63200 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric 

Administration

50 CFR Parts 679 and 680

[Docket No. 040831251-4251-01; I.D. 

100804A]

RIN 0648–AS47

Fisheries of the Exclusive Economic 

Zone Off Alaska; Allocating Bering Sea 

and Aleutian Islands King and Tanner 

Crab Fishery Resources

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce.

ACTION: Proposed rule; request for 

comments.

SUMMARY: NMFS proposes regulations 

implementing Amendments 18 and 19 

to the Fishery Management Plan for 

Bering Sea/Aleutian Islands (BSAI) King 

and Tanner Crabs (FMP). Amendments 

18 and 19 amend the FMP to include 

the Voluntary Three-Pie Cooperative 

Program (hereinafter referred to as the 

Crab Rationalization Program 

(Program)). Congress amended the 

Magnuson-Stevens Fishery 

Conservation and Management Act 

(Magnuson-Stevens Act) to require the 

Secretary of Commerce to approve the 

Program. The proposed action is 

necessary to increase resource 

conservation, improve economic 

efficiency, and improve safety. This 

action is intended to promote the goals 

and objectives of the Magnuson-Stevens 

Act, the FMP, and other applicable law.

DATES: Comments must be received no 

later than December 13, 2004.

ADDRESSES: Send comments to Sue 

Salveson, Assistant Regional 

Administrator, Sustainable Fisheries 

Division, Alaska Region, NMFS, Attn: 

Lori Durall. Comments may be 

submitted by:

• Mail: P.O. Box 21668, Juneau, AK 

99802.

• Hand Delivery to the Federal 

Building: 709 West 9th Street, Room 

420A, Juneau, AK.

• Facsimile: 907-586-7557.

• E-mail: KTC18–PR–0648–

AS47@noaa.gov. Include in the subject 

line of the e-mail the following 

document identifier: Crab 

Rationalization RIN 0648–AS47. E-mail 

comments, with or without attachments, 

are limited to 5 megabytes.

• Webform at the Federal eRulemaking 

Portal: www.regulations.gov. Follow the 

instructions at that site for submitting 

comments.

Send comments on 

collection-of-information requirements 

to the same NMFS address and also to 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Washington, DC 20503 (Attn: 

NOAA Desk Officer). Also, send 

comments to David Rostker, OMB, by 

e-mail at DRostker@omb.eop.gov or by 

facsimile to 202-395-7285.

Copies of Amendments 18 and 19 and 

the Environmental Impact Statement 

(EIS) for this action may be obtained 

from the NMFS Alaska Region at the 

address above or from the Alaska Region 

website at http://www.fakr.noaa.gov/

sustainablefisheries/crab/eis/

default.htm. The EIS contains as 

appendices the Regulatory Impact 

Review (RIR), Initial Regulatory 

Flexibility Analysis (IRFA), and Social 

Impact Assessment (SIA) prepared for 

this action.

FOR FURTHER INFORMATION CONTACT:

Susan Salveson, 907-586-7228 or 

sue.salveson@noaa.gov.

SUPPLEMENTARY INFORMATION: In January 

2004, Congress amended section 313 of 

the Magnuson-Stevens Act through the 

Consolidated Appropriations Act of 

2004 (Pub. L. 108-199, section 801), by 

adding paragraph (j). As amended, 

section 313(j)(1) requires the Secretary 

to approve by January 1, 2005, and 

implement thereafter, the Program as it 

was adopted by the North Pacific 

Fishery Management Council (Council). 

Amendments 18 and 19 amend the FMP 

to include the Program.

This proposed rule implements 

Amendments 18 and 19 to the FMP. The 

Notice of Availability for these 

amendments was published in the 

Federal Register on September 1, 2004 

(69 FR 53397). NMFS solicited public 

comments on the proposed amendments 

through November 1, 2004. NMFS 

published the amendments in 

September so that the decision date for 

approval of the amendments will be 

before the statutory deadline of January 

1, 2005.

The Program would allocate BSAI 

crab resources among harvesters, 

processors, and coastal communities. 

The Council developed the Program 

over a 6-year period to accommodate the 

specific dynamics and needs of the 

BSAI crab fisheries. The Program builds 

on the Council’s experiences with the 

halibut and sablefish Individual Fishing 

Quota (IFQ) program and the American 

Fisheries Act (AFA) cooperative 

program for Bering Sea pollock. The 

Program is a limited access system that 

balances the interests of several groups 

who depend on these fisheries. The 

Program would address conservation 

and management issues associated with 

the current derby fishery and would 

reduce bycatch and associated discard 

mortality. The Program also would 

increase the safety of crab fishermen by 

ending the race for fish. Share 

allocations to harvesters and processors, 

together with incentives to participate 

in fishery cooperatives, would increase 

efficiencies, provide economic stability, 

and facilitate compensated reduction of 

excess capacities in the harvesting and 

processing sectors. Community interests 

would be protected by Community 

Development Quota (CDQ) allocations 

and regional landing and processing 

requirements, as well as by several 

community protection measures.

This preamble first provides a Crab 

Rationalization Program overview that 

presents a general description of all of 

the Program components. Subsequent 

sections focus on the specifics of the 

following Program components: quota 

share allocation, processor quota share 

allocation, IFQ and individual 

processing quota (IPQ) issuance, quota 

transfers, use caps, crab harvesting 

cooperatives, protections for Gulf of 

Alaska groundfish fisheries, binding 

arbitration, monitoring, economic data 

collection, and cost recovery fee 

collection.

Crab Rationalization Program 

Overview

The Program would apply to the 

following BSAI crab fisheries: Bristol 

Bay red king crab (Paralithodes 

camtschaticus), Western Aleutian 

Islands (Adak) golden king crab 

(Lithodes aequispinus) - West of 174°

W., Eastern Aleutian Islands (Dutch 

Harbor) golden king crab - East of 174°

W., Western Aleutian Islands (Adak) red 

king crab - West of 179° W., Pribilof 

Islands blue king crab (P. platypus) and 

red king crab, St. Matthew Island blue 

king crab, Bering Sea snow crab 

(Chionoecetes opilio), and Bering Sea 

Tanner crab (C. bairdi). Golden king 

crab is also known as brown king crab. 

In this document, the phrases ‘‘crab 

fishery’’ and ‘‘crab fisheries’’ refer to 

these fisheries, unless otherwise 

specified.

Several crab fisheries under the FMP 

would be excluded from the Program, 

including the Norton Sound red king 

crab fishery, which is operated under a 

‘‘superexclusive’’ permit program 

intended to protect the interests of local, 

small-vessel participants. Also excluded 

from this Program are the Aleutian 

Islands Tanner crab fishery, Aleutian 

Islands red king crab fishery east of 179°

W. long., and the Bering Sea golden king 

crab, scarlet king crab (L. couesi), 

triangle Tanner crab (C. angulatus), and 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63201

grooved Tanner crab (C. tanneri) 

fisheries.

Harvest Sector

Qualified harvesters would be 

allocated quota share (QS) in each crab 

fishery. To receive a QS allocation, a 

harvester must hold a permanent, fully 

transferable license limitation program 

(LLP) license endorsed for that crab 

fishery. Quota share represents an 

exclusive but revokable privilege that 

provides the QS holder with an annual 

allocation to harvest a specific 

percentage of the total allowable catch 

(TAC) from a fishery. IFQs are the 

annual allocations of pounds of crab for 

harvest that represent a QS holder’s 

percentage of the TAC. Using LLP 

licenses for defining eligibility in the 

Program would maintain current fishery 

participation. A harvester’s allocation of 

QS for a fishery would be based on the 

landings made by his or her vessel in 

that fishery. Specifically, each 

allocation would be the harvester’s 

average annual portion of the total 

qualified catch during a specific 

qualifying period. Qualifying periods 

were selected to balance historical and 

recent participation. Different periods 

were selected for different fisheries to 

accommodate closures and other 

circumstances in the fisheries in recent 

years.

Quota share would be designated as 

either catcher vessel (CV) shares or 

catcher/processor (CP) shares, 

depending on the nature of the LLP 

license and whether the vessel 

processed the qualifying harvests on 

board. Catcher vessel IFQ would be 

issued in two classes, Class A IFQ and 

Class B IFQ. Crabs harvested with Class 

A IFQ would require delivery to a 

processor holding unused processing 

quota. Class A IFQ landings also would 

be subject to a regional delivery 

requirement. Under this regional 

requirement, landings would be 

delivered either in a North or in a South 

region (in most fisheries). Crabs 

harvested with Class B IFQ could be 

delivered to any processor and would 

not be regionally designated. Landings 

in excess of IFQ would be forfeited in 

all cases. Class B IFQs are intended to 

provide ex-vessel price negotiating 

leverage to harvesters. For each region 

of each fishery, the allocation of Class 

B IFQ would be 10 percent of the total 

allocation of IFQ to the CV sector.

Transfer of QS and IFQ, either by sale 

or lease, would be allowed, subject to 

limits including caps on the amount of 

shares a person may hold or use. To be 

eligible to receive transferred QS or IFQ, 

a person would have to meet specific 

eligibility criteria. Initial recipients of 

QS, CDQ groups, and eligible crab 

community entities would be exempt 

from the transfer eligibility criteria.

Separate caps would be imposed to 

limit the amount of QS and IFQ a 

person could hold and to limit the use 

of IFQ on board a vessel. These caps are 

intended to prevent negative impacts 

from what can be described as excessive 

consolidation of shares. Excessive share 

holdings are prohibited by the 

Magnuson-Stevens Act. Different caps 

were chosen for the different fisheries 

because fleet characteristics and 

dependence differ across fisheries. 

Separate caps on QS holdings would be 

established for CDQ groups, which 

represent rural western Alaska 

communities. Processor holdings of QS 

would also be limited by caps on 

vertical integration. Quota share holders 

could retain and use initial allocations 

of QS above the caps.

Crew Sector

To protect their interests in the 

fisheries, qualifying crew would be 

allocated 3 percent of the initial QS 

pool. These shares are intended to 

provide long term benefits to captains 

and crew. The Council originally 

intended this provision to apply only to 

vessel captains. However, NMFS has 

determined that documentation 

necessary to allocate Crew QS, called C 

shares by the Council, would require 

that these shares be initially issued to 

individuals who hold a State of Alaska 

Interim Use Permit. Most likely, this 

individual would be the captain; 

however, the State does not require that 

the holder of the Interim Use Permit be 

the vessel captain. The allocation to 

crew would be based on the same 

qualifying years and computational 

method used for QS allocations to LLP 

license holders. Crew (C) QS would be 

issued as CVC QS and CPC QS, 

depending on the activity in the 

qualifying years. To ensure that Crew 

QS and IFQ benefit at-sea participants 

in the fisheries, Crew IFQ could be used 

only when the IFQ holder is on board 

the vessel, except when a Crew QS 

holder joins a cooperative.

To be eligible to receive an allocation, 

an individual would be required to have 

historic and recent participation. 

Historic participation would be 

demonstrated by at least one landing in 

each of three of the qualifying years. 

Recent participation would be 

demonstrated by at least one landing in 

two of the three most recent seasons, 

with some specific exceptions.

CV Crew IFQ would be required to be 

delivered to shore-based or floating 

processors for processing. CV Crew IFQ 

would not be subject to specific delivery 

requirements until July 1, 2008. After 

July 1, 2008, CV Crew IFQ would be 

subject to the Class A IFQ/Class B IFQ 

distinction with commensurate regional 

delivery requirements unless the 

Council determines, after review, not to 

apply those designations. Before July 1, 

2007, the Council would review CV 

Crew IFQ landing patterns to determine 

whether the distribution of landings 

among processors and communities of 

CV Crew IFQ differs from the 

distribution of IFQ landings.

CP crew would be allocated CPC QS 

and IFQ that include a harvesting and 

on-board processing privilege. Harvests 

with CPC IFQ also could be delivered to 

shore-based or floating processors.

Crew QS and IFQ could be transferred 

to eligible individuals. Leasing of Crew 

IFQ would be permitted before July 1, 

2008. After July 1, 2008, leasing would 

be permitted only in the case of a 

documented hardship (such as a 

medical hardship or loss of vessel) for 

the term of the hardship, subject to a 

maximum of 2 years over a 10-year 

period. Individual Crew QS holdings 

would be capped.

Processing Sector

A processing privilege, analogous to 

the harvesting privilege allocated to 

harvesters, would be allocated to 

processors. Qualified processors would 

be allocated processor quota share (PQS) 

in each crab fishery. PQS represents an 

exclusive but revocable privilege to 

receive deliveries of a specific portion of 

the annual TAC from a fishery. An 

annual allocation of pounds of crab 

based on the PQS is IPQ. IPQs would be 

issued for 90 percent of the IFQ 

allocated harvesters, equaling the 

amount of IFQ allocated as Class A IFQ. 

Processor privileges would not apply to 

the remaining TAC allocated as Class B 

IFQ, or for Crew IFQ until July 1, 2008. 

IPQs would be regionally designated for 

processing (corresponding to the 

regional designation of the Class A IFQ).

PQS allocations would be based on 

processing history during a specified 

qualifying period for each fishery. A 

processor’s initial allocation of PQS in 

a fishery would equal its share of all 

qualified pounds of crab processed in 

the qualifying period. Processor shares 

would be transferable, including the 

leasing of IPQs and the sale of PQS, 

subject to caps and to community 

protection measures. IPQs could be used 

without transfer at any facility or plant 

operated by a processor. New processors 

could enter the fishery by purchasing 

PQS or IPQ or by purchasing crab 

harvested with Class B IFQ or crab 

harvested by CDQ groups or the Adak 

community entity.

63202 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

A PQS holder would be limited to 

holding 30 percent of the PQS issued for 

a fishery, except that initial allocations 

of shares above this limit could be 

retained and used. In addition, in the 

snow crab fishery, no processor would 

be permitted to use or hold in excess of 

60 percent of the IPQs issued for the 

Northern region.

Catcher/Processor Sector

CPs have a unique position in the 

Program because they participate in 

both the harvesting and processing 

sectors. To be eligible for CP QS, a 

person would be required to hold a 

permanent, fully transferable LLP 

license designated for CP use. In 

addition, a person must have processed 

crab on board the CP, whose history 

gave rise to the LLP license, in either 

1998 or 1999. Persons meeting these 

qualification requirements would be 

allocated CP QS in accordance with the 

allocation rules for QS for all qualified 

catch that was processed on board. 

These shares would represent a harvest 

privilege and an on-board processing 

privilege. Catcher/Processor QS would 

not have regional designations.

Regionalization

The regional delivery requirements 

for QS are intended to preserve the 

historic geographic distribution of 

landings in the fisheries. Communities 

in the Pribilof Islands are the prime 

beneficiaries of this regionalization 

provision. Two regional designations 

would be created in most fisheries. The 

North region would be all areas in the 

Bering Sea north of 56°20′ N. latitude. 

The South region would be all other 

areas. Catcher vessel QS, Class A IFQ, 

PQS, and IPQ would be regionally 

designated. Crab harvested with 

regionally designated IFQ would be 

required to be delivered to a processor 

in the designated region. Likewise, a 

processor with regionally designated 

IPQ would be required to accept 

delivery of and process crab in the 

designated region. Legal landings in a 

region in the qualifying years would 

result in QS and PQS designated for that 

region.

The Program has two exceptions to 

the North/South regional designations. 

In the Western Aleutian Islands golden 

king crab fishery, 50 percent of the Class 

A IFQ and IPQ would be designated as 

west shares to be delivered west of 174°

W. longitude. The remaining 50 percent 

of the Class A IFQ and IPQ would have 

no regional designation and would not 

be subject to a regional delivery 

requirement. The west designation 

would be applied to all Class A IFQ and 

IPQ regardless of the historic location of 

landings in the fishery. A second 

exception is the Bering Sea Tanner crab 

fishery, which would have no regional 

designation. This fishery is anticipated 

to be conducted primarily as a 

concurrent fishery with the regionalized 

Bristol Bay red king crab and Bering Sea 

snow crab fisheries, making the regional 

designation of Tanner crab landings 

unnecessary.

Cooperatives

Harvesters may form voluntary 

cooperatives in order to collectively 

manage their IFQ holdings. A minimum 

membership of four unique QS holders 

would be required for cooperative 

formation. Quota share holders who also 

(1) hold PQS or IPQ, (2) are affiliated 

with a person who holds PQS or IPQ, 

(3) process Class B IFQ, or (4) are 

affiliated with a person that processes 

Class B IFQ, would be prohibited from 

joining a crab harvesting cooperative. A 

cooperative would be required to apply 

for a cooperative IFQ permit. The 

cooperative IFQ permit would display 

the aggregate amount of IFQ in each 

crab fishery that would be yielded by 

the collective QS holdings of the 

members. IFQ could be transferred 

between cooperatives, subject to NMFS’

approval. Cooperative members would 

be allowed to leave a cooperative or 

change cooperatives on an annual basis 

prior to the July 1 deadline for the 

annual cooperative IFQ permit 

application. Vessels that are used 

exclusively to harvest cooperative IFQ 

would not be subject to use caps. 

Cooperatives are free to associate with 

one or more processors to the extent 

allowed by antitrust law.

Community Protection Measures

The Program includes several 

provisions intended to protect 

communities from adverse impacts that 

could result from the Program. 

Communities eligible for the community 

protection measures would be those 

with 3 percent or more of the qualified 

landings in any crab fishery included in 

the Program. Based on these criteria, 

NMFS has preliminarily determined 

that the following crab communities 

meet this criteria: Adak, Akutan, Dutch 

Harbor, Kodiak, King Cove, False Pass, 

St. George, St. Paul, and Port Moller. All 

of these communities are identified as 

eligible crab communities (ECCs) for 

purposes of community protection 

measures.

‘‘Cooling off’’ provision. Until July 1, 

2007, PQS and IPQ based on processing 

history from the ECCs could not be 

transferred from those communities. 

The use of IPQ outside the community 

during this period would be limited to 

20 percent of the IPQ and for specific 

hardships. PQS and IPQ from three crab 

fisheries would be exempt from the 

cooling off provision: Tanner crab, 

Western Aleutian Islands red king crab, 

and Western Aleutian Islands golden 

king crab.

Individual processing quota caps. IPQ 

caps would be established to limit the 

annual issuance of IPQs in seasons 

when the Bristol Bay red king crab or 

snow crab TAC exceeds a threshold 

amount. Under these circumstances, 

Class A IFQ issued in excess of these 

thresholds would not be subject to the 

IPQ landing requirements but would be 

subject to the regional delivery 

requirements.

Sea time waiver. Sea time eligibility 

requirements for the purchase of QS 

would be waived for CDQ groups and 

community entities in ECCs, allowing 

those communities to build and 

maintain local interests in harvesting. 

CDQ groups and ECCs would be eligible 

to purchase PQS but would not be 

permitted to purchase Crew QS.

Right of first refusal (ROFR). ECCs, 

except for Adak, would have a ROFR on 

the transfer of PQS and IPQ originating 

from processing history in the 

community if the transfer would result 

in relocation of the shares outside the 

community. Adak would not be eligible 

for the ROFR provision because Adak 

would receive a direct allocation of 

Western Aleutian Islands golden king 

crab. In addition, the City of Kodiak and 

the Kodiak Island Borough in the Gulf 

of Alaska (GOA) would have a ROFR on 

the transfer of PQS and IPQ from 

communities in the GOA north of 56°20′

N. latitude.

Community Development Quota 

Program and Community Allocations

Community Development Quota 

Program. The CDQ Program would be 

expanded to include the Eastern 

Aleutian Islands golden king crab 

fishery and the Western Aleutian 

Islands red king crab fishery. In 

addition, the CDQ allocations in all crab 

fisheries covered by the Program would 

be increased from 7.5 to 10 percent of 

the TAC. The increase would not apply 

to the CDQ allocation of Norton Sound 

red king crab because this fishery is 

excluded from the Program. The crab 

CDQ fisheries would be managed as 

separate commercial fisheries by the 

State under authority deferred to it 

under the FMP. The State would 

establish observer coverage 

requirements, State permitting 

requirements, and transfer provisions 

among the CDQ groups. It also would 

monitor catch to determine when quotas 

had been reached, enforce any penalties 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63203

associated with quota overages, and 

monitor compliance with the 

requirement that CDQ groups must 

deliver at least 25 percent of their 

allocation to shore-based processors.

Crab harvested under the CDQ 

allocations (except Norton Sound red 

king crab) would be subject to some of 

the Federal requirements that apply to 

all crab fisheries under the Program 

including permitting, recordkeeping and 

reporting, a vessel monitoring system, 

and the cost recovery fees. The specifics 

of these requirements are discussed in 

more detail in later sections.

The CDQ groups could participate in 

the crab fisheries as holders of both QS 

and PQS. Some CDQ groups would be 

initial recipients of QS because they 

hold LLP licenses and the appropriate 

catch history. In addition, the CDQ 

groups would be exempt from the 

transfer eligibility requirement related 

to sea time so they would be eligible to 

obtain QS by transfer, subject to QS use 

caps for CDQ groups. The CDQ groups 

also would be able to obtain PQS by 

transfer because there are no transfer 

restrictions on PQS. While harvesting 

crab with IFQ, the CDQ groups would 

be subject to the same regulations as 

apply to other IFQ holders. The 

purchase and holding of QS and PQS by 

the CDQ groups would be subject to the 

administrative regulations for the CDQ 

Program at 50 CFR part 679. These 

regulations include information, 

reporting, prior approval, and use 

requirements for all CDQ investments, 

which include QS and PQS.

Adak allocation. An allocation of 10 

percent of the TAC of Western Aleutian 

Islands golden king crab would be made 

to the community of Adak. The 

allocation to Adak would be made to a 

nonprofit entity representing the 

community, with a board of directors 

elected by the community. As an 

alternative and in the interim, the 

allocation and funds derived from it 

could be held in trust by the Aleut 

Enterprise Corporation for a period not 

to exceed 2 years, if the Adak 

community non-profit entity is not 

formed prior to implementation of the 

Program. Oversight of the use of the 

allocation for ‘‘fisheries related 

purposes’’ would be deferred to the 

State under the FMP. NMFS would have 

no direct role in oversight of the use of 

this allocation. The State would provide 

an implementation review to the 

Council to ensure that the benefits 

derived from the allocation accrue to the 

community and achieve the goals of the 

fisheries development plan. The Adak 

allocation would be managed as a 

separate commercial fishery by the State 

in a manner similar to management of 

the crab CDQ fisheries. As with the CDQ 

allocations, crab harvested under the 

Adak allocation would be subject to 

several requirements that apply to all 

crab fisheries under the Program 

including permitting, recordkeeping and 

reporting, a vessel monitoring system, 

and the cost recovery fees.

Community purchase. Any non-CDQ 

community in which 3 percent or more 

of any crab fishery was processed could 

form a non-profit entity to receive QS, 

IFQ, PQ and IPQ transfers on behalf of 

the community. The non-profit entity 

would be called an eligible crab 

community organization (ECCO).

Protections for Participants in Other 

Fisheries

The Program would greatly increase 

the flexibility for crab fishermen to 

chose when and where to fish for their 

IFQ, and this increased flexibility would 

provide crab fishermen with increased 

opportunity to participate in other 

fisheries. Restrictions on the 

participants in other fisheries, also 

called sideboards, would restrict a 

vessel’s harvests to its historical 

landings in all GOA groundfish fisheries 

(except the sablefish fishery). Vessels 

with less than 100,000 pounds (45,359 

kg) of total snow crab landings and more 

than 500 metric tons (mt) (1,102,311 lb) 

of total Pacific cod landings in the GOA 

during the qualifying years would be 

exempt from the restrictions. In 

addition, vessels with less than 50 mt 

(110,231 lb) of total groundfish landings 

in the GOA during the qualifying period 

would be prohibited from harvesting 

Pacific cod from the GOA. Restrictions 

would be applied to vessels but would 

also restrict landings made using a 

groundfish LLP license derived from the 

history of a vessel so restricted, even if 

that LLP license is used on another 

vessel. Groundfish sideboards in the 

GOA would be managed by NMFS 

through fleet-wide sideboard directed 

fishing closures in Federal waters and 

for the parallel fishery in state waters.

Arbitration System

BSAI crab fisheries have a history of 

contentious price negotiations. 

Harvesters have often acted collectively 

to negotiate an ex-vessel price with 

processors, which at times delayed 

fishing. The Arbitration System was 

developed to compensate for 

complications arising from the creation 

of QS/IFQ and PQS/IPQ. The 

complications include price 

negotiations that could continue 

indefinitely and result in costly delays 

and the ‘‘last person standing’’ problem 

where the last Class A IFQ holder to 

contract deliveries would have a single 

IPQ holder to contract with, effectively 

limiting any ability to use other 

processor markets for negotiating 

leverage. To ensure fair price 

negotiations, the Arbitration System 

includes a provision for open 

negotiations among IPQ and IFQ holders 

as well as various negotiation 

approaches, including: (a) a share 

matching approach where IPQ holders 

make known to unaffiliated IFQ holders 

that have uncommitted IFQ available 

the amount of uncommitted IPQ they 

have available so the IFQ holder can 

match up its uncommitted IFQ by 

indicating an intent to deliver its catch 

to that IPQ holder; (b) a lengthy season 

approach that allows parties to postpone 

binding arbitration until sometime 

during the season; and (c) a binding 

arbitration procedure to resolve price 

disputes between an IPQ holder and 

eligible IFQ holders.

The arbitration process would begin 

preseason with a market report for each 

fishery prepared by an independent 

market analyst selected by the PQS and 

QS holders and the establishment of a 

non-binding fleet wide benchmark price 

by an arbitrator who has consulted with 

fleet representatives and processors. 

Information provided by the sectors 

would be historical in nature and at 

least 3 months old. This non-binding 

price would guide the above described 

negotiations. Information sharing among 

IPQ and IFQ holders, collective 

negotiations, and release of arbitration 

results would be limited to minimize 

the antitrust risks of participants in the 

Program.

The binding arbitration procedure in 

a last best (or final) offer format. The 

IPQ holder, each IFQ holder, and each 

crab harvesting cooperative could 

submit an offer. For each IFQ holder or 

cooperative, the arbitrator would select 

between the IFQ holder’s (or 

cooperative’s) offer and the IPQ holder’s 

offer. After an arbitration decision is 

rendered, an eligible IFQ holder with 

uncommited IFQ could opt-in to the 

completed contract by accepting all 

terms of the arbitration decision as long 

as the IPQ holder held sufficient 

uncommitted IPQ.

Monitoring and Enforcement

NMFS and the State of Alaska would 

coordinate monitoring and enforcement 

of the crab fisheries. Harvesting and 

processing activity would need to be 

monitored for compliance with the 

implementing regulations. Methods for 

catch accounting and catch monitoring 

plans would generate data to provide 

accurate and reliable round weight 

accounting of the total catch and 

landings to manage quota share 

63204 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

accounts, prevent overages of IFQ and 

IPQ, and determine regionalization 

requirements and fee liability. 

Monitoring measures would include 

landed catch weight and species 

composition, bycatch, and deadloss to 

estimate total fishery removals.

Economic Data Collection

The Program includes a 

comprehensive economic data 

collection program to aid the Council 

and NMFS in assessing the success of 

the Program and developing 

amendments necessary to mitigate any 

unintended consequences. An 

Economic Data Report (EDR), containing 

cost, revenue, ownership, and 

employment data, would be collected 

on a periodic basis from the harvesting 

and processing sectors. The data would 

be used to study the economic impacts 

of the Program on harvesters, 

processors, and communities. 

Participation in the data collection 

program would be mandatory for all 

participants in the crab fisheries.

Cost Recovery and Fee Collection

NMFS would establish a cost recovery 

fee system, required by section 304(d)(2) 

of the Magnuson-Stevens Act, to recover 

actual costs directly related to the 

management and enforcement of the 

Program. The crab cost recovery fee 

would be paid in equal shares by the 

harvesting and processing sectors and 

would be based on the ex-vessel value 

of all crab harvested under the Program, 

including CDQ crab and Adak crab. 

NMFS also would enter into a 

cooperative agreement with the State of 

Alaska to use IFQ cost recovery funds in 

State management and observer 

programs for BSAI crab fisheries. The 

crab cost recovery fee is prohibited from 

exceeding 3 percent of the annual 

ex-vessel value. Within this limit, the 

collection of up to 133 percent of the 

actual costs of management and 

enforcement under the Program would 

be authorized, which would provide for 

fuller reimbursement of management 

costs after allocation of 25 percent of the 

cost recovery fees to the crew loan 

program.

Crew Loan Program

To aid captains and crew in 

purchasing QS, a low interest loan 

program (similar to the loan program 

under the halibut and sablefish IFQ 

program) would be created. This 

program would be funded by 25 percent 

of the cost recovery fees as required by 

the Magnuson-Stevens Act. Loan money 

would be accessible only to active 

participants and could be used to 

purchase either QS or Crew QS. Quota 

share purchased with loan money 

would be subject to all use and leasing 

restrictions applicable to Crew QS for 

the term of the loan. This proposed rule 

does not contain proposed regulations 

to implement the crew loan program. 

Those proposed regulations will be 

developed by NMFS Financial Services.

Annual Reports and Program Review

NMFS, in conjunction with the State 

of Alaska, would produce annual 

reports on the Program. Before July 1, 

2007, the Council would review the 

PQS, binding arbitration, and C share 

components of the Program. After July 

1, 2008, the Council would conduct a 

preliminary review of the Program. A 

full review of the entire Program would 

be undertaken in 2010. Additional 

reviews would be conducted every 5 

years. These reviews are intended to 

objectively measure the success of the 

Program in achieving the goals and 

objectives specified in the Council’s 

problem statement and the 

Magnuson-Stevens Act. These reviews 

would examine the impacts of the 

Program on vessel owners, captains, 

crew, processors, and communities, and 

include an assessment of options to 

mitigate negative impacts.

The following sections provide more 

detail on the key components of the 

Program.

Quota Share Allocation

This section identifies those who 

would be eligible to receive QS in the 

initial allocation and describes the four 

QS sectors. The following sections 

discuss the application process and the 

proposed mechanism for deriving QS 

and IFQ in each sector. Qualified 

harvesters would be allocated QS in 

each crab fishery. To receive an initial 

QS allocation, a person must either: (1) 

hold a permanent, fully transferable LLP 

license endorsed for that crab fishery; or 

(2) have made a landing under the 

authority of a State of Alaska Interim 

Use Permit issued to crew members by 

the State of Alaska. Quota share would 

represent an exclusive but revokable 

privilege that provides the QS holder 

with an annual allocation to harvest a 

specific percentage of the TAC from a 

fishery. The annual allocations to QS 

holders of TAC, in pounds, are referred 

to as IFQ.

QS Sectors

The sector of QS issued would be 

based on eligibility and fishing activity 

during the qualified period. These 

distinctions yield four sectors of QS, as 

follows:

(1) Catcher Vessel Owner (CVO) QS 

would be issued to an LLP license 

holder who harvested and delivered 

unprocessed crab to a processor.

(2) Catcher/Processor Owner (CPO) 

QS would be issued to a CP LLP license 

holder for crab harvested and processed 

crab on board the same vessel or under 

that LLP license.

(3) Catcher Vessel Crew (CVC) QS 

would be issued to a crew member who 

held a State of Alaska Interim Use 

Permit and signed a fish ticket for the 

delivery of crab during the qualifying 

period.

(4) Catcher/Processor Crew (CPC) QS 

would be issued to a crew member who 

held a State of Alaska Interim Use 

Permit and signed a fish ticket for crab 

processed at-sea on the vessel that 

harvested that crab.

Official Crab Rationalization Record

Prior to issuing any QS, NMFS would 

compile an official record that contains 

the best available information on the 

harvesting and processing activities in 

the crab fisheries. This record would be 

the basis for determining QS allocations. 

In order to facilitate the timely issuance 

of QS, NMFS would require any claims 

that are contrary to the official record to 

be substantiated before changing the 

official record.

NMFS would establish certain 

operational standards about the use of 

landings in the official record to 

facilitate timely issuance of QS. First, 

NMFS would not issue CPO or CVO QS 

to any person other than to the 

applicant who holds the LLP license at 

the time of application. The Council 

clearly established that the basis for 

recognizing and allocating QS is the 

possession of an LLP license endorsed 

for the crab fishery, the associated legal 

landings that were made on the vessel 

that resulted in the issuance of the LLP 

license and endorsement, and any 

landings that were made under the 

authority of that LLP license.

Second, NMFS would assume any of 

the legal landings recorded on State of 

Alaska fish tickets to be correct. An 

applicant who has information to 

suggest the fish ticket records are 

inaccurate would have the burden of 

proving that to be the case.

Third, NMFS would assume the LLP 

license issued based on the landings 

made on a vessel continued to be used 

on that same vessel, unless the 

applicant shows, with written 

documentation, that the LLP license was 

transferred and used on another vessel. 

NMFS would make this assumption 

because, during the years 2000 and 

2001, NMFS did not track the vessel on 

which the LLP license was used. Thus, 

NMFS would require an applicant to 

inform NMFS if the LLP license was 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63205

used on a vessel other than the vessel 

for which the LLP license was originally 

issued. Written documentation 

establishes a clear record of any transfer 

of LLP license use prior to tracking by 

NMFS.

Fourth, if more than one person is 

claiming legal landings or legal 

processing activities during the same 

time at the same processing facility or 

on board the same vessel, then each 

person eligible to receive QS or PQS 

based on those legal landings or legal 

processing activities would receive any 

QS or PQS issued divided in equal 

proportion among all eligible recipients 

for that time period. This pro rata 

division of QS would occur unless the 

applicants can provide written 

documentation establishing an 

alternative means for distributing the 

QS or PQS resulting from the activities 

during that time period.

Catcher Vessel Owner - CVO QS Sector

Eligibility to receive QS at initial 

allocation would be limited to U.S. 

citizens who hold a permanent, fully 

transferable LLP license at the time of 

application. This means any corporation 

applying to receive CVO QS must also 

be incorporated as a U.S. corporation.

The landings that would be 

considered as the basis for a QS 

allocation for a crab fishery would be 

those made on the vessel used to qualify 

for the LLP license and species 

endorsement for that fishery or were 

made by the vessel on which that LLP 

license was used. NMFS would initially 

allocate QS only to the person holding 

that LLP license at the time of 

application. Any subsequent transfer of 

QS after initial issuance by the qualified 

LLP license holder would be subject to 

the QS transfer provisions described 

later in this preamble. NMFS would 

establish that the landings made under 

the authority of an LLP license are 

non-severable from that license. In other 

words, ‘‘catch history’’ that has been 

separated from an LLP license would 

not be considered for initial allocation 

of QS.

The proposed definition of persons 

eligible to receive an initial allocation of 

CVO QS and the qualifying periods used 

to determine the allocation of QS are 

described in the following table:

TABLE 1—ELIGIBILITY TO RECEIVE CATCHER VESSEL OWNER (CVO) AND CATCHER PROCESSOR OWNER (CPO) QUOTA

SHARE (QS) AND ASSOCIATED QUALIFYING YEAR PERIODS

Eligible Person to Receive QS Crab Fisheries Qualifying Year Periods for Determining QS Allocation 

General: A citizen of the United States at the time of application for QS, 

and is...

CVO QS: The holder of a permanent, fully transferable LLP license endorsed for that crab fishery at the time of application to receive QS and 

who is a citizen of the United States at the time of application for QS; or

Eastern Aleutian Island golden 

king crab (EAG)

5 years of the 5-year base period beginning on September 1, 

1996, and ending on September 

24, 2000.

CPO QS: (1) The holder of a permanent, fully transferable LLP license 

endorsed for that crab fishery and endorsed for CP activities at the time 

of application to receive QS; and (2) Harvested and processed at-sea 

any crab species in any BSAI crab fishery during the years 1998 or 

1999.

Western Aleutian Island golden 

king crab (WAG)

5 years of the 5-year base period beginning on September 1, 

1996, and ending on March 30, 

2001.

Bering Sea Tanner crab (BST) 4 years of the 6-year period beginning on November 15, 1992, 

through November 27, 1996.

Bering Sea snow crab (BSS) 4 years of the 5-year period beginning on January 15, 1996, 

and ending on April 8, 2000.

Bristol Bay red king crab (BBR) 4 years of the 5-year base period beginning on November 1, 

1996, and ending on October 

20, 2000.

Pribilof Islands red and blue 

king crab (PIK)

4 years of the 5-year period beginning on September 15, 1994, 

and ending on September 28, 

1998.

St. Matthew blue king crab 

(SMB)

4 years of the 5-year period beginning on September 15, 1994, 

and ending on September 26, 

1998.

Western Aleutian Islands red 

king crab (WAI)

3 years of the 4-year period beginning on November 1, 1992, 

and ending on February 13, 

1996.

63206 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

Catcher Processor Owner - CPO QS 

Sector

The eligibility to receive a CPO QS is 

essentially the same as for CVO QS. In 

order to receive CPO QS, a person 

would have to be a U.S. citizen who 

holds a permanent, fully transferable 

LLP license at the time of application. 

The LLP license would have to be 

endorsed for the fisheries for which the 

QS would be issued and would have to 

be endorsed to allow the person to 

harvest and process crab as a CP. Only 

landings harvested and processed on 

board the vessel during the qualifying 

years would be used toward CPO QS. 

The qualifying periods and number of 

qualifying years used in CPO QS initial 

issuance calculations would be the same 

as those in Table 1. In addition, any 

person who applies to receive CPO QS 

would have to have made crab landings 

that were processed at-sea in either 1998 

or 1999. These provisions are intended 

to ensure that LLP licenses with a 

history of harvesting and processing 

at-sea have continued to do so recently, 

in order to reduce the amount of QS that 

would be issued for use on vessels that 

are no longer active in the fishery.

Catcher Vessel Crew - CVC QS Sector

CVC QS would be issued based on 

different eligibility criteria. Table 2 

summarizes the persons who would be 

eligible to receive an initial allocation of 

CVC QS, the qualifying years used, and 

the number of years that could be 

selected for initial allocation of QS. 

Individuals would be qualified to 

receive QS if they are designated on a 

State of Alaska Interim Use Permit and 

had historic and recent participation. 

NMFS would determine participation 

based on signed State of Alaska fish 

tickets because the State of Alaska 

requires individuals who sign a fish 

ticket to hold a State of Alaska Interim 

Use Permit.

Historic participation would be 

demonstrated by at least one landing in 

each of three of the qualifying years. 

Recent participation would be 

demonstrated by at least one landing in 

two of the three most recent seasons 

before June 10, 2002, except for the 

fisheries that were closed in this period. 

For these fisheries, Western Aleutian 

Islands red king crab, the Pribilof 

Islands red and blue king crab, the St. 

