.

The EIS prepared to support Amendment 5 does not explicitly discuss the
economic impacts of the recreational fish size restrictions revised by
this action. It has been historically interpreted that the skin-on
provision applied to the recreational minimum fish size requirements at
§ 648.89, despite questions expressed at recent Council meetings. Since
this action would not affect the recreational size limits and possession
limits, this action would not modify current fishing practices or affect
an individual's ability to catch a fish. As a result, this action is not
expected to decrease participation in the charter/party fishery and
should not result in decreased revenue for that fishery. This action may
affect the processing of legal-sized fish such that the skin is not
removed from fillets until the fish are brought home for consumption.
However, this would not result in any direct or indirect economic
impacts to individuals or small entities.

## 2.5 Economic Impacts of the No Action Alternative 

The only alternative to the proposed action considered is the no action
alternative. The no action alternative would maintain the existing
regulations without any of the proposed corrections/clarifications
specified in Section 2.4 above. Many of these provisions are purely
administrative in nature and would impose no economic impacts, while
others would have unanticipated economic impacts if not implemented
under this action. The following proposed measures are considered
administrative measures with no economic impacts:

-   Defining terms used in the DAS Leasing and Transfer Programs;

-   Codifying VMS notification requirements specified in permit holder
    letters;

-   Inserting reference to the GOM Grate Raised Footrope Trawl Exempted
    Whiting Fishery in existing prohibitions;

-   Inserting a prohibition for violating the requirements of an
    in-season management action;

-   Removing an unnecessary exemption from the closed area regulations;

-   Reinserting application requirements for the DAS Leasing Program

-   Correcting the VMS positional polling rates to reflect
    administrative capacity;

-   Refining the regulations governing the review and approval of sector
    operations plans; and

-   Clarifying the applicability of the minimum fish size requirements
    for charter/party and private recreational vessel.

    Although codifying the VMS notification requirements under this
    action is not expected to have any economic impacts beyond those
    which have previously been analyzed, failing to implement this
    action would forgo any potential reductions in VMS operational costs
    associated with using the IVR to confirm the applicability of the
    previous VMS activity code on the next trip. Therefore, the no
    action alternative would increase the likelihood that the upper
    bound VMS operational costs previously analyzed would be achieved.

    The CA I Hook Gear Haddock SAP provides an opportunity for
    participating vessels to use Category B DAS to harvest haddock
    within CA I. It is estimated that catch per unit effort within CA I
    is greater than fishing outside of this area, thereby allowing
    vessels to harvest available resources in a cost effective manner.
    Further, there are very few opportunities for vessels to use
    Category B DAS. Therefore, any opportunity to use Category B DAS
    reduces operating costs to vessels because the vessel has more DAS
    available to fish.

    The no action alternative could result in unintended adverse
    economic impacts to vessels participating in the CA I Hook Gear
    Haddock SAP. The proposed action would reinsert regulations
    providing the Regional Administrator with the authority to adjust
    the start date and haddock TAC of Season 2 of this SAP. This
    authority is necessary to ensure that vessels participating in
    Season 1 of the SAP do not overharvest the haddock TAC and prevent
    vessels participating in Season 2 of the SAP from accessing
    available haddock resources. The no action alternative, by not
    reestablishing the Regional Administrator's authority to prevent the
    seasonal TACs from being overharvested, could result in opportunity
    costs to vessels intending to participate in Season 2 of the SAP if
    they are unable to access this SAP because the haddock TAC was fully
    harvested in Season 1. Therefore, the no action alternative could
    modify participation in the SAP, redistribute the benefits
    associated with this SAP, and increase operating costs by forcing
    vessels to fish outside of CA I under a more valuable Category A
    DAS. These impacts are beyond those anticipated during the original
    development of FW 41 by the Council.

    The no action alternative would impose greater adverse economic
    impacts for vessels landing white hake. The current regulations
    restrict white hake landings to 500 lb/DAS, up to 5,000 lb/trip.
    However, the white hake trip limits analyzed and adopted in FW 42
    are 1,000 lb/DAS, up to 10,000 lb/trip. Assuming an average price of
    \$1.00 per pound, as observed in recent landings at several markets
    in New England, the no action would reduce vessel revenue by up to
    \$500 per DAS and up to \$5,000 per trip. Thus, for vessels landing
    large quantities of white hake, the no action alternative could have
    substantial adverse economic impacts beyond that which was
    anticipated during the development of FW 42. Therefore, while the no
    action alternative may slightly increase the price of white hake by
    reducing market supply, the no action alternative would
    substantially reduce the profitability of vessels landing white
    hake.

# 3.0 Evaluation of Significance Under E.O. 12866

E.O. 12866 indicates that a "significant regulatory action" is an action
that may result in the following criteria being met:

-   The action would have an annual effect on the economy of \$100
    million or more or would adversely affect a sector of the economy,
    productivity, competition, jobs, the environment, public health or
    safety, or State, local, or tribal governments or communities;

-   The action would create serious inconsistencies with an action of
    another agency;

-   The action would materially alter budgetary impacts of entitlements,
    grants, user fees, or loan programs or the rights and obligations of
    recipients thereof; or

-   The action would raise novel legal or policy issues.

    Section 2.0 above contains information concerning the fishery, the
    nature of the problem being addressed, and a qualitative discussion
    of the economic impacts associated with the alternatives considered
    in this action. The proposed action does not constitute a
    significant regulatory action under E.O. 12866. It will not have an
    annual effect on the economy of more than \$100 million. The
    proposed action correcting and clarifying the current regulations to
    accurately reflect measures adopted by the Council and approved by
    the Secretary of Commerce in recent groundfish actions is not
    expected to have any additional economic impact beyond that
    described in the DSEIS and EAs prepared for those actions. This
    action will also not adversely affect, in the long-term,
    competition, jobs, the environment, public health or safety, or
    state, local or tribal government communities. In addition, the
    action will not create a serious inconsistency or otherwise
    interfere with an action taken or planned by another agency.
    Further, the action will not materially alter the budgetary impact
    of entitlement, grants, user fees, or loan programs or the rights
    and obligations of their participants. Finally, the action does not
    raise novel legal or policy issues arising out of legal mandates,
    the President's priorities, or the principles set forth in E.O.
    12866.

# 3.1 Certification Determination Under RFA

NMFS guidelines for economic analysis prepared in compliance with the
RFA indicate that NMFS may certify that a proposed action does not have
a significant impact on a substantial number of small entities. These
guidelines identify two criteria to assist in that certification: (1)
Whether the proposed action places a substantial number of small
entities at a significant competitive disadvantage to large entities,
and (2) whether the proposed action significantly reduces profit for a
substantial number of small entities. Because all entities affected by
the proposed action are considered small entities according to the SBA
size standard described above, the proposed action would not place small
entities at a competitive disadvantage to large entities. The proposed
action would affect a substantial number of small entities, as all
vessels issued a limited access NE multispecies DAS permit (i.e.,
Categories A, D, E, and F permit), all vessels issued an open access NE
multispecies Category K permit, and all vessels issued an open access NE
multispecies charter/party Category I permit would be affected by this
action. However, the proposed action will not significantly reduce
profit for affected vessels, as the proposed measures are either
administrative in nature and would have no economic impact, or would
ensure that previously analyzed and approved measures are reinserted
into the current regulations. Therefore, the proposed action would
ensure that the economic impacts previously analyzed in recently
approved groundfish actions would be realized.