Matthew Island blue king crab, and 

Tanner crab, recent participation would 

be demonstrated by at least one landing 

in two of the three most recent seasons 

preceding June 10, 2002, in the snow 

crab, Bristol Bay red king crab, or one 

of the Aleutian Islands golden king crab 

fisheries. The recent participation 

requirement would be waived for 

captains who died in fishing-related 

incidents if the captain’s estate applies 

for QS. See the following table for 

details:

TABLE 2—ELIGIBILITY TO RECEIVE CATCHER VESSEL CREW (CVC) QUOTA SHARE (QS) AND QUALIFYING YEAR PERIODS

Eligible Person to Receive QS Crab Fisheries 

Number of Qualifying 

Year Periods for Determining QS Initial Allocation 

Qualifying Seasons for 

Determining Recent 

Participation 

An individual who:

(1) is a citizen of the United States, or his or her successor-ininterest if that individual is deceased;

(2) has historical participation in the fishery demonstrated by 

being the individual named on a State of Alaska Interim Use 

Permit who made at least one legal landing per year for any 3 

qualifying years under that permit based on data from fish tickets maintained by the State of Alaska; and

(3) has recent participation in the fishery demonstrated by being 

the individual named on a State of Alaska Interim Use Permit 

who made at least one legal landing under that permit in any 2 

of 3 seasons based on data from fish tickets maintained by the 

State of Alaska.

Eastern Aleutian golden 

king crab (EAG)

3 years of the 5-year 

base period beginning 

on September 1, 1996, 

and ending on September 24, 2000.

(1) September 1, 1999, 

through October 25, 

1999. 

(2) August 15, 2000, 

through September 24, 

2000.

(3) August 15, 2001, 

through September 10, 

2001.

Western Aleutian golden king crab (WAG)3 years of the 5-year 

base period beginning 

on September 1, 1996, 

and ending on March 

30, 2001.

(1) September 1, 1999, 

through August 14, 

2000. 

(2) August 15, 2000, 

through March 28, 

2001.

(3) August 15, 2001, 

through March 30, 

2002.

Bering Sea Tanner 

crab (BST)

3 years of the 6-year 

period beginning on 

November 15, 1992, 

through November 27, 

1996.

any 2 of the last 3 seasons prior to June 10, 

2002 in the Eastern 

Aleutian Island golden 

king crab, Western 

Aleutian Island golden 

king crab, Bering Sea 

snow crab, or Bristol 

Bay red king crab fisheries.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63207

TABLE 2—ELIGIBILITY TO RECEIVE CATCHER VESSEL CREW (CVC) QUOTA SHARE (QS) AND QUALIFYING YEAR

PERIODS—Continued

Eligible Person to Receive QS Crab Fisheries 

Number of Qualifying 

Year Periods for Determining QS Initial Allocation 

Qualifying Seasons for 

Determining Recent 

Participation 

Bering Sea snow crab 

(BSS)

3 years of the 5-year 

period beginning on 

January 15, 1996, and 

ending on April 8, 

2000.

(1) April 1, 2000, 

through April 8, 2000.

(2) January 15, 2001, 

through February 14, 

2001.

(3) January 15, 2002, 

through February 8, 

2002.

Bristol Bay red king 

crab (BBR)

3 years of the 5-year 

base period beginning 

on November 1, 1996, 

and ending on October 

20, 2000.

(1) October 16, 2000, 

through October 20, 

2000.

(2) October 15, 2001, 

through October 18, 

2001.

(3) October 15, 2002, 

through October 18, 

2002.

Pribilof Islands red and 

blue king crab (PIK)

3 years of the 5-year 

period beginning on 

September 15, 1994, 

and ending on September 28, 1998.

any 2 of the last 3 seasons prior to June 10, 

2002, in the Eastern 

Aleutian Island golden 

king crab, Western 

Aleutian Island golden 

king crab, Bering Sea 

snow crab, or Bristol 

Bay red king crab fisheries, except that persons applying for an allocation to receive QS 

based on legal landings 

made aboard a vessel 

less than 60′ LOA at 

the time of harvest are 

exempt from this requirement.

St. Matthew blue king 

crab (SMB)

3 years of the 5-year 

period beginning on 

September 15, 1994, 

and ending on September 26, 1998.

any 2 of the last 3 seasons prior to June 10, 

2002, in the Eastern 

Aleutian Island golden 

king crab, Western 

Aleutian Island golden 

king crab, Bering Sea 

snow crab, or Bristol 

Bay red king crab fisheries.

Western Aleutian Islands red king crab 

(WAI)

3 years of the 4-year 

period beginning on 

November 1, 1992, and 

ending on February 13, 

1996.

any 2 of the last 3 seasons prior to June 10, 

2002, in the Eastern 

Aleutian Island golden 

king crab, Western 

Aleutian Island golden 

king crab, Bering Sea 

snow crab, or Bristol 

Bay red king crab fisheries.

In addition, the Program exempts 

crew members who participated in 

small vessels (under 60 feet in length) 

from seasonal requirements in the 

Pribilof Islands red and blue king crab 

fisheries. Such small vessels have 

traditionally participated in the fishery, 

but have been limited in recent years 

due to hazardous weather conditions. 

63208 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

This exemption for small vessels would 

allow crew serving in the fishery to be 

considered for initial allocation.

Catcher Processor Crew - CPC QS Sector

Catcher/Processor crew would be 

allocated CPC QS that include a 

harvesting and on-board processing 

privilege. Harvests with CPC QS also 

may be delivered to shore-based or 

floating processors. The definition of an 

eligible person, the qualifying years, and 

the seasonal recent participation 

requirements for the CPC QS sector 

would be the same as those for the CVC 

QS sector described in Table 2 above. 

The allocation to the CPC QS sector 

would be based on an individual 

landing under the authority of a State of 

Alaska Interim Use Permit and 

processing the catch on board the vessel 

that made the landing.

Regional Designations of QS

In addition to the four QS sectors 

issued in each of the eight crab fisheries, 

QS would have regional delivery 

requirements. Regional delivery 

requirements are based on the specific 

geographic location in which the crab 

were landed during the qualifying years. 

Any QS that is subject to regional 

landing requirements must be delivered 

to a Registered Crab Receiver (RCR) 

operating in that region. Regional 

designations would apply to: (1) QS 

initially issued to the CVO QS sector, (2) 

CPO QS subsequently transferred for 

use as CVO QS under the transfer 

provisions, or (3) after July 1, 2008, QS 

initially issued for the CVC QS sector. 

Regional designations would not apply 

to CPO QS or to CPC QS. Any QS not 

subject to regional designation would be 

issued as an ‘‘Undesignated’’ region. 

The regional designations for each of the 

fisheries are summarized in the 

following table:

TABLE 3—REGIONAL DESIGNATIONS OF QUOTA SHARE (QS) AND PROCESSOR QUOTA SHARE (PQS) 

Crab Fishery 

North Region, 

North of 56°20′ N. 

lat. 

South Region, 

South of 56°20′ N. 

lat. 

West Region, 

West of 174° W. 

long. 

Undesignated 

EAG - Eastern Aleutian golden king crab X X

WAG - Western Aleutian golden king crab X X

BST - Bering Sea Tanner crab X

BSS - Bering Sea snow crab X X

BBR - Bristol Bay red king crab X X

PIK - Pribilof Islands red and blue king crab X X

SMB - St. Matthew blue king crab X X

WAI - Western Aleutian Islands red king crab X

The North Region would include all 

landings made in that crab fishery North 

of a line at 56°20′ N. latitude in the 

Bering Sea subarea of the EEZ. The 

South Region would include all 

landings made in the EEZ south of that 

line. The West Region would apply only 

to the Western Aleutian Islands golden 

king crab fishery. Under this regional 

designation, 50 percent of the CVO QS 

issued in the fishery would be 

designated as West Region and would 

be limited for delivery West of a line at 

174° W. longitude. Undesignated QS 

may be delivered in any region.

Calculation of QS Issuance

The amount of QS that would initially 

be issued to any one person would be 

based on the amount of legal landings 

made by that person as a percentage of 

the total legal landings made by all 

persons eligible to receive QS. NMFS 

would build the official crab 

rationalization record, which would 

contain the total legal landings for each 

fishery based on the best available 

information using the State of Alaska 

fish ticket database. The official record 

would be established for the CVO and 

CPO QS sectors based on the total legal 

landings during the qualifying years that 

resulted in the issuance of LLP licenses 

or that were made under the authority 

of an LLP license. The official record for 

the CVC and CPC QS sectors would be 

based on the total legal landings made 

under the authority of State of Alaska 

Interim Use Permits during the 

qualifying years. The official record is 

presumed to be correct unless an 

applicant provides information 

indicating a correction is necessary.

The computation process for CVO and 

CPO QS and the computation process 

for CVC and CPC are the same. The 

process for determining initial 

allocation of CVO and CPO QS is 

detailed first. The following steps would 

be used to calculate QS for an applicant.

Establish harvest denominator. The 

official crab rationalization record 

would result in a harvest denominator 

for all LLP licenses that would be used 

in calculating QS. The harvest 

denominator represents the total legal 

landings made in each year for each 

crab fishery.

The use of a harvest denominator 

allows NMFS to calculate the relative 

percentage of the legal landings made by 

a person applying to receive QS without 

having to adjust the relative percentage 

of all other applicants if additional 

applications are approved after appeal. 

The harvest denominator would remain 

fixed for all applicants. One harvest 

denominator would be established for 

the CVO and CPO QS sectors, and one 

for the CVC and CPC QS sectors because 

the number of qualifying years used 

differ.

Computation of initial issuance of 

CVO and CPO QS. In order to facilitate 

understanding of the computation, a 

hypothetical example is used to 

illustrate the process. This example 

does not use data or persons from 

existing crab fisheries and is intended 

for illustrative purposes only. In our 

example, there are only two participants 

in the fishery, LLP A and LLP B, each 

with different landing patterns. The 

total legal landings, the region in which 

those landings were made, the amount 

of the landings harvested on board the 

vessel and processed at-sea, and the 

computation process using two LLPs (A 

and B) are described in the following 

table:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63209

TABLE 4—HYPOTHETICAL CRAB FISHERY – BEST 3 OF 4 YEARS USED – CALCULATION OF CATCHER VESSEL OWNER

(CVO) AND CATCHER PROCESSOR CREW (CPO) QUOTA SHARE (QS) INITIAL ISSUANCE FOR LLPS

Year 1 Year 2 Year 3 Year 4 Total of Years 

Used 

1. Harvest Denominator in Fishery (Legal Landings)1,000 lb 500 lb 3,000 lb 1,333 lb 5,833 lb

2. Total Legal Landings of LLP A 500 lb 200 lb 1,000 lb 1,000 lb 2,700 lb

3. Percentage of Harvest Denominator for LLP A 

(year used)

50 % (Used) 40 % (Used) 33.3 % 75 % (Used) 55.0 %

(3A) Total Landings Landed Onshore for LLP A 500 100 500 200 800 lb

(3B) Total Landings Processed At-sea for LLP A 0 100 500 800 900 lb

(3C) Percentage of Landings Landed on Shore for LLP A = (800 / (800 + 900)) = 47.06 %

(3D) Percentage of Landings Processed At-sea for LLP A = (900 / (800 + 900)) = 52.94 %

(3E) Total Onshore Landings in the North Region for LLP A500 100 0 200 800 lb

(3F) Total Onshore Landings in the South Region for LLP A0 0 500 0 0 lb

(3G) Percentage of Landings in the North Region for LLP A = (800 / (800 + 0)) = 100 %

(3H) Percentage of Landings in the South Region for LLP A = (0/ (800 + 0)) = 0 %

4. Total Legal Landings of LLP B 500 lb 300 lb 2,000 lb 333 lb 3,800 lb

5. Percentage of Harvest Denominator for LLP B 50 % (Used) 60 % (Used) 66.6 % (Used) 25 % 58.9 %

(5A) Total Landings Landed Onshore for LLP B 500 300 1,500 200 2,300 lb

(5B) Total Landings Processed At-sea for LLP B 0 0 500 800 500 lb

(5C) Percentage of Landings Landed on Shore for LLP B = (2,300 / (2,300 + 500)) = 82.14 %

(5D) Percentage of Landings Processed At-sea for LLP B = (500 / (2,300 + 500)) = 17.86 %

(5E) Total Onshore Landings in the North Region for LLP B500 300 500 0 1,300 lb

(5F) Total Onshore Landings in the South Region for LLP B0 0 1,000 200 1,000 lb

(5G) Percentage of Landings in the North Region for LLP B = (1,300 / (1,300 + 1,000)) = 56.52 %

(5H) Percentage of Landings in the South Region for LLP B = (1,000 / (1,300 + 1,000)) = 43.48 %

6. Sum of Total Percentages of Harvest Denominators for All LLPs = LLP A 55 (Line 3) + LLP B 58.9 (Line 5) = 113.9 %

7. Percentage of the Sum of the Percentage of the Harvest Denominator for LLP A = (0.550/1.139) = 0.4829 or 48.29 %

8. Percentage of the Sum of the Percentage of the Harvest Denominator for LLP B = (0.589/1.139) = 0.5171 or 51.71 %

9. Initial QS Pool = 9,000 Units

10. Unadjusted Initial QS Allocation for LLP A = 48.29 % × 9,000 = 4,346 QS Units

11. Unadjusted Initial QS Allocation for LLP B = 51.71 % × 9,000 = 4,654 Units

12. Initial QS Allocation for LLP A = 4,346 QS Units × (0.97) = 4,216 QS Units

13. Initial QS Allocation for LLP B = 4,654 QS Units × (0.97) = 4,514 QS Units

14. Percentage of LLP A QS Allocation as CVO QS = 4,216 × 0.4706 (Line 3C) = 1,984 CVO QS Units

15. Percentage of LLP A QS Allocation as CPO QS = 4,216 × 0.5294 (Line 3D) = 2,232 CPO QS Units

16. Percentage of LLP B QS Allocation as CVO QS = 4,514 × 0.8214(Line 5C) = 3,708 CVO QS Units

17. Percentage of LLP B QS Allocation as CPO QS = 4,514 × 0.1786 (Line 5D) = 806 CPO QS Units

63210 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

Determine the total legal landings for 

each applicant. First, NMFS would sum 

the total legal landings for each LLP 

license, in each of the crab fisheries for 

which the LLP is endorsed, for each of 

the qualifying years. If there were no 

legal landings in a qualifying year, then 

the amount would be zero for that year. 

If a person is applying to receive QS 

using multiple licenses, the total legal 

landings would be summed for each 

license separately. In our hypothetical 

example this corresponds to Line 2 in 

Table 4 for LLP A and Line 4 for LLP 

B.

Determine the percentage of the 

harvest denominator in each year.

NMFS would divide the total legal 

landings for that person by the harvest 

denominator for each year. This yields 

the percentage of the harvest 

denominator. For LLP A, this 

corresponds to Line 3 in Table 4. For 

LLP B, this corresponds to Line 5.

Determine the qualifying years to be 

used. Most of the crab fisheries have a 

‘‘best of’’ provision in which only a 

select number of the qualifying years are 

actually used in the QS computation. 

NMFS would determine which years are 

used for each initial QS allocation by 

determining the years that represent the 

highest percentage of the harvest 

denominator. In our hypothetical 

example, 3 of the 4 years representing 

the greatest percentage of the harvest 

denominator in each year would be 

used. This method ensures that a person 

applying to receive QS would receive a 

QS allocation based on the highest 

percentage of the total landings in each 

year. For LLP A, this corresponds to the 

italicized years noted as ‘‘(Used)’’ in 

Line 3 of Table 4. For LLP B, this 

corresponds to Line 5. If a person has 

insufficient years of landings, one or 

more ‘‘0 lb’’ years would be ‘‘(Used).’’

Sum the percentages of the harvest 

denominator for each LLP license. The 

next step is to sum the percentages for 

the years used for each LLP license held 

by the applicant. Then, that amount is 

divided by the total number of years 

used for that crab fishery. In our 

hypothetical example, for LLP A, this 

would be the sum of the italicized 

percentages in Line 3 of Table 4 divided 

by three, or (50 percent + 40 percent + 

75 percent)/3 = 55.0 percent. The same 

computation is provided for LLP B in 

Line 5 of Table 4, and is equal to 58.9 

percent.

Sum the average percent of the 

harvest denominator. In our example, 

the percentage of the harvest 

denominator is 55.0 percent (for LLP A) 

and 58.9 percent (for LLP B). The sum 

of the percentages of all LLP licenses is 

113.9 percent. This computation is 

shown in Line 6 of Table 4. The reason 

that the amount is greater than 100 

percent is that NMFS uses the best years 

of each LLP license to determine the 

percentage of the harvest denominator 

that the landings represent.

Divide each LLP license’s percentage 

by the sum of the percentages of the 

harvest denominator. In order to 

properly scale the landings so each LLP 

license is receiving a percentage of the 

harvest denominator, each LLP license’s 

percentage of the harvest denominator 

must be divided by the sum of all 

percentages for all LLP licenses. This 

total is the percentage of the sum of the 

harvest denominators for each LLP 

license. This computation is shown in 

Line 7 for LLP A and in Line 8 for LLP 

B in Table 4.

Multiply the percentage of the sum of 

the percentages of the harvest 

denominator by the initial QS pool. The 

amounts calculated in Lines 7 and 8 are 

multiplied by the Initial QS Pool; in our 

example 9,000 QS Units. In the crab 

fisheries, NMFS would establish an 

initial QS pool as a fixed amount. This 

fixed initial QS pool would be used to 

initially distribute QS to recipients. If 

appeals are adjudicated, then additional 

QS may be added to the QS pool, but 

the process for determining how much 

QS a person would receive would be 

established using the same procedure 

detailed in our example.

Establish the initial QS and PQS 

pools. The initial QS pool that would be 

established in each of the eight crab 

fisheries is an amount large enough so 

that, on initial issuance, a single unit of 

QS would yield an annual amount of 

IFQ less than the average weight of one 

crab. To achieve this, the initial QS pool 

for the eight crab QS fisheries would be 

set at an amount of units equal to three 

times the highest historical fishery 

harvest rounded to the nearest 

10,000,000 units. The Initial PQS pools 

are set at the same level as the initial QS 

pools for ease of computation and to 

ensure that a single unit of PQS would 

yield an annual amount of IPQ less than 

the average weight of one crab. The 

Initial QS pools for all the crab fisheries 

using this method are shown in the 

following table:

TABLE 5—INITIAL QS AND PQS POOL FOR EACH CRAB FISHERY

Initial QS Pool Initial PQS Pool 

EAG - Eastern Aleutian Islands golden king crab 10,000,000 10,000,000

WAG - Western Aleutian Islands golden king crab 40,000,000 40,000,000

BST - Bering Sea Tanner crab 200,000,000 200,000,000

BSS - Bering Sea Snow Crab 1,000,000,000 1,000,000,000

BBR - Bristol Bay red king crab 400,000,000 400,000,000

PIK - Pribilof Islands red and blue king crab 30,000,000 30,000,000

SMB - St. Matthew blue king crab 30,000,000 30,000,000

WAI - Western Aleutian Islands red king crab 60,000,000 60,000,000

The initial QS pools would be used 

for all four QS sectors. The amount of 

QS initially issued as CVO and CPO QS 

sectors would be 97 percent of the total 

amount of QS, and the amount of QS 

initially issued to the CVC and CPC QS 

sectors in any one fishery would be 3 

percent of the initial QS pools. NMFS 

would implement this provision by 

multiplying the amount of QS initially 

issued by either 97 percent for the CVO 

and CPO QS sectors, or 3 percent for the 

CVC and CPC QS sectors. The 

calculation showing the unadjusted 

allocation for LLP A is shown in Line 

10 of Table 4, and the adjusted amount 

for the CVO and CPO QS sectors is 

shown in Line 12. The same 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63211

calculations for LLP B are shown in 

Lines 11 and 13.

Determine the amount of QS issued as 

CVO or CPO QS. The amount of QS 

issued as CVO QS to each LLP license 

holder would be equal to the percentage 

of landings delivered unprocessed, to a 

shorebased or stationary floating 

processor. In our hypothetical example, 

the onshore landings made by LLP A in 

each year are shown in Line 3A of Table 

4. The landings processed at-sea in each 

year are shown in Line 3B. The 

italicized numbers are the years used in 

the initial QS calculations because they 

represent the years with the highest 

percentage of the total harvest 

denominator the best years for that LLP 

license. The total shown in the last 

column of Line 3A and Line 3B is the 

total of onshore landings for the best 

years only. In this case, Year 3 is not 

used for LLP A. In order to calculate the 

percentage of QS that would be issued 

as CVO QS for LLP A, NMFS would 

determine the percentage of the 

landings that were landed on shore for 

each LLP license applying to receive 

QS. In our example, for LLP A, the 

percentage of landings delivered 

onshore is calculated in Line 3C. The 

percentage calculated in Line 3C is then 

multiplied by the amount of QS initially 

issued to LLP A, which is shown in Line 

12. This calculation is provided in Line 

14 for LLP A. The amount of QS issued 

as CVO QS for LLP B is determined by 

using the same methodology. Lines 5A, 

5B, 5C, and Line 16 show the same 

calculation for LLP B. Only landings 

that were processed at-sea and that gave 

rise to an LLP license endorsed for CP 

activity would be allocated CPO QS.

Determination of Regional Designation

Regional designation applies to most 

of the crab fisheries (see Table 3 for 

regional designations). Regional 

designation does not apply to QS 

initially issued to the CPO QS sector, 

but can apply to the CVO QS sector. In 

our example, we assume there are two 

regions in the hypothetical fishery: a 

North region and a South region. The 

percentage of landings made in each 

region in each year under LLP A is 

shown in Lines 3E and 3F. The 

percentages for LLP B are shown in 

Lines 5E and 5F. In order to calculate 

the amount of the CVO QS allocated to 

each region, several additional steps 

must be taken depending on specific 

conditions applicable to each LLP 

license holder.

LLP license holders with landings in 

only one region. If an LLP license holder 

made landings in only one region, then 

all of the QS issued would be for that 

region. That is the case for LLP A in our 

hypothetical fishery example. As shown 

in Lines 3E and 3F, the amount of 

landings that occurred in each region 

are shown in italics. Note the landings 

processed at-sea are not assigned to a 

region. As shown in the calculations 

Line 3G and 3H, 100 percent of the 

onshore landings subject to regional 

designation for the years used were in 

the North region.

LLP license holders with landings in 

more than one region. If an LLP license 

holder received QS based on landings 

made in more than one region, then a 

one-time additional adjustment in the 

designation of the QS would be required 

to account for the issuance of PQS so 

the amount of QS issued in a region is 

equal to the amount of PQS in that 

region. In our hypothetical example, 

LLP B has qualified landings that would 

result in QS for both the North and the 

South Region. Before that QS could be 

issued, the relative distribution of PQS 

would need to be determined. The 

initial issuance of QS for LLP B in the 

hypothetical example will be explained 

after the processing sector initial 

allocation has been discussed.

Other Provisions of Initial QS Issuance

Additional provisions would pertain 

to the issuance of QS: two provisions for 

determining QS issuance to vessels that 

sank, and a provision to allow a person 

to receive QS for landings made by a 

vessel not used to qualify for a 

permanent, fully transferable LLP 

license endorsed for that fishery.

Sunken vessels. Two provisions 

would apply to vessels that have sunk. 

First, a person would receive 50 percent 

of their average legal landings for the 

qualifying years unaffected by the 

sinking after the time of sinking until 

that vessel was replaced under the 

provisions established for vessel 

replacement under the LLP, at 50 CFR 

679.4(k)(5)(v). This provision would 

apply if a person who owned a vessel 

that sank, replaced that vessel under the 

LLP qualification rules or after 

satisfying the LLP qualification 

requirements. This provision also 

requires the owner of the vessel to 

replace the vessel and begin fishing 

within a specified time period. As an 

example, if, due to a sinking, a person’s 

vessel was not operational in two of the 

four qualifying years, that person would 

receive QS equal to 50 percent of the 

average of the 2 years during which that 

vessel was operational to be applied 

toward the 2 years the vessel was not 

operational. This provision allows some 

compensation to LLP holders for some 

qualifying years in which the LLP 

holder was prevented from participating 

due to sinking.

The second sunken vessel provision 

would apply under circumstances in 

which a person applying to receive an 

initial issuance of QS: (1) was denied a 

request to replace the vessel under the 

provisions of Public Law 106-554 

(Consolidated Appropriations Act of 

2001); (2) replaced the vessel with a 

newly constructed vessel that began 

construction by June 10, 2002; and (3) 

participated in any Bering Sea crab 

fishery by October 31, 2002, with the 

replacement vessel. A newly 

constructed vessel would be defined as 

one the keel of which was laid by June 

10, 2002. This provision is intended to 

accommodate a specific circumstance in 

which a person delayed construction of 

a vessel based on Public Law 106-554. 

Public Law 106-554 was in effect for 

less than a year during late 2000 and 

part of 2001. Although the law was in 

effect for less than a year, it may have 

hindered the ability of a vessel owner to 

replace a vessel to participate in crab 

fisheries and to make qualifying 

landings. This provision would allow a 

person to receive QS equal to 50 percent 

of the average of the years unaffected by 

the sinking.

For both of these provisions, the 

calculation methods for determining the 

actual amount of QS issued would 

follow the same methods shown earlier. 

The adjustment for sunken vessels 

would be made when determining the 

amount of landings that would be 

attributed to the LLP license used on 

board a vessel.

Interim LLP license history 

exemption. A key component of this 

program is that QS is awarded based on 

the legal landing made on a vessel that 

qualified for a permanent, fully 

transferable LLP license. The Council 

recommended a limited provision that 

would allow a person to apply to 

receive QS based on legal landings that 

were not used to qualify for a 

permanent, fully transferable LLP 

license. Under this provision, a person 

who applies to receive QS with an LLP 

license endorsed for a fishery could 

choose to receive the QS based either on 

the landings made by the vessel that 

was used to qualify for that LLP license 

or on the landings made on another 

vessel. The intent of this provision is to 

allow a vessel owner who had 

participated in a fishery to use historical 

landings as long as a permanent, fully 

transferable LLP license was transferred 

for use on that vessel after the qualifying 

period.

An applicant for CVO or CPO QS who 

deployed a vessel in a crab fishery 

under the authority of an interim LLP 

license and later transferred a 

permanent, fully transferable LLP 

63212 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

license before January 1, 2002, for use 

in that crab fishery, to insure that the 

vessel would remain authorized to 

participate in the fishery following the 

invalidation of the interim LLP license, 

may choose to use either: (1) the legal 

landings made on the vessel that gave 

rise to the interim LLP license for that 

crab fishery prior to the transfer of the 

permanent, fully transferable LLP 

license for use on that vessel; or (2) the 

legal landings made on the vessel that 

gave rise to the permanent, fully 

transferable LLP license and the legal 

landings made under the authority of 

that LLP license in that crab fishery 

prior to January 1, 2002. This exemption 

is meant to address a specific 

circumstance in which a person may 

have participated in a fishery legally, 

but required a permanent, fully 

transferable LLP license to continue 

participating in the fishery. It is not 

intended to address transfers of LLP 

licenses among persons that are 

undertaken for other reasons. NMFS 

intends that this provision provide a 

limited exemption and not a general 

opportunity to allow persons who 

voluntarily transferred LLP licenses to 

choose a specific catch history that is 

severable from the LLP license under 

which a person is applying to receive 

QS. NMFS specifically requests public 

comment on this approach relative to 

Council objectives (see ADDRESSES).

Computation of Initial Issuance of CVC 

and CPC QS

The method for calculating CVC and 

CPC QS is essentially the same as the 

CPO and CVO QS, with some key 

differences. The first difference is that, 

for these sectors, the harvest 

denominator would represent the legal 

landings made by individuals under the 

authority of a State of Alaska Interim 

Use Permit who met the recent 

participation eligibility requirements. 

Second, the regional designations would 

be noted on the QS, but would not be 

applied to the CVC QS until after July 

1, 2008. The regional designations are 

not shown in this example but would be 

calculated in the same manner as that 

used for the CVO and CPO QS.

For illustration purposes, we will 

demonstrate the initial issuance using 

the same hypothetical fishery. The 

issuance process is shown in the 

following table (Table 6). As with the 

other example, we will assume there are 

two crewmembers who are qualified to 

receive an initial issuance of QS. The 

specific calculations are not detailed in 

this example because they are the same 

as those described under the CVO and 

CPO QS example. Note the total 

landings in Line 1 of Table 6 differ from 

those in Table 4 (CVO and CPO QS) 

because the recency requirements 

would exclude certain landings and, 

under the CVC and CPC QS 

calculations, landings made legally on a 

vessel would be considered even if 

those landings did not result in the 

issuance of an LLP license for those 

landings. Additionally, the amount of 

QS issued to the CVC and the CPC QS 

sectors is shown in Lines 12 and 13. The 

QS issued to these sectors is equal to 3 

percent of the QS pool.

TABLE 6—HYPOTHETICAL CRAB FISHERY – BEST 3 OF 4 YEARS USED – CALCULATION OF CATCHER VESSEL CREW

(CVC) AND CATCHER PROCESSOR CREW (CPC) QUOTA SHARE (QS) INITIAL ISSUANCE FOR STATE OF ALASKA INTERIM USE PERMIT HOLDERS

Year 1 Year 2 Year 3 Year 4 Total for Years 

Used 

(1) Harvest Denominator in Fishery (Legal Landings)1,000 lb 200 lb 1,000 lb 1,000 lb 3,200 lb

(2) Total Legal Landings of Crew A 500 lb 20 lb 300 lb 500 lb 1,320 lb

(3) Percentage of Harvest Denominator for Crew 

A

50 % (Used) 10 % 30 % (Used) 50 % (Used) 43.3 % (Used)

(3A) Total Landings Landed Onshore for Crew A 500 10 200 300 1,000

(3B) Total Landings Processed At-sea for Crew 

A

0 10 100 200 300

(3C) Percentage of Landings Landed on Shore for Crew A = (1,000 / (1,000 + 300)) = 76.92 %

(3D) Percentage of Landings Processed At-sea for Crew A = (300 / (1,000 + 300)) = 23.08 %

(4) Total Legal Landings of Crew B 500 lb 180 lb 700 lb 500 lb 1,880 lb

(5) Percentage of Harvest Denominator for Crew 

B

50 % 90 % (Used) 70 % (Used) 50 % (Used) 70 % (Used)

(5A) Total Landings Landed Onshore for Crew B 500 100 200 500 800

(5B) Total Landings Processed At-sea for Crew 

B

0 80 500 0 580

(5C) Percentage of Landings Landed Onshore for Crew B = (800 / (800 + 580)) = 57.97 %

(5D) Percentage of Landings Processed At-sea for Crew B = (580 / (800 + 580)) = 42.03 %

(6) Sum of Percentage of Harvest Denominators for All Crew = Crew A 0.433 (Line 3) + Crew B 0.700 (Line 5) = 1.133 or 113.3 %

(7) Percentage of the Sum of the Percentage of the Harvest Denominator for Crew A = (0.433/1.133) = 0.3822 or 38.22 %

(8) Percentage of the Sum of the Percentage of the Harvest Denominator for Crew B = (0.700/1.133) = 0.6178 or 61.78 %

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63213

TABLE 6—HYPOTHETICAL CRAB FISHERY – BEST 3 OF 4 YEARS USED – CALCULATION OF CATCHER VESSEL CREW

(CVC) AND CATCHER PROCESSOR CREW (CPC) QUOTA SHARE (QS) INITIAL ISSUANCE FOR STATE OF ALASKA INTERIM USE PERMIT HOLDERS—Continued

Year 1 Year 2 Year 3 Year 4 Total for Years 

Used 

(9) Initial QS Pool = 9,000 Units

(10) Unadjusted Initial QS Allocation for Crew A = 38.22 % × 9,000 = 3,440 QS Units

(11) Unadjusted Initial QS Allocation for Crew B = 61.78 % × 9,000 = 5,560 Units

(12) Initial QS Allocation for Crew A = 3,440 QS Units × (0.03) = 103 QS Units

(13) Initial QS Allocation for Crew B = 5,560 QS Units × (0.03) = 167 QS Units

(14) Percentage of Crew A QS Allocation as CVC QS = 103 × 0.7692 (Line 3C) = 79 CVC QS Units

(15) Percentage of Crew A QS Allocation as CPC QS = 103 × 0.2308 (Line 3D) = 24 CPC QS Units

(16) Percentage of Crew B QS Allocation as CVC QS = 167 × 0.5797 (Line 5C) = 97 CVC QS Units

(17) Percentage of Crew B QS Allocation as CPC QS = 167 × 0.4203 (Line 5D) = 70 CPC QS Units

Under our example, if the QS issued 

to the CVO, CPO, CVC, and CPC QS 

sectors is summed, then the total QS 

issued for all of the QS recipients is 

equal to 9,000 units the initial QS pool 

(sum the total from Lines 14 through 17 

in both Table 4 and Table 6). The initial 

QS pool would be issued to all 

successful applicants. Additional QS 

would be issued to applicants who have 

a successful appeal of an initially 

denied application. However, it is the 

initial QS pool that would be used to 

determine the caps that apply to QS use. 

Those caps are discussed below.

Processor Quota Share Allocation

A processing privilege, analogous to 

the harvest privilege allocated to 

harvesters, would be allocated to 

processors. Qualified processors would 

be allocated PQS in each crab fishery. 

PQS represents an exclusive but 

revocable privilege to receive deliveries 

of a specific portion of the annual TAC 

from a fishery.

PQS allocations would be based on 

processing history during a specified 

qualifying period for each fishery. A 

processor’s allocation in a fishery would 

equal its share of all qualified pounds of 

crab processed in the qualifying period 

(i.e., pounds processed by the processor 

divided by a denominator that 

represents pounds processed by all 

qualified processors). Unlike the QS 

allocation process, PQS is not allocated 

using a ‘‘best of’’ years provision.

A person would be eligible to receive 

PQS if they are a: (1) U.S. citizen, 

corporation, or partnership at the time 

of application; and (2) legally processed 

any crab QS species during either 1998 

or 1999. In addition, the Council 

provided an exemption to this eligibility 

requirement to accommodate long term 

participants in the fishery who did not 

participate in 1998 or 1999. An 

applicant may receive QS if that person 

had processed Bering Sea snow crab 

during each season from 1988 through 

1997 and invested at least $1,000,000 in 

processing equipment and facilities 

during the period from January 1, 1995, 

through June 10, 2002. NMFS has 

interpreted this requirement to apply 

from the period of January 1, 1995, 

through June 10, 2002, the time of final 

Council action on this provision. This 

would limit the ability of additional 

persons to claim eligibility under this 

provision. The date of final Council 

action would provide a suitable period 

of time during which to measure fiscal 

expenditures.

Under this proposed rule, a person 

who has acquired or retained legal 

processing history through transfer by 

the express terms of a written contract 

that clearly and unambiguously 

provides that the legal processing 

history and rights, may apply for and 

receive PQS based on that legal 

processing history. This provision 

would allow for the transfer or retention 

of legal processing history prior to the 

implementation of this program. This 

provision would apply only if the 

person applying for PQS either: (1) 

legally processed any crab during 1998 

or 1999 as demonstrated on the official 

crab rationalization record; or (2) 

provides documentation of a contractual 

agreement for the transfer or retention of 

the legal crab processing history for any 

amount of any crab during 1998 or 1999, 

as demonstrated in the official crab 

rationalization record.

This provision differs from the 

requirements established for QS holders 

who must either have an LLP license or 

be named on a State of Alaska Interim 

Use Permit in order to apply and receive 

QS. There is not a licensing requirement 

that allows for the tracking of processing 

history to specific persons. State of 

Alaska revenue codes, port codes, and 

other identifying elements do not 

necessarily establish the identity of a 

processor. Additionally, the Council 

recognized that custom processing, in 

which one firm paid another to process 

crab at a specific facility, or allowed the 

lease of its facility, did occur and 

permitted those crab buyers to claim 

legal processing history and the rights to 

apply for PQS in cases where 

documentation indicated that the legal 

processing that occurred at a facility 

was conducted by someone other than 

the buyer of the crab at the time.

Additionally, the Council’s motion 

establishing a qualified person could be 

interpreted to strictly limit the ability to 

apply for and receive PQS only if the 

person who processed crab in 1998 or 

1999, or Bering Sea snow crab under the 

provisions provided above, applies, 

even if the processing facility, history, 

and other rights have been transferred to 

another person. This interpretation 

appears to narrowly limit the Council’s 

overall recommendation that PQS and 

IPQ are access rights that may be 

acquired by a wide range of persons.

This interpretation of Council intent 

also appears to be consistent with the 

ability to trade legal landings in the 

CVO and CPO QS sectors prior to the 

initial issuance of QS. Legal landings, 

and the right to apply for and receive 

CVO or CPO QS may be acquired by 

63214 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

persons who purchase the LLP license 

and the rights that transfer with that 

LLP license prior to submitting an 

application for QS. This provision 

would require that if legal processing 

history has been transferred and 

retained that the basic qualification for 

eligibility established by the Council, 

processing of any BSAI crab species in 

1998 or 1999, must still be met.

In addition, these regulations would 

establish that if a person applies to 

receive PQS, that person or that person’s 

successor-in-interest must exist at the 

time of application for PQS. A former 

partner of a dissolved partnership or a 

former shareholder of a dissolved 

corporation who would otherwise 

qualify as a person may apply for PQS 

in proportion to his or her ownership 

interest in the dissolved partnership or 

corporation. Documentation of 

ownership interest in a dissolved 

partnership or corporation, association, 

or other entity would be limited to 

corporate documents (e.g., articles of 

incorporation) or notarized statements 

signed by each former partner, 

shareholder or director, and specifying 

their proportions of interest. These 

requirements are similar to those used 

in the halibut and sablefish IFQ Program 

to establish who may apply to receive 

QS under the Program. The provisions 

in this proposed rule require that the 

person who received the crab and 

processed that crab, or their 

successor-in-intererst, is a person who is 

eligible to receive PQS.

The amount of PQS allocated to a 

person would be based on a record of 

receiving and processing crab based on 

State of Alaska fish ticket data during 

the qualifying years. Data from the State 

of Alaska fish tickets concerning legal 

processing of crab would be presumed 

to be correct unless other 

documentation is provided by the 

applicant. However, allocations can be 

made to a buyer not recorded on a fish 

ticket if the applicant can demonstrate 

that the entity that should receive an 

allocation is someone other than the 

entity named on the fish ticket. Proof of 

this eligibility can include data from the 

State of Alaska Commercial Operators 

Annual Report, fish tax records, or other 

documentation of direct payments to 

fishermen. This provision is intended to 

address the custom processing 

arrangements. The following table 

establishes the eligibility and qualifying 

years for receiving PQS.

TABLE 7—PQS ELIGIBILITY AND QUALIFYING YEARS

Eligible Person to Receive PQS Crab Fisheries Qualifying Year Periods for Determining PQS Allocation 

The person who legally processed the crab during the qualifying years 

and; 

(1) is a US Citizen, corporation, or partnership; and

(2) processed crab in 1998 or 1999; or

(3) processed Bering Sea snow crab during 1988 through 1997 and invested at least $1,000,000 in processing equipment and facilities during 

the period from January 1, 1995, through June 10, 2002.

Eastern Aleutian Island golden 

king crab (EAG)

4 years of the 4-year base period beginning on: 

(1) September 1, 1996, through 

December 25, 1996;

(2) September 1, 1997, though 

November 24, 1997;

(3) September 1, 1998, through 

November 7, 1998;

(4) September 1, 1999, through 

October 25, 1999.

Western Aleutian Island golden 

king crab (WAG)

4 years of the 4-year base period beginning on: 

(1) September 1, 1996, through 

August 31, 1997;

(2) September 1, 1997, though 

August 31, 1998;

(3) September 1, 1998, through 

August 31, 1999;

(4) September 1, 1999, through 

August 14, 2000.

Bering Sea Tanner crab (BST) Equivalent to 50 percent of the 

total legally processed crab in 

the Bering Sea C. opilio fishery 

during the qualifying years established for the QS fishery; and 

50 percent of the totally legally 

processed crab in the Bristol 

Bay red king crab fishery during 

the qualifying years established 

for that crab QS fishery.

Bering Sea snow crab (BSS) 3 years of the 3-year period beginning on: 

(1) January 15, 1997, through 

March 21, 1997;

(2) January 15, 1998, through 

March 21, 1998; and

(3) January 15, 1999, through 

March 22, 1999.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63215

TABLE 7—PQS ELIGIBILITY AND QUALIFYING YEARS—Continued

Eligible Person to Receive PQS Crab Fisheries Qualifying Year Periods for Determining PQS Allocation 

Bristol Bay red king crab (BBR) 3 years of the 3-year QS base 

period beginning on: 

(1) November 1, 1997, through 

November 5, 1997;

(2) November 1, 1998, through 

November 6, 1998; and

(3) October 15, 1999, through 

October 20, 1999.

Pribilof Islands red and blue 

king crab (PIK)

3 years of the 3-year period beginning on: 

(1) September 15, 1996, 

through September 26, 1996;

(2) September 15, 1997, 

through September 29, 1997; 

and

(3) September 15, 1998, 

through September 28, 1998.

St. Matthew blue king crab 

(SMB)

3 years of the 3-year period beginning on: 

(1) September 15, 1996, 

through September 23, 1996;

(2) September 15, 1997, 

through September 22, 1997; 

and

(3) September 15, 1998, 

through September 26, 1998.

Western Aleutian Islands red 

king crab (WAI)

Equivalent to the total legally 

processed crab in the Western 

Aleutian Islands golden king 

crab fishery during the qualifying years established for that 

crab QS fishery.

In the Bering Sea Tanner crab fishery, 

the issuance of PQS would be based on 

the processing history in the Bering Sea 

snow crab fishery. The Bering Sea 

Tanner crab fishery has not been open 

in recent years and, in the past, both 

Bering Sea snow crab and Bering Sea 

Tanner crab were harvested together. In 

the Western Aleutian Islands red king 

crab, the issuance of PQS would be 

based on the processing history in the 

Western Aleutian golden king crab 

fishery. This provision recognizes the 

fact there has been limited processing in 

these fisheries in recent years and much 

of the participation is sporadic and 

conducted by processing entities who 

have also been involved in the Western 

Aleutian Islands red king crab fishery.

Computation of Initial Issuance of PQS

The amount of PQS that would 

initially be issued to any one person 

would be based on the amount of legal 

processing by the person as a percentage 

of a denominator that represents the 

total legal processing by all persons 

eligible to receive PQS. The following 

steps would be used to calculate PQS 

for an applicant.

NMFS would build the official crab 

rationalization record, which would 

contain the total legal processing for all 

of the crab fisheries based on the best 

available information by using the State 

of Alaska fish ticket database. The 

official record is presumed to be correct 

unless an applicant provides 

information that indicates a correction 

is necessary. The total legal processing 

amount is the total processing 

denominator (TPD).

In order to clearly explain the 

computation, the hypothetical example 

used previously for the QS issuance is 

repeated here. This example does not 

use data or persons from existing crab 

fisheries and is intended for illustrative 

purposes only. In our example, there are 

only two processors in the fishery: 

Processor A and Processor B, each with 

different landings patterns. The total 

legal processing, the region in which 

that processing occurred, and the 

amount of the processing are shown in 

Table 8. The computation process using 

two processors (A and B) is described in 

the table. Note this hypothetical fishery 

also assumes all applicable years are 

used to determine an initial issuance of 

PQS. As with all crab fisheries, the years 

used for selecting processing history 

differ from those used to determine legal 

landings for allocating QS. Because all 

years are used, the total processing 

denominator is not divided by the sum 

of the percentage of the processing 

denominator of all persons receiving 

PQS.

The percentage of the TPD for each 

person is multiplied by the initial PQS 

pool, although the initial PQS pool does 

not need to be set at the same number 

as the initial QS pool. NMFS would set 

both pools at the same number for each 

crab fishery to facilitate ease of 

computation for use limitations. In our 

hypothetical example, this means there 

would be an initial QS pool of 9,000 

units and an initial PQS pool of 9,000 

units. Although the amount of IFQ a 

unit of QS yields and the amount of IPQ 

a unit of PQS may yield would differ, 

the initial pools of quota would be the 

same. See the following table for details:

63216 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 8—HYPOTHETICAL CRAB FISHERY – FOUR YEARS USED – CALCULATION OF PQS INITIAL ISSUANCE

Year 1 Year 2 Year 3 Year 4 Total 

(1) Total Processing Denominator in Fishery 

(Legal Processing)

1,800 lb 400 lb 1,000 lb 1,000 lb 4,200 lb

(2) Total Legal Processing of Processor A 600 lb 200 lb 300 lb 500 lb 1,600 lb

(3) Percentage of Total Harvest Denominator for 

Processor A

33.3 % (Used) 50 % (Used) 30 % (Used) 50 % (Used) 40.8 % (Used)

(3A) Total Landings in the North Region for 

Processor A

100 0 100 200 400

(3B) Total Landings in the South Region for 

Processor A

500 200 200 300 1,200

(3C) Percentage of Processing in the North Region for Processor A = (400 / (400 + 1,200)) = 25.00 %

(3D) Percentage of Processing in the South Region for Processor A = (1,200 / (400 + 1,200)) = 75.00 %

(4) Total Legal Processing of Processor B 1,200 lb 200 lb 700 lb 500 lb 2,600 lb

(5) Percentage of Total Processing Denominator 

for Processor B

66.7 % (Used) 50 % (Used) 70 % (Used) 50 % (Used) 59.2 %

(5A) Total Processing in the North Region for 

Processor A

900 100 500 0 1,500

(5B) Total Landings in the South Region for 

Processor B

300 100 200 500 1,100

(5C) Percentage of Processing in the North Region for Processor B = (1,500 / (1,500 + 1,100)) = 57.69 %

(5D) Percentage of Processing in the South Region for Processor B = (1,100 / (1,500 + 1,100)) = 42.31 %

(6) Sum of Percentage of Total Processing Denominators for All Processors = Processor A 0.408 (Line 3) + Processor B 0.592 (Line 5) = 1.00 

or 100 %—NO SCALING FACTOR REQUIRED

(7) Initial PQS Pool = 9,000 Units

(8) Initial PQS Allocation for Processor A = 9,000 PQS Units × 0.408 (Line 3) = 3,672 PQS Units

(9) Initial PQS Allocation for Processor B = 9,000 PQS Units × 0.592 (Line 5) = 5,328 PQS Units

(10) Percentage of Processor A PQS allocation as North Region PQS = 3,672 × 0.2500 (Line 3C) = 918 PQS Units

(11) Percentage of Processor A PQS allocation as South Region PQS = 3,672 × 0.7500 (Line 3D) = 2,754 PQS Units

(12) Percentage of Processor B PQS allocation as North Region PQS = 5,328 × 0.5769 (Line 5C) = 3,074 PQS Units

(13) Percentage of Processor A PQS allocation as South Region PQS = 5,328 × 0.4231 (Line 5D) = 2,254 PQS Units

Regional Designations of PQS

PQS is issued with the same regional 

designations as those of QS as described 

in Table 3.

Regional Adjustment for North and 

South Designations. North and South 

PQS regional designation is based on 

the location of the legal processing that 

is used as the basis for PQS allocation, 

as shown in Table 8. Once PQS is issued 

with regional designation, the issuance 

of QS would be adjusted so that the 

regional designations for QS would 

match the regional designations for PQS 

in each crab fishery. The adjustment 

would be made to the QS issued 

because the processing facilities are 

typically fixed shorebased plants. The 

adjustments to establish the same 

regional designation ratios is necessary 

to ensure matches in the amounts of IPQ 

and IFQ that are harvested and 

delivered in any one region.

This adjustment process would be 

made prior to the issuance of the QS 

and PQS. The ratio between the regions 

should be the same even if the number 

of QS units differs. Using our 

hypothetical fishery example, we 

illustrate this process by showing how 

each LLP license holder’s QS allocation 

would be adjusted at initial allocation. 

Drawing on information from Table 4 

and Table 6, the calculation is shown in 

the following table:

TABLE 9—ADJUSTMENT FOR NORTH AND SOUTH REGIONAL DESIGNATION FOR QS 

(1) Percentage of Landings in the North Region for LLP A = 100 % (Line 3G of Table 4) of 1,984 QS Units (Line 14 of Table 4) = 1,984 QS Units

(2) Percentage of Landings in the South Region for LLP A = 0 % (Line 3H of Table 4) of 1,984 QS Units (Line 14 of Table 4) = 0 QS Units

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63217

TABLE 9—ADJUSTMENT FOR NORTH AND SOUTH REGIONAL DESIGNATION FOR QS—Continued

(3) Percentage of Landings in the North Region for LLP B = 56.52 % (Line 5G of Table 4) of 3,708 QS Units (Line 16 of Table 4) = 2,096 QS Units

(4) Percentage of Landings in the South Region for LLP B = 43.48 % (Line 5H of Table 4) of 3,708 QS Units (Line 16 of Table 4) = 1,612 QS Units

(5) Total QS (Sum of Lines 1-4) = 5,692 Units

(6) Total QS in North Region (Sum Lines 1 and 3) = 4,080 Units

(7) Total QS in South Region (Sum Lines 2 and 4) = 1,612 Units

(8) Percentage of North QS to South QS = 4,080/5,692 = 71.68 % North 1,612/5,692 = 28.32 % South

(9) QS issued as North Region only = 1,984 Units (Line 1)

(10) QS as both North and South Region = (Line 5 ¥ Line 1) = 3,708 Units

(11) Percentage of Processing in the North Region for Processor A = 25.00 % (Line 3C of Table 8) of 3,672 Units (Line 8 of Table 8) = 918 Units

(12) Percentage of Processing in the South Region for Processor A = 75.00 % (Line 3D of Table 8) of 3,672 Units (Line 8 of Table 8) = 2,754 Units

(13) Percentage of Processing in the North Region for Processor B = 57.69 % (Line 5C of Table 8) of 5,328 Units (Line 9 of Table 8) = 3,074 Units

(14) Percentage of Processing in the South Region for Processor B = 42.31 % (Line 5D of Table 8) of 5,328 Units (Line 9 of Table 8) = 2,254 Units

(15) Total PQS in North Region = 3,992 Units (Sum of Line 11 and 13)

(16) Total PQS in South Region = 5,008 Units (Sum of Line 12 and 14)

(17) Ratio of North PQS : South PQS = 44.36% North, 55.64 % South

Calculations: (a) QS North Region = Total QS 5,692 (Line 5) x 44.38% (Line 17) = 2,525 Units

(b) QS South Region = Total QS 5,692 (Line 5) × 55.64 % (Line 17) = 3,167 Units

(c) QS North Region for all persons holding North Region and South Region QS = QS North Region ¥ North Region only QS 2,525 Units ¥ 1,984 (Line 9) Units = 

541 Units

(d) QS South Region for all persons holding North Region and South Region QS = QS South Region ¥ South Region only QS 3,167 Units ¥ 0 Units = 3,167 

Units

(e) North Region QS issued to LLP A = 1,984 QS Units

(f) North Region QS issued to LLP B = Total QS held by LLP B (3,708) × 541 Units/3,708 Units = 541 North Region QS Units

(g) South Region QS issued to LLP B = Total QS held by LLP B (3,708) ¥ 541 North Region QS Units = 3,167 South Region QS Units

In this example, only one of the LLP 

license holders holds QS that would 

require adjustment. Although CVC QS is 

not subject to regional delivery 

requirements until after July 1, 2008, 

NMFS would compute the amount of 

QS designated for each region prior to 

the issuance of the CVC QS. This would 

allow a holder of CVC QS to know the 

regional designation of the QS prior to 

the application of that designation. The 

ratio of North and South regional 

designation would be the same for both 

the CVO and CVC QS.

The adjustment for regional 

designation would need to occur once 

appeals are decided and those 

readjustments in regional designation 

would be made prior to fishing to 

minimize disruptions in the fishery. A 

person who would receive QS with 

more than one regional designation for 

that crab fishery would have his or her 

QS holdings regionally adjusted on a 

pro rata basis according to the following 

process:

(1) Determine the ratio of the initial 

PQS pool in the North and South 

regions.

(2) Multiply Initial QS pool by the 

ratio of North and South PQS. This 

would yield the target North QS pool 

and the target South QS pool.

(3) Sum the QS for all persons who 

are eligible to receive North QS. This is 

the unadjusted North QS pool.

(4) Repeat the procedure for the South 

Region. This is the unadjusted South QS 

pool.

(5) Subtract the amount of QS for 

persons receiving North QS only from 

the unadjusted North QS pool to 

calculate the amount of North QS 

available to all persons holding both 

North and South region QS.

(6) Subtract the amount of QS for 

persons receiving South QS only from 

the unadjusted South QS pool to 

calculate the amount of South QS 

available to all persons holding both 

North and South region QS.

(7) Subtract the Unadjusted North QS 

pool from the Target North QS pool to 

calculate the number of QS units that 

would be applied to the North QS pool 

to adjust the regional designations. This 

amount is the Adjustment Amount.

(8) Divide the Adjustment Amount by 

the unadjusted North QS pool for North 

and South QS holders. This yields the 

regional adjustment factor (RAF) for 

each person.

(9) For each person who holds both 

North and South Region QS, the QS 

adjustment (QS Adj. p) to that person’s 

Unadjusted North QS is expressed in 

the following equation as:

QS adj. p = Unadjusted North QS p × RAF

(10) If the QS adjustment for a person 

is negative, the QS adjustment for that 

person is subtracted from that person’s 

unadjusted North QS amount and added 

to that person’s unadjusted South QS. If 

the QS adjustment for a person is 

positive, the QS adjustment for that 

person is added to that person’s 

unadjusted North QS amount and 

subtracted from that person’s 

unadjusted South QS. These 

adjustments would yield the regional 

amount of QS for that person.

Regional Adjustment in the Western 

Aleutian Islands Golden King Crab 

Fishery. The PQS issued would need to 

be adjusted so that 50 percent of the 

PQS is designated as West region, and 

50 percent is undesignated. However, 

the process for regionally allocating PQS 

63218 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

in the Western Aleutian Islands golden 

king crab fishery differs slightly from 

the North and South PQS regional 

designation, which is based on the 

location of the legal processing. Fifty 

percent of the PQS that would be issued 

in the Western Aleutian Islands golden 

king crab fishery would be issued with 

a West designation. The West 

designation applies to PQS for 

processing west of a line at 174° W. 

long. The remaining 50 percent of the 

PQS issued for this fishery is 

undesignated region PQS.

If a person owns a crab processing 

facility that is located in the West region 

at the time of application, that person 

would receive West PQS only. If a 

person applies to receive PQS and does 

not own a crab processing facility 

located in the West region at the time of 

application, then that person would 

receive West region (West) and 

Undesignated region (Und.) PQS. 

Expressed algebraically, for any person 

(p) allocated both West region PQS and 

undesignated region PQS the formula is 

as follows:

(1) PQSWest = PQS × 0.50

(2) PQSUnd. = PQS × 0.50

(3) PQSWest for PQSWest & Und. holders = 

PQSWest ¥ PQSWest only

(4) PQSWest for Personp = PQSp × (PQSWest

for PQSWest & Und.) holders/(PQSWest for 

PQSWest & Und. holders + PQSUnd)

(5) PQSUnd. for Personp = PQSp ¥PQSWest

for Personp

For purposes of the allocation of PQS 

in the Western Aleutian Islands golden 

king crab fishery, ownership of a 

processing facility is defined as a sole 

proprietor, or a relationship between 2 

or more entities in which a person 

directly or indirectly owns a 10-percent 

or greater interest in the facility. A 

processing facility is defined as a 

shorebased, or stationary floating 

processor. Catcher/Processors would not 

be considered as ownership of a 

processing facility operating in the West 

region.

The QS issued to the Western 

Aleutian Islands golden king crab 

fishery is adjusted so 50 percent of the 

QS issued is West QS, which can be 

delivered only to an RCR located west 

of the 174° W. longitude. The 

adjustment in the initial issuance of QS 

would be made for persons who made 

landings of Western Aleutian Islands 

golden king crab west and east of 174°

W. longitude.

If a person received QS based solely 

on landings made east of 174° W. 

longitude, all of that QS would be 

issued to that person as regionally 

undesignated QS. If a person received 

QS based on landings made only west 

of 174° W. longitude, all of that QS 

would be issued as West QS. However, 

if a person received QS based on 

landings made both east and west of the 

174° W. longitude line, then, that QS 

would be issued such that a portion of 

the QS would be issued as 

‘‘Undesignated’’ and a portion as 

‘‘West’’ so that all of the QS issued in 

the Western Aleutian Islands golden 

king crab fishery are issued with a 50 

percent West and a 50 percent 

Undesignated ratio. Person’s receiving 

QS with both regional designations 

would have the QS pro-rated so the total 

of all QS is issued initially as 50 percent 

West and 50 percent Undesignated QS. 

The following process would be 

followed:

(1) Sum the QS for all persons who 

are eligible to receive West QS. This is 

the unadjusted West QS pool;

(2) Sum the QS for all persons who 

are eligible to receive Undesignated QS. 

This is the unadjusted Undesignated QS 

pool;

(3) Subtract the amount of QS for 

persons receiving West QS only from 

the unadjusted West QS pool to 

calculate the amount of West QS 

available to all persons holding both 

West and Undesignated region QS;

(4) Subtract the amount of QS for 

persons receiving Undesignated QS only 

from the unadjusted Undesignated QS 

pool to calculate the amount of 

Undesignated QS available to all 

persons holding both West and 

Undesignated region QS;

(5) Subtract the Unadjusted West QS 

pool from the Target West QS pool to 

calculate the number of QS units that 

would be applied to the West QS pool 

to adjust the regional designations. This 

amount is the Adjustment Amount;

(6) Divide the Adjustment Amount by 

the unadjusted QS pool for West and 

Undesignated QS holders. This yields 

the regional adjustment factor (RAF) for 

each person;

(7) For each person who holds both 

unadjusted West and Undesignated 

Region QS, the QS adjustment to that 

person’s Unadjusted West QS is 

determined by multiplying the 

Unadjusted West QS by the RAF; and

(8) If the QS adjustment for person is 

negative, the QS adjustment for that 

person is added to that person’s 

unadjusted West QS amount and 

subtracted from that person’s 

unadjusted Undesignated QS. If the QS 

adjustment for a person is positive, the 

QS adjustment for that person is 

subtracted from that person’s 

unadjusted West QS amount and added 

to that person’s unadjusted 

Undesignated QS. These adjustments 

would yield the regional adjustment 

amounts for that person.

Initial Issuance of Crab QS and PQS

In order to receive an initial allocation 

of QS or PQS, an eligible person would 

need to submit an Application for Crab 

QS or PQS. The application would be 

sent to the last known address of a 

person identified as an eligible 

applicant by the official crab 

rationalization record and would be 

available on the NMFS Alaska Region 

web page at www.fakr.noaa.gov. All 

applications would have to be 

submitted by the close of the 

application period. The application 

period would be specified in the 

Federal Register at the time of the 

publication of the Final Rule. 

Applications could be mailed, faxed, or 

hand delivered to the NMFS, Alaska 

Region (see ADDRESSES). The contents of 

the application vary, depending on the 

type of QS and/or PQS for which a 

person is applying. If an applicant is 

applying as the successor-in-interest to 

an eligible applicant, an application 

must also contain valid documentation 

demonstrating the applicant’s status as 

a successor-in-interest to that eligible 

applicant.

An Application for Crab QS or PQS 

would be signed by the applicant or the 

individual representing the applicant 

and would contain the necessary 

information to identify the person 

applying, the basis for applying for QS 

or PQS, any necessary information on 

the vessel or processor, documentation 

of crew participation, contract 

provisions for community ROFR, and 

any other information deemed necessary 

by the Regional Administrator.

Additional requirements in the 

Application for Crab QS or PQS exist for 

persons applying to receive PQS from 

legal landings made in an ECC, or in a 

community in the GOA north of a line 

at 56°20′ N. latitude — a North GOA 

Community. Prior to the initial issuance 

of PQS based on legal processing 

located in an ECC, that person must 

provide documentation he or she has 

completed a contract with the entity 

representing the ECC that sets out the 

terms for ROFR for any PQS to be 

transferred in a future sale. In the case 

of a North GOA Community, a ROFR 

contract must be signed with the City of 

Kodiak and the Kodiak Island Borough.

The Regional Administrator would 

evaluate Applications for QS and PQS 

submitted during the specified 

application period and compare all 

claims in the application with the 

information in the official crab 

rationalization record. Claims in the 

application consistent with information 

in the official record would be accepted 

by the Regional Administrator. 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63219

Inconsistent claims in the application, 

unless verified by documentation, 

would not be accepted.

If NMFS determines the additional 

information or documentation 

submitted by the applicant is correct 

and supports the applicant’s burden of 

proving the inconsistent claims, the 

information would be used to determine 

whether the applicant is eligible for a 

QS or PQS allocation. However, if the 

Regional Administrator determines the 

additional information or 

documentation does not support the 

applicant’s burden, the applicant would 

be notified through an initial 

administrative determination (IAD), 

stating the applicant did not meet the 

burden of proof.

NMFS would specify a 30-day 

evidentiary period during which an 

applicant may provide additional 

information or documentation to 

support the claims made in his or her 

application. An applicant would be 

limited to one 30-day evidentiary period 

per application. Additional information 

or documentation, or a revised 

application, received after the 30-day 

evidentiary period, but before an IAD is 

issued, would be considered.

NMFS would prepare and send an 

IAD to the applicant following the 

expiration of the 30-day evidentiary 

period if sufficient documentation is not 

provided. The IAD would indicate the 

deficiencies in the application. The IAD 

would also indicate which claims 

cannot be approved based on the 

available information or documentation. 

An applicant who receives an IAD may 

appeal. An applicant who avails himself 

or herself of the opportunity to appeal 

an IAD would not receive the QS or PQS 

being contested.

NMFS would not initiate an IAD in 

the case of an Application for Crab QS 

or PQS that is complete except for a 

signed ROFR contract. This provision 

would accommodate applicants who 

have complied with the application 

requirements with the exception of a 

mutually signed contract which relies 

on agreement of both parties. Once an 

application is submitted with a ROFR 

contract, NMFS would allocate PQS to 

that person.

IFQ Issuance

The annual allocations of the TAC, in 

pounds, to QS holders are referred to as 

IFQ. IFQ would be issued for each of the 

four QS sectors. IFQ is a permit that 

allows the harvesting of an amount of 

the TAC for a fishery. As with QS, IFQ 

would be issued on a fishery-by-fishery 

and regional basis.

IFQ would be issued once the TAC for 

that crab fishery in that crab fishing year 

has been specified by the State of 

Alaska. The TAC available as IFQ would 

be the fishery TAC minus the 10 percent 

CDQ allocation. For the Western 

Aleutian Islands golden king crab 

fishery, the 10 Adak allocation would be 

deducted from the TAC prior to 

allocating the IFQ. All IFQ would be 

issued for a crab fishing year.

QS issued after NMFS has issued 

annual IFQ would not result in IFQ for 

that crab fishery for that fishing year. If 

additional actions such as appeals, or 

other administrative decisions occur 

after IFQ has been issued for that 

fishery, the person would not receive 

IFQ until the following year. This single 

annual issuance is required for 

administrative purposes so that 

mid-year adjustments to other IFQ 

holders would not occur that would 

alter their allocation or the ratio of QS 

to IFQ for that year.

The account of the person holding 

IPQ would be debited as soon as the 

landings are reported. A person would 

be prohibited from harvesting an 

amount of crab in excess of the IFQ 

held. Penalties would be imposed for 

any overage in excess of a person’s IFQ. 

The IFQ is subject to use provisions 

described later in this preamble. 

Descriptions of the types of IFQ 

resulting from each type of QS follow.

CVO IFQ

CVO QS yields two separate classes of 

IFQ: Class A IFQ and Class B IFQ. Class 

A IFQ limits the delivery of any crab 

harvested with that IFQ to an RCR 

holding unused IPQ with a specific 

regional designation. Class B IFQ could 

be delivered to any RCR, except to an 

RCR that has already used CPO or CPC 

IFQ in that crab fishery during that 

season. Class B IFQ would not be 

regionally designated.

The Class A/Class B IFQ distinction 

would be made only in the annual IFQ 

allocations. QS would be issued in a 

single class. Since the Class B IFQ are 

intended to provide negotiating leverage 

to harvesters who are unaffiliated with 

holders of PQS or IPQ, only QS holders 

who do not also hold PQS or who are 

unaffiliated with holders of PQS, would 

receive Class B IFQ. Holders of PQS or 

IPQ and their affiliates who hold QS 

would be allocated Class A IFQ for all 

of their QS holdings. For each region of 

each fishery, the allocation of Class B 

IFQ would be 10 percent of the total 

allocation of IFQ. For example, if no 

North QS holders are affiliated with 

PQS or IPQ holders, each IFQ allocation 

would be 90 percent North Class A IFQ 

and 10 percent Class B IFQ. If half of the 

North QS is held by persons affiliated 

with a PQS or IPQ holder, the holders 

of North QS who are not affiliated with 

a PQS or IPQ holder would receive 80 

percent Class A IFQ and 20 percent 

Class B IFQ. The result would be that 

10 percent of the total North IFQ in the 

fishery would be Class B IFQ. The 

absence of an affiliation with a holder 

of PQS or IPQ would be established by 

a harvester filing an annual affidavit 

stating the use of any IFQ held by that 

harvester is not subject to any control of 

any holder of PQS or IPQ.

Persons who hold CVO IFQ and also 

hold PQS or IPQ would receive only 

Class A IFQ. Persons who hold CVO IFQ 

and are affiliated with a person who 

holds PQS or IPQ would receive only 

Class A IFQ. Affiliation would be 

determined based on two factors: 

ownership and control. IFQ would be 

considered to be held by a processor if 

a PQS or IPQ holder directly or 

indirectly owns at least 10 percent of an 

entity who holds or receives IFQ. This 

10 percent ownership standard has been 

used in other rationalization programs 

in the past as a means of measuring 

ownership and comports with the 

mechanism employed to measure 

common ownership for purposes of QS 

use caps. The definition of affiliation 

used in this proposed rule is similar to 

that developed for the AFA regulations, 

and is consistent with Council intent.

Examples of the affiliation rule 

follow: First, if a PQS or IPQ holder also 

held QS and received IFQ, that IFQ 

would be considered to be affiliated and 

issued as Class A IFQ; second, if a PQS 

or IPQ holder owned 50 percent of 

Corporation A and Corporation A 

owned 50 percent of Corporation B, 

which received IFQ, that IFQ would be 

considered to be affiliated with a 

processor because that PQS or IPQ 

holder indirectly owns 25 percent of 

Corporation B, which is receiving the 

IFQ; third, if a PQS or IPQ holder 

owned 20 percent of Corporation C and 

Corporation C owned 20 percent of 

Corporation D, which received IFQ, that 

IFQ would not be considered affiliated 

because the PQS or IPQ older indirectly 

owns only 4 percent of Corporation D; 

therefore, both Class A and Class B IFQ 

would be issued to Corporation D.

Control of IFQ by a PQS or IPQ holder 

would be measured by linkages between 

the PQS or IPQ holder and the IFQ 

holder and would serve as a means of 

effectively extending the ability of the 

PQS or IPQ holder to control the 

deliveries of crab to a specific processor. 

NMFS would interpret control in 

situations in which the person holding 

PQS or IPQ: Control exists if an 

individual, corporation, or other 

business entity that holds PQS controls 

a 10 percent or greater interest in the 

63220 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

IFQ holder. An entity controls a 10 

percent or greater interest in a second 

entity if the first entity: (1) Controls a 10 

percent ownership share of the second 

entity, or (2) Controls 10 percent or 

more of the voting stock of the second 

entity. In addition to this direct form of 

control, affiliation would also include 

other means whereby an entity 

otherwise controls another entity.

An entity otherwise controls another 

when the first entity has the power to 

exercise a controlling influence over the 

management or policies of the other 

entity, unless such power is solely the 

result of an official position with such 

entity. This definition is drawn from the 

Investment Company Act of 1940. This 

definition is intended to incorporate all 

forms of control. Examples of the types 

of control that may be encompassed by 

this definition, include the authority to 

direct the delivery of crab harvested 

under an IFQ permit held by the second 

entity to a specific RCR, or when one 

entity absorbs the majority of costs and 

normal business risks associated with 

the operation of a second entity, 

including the costs associated with 

obtaining and using any amount of the 

QS, PQS, IFQ, or IPQ held by the second 

entity.

NMFS would require QS holders to 

submit an affidavit on an annual basis, 

along with the Annual Application for 

Crab IFQ/IPQ Permit, to attest to 

whether an affiliation exists between a 

PQS or IPQ holder and the IFQ 

recipient.

The Regional Administrator would 

determine the amount of Class A and 

Class B IFQ that is issued to a QS 

holder. This is calculated by allocating 

90 percent of the TAC (TAC a) as Class 

A IFQ. A portion of TAC a is allocated 

to persons eligible to hold only Class A 

IFQ (TAC a only), the remaining TAC 

(TAC r) is allocated for harvest by a 

person (p) eligible to receive both Class 

A IFQ and Class B IFQ. Expressed 

algebraically, for an individual person 

(p) eligible to hold both Class A and 

Class B IFQ the annual allocation 

formula is as follows:

1. TACa = TAC × 0.90

2. TACr = TACa ¥ TACa only

3. IFQap = TACr / (TAC ¥ TACa only) × IFQp

4. IFQbp = IFQp ¥ IFQap

CPO IFQ

CPO QS yields only one class of IFQ, 

CPO IFQ. This IFQ allows the harvest 

and processing of an amount of crab. 

The person holding CPO IFQ can choose 

to harvest an amount of crab and 

process it on board that same vessel. 

Alternatively, the CPO IFQ holder can 

harvest crab and deliver the crab to a 

separate RCR. CPO IFQ is not subject to 

regional restrictions while used as CPO 

IFQ.

CVC IFQ

CVC QS yields CVC IFQ. CVC IFQ 

would not be subject to regional 

designation until July 1, 2008. After July 

1, 2008, CVC IFQ would be issued as 

Class A and Class B IFQ, subject to the 

same regional designation and 

affiliation requirements as those 

described under CVO IFQ.

CPC IFQ

CPC QS yields CPC IFQ. As with CPO 

IFQ, there are no regional delivery 

requirements, and crab harvested using 

a CPC IFQ can be harvested and 

processed on board a vessel, or it can be 

delivered to another RCR. Unlike CVC 

IFQ, CPC IFQ would not convert to 

Class A and Class B shares annually 

starting July 1, 2008.

IPQ Issuance

An annual allocation of PQS is 

referred to as IPQ and expressed in 

pounds of crab. IPQ would be 

equivalent to the amount of the TAC 

that is issued as Class A IFQ for that 

crab fishery. Processor privileges do not 

apply to the amount of the TAC 

allocated as Class B IFQ, or prior to July 

1, 2008, allocated for use by the CPO 

and CPC sectors. IPQs would be 

regionally designated for processing 

with the same regional designations that 

apply to IFQ. The account of the person 

holding IPQ would be debited as soon 

as the landings are reported.

Annual Application for Crab IFQ/IPQ 

Permit

Prior to the issuance of IFQ or IPQ for 

a crab fishery, each person that wishes 

to receive IFQ or IPQ must submit an 

Annual Application for Crab IFQ/IPQ 

Permit. This application is necessary for 

NMFS to administer several aspects of 

this program, specifically: (1) to 

determine the designation of Class A 

and Class B IFQ in each crab fishing 

year for each person based on the 

affidavit; (2) to determine whether the 

applicant would be using the IFQ as 

part of a crab harvesting cooperative; 

and (3) to ensure that an EDR has been 

submitted, if required. This application 

must be submitted prior to the start of 

the crab fishing year.

A complete Annual Application for 

Crab IFQ/IPQ Permit would include the 

applicant’s identification and contact 

information, whether the applicant has 

joined a crab cooperative, and a 

completed affidavit of affiliation 

declaring any and all affiliations with 

any PQS or IPQ holder. An affidavit of 

affiliation would include the applicant’s 

relationships with IPQ or PQS holders 

that may involve direct or indirect 

ownership or control of the delivery of 

IFQ and any supplemental 

documentation deemed necessary by 

NMFS to determine whether an 

affiliation exists. This includes the 

names of all persons, to the individual 

level, holding an ownership interest in 

the entity and the percentage ownership 

each person holds. The application 

must also include the submission of an 

EDR, and pay any outstanding fees, if 

required.

As with the other permit applications, 

NMFS would review the application for 

completeness, payment of any fees 

required under this program, and other 

provisions required for permit holders.

QS/IFQ and PQS/IFQ Transfer 

Provisions

After the initial allocation of QS and 

PQS, these shares and their 

corresponding IFQ and IPQ, may be 

transferred. All transfers must be 

approved by NMFS. A transfer is any 

change in the person holding the QS or 

using the IFQ, permanently or for a 

fixed period of time. IFQ used by a 

person holding a Crab IFQ Hired Master 

Permit issued by NMFS, and the use of 

IFQ assigned to a crab harvesting 

cooperative and used within that 

cooperative, are not considered to be 

transfers of IFQ.

Eligibility to Transfer Quota

Before receiving quota by transfer 

quota, a person must establish eligibility 

to receive QS, PQS, IFQ, or IPQ by 

transfer by submitting a completed 

Application for Eligibility to Receive 

QS/IFQ or PQS/IPQ by Transfer, 

available on the NMFS Alaska Region 

website at http://www.fakr.noaa.gov, or 

from the NMFS Alaska Region (see 

ADDRESSES). If a person is an initial 

issuee of QS, an eligibility application is 

not required. To be eligible to receive 

QS, PQS, IFQ, or IPQ by transfer, a 

person must first meet the requirements 

in the following table:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63221

TABLE 10—ELIGIBILITY REQUIREMENTS TO RECEIVE QUOTA BY TRANSFER

Quota Type Eligible Person Eligibility Requirements 

PQS Any person None

IPQ Any person None

CVO or CPO QS A person initially issued QS None

An individual who is a U.S. citizen with at least 150 days of sea 

time as part of a harvesting crew in any U.S. 

commercial fishery

A corporation, partnership, or other entity with at least on individual member who is a U.S. 

citizen and who: 

(1) owns at least 20 percent of the corporation, 

partnership, or other entity; and

(2) has at least 150 days of sea time as part of a 

harvesting crew in any U.S. commercial fishery

An ECCO None

A CDQ Group None

CVO or CPO IFQ All persons eligible for CVO or CPO QS Same as the requirements for CVO and CPO QS

A crab harvesting cooperative None

CVC or CPC QS An individual initially issued QS None

An individual who is a U.S. citizen with: 

(1) at least 150 days of sea time as part of a harvesting crew in any U.S. commercial fishery; and

(2) recent participation in the 365 days prior to the 

transfer.

CVC or CPC IFQ All persons eligible for CVC or CPC QS Same as the requirements for CVC and CPC QS

A crab harvesting cooperative None

Prior to receiving QS by transfer on 

behalf of a specific ECC, a non-profit 

entity that intends to represent that ECC 

as an ECCO must have approval from 

the Regional Administrator. To receive 

approval, the non-profit entity seeking 

to become an ECCO must submit a 

complete Application to Become an 

ECCO to NMFS, available on the NMFS 

Alaska Region website at http://

www.fakr.noaa.gov, or from the NMFS 

Alaska Region (see ADDRESSES). If an 

application is disapproved, then the 

determination may be appealed.

An ECCO is a non-profit organization 

that is authorized to hold QS and lease 

the resulting IFQ to residents of the ECC 

on whose behalf it holds the QS. Each 

ECC would have to designate an ECCO 

to transfer and hold QS on its behalf. 

The ECCO would be identified by either 

the CDQ group, or the municipality in 

which the ECC is located, except in 

cases where the ECC is also located in 

a borough. In such case, the 

municipality and borough must agree to 

designate the same non-profit 

organization to serve as the ECCO. Each 

ECC may designate only one ECCO to 

hold crab QS on behalf of that 

community at any one time.

A complete Application to Become an 

ECCO consists of: (1) The articles of 

incorporation under the laws of the 

State of Alaska for that non-profit entity; 

(2) A statement indicating the ECC 

represented by that non-profit entity for 

purposes of holding QS; (3) 

Management organization information; 

and (4) A statement describing the 

procedures that would be used to 

determine the distribution of IFQ to 

residents of the community represented 

by that ECCO.

Transfer Applications

Once an eligibility application is 

submitted, and eligibility to receive QS, 

PQS, IPQ, or IFQ is established, a 

transfer application must be submitted 

to NMFS for the actual transfer of a 

specific type of quota. There are three 

forms of transfer applications and the 

application form used would vary 

depending on the person applying for 

the transfer. The three forms are: (1) 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ. This application is required 

to transfer any amount of QS, PQS, IFQ, 

or IPQ from an entity that is not an 

ECCO or a crab harvesting cooperative; 

(2) Application for Transfer of Crab QS/

IFQ to or from an ECCO. This 

application is required to transfer any 

amount of QS or IFQ to or from an 

entity that is an ECCO; or (3) 

Application for Inter-cooperative 

Transfer. This application is required to 

transfer any amount of IFQ from a crab 

harvesting cooperative to another crab 

harvesting cooperative. All of these 

transfer forms would be available on the 

NMFS Alaska Region website at http://

www.fakr.noaa.gov, or from the NMFS 

Alaska Region (see ADDRESSES).

For the transfer of PQS or IPQ, an 

application must contain a signature of 

a representative of an ECC entity with 

ROFR. For the transfer of CVC QS or 

IFQ or CPC QS or IFQ, individuals must 

submit proof of at least one landing of 

crab in any crab fishery in the 365 days 

prior to submission to NMFS of the 

application. Proof of this landing is 

either: signature of the applicant on an 

ADF&G Fish Ticket; or an affidavit from 

the vessel owner attesting to that 

individual’s participation as a member 

63222 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

of a fish harvesting crew on board that 

vessel at the time of the landing.

NMFS would establish the deadline of 

August 1 by which QS and PQS holder 

must apply for their annual IFQ or IPQ 

permits for that crab fishing year. This 

deadline provides NMFS the time 

necessary to calculate whether, and how 

much, of the IFQ issued to a person 

should be designated as Class A or Class 

B IFQ based on the affidavit of 

affiliation provided in the application. 

NMFS would need to know all 

affiliation information for all persons to 

calculate the Class A/B IFQ ratios for 

each person accurately. Without this 

deadline, NMFS would not have 

sufficient information on affiliations 

and could not calculate the Class A/B 

ratio for a person.

This deadline date of August 1 allows 

NMFS time to issue the IFQ and IPQ for 

the Aleutian Islands golden king crab 

fishery (which typically begins in midAugust) and sufficient time to calculate 

and issue the IFQ and IPQ for all the 

other fisheries when the TACs are 

announced by the State of Alaska (in the 

Fall). Between August 1 and the 

issuance of IFQ or IPQ for a crab fishery, 

NMFS would not approve any transfers 

of QS, PQS, IFQ, or IPQ. This limit on 

transfer approval ensures that NMFS 

calculates the Class A/B IFQ ratio based 

on the affiliation information of all 

persons in the fishery at the same time. 

Once the IFQ and IPQ is issued, NMFS 

would resume the approval of valid 

transfer applications. For most crab 

fisheries, this would effectively result in 

a one month period when NMFS would 

not approve transfers. Persons may still 

submit applications during this time, 

but approval would not occur until 

NMFS has issued the IFQ and IPQ for 

the crab fishery.

Approval criteria for an Application 

for Transfer of Crab QS/IFQ or PQS/

IPQ. An Application for Transfer of Crab 

QS/IFQ or PQS/IPQ would not be 

approved until the Regional 

Administrator has determined that: (1) 

The person applying to receive the 

quota is eligible to receive it; (2) The 

application is notarized; (3) All fees for 

this program are paid as well as any 

fines, civil penalties, or other payments 

due and owing, or outstanding permit 

sanctions, resulting from Federal fishery 

violations involving either party exist; 

(4) The person applying to receive quota 

currently exists; (5) The transfer would 

not cause the person applying to receive 

the quota to exceed the use limit; (6) 

The person applying to make or receive 

the QS, PQS, IFQ or IPQ transfer has 

submitted an EDR, if required; (7) In the 

case of the transfer of PQS or IPQ, that 

the provisions for ROFR have been met; 

and (8) Other pertinent information 

requested on the application for transfer 

has been supplied to the satisfaction of 

the Regional Administrator.

Application for Transfer of Crab QS/

IFQ to or from an ECCO. An 

Application for Transfer of Crab QS/IFQ 

to or from an ECCO must be approved 

by the Regional Administrator. This 

application is required for the ECCO to 

hold the QS and for the individual that 

would use the IFQ to harvest crab. Any 

transfer of QS from an ECC by the ECCO 

requires authorization of the appropriate 

governing body of the ECC to ensure 

proper oversight.

In the application, all individuals 

applying to receive IFQ by transfer from 

an ECCO must submit proof of at least 

one delivery of crab in any crab fishery 

in the 365 days prior to submission to 

NMFS of the application. Proof of this 

landing is either: the signature of the 

applicant on an ADF&G Fish Ticket; or 

an affidavit from the vessel owner 

attesting to that individual’s 

participation as a member of a fish 

harvesting crew on board that vessel 

during that landing. In conjunction with 

the transferee, the ECCO would be a 

party to the Application for the Transfer 

of QS/IFQ to or from an ECCO. The 

ECCO would provide to NMFS an 

explanation for the transfer of QS/IFQ to 

be included in NMFS’ review of the 

community benefits of ECCO’s. 

Included among the reasons for transfer 

are: facilitation of ECCO management 

and administration; to finance future QS 

purchases by the ECCO; to permit 

community residents to fish; or, to 

facilitate dissolution of the ECCO. A 

person receiving IFQ from an ECCO 

must affirm that they have been a 

permanent resident in the ECC for a 

period of 12 months prior to the 

submission of the application.

ECCO Annual Report for an ECC. In 

addition to the Application to Transfer 

Crab QS/IFQ to or from an ECCO, the 

ECCO must submit an annual report for 

the ECC to NMFS. An ECCO would be 

required to submit a complete annual 

report by June 30 of the crab fishing year 

that it is required. If an ECCO did not 

submit an annual report for the previous 

year, NMFS would not approve an 

Application to Transfer Crab QS/IFQ to 

or from that ECCO. This annual report 

is similar to the requirement in the 

current halibut and sablefish 

community purchase program. The 

annual report would ensure that the 

ECCO maintains the intent of the ECC 

QS purchase provisions that the QS and 

IFQ benefit residents of eligible 

communities.

The annual report would detail the 

use of the QS and IFQ in that 

community, including information on 

the IFQ lease holders, crew employed, 

criteria used by the ECCO to distribute 

IFQ leases among eligible community 

residents, any changes in the 

management structure of the ECCO, and 

copies of decision making documents 

from ECCO board meetings. In addition, 

NMFS would request a description of 

efforts the ECCO has made to ensure 

that IFQ lessees employ crew members 

who are eligible community residents of 

the ECC aboard vessels on which IFQ 

derived from QS held by an ECCO is 

being fished.

Inter-cooperative Transfers

A crab harvesting cooperative would 

be permitted to transfer its IFQ only to 

another crab harvesting cooperative. 

Crab harvesting cooperatives wishing to 

engage in an inter-cooperative transfer 

must complete an Application for 

Inter-cooperative Transfer.

Application for Inter-cooperative 

Transfer. A complete application 

consists of the following: (1) the name 

and contact information of the crab 

harvesting cooperative transferor and 

transferee; (2) the identification of the 

crab IFQ being transferred, including 

the permit number, year that permit was 

issued, and number of pounds being 

transferred; (3) price paid for the IFQ; 

(4) whether an EDR was submitted, if 

required; (5) whether all fees have been 

paid; and (6) original notarized 

signatures of both the transferee and 

transferor. The approval criteria for an 

Application for Inter-Cooperative 

Transfer are the same as those for an 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ.

Specific Provisions on the Transfer of 

CVO and CPO QS and IFQ

CVO and CPO QS and the resulting 

IFQ would be transferrable under the 

Program, subject to the caps on the 

amount of shares a person may hold or 

use. Leasing would be defined for 

purposes of this program as the use of 

IFQs on a vessel in which the QS holder 

has less than 10 percent ownership 

interest or on which the QS holder is 

not present. The general provisions for 

the leasing of CVO and CPO IFQ (i.e., 

the temporary transfer of IFQs without 

the accompanying QS) would expire on 

July 1, 2010, which is five years after 

Program implementation. Leasing 

among crab harvesting cooperatives 

would not expire. The Council’s intent 

in allowing leasing to continue through 

crab harvesting cooperatives is to create 

an incentive for cooperative 

membership.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63223

Specific Provision on the Transfer of 

CVC and CPC QS and IFQ

CVC or CPC QS would be fully 

transferable to persons determined by 

NMFS to be eligible to receive this type 

of QS by transfer. In order to be eligible 

to receive CVC/CPC QS and/or IFQ by 

transfer, a person must be an individual 

U.S. citizen with at least 150 days of sea 

time as part of a harvesting crew in any 

U.S. commercial fishery. Additionally, 

the person must be an ‘‘active 

participant’’ in the BSAI crab fisheries 

as demonstrated by a landing in a crab 

fishery in the last 365 days. 

Documentation of ‘‘active participation’’

includes an ADF&G fish ticket, an 

affidavit from the vessel owner, or other 

verifiable documentation.

The accompanying CVC or CPC IFQ 

may also be leased until July 1, 2008. 

After July 1, 2008, leasing would be 

permitted only in the case of a 

documented hardship for the term of the 

hardship, subject to a maximum of 2 

years over a 10 year period. A hardship 

would be considered if there is: (1) a 

severe medical condition of the QS 

holder documented by a medical doctor 

who verifies the QS holder cannot 

participate in the fishery because of the 

medical condition, (2) a medical 

condition involving a person that 

requires the QS holder’s full-time care 

of that person, or (3) a total or 

constructive physical loss of a vessel. 

The QS holder would be required to 

provide documentation to NMFS the 

vessel was lost and could not be 

replaced in time to participate in the 

fishery.

Specific Provisions on the Transfer of 

PQS and IPQ

PQS and the resulting IPQ are fully 

transferable subject only to use and 

ownership caps. This allows for the 

entry of new processors into the fishery. 

The Council did not identify any 

specific eligibility criteria for persons 

wishing to obtain PQS or IPQ by 

transfer. However, the Council did 

establish a ROFR provision that restricts 

transfers of PQS and IPQ out of a 

community.

Right of First Refusal (ROFR)

The Program contains provisions for a 

ROFR to be granted to ECCs, with the 

exception of Adak, for the purchase of 

PQS/IPQ that is proposed by the PQS 

holder to be transferred out of the ECC. 

ROFR would apply to all crab PSQ/IPQ 

derived from legal processing that 

occurred in that ECC except for PSQ/

IPQ issued for Tanner crab, Western 

Aleutian Islands golden king crab, and 

Adak red king crab. The Tanner crab 

fishery is exempt because this species 

has been and likely would continue to 

be a concurrent fishery with Bristol Bay 

red king crab and snow crab. The 

Western Aleutian Islands golden king 

crab fishery is exempt because the 

fishery is regionalized in a manner that 

largely makes ROFR provisions 

unnecessary. Last, the Adak red king 

crab fishery was closed for several years 

limiting community dependence on that 

fishery.

To qualify as an ECC, a community 

must have processor history that 

accounts for at least 3 percent of the 

initial allocation of PQS in any crab 

fishery. The 3 percent threshold is 

intended to limit the ROFR to 

communities with historical 

dependence on the crab fisheries. Based 

on the Alaska State fish ticket database, 

the following nine communities meet 

this threshold of historical dependence 

as an ECC: Adak, Akutan, False Pass, St. 

George, St. Paul, Dutch Harbor, Kodiak, 

King Cove, and Port Moller. Adak is not 

eligible for ROFR because the Program 

excludes any community that receives a 

direct allocation of crab, which Adak 

does (see provisions for Adak allocation 

within this proposed rule). The 

rationale for this provision is that the 

direct allocation of crab is sufficient to 

support Adak’s dependence on the crab 

fisheries, and any further protection of 

the community’s interest in the fisheries 

is unnecessary.

ECCs would be required to designate 

an entity to represent it for purposes of 

ROFR. For those ECCs that are also CDQ 

communities (Akutan, False Pass, St. 

George, and St. Paul), the entity would 

be the CDQ group of which the 

community is a member. For non CDQ 

communities that are ECCs (Dutch 

Harbor, Kodiak, King Cove, and Port 

Moller), the entity would be a person or 

organization designated by the 

governing bodies of the ECCs. The entity 

for an ECC would be designated the 

right to intervene on behalf of its 

communities if a PQS holder proposes 

to transfer PQS or IPQ outside the 

community.

The ROFR provisions attempt to strike 

a balance between community and 

industry interests. Generally, the ROFR 

provides an ECC with the right to 

purchase PQ or IPQ from a processor for 

the same price and subject to the same 

conditions as offered by the seller in an 

open market. Under this system, the 

holder of PQS/IPQ would notify the 

ECC or its representative of the terms of 

the pending sale. The ECC would then 

have the opportunity to exercise the 

ROFR by notifying the seller of 

acceptance of those terms within a 

specified time period. If the terms are 

not accepted, the open market sale may 

proceed.

An exception to the ROFR would 

allow a company to consolidate 

operations among several commonly 

owned plants to achieve intra-company 

efficiencies. In addition, companies 

could lease IPQ for use outside a 

community. However, use of more than 

20 percent of a person’s IPQ holdings 

outside an ECC during a crab fishing 

year would trigger the ECC’s right of 

first refusal. The time period of a crab 

fishing year to allow for this 20 percent 

exception differs from the Council’s 

motion that was based on a time period 

of ‘‘3 of the preceding 5 years.’’ Under 

the Council’s motion, 5 years potentially 

would need to pass before an ECC entity 

could determine whether or not to 

exercise ROFR. This approach would be 

inconsistent with the community 

protection objective of ROFR. Thus, 

NMFS proposes to base this 20 percent 

exception on an annual time period and 

specifically requests public comment on 

this approach relative to Council 

objectives and practicality (see 

ADDRESSES).

The designation of a representing 

entity for non-CDQ ECCs must be 

completed well in advance of the end of 

the application period for initial 

issuance of PQS to allow applicants for 

PQS and ECC entities to develop and 

sign contracts between the ECC entity 

and the applicant for PQS. The Council 

suggested ECCs designate the entity to 

represent it for purposes of ROFR at 

least 90 days before the end of the 

application period for initial issuance of 

PQS. This time frame would provide 

processors time to enter a contract that 

would establish ROFR. Given the 

proposed application period is 60 days 

and in order to meet a schedule that 

would allow for issuance of QS for the 

2005 Fall crab fisheries, NMFS proposes 

that ECCs designate the entity to 

represent them within 30 days of the 

publication of the final rule which 

implements the Program. This time 

frame still would allow a 60-day period 

for processors to enter into contracts 

prior to submission of their application 

for PQS. An application for PQS would 

not be considered complete until it is 

accompanied by a valid contract signed 

by the applicant for initial issuance of 

PQS and the ECC entity.

To exercise a ROFR, an ECC would be 

required to meet all of the terms and 

conditions of the underlying 

transaction. As indicated above, the 

ROFR would be established by a 

contract to be entered into between the 

PQS holder receiving the allocation of 

PQS and the ECC entity. The applicant 

for PQS would be required to enter the 

63224 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

contract in order to receive the initial 

allocation of PQS by NMFS.

The contracts establishing the ROFR 

for ECCs must include specified 

conditions set forth at § 680.40(m). An 

explanation for each of these conditions 

is presented in section 3.6.2.2 of 

Appendix 1 to the EIS (see ADDRESSES). 

These conditions were developed by an 

ad hoc committee assigned by the 

Council to develop community 

protection measures and were 

ultimately adopted by the Council. They 

generally are intended to protect a 

balance between community and 

processor interests while providing 

some flexibility under contractual 

arrangements that would be enforced 

through civil contract law. NMFS does 

not intend to provide draft contractual 

language for purposes of ROFR; 

however, the agency would support the 

enforcement of some of the contract 

conditions, such as requiring signed 

contracts to be submitted as part of the 

application process for initial issuance 

of PQS. Similarly, NMFS would require 

the ECC entity as signatory on the 

contract to acknowledge in writing the 

community does not wish to exercise 

ROFR prior to agency approval of any 

transfer of PQS or IPQ. NMFS also could 

annually notify each ECC entity of the 

location where IPQs from the 

community were used and of any 

transfer of shares linked to the 

community. This notification could 

assist the community in tracking 

transfers and use of shares, thereby 

assisting the community efforts to 

enforce the ROFR. NMFS specifically 

requests comments on whether such 

notification would be helpful (see 

ADDRESSES).

The Program would establish an 

additional ROFR provision for ECCs 

located in the northern GOA. The only 

ECC in this area is the combined City 

and Borough of Kodiak. Under this 

provision, the ECC entity representing 

Kodiak would have a ROFR to purchase 

PQS that is proposed to be transferred 

from non ECC communities located in 

the northern GOA. The terms and 

conditions supporting Kodiak’s ROFR 

would be the same as those for the 

general ROFR provisions referenced 

above. Applicants for PQS in non ECC 

communities in the northern GOA 

would be required to enter into a 

contract with the ECC entity 

representing Kodiak and to submit a 

copy of a signed contract with their 

application for initial issuance of PQS. 

Subsequently, a holder of PQS in a non 

ECC community in the northern GOA 

who wishes to transfer PQS out of that 

community must provide NMFS with a 

written acknowledgment from the ECC 

entity representing Kodiak confirming 

that Kodiak does not wish to exercise 

ROFR prior to agency approval of 

transfer of PQS to a community other 

than Kodiak.

The northern GOA ROFR provision is 

intended to provide Kodiak with a 

ROFR that would enable it to 

consolidate processing shares of non 

ECC communities in the northern GOA.

QS, PQS, IFQ, and IPQ Use Caps

This proposed rule establishes use 

caps on the amount of QS, PQS, IFQ, 

and IPQ which may be held by a person 

and the amount of IFQ used on a vessel. 

Use caps would limit the degree of 

consolidation of QS and PQS holders 

and the numbers of vessels in the crab 

fisheries.

QS and IFQ Use Caps

Use caps would be imposed on a 

person’s holdings of QS. No person 

could use IFQ in excess of the amount 

of IFQ that is yielded from these QS 

caps unless that IFQ is derived from QS 

that was received by that person in the 

initial allocation of QS for that crab 

fishery. Different caps are chosen for the 

different fisheries because fleet 

characteristics and dependence differ 

across fisheries. Separate caps on QS 

holdings are established for CDQ 

groups. Also, separate caps would be 

established for persons who hold QS 

and PQS.

Use caps on the amount of QS and 

IFQ a person may hold are based on the 

initial QS pools to provide greater 

stability for participants and to 

determine where their allocation is 

relative to the overall allocations. 

Because the QS pool would change over 

time, establishing a set pool early-on 

would provide greater stability and 

would not require QS holders to divest 

themselves of QS should the quota pool 

change. The QS use caps in the halibut 

and sablefish IFQ program are set at a 

fixed amount of QS units, and a similar 

management approach is used to set use 

caps in this Program.

A person who receives an initial 

allocation of QS that exceeds the use 

caps listed here is limited to hold no 

more than that amount. NMFS would 

not issue a person QS in excess of use 

caps based on QS derived from landings 

attributed to an LLP license obtained via 

transfer after June 10, 2002. This 

provision would prevent excessive 

consolidation prior to the issuance of 

QS through the trading of LLP licenses 

and their associated history.

Non-individuals holding QS would be 

required to provide, on an annual basis, 

ownership information as required by 

the Annual Application for Crab IFQ/

IPQ Permit. Use caps would be applied 

both individually and collectively. 

Under this rule, all of a person’s direct 

holdings of QS and IFQ would be 

credited toward the cap. In addition, a 

person’s indirect holdings would be also 

credited toward the cap in proportion to 

the person’s ownership interest. For 

example, if a person owns a 20 percent 

interest in a company that holds 100 QS 

units, that person is credited with 

holding 20 QS units for purposes of 

determining compliance with the cap.

These caps would be applied in two 

steps. First, NMFS would use a 

threshold rule for determining whether 

the shares are held by a person. Second, 

NMFS would use the individual and 

collective rule for determining the 

extent of share ownership. Under the 

threshold rule, any entity with 

10-percent or more common ownership 

is considered to be an owner for 

purposes of determining this cap. Any 

direct holding of QS by those entities 

would be fully credited to the QS holder 

for purposes of establishing use caps. 

See the following table for details:

TABLE 11—USE CAPS ON QS AND IFQ HOLDINGS FOR ALL PERSONS NOT HOLDING PQS, AND NON-CDQ GROUPS

Fishery CVO and CPO Use Cap in 

QS Units 

CVC and CPC Use Cap in 

QS Units 

1.0 percent of the initial QS pool for Bristol Bay red king crab 3,880,000 120,000

1.0 percent of the initial QS pool for Bering Sea snow crab 9,700,000 300,000

1.0 percent of the initial QS pool for Bering sea Tanner crab 1,940,000 60,000

2.0 percent of the initial QS pool for Pribilof Islands red and blue king crab 582,000 18,000

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63225

TABLE 11—USE CAPS ON QS AND IFQ HOLDINGS FOR ALL PERSONS NOT HOLDING PQS, AND NON-CDQ GROUPS—

Continued

Fishery CVO and CPO Use Cap in 

QS Units 

CVC and CPC Use Cap in 

QS Units 

2.0 percent of the initial QS pool for St. Matthew blue king crab 582,000 18,000

10.0 percent of the initial QS pool for Eastern Aleutian Islands golden king 

crab

970,000 30,000

10.0 percent of the initial QS pool for Western Aleutian Islands golden king 

crab

3,880,000 120,000

10.0 percent of the initial QS pool for Western Aleutian Islands golden king 

crab

5,820,000 180,000

The use cap limits for CDQ Groups 

are shown in the following table (Table 

12). The QS and IFQ use caps in Table 

12 apply to a CDQ group regardless of 

whether the CDQ holds PQS and QS. No 

CDQ group could use IFQ in excess of 

the amount of IFQ that is yielded from 

these QS caps unless that IFQ is derived 

from QS that was received by that CDQ 

group in the initial allocation of QS for 

that crab fishery.

TABLE 12—USE CAPS ON QS AND IFQ HOLDINGS FOR CDQ GROUPS

Fishery CDQ CVO and CPO Use Cap in QS 

Units 

5.0 percent of the initial QS pool for Bristol Bay red king crab 19,400,000

5.0 percent of the initial QS pool for Bering Sea snow crab 48,500,000

5.0 percent of the initial QS pool for Bering sea Tanner crab 9,700,000

10.0 percent of the initial QS pool for Pribilof Islands red and blue king crab 2,910,000

10.0 percent of the initial QS pool for St. Matthew blue king crab 2,910,000

20.0 percent of the initial QS pool for Eastern Aleutian Islands golden king crab 1,940,000

20.0 percent of the initial QS pool for Western Aleutian Islands golden king crab 7,760,000

20.0 percent of the initial QS pool for Western Aleutian Islands golden king crab 11,640,000

No person who holds QS and PQS 

could use IFQ in excess of the amount 

of IFQ that is yielded from these QS 

caps unless that IFQ is derived from QS 

that was received by that person in the 

initial allocation of QS for that crab 

fishery. The use cap limits for PQS 

holders who also hold QS are shown in 

the following table:

TABLE 13—USE CAPS ON QS AND IFQ HOLDINGS FOR PERSONS WHO HOLD QS AND PQS 

Fishery CVO and CPO Use Cap in 

QS Units 

CVC and CPC Use Cap in 

QS Units 

5.0 percent of the initial QS pool for Bristol Bay red king crab 19,400,000 600,000

5.0 percent of the initial QS pool for Bering Sea snow crab 48,500,000 1,500,000

5.0 percent of the initial QS pool for Bering sea Tanner crab 9,700,000 300,000

5.0 percent of the initial QS pool for Pribilof Islands red and blue king crab 1,455,000 45,000

5.0 percent of the initial QS pool for St. Matthew blue king crab 1,455,000 45,000

5.0 percent of the initial QS pool for Eastern Aleutian Islands golden king 

crab

485,000 15,000

5.0 percent of the initial QS pool for Western Aleutian Islands golden king 

crab

1,940,000 60,000

5.0 percent of the initial QS pool for Western Aleutian Islands golden king 

crab

2,910,000 90,000

63226 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

CVC and CPC QS and IFQ use is 

capped based on the QS and IFQ pool 

that is issued to those QS sectors, not as 

a percentage of the whole QS pool, or 

TAC issued for that fishery for that year. 

The effect is that the use caps are set at 

the percentage of the QS pool for that 

sector. This is intended to preserve the 

goals of CVC and CPC QS and IFQ 

allocations as a means to provide 

participation for crew members and 

limit consolidation in crew 

employment.

PQS Use Caps

A person may not use more than 30 

percent of the initial PQS pool in any 

crab fishery unless that person received 

an initial allocation of PQS in excess of 

this limit. A person would not be issued 

PQS in excess of the use caps based on 

processing history transferred after June 

10, 2002, the same date for limiting the 

QS use caps. This would limit the 

consolidation that could occur prior to 

the implementation of this Program, 

thereby frustrating the goals of a use cap 

limitation.

As with vertical integration caps, PQS 

use caps would be applied using a 

threshold rule for determining whether 

the shares are held by a processor and 

then the individual and collective rule 

for determining the extent of share 

ownership. Under the threshold rule, 

any entity with 10 percent or more 

common ownership with a processor is 

considered to be a part of that processor. 

Any direct holdings of those entities 

would be fully credited to the 

processor’s holdings. Indirect holdings 

of those entities would be credited 

toward the processor’s cap in proportion 

to the entity’s ownership.

IPQ Use Caps

IPQs would be capped at the same 

levels as those for the PQS, and the 

same would be established using the 

same threshold rule for determining the 

amount of PQS held by a person. In 

addition to this general use cap, two 

other provisions would apply to IPQs. 

In addition to the overall 30 percent 

PQS use cap, in the Bering Sea snow 

crab fishery no person would be 

permitted to hold in excess of 60 

percent of the IPQ issued with a North 

region designation for that fishery.

A further restriction would exist, 

which limits the annual allocation of 

IPQs in seasons when the TAC exceeds 

a threshold amount in two fisheries. In 

the Bristol Bay red king crab fishery, 

IPQs would not be issued for the 

amount of the TAC in excess of 20 

million pounds (9,072 mt). In the Bering 

Sea snow crab fishery, IPQs would not 

be issued for the amount of the TAC in 

excess of 175 million pounds (79,379 

mt). Any Class A IFQ issued in excess 

of the threshold would not be required 

to be delivered to an RCR with unused 

IPQ, but it would be subject to the 

regional landing requirements. This 

Class A IFQ would be distributed among 

users based on their QS holdings.

Vessel Use Caps

The amount of CVO or CPO IFQ that 

could be used on any one vessel during 

a crab fishing year would be limited. 

This vessel use limit would apply for all 

vessels, except for vessels that 

participate solely in a crab harvesting 

cooperative. A vessel could not harvest 

crab in excess of the following 

percentages of the TAC for that crab 

fishery for that crab fishing year: (1) 2 

percent of the TAC for the Bering Sea 

snow crab, Bristol Bay red king crab, 

and Bering Sea tanner crab fisheries; (2) 

4 percent of the TAC for the Pribilof 

Islands red and blue king crab, and St. 

Matthew blue king crab fisheries; and 

(3) 20 percent for Eastern Aleutian 

Islands golden king crab, Western 

Aleutian Islands golden king crab, and 

Western Aleutian Islands red king crab 

west of 179° W. long.

CVC or CPC QS used on a vessel 

would not be included in determining 

whether a vessel use cap is met. Crab 

that are allocated to the CDQ program or 

the Adak community entity would not 

be included in determining whether a 

vessel use cap is met.

A person who receive an approval of 

IFQ allocation in excess of these vessel 

use caps may catch and retain all of that 

IFQ with a single vessel. However, two 

or more persons may not catch and 

retain their IFQs with one vessel in 

excess of these limitations.

The vessel use cap would not apply 

to a vessel if all of the IFQ used on that 

vessel in a crab fishing year is IFQ held 

by a crab harvesting cooperative. This 

exemption does not apply if that vessel 

is used to harvest any amount of IFQ not 

held by a crab harvesting cooperative 

during the same crab fishing year.

Catcher/Processor Vessel Activity

A person may purchase additional 

PQS for use on a CP vessel, but any crab 

processed with purchased PQS must be 

processed within three miles of shore in 

the region designated for that PQS. This 

effectively limits the use of PQS and the 

resulting IPQ to vessels that are 

operating as stationary floating crab 

processors.

A vessel operating as a CP may not 

accept deliveries of Class B IFQ for 

processing. For purposes of this 

provision, any vessel that receives and 

processes crab harvested with Class B 

IFQ for processing during a season 

would be prohibited from acting as a CP 

during the remainder of the season, and 

any vessel that operates as a CP during 

a season would be prohibited from 

receiving and processing crab harvested 

with Class B IFQ during that season. 

This provision only applies for that crab 

fishery for that season. A vessel could 

operate as a CP in one crab fishery and 

receive crab harvested with Class B IFQ 

in another crab fishery.

QS Holder On Board Provisions

A person holding CVC or CPC QS is 

required to be aboard the vessel upon 

which their IFQ is being harvested; 

unless the IFQ resulting from that QS 

has been: (1) leased to a qualified 

person; or (2) is used by a crab 

harvesting cooperative.

A person holding CVO or CPO QS 

does not have to be aboard the vessel 

being used to harvest their IFQ if they 

hold at least a 10 percent ownership 

interest in the vessel upon which the 

IFQ is to be harvested and are 

represented by a crab IFQ hired master 

employed by that QS holder.

Crab Harvesting Cooperatives

Consistent with the Fishermen’s 

Collective Marketing Act (FCMA, 15 

U.S.C. 521) and other applicable laws, 

including antitrust, QS holders may 

form voluntary crab harvesting 

cooperatives to combine and 

cooperatively manage their aggregate QS 

holdings. Each cooperative that is 

approved by NMFS would receive the 

amount of cooperative IFQ that would 

be yielded by the aggregate QS holdings 

of all of the members of the cooperative. 

The Program contains two primary 

incentives to encourage individual QS 

holders to join and participate in crab 

harvesting cooperatives. First, vessels 

fishing exclusively in cooperatives 

would be exempt from the vessel use 

caps that restrict vessels that harvest 

individually-held IFQ. Second, 

beginning in the sixth year of the 

program, only leasing within 

cooperatives or between cooperatives 

would be allowed. The proposed 

regulations at § 680.21 set out the 

provisions governing the formation and 

operation of crab harvesting 

cooperatives.

Membership Requirements

Under the Program, a minimum 

membership of four unique QS holders 

would be required for cooperative 

formation. The language of Amendment 

18 explicitly states that the four or more 

unique members of a crab harvesting 

cooperative are to be harvester QS 

holders engaged in one or more crab 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63227

fisheries. Therefore, the proposed 

regulations concerning membership 

requirements for a crab harvesting 

cooperative require that members of a 

cooperative be QS holders. However, 

there is no explicit language in 

Amendment 18 as to whether QS 

holders who also hold PQS or IPQ, or 

are affiliated with persons who hold 

PQS or IPQ, may be members of a crab 

harvesting cooperative. NMFS 

considered this issue in developing the 

proposed rule and, for the reasons set 

forth below, proposes that QS holders 

who also hold PQS or IPQ or are 

affiliated with persons who hold PQS or 

IPQ be prohibited from joining a crab 

harvesting cooperative.

Section 313(j)(6) of the 

Magnuson-Stevens Act (16 U.S.C. 

1862(j)(6)) states that ‘‘Nothing in [the 

Magnuson-Stevens Act] shall constitute 

a waiver, either express or implied, of 

the antitrust laws of the United States.’’

However, the FCMA was enacted to 

provide exemptions from antitrust 

liability for certain activities by 

associations of qualified members. The 

FCMA reads as follows:

Sec. 521. Fishing industry; associations 

authorized; ‘‘aquatic products’’ defined; 

marketing agencies; requirements

Persons engaged in the fishery industry, as 

fishermen, catching, collecting, or cultivating 

aquatic products, or as planters of aquatic 

products on public or private beds, may act 

together in associations, corporate or 

otherwise, with or without capital stock, in 

collectively catching, producing, preparing 

for market, processing, handling, and 

marketing in interstate and foreign 

commerce, such products of said persons so 

engaged.

The term ‘‘aquatic products’’ includes all 

commercial products of aquatic life in both 

fresh and salt water, as carried on in the 

several States, the District of Columbia, the 

several Territories of the United States, the 

insular possessions, or other places under the 

jurisdiction of the United States.

Such associations may have marketing 

agencies in common, and such associations 

and their members may make the necessary 

contracts and agreements to effect such 

purposes: Provided, however, That such 

associations are operated for the mutual 

benefit of the members thereof, and conform 

to one or both of the following requirements:

First. That no member of the association is 

allowed more than one vote because of the 

amount of stock or membership capital he 

may own

therein; or

Second. That the association does not pay 

dividends on stock or membership capital in 

excess of 8 per centum per annum.

and in any case to the following:

Third. That the association shall not deal 

in the products of nonmembers to an amount 

greater in value than such as are handled by 

it for members.

The FCMA, enacted in 1934, permits 

persons engaged in the fishing industry, 

as fishermen that catch, collect, or 

cultivate aquatic products or as planters 

of aquatic products, to act together in 

associations (cooperatives) for the 

purposes listed. The FCMA extended to 

the fishing industry the exemption from 

the operation of antitrust laws that is 

granted to agricultural cooperatives in 

the Clayton Act (15 U.S.C. 17) and the 

Capper-Volstead Act (7 U.S.C. 291, et 

seq.). The intent of the FCMA is to 

provide fishermen, acting through 

fishery cooperatives, an opportunity to 

compete on the same basis as may an 

individual corporation. Because there is 

no waiver of antitrust laws in the 

Magnuson-Stevens Act and because the 

only exemption from antitrust law for 

fishing cooperatives is provided by the 

FCMA, crab harvesting cooperatives are 

required to be organized and operate in 

a manner that is consistent with 

requirements of the FCMA and the 

proposed rule contains a provision 

reflecting this requirement.

According to the case law that has 

developed under the Capper-Volstead 

Act and the FCMA (particularly 

National Broiler Marketing Assn. v. 

United States, 436 U.S. 816 (1978) and 

United States v. Hinote, 823 F. Supp. 

1350 (S.D. Miss. 1993)), all members of 

an FCMA-protected cooperative must be 

‘‘producers’’ and any non-producer 

participation in the control and policy 

making of a cooperative would 

disqualify the cooperative for exemption 

from antitrust law provided by the 

FCMA. While NMFS recognizes that 

there is some legal uncertainty as to 

whether members of a cooperative who 

participate in both production and 

processing would be considered 

‘‘non-producers,’’ NMFS has 

determined that there is a significant 

likelihood that a crab harvesting 

cooperative that is permitted to include 

members that hold PQS or IPQ or 

process Class B IFQ, or who are 

affiliated with persons who hold PQS or 

IPQ or process Class B IFQ would be 

found to include non-producer members 

and therefore would fail to have the 

protections from antitrust law afforded 

by the FCMA. Therefore, persons 

holding CVO, CVC, CPO, or CPC QS 

would be considered QS holders for 

purposes of crab harvesting cooperative 

formation. However, QS holders who 

also (1) hold PQS or IPQ, (2) are 

affiliated with a person who holds PQS 

or IPQ, (3) process Class B IFQ, or (4) 

are affiliated with a person that 

processes Class B IFQ would be 

prohibited from joining a crab 

harvesting cooperative.

NMFS acknowledges that the 

proposed exclusion of QS holders that 

also hold PQS or IPQ or process Class 

B IFQ, or that are affiliated with persons 

that hold PQS or IPQ or process Class 

B IFQ from cooperative membership 

would deny these QS holders from 

taking advantage of the vessel use cap 

exemption that participation in a 

cooperative would afford. However, 

even if the proposed regulations 

permitted the membership of such 

persons in a cooperative, it is likely that 

such participation could be excluded 

through other means. Additionally, 

NMFS notes that although the proposed 

rule would not exclude CP QS holders 

from membership in crab harvesting 

cooperatives, the proposed rule would 

exclude CP QS holders that also hold 

PQS or IPQ or process Class B IFQ, or 

who are affiliated with persons that 

hold PQS or IPQ or process Class B IFQ 

from cooperative membership.

The proposed regulations also would 

prohibit members of a cooperative, 

including CP QS holders, from 

acquiring PQS or IPQ during the valid 

duration of the cooperative IFQ permit. 

These measures are intended to 

minimize the risk of a finding that a 

crab harvesting cooperative’s members 

were not ‘‘producers’’ as required by the 

FCMA. However, it is not clear that 

these limitations on membership and 

acquisition remove the risk entirely. 

NMFS stresses that although a crab 

harvesting cooperative may meet the 

regulatory requirements set for in 

§ 680.21, the cooperative may not satisfy 

all of the requirements for an FCMA 

cooperative. Persons wishing to form a 

crab harvesting cooperative are strongly 

encouraged to consult with experts in 

the field of antitrust.

In addition to the requirement that 

crab harvesting cooperatives be 

organized according to the requirements 

of the FCMA, a cooperative also would 

be required to be formed as a legal 

business entity registered under the 

laws of one of the 50 states or the 

District of Columbia in order to be 

eligible for a cooperative IFQ permit 

issued by NMFS.

Cooperative membership would be 

‘‘all or nothing’’ in that each QS holder 

would be able to join only one crab 

harvesting cooperative at the beginning 

of each fishing year, and all QS held by 

each member would be converted to 

cooperative IFQ. A QS holder would be 

prohibited from joining more than one 

cooperative, and would be unable to 

allocate only a portion of his QS 

holdings to a cooperative and retain the 

remainder for conversion to individual 

IFQ for his own exclusive use.

NMFS believes that because the 

proposed rule would allow unrestricted 

leasing between crab harvesting 

cooperatives, each cooperative would be 

63228 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

free to focus on harvesting IFQ for the 

fisheries of its choice. Thus, through 

leasing, cooperative members could 

realize the same benefits in being a 

member of one cooperative as they 

could in joining multiple cooperatives. 

Additionally, NMFS believes the ability 

to join multiple cooperatives would 

cause a potentially unmanageable 

number of cooperatives to be formed. 

NMFS is concerned that if membership 

is allowed in more than one 

cooperative, then it would be easy for 

QS holders to allocate a nominal 

amount of IFQ to a given cooperative 

and form what would be, in effect, 

single member cooperatives. This would 

undermine the Council’s intent that 

each cooperative have at least four 

independent members. Also, NMFS is 

concerned that bycatch may increase if 

single-species cooperatives are formed 

because the cooperative would have to 

discard all legal crab of species for 

which the cooperative does not have 

IFQ. Finally, cooperative management 

by its members is complex and 

technical, and NMFS is concerned that 

cooperative management would be 

diluted by members who have joined 

multiple cooperatives, and therefore, 

each cooperative would be less effective 

at managing the harvesting of the 

cooperative’s IFQ. NMFS specifically 

requests public comment on whether 

QS holders should be able to join more 

than one cooperative relative to these 

assumptions and Council intent (see 

ADDRESSES).

Membership in crab harvesting 

cooperatives would be voluntary. No QS 

holder would be required to join a 

cooperative to receive or harvest IFQ, 

and no cooperative would be required to 

accept as a member a QS holder that the 

cooperative does not wish to admit. 

Each member of a cooperative would be 

required to maintain their membership 

in the cooperative for the one-year 

duration of the cooperative IFQ permit, 

or as long as they hold any amount of 

QS upon which the cooperative’s IFQ 

permit is based. However a cooperative 

member would have an opportunity to 

leave their cooperative or change 

cooperatives each year during the 

annual application process.

Members of a cooperative fishing 

under a cooperative IFQ permit would 

be governed by the same regulations 

that govern individuals fishing under an 

individual IFQ permit. The only persons 

eligible to fish for crab under a 

cooperative IFQ permit would be the 

members of the cooperative, or a crab 

IFQ hired master who is fishing on 

board a vessel that is affiliated with (i.e. 

owned or controlled) by a member of 

the cooperative. In addition, the 

members of a cooperative may be held 

liable for any violations of the 

regulations applicable to fishing for crab 

made by any person fishing under the 

cooperative.

Application for an Annual Crab 

Harvesting Cooperative IPQ Permit

Cooperatives would be required to 

apply for a cooperative IFQ permit on 

an annual basis prior to July 1 of each 

year. If a cooperative’s application is 

approved by NMFS, the cooperative 

would receive the sum of the annual 

IFQ allocations of its members in the 

form of a cooperative IFQ permit that is 

issued to the cooperative rather than the 

individual QS holders. Cooperative IFQ 

permits would maintain all of the 

region, species, and sector designations 

of the underlying QS held by the 

members of the cooperative with the 

following exception.

CVC IFQ would lose their ‘‘C’’

designation (and associated holder on 

board and leasing restrictions) when 

converted to cooperative IFQ so that the 

CVC QS holders would be able to 

participate in cooperatives on an equal 

basis with other QS holders. This means 

CVC IFQ could be harvested by the 

cooperative without the CVC IFQ holder 

on board the vessel. NMFS has 

determined that this approach is 

necessary to allow the CVC QS holders 

to join and participate in cooperatives. 

The primary purpose of crab harvesting 

cooperatives is to allow crab fishermen 

to consolidate and collectively manage 

their QS holdings. If each cooperative is 

required to treat CVC IFQ separately 

from other types of IFQ, and if each CVC 

QS holder is required to be on board the 

vessel any time the cooperative’s CVC 

IFQ are being fished, then CVC QS 

holders gain nothing from participating 

in a cooperative and would have 

incentives to avoid joining cooperatives. 

This is because CVC QS holders could 

otherwise retain their shares as 

individually-held IFQ and fish their 

shares on board any vessel fishing for 

crab in the BSAI. Without the ability to 

participate fully in the cooperative, CVC 

QS holders would have no incentive to 

join any cooperative. In fact, they would 

have reasons to avoid joining 

cooperatives because they would gain 

no benefits from cooperative 

participation while at the same time 

subjecting themselves to the increased 

complexity and potential liability of 

participating in a cooperative.

Incentives to Join Crab Harvesting 

Cooperatives

The Program provides two incentives 

for QS holders to join cooperatives. 

First, fishing vessels that are used to 

harvest cooperative IFQ exclusively and 

that do not harvest any amount of 

non-cooperative-held IFQ would be 

exempt from the vessel use caps that 

apply to vessels used to harvest 

non-cooperative-held IFQ. Second, 

beginning July 1, 2011, only 

cooperatives would be allowed to lease 

IFQ and leasing of IFQ by 

non-cooperative IFQ holders would be 

prohibited.

Transfers of QS and IFQ by Members of 

a Cooperative

The regulations governing the transfer 

of QS and IFQ would apply somewhat 

differently to members of a cooperative 

who wish to transfer QS and IFQ during 

the fishing season than they would to 

QS holders who are not members of a 

cooperative. This is because at the time 

a QS holder joins a cooperative, all of 

his or her QS would be converted to 

cooperative IFQ that is held in common 

by the cooperative. A member of a 

cooperative may buy or sell QS at any 

time during the fishing season or 

between seasons simply by following 

the general requirements for the transfer 

of QS at § 680.41. A member of a 

cooperative also may obtain IFQ at any 

time by following the general 

requirements for the transfer of IFQ at 

§ 680.41 and may individually hold that 

IFQ or may transfer the IFQ to the 

member’s cooperative. However, once a 

cooperative has been issued an IFQ 

permit, the members of that cooperative 

cannot transfer away IFQ because they 

hold no IFQ of their own. Only the 

cooperative may transfer away 

cooperative IFQ, and only by following 

the requirements for the transfer of 

cooperative IFQ at § 680.41. 

Additionally, members of a cooperative 

would be prohibited from acquiring any 

amount of PQS or IPQ during the valid 

duration of the cooperative IFQ permit. 

The rational for this provision is 

provided under the discussion of 

cooperative membership requirements.

A cooperative that has been issued 

cooperative IFQ is not allowed to hold 

QS directly, even though as a legal 

business entity, a cooperative would 

otherwise be eligible to acquire and 

hold QS. This prohibition on 

cooperatives holding QS is necessary to 

maintain the regulatory distinctions 

between non-cooperative-held IFQ and 

cooperative IFQ, and to simplify the 

administration of the Program.

Inseason Membership Changes

Because cooperative IFQ permits are 

annual permits, and cooperatives are 

required to apply annually for each 

year’s cooperative IFQ permit, any 

changes in cooperative membership that 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63229

occur between fishing seasons would 

simply be reflected in the following 

year’s cooperative IFQ permit 

application. However, inseason transfers 

of QS by members of a cooperative may 

result in the situation where a current 

member of the cooperative no longer 

holds QS and/or a new person holds QS 

that has been allocated to the 

cooperative in the form of IFQ. If this 

occurs, then the cooperative has the 

option of amending its membership to 

add or remove members through the 

submission of an amended cooperative 

IFQ permit application. If the 

cooperative chooses to amend its 

membership during the fishing season, 

then the cooperative would be required 

to submit to NMFS an amended 

application for cooperative IFQ 

reflecting the membership change. If the 

change to cooperative membership is 

approved, NMFS would issue an 

amended IFQ permit application to the 

cooperative reflecting the change in 

membership. The same process may be 

used by a cooperative to accommodate 

the rights of a successor in interest in 

the event that a member dies (in the 

case of an individual), or dissolves (in 

the case of a business entity).

Each cooperative would be free to 

develop its own procedures for dealing 

with inseason membership changes. 

Cooperatives may choose to grant 

automatic membership to persons who 

obtain QS through purchase or as 

successors-in-interest to a member that 

died. Conversely, they may establish 

their own procedures for deciding 

whether to admit new members on an 

inseason basis. However a cooperative 

decides to address the issue of inseason 

membership changes a cooperative 

would not be required by NMFS to grant 

membership to a QS holder with whom 

it does not wish to associate, regardless 

of how that person acquired the QS in 

question. It is important to note that the 

inseason membership process could not 

be used by a cooperative for inseason 

expulsions of a member who holds QS 

that is allocated to the cooperative in 

the form of IFQ. If a cooperative wishes 

to expel a member that holds QS upon 

which the cooperative’s IFQ is based, it 

must wait until the end of the fishing 

year. In addition, this inseason process 

could not be used to add a member that 

has not obtained QS that is allocated to 

the cooperative in the form of IFQ. 

These two types of membership changes 

can only be accomplished between 

fishing years through the annual permit 

application process.

Protections for GOA Groundfish 

Fisheries

Protections, called sideboards limits, 

restrict the ability of vessels with Bering 

Sea snow crab fishing history to 

participate in GOA groundfish fisheries. 

The purpose of the proposed sideboard 

limits is to prevent vessels that 

traditionally participated in the Bering 

Sea snow crab fishery from using the 

flexibility of the Program to increase 

their level of participation in the GOA 

groundfish fisheries, and primarily the 

GOA Pacific cod fishery. Historically, 

the Bering Sea snow crab fishery and 

GOA groundfish fisheries operated 

concurrently from January through 

March, meaning that a crab vessel 

owner had to decide whether to fish for 

Bering Sea snow crab or GOA 

groundfish but could not participate 

fully in both fisheries. With crab 

rationalization, vessel owners have the 

flexibility to fish for snow crab 

whenever they want, or to lease their 

crab IFQ and not fish at all. This 

increased flexibility for crab fishermen 

could lead to increases in fishing effort 

in GOA groundfish fisheries, especially 

the Pacific cod fishery, which is the 

primary groundfish target species for 

pot vessels, negatively affecting the 

other participants in those fisheries. 

This concern about spillover effects is 

limited primarily to the GOA where the 

Pacific cod TAC is not allocated among 

gear types. In the BSAI, most of the 

Pacific cod TAC is allocated to vessels 

using longline and trawl gear and LLP 

license restrictions prevent the entry of 

new pot vessels into the BSAI Pacific 

cod fishery, meaning that snow crab 

fishermen who wish to increase their 

groundfish fishing activity would need 

to look primarily to the GOA Pacific cod 

fishery.

The GOA groundfish sideboard 

restrictions would apply to any 

non-AFA crab vessel with a fishing 

history that generated any amount of 

Bering Sea snow crab QS, and to any 

LLP licenses earned in whole or in part 

by the crab fishing history of such 

vessels. Because AFA catcher vessels 

are already subject to sideboard 

restrictions in the GOA under the 

implementing regulations for the AFA, 

no additional restrictions for AFA 

catcher vessels with snow crab history 

are proposed here. Those snow crab 

vessels subject to GOA groundfish 

sideboard restrictions would be limited, 

in the aggregate, from harvesting an 

amount of each GOA groundfish species 

that exceeds the percentage of each 

species that such vessels retained, in the 

aggregate, from 1996 to 2000 relative to 

the total retained catch of each species 

by all groundfish vessels during the 

same period. The sideboard restrictions 

are also apportioned by season and/or 

area for each GOA groundfish TAC that 

is apportioned by season or area.

There are some additional sideboard 

restrictions and exemptions for GOA 

Pacific cod that do not apply to other 

GOA groundfish species. Specifically, 

any vessel subject to GOA groundfish 

sideboards that landed less than 50 mt 

(110,231 lb) of GOA groundfish between 

1996 and 2000 would be prohibited 

from engaging in directed fishing for 

Pacific cod at all times. Additionally, 

any vessel that landed less than 100,000 

pounds (45.4 mt) of Bering Sea snow 

crab and more than 500 mt (1,102,311 

lb) of GOA Pacific cod between 1996 

and 2000 would be exempt from the 

GOA Pacific cod sideboard restrictions. 

NMFS would notify all persons who 

own a vessel or hold a LLP license as 

to whether they are subject to the 

sideboard restrictions by issuing 

amended Federal fisheries permits and 

LLP licenses to each affected vessel 

owner or LLP license holder. The 

amended Federal fisheries permits and 

LLP licenses would display the type of 

sideboard restriction on the face of the 

permit or license.

Arbitration System

The Council developed the 

Arbitration System to compensate for 

complications arising from the creation 

of both QS/IFQ and PQS/IPQ. These 

complications include price 

negotiations that could continue 

indefinitely and result in costly delays, 

and the ‘‘last person standing’’ problem 

where the last parties to contract will 

have a single market for their product or 

service. The Arbitration System is 

designed to alleviate many of the 

concerns arising from the parity of 

supply and demand under the Program. 

If an IPQ holder or IFQ holder were 

unable to reach an agreement on price 

during open negotiations, the 

negotiation approaches prescribed in 

the proposed regulations could be used 

by certain participants to settle their 

disputes. This also encourages more 

efficient negotiations by preventing 

indefinite stalemates.

The Council, along with considerable 

input from the potential participants, 

developed the Arbitration System to 

accommodate the varied interests of the 

parties involved as well as reflect the 

historical negotiations between 

harvesters and processors. The 

Arbitration System identifies the general 

structure of the system and the general 

principles that guide oversight and 

management. It also identifies the roles 

and fundamental standards for the 

63230 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

Market Analyst in developing and 

producing a preseason Market Report 

for each fishery, the Formula Arbitrator 

in developing a single annual fleet-wide 

pricing formula (non-binding price 

formula), the Contract Arbitrators in 

making decisions, and the last best offer 

binding arbitration method as the 

arbitration procedure for participants.

Section 313(j)(6) of the 

Magnuson-Stevens Act, as amended by 

section 801 of Pub. L. 108-199, 

stipulates that the legislation does not 

provide any exemption to the antitrust 

laws. To the extent the Arbitration 

System, as approved by the Council, 

would have permitted actions that put 

the participants at risk of subjecting 

themselves to antitrust liability, the 

Council approved minor changes, 

primarily to address information 

exchanges that could have occurred 

under the Arbitration System as 

originally approved. At its June 2004, 

meeting, the Council adopted changes to 

the Arbitration System for approval by 

January 1, 2005. The Council’s changes 

are in Amendment 19 to the FMP and 

would be implemented by these 

proposed regulations.

Council-Approved Changes to the 

Arbitration System

First, the Council eliminated a 

provision that would have allowed PQS 

or IPQ holders to participate in common 

discussions concerning historical prices 

in the fisheries. The intent of the 

provision was to facilitate the 

development of information about 

historic division of revenues, which is 

one of the primary bases upon which 

the Formula Arbitrator establishes the 

non-binding price formula and upon 

which the Contract Arbitrators will base 

a decision. The only limitation upon 

PQS or IPQ holders was that the 

discussion would be about historical 

prices. The provision, however, could 

have allowed PQS or IPQ holders to 

engage in collective, direct discussions 

regarding pricing information. The 

potential anticompetitive risks 

associated with encouraging 

competitors to discuss pricing 

information, even historical 

information, was too great. There was a 

high probability that competitors could 

move beyond discussions on strictly 

‘‘historical’’ information. Moreover, the 

availability of pricing information 

facilitates collusion, especially when 

the processors will be identified with 

the prices they charge. Further, 

information about historical prices 

could be generated through other 

means, such as information provided to 

the Market Analyst.

Second, the Council adopted changes 

to limit access of parties to an 

arbitration proceeding to information 

provided directly by them to the 

Contract Arbitrator in the proceeding in 

which they participate. The Program 

originally provided all participants in 

an arbitration access to all information 

provided to their Contract Arbitrator, 

which could include information 

provided to other Contract Arbitrators in 

binding arbitration proceedings to assist 

them in reaching decisions. This 

provision could have allowed 

participants to access pricing and other 

competitively sensitive information 

submitted to a Contract Arbitrator by 

every Arbitration IFQ holder and IPQ 

holder during all prior arbitration 

proceedings. Accordingly, it presented a 

serious antitrust risk. Under the 

antitrust immunity provided by the 

FCMA, a crab harvesting cooperative or 

members of a cooperative could share 

sensitive competitive information with 

other members of the same cooperative, 

but the arbitrator would not be the 

person to disseminate such information. 

All participants in an arbitration 

proceeding would be required to sign a 

confidentiality agreement stating they 

would not disclose any information 

received from the Contract Arbitrator.

Third, the Arbitration System 

permitted harvesters to act collectively 

during binding arbitration to the extent 

permitted by the FCMA. The FCMA 

authorizes the establishment of 

cooperatives comprised of fishermen. 

Pursuant to the FCMA, cooperative 

members may freely exchange 

information, agree among themselves on 

the price they will accept for their 

products, bargain jointly and agree on 

the basis for negotiations without 

risking antitrust liability. If the 

cooperative or members of the 

cooperative share sensitive competitive 

information or attempt to collaborate 

with non-member harvesters on any 

issues relating to price or costs, they 

would risk antitrust liability. The 

Council adopted a change to clarify that 

IFQ holders that are members of a 

FCMA crab harvesting cooperative can 

participate collectively as a member of 

that FCMA cooperative in binding 

arbitration and that non-member 

harvesters cannot participate 

collectively with cooperative members 

during the arbitration procedures.

The proposed rule would clearly 

prohibit crab harvesting cooperative 

members from sharing sensitive 

competitive information or any issues 

relating to costs or price or collaborate 

with nonmembers at any stage of the 

arbitration proceedings without risking 

antitrust liability. Moreover, the 

proposed rule would prohibit 

collaboration among members of 

different FCMA cooperatives for 

purposes other than nominating and 

selecting the arbitrators and market 

analysts to avoid behavior that is 

outside the scope of the antitrust 

immunity provided by the FCMA.

Fourth, the Council eliminated a 

provision that required the Market 

Analyst to survey the crab product 

throughout the year and periodically 

publish prices in the crab product 

market. The periodic announcement of 

prices presented a serious antitrust risk 

since it could provide a way of 

matching up prices with individual 

market participants. To the extent the 

information about product prices is 

necessary for the Formula and Contract 

Arbitrators to perform their functions, 

they will have it from other sources. The 

more frequent the periodic price 

updates, the smaller would be the 

number of IFQ and IPQ holders as well 

as distributors or customers generating 

the composite price that was reported. 

Aggregation would have been less 

effective and if market participants 

could know or learn which particular 

IPQ and IFQ holders had completed 

negotiations or arbitrations during a 

particular survey period, then it could 

be difficult to ensure price anonymity.

The announcement of recent prices 

and the lack of anonymity could have 

made it easier for IPQ holders to arrive 

at agreements to set prices and for IPQ 

holders to enforce the agreements. 

Under the proposed rule, the Market 

Analyst would prepare only one annual 

Market Report for each fishery and 

would be prohibited from issuing 

interim or supplemental reports for each 

fishery.

Fifth, the Council changed the 

Arbitration System to limit the 

announcement of the results of each 

arbitration decision as it occurs to an 

IPQ holder and IFQ holders in that 

particular arbitration as well as to IFQ 

holders that are not affiliated and have 

not committed to an IPQ holder and 

who may want to opt-in to a previously 

completed contract. The Program would 

have allowed the public announcement 

of the outcome of each binding 

arbitration proceeding to inform IFQ 

holders with uncommitted IFQ so they 

could decide whether to opt into the 

completed contract. The provision 

raised antitrust concerns. If the results 

of an arbitration decision were 

announced before all binding arbitration 

proceedings were completed, they could 

influence what was asked by the parties 

in a subsequent arbitration, resulting in 

price stabilization. The change allows 

disclosure of all arbitration decisions to 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63231

the Contract Arbitrators and to 

non-affiliated IFQ holders who have not 

committed to an IPQ holder. The parties 

to an arbitration would be required to 

agree to make the terms and conditions 

of the arbitration decision available to 

non-affiliated uncommitted IFQ holders.

Arbitration System Requirements

The Council intended the Arbitration 

System to function as an ‘‘industry-run’’

system with minimal involvement by 

NMFS. The Program establishes a 

structure for the negotiation of price, 

delivery and other contract terms 

between an IPQ holder and IFQ holders. 

It specifies the basic elements of the 

Arbitration System: the standards for 

arbitration; the roles of the Market 

Analyst, Formula Arbitrator and 

Contract Arbitrators; the data available 

to the Market Analyst and Arbitrators; 

restrictions on participation by PQS and 

IPQ holders (processors) and IFQ 

holders that are affiliated with PQS and 

IPQ holders (processor-affiliates); last 

best offer binding arbitration 

procedures; and payment for the system. 

The Program also specifies that 

processor-affiliated shares can 

participate to the extent allowed under 

the antitrust laws and that processors 

can participate individually and not 

collectively, except in the choice of the 

Market Analyst and the Arbitrators. The 

Arbitration System also is mandatory for 

all IPQ and IFQ holders participating in 

the Program.

First, at any time prior to the season 

opening date, IPQ and IFQ holders can 

initiate discussions through open 

negotiations. Open negotiation is 

available to both affiliated and 

non-affiliated IFQ holders and all IPQ 

holders. If they are unable to conclude 

a contract through open negotiations, 

eligible persons, as defined by the 

proposed rule, may use several other 

negotiation approaches to reach 

agreement, including share-matching, 

mediation and binding arbitration 

procedures.

The negotiation approaches and 

Binding Arbitration procedure are 

limited to IPQ holders and Arbitration 

IFQ holders. Under the proposed rule, 

Arbitration IFQ means: (a) Class A CVO 

IFQ held by a person who is not a 

holder of PQS or IPQ and who is not 

affiliated with any holder of PQS or IPQ; 

(b) prior to July 1, 2008, CVC IFQ held 

by a person who is not a holder of PQS 

or IPQ and who is not affiliated with 

any holder of PQS or IPQ that the holder 

has elected to submit to the Arbitration 

System; (c) after July 1, 2008, Class A 

CVC IFQ held by a person who is not 

a holder of PQS or IPQ and is not 

affiliated with any holder of PQS or IPQ; 

and (d) IFQ held by a crab harvesting 

cooperative as long as no member of 

such cooperative holds PQS or IPQ or is 

affiliated with a person who holds PQS 

or IPQ.

Under the proposed rule, the structure 

of the Arbitration System would be 

managed and carried out primarily by 

the participants in the crab fisheries 

through contractual arrangements, with 

NMFS oversight. The proposed rule 

would require that participants in the 

crab fisheries join and maintain 

membership in an Arbitration 

Organization. The persons who are 

eligible to join an Arbitration 

Organization are: (a) holders of CVO and 

CVC QS; (b) holders of PQS; (c) holders 

of Arbitration IFQ, (d) holders of Class 

A IFQ affiliated with a PQS or IPQ 

holder; and (e) holders of IPQ.

While the Program does not require 

the establishment of arbitration 

organizations and membership in such 

organizations, NMFS believes the 

structure is necessary to facilitate the 

industry’s ability to coordinate among 

its members and carry out the Council’s 

intent to establish the Arbitration 

System primarily as an ‘‘industry-run’’

system. This approach also facilitates 

the ability of NMFS to monitor the 

activities of members more efficiently 

and effectively than monitoring 

numerous contracts among unique 

quota holders. NMFS believes industry 

participants will have sufficient interest 

in establishing the arbitration 

organizations, agreeing to the contracts, 

and selecting the Market Analysts, 

Formula Arbitrators and Contract 

Arbitrators necessary for the Arbitration 

System to function. NMFS particularly 

invites public comment on the 

feasibility of basing the structure of the 

Arbitration System upon intra-industry 

contracts.

To minimize antitrust risks, this 

proposed rule would not allow 

harvesters and processors to be 

members of the same Arbitration 

Organization. The proposed rule would 

require that PQS and IPQ holders and 

QS and IFQ holders must be members 

of different arbitration organizations. 

Holders of PQS or IPQ could only be a 

member of a PQS/IPQ Arbitration 

Organization, and they may join 

separate such organizations. Holders of 

QS or IFQ who neither hold nor are 

affiliated with a person who holds PQS 

or IPQ could only be a member of an 

Arbitration QS/IFQ Arbitration 

Organization, and they may join 

separate such organizations. Holders of 

QS or IFQ who are affiliated with a 

person who holds PQS or IPQ could 

only be a member of an Affiliated QS/

IFQ Arbitration Organization, and they 

may join separate such organizations. 

There could be Arbitration 

Organizations comprised solely of 

members who hold QS or IFQ or PQS 

or IPQ.

Under the proposed rule, the 

Arbitration QS/IFQ Arbitration 

Organizations and PQS/IPQ Arbitration 

Organizations would be responsible for 

nominating and mutually selecting 

persons for the positions of Market 

Analyst, Formula Arbitrators, and 

Contract Arbitrators and establishing 

contracts with such persons. The 

contracts would stipulate the functions 

and obligations of those positions 

consistent with the roles and standards 

for the Market Analyst, Formula 

Arbitrator, and Contract Arbitrators, as 

specified by the Program and reflected 

in the proposed rule. They also would 

provide certain information to NMFS. 

All arbitration organizations, among 

other matters, would be responsible for 

ensuring the collection and payment of 

all fees required to fund the Arbitration 

System; providing information to their 

members, such as copies of the contracts 

with the Market Analyst, Formula 

Arbitrator and Contract Arbitrators; and 

enforcing the terms of various contracts 

to which they are a party. The 

Arbitration Organizations would be 

prohibited from engaging in any 

contract negotiations on behalf of their 

members except to the degree necessary 

to hire the Market Analyst, Formula 

Arbitrator, and Contract Arbitrators. 

This is not intended to prohibit the 

members of an Arbitration IFQ 

Arbitration Organization from 

negotiating as a crab harvesting 

cooperative under the FCMA.

Arbitration Standard

Reflecting the economic reality faced 

by both harvesters and processors, the 

Council determined that preserving the 

historical division of revenues in the 

fisheries in order to protect the 

investment and reliance of the 

harvesters and processors should guide 

the Arbitration System. The Program 

requires the Market Analyst, Formula 

Arbitrator and Contract Arbitrators, in 

developing the non-binding price 

formula and deciding an individual 

arbitration, to consider: (1) current 

pricing; (2) consumer and wholesale 

product prices; (3) innovations and 

developments of the different sectors; 

(4) efficiency and productivity of the 

different sectors; (5) quality standards 

for each market; (6) maintaining 

financially healthy and stable harvesting 

and processing sectors; (7) safety; (8) the 

timing and location of deliveries; and 

(9) reasonable underages to avoid 

63232 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

penalties for overharvesting IFQ and 

reasonable deadloss.

Under the proposed rule, the 

Arbitration System would commence 

preseason when the Arbitration QS 

Arbitration Organizations and the PQS 

Arbitration Organizations nominate 

persons for the positions of Market 

Analyst, Formula Arbitrator, and 

Contract Arbitrators. The PQS and QS 

holders, who are members of their 

respective Arbitration Organizations, 

then choose, by mutual agreement, the 

persons for these positions.

NMFS has interpreted ‘‘mutual 

agreement’’ to mean the agreement of 

not less than 50 percent of the PQS 

holders and not less than 50 percent of 

the QS holders in a fishery. This 

standard does not require complete 

consensus, but requires a majority of 

harvesters and processors to agree on 

specific individuals. This approach 

increases the likelihood of the selection 

of Market Analysts, Formula Arbitrators, 

and Contract Arbitrators who are 

acceptable to the majority of 

participants. Because the selection of 

the Market Analyst, Formula Arbitrator, 

and Contract Arbitrators is critical to the 

effective implementation of the 

Arbitration System, the standard for the 

selection process should not be so 

stringent so as to prevent the possibility 

of actually selecting a mutually 

acceptable Market Analyst, Formula 

Arbitrator, and Contract Arbitrators.

To ensure the market analyses and 

pricing formula are available to inform 

all negotiation among the IFQ and IPQ 

holders, the Arbitration QS/IFQ 

Arbitration Organizations and PQS/IPQ 

Arbitration Organizations would 

mutually agree through their contract to 

notify NMFS of the selection of the 

Market Analysts, Formula Arbitrator 

and Contract Arbitrators by June 1 for 

that crab fishing year, except during 

2005, they would be required to notify 

NMFS by July 1, 2005. The proposed 

rule reflects the Program in that the 

same person could be selected as Market 

Analyst and Formula Arbitrator; but the 

Contract Arbitrators could not be the 

same person as the Market Analyst and 

Formula Arbitrator, and could not be 

employed or associated with those 

persons.

Market Report

The Program requires the 

promulgation of a preseason Market 

Report for each crab fishery to help 

inform all negotiations among all IPQ 

and IFQ holders. The Market Report 

would be produced annually by a 

Market Analyst selected jointly by the 

arbitration organizations. It would 

provide an analysis of the market based 

on a survey of the market for crab 

products from that fishery as well as 

information provided by the IPQ and 

IFQ holders.

NMFS recognized the potential 

antitrust risk involved in exchanges of 

cost and price information, and so the 

proposed rule requires that the 

information provided by the 

participants must be historical in nature 

and that the Market Report cannot 

identify which participants provided 

specific information. These 

requirements are consistent with the 

U.S. Department of Justice and Federal 

Trade Commission Statements of 

Antitrust Enforcement Policy in Health 

Care (1966) (Guidelines). The 

Guidelines create an antitrust ‘‘safety 

zone’’ around the exchange of cost and 

price information when (1) the 

collection of the data is managed by a 

third party, including a government 

agency; (2) the information shared is 

based on information more than three 

months old; and (3) there are at least 

five providers reporting data such that 

recipients would be unable to identify 

the prices charged by any particular 

firm. In adhering to the Guidelines, the 

proposed regulations require that the 

IFQ holders and IPQ holders would give 

information directly to the Market 

Analyst and not to any other IPQ holder 

or IFQ holder, except that IFQ holders 

who are members of any single crab 

harvesting cooperative may share such 

information with other members of the 

same crab harvesting cooperative who 

are authorized to participate in the 

Arbitration System, that the information 

provided would be more than three 

months old, and the information and 

data would be aggregated in the report 

so that prices would not be identifiable 

with the person offering the price.

The Market Report could include 

information that is provided through 

surveys, directly from IFQ and IPQ 

holders, and from other sources that 

voluntarily provide data. The Market 

Analyst would not have subpoena 

power to obtain information. The 

Market Analyst could meet with crab 

harvesting cooperative members 

collectively, but would have to meet 

individually with: (a) IPQ holders; (b) 

distinct crab harvesting cooperatives; 

and (c) IFQ holders who are not 

members of the same crab harvesting 

cooperative. The proposed rule 

prohibits the Market Analyst from 

disclosing any information to any 

person except as allowed by the 

requirements of the contract. The 

contract with the Market Analyst would 

specify that the Market Analyst will 

provide the Market Report not later than 

50 days prior to the first crab fishing 

season for that crab QS fishery in that 

crab fishing year to each Arbitration 

Organization in that fishery and NMFS.

Non-binding Price Formula

To further guide the negotiations 

among all IFQ and IPQ holders, the 

proposed rule would mirror the Program 

by requiring the development and 

announcement of a non-binding pricing 

formula. Under the proposed rule, the 

Arbitration QS Arbitration 

Organizations and the PQS Arbitration 

Organizations contract with a Formula 

Arbitrator to develop a non-binding 

price formula. The contract would 

specify that the Formula Arbitrator must 

conduct a single annual fleet-wide 

analysis of arbitrations to establish a 

non-binding pricing formula under 

which a fraction of the weighted average 

first wholesale prices for crab products 

from each fishery may be used to set an 

ex-vessel price. The contract also would 

require that the non-binding price 

formula: (a) must be based upon the 

historical distribution of first wholesale 

revenues between fishermen and 

processors in the aggregate based on 

arm’s length first wholesale prices and 

ex-vessel prices, taking into 

consideration the size of the harvest in 

each year; and (b) must establish a price 

that preserves the historical division of 

revenues in the fishery while 

considering the nine factors described 

in the Arbitration Standard.

The non-binding pricing formula 

would be guided by the general factors 

for the fishery as well as arbitration 

decisions from the previous season. IPQ 

and IFQ holders could furnish relevant 

information and data upon the request 

of the Formula Arbitrator subject to the 

antitrust requirements that the 

information be historical and the 

persons submitting information should 

not be identified as having submitted 

specific information in the report. The 

contract would require the Formula 

Arbitrator to provide the non-binding 

pricing formula not later than 50 days 

prior to the first crab fishing season for 

that crab QS fishery in that crab fishing 

year to each Arbitration Organization in 

that fishery and NMFS.

Open Negotiations

The Program provides that prior to the 

crab fishing season, any IFQ holder can 

negotiate with any IPQ holder on price 

and delivery terms for the upcoming 

season. It allows the IFQ and IPQ 

holders to freely contact each other to 

initiate open negotiations. If they reach 

an agreement on all price and delivery 

terms during the preseason, a binding 

contract would result. Due to the 

limitations of the antitrust laws, IPQ 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63233

holders would be required to negotiate 

individually with IFQ holders, whereas 

IFQ holders who are members of the 

same crab harvesting cooperative can 

negotiate collectively with a single IPQ 

holder. An affiliated IFQ holder could 

negotiate during the open negotiations 

period, but individually, and not as part 

of a crab harvesting cooperative. The 

proposed rule provides the period of 

open negotiations would end at the date 

of the first crab fishing season for that 

crab QS fishery in that crab fishing year. 

In effect, this removes the ability of 

affiliated IFQ holders to negotiate 

contracts once the crab fishing season 

has begun because they cannot use the 

negotiation methods in the Arbitration 

System due to antitrust constraints.

Lengthy Season Approach

Rather than mediate immediately 

during the preseason, the Program 

provides and the proposed rule would 

allow IPQ holders and Arbitration IFQ 

holders to choose to adopt a ‘‘Lengthy 

Season’’ approach and postpone 

negotiation of specific contract terms 

and binding arbitration until during the 

regular season. If the parties reach a 

final agreement on contract terms, 

binding arbitration is not necessary. If 

the parties are unable to reach an 

agreement on whether to adopt a 

Lengthy Season, they could request 

mediation or determine whether to 

adopt the approach. If mediation is 

unsuccessful, the parties enter binding 

arbitration to determine whether to 

adopt a Lengthy Season approach.

Share Matching Approach

To facilitate the ability of Arbitration 

IFQ holders to find IPQ holders with 

available quota, the proposed rule 

implements the Program’s provision for 

a share-matching approach. Under the 

proposed rule, 25 days prior to the date 

of the first crab fishing season for that 

crab QS fishery in that crab fishing year, 

IPQ holders would be required to make 

known to holders of uncommitted 

Arbitration IFQ the amount of IPQ that 

is uncommitted and remains available. 

An uncommitted Arbitration IFQ holder 

could match up its uncommitted IFQ by 

indicating its intention to deliver its 

catch to a specific IPQ holder with 

sufficient available uncommitted IPQ.

The Arbitration IFQ holder must offer 

the IPQ holder a substantial amount of 

the Arbitration IFQ holder’s 

uncommitted IFQ. While the Program 

does not define ‘‘substantial,’’ the 

proposed rule defines ‘‘substantial’’ as 

not less than 50 percent of the 

Arbitration IFQ holder’s total 

uncommitted IFQ in order to prevent 

IPQ holders from potentially 

coordinating countless arbitration 

sessions. After matching, an Arbitration 

IFQ holder and IPQ holder could either 

arbitrate or, at the discretion of both 

parties, try to mediate to determine the 

contract terms. The Program and the 

proposed rule require the IPQ holder to 

accept all proposed matches up to the 

amount of its uncommitted IPQ.

Last Best Offer Binding Arbitration

The centerpiece of the Arbitration 

System is the last best offer binding 

arbitration procedure. It would be 

available to resolve price and delivery 

disputes arising from open negotiations 

among Arbitration IFQ holders and IPQ 

holders, lengthy season approach, share 

matching or performance disputes. 

Specifically, Arbitration IFQ holders 

and IPQ holders would be eligible to 

participate in binding arbitration. As 

with the other negotiation approaches, 

the role of the Contract Arbitrator would 

be specifically detailed in the contracts 

among the Arbitration Organizations 

and the Contract Arbitrator.

In a last best offer arbitration, the 

parties each would submit a last best 

offer defining all the terms specified for 

inclusion in a last best offer by the 

Contract Arbitrator. An Arbitration IFQ 

holder that is a crab harvesting 

cooperative could submit a last best 

offer that defines terms for the delivery 

of crab harvested by members of that 

crab harvesting cooperative with IFQ 

held by the cooperative. The Contract 

Arbitrator would choose one of the last 

best offers for price made by the IPQ 

holder and IFQ holder(s). The 

arbitration organizations’ contract with 

the Contract Arbitrator would require 

that the Contract Arbitrator base the 

decision on specific information, 

including consideration of the factors in 

the Arbitration Standard, the historical 

distribution of first wholesale revenues 

between fishermen and processors, and 

the Market Report. The Contract 

Arbitrator also could use information 

from previous arbitrations, the 

non-binding price formula and other 

information provided to the Contract 

Arbitrator by the parties to the 

arbitration. The Council chose to adopt 

a last best offer arbitration with the 

intent that it would deter parties from 

exaggerating their offers in hopes of 

achieving a more favorable result.

The proposed rule provides that at 

any point more than 15 days prior to the 

date of the first crab fishing season for 

a crab QS fishery, an Arbitration IFQ 

holder or IPQ holder may initiate a 

binding arbitration procedure. Prior to 

the submission of the last best offer, the 

Contract Arbitrator would work with the 

parties to generate the information the 

Contract Arbitrator would require for 

reaching a decision. To minimize 

antitrust risk, the proposed rule reflects 

the Council’s change and provides that 

only the parties to the arbitration and 

the Contract Arbitrators would have 

access to information provided directly 

by the parties to the Contract Arbitrator 

for that particular arbitration. To further 

preclude antitrust risk, the Program and 

the proposed rule require the parties to 

sign a confidentiality agreement 

stipulating they shall not disclose any 

confidential information generated 

during the arbitration proceeding.

To ensure the parties understand their 

obligations as early as possible, the 

Program requires the Contract Arbitrator 

to notify the parties to an arbitration of 

the arbitration decision no later than 10 

days before the season opening date. In 

order to implement that provision, the 

proposed rule requires that if last best 

offers are submitted at least 15 days 

before the first crab fishing season for 

that crab fishing year for that crab QS 

fishery, the Contract Arbitrator must 

issue arbitration decisions no later than 

10 days before the first crab fishing 

season for that crab fishing year for that 

crab QS fishery. In effect, the Contract 

Arbitrator would have 5 days to render 

a decision in order to notify the parties 

10 days before the season opening date. 

The proposed rule provides that in other 

situations, the Contract Arbitrator will 

notify the parties of the arbitration 

decision within 5 days of the parties 

submitting their last best offers.

The proposed rule provides that the 

arbitration decision would result in a 

binding contract between the parties 

that could be enforced by the parties to 

that contract, not NMFS. The parties 

would have to agree to make the 

contract terms available, when 

requested, to Arbitration IFQ holders 

with uncommitted IFQ to enable an IFQ 

holder to determine whether to opt into 

the completed contract. The Contact 

Arbitrator would need to provide this 

information within 5 days of receiving 

the request for that information.

At its June 2004 meeting, the Council 

considered the antitrust risks of sharing 

the arbitration results among IPQ 

holders or affiliated IFQ holders or 

Arbitration IFQ holders that already 

have committed to an IPQ holder. The 

Council agreed that such information 

sharing would raise antitrust concerns 

regarding illicit price stabilization or 

collusion. To the extent IFQ holders are 

members of a crab harvesting 

cooperative under the FCMA, they are 

allowed to share the information with 

other members of the same cooperative 

and set prices with antitrust immunity.

63234 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

However, sharing the results of 

arbitrations with IPQ holders or 

affiliated IFQ holders or Arbitration IFQ 

holders that already committed to an 

IPQ holder and so have no need to 

opt-in could create serious antitrust 

risks. If IPQ holders shared the results 

of completed arbitrations with other 

PQS or IPQ holders, they would risk 

antitrust violations. Without antitrust 

immunity, sharing current pricing 

information could facilitate illicit price 

stabilization or collusion. Also, if IPQ 

holders shared the results of arbitrations 

before all arbitrations were completed, 

an IPQ holder could alter its final offer 

to the Contract Arbitrator to make it 

closer to the price in previous 

arbitrations in a manner similar to what 

would occur if the IPQ holders 

coordinated on prices.

Therefore, the proposed rule allows 

the disclosure of arbitration results only 

to Arbitration IFQ holders that have not 

committed to an IPQ holder so they 

have access to the real-time results of 

completed arbitrations for purposes of 

determining whether to opt-in to a 

completed contract. The information 

would be provided to the Arbitration 

Organization of which the parties the 

arbitration are members in order for the 

Arbitration Organization to make such 

information available to the 

uncommitted Arbitration IFQ holders.

The proposed rule also would require 

the Contractor Arbitrator to provide 

NMFS, among other information, any 

last best offers made during the binding 

arbitration process, including all 

contract details, the names of 

participants in the arbitration, the 

arbitration decision and the completed 

contract. This information is necessary 

for DOJ to carry out its mandate under 

section 313(j)(6) of the 

Magnuson-Stevens Act to determine 

whether any acts of anti-competition, 

antitrust or price collusion have 

occurred among PQS or IPQ holders 

under the Program.

Post Binding Arbitration Opt-In

The post binding arbitration opt-in 

provisions reflect the Council’s belief in 

the efficiency and fairness of the 

arbitration procedure. The proposed 

rule reflects the Program’s opt-in 

provisions. The proposed rule allows a 

holder of uncommitted Arbitration IFQ 

to opt-in to any contract that results 

from a completed arbitration with any 

IPQ holder with available uncommitted 

IPQ. To facilitate the process, the 

Program requires that IPQ holders 

provide information regarding the 

amount of uncommitted IPQ they have 

available. The proposed rule would 

require the arbitration organizations to 

agree in their contract to establish a 

system to ensure access to such 

information by Arbitration IFQ holders 

that have uncommitted IFQ. All the 

same terms from the original contract 

would apply. Once exercised, the opt-in 

is a binding contract.

To initiate the process, the Arbitration 

IFQ holder would notify the IPQ holder 

and the Contract Arbitrator to the 

original contract of its intent to opt-in, 

specifying the amount of IFQ involved, 

and indicating acceptance of the terms 

of the original contract. However, if a 

dispute arose regarding whether the 

opt-in offer was consistent with the 

terms of the completed contract, the 

dispute could be decided by the 

Contract Arbitrator who arbitrated the 

original contract.

Performance and Quality Disputes

Building on the arbitration 

infrastructure, the Program provides 

that performance and quality disputes 

that could not be resolved through 

commercial channels could be 

arbitrated following procedures similar 

to those laid out for binding arbitration. 

The disputes could be raised at any 

point in time prior to the 

commencement of the first crab fishing 

season for the following crab fishing 

year in that crab fishery. Meanwhile, 

when disputes over the quality of the 

harvested crab arise within the context 

of an existing contract, if the parties 

employed a formula-based price, the 

proposed rule provides they each will 

receive their share of the value of the 

amount of crab delivered based on the 

provisions of the contract. When the 

Arbitration IFQ holder prefers to use 

actual ex-vessel price and not a 

formula-based price and a dispute arises 

regarding crab quality and price, the 

dispute should be referred to a mutually 

agreeable independent quality specialist 

firm with both parties sharing the costs.

Payment of Costs for Arbitration

The Program provides that the costs of 

the market analysis and the arbitrators 

must be shared by the two sectors. The 

proposed rule interprets that provision 

to require the costs of the Arbitration 

System to be shared equally by all IPQ 

holders and Arbitration IFQ holders and 

Class A IFQ holders. The costs of the 

system would include all costs of the 

Market Analyst, Formula Arbitrator and 

Contract Arbitrator, dissemination of 

information concerning uncommitted 

IPQ to holders of uncommitted 

Arbitration IFQ, and the costs of such 

person associated with lengthy season 

approach, share matching approach, 

binding arbitration, and quality and 

performance disputes.

The proposed rule requires the 

arbitration organizations to develop a 

system to determine such costs, assess 

them equally among the participants, 

and collect the fees. The proposed rule 

provides that such costs must be shared 

based on the amount of IPQ or IFQ held 

by each person and that the costs must 

be divided so that the IPQ holders pay 

50 percent of the costs and the 

Arbitration IFQ and Class A IFQ holders 

pay 50 percent of the costs. Consistent 

with the Program, PQS holders would 

be required to advance all costs and 

collect the contribution of Class A IFQ 

holders at landing subject to terms 

mutually agreed upon by the arbitration 

organizations.

Monitoring and Catch Weighing 

Requirements for Catcher/Processors, 

Registered Crab Receivers, and Catcher 

Vessels

NMFS has identified three primary 

objectives for monitoring catch in 

rationalized fisheries. First, monitoring 

must ensure independent verification of 

catch weight, species composition, and 

location data for every delivery by a 

catcher vessel or every pot by a CP. 

Second, all catch must be weighed 

accurately. Third, the system must 

provide a verifiable record of the weight 

of each delivery.

To effectively manage the crab 

fisheries, NMFS must have data that 

will provide reliable independent 

estimates of the total catch by quota 

sector for all crab harvested. Because 

participants are operating under their 

own IFQ, they have a strong interest in 

ensuring that catch data do not 

overestimate the amount of crab 

harvested. Based on experience gained 

under other quota-based programs, 

NMFS anticipates estimates of catch 

will be questioned frequently by 

industry. Further, individual harvesters 

and processors would benefit directly if 

catch is under reported because each 

processor or vessel is operating under 

an individual allocation. For these 

reasons, NMFS is proposing a 

catch-weighing system for the crab 

fisheries under this Program that is 

more rigorous than that required in 

non-rationalized fisheries.

In order to implement the Program, 

NMFS proposes new monitoring and 

catch weighing requirements for RCRs 

taking deliveries of crab, catcher vessels 

harvesting crab, and CPs catching and/

or harvesting crab. These proposed new 

requirements are summarized in the 

following table:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63235

TABLE 14—SUMMARY OF MONITORING REQUIREMENTS FOR CRAB FISHERY PARTICIPANTS

Requirement RCR Taking Deliveries of Crab Catcher Vessel Harvesting Crab Catcher Processor Harvesting or 

Processing Crab 

Weigh all retained quota by quota 

category prior to processing.

Yes. On a scale approved by the 

State in which the RCR is located.

No. Yes. On a scale approved by 

NMFS.

Scale testing requirements. Yes. On demand. N/A Yes. Scale must be tested daily 

when use is required.

Printed record of scale weights. Yes. N/A Yes. Printed record of scale 

weights for unprocessed crab as 

well as for processed product.

Operate under an approved catch 

monitoring plan (CMP).

Yes. No. No.

Offload requirements. No. Yes. All offloads must be to an 

RCR. Vessel may not leave RCR 

until reporting of offload is completed.

Yes. All product must be 

offloaded on shore.

Product weighing requirements. No. N/A Yes. All product must be weighed 

on a scale approved by the State 

in which product offload takes 

place.

Vessel Monitoring System (VMS) 

requirements.

N/A Yes. Yes.

Provide Observer work station. No. No. Yes.

Catcher/Processors Catch-Weighing and 

Monitoring Requirements

NMFS proposes to require all crab 

IFQ harvested and processed by CPs be 

weighed at-sea prior to processing. 

These catch weighing requirements 

include the following:

(1) Scales must meet the performance 

and technical requirements specified in 

appendix A to part 679. At this time, 

NMFS has approved scales produced by 

Marel hf and Skanvaegt International A/

S for weighing total catch. Marel hf, 

Skanvaegt International A/S and Pols hf 

manufacture scales that have been 

approved for use by observers.

(2) Each scale must be inspected and 

approved annually by a 

NMFS-approved scale inspector.

(3) Each observer sampling scale must 

be accurate within 0.5 percent when its 

use is required.

(4) The observer sampling scale must 

be accompanied by accurate test weights 

sufficient to test the scale at 10, 25 and 

50 kg or, if the scale is denominated in 

pounds, at 25, 50 and 100 lb.

(5) Each scale used to weigh crab 

must be tested daily. Automatic hopper 

scales must be tested at their minimum 

and maximum capacity using certified 

test weights. Flow scales must be tested 

with no less than 400 kg of fish or other 

test material.

(6) When tested, a flow scale and the 

observer sampling scale must agree 

within 3 percent. An automatic hopper 

scale must be accurate within 2 percent 

when compared with the known weight 

of the certified test weights.

(7) Scales must produce a printed 

record of all crab retained by the vessel. 

This record must be printed no less than 

once every 24 hours when use of the 

scale is required.

In other programs where NMFS 

requires all catch be weighed at-sea, 

NMFS also requires that an observer be 

on duty whenever catch may be 

weighed. Because fishing operations 

occur on a 24 hour basis, this generally 

requires that the vessel carry two 

observers. This is necessary because no 

catch-weighing system is tamper proof 

and NMFS ensures that all catch is 

being weighed by requiring an observer 

to be on duty at all times. This allows 

NMFS to audit the vessel’s reported 

weight of groundfish against the 

observer’s data. However, the crab 

fisheries differ from the groundfish 

fisheries in two important ways. First, 

the final Council motion establishing 

the Program delegated observer coverage 

responsibility to the State of Alaska, 

and, at this time, the State requires CPs 

to provide only a single observer. 

Second, crab are far more valuable per 

pound than groundfish. Thus, while it 

is probably not practical for vessel crew 

to attempt to bypass the scale with 

groundfish, it may be more tempting to 

do so with a comparatively high value 

product such as crab. Because of these 

differences, NMFS believes crab weights 

must be audited at the point of offload. 

This would require a crab CP to offload 

all product shoreside at a designated 

port and weigh that product on a scale 

approved by the State in which the 

offload takes place. These offload 

product-weighing requirements include 

the following:

(1) Offload all product to a shoreside 

location in the United States accessible 

by road service or regularly scheduled 

air service.

(2) Weigh all product on a scale 

approved by the State in which the RCR 

is located, which must be equipped 

with a printer.

(3) Report the total weight of the 

offload to NMFS.

Observer sampling stations provide a 

location where observers can work 

safely and effectively. While the 

Program delegates observer coverage 

requirements to the State of Alaska, 

NMFS believes a quota type program 

necessarily imposes new duties on 

observers because of the increased 

season length and subsequent need to be 

on station more often. In spite of the 

requirements detailed above for full 

accounting of product, observers would 

still play an important role in ensuring 

catch weights are accurately reported. In 

order to facilitate these duties, NMFS is 

proposing to require vessels to provide 

minimal work areas and facilities for the 

63236 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

use of the observer. NMFS proposes to 

require that CPs provide the following 

for observers:

(1) An observer work area for 

sampling unsorted crab. The work area 

must be no less than 6 square meters 

and no less than 1 meter on each side. 

The work area must be located within 

3 meters of where the vessel crew sort 

crab.

(2) An observer work area for 

sampling retained crab. The work area 

must be no less than 1 meter on each 

side. The work area must be located 

downstream from the scale used to 

weigh total catch and upstream from the 

area where crab are processed.

(3) The observer work area for 

sampling retained crab must be 

provided with a NMFS-approved 

motion compensated platform scale 

located within 5 meters of the work 

area. Clear and unobstructed passage 

must be provided between the scale and 

the observer work area. The scale must 

be accompanied with certified test 

weights sufficient to test the scale at 10, 

25 and 50 kg (or 25, 50 and 100 lb if 

scale is denominated in lb). The scale 

may also be used by vessel crew, but 

must be available to the observer at all 

times.

(4) Both observer work areas must be 

protected from extreme weather and 

unusual safety hazards.

(5) Vessel crew may use both observer 

work areas, but the entire area must be 

available to the observer whenever the 

observer is working.

(6) The vessel owner must prepare a 

diagram, drawn to scale, showing the 

location of both observer work areas. 

The diagram must be retained on board 

the vessel whenever the vessel is 

harvesting or processing crab quota.

Registered Crab Receivers 

Catch-Weighing and Monitoring 

Requirements

This proposed rule would establish a 

new catch monitoring system for RCRs. 

The catch management goals established 

by NMFS for the crab fisheries are the 

same for the inshore and offshore 

sectors. However, NMFS does not 

believe the regulations developed for 

CPs are adequate for inshore processors 

and other RCRs for two reasons. First, 

inshore processors vary more in size, 

facilities and layout than do CPs. 

Second, the State is responsible for 

approving scales used for trade within 

the State in which the landing is made 

and has developed an effective program 

for their inspection and approval.

Catch Monitoring Plans

The catch monitoring system 

developed by NMFS for CPs is based on 

a standardized system of round weight 

accounting and offload monitoring. 

Because of the wide variation among 

RCRs, NMFS believes a 

performance-based catch monitoring 

system is more appropriate for this 

sector. Under this system, each RCR 

would be required to submit a Catch 

Monitoring Plan (CMP) to NMFS for 

approval. The CMP would detail how 

the RCR would meet the following 

standards for each location where crab 

would be received:

(1) All crab, including crab parts, and 

dead or otherwise unmarketable crab, 

must be sorted and weighed by quota 

category. The CMP must detail how and 

where crab are sorted and weighed.

(2) Scales used for weighing crab must 

be identified by serial number.

(3) Scales identified in the CMP must 

be accurate within specified limits. For 

each scale identified in a CMP, a testing 

plan must be developed showing how 

the RCR will test the scale, where the 

required test weights are located, and 

what personnel are responsible for scale 

testing.

(4) A printed record of the weight of 

each delivery must be produced. A 

sample copy of the printed record must 

be included in the CMP.

(5) The CMP must designate an 

observation area. The observation area is 

a location where an individual may 

monitor the offloading and weighing of 

crab during a delivery. From the 

observation area, an individual must 

have an unobstructed view or be able 

otherwise to monitor the entire offload 

of crab between the first location where 

crab are removed from the boat and a 

location where all sorting has taken 

place and all quota has been weighed. 

The observation area must be accessible 

to authorized personnel, be sheltered 

from the weather, and not be exposed to 

undue safety hazards.

(6) The CMP must designate a plant 

liaison. The plant liaison is responsible 

for orienting new observers or 

NMFS-authorized personnel to the 

plant, assisting in the resolution of 

NMFS or observer concerns, and 

informing NMFS if changes are made to 

the CMP.

(7) The CMP must be accompanied by 

a scale drawing of the plant showing 

where crab are removed from a 

delivering vessel, the observation area, 

all scales used to weigh crab, and each 

location where crab is sorted.

(8) All offloading and weighing 

locations detailed in the CMP must be 

located on the same vessel or in the 

same geographic location. If a CMP 

describes facilities for the offloading of 

vessels at more than one location it 

must be possible to see all locations 

simultaneously.

Each CMP location would be 

inspected by NMFS or NMFS 

authorized personnel to ensure the 

layout conforms to the elements of the 

plan. A CMP that meets all of the 

standards would be approved by NMFS 

for 1 year, unless during the year 

changes are made in plant operations or 

layout that do not conform to the CMP. 

After 1 year, NMFS would review the 

CMP with plant management to ensure 

the CMP has been implemented and the 

standards continue to be met.

Proposed catch weighing standards 

for CPs are based on the use of scales 

approved by NMFS. Because Federal 

and State scale approval standards 

differ, most NMFS-approved scales are 

not legal for trade in most States and 

most State-approved scales do not meet 

NMFS criteria for inseason testing and 

auditing. NMFS believes the State in 

which the landing is made should be 

the primary authority responsible for 

approving and testing scales located 

onshore or on vessels anchored inside 

the territorial sea and that weighing crab 

delivered inshore on scales approved by 

NMFS is unnecessary. Under existing 

State regulations, crab buyers and 

processors are required to weigh all 

catch that is bought or sold on 

State-approved scales. In most states, 

including Alaska, these scales must be 

inspected annually by State-authorized 

inspectors.However, State regulations 

generally do not provide for inseason 

testing of scales nor do they require that 

scales produce a printed record of each 

delivery. NMFS believes these are 

essential features of an acceptable catch 

weighing system. Therefore, NMFS has 

developed a catch-weighing system that 

implements these additional features 

within the existing framework of State 

scale inspection and approval.

Thus, this proposed rule reflects 

cooperative State and Federal 

development of catch weighing 

requirements for RCRs and includes the 

following provisions:

(1) As described above, each RCR 

would be required to submit a scale 

testing plan as part of its CMP that 

describes the procedure the plant will 

use to test each scale identified in the 

CMP. The testing plan would list the 

test weights and equipment required to 

test the scale, where the test weights 

and equipment are stored, and the 

names of the plant personnel 

responsible for testing the scale. Test 

amounts for various scale types are 

shown in Table 15.

(2) Test weights would have to be 

certified at least biannually by a 

metrology laboratory approved by the 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63237

National Institute of Standards and 

Technology (NIST).

(3) NMFS or NMFS-authorized 

personnel could request that any scale 

be tested in accordance with the testing 

plan, provided the scale had not been 

tested and found accurate within the 

past 24 hours.

(4) Each scale would have to be 

accurate within the limits specified in 

Table 15 when tested by the plant staff.

(5) Each scale used to weigh catch 

must be equipped with a printer to 

provide a printout or printouts showing 

the total weight of each delivery, which 

would have to be generated after each 

delivery had been weighed. The 

printouts must be retained by the plant 

and made available to NMFS-authorized 

personnel, including observers. See 

Tables 15 and 16 for details:

TABLE 15—TEST WEIGHT AND TEST LOAD AMOUNTS THAT WOULD BE REQUIRED TO PERFORM INSEASON TESTING ON

VARIOUS SCALE TYPES AND CAPACITIES

Scale Type Capacity1 Test Weights2 Test Loads3

Automatic Hopper 0 to 150 kg Minimum Weighment1 or 10 kg, 

whichever is greater

Minimum1

Maximum1 Maximum1

Automatic Hopper >150 kg Minimum weighment1 or 10 kg, 

whichever is greater

Minimum1

25 percent of Maximum1 or 150 

kg, whichever is greater

Maximum1

Platform or flatbed 0 to 150 kg 10 kg Not Acceptable

Midpoint

Maximum1

Platform or flatbed >150 kg 10 kg Not Acceptable

12.5 percent of Maximum1 or 75 

kg, whichever is greater

50 percent of Maximum1 or 75 

kg, whichever is greater

25 percent of Maximum1 or 150 

kg, whichever is greater

75 percent of Maximum1 or 150 

kg, whichever is greater

1These amounts will be shown on the scale marking plate.

2Test Weights are weights that have been approved by a NIST-approved laboratory.

3Test load is any combination of approved test weights and other material specified in the scale testing plan. Test material other than test 

weights must be weighed on an accurate observer platform scale at the time of each use.

TABLE 16—PROPOSED MAXIMUM PERMISSIBLE ERRORS FOR INSEASON

SCALE TESTING1

Test Load in Scale 

Divisions2

Maximum Error in 

Scale Divisions 

0-500 1

501-2,000 2

2,001-4,000 3

>4,000 4

1Maximum permissible errors and testing 

procedure for inseason testing are not the 

same as for State scale approval. A scale that 

is accurate for the purposes of inseason testing may or may not be accurate enough to be 

approved by the State. 2Division size is shown on the scale’s marking plate.

Catcher Vessels Catch Monitoring 

Requirements

Under this proposed rule, NMFS is 

not requiring catcher vessels to weigh 

their own catch. Rather, the proposed 

catch-accounting system would be 

based on data received from the RCR. 

Because this is the location where all 

non-CP catch accounting would take 

place, NMFS would require that all crab 

retained by a catcher vessel be landed 

to an RCR. The proposed regulations do 

not make any exceptions for activities 

such as dockside sales or tendering. 

Thus, if a holder of CVO or CVC IFQ 

wished to sell their own catch to the 

general public, the quota holder would 

be required to be an RCR and to conduct 

the offload of crab from the vessel in 

accordance with the requirements 

described above for an RCR.

Interagency Electronic Reporting 

System (IERS)

The RCR would obtain at his or her 

own expense, hardware, software, and 

Internet connectivity to support Internet 

submissions of the crab rationalization 

(CR) crab landing report on the IERS.

IERS application for user ID. Each 

RCR permit holder would submit a dataentry application to the Regional 

Administrator to provide information 

needed to process account access into 

the IERS. The IERS will provide a web 

page where the applicant would enter 

information. The IERS would confirm 

that all required information is 

submitted, that the information entered 

is in correct format, and also that the 

requested user ID is not already in use. 

The IERS would generate a PDF 

document from the information entered 

by the applicant. The user would sign 

and submit the form. An Agency IERS 

staff would review the form, confirm 

that the user should be authorized for 

the system, and would activate the user 

on the IERS. The IERS would then send 

the user(s) an email telling them they 

can now use their new user ID.

CR Crab Landing Report. The CR crab 

landing report (internet version and fax 

version) would be submitted through 

the IERS, which is the result of 

collaboration among NMFS Alaska 

Region, International Pacific Halibut 

Commission, and State of Alaska, 

Department of Fish and Game (ADF&G). 

The CR crab landing report is the first 

step of a complete, unified IERS that 

would be extended in future years to the 

groundfish fisheries, IFQ, and CDQ 

halibut fisheries. This internet report 

would replace the paper ADF&G fish 

ticket for debiting CR crab landings. All 

63238 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

retained CR crab catch would be 

weighed, reported and debited from the 

appropriate IFQ or IPQ account under 

which the catch was harvested or 

received, as appropriate. The IERS is a 

more convenient, accurate, and timely 

method of reporting.

Additionally, the proposed IERS 

would provide continuous access to IFQ 

and IPQ accounts. These provisions 

would make recordkeeping and 

reporting requirements less burdensome 

on participants by allowing participants 

to more efficiently monitor his or her 

accounts and fishing activities.

Catcher/Processor Offload Report

An RCR receiving CR crab that were 

harvested and processed by a CP must 

complete a CP offload report at the time 

of offload and attach a scale printout 

showing gross product offload weight. 

Crab weights must be audited at the 

point of offload. This report would 

allow audit comparisons of catch 

accounting information between the 

vessel’s reported weight of crab with the 

observer’s data.

ECCO Annual Report for an ECC (see 

Approval criteria for an Application for 

Transfer of QS/IFQ to or from an ECCO).

Vessel Monitoring System (VMS) 

Requirements

Under the proposed rule, a vessel that 

harvests crab in the crab fisheries, 

including a vessel harvesting CDQ or 

Adak allocations, would be required to 

have aboard an operating 

NMFS-approved VMS transmitter at any 

time when the vessel has crab gear on 

board. These transmitters automatically 

determine the vessel’s location several 

times per hour using Global Positioning 

System (GPS) satellites and send the 

position information to NMFS via a 

mobile communication service provider. 

The VMS transmitters are designed to be 

tamper-resistant and automatic. The 

vessel owner should be unaware of 

exactly when the unit is transmitting 

and would be unable to alter the signal 

or the time of transmission.

NMFS believes a VMS system is an 

essential component of a rationalized 

crab fishery. A VMS system would 

allow NMFS to verify where fishing is 

taking place and ensure that vessels 

harvesting crab were permitted to do so 

and that harvested IFQ is properly 

debited. A VMS system also allows 

NMFS to track vessels as they arrive in 

port to offload crab or crab product. 

This helps to ensure all landings are 

properly made to an RCR and the 

landing is properly debited from the IFQ 

holder’s account.

NMFS has approved VMS system 

components manufactured by several 

vendors. Additional details concerning 

these VMS components may be found in 

the NMFS’ notice of approval of these 

VMS components published in the 

Federal Register on April 15, 2004 (69 

FR 1986).

Economic Data Collection

The Program includes a 

comprehensive economic data 

collection program to aid the Council 

and NMFS in assessing the success of 

the Program and developing 

amendments necessary to mitigate any 

unintended consequences. The data 

would be used to study the economic 

effects of the Program on harvesters, 

processors, and communities. 

Participation in the data collection 

program would be mandatory for all 

participants in the fisheries.

The Magnuson-Stevens Act authorizes 

a mandatory economic data collection 

system that would provide analysts with 

information necessary to study the 

impacts of the Program and to ensure 

the Program would equitably distribute 

benefits between the harvesting and 

processing sectors and provide a stable 

economic environment. The 

Magnuson-Stevens Act also authorizes 

NMFS to supply economic data to the 

Federal Trade Commission (FTC) and 

the Department of Justice (DOJ) for 

analysis by those agencies. The 

authority to collect a wide variety of 

economic data from both harvesters and 

processors is exclusive to the crab 

fisheries.

Selection and Scope of Work for the 

Data Collection Agent

To address concerns for strict control 

over sensitive economic data, collection 

of economic data would not be 

performed by NMFS but by a third-party 

agent, or Data Collection Agent. NMFS 

has determined the Pacific States 

Marine Fisheries Commission (Pacific 

States) would be the Data Collection 

Agent, although NMFS is authorized to 

select any appropriate entity. NMFS 

would establish the regulatory structure 

for mandatory submission of economic 

data by harvesters and processors. 

Pacific States would establish systems 

for the collection and compilation of the 

data.

Pacific States, in a cooperative 

agreement or another form of a 

procurement agreement with NMFS, 

would be authorized to collect data, 

ensure confidentiality of the data by 

following all statutory and regulatory 

data confidentiality guidelines, and 

release the data to NMFS and other 

authorized users. Among other duties, 

Pacific States, acting as an agent for 

NMFS, would identify submitters, 

forward EDRs to submitters and collect 

the data. Once received, Pacific States 

would act as a storehouse for the data 

and provide it only to authorized users 

and only in authorized form.

In instances where NMFS economists, 

Council staff, or other authorized users 

accessing the data for crab management 

analysis or report purposes request data, 

Pacific States would furnish them but 

eliminate or remove the identifiers for 

the submitter. This would make the data 

‘‘blind’’ to these users. However, if the 

data are requested by NMFS 

Enforcement, NOAA GC, RAM, DOJ, or 

FTC, and the purpose is connected to 

law enforcement or qualification for QS, 

PQS, IFQ, IPQ, and other Federal 

permits, Pacific States would provide 

the data and the identity of the 

submitter.

Pursuant to a procurement agreement 

with NMFS, Pacific States would be 

authorized to establish a method and 

protocol for ensuring accuracy of the 

data submissions. Measures to verify the 

accuracy of the data would include 

consultation with NMFS economists 

and analysts to ascertain anomalies, 

outliers, and other deviations from 

averaged variables. The principle means 

to verify data would be consultation 

between Pacific States staff and the 

submitter when questions arise 

regarding data. To assure timely 

resolution of verification consultations, 

submitters would be required to 

respond to Pacific States inquiries 

within 15 days. Pacific States would 

request oral or written confirmation of 

data submissions and request copies of 

or review documents or statements that 

would substantiate data submissions. 

Data in EDRs would be amended by 

Pacific States in response to submitter 

requests and the results of the follow-up 

verification processes.

EDR audits would occur either 

through random selection or when 

circumstances require more thorough 

review of the submissions. Pacific 

States, in instances where a random 

audit occurs or an audit is otherwise 

justified, would retain a professional 

auditor/accounting specialist who 

would review and request financial 

documents substantiating economic 

data that is questioned. In an instance 

where data cannot be verified or 

concerns resolved by Pacific States, 

NMFS would request referral of the 

matter to the auditor for further 

disposition.

Pacific States would provide support 

for arbitrators for binding arbitration. If 

an arbitrator is involved in price 

determinations for parties to binding 

arbitration, Pacific States would, at the 

request of a binding arbitrator, supply 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63239

detailed revenue, landing, and 

production data to the binding 

arbitrator. The information supplied to 

the arbitrator by Pacific States would be 

aggregated so as to avoid releasing 

confidential information.

Type of Data to Be Submitted

Cost, revenue, production, and 

ownership data would be submitted in 

an EDR. Relevant state and local 

fishing-related taxes would be reported. 

The data would assist in the analysis of 

the variable costs of processors and 

harvesters. Data on fixed costs would 

not be collected unless such data 

informs the analysis of industry variable 

costs. NMFS would require submission 

of data recommended for collection by 

the Council’s data collection committee. 

This committee reviewed NMFS’

economist’s data surveys and proposed 

additional data to be collected. The 

surveys that resulted from the 

committee deliberations are the 

foundation for the EDRs.

To analyze local and regional seafood 

employment, owners and lease holders 

of vessels submitting annual EDRs 

would submit State of Alaska crew 

license numbers and Commercial 

Fisheries Entry Commission permit 

serial numbers of their harvesting and 

processing employees. Additionally, 

identification of number of employees 

or crew, and their home state or country 

would be provided in the EDRs.

There would be two variations of the 

EDRs, an historic EDR and an annual 

EDR. The first would require 

submission of historical-based economic 

data. Historical data would capture 

economic data from 1998 through 2004. 

It would capture pre-Program 

implementation data for comparison to 

the economics of harvesting and 

processing before and after Program 

implementation. The annual EDR would 

capture economic data on an annual 

basis at the conclusion of each calendar 

years’ crab fisheries.

For a crab harvester or CP, the annual 

EDR data collection system is based on 

collection of data relating to costs and 

revenues for a vessel. For crab 

processing entities, the data collection 

system is based on collection of costs 

and revenues for a processing company 

or plant. Processor submitters would 

distinguish data stemming from custom 

processing and business with affiliated 

processors from otherwise standard 

operations data.

The EDR forms would be accessible to 

submitters on the NMFS Alaska Region 

website at www.fakr.noaa.gov. Persons 

may download the form to complete 

manually or may complete it 

electronically on the website. Paper 

copies of the forms would also be 

mailed directly to identified persons. 

Persons would submit the completed 

EDRs to Pacific States.

Who Must Provide an EDR

Participants in the crab fishing 

industry harvesting or processing fish 

under Magnuson-Stevens Act authority 

after enactment of Pub. Law 108-199 on 

January 23, 2004, would submit data in 

the EDR. The members of the crab 

industry include a potentially broad 

range of individuals, corporations, 

partnerships, and other business 

formations. Both owners and lessees of 

fishing vessels and processing 

operations would be responsible for 

submission of the EDR.

Because of the contractual nature of 

leasing vessels or processing operations, 

whether someone has leased a vessel or 

processing operation remains a private 

business matter and not apparent to 

NMFS. To ascertain leasing 

arrangements and determine who is a 

lessee that should submit an EDR, 

NMFS would be requiring the lessors to 

identify his or her lessees in the EDR 

and QS or transfer applications.

Some members of the harvesting and 

processing industry who NMFS has the 

authority to require submission of an 

EDR would not be required to submit an 

annual EDR. Persons who hold QS, such 

as those who hold CPC QS, that do not 

own or lease a vessel, would not be 

required to submit an annual EDR. 

Additionally, harvesters and processors 

of crab not included in the Program, 

such as Norton Sound red king crab, 

would not be obligated to submit annual 

or historic EDRs for that crab.

For catcher vessels owners submitting 

historic data, there would be a sample 

based selection of owners of these 

vessels for submission of any 3 years 

selected between1998 through 2004. 

Catcher vessel owners would not be 

required to submit historical data for all 

years 1998 through 2004 because of the 

extraordinary reporting burden this 

would entail. A notice published in the 

Federal Register would identify each 

vessel selected for submission of catcher 

vessel historical data. The owner or 

lessee of the vessel would be required 

to submit the EDR.

Catcher/processor EDRs would 

consist of one form for annual data and 

one form for historical data and would 

not require submission of both 

‘‘harvester’’ and ‘‘processor’’ EDRs, 

unless, the person owned or leased a 

vessel that also operated as a catcher 

vessel during the specified year. The 

submitter of the historical EDR for a CP 

would be the owner or lessee of a vessel 

that made at least one landing of crab 

in the years 1998, 2001, or 2004, as 

there is an insufficient number of CPs to 

apply a sample based selection 

submission requirement.

For shore-side and stationary floating 

processors, the submitter of the EDR 

would be the owner or lessee of a 

processing company consisting of one or 

more fish processing plants. For 

processors, the submission of the EDR is 

required if they qualified for or received 

QS, PQS, IFQ, or IPQ. Data would be 

reported for individual plants owned by 

the submitter. For historical data 

submissions, owners or lessees of 

processing companies processing crab 

in 1998, 2001, or 2004, and who would 

be participating in the Program, would 

be required to submit these data in the 

EDR.

NMFS has determined that there are 

persons that do have historic data from 

the years 1998 to 2004 that would not 

be required to submit an EDR. The effect 

of eliminating this historical data on the 

18 month and 3 year review of Program 

is not possible to determine at this time, 

but would be better understood at the 

conclusion of the verification process 

for historical EDR data.

The owner or lessee of the fishing 

vessel or processing company required 

to submit the EDR may appoint a 

contact individual, who on his or her 

behalf, would respond to inquiries and 

verification processes from Pacific 

States regarding data and the EDR.

Because EDR submission is 

mandatory, NMFS must ensure there are 

compliance incentives. In addition to 

incentives to avoid enforcement actions, 

another incentive would be to withhold 

issuance or transfer of IPQ, PQS, IFQ, or 

QS should a submitter fail to submit an 

EDR. For example, if a prior year’s EDR 

is not submitted by a crab IFQ applicant 

who was obligated to submit the EDR, 

the permit application would be 

considered incomplete by NMFS, the 

permit application denied and an IAD 

issued setting forth the facts, a 

discussion and determination. Upon 

issuance of the IAD, NMFS may 

withhold issuance of any new IFQ or 

IPQ and disapprove any transfer of IFQ, 

IPQ, and/or QS, PQS to or from a permit 

holder until final agency action. An 

aggrieved permit or transfer applicant 

could appeal an IAD through the Office 

of Administrative Appeals (OAA) in 

NMFS as described at § 680.43. An IAD 

that is not appealed within 60 days of 

issuance of the OAA, would become a 

final agency action. To facilitate NMFS’

determination of whether an application 

is complete by virtue of completion of 

a prior years’ EDR, Pacific States would 

inform NMFS of the status of EDR 

submissions. If the application was 

63240 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

otherwise complete, NMFS would 

provide the permit for IFQ or IPQ once 

the submitter files the EDR with Pacific 

States.

Submission Deadlines for EDRs

Submission deadlines for both 

historical and annual EDRs would 

correspond with availability of the data 

to the submitters, providing sufficient 

time for preparation, and providing 

NMFS with sufficient time to prepare 

reports based on the data for Program 

review. NMFS would require an annual 

EDR be submitted each year on or before 

May 1, encompassing the previous 

calendar year. An EDR for historical 

data would be submitted no later than 

60 days after the effective date of the 

final rule. The EDR for catcher vessel 

historic data would be required to be 

submitted within 60 days of publication 

of a Federal Register notice identifying 

vessels that must submit historic data to 

Pacific States.

DOJ/FTC Review of the Program

Section 313(j)(6) of the 

Magnuson-Stevens Act states there is no 

waiver of the anti-trust laws of the 

United States for persons receiving PQS. 

Anti-trust laws include the Sherman 

Act, (15 U.S.C. sec. 1, et seq.), the 

Clayton Act, (15 U.S.C. sec 12, et seq.), 

and the Federal Trade Commission Act 

(15 U.S.C. sec. 41, et seq.). The Federal 

anti-trust laws are enforced by criminal 

and civil enforcement actions brought 

by the Antitrust Division of the DOJ, 

and civil enforcement actions brought 

by the FTC.

Although the Program proposes caps 

and limitations on the accumulation 

and holding of PQS, there remains 

potential for consolidations resulting in 

anti-competitive conduct or price 

collusion. To the extent possible 

through information collectible in the 

Program and to reduce the potential for 

violations of the anti-trust laws and 

related concerns, the Program would 

provide for review of processor activity 

by DOJ, or FTC. This information would 

assist analysis of consolidations and 

market impacts of processor activities.

Pursuant to section 313(j)(6) of the 

Magnuson-Stevens Act, NMFS has 

consulted with DOJ and FTC to develop 

and implement a system for accessing 

data and information DOJ and FTC have 

identified as helpful to them. In general, 

access to collected information in the 

Program would shorten investigation 

time by DOJ or FTC and possibly lead 

to earlier detection of anti-competitive 

conduct. Access to the information 

would be for the perpetuity of the 

Program. Should DOJ and FTC require 

additional information in the future, 

NMFS would take appropriate actions to 

provide for its collection to the extent 

authorized under the Magnuson-Stevens 

Act.

To assist determination of whether 

anti-competitive conduct, price 

collusion, or violations of the anti-trust 

law exist, the Program, principally 

through memorandums of 

understanding and administrative 

precesses, would authorize and allow 

access to data and information to DOJ or 

FTC. When either DOJ or FTC request 

information held by NMFS or any 

NMFS agent, access to it would not be 

conditioned or restricted, and access 

would be contemporaneous with the 

request, or provided routinely through a 

data report. For example, Pacific States, 

who would be a NMFS agent for 

collection of economic data from 

members of the crab harvesting and 

processing industry, would provide DOJ 

and FTC access to these data. DOJ and 

FTC would also have access to the 

identity of the submitters of the data 

both for the economic data and any 

other information held by NMFS or its 

agents.

The information that would be 

available to DOJ and FTC includes the 

following: all data submitted in EDRs by 

any submitter, including catcher vessel 

owners and lessees, and all varieties of 

processors, including owners and 

lessees of processing entities. All QS 

holder information would be accessible 

by DOJ or FTC. This includes 

information required by and provided in 

permit applications, transfer of QS , and 

related forms submitted to RAM. If an 

application requires submission of a 

copy of a contract for sale of QS or a 

permit for annual issuance of IFQ or 

IPQ, a copy of such contract could be 

accessed by DOJ or FTC.

Cost Recovery and Fee Collection

Section 304(d)(2)(A) of the 

Magnuson-Stevens Act requires the 

Secretary to ‘‘collect a fee to recover the 

actual costs directly related to the 

management and enforcement of 

any...individual fishing quota program 

[or] community development quota 

program.’’ As a quota program, the 

Program must follow the statutory 

provisions set forth by section 304(d) 

and section 313(j) of the 

Magnuson-Stevens Act.

Paragraphs 304(d)(2)(B) and (C) of the 

Magnuson-Stevens Act specify an upper 

limit on fees, when the fees must be 

collected, and where the fees must be 

deposited. Section 303(d)(4) of the 

Magnuson-Stevens Act allows NMFS to 

reserve up to 25 percent of the fees 

collected for use in a loan program to 

aid in financing the purchase of quota 

by entry-level and small-vessel 

fishermen.

The Magnuson-Stevens Act specifies 

the following with respect to the 

imposition of cost-recovery fees:

(1) Fees are collected to recover actual 

costs directly related to actual 

enforcement and management of an 

individual fishing quota program or 

community development quota program 

that allocates a percentage of the total 

allowable catch of a fishery to such 

program;

(2) Fees must not exceed 3 percent of 

ex-vessel value;

(3) Fees collected under this program 

are in addition to any other fees charged 

under the Magnuson-Stevens Act;

(4) With the exception of money 

reserved for the loan program, fees must 

be deposited in the Limited Access 

System Administrative Fund (LASAF) 

in the U.S. Treasury; and

(5) Fees must be collected at either the 

time of a legal landing of harvested fish, 

filing of a landing report, or the sale of 

such fish during a fishing season or in 

the last quarter of the calendar year in 

which the fish are harvested.

Section 313(j) of the 

Magnuson-Stevens Act provides that the 

Secretary will approve a cost recovery 

program for the Program, conducted in 

accordance with the existing halibut 

and sablefish cost recovery program. 

Similar to the halibut and sablefish cost 

recovery program, the Crab 

Rationalization cost recovery program 

would allow for the collection of actual 

management and enforcement costs up 

to 3 percent of ex-vessel gross revenues 

and a loan program based on 25 percent 

of the fees collected.

Section 313(j) provides several 

additional provisions specific to the cost 

recovery program to accommodate the 

processing component of the Program 

and to address problems experienced 

under the halibut and sablefish cost 

recovery program. Unique to Crab 

Rationalization, the Council authorized 

the collection of 133 percent of actual 

costs of management, which would 

provide for fuller reimbursement of the 

management and enforcement costs of 

the program after allocation of 25 

percent of the cost recovery to the loan 

program. Additionally, the Council 

provided that cost recovery fees would 

be paid in equal shares by the 

harvesting and processing sectors and 

that CPs, being a combination of both 

sectors, would pay the full fee 

percentage.

Cost Recovery Program Description

NMFS developed the cost recovery 

program in conformance with statutory 

requirements and to provide for partial 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63241

compensation to the agency for the 

added costs of management and 

enforcement of the Program. Key 

provisions of the cost recovery program 

include (1) a new definition and 

application of ‘‘fee liability,’’ (2) the 

establishment of an RCR permit system 

to streamline management and 

reporting, (3) the establishment of a 

‘‘crab fishing year’’ for biological and 

administrative purposes, and (4) a new 

administrative process that requires the 

collection and submission of fees by 

RCRs rather than requiring separate 

billings for each individual crab 

rationalized allocation (crab allocation) 

holder. The crab allocations include 

IFQ, Crew IFQ, IPQ, CDQ, and the Adak 

community allocation. This system 

would impose less of an administrative 

burden on the industry as a whole, 

provide more efficiency in the agency 

administrative process, and reduce the 

overall cost of managing the Program.

Generally, any crab allocation holder 

would incur a cost recovery fee liability 

for every pound of crab landed in the 

crab fisheries. The RCR permit holder 

would be responsible for collecting any 

fee liability for the crab allocation 

holder landing crab and self-collecting 

any fee liability for all crab landed at 

that facility. Under a CDQ or the Adak 

community allocation, the harvester 

delivering the crab on behalf of the 

community entity to the RCR would be 

responsible for paying the harvester 

share of the fee liability at the time of 

landing to the RCR. The RCR permit 

holder would be responsible for 

submitting this payment to NMFS on or 

before the due date of July 31 following 

the crab fishing year in which payment 

for the crab was made. The dollar 

amount of the fee due would be 

determined by multiplying the fee 

percentage (not to exceed 3 percent) by 

the ex-vessel value of crab debited from 

the allocation.

Registered Crab Receiver

NMFS determined the need for a focal 

point for landing crab to ensure proper 

monitoring and enforcement of the 

rationalized fishery. Subsequently, 

NMFS determined that, under the 

Program, it must identify and receive 

reporting from all entities that receive 

and/or process crab. As a result, NMFS 

concluded that all persons who receive 

and/or process crab must apply for and 

possess an RCR permit before receiving 

any crab. This designation would ensure 

that all processors who receive crab, 

whether or not they possess IPQ, would 

be responsible for any fee liabilities 

associated with any crab received by 

those processors.

Fee Percentage

Three percent of the ex-vessel value of 

crab harvested under a quota program is 

the maximum fee amount allowed by 

section 304(d)(2)(B) of the 

Magnuson-Stevens Act. This proposed 

rule would set a 3 percent fee at the start 

of each crab fishing year, but would 

allow the Regional Administrator to 

reduce the fee percentage if actual 

management and enforcement costs 

could be recovered by using a smaller 

percentage. NMFS recognizes that in 

order for fishermen to budget their 

costs, they need to know the fee 

percentage that would apply to any crab 

deducted from a crab allocation in a 

crab fishing year at the time of sale. 

Based on preliminary calculations, 

NMFS expects that 3 percent of 

ex-vessel value would not cover the 

management and enforcement costs of 

the Program. NMFS proposes to begin 

the cost recovery program by using the 

maximum of 3 percent and, if possible, 

adjusting the fee downward in the 

following season. The fee percentage 

calculation adjusts for overpayment of 

the management and enforcement costs 

through a variable that considers the 

balance in the LASAF account.

Calculating Ex-vessel Value

The ex-vessel value of a crab landing 

would equal the sum of all payments of 

monetary worth made to fishermen for 

the sale of crab (e.g., ex-vessel value = 

cash payment + bait discount from 

processor + bonus). This would include 

any retro-payments (e.g., bonuses, 

delayed partial payments, post-season 

payments) made to any crab allocation 

holder for previously received crab. 

Retro-payments would be part of the 

ex-vessel value and, as such, carry a fee 

liability. The fee liability for 

retro-payments would be based on the 

crab fee percentage in effect at the time 

the crab was received by the RCR. If 

crab allocation holders receive 

retro-payments after the initial payment, 

but during the same crab fishing year, 

the cost recovery fee for those 

retro-payments would be due by the 

following July 31. If retro-payments 

were received by crab allocation holders 

during the year following the crab 

fishing year when those crab were 

landed, cost recovery fees associated 

with those post-season retro-payments 

would be due the following July 31. In 

other words, no matter when the crab 

was received by the RCR, the cost 

recovery fee would be due by July 31 of 

the crab fishing year following the crab 

fishing year in which payment was 

received.

Ex-vessel Value

Throughout this section, ‘‘value’’

refers to the worth, in U.S. dollars, of 

any amount of crab as determined by 

the sale, or potential economic return 

for the sale, of those crab. ‘‘Value’’ shall 

also include any money, services, or 

goods-in-kind exchanged for crab. 

‘‘Price’’ is the worth in U.S. dollars, for 

1 lb (0.45 kg) of crab debited from any 

allocation. Therefore, in this context, 

value and price mean the same thing 

only when describing the worth of 1 lb 

(0.45 kg) of crab when sold. For 

purposes of determining cost recovery 

fees, NMFS would distinguish between 

two types of ex-vessel values: 

‘‘shoreside ex-vessel value’’ and ‘‘CP 

ex-vessel value.’’ Shoreside ex-vessel 

value would be the amount of money an 

RCR permit holder paid for any crab he 

or she received. As explained below, 

this proposed rule would establish CP 

ex-vessel values to accommodate the 

special conditions for CPs who conduct 

processing on board the vessel.

Shoreside Processor Ex-vessel Value

For the shoreside processing sector, 

NMFS would define ex-vessel value as 

the value paid by the RCR to the 

allocation holder at the time of receipt. 

Shoreside RCR permit holders would 

calculate and retain both the harvesting 

and processing sector’s fee liability 

portions for any crab debited from an 

allocation based on the value paid for 

that crab. This method of determining 

ex-vessel value for the shoreside 

processing sector requires no prior 

calculation of ex-vessel value by NMFS 

because the shoreside processors would 

determine the ex-vessel value at the 

time they receive the crab from the 

allocation holder. Shoreside processors 

would pay the actual ex-vessel value, 

which they would also use to calculate 

fee liability.

CP Ex-vessel Value

For the CP sector, NMFS would 

calculate the ex-vessel value based on a 

weighted average of previous years’

shoreside ex-vessel values. This method 

correlates with an existing method used 

to calculate standard prices under the 

halibut and sablefish IFQ program. 

NMFS determined that using the 

weighted average method for CPs 

represents the method best suited for 

achieving both equity and accurate 

accounting for the CP sector. Based on 

the information received through the 

electronic reporting system, NMFS 

would annually calculate and publish in 

the Federal Register a list of CP 

standard prices broken down by crab 

species, month, and port or port group.

63242 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

The CP standard prices would remain 

in effect until changed by the Regional 

Administrator through publication in 

the Federal Register the following year. 

The Regional Administrator would 

revise the CP standard prices annually 

based on information regarding current 

volume and value provided by RCRs 

operating as shoreside processors. The 

CP standard prices would be calculated 

by NMFS to reflect as accurately as 

practical the seasonal and regional 

variations in the shoreside ex-vessel 

prices of crab.

The information that would be 

reviewed by the Regional Administrator 

to determine CP standard prices would 

include the following: (1) Landed 

pounds by crab species, port or 

port-group, and date; (2) Total ex-vessel 

value by species, port or port-group, and 

date; and (3) Price adjustments based on 

retro-payments.

Fee Liability

Under this proposed rule, NMFS 

would identify the crab cost recovery 

fee liability as the total fee owed by a 

crab allocation holder based on the 

applicable period’s fee percentage and 

the ex-vessel value for the crab species, 

as calculated according to 

§ 680.44(a)(2)(ii), including any 

retro-payments, penalties, or interest. 

Fee liability would be calculated by 

multiplying the fee percentage by the 

ex-vessel value of the crab. For example, 

a crab allocation holder who lands 10 

pounds (4.54 kg) of crab at an ex-vessel 

price of $1 a pound under a fee 

percentage of 3 percent is subject to and 

must pay a fee of $0.03 for that crab.

A fee liability would attach to any 

crab debited from an allocation during 

a crab fishing year. By using the 

‘‘debited’’ designation rather than the 

term ‘‘landed,’’ NMFS created a more 

specific method of ensuring that RCRs 

properly apply fee liability to crab. The 

use of the term ‘‘landed’’ contradicts 

Council intent to avoid imposing fees on 

forfeited or confiscated crab. Although 

deadloss must be debited from 

allocations by statute and thus be 

subject to crab cost recovery fee 

liability, the ex-vessel value of deadloss 

would most likely be $0 and would 

result in no fees.

Fee Liability Calculation. The fee 

amount would be the product (in U.S. 

dollars) of multiplying the appropriate 

ex-vessel value by the fee percentage 

(up to 3 percent). The RCR permit 

holder would document the calculations 

of fees based on applicable ex-vessel 

values through the electronic reporting 

system provided by NMFS. The 

following example shows how an RCR 

permit holder would calculate fee 

liabilities.

Example of Ex-vessel Value 

Determination. A crab allocation 

fisherman makes a landing of Bristol 

Bay red king crab at Dutch Harbor in 

February that results in a debit of 1,000 

lb (0.35 mt) from his or her allocation 

(1,000 raw crab pounds). He or she sells 

all the crab to a shoreside processor for 

$1.00 per pound. If the fee percentage is 

3 percent, then a shoreside RCR who 

receives the crab would deduct $.015 for 

each pound of crab received from what 

he or she pays the allocation holder who 

landed the crab. The RCR would be 

responsible for an additional $.015 for 

each pound of crab received after 

payment to the allocation holder for a 

total of $.03 on every $1.00 of crab, or 

3 percent. On the other hand, a CP 

would be responsible for the full 3 

percent from the same landing of crab. 

The RCR would determine the ex-vessel 

value as follows:

(Raw Crab Pounds Sold × Price per crab lb) 

× Fee Percentage = allocation or RCR Permit 

Holder Fee

CP: (1,000 IFQ lb × $1.00/IFQ lb) × 0.03 = 

$30.00

Shoreside Processor: (1,000 IFQ lb × $1.00/

IFQ lb) × 0.015 = $15.00

Allocation Harvester: (1,000 IFQ lb × $1.00/

IFQ lb) × 0.015 = $15.00

Fishing Year

NMFS determined the need for a 

‘‘crab fishing year’’ to accommodate 

biological and administrative 

requirements of the crab fishery. The 

proposed crab fishing year would run 

from July 1 to June 30 to support 

molting and mating requirements for 

crab, required biological surveys, the 

State’s calculation of the TAC, and 

Federal administrative application and 

permitting requirements. The proposed 

rule would require all RCRs to submit 

all fee liabilities and any associated 

documentation by July 31 of the 

following crab fishing year.

Payment Submission

Instead of a billing system similar to 

the halibut and sablefish IFQ program, 

this proposed rule would require all 

RCRs to retain, document, and submit 

all fee liabilities for themselves and any 

crab allocation holders from which they 

receive crab. NMFS determined that this 

method provides the highest degree of 

administrative efficiency with the 

lowest burden on the affected public. 

Under this method, NMFS would 

establish the fee percentage for the 

pending year based on a calculation 

similar to that used under the halibut 

and sablefish model. NMFS would 

publish the fee percentage calculation in 

the Federal Register prior to fishing for 

the pending crab fishing year. All RCRs 

would apply that fee percentage to any 

crab they receive or process during the 

period in which the fee percentage 

applies.

RCR permit holders must collect all 

fee liabilities for any crab received and 

debited from a crab allocation 

throughout the fishing year and submit 

those fees by July 31 of the following 

crab fishing year. Early payments would 

be allowed but would not relieve an 

RCR permit holder from any associated 

reporting requirements.

Payment Compliance

An RCR permit holder who has 

incurred a fee liability would be 

required to pay the fee to NMFS by July 

31 of the year following the crab fishing 

year in which the applicable crab was 

debited from a crab allocation and 

payment was made. The issuance of 

new permits would be contingent on an 

RCR’s submission of his or her full fee 

liability as indicated by his or her own 

reporting. NMFS would provide due 

process under an administrative appeals 

system similar to that of the halibut and 

sablefish IFQ program for any RCRs who 

choose to challenge any dispute 

regarding fee liability based on the RCRs 

own submitted data. However, no 

permit would be issued until his or her 

full fee liability is received or there is 

final agency action resolved in favor of 

the RCR. Furthermore, any RCR that 

fraudulently submits required 

information regarding cost recovery fee 

collection would face an enforcement 

action under the prohibitions for this 

section.

If an RCR permit holder has made a 

timely payment to NMFS of any amount 

less than the fee liability indicated by 

the RCR permit holder’s own reporting, 

the RCR permit holder has the burden 

of demonstrating the fee amount 

submitted is correct. If, upon 

preliminary review of the accuracy and 

completeness of a fee payment, NMFS 

determines the RCR permit holder has 

not paid a sufficient amount, NMFS 

would, at any time thereafter, send an 

IAD to the RCR permit holder. The IAD 

would present the facts, explain those 

facts within the context of the relevant 

agency policies and regulations, and 

make a determination as to the 

appropriate disposition of the matter. In 

the IAD, NMFS would explain that the 

RCR permit holder’s estimated fee 

liability failed to correspond with the 

RCR permit holder’s own reporting and 

would provide the correct fee liability 

due as calculated from the RCR permit 

holder’s own reporting. Upon issuance 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63243

of an IAD, NMFS may withhold 

issuance of any new IFQ, IPQ, or RCR 

permit and disapprove any transfer of 

IFQ, IPQ, PQS, and/or QS to or from the 

RCR permit holder until final agency 

action is taken. An aggrieved RCR 

permit holder could appeal an IAD 

through the OAA as described at 

§ 679.43. An IAD that is not appealed to 

the OAA within 60 days of issuance in 

NMFS would become a final agency 

action.

Upon final agency action, the RCR 

would remain subject to several 

conditions. If the final agency action 

determines the RCR permit holder owes 

additional fees and if the RCR permit 

holder has not paid such fees, no new 

RCR, IFQ, or IPQ permit(s) would be 

issued to the RCR permit holder for the 

current or subsequent crab fishing years 

until the required payment is received 

by NMFS. Additionally, the RCR permit 

holder would continue to be restricted 

from transferring or receiving by transfer 

any PQS, QS, IFQ or IPQ. An RCR 

permit holder could pay, under protest, 

the disputed fee difference in order to 

avoid permit restrictions. If NMFS does 

not receive the required payment within 

30 days of the issuance of the final 

agency action, NMFS would refer the 

matter to the appropriate authorities 

within the U.S. Treasury for purposes of 

collection.

Limited Access System Administrative 

Fund (LASAF)

Most of the fees collected would be 

deposited in the LASAF established in 

the U.S. Treasury. Up to 25 percent 

could be deposited separately in the 

U.S. Treasury and made available to 

cover the costs of the loan program, as 

required by sections 304(d)(2)(C) and 

313(j) of the Magnuson-Stevens Act. 

Separate accounts would be created 

within the LASAF to ensure that NMFS 

would use funds from the Program’s 

cost recovery only to pay for the costs 

directly related to the management and 

enforcement of the Program, and not 

other limited access programs.

Community Development Quota Fee 

Provisions

Section 304(d)(2)(A) of the 

Magnuson-Stevens Act requires the 

Secretary to collect a fee to recover the 

actual costs directly related to the 

management and enforcement of any 

community development quota 

program. Community development 

quota programs under the Program 

include those CDQ allocations 

established under section 305(i). 

Additionally, Magnuson-Stevens Act 

section 313(j) requires the Secretary to 

collect a fee to recover the actual costs 

directly related to the management and 

enforcement of the Adak community 

allocation. NMFS and ADF&G believe 

there would be increased management 

and enforcement costs associated with 

the CDQ and Adak community 

allocations under the Program. 

Therefore, all fee liability provisions 

would apply equally to any allocation of 

crab regardless of its designation under 

the Program.

Section 305(i)(3), requires the 

Secretary to deduct the costs incurred 

by participants in a community 

development quota program for observer 

and reporting requirements that are in 

addition to observer and reporting 

requirements of other participants in the 

fishery from any fees collected under 

section 304(d)(2). ADF&G confirmed its 

intention to manage the Adak 

community allocation similar to a CDQ 

allocation under its management 

authority. ADF&G also stated it does not 

intend to impose any observer and 

reporting requirements for the 

community allocations beyond those 

required for any other allocation under 

the Program. Therefore, no deductible 

costs would exist for any community 

development quota program under this 

Program. This allows for a uniform and 

administratively simple fee calculation 

and payment system for the entire cost 

recovery program.

Annual Report

NMFS would publish an annual 

report on the performance of the cost 

recovery program. The annual report, 

which could be included with other 

reports on the performance of the 

Program, would provide information 

regarding the amount of the fees 

received by NMFS, the disposition of 

the fees, the status of the Program’s 

account in the LASAF, and the Program 

costs for the previous year.

Section 679.5 Recordkeeping and 

Reporting (R&R)

In § 679.5, paragraph (a)(7)(i) would 

be revised by adding a new paragraph 

(a)(7)(i)(B) to describe the added fishing 

activities of shoreside processors and 

stationary floating processors (SFPs) of 

‘‘purchase or arrange to purchase’’ and 

by redesignating (a)(7)(i)(B) through (E) 

as (a)(7)(i)(C) through (i)(F), 

respectively. Newly redesignated 

paragraph (a)(7)(i)(C) would be revised 

by removing reference to shoreside 

processors and SFPs.

The longline and pot gear daily 

fishing logbook (DFL) and longline and 

pot gear daily cumulative production 

logbook (DCPL) would be revised for 

use by the operator on crab catcher 

vessels of all lengths and on all crab 

CPs. In § 679.5, paragraph (C)(1) would 

be revised to include crab numbers, crab 

weight in pounds, and Federal crab 

vessel permit number.

In § 679.5, regulations for the product 

transfer report (PTR), as well as the PTR 

form, would be revised so the PTR 

could also be used to document 

shipments of crab managed under 50 

CFR part 680. Paragraph (g)(1) would be 

revised by splitting the paragraph into 

three subparagraphs. Paragraph (g)(1)(i) 

would describe PTR requirements when 

documenting shipments of groundfish. 

The operator of a mothership or CP or 

the manager of a shoreside processor or 

SFP is responsible for the PTR. 

Paragraph (g)(1)(ii) would describe PTR 

requirements when documenting 

shipments of IFQ halibut, IFQ sablefish, 

and CDQ halibut. The Registered Buyer 

is responsible for the PTR. Paragraph 

(g)(1)(iii) would describe new PTR 

requirements when documenting 

shipments of crab. The RCR would be 

responsible for the PTR.

The requirements for the receiver of 

fish to submit a PTR would be removed 

from § 679.5(g). The NOAA Fisheries 

Office for Law Enforcement (OLE) has 

determined that it is no longer necessary 

for a receiver to submit a PTR. 

Therefore, only shipments of fish would 

be documented on a PTR.

In § 679.5, a new heading, 

‘‘Exceptions’’ would be added as new 

paragraph (g)(2). Paragraphs (g)(1)(i) 

through (iii) and (g)(1)(v) and (vi) would 

be redesignated as (g)(2)(i) through (v), 

respectively. Paragraph (g)(1)(iv) would 

be removed because the requirement for 

receivers to submit a PTR is removed. 

Newly redesignated paragraph (g)(2)(i) 

‘‘Bait sales (non-IFQ groundfish only)’’

would be revised to clarify the 

requirement. Newly redesignated 

paragraph (g)(2)(ii) ‘‘Retail sales’’ would 

be revised to create paragraphs (g)(ii)(A) 

and (ii)(B). Paragraph (g)(ii)(A) would 

address existing requirements for retail 

sales of IFQ halibut, IFQ sablefish, CDQ 

halibut, and non-IFQ groundfish. 

Paragraph (g)(ii)(B) would add new 

requirements for retail sales of crab. 

Newly redesignated paragraph (g)(iv)(A) 

‘‘Dockside sales’’ would be revised by 

removing ‘‘IFQ fish’’ and adding in its 

place ‘‘IFQ halibut and IFQ sablefish.’’

Newly redesignated paragraph (g)(v) 

‘‘Transfer directly from the landing site 

to a processing facility ...’’ would be 

revised to include shipment of crab. 

Paragraph (g)(v)(A) would address the 

current IFQ landing report receipt 

requirements for CDQ halibut, IFQ 

halibut, and IFQ sablefish. Paragraph 

(g)(v)(B) would describe new 

requirements for crab landing report 

receipt. Paragraphs (g)(v)(A) and 

63244 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(g)(v)(B) would further be revised by 

removing ‘‘(Internet or transaction 

terminal receipt)’’ and by adding in its 

place ‘‘(Internet receipt).’’ Paragraphs 

(g)(v)(C) and (g)(v)(D) would be revised 

to include the crab landing report 

receipt.

Newly redesignated paragraph (g)(3) 

would be revised to include 

requirements for an RCR. Paragraph 

(g)(3)(iii) would be revised to remove 

‘‘ensure ... a revised PTR is submitted’’

and would be replaced by ‘‘submit a 

revised PTR.’’

The heading of newly redesignated 

paragraph (g)(4) would be revised by 

removing ‘‘general information’’ and by 

adding in its place ‘‘required 

information.’’ Paragraph (g)(4) would be 

revised to include requirements for an 

RCR. Paragraph (g)(4)(i) would be 

revised. The OLE has determined that a 

confirmation number documenting 

receipt of a PTR by NMFS would be 

beneficial to record tracking. The 

fishermen would submit the PTR to 

OLE, who would return by e-mail the 

confirmation number for each PTR 

submitted.

The vessel activity report (VAR) 

would be revised for use by the operator 

on crab vessels required to obtain a 

Federal Crab Fishing Vessel permit. 

Section 679.5(k) would be revised to 

require a catcher vessel of any length 

that is required to obtain a Federal Crab 

Fishing Vessel permit that has fish, fish 

products, shellfish, or shellfish products 

to submit a VAR prior to crossing the 

seaward boundary of the EEZ off Alaska 

or the U.S.-Canadian international 

boundary between Alaska and British 

Columbia.

Use of the ATM terminals for 

submitting IFQ landing reports for IFQ 

halibut, IFQ sablefish, and CDQ halibut 

would be removed, because ATM 

terminals and associated printers have 

become obsolete, in fact have not been 

manufactured since 2001. It is no longer 

possible to obtain new units or parts for 

existing terminals or ribbons for the 

printers.

Internet and ATMs are completely 

different technologies, that require 

entirely separate software to run them. 

NMFS Alaska Region can no longer 

afford staff resources to maintain two 

electronic reporting systems for IFQ 

halibut, CDQ halibut, and IFQ sablefish.

Internet is easier and more convenient 

for constituents to use and less prone to 

result in incorrect account. Users would 

have a larger screen with which to 

review all data at the same time and 

make corrections before submitting as 

compared with the small LED display 

for ATMs. Another advantage of the 

Internet is the fact that users won’t have 

to upgrade every time software changes. 

Internet use costs are relatively low. 

There would be no NMFS telephone 

charges or equipment maintenance. 

Because IFQ fees are charged for NMFS 

program costs, user fees may well be 

lower when ATMs are no longer used.

All of NMFS Alaska Region reporting 

within the next 1–2 years is planned to 

be via an Internet- based interagency 

electronic ‘‘fish ticket’’ or ‘‘shared 

reporting system’’ with the State of 

Alaska and International Pacific Halibut 

Commission. The ATMs are obsolete 

when compared with this envisioned 

new system.

NMFS Alaska Region introduced use 

of an Internet alternative for IFQ landing 

reports in June 2002. In 2004, 97 percent 

of reports were submitted electronically, 

and of all reports, 84 percent were made 

using the Internet system. In 2004 to 

date, all but 12 of the locations from 

which landings were filed have used the 

Internet at least once, indicating that 

almost everyone has the capability to 

use the Internet. However, since 1995, 

NMFS Alaska Region has offered a 

limited-use manual backup system for 

those persons who are unable to report 

electronically.

In § 679.5, text referring to the ATM 

terminal would be removed from 

paragraphs (l)(2)(iii)(M), (l)(2)(iv), 

(l)(2)(iv)(A), (l)(2)(iv)(C), and 

(l)(2)(iv)(D). In addition, the Federal 

Fisheries Permit application would be 

revised to remove references to the ATM 

terminal.

In § 679.5(l), two of the existing IFQ 

forms would be revised for use by the 

operator on crab vessels of any length 

required to obtain a Federal Crab 

Fishing Vessel permit: Paragraph (l)(3) 

would be revised to require a 

transshipment authorization from an 

OLE clearance officer prior to crab or 

crab products being transferred between 

vessels.

In § 679.5, paragraph (l)(4) would be 

revised to require the RCR to submit a 

Departure Report prior to departing the 

waters of the EEZ adjacent to the 

jurisdictional waters of the State of 

Alaska, the territorial sea of the State of 

Alaska, or the internal waters of the 

State of Alaska when crab are on board.

In § 679.28, paragraph (f)(4)(i) would 

be changed by adding the requirements 

to enter the Federal crab vessel permit 

number to the VMS check-in report and 

by removing outdated text ‘‘and 

approximately when and where the 

vessel began fishing.’’ Removal of this 

outdated text would align the 

regulations at § 679.28 with NMFS’

current VMS policy.

A new Table 13 to part 679—Transfer 

Form Summary—would be added. This 

table previously occurred in the 

regulatory text at § 679.5(a)(15) as an 

intext table. Table 13 would be revised 

to include paperwork requirements for 

crab transfers. In Section 679, paragraph 

(a)(15) would be revised to reference 

Table 13.

Table 14a to part 679—Port of 

Landing Codes, Alaska—and Table 14b 

to part 679—Port of Landing Codes, 

Non-Alaska—would be indicated for use 

by crab participants completing 

paperwork requirements. Table 14b 

would be revised by moving the port of 

Olympia from the state of Oregon and 

placing it under the state of Washington. 

Table 14c At-sea Operation Type Codes 

would be added for use by crab 

participants.

Table 15 to part 679—Gear Codes, 

Descriptions, and Use—would be 

indicated for use by crab participants 

completing paperwork requirements. 

Table 15 would be revised by adding a 

column for crab and indicating pot gear.

Part 680 would have nine tables to 

support the regulatory text. Table 1 to 

Part 680—Crab Rationalized (CR) 

Fisheries—presents the crab species that 

are included in the Crab Rationalization 

Program and areas where each crab 

species occurs. The coordinates for each 

area are given in latitude and longitude. 

A 3-digit alphabetic code is given for 

each combination of crab species and 

area.

Table 2 to Part 680—Crab Species 

Codes—presents 3-digit numeric species 

codes for the crab species that occur in 

the EEZ off the coast of Alaska. Both 

common names and Latin names are 

provided.

Table 3a to Part 680—Crab Delivery 

Condition Codes—presents codes to 

represent the condition of the shellfish 

at the point it is weighed and recorded 

on an ADF&G fish ticket.

Table 3b to Part 680—Crab 

Disposition or Product Codes—presents 

codes to represent the product that was 

made from the crab or whether the crab 

was used for personal use.

Table 4 to Part 680—Crab Process 

Codes—presents codes to represent the 

process used to create the crab product.

Table 5 to Part 680—Crab Size—

presents codes to represent the size of 

crab product.

Table 6 to Part 680—Crab Grade—

presents codes to represent quality of 

crab product.

Table 7 to Part 680—Eligibility for 

Initial Issuance of Crab QS by Crab QS 

Fishery—presents the qualifying years 

for CVO and CPO QS, the qualifying 

years for CVC and CPC QS, recent 

participation seasons for CVC and CPC 

QS, and subsets of qualifying years that 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63245

can be used to calculate QS for each QS 

fishery.

Table 8 to Part 680—Initial QS and 

PQS Pool for each Crab QS Fishery—

presents the initial QS pool for the eight 

crab QS fisheries.

Table 9 to Part 680—Eligibility for 

Initial Issuance of Crab PQS by Crab QS 

Fishery—presents for each crab QS 

fishery, the qualifying periods used to 

determine the allocation of PQS.

Classification

The Magnuson-Stevens Act mandates 

that NMFS approve Amendment 18 to 

the FMP by January 1, 2005. At this 

time, NMFS has not determined that 

Amendment 19 and the provisions in 

this rule that would implement 

Amendments 18 and 19 are consistent 

with the national standards of the 

Magnuson-Stevens Act and other 

applicable laws. NMFS, in making the 

determination that this proposed rule is 

consistent, will take into account the 

data, views, and comments received 

during the comment period (see DATES).

A Regulatory Impact Review (RIR) 

was prepared to assess all costs and 

benefits of available regulatory 

alternatives. The RIR considers all 

quantitative and qualitative measures. 

The Program was chosen based on those 

measures that maximize net benefits to 

affected participants in the BSAI crab 

fisheries. Additionally, a draft initial 

regulatory flexibility analysis (IRFA) 

was prepared that describes the impact 

this proposed rule would have on small 

entities. Copies of the RIR/draft IRFA 

prepared for this proposed rule are 

available from NMFS (see ADDRESSES).

The complete IRFA includes the draft 

IRFA and this preamble document. The 

IRFA describes in detail the reasons 

why this action is being proposed, 

describes the objectives and legal basis 

for the proposed rule, and discusses 

both small and non-small regulated 

entities to adequately characterize the 

fishery participants. Section 313(j) of 

the Magnuson-Stevens Act provides the 

legal basis for the proposed rule, namely 

to achieve the objective of reducing 

excessive fishing capacity and ending 

the race for fish under the current 

management strategy for commercial 

fishing vessels operating in the BSAI 

crab fisheries. By ending the race for 

fish, NMFS expects the proposed action 

to increase resource conservation, 

improve economic efficiency, and 

address social concerns.

The IRFA contains a description and 

estimate of the number of small entities 

to which the proposed rule would 

apply. Approximately 236 entities own 

crab harvest vessels that are directly 

regulated under the alternatives 

considered. Of those entities, 223 are 

small entities because they either 

generated 3.5 million or less in gross 

revenue, based on participation in 1998, 

1999, or 2000, or they are independent 

entities not affiliated with a processor 

that would increase the entities average 

revenue above the small business size 

standards. Thirteen of the entities 

(owning 38 vessels) are considered 

non-small entities. NMFS requests 

public comment on which small 

business size standard is appropriate for 

catcher processors: the catcher vessel 

size standard or the processor size 

standard (see ADDRESSES).

A total of 134 entities made at least 

one crab landing from 1991 to 2000, but 

do not appear to qualify for an initial 

allocation of QS. Five of these entities 

are not small entities and 129 qualify as 

‘‘small’’ by SBA standards. The 

non-small entities owned a total of nine 

catcher vessels. The small entities 

owned a total of 155 catcher vessels and 

one CP. By and large, vessels that do not 

qualify for the Program either left the 

fishery or currently fish under interim 

LLP licenses. Moreover, the vessels the 

IRFA considers ‘‘non-qualified’’ could 

not or would not be allowed to continue 

fishing under the current LLP. The 

impacts to the small entities that would 

be prohibited from fishing by the LLP 

were analyzed in the RIR/IRFA and 

FRFA prepared for the LLP. Therefore, 

the non-qualified vessels are not 

considered impacted by the proposed 

rule and are not discussed in this IRFA.

Eight small entities and nine 

non-small entities appear to qualify for 

processor allocations based on 

participation during 1998 and 1999. 

These totals exclude CPs, which are 

included in the vessel discussion. The 

nine inshore processors are considered 

non-small entities because they appear 

to exceed the ‘‘500 or more employees’’

threshold when all their affiliates, 

worldwide, are included. The nine large 

processing entities owned 28 separate 

crab processing facilities, and the eight 

small processing entities owned 10 

plants. Forty-three small processing 

entities (owning 50 plants) appear not to 

qualify for initial PQS allocations.

Thirteen communities could be 

directly impacted by the regionalization 

provisions under consideration. The 

overall impact on communities cannot 

be determined until NMFS makes all of 

the allocations of processing shares. At 

a minimum, St. Paul, St. George, Adak, 

Akutan, Dutch Harbor, King Cove, False 

Pass, Ninilchik, Homer, Port Moller, 

Cordova, and Kodiak possess recorded 

landings in the crab fisheries under any 

of the alternatives. The communities 

where these processors are located 

would all be considered small 

government jurisdictions. Each of the 

communities have populations well 

under the 50,000 limit for consideration 

as a small entity.

Other supporting businesses may also 

be indirectly affected by this action if it 

leads to fewer vessels participating in 

the fishery. These impacts are treated in 

the RIR prepared for this action (see 

ADDRESSES).

The Council considered an extensive 

and elaborate series of alternatives, 

options, and suboptions as it designed 

and evaluated the potential for 

rationalization of the BSAI crab 

fisheries, including the ‘‘no action’’

alternative. The RIR presents the 

complete set of alternatives, in various 

combinations with the complex suite of 

options. The EIS presents four 

alternative programs for management of 

the BSAI crab fisheries, namely, Status 

Quo/No Action (Alternative 1); the Crab 

Rationalization Program (Alternative 2); 

an Individual Fisherman’s Quota (IFQ) 

Program (Alternative 3); and a 

Cooperative Program (Alternative 4). 

These alternatives constitute the suite of 

‘‘significant alternatives’’, under the 

proposed action, for RFA purposes. 

Each is addressed briefly below. Please 

refer to the EIS and its appendices for 

more detail (see ADDRESSES). The 

following is a summary of the contents 

of those more extensive analyses, 

specifically focusing on the aspects 

which pertain to small entities.

Under the status quo, the BSAI crab 

fisheries have followed the well known 

pattern associated with managed open 

access. Enticed by the prospect of 

capturing 100 percent of the benefits, 

while externalizing all but a very small 

‘‘common’’ share of the cost of an 

individual fishing decision (i.e., no 

enforceable ownership rights to ration 

access) these BSAI crab fisheries have 

been characterized by ‘‘race-for-fish’’, 

capital stuffing behavior, excessive risk 

taking, and a dissipation of potential 

rents. In the face of substantial stock 

declines, participants in these fisheries 

are confronted by significant surplus 

capacity (in both the harvesting and 

processing sectors), financial distress 

(for some, failure), and widespread 

economic instability, all contributing to 

resource conservation and management 

difficulties.

In response to worsening biological, 

economic, social, and structural 

conditions in many of the BSAI crab 

fisheries, the Council found that the 

status quo management structure was 

causing significant adverse impacts to 

the participants in these fisheries, as 

well as the communities that depend on 

these fisheries. As indicated in the 

63246 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

IRFA, many small entities, as defined 

under RFA, are negatively impacted 

under current managed open access 

rules. The management tools in the 

existing FMP (e.g., time/area restriction, 

LLP, pot limits) do not provide 

managers with the ability to effectively 

solve these problems, thereby making 

Magnuson-Stevens Act goals difficult to 

achieve and forcing reevaluation of the 

existing FMP.

In an effort to alleviate the problems 

caused by excess capacity and the race 

for fish, the Council determined that the 

institution of some form of 

rationalization program is needed to 

improve crab fisheries management in 

accordance with the Magnuson-Stevens 

Act.

The IFQ alternative would, as the 

name implies, allocate individual shares 

of the crab TAC to harvesters, imparting 

a ‘‘quasi-private property interest’’ (i.e. 

a transferrable access privilege) in a 

share of the TAC, thus removing the 

undesirable ‘‘common property’’

attributes of the status quo on qualifying 

harvesters. The rationalization of the 

BSAI crab fisheries would likely benefit 

the approximately 223 businesses that 

own harvest vessels and are considered 

small entities. In recent years these 

entities have competed in the race to 

fish against larger businesses. The IFQ 

alternative would allow these operators 

to slow their rate of fishing and give 

more attention to efficiency. Some of 

these operations and the vessels they 

use could be negatively impacted if the 

allocations they qualify for are small 

and cannot be fished economically. The 

participants, however, would be 

permitted to lease or sell their 

allocations, and could obtain some 

return from their allocations. 

Differences in efficiency implications of 

rationalization by business size cannot 

be predicted. Some participants believe 

that smaller vessels could be more 

efficient than larger vessels in a 

rationalized fishery because a vessel 

only needs to be large enough to harvest 

the IFQ. Conversely, under open access, 

a vessel has to be large enough to out 

compete the other fishermen and, 

hence, the overcapacity problems under 

the race for fish. If that is true, it is 

possible that some of the smaller 

participants in the fishery could 

increase their activity (by purchasing or 

leasing QS/IFQ) in a rationalized 

fishery.

However, the IFQ alternative would 

fail to protect the economic and social 

interests of other participants, also 

dependent on these crab fisheries, 

namely, processor and community 

entities. As the analysis in the RIR 

demonstrates, while harvesters clearly 

benefit, the IFQ alternative likely would 

increase the negative economic impacts 

relative to status quo on processor and 

community small entities. Specifically, 

as discussed in the RIR and SIA, 

harvesters may deliver crab to new 

processors in locations with more access 

to the outside world, forcing the closing 

of processing facilities in remote areas, 

such as Saint Paul, Saint George, and 

Unalaska/Dutch Harbor.

The Cooperative alternative yields 

many of the positive economic, social, 

and structural results cited above for the 

IFQ alternative. In addition, however, 

the Cooperative alternative holds out 

the promise of providing efficiency 

gains to both small entity harvesters and 

the processors. Data on cost and 

operating structure within each sector 

are unavailable, so a quantitative 

evaluation of the size and distribution of 

these gains, accruing to each sector 

under this management regime, cannot 

be provided. Nonetheless, it appears 

that the Cooperative alternative offers 

all of the same ‘‘improvements’’ over the 

status quo as does the IFQ alternative 

(e.g, institution of 

‘‘rights-based-management’’ structure, 

reduction in uncertainty) while 

including another of the populations of 

participants the Council expressed 

explicit concern about protecting, in its 

problem statement and objectives for 

this action (i.e., crab processors). While, 

on the basis of available information, 

the Cooperative alternative appears to 

minimize negative economic impacts on 

small entities to a greater extent than 

does an IFQ alternative, and both appear 

to minimize negative economic impacts 

compared to the Status Quo, it is 

apparent, on the basis of the EIS and 

RIR analyses, that the Cooperative 

alternative does not extend the benefits 

of rationalization to the third population 

of small entities, fishery dependent 

communities.

After an exhaustive public process, 

spanning several years, the Council 

concluded that the Program best 

accomplishes the stated objectives 

articulated in the problem statement 

and applicable statutes, and minimizes 

to the extent practicable adverse 

economic impacts on the universe of 

directly regulated small entities. This 

proposed rule would implement the 

Program.

The Program makes three separate 

allocations; one to the harvest sector, 

one to the processing sector, and one to 

defined regions. All three allocations are 

based on historic participation to 

protect investment in and reliance on 

the fisheries. Harvesters would receive 

harvest allocations, processors would 

receive processing allocations, and 

regions would receive allocations of 

landings and processing activity. These 

three separate allocations are also 

intended to mitigate the negative effects 

of the transition from a regulated open 

access race-for-fish to rationalized 

fisheries, burdens which tend to fall 

most heavily on small entities.

The competing interests of harvesters 

and processors, many of which are 

small entities, are balanced by allocating 

different portions of the total harvest to 

the two sectors. Harvesters would be 

allocated harvest shares for 100 percent 

of the TAC, minus the community 

allocations. Processors would be 

allocated processing shares for 90 

percent of the TAC. To ensure 

corresponding allocations to the two 

sectors, 90 percent of the harvest 

allocation is allocated as Class A IFQ 

that require delivery to a processor that 

holds IPQ. The remaining 10 percent 

would be Class B IFQ shares that can be 

delivered to any processor. Under the 

Program, harvesters (many of whom, as 

noted, are small entities) would be 

permitted to form cooperatives to 

achieve efficiencies and reduce 

transaction costs through the 

coordination of harvest activities and 

deliveries to processors.

Small harvester entities that receive 

allocations large enough to support their 

participation could benefit from not 

needing to participate in the race for 

fish, as with the IFQ alternative. The 

portion of the fishery allocated as Class 

B IFQ, also known as open delivery IFQ, 

would also impact the effects of the 

Program on small harvesters, since Class 

B IFQ are likely to provide harvesters 

with additional power in their delivery 

negotiations with processors.

Small processors appear to have been 

exiting the crab fishery in recent years 

as the harvest levels have declined and 

seasons have been compressed. The 

proposed rule would allocate PQS to 

processors that participated in the 

fishery in either 1998 or 1999. ‘‘Small’’

processors that plan to enter or reenter 

the crab fisheries (but did not 

participate during the qualifying years) 

would be allowed to process crab 

harvested with Class B IFQ and CDQ 

crab. Class B IFQ and CDQ crab would 

provide a mechanism for small 

processors to enter the fishery without 

large capital outlays to purchase PQS or 

IPQ. Class B IFQ, however, would 

reduce the allocation of PQS to the 

small and large processors that qualify 

for the Program. Class B IFQ therefore 

may negatively impact small processors, 

if they are unable to compete with large 

processors in the market place for the 

Class B IFQ.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63247

To resolve impasses in price 

negotiations, a potentially crippling 

occurrence for the smaller operators, the 

Program would include a mandatory 

binding arbitration program for the 

settlement of price disputes between 

harvesters and processors. Historically, 

prices have been settled by protracted, 

often contentious negotiations, from 

time to time resulting in harvesters 

delaying fishing (i.e., strikes), which can 

be detrimental to all concerned. An 

effective system of binding arbitration 

could protect the interests of both 

sectors in negotiations, while avoiding 

costly delays in fishing due to strikes.

A number of small governmental 

jurisdictions would be directly 

regulated by, and therefore could be 

impacted by, this proposed rule. All 

communities benefitting from these 

special provisions of the proposed rule 

are ‘‘small’’, under SBA criteria. 

Community interests have been 

explicitly considered in the Program, 

and special provisions have been 

included to minimize (to the extent 

practicable) adverse impacts on these 

small entities. Under these provisions 

the degree of protection would likely 

vary community-to-community.

The allocation to regions is 

accomplished by regionally designating 

all Class A IFQ (delivery restricted) and 

all corresponding IPQ. In most fisheries, 

regionalized IFQ and IPQ are either 

North or South, with North IFQ 

designated for delivery in areas on the 

Bering Sea north of 56°20′ north latitude 

and South IFQ designated for any other 

areas, including Kodiak and other areas 

on the Gulf of Alaska. IFQ and IPQ 

designations are based on the historic 

location of the landings and processing 

that gave rise to the shares. The 

proposed rule would also increase the 

allocation of crab to CDQ groups from 

7.5 percent to 10 percent, providing 

additional aid to the 65 CDQ 

communities (all small entities).

Community processing requirements 

in the first two years of the Program and 

ROFR would benefit communities with 

history supporting initial allocations 

and are intended to protect community 

interests. The ROFR provisions are 

likely to benefit communities that are 

more capable of exercising the right. 

Under the more general regional 

protection, processing activity could 

move between communities in a region. 

This is likely to benefit those 

communities able to attract additional 

processing activity from other 

communities in the region and harm 

communities that processing activity 

leaves. IPQ caps would benefit 

communities able to attract processing 

in years of high total harvest. 

Additionally, CDQ groups would be 

able to purchase QS and PQS to increase 

their participation in the BSAI crab 

fisheries above the CDQ allocation.

The proposed rule also contains 

several additional measures to protect 

various interests. Eligible crew would 

receive 3 percent of the initial allocation 

of QS. Sideboards would limit the 

activity of crab vessels in other fisheries 

(such as the GOA groundfish fisheries) 

to protect participants in those fisheries 

from a possible influx of activity that 

could arise from vessels that exit the 

crab fisheries, or are able to time 

activities to increase participation in 

other fisheries. While these benefactors 

of this provision are not directly 

regulated, and therefore not counted 

among the entities addressed in this 

IRFA, they are predominantly small 

entities.

Fish taxes would likely be 

redistributed with any redistribution of 

processing activity. In addition, the 

provision of support services and 

associated sales taxes would likely be 

redistributed to some extent by 

redistribution of landings in a 

rationalized fishery. Increased efficiency 

in the fisheries arising from the Program 

could reduce the demand for support 

services, impacting sales tax revenues, if 

the fleet is able to reduce their overall 

costs. These impacts may occur in large 

and small communities. Since the 

redistribution of activity and the 

increased efficiency cannot be predicted 

these effects cannot be fully 

characterized. Additional analysis of 

community impacts is contained in the 

Social Impact Analysis, EIS Appendix 3 

(see ADDRESSES).

Implementation of the proposed rule 

would change the overall reporting 

structure and recordkeeping 

requirements of the participants in the 

BSAI crab fisheries. Under the 

statutorily mandated proposed rule, all 

participants would be required to 

provide additional reporting. Each 

harvester would be required to track 

harvests to avoid exceeding his or her 

allocation. As in other North Pacific 

rationalized fisheries, processors would 

provide catch recording data to 

managers to monitor harvest of 

allocations. Processors would be 

required to record deliveries and 

processing activities to aid in the 

Program administration.

NMFS would be required to develop 

new databases to monitor harvesting 

and processing allocations. These 

changes could require the development 

of new reporting systems. The costs of 

NMFS’ monitoring of the fisheries 

would be passed to participants through 

the cost recovery program.

To participate in the Program, persons 

would be required to complete 

application forms, transfer forms, EDR 

forms, reporting requirements, and other 

collections-of-information. These the 

forms are either required by the 

Magnuson-Stevens Act or required for 

the administration of the Program. 

These forms impose costs on small 

entities in gathering the required 

information and completing the forms.

We have estimated the costs of 

complying with the reporting 

requirements based on the burden hours 

per response, number of responses per 

year, and a standard estimate of $25 per 

burden hour (except the estimate for the 

EDR forms is $100 per burden hour). 

Persons would be required to complete 

most of the forms at the start of the 

Program, like applications for initial 

issuance of QS/PQS and the historic 

EDR. Persons would be required to 

complete some forms every year, like 

applications for IFQ/IPQ and annual 

EDRs. Participation in the binding 

arbitration program would be also be 

annual. Additionally, reporting would 

be completed more frequently.

The proposed rule also includes a 

comprehensive data collection program, 

which would require participants to 

submit detailed economic data 

concerning their participation in these 

fisheries. The data collection program is 

intended to provide managers with 

better information concerning the 

fisheries to aid in management and to 

limit negative unintended consequences 

arising from management decisions. 

Under the required data collection 

program, NMFS minimized the cost and 

time burden associated with the data 

collection components by breaking 

down the program into specific forms 

directed at specific segments of the 

fishery. Although most participants 

collect data similar to that which would 

be collected by the data collection 

program for making business decisions, 

the data collection program could 

impose additional recordkeeping 

requirements on participants in the 

fisheries. The detailed level of data 

required would likely require some 

additional data compilation and 

reporting beyond the status quo. 

Professional assistance, such as 

accounting services, are likely to be 

necessary for most participants to 

comply with these requirements. NMFS 

estimates that it would cost small 

entities that hold CVO QS and PQS 

approximately $1,503 to complete the 

historic EDR and an additional $1,503 to 

complete the annual EDR every year. It 

would cost small entities that hold CPO 

QS $2,503 to complete each EDR 

63248 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

because they would report both 

harvesting and processing information.

It would cost participants in the 

Program $56 to complete applications to 

receive an initial allocation of QS and 

PQS, $55 for the annual application for 

IFQ and PQS, $61 to complete the 

one-time application to be eligible to 

receive transfers, and $61 to complete a 

transfer application. Additionally, it 

would cost processors who intend to 

process crab $16 to complete an RCR 

permit application. It would cost an 

ECCO $64 to complete the Application 

to Become an ECCO and $54 to 

complete the Application to Transfer 

Crab QS/IFQ to or from the ECCO. 

Additionally, it would cost an ECCO 

$206 to complete the required annual 

report.

Congress directed the implementation 

of much of the proposed Program 

through statute. To the extent that the 

statute allowed flexibility, NMFS 

considered multiple alternatives to 

effectively implement specific 

provisions within the proposed Program 

through regulation. In each instance, 

NMFS attempted to impose the least 

burden on the public, including the 

small entities subject to the Program.

The CR crab landing report (internet 

version and optional fax version) would 

be used to debit crab landings. All 

retained crab catch must be weighed, 

reported, and debited from the 

appropriate IFQ account under which 

the catch was harvested and IPQ 

account under which the catch was 

processed. Under recordkeeping and 

reporting, NMFS considered the options 

of a paper based reporting system or an 

electronic reporting system. NMFS 

chose to implement an electronic 

reporting system as a more convenient, 

accurate, and timely method of 

reporting. Additionally, the proposed 

electronic reporting system would 

provide continuous access to IFQ and 

IPQ accounts. These provisions would 

make recordkeeping and reporting 

requirements less burdensome on 

participants by allowing participants to 

more efficiently monitor their accounts 

and fishing activities. NMFS recognizes 

that participants in the current fishery 

might be more comfortable with the 

paper based fish ticket system, but 

believes that the added benefits of the 

electronic reporting system outweigh 

any benefits of the paper based system. 

However, NMFS would also provide an 

optional lower tech backup using 

existing telecommunication and paper 

based methods, which would reduce the 

burden on small entities in more remote 

areas possessing less electronic 

infrastructure.

As an IFQ system, the 

Magnuson-Stevens Act requires NMFS 

to collect cost recovery fees associated 

with the monitoring and enforcement of 

the proposed Program. The fees would 

be charged to harvesters and processors 

based on the amount of IFQ and IPQ 

used by each IFQ and IPQ holder. The 

initial amount of the fee would be 3 

percent of the ex-vessel value of each 

fishery. We can not calculate the actual 

amount of the fee for each fishery in 

each year because we can not predict 

the future TACs or future ex-vessel 

values. NMFS considered options that 

included: (1) collection and payment 

individually by harvesters and 

processors under a billing system, and 

(2) collection of fees from the harvester 

by the processor and self-collection of 

processor fees under an annual fee 

submission process. NMFS determined 

that the collection of all fees from the 

harvesting and processing sector by the 

receiving processor for submission to 

NMFS on an annual basis would impose 

the least administrative burden on the 

affected public. The collection of fees by 

the receiving processor corresponds 

with the existing requirement for many 

processors to collect excise taxes from 

delivering harvesters in other fisheries. 

Additionally, rather than use the 

calendar year for administrative 

purposes, NMFS negotiated an 

administrative year for the program that 

accommodates fee collection by 

imposing the most significant 

administrative burden on the affected 

participants during the time of year 

when the crab fisheries are closed.

Under this proposed rule, CPs would 

be required to purchase and install 

motion-compensated scales to weigh all 

crab at-sea. Such scales would cost on 

a one-time basis, approximately $25,000 

per vessel. Additional costs on a 

one-time basis associated with the 

installation of the scales are estimated to 

be between $10,000 and $40,000, 

depending on the extent to which the 

vessel must be reconfigured to install 

the scale. Scale monitoring 

requirements would cost approximately 

$6,235 per year. Based on discussions 

with equipment vendors, NMFS 

estimates that 8 CPs, one of which is a 

small entity, would choose to fish CPO 

or CPC IFQ.

NMFS considered, but rejected, the 

use of product weight and recovery rates 

(PRRs) in favor of the use of at-sea scales 

for catch accounting on CPs. NMFS 

rejected the use of PRRs for several 

reasons. First, the technology for 

weighing catch at-sea is well developed, 

and NMFS believes that the catch 

weights generated from these scales 

produce the best available data for catch 

accounting purposes. Second, recovery 

rates are not well known for many 

stocks, and, because recovery could vary 

with season, the rates may change when 

fishing occurs over a larger portion of 

the year. Third, glaze percentages on 

CPs product vary widely. If NMFS chose 

to use PRRs, NMFS must either apply 

vessel specific rates that incorporate 

glaze percentages or develop a standard 

glaze percentage that would either 

unfairly penalize the boats with high 

amounts of glaze or underestimate the 

amount of harvest on boats with low 

glaze percentages. Finally, CPs conduct 

different cooking, precooking, prefreeze 

brining and freezing processes. These 

procedural differences create significant 

uncertainty in calculating and verifying 

recovery. NMFS acknowledges that 

PRRs would be less costly to the 

affected public, particularly the small 

entities, but determined that the added 

management benefits of scales outweigh 

their costs. To the extent that additional 

PRR data become available to NMFS for 

analysis, future rules may allow PRR 

based catch accounting. CPs not wishing 

to incur the costs associated with scale 

installation prior to that time have the 

option of either joining a cooperative or 

leasing their quota.

NMFS considered, but rejected, 

requirements for increased observer 

coverage for the CP fleet. Under existing 

State regulations, CPs are required to 

pay for and carry one observer when 

engaged in crab fishing operations. In 

similar NMFS managed quota fisheries, 

NMFS requires that all fishing activity 

be observed. In most cases, this means 

that a vessel must carry two observers. 

NMFS rejected this approach in the crab 

fisheries for two reasons. First, the 

Council motion specifically delegated 

observer coverage responsibility to the 

State of Alaska. Second, NMFS felt that 

the monitoring approach developed for 

the fishery (total catch weighing plus a 

requirement for a total offload weight) 

provided for more effective monitoring 

at a lower cost. NMFS estimates that a 

requirement for increased observer 

coverage would have cost CPs 

approximately $400/day plus the 

additional costs associated with 

reconfiguring vessels to ensure that 

adequate space was available for the 

additional observer.

For monitoring of processing activity, 

it would cost shore-based processors 

approximately $416 to complete the 

catch monitoring plan and an additional 

$2,800 annually to complete all landing 

reports.

NMFS determined that a VMS 

program is essential to the proper 

enforcement of the Program. Therefore, 

all vessels participating in the Program 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63249

would be required to participate in a 

VMS program. Depending on which 

brand of VMS a vessel chooses to 

purchase, NMFS estimates that this 

requirement would impose a cost of 

$2,000 per vessel for equipment 

purchase, $780 for installation and 

maintenance, and $5 per day for data 

transmission costs. Based on the 

number of qualified vessels, NMFS 

estimates that a maximum of 276 

vessels, of which 238 are considered 

small entities, could incur this cost if 

they choose to participate in the 

Program.

Collection-of-information

This rule contains new 

collection-of-information requirements 

subject to review and approval by OMB 

under the Paperwork Reduction Act 

(PRA). These requirements have been 

submitted to OMB for approval. Public 

reporting burden per response for these 

requirements are listed by topic.

Crab Permits, Transfers, and Fees

These requirements and their 

associated burden estimates per 

response are: 2 hours for Annual 

Application for Crab IFQ/IPQ Permit; 2 

hours for Application for Crab QS/IFQ 

or PQS/IPQ; 2 hours for Application for 

annual crab harvesting cooperative IFQ 

permit; 30 minutes for Application for 

Crab IFQ Hired Master permit; 30 

minutes for Application for RCR Permit; 

20 minutes for Application for Federal 

crab vessel permit; 2 hours for 

Application for eligibility to receive 

Crab QS/IFQ or PQS/IPQ by transfer; 2 

hours for Application to Become an 

Eligible Crab Community Organization 

(ECCO); 2 hours for Application for 

transfer of Crab QS/IFQ or PQS/IPQ; 2 

hours for Application for transfer of crab 

QS/IFQ to or from an ECCO; 2 hours for 

Application for Inter-cooperative 

Transfer; 30 minutes for RCR fee 

submission form; and 4 hours for a letter 

of appeal, if denied a permit.

Crab Reports

These requirements and their 

associated burden estimates per 

response are: 35 minutes to 

electronically submit crab landing 

report and print receipts, 35 minutes to 

submit crab landing report paper 

backup (ADF&G fish ticket), 15 minutes 

for application for user ID, 20 minutes 

for CP offload report, 40 hours for ECCO 

annual report for an ECC.

Crab Economic Data Reports

These requirements and their 

associated burden estimates per 

response are: 25 hours for Catcher 

processor historical EDR, 25 hours for 

Catcher processor annual EDR, 15 hours 

for Catcher vessel historical EDR, 15 

hours for Catcher vessel annual EDR, 15 

hours for Catcher vessel annual EDR, 15 

hours for Stationary crab floating 

processor historical EDR, 15 hours for 

Stationary crab floating processor 

annual EDR, 15 hours for Shoreside crab 

processor historical EDR, 15 hours for 

Shoreside crab processor annual EDR, 

and 3 hours for historical and annual 

audits.

Crab Arbitration Reports

These requirements and their 

associated burden estimates per 

response are: 4 hours for Annual 

Arbitration Organization Report, 1 hour 

for Arbitration Organization 

miscellaneous reporting, 40 hours for 

Market Report, 40 hours for Nonbinding Price Formula Report, and 45 

minutes to establish price for arbitration 

negotiations.

This rule also contains revised 

requirements that have been submitted 

to OMB for approval. These 

requirements are listed by OMB control 

number.

OMB No. 0648—0213

This requirement and its associated 

burden estimate per response is: 14 

minutes for Vessel Activity Report, 20 

minutes for Product transfer report, and 

28 minutes for Catcher vessel longline 

and pot gear daily fishing logbook.

OMB No. 0648—0272

These revised requirements and their 

associated burden estimates per 

response are: 6 minutes for Application 

for Replacement of Certificates, Permits, 

or Cards; 6 minutes for Transshipment 

authorization; and 6 minutes for 

Departure report.

OMB No. 0648—0330

These revised requirements and their 

associated burden estimates per 

response are: 6 minutes for At-sea 

inspection request, 45 minutes for 

Record of daily scale tests, 45 minutes 

for printed output of at-sea scale weight, 

45 minutes for printed output of State 

of Alaska scale weight, 80 hours for 

scale type evaluation, 6 minutes for 

at-sea scale approval report/sticker, 2 

hours for Observer sampling station 

inspection request, 2 minutes for prior 

notice to Observers of scale tests, and 40 

hours for Crab catch monitoring plan.

OMB No. 0648—0445

These revised requirements and their 

associated burden estimates per 

response are: 12 minutes for VMS 

check-in form, 6 hours for VMS 

installation, 4 hours for VMS annual 

maintenance, and 6 seconds for each 

VMS transmission.

Response times include the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing the collection 

of information.

Public comment is sought regarding: 

whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

the accuracy of the burden estimate; 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and ways to minimize the 

burden of the collection of information, 

including through the use of automated 

collection techniques or other forms of 

information technology.

Send comments on these or any other 

aspects of the collection of information 

to NMFS, Alaska Region at the 

ADDRESSES above, and e-mail to 

DRostker@omb.eop.gov, or fax to (202) 

395-7285.

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number.

This proposed rule has been 

determined to be significant for 

purposes of Executive Order 12866.

A Draft Environmental Impact 

Statement (EIS) (dated March 2004) was 

prepared for this rule and made 

available to the public for comment (69 

FR 13036, March 19, 2004). The Final 

EIS was prepared and made available to 

the public on September 3, 2004 (69 FR 

53915). Copies of the Final EIS for this 

action are available from NMFS (see 

ADDRESSES).

Dated: October 22, 2004.

Rebecca Lent,

Deputy Assistant Administrator for 

Regulatory Programs, National Marine 

Fisheries Service.

For the reasons set out in the 

preamble, 50 CFR part 679 is proposed 

to be amended and new 50 CFR part 680 

is proposed to be added as follows:

PART 679—FISHERIES OF THE 

EXCLUSIVE ECONOMIC ZONE OFF 

ALASKA

1. The authority citation for part 679 

continues to read as follows:

Authority: 16 U.S.C. 773 et seq., 1801 et 

seq., and 3631 et seq.; Title II of Division C, 

Pub. L. 105-277; Sec. 3027, Pub. L. 106-31, 

113 Stat. 57; 16 U.S.C. 1540(f).

63250 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

2. In § 679.1, revise paragraphs (g) and 

(j) to read as follows:

§ 679.1 Purpose and scope.

* * * * *

(g) Fishery Management Plan for 

Bering Sea/Aleutian Islands King and 

Tanner Crabs. Regulations in this part 

govern commercial fishing for king and 

Tanner crab in the Bering Sea and 

Aleutian Islands Area by vessels of the 

United States, and supersede State of 

Alaska regulations applicable to the 

commercial king and Tanner crab 

fisheries in the Bering Sea and Aleutian 

Islands Area EEZ that are determined to 

be inconsistent with the FMP (see 

subparts A, B, and E of this part). 

Additional regulations governing 

commercial fishing for, and processing 

of, king and Tanner crab managed 

pursuant to section 313(j) of the 

Magnuson-Stevens Act and the Crab 

Rationalization Program are codified at 

50 CFR part 680.

* * * * *

(j) License Limitation Program (LLP).

(1) Regulations in this part implement 

the LLP for the commercial groundfish 

fisheries in the EEZ off Alaska and the 

LLP for the commercial crab fisheries in 

the Bering Sea and Aleutian Islands 

Area.

(2) Regulations in this part govern the 

commercial fishing for groundfish under 

the LLP by vessels of the United States 

using authorized gear within the GOA 

and the BSAI and the commercial 

fishing for crab species under the LLP 

by vessels of the United States using 

authorized gear within the Bering Sea 

and Aleutian Islands Area.

* * * * *

3. In § 679.2, revise the definitions of 

‘‘Alaska local time,’’ and ‘‘Shoreside 

processor,’’ revise paragraphs (2) and (3) 

of the ‘‘Directed fishing’’ definition, and 

add a definition of ‘‘Registered crab 

receiver’’ in alphabetical order to read 

as follows:

§ 679.2 Definitions.

* * * * *

Alaska local time (A.l.t.) means the 

time in the Alaska time zone.

* * * * *

Directed fishing means:

* * * * *

(2) With respect to license limitation 

groundfish species, directed fishing as 

defined in paragraph (1) of this 

definition.

(3) With respect to crab species under 

this part, the catching and retaining of 

any crab species.

* * * * *

Registered crab receiver (RCR) means 

a person issued by the Regional 

Administrator an RCR permit described 

under 50 CFR part 680.

* * * * *

Shoreside processor means any 

person or vessel that receives, 

purchases, or arranges to purchase, 

unprocessed groundfish, except catcher/

processors, motherships, buying 

stations, restaurants, or persons 

receiving groundfish for personal 

consumption or bait.

* * * * *

4. In § 679.3, revise paragraph (d) to 

read as follows:

§ 679.3 Relation to other laws.

* * * * *

(d) King and Tanner crabs. Additional 

regulations governing conservation and 

management of king crab and Tanner 

crab in the Bering Sea and Aleutian 

Islands Area are contained in 50 CFR 

part 680 and in Alaska Statutes at A.S. 

16 and Alaska Administrative Code at 5 

AAC Chapters 34, 35, and 39.

* * * * *

5. In § 679.4, revise paragraph 

(k)(1)(ii), remove and reserve paragraphs 

(l)(3)(ii)(D), (l)(4)(i), and (l)(5)(ii), and 

remove paragraphs (l)(4)(ii)(D), 

(l)(4)(ii)(E), (l)(5)(iv)(E), and (l)(5)(iv)(F) 

to read as follows:

§ 679.4 Permits.

* * * * *

(k) * * *

(1) * * *

(ii) Each vessel must have a crab 

species license issued by NMFS on 

board at all times it is engaged in fishing 

activities, defined in § 679.2, for the 

crab fisheries identified in this 

paragraph. A crab species license may 

be used only to participate in the 

fisheries designated on the license and 

on a vessel that complies with the vessel 

designation and MLOA specified on the 

license. NMFS requires a crab species 

license for participation in the following 

crab fisheries:

(A) Aleutian Islands red king crab in 

waters of the EEZ with an eastern 

boundary the longitude of Scotch Cap 

Light (164°44′ W. long.) to 53°30′ N. lat., 

then west to 165° W. long., a western 

boundary of 174° W. long., and a 

northern boundary of a line from the 

latitude of Cape Sarichef (54°36′ N. lat.) 

westward to 171° W. long., then north 

to 55°30′ N. lat., and then west to 174°

W. long.;

(B) Aleutian Islands Area C. opilio

and C. bairdi in waters of the EEZ with 

an eastern boundary the longitude of 

Scotch Cap Light (164°44′ W.long.) to 

53°30′ N. lat., then west to 165° W. long, 

a western boundary of the U.S.-Russian 

Convention Line of 1867, and a northern 

boundary of a line from the latitude of 

Cape Sarichef (54°36′ N. lat.) westward 

to 171° W. long., then north to 55°30′ N. 

lat., then west to 174° W. long.;

(C) Norton Sound red king and Norton 

Sound blue king in waters of the EEZ 

with a western boundary of 168° W. 

long., a southern boundary of 62° N. lat., 

and a northern boundary of 65°36′ N. 

lat.;

(D) Bering Sea brown king crab 

(Lithodes aequispinus) in waters of the 

EEZ east of the U.S.-Russian Convention 

line of 1867 with a southern boundary 

of 54°36′ N. lat. to 171° W. long., and 

then south to 54°30′ N. lat.

(E) Scarlet or deep sea king crab 

(Lithodes couesi) in the waters of the 

Bering Sea and Aleutian Islands Area;

(F) Grooved Tanner crab 

(Chionoecetes tanneri) in the waters of 

the Bering Sea and Aleutian Islands 

Area; and

(G) Triangle Tanner crab 

(Chionoecetes angulatus) in the waters 

of the Bering Sea and Aleutian Islands 

Area.

* * * * *

6. In § 679.5, revise paragraphs 

(a)(7)(i) table only, (a)(15), (c)(1), (g), (k), 

(l) introductory text, (l)(2)(iii)(M), 

(l)(2)(iv) introductory text, (l)(2)(iv)(C), 

(l)(2)(iv)(D), (l)(3)(i), and (l)(4), and 

remove and reserve (l)(2)(iv)(A) to read 

as follows:

§ 679.5 Recordkeeping and reporting 

(R&R).

(a) * * *

(7) * * *

(i) * * *

If participant is... And fishing activity is... An active period is... An inactive period is... 

(A) CV1 Harvest or discard of groundfish When gear remains on the 

grounds in a reporting area (except 300, 400, 550, or 690), regardless of the vessel location

When no gear remains on the 

grounds in a reporting area

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63251

If participant is... And fishing activity is... An active period is... An inactive period is... 

(B) SS, SFP Receipt, purchase or arrange to 

purchase, or processing of 

groundfish

When checked in or processing When not checked in or processing

(C) MS Receipt, discard, or processing of 

groundfish

When checked in or processing When not checked in or not processing

(D) CP Harvest, discard, or processing of 

groundfish

When checked in or processing When not checked in or not processing

(E) BS Receipt, discard, or delivery of 

groundfish

When conducting fishing activity 

for an associated processor

When not conducting fishing activity for an associated processor

1CV = Catcher vessel; SS = Shoreside processor; SFP = stationary floating processor; MS = mothership; Catcher/processor = CP; BS = Buying station

* * * * *

(15) Transfer comparison. The 

operator, manager, Registered Buyer, or 

Registered Crab Receiver must refer to 

Table 13 to this part for paperwork 

submittal, issuance, and possession 

requirements for each type of transfer 

activity of non-IFQ groundfish, IFQ 

halibut, IFQ sablefish, CDQ halibut, and 

CR crab.

* * * * *

(c) Catcher vessel DFL and catcher/

processor DCPL—(1) Longline and pot 

gear catcher vessel DFL and catcher/

processor DCPL. (i) In addition to 

information required at paragraphs (a) 

and (b) of this section:

(A) Groundfish fisheries. (1) The 

operator of a catcher vessel using 

longline or pot gear to harvest 

groundfish and that retains any 

groundfish from the GOA, or BSAI, 

must maintain a longline and pot gear 

DFL.

(2) The operator of a catcher/

processor using longline or pot gear to 

harvest groundfish and that retains any 

groundfish from the GOA, or BSAI, 

must maintain a longline and pot gear 

DCPL.

(B) IFQ halibut, CDQ halibut, and IFQ 

sablefish fisheries. (1) The operator of a 

catcher vessel using longline or pot gear 

to harvest IFQ sablefish, IFQ halibut, or 

CDQ halibut from the GOA, or BSAI, 

must maintain a longline and pot gear 

DFL.

(2) The operator of a catcher/

processor using longline or pot gear to 

harvest IFQ sablefish, IFQ halibut, or 

CDQ halibut from the GOA, or BSAI, 

must maintain a longline and pot gear 

DCPL.

(C) CR crab fisheries. (1) The operator 

of a catcher vessel using longline or pot 

gear to harvest CR crab from the BSAI, 

must maintain a longline and pot gear 

DFL.

(2) The operator of a catcher/

processor using longline or pot gear to 

harvest CR crab from the BSAI, must 

maintain a longline and pot gear DCPL.

(ii) Required information. The 

operator of a catcher vessel or catcher/

processor identified in paragraph 

(c)(1)(i) of this section must record in 

the DFL or DCPL, the following 

information:

(A) Federal reporting area. Federal 

reporting area code (see Figures 1 and 

3 to this part) where gear retrieval (see 

§ 679.2) was completed, regardless of 

where the majority of the set took place. 

Use a separate logsheet for each 

reporting area.

(B) Number of crew. If a catcher 

vessel, the number of crew, excluding 

observer(s), on the last day of a trip. If 

a catcher/processor, the number of crew, 

excluding observer(s), on the last day of 

the weekly reporting period.

(C) Gear type. Use a separate logsheet 

for each gear type.

(1) Circle gear type used to harvest the 

fish. If gear is other than those listed, 

circle ‘‘Other’’ and describe. If using 

hook-and-line gear, enter the 

alphabetical letter that coincides with 

gear description.

(2) If gear information is the same on 

subsequent pages, mark the box instead 

of re-entering the gear type information.

(3) Pot gear. If you checked pot gear, 

enter the number of pots set and the 

number of pots lost (if applicable).

(4) Hook-and-line gear. If 

hook-and-line gear:

(i) Indicate whether gear is fixed hook 

(conventional or tub), autoline, or snap 

(optional, but may be required by IPHC 

regulations).

(ii) Skates. Indicate length of skate to 

the nearest foot (optional, but may be 

required by IPHC regulations), number 

of skates set, and number of skates lost 

(optional, but may be required by IPHC 

regulations).

(iii) Hooks. Indicate size of hooks, 

hook spacing in feet, number of hooks 

per skate (optional, but may be required 

by IPHC regulations).

(iv) Seabird avoidance gear code.

Record seabird avoidance gear code(s) 

(see § 679.24(e) and Table 19 to this 

part).

(D) Permit numbers. Enter the permit 

number(s) for the applicable fishery in 

which you participated.

(1) IFQ permit number of the operator 

and of each IFQ permit holder aboard 

the vessel.

(2) CDQ group number (if applicable).

(3) Halibut CDQ permit number (if 

applicable).

(4) Federal crab vessel permit number 

(if applicable).

(E) Observer information. Record the 

number of observers aboard, the name of 

the observer(s), and the observer cruise 

number(s).

(F) Management program. Use a 

separate logsheet for each management 

program. Indicate whether harvest 

occurred under one of the following 

management programs. If harvest is not 

under one of these management 

programs, leave blank:

(1) Exempted Fishery. Record 

exempted fishery permit number (see 

§ 679.6).

(2) Research Fishery. Record research 

program permit number (see 

§ 600.745(a) of this chapter).

(G) Catch by set. (See § 679.2 for 

definition of set). The operator must 

record the following information for 

each set, if applicable:

(1) If no catch occurred for a day, 

write ‘‘no catch;’’

(2) Set number, sequentially by year;

(3) Gear deployment date 

(month-day), time (in military format, 

A.l.t.), and begin position coordinates 

(in lat and long to the nearest minute);

(4) Gear retrieval date (month-day), 

time (in military format, A.l.t.), and end 

position coordinates (in lat and long to 

the nearest minute);

(5) Begin and end buoy or bag 

numbers (optional, but may be required 

by IPHC regulations);

(6) Begin and end gear depths,

recorded to the nearest fathom 

(optional, but may be required by IPHC 

regulations);

63252 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(7) Target species code. Enter the 

species code of the species you intend 

to catch;

(8) Estimated haul weight. Enter the 

total estimated haul weight of all 

retained species. Indicate whether to the 

nearest pound or to the nearest 0.001 mt 

(2.20 lb);

(9) IR/IU Species (see § 679.27). If a 

catcher/processor, enter species code of 

IR/IU species and estimated total round 

weight for each IR/IU species; indicate 

whether to the nearest pound or the 

nearest 0.001 mt (2.20 lb);

(10) Estimated total round weight of 

IFQ halibut and CDQ halibut to the 

nearest pound;

(11) Number and estimated total 

round weight of IFQ sablefish to the 

nearest pound;

(12) Circle to indicate whether IFQ 

sablefish product is Western cut (WC), 

Eastern cut (EC), or round weight (RD); 

and

(13) Number and scale weight of raw 

CR crab to the nearest pound.

(H) Data entry time limits. (1) The 

operator must record in the DFL or 

DCPL within 2 hours after completion of 

gear retrieval: Set number; time and date 

gear set; time and date gear hauled; 

begin and end position; CDQ group 

number, halibut CDQ permit number, 

IFQ permit number, and/or Federal crab 

vessel permit number (if applicable), 

number of pots set, and estimated total 

haul for each set.

(2) If a catcher vessel, the operator 

must record all other required 

information in the DFL within 2 hours 

after the vessel’s catch is off-loaded, 

notwithstanding other time limits.

(3) If a catcher/processor, the operator 

must record all other required 

information in the DCPL by noon of the 

day following completion of production.

(4) If a catcher/processor, the operator 

must record product information in the 

DCPL by noon each day to record the 

previous day’s production information.

* * * * *

(g) Product transfer report (PTR)—(1) 

General requirements. Except as 

provided in paragraph (g)(1)(i) through 

(vi) of this section:

(i) Groundfish. The operator of a 

mothership or catcher/processor or the 

manager of a shoreside processor or SFP 

must complete and submit a separate 

PTR for each shipment of groundfish 

and donated prohibited species caught 

in groundfish fisheries. A PTR is not 

required to accompany a shipment.

(ii) IFQ halibut, IFQ sablefish, and 

CDQ halibut. A Registered Buyer must 

submit a separate PTR for each 

shipment of halibut or sablefish for 

which the Registered Buyer submitted 

an IFQ landing report or was required 

to submit an IFQ landing report. A PTR 

is not required to accompany a 

shipment.

(iii) CR crab. A Registered Crab 

Receiver (RCR) must submit a separate 

PTR for each shipment of crab for which 

the RCR submitted a CR crab landing 

report or was required to submit a CR 

crab landing report. A PTR is not 

required to accompany a shipment.

(2) Exceptions—(i) Bait sales (non-IFQ 

groundfish only). During one calendar 

day, the operator or manager may 

aggregate and record on one PTR the 

individual sales or shipments of nonIFQ groundfish to vessels for bait 

purposes during the day recording the 

amount of such bait product shipped 

from a vessel or facility that day.

(ii) Retail sales—(A) IFQ halibut, IFQ 

sablefish, CDQ halibut, and non-IFQ 

groundfish. During one calendar day, 

the operator, manager, or Registered 

Buyer may aggregate and record on one 

PTR the amount of transferred retail 

product of IFQ halibut, IFQ sablefish, 

CDQ halibut, and non-IFQ groundfish if 

each sale weighs less than 10 lb or 4.5 

kg.

(B) CR crab. During one calendar day, 

the RCR may aggregate and record on 

one PTR the amount of transferred retail 

product of CR crab if each sale weighs 

less than 100 lb or 45 kg.

(iii) Wholesale sales (non-IFQ 

groundfish only). The operator or 

manager may aggregate and record on 

one PTR, wholesale sales of non-IFQ 

groundfish by species when recording 

the amount of such wholesale species 

leaving a vessel or facility in one 

calendar day, if invoices detailing 

destinations for all of the product are 

available for inspection by an 

authorized officer.

(iv) Dockside sales. (A) A person 

holding a valid IFQ permit, IFQ card, 

and Registered Buyer permit may 

conduct a dockside sale of IFQ halibut 

or IFQ sablefish with a person who has 

not been issued a Registered Buyer 

permit after all IFQ halibut and IFQ 

sablefish have been landed and reported 

in accordance with paragraph (l) of this 

section.

(B) A person holding a valid halibut 

CDQ permit, halibut CDQ card, and 

Registered Buyer permit may conduct a 

dockside sale of CDQ halibut with a 

person who has not been issued a 

Registered Buyer permit after all CDQ 

halibut have been landed and reported 

in accordance with paragraph (l) of this 

section.

(C) A Registered Buyer conducting 

dockside sales must issue a receipt to 

each individual receiving IFQ halibut, 

CDQ halibut, or IFQ sablefish in lieu of 

a PTR. This receipt must include:

(1) Date of sale;

(2) Registered Buyer permit number;

(3) Weight by product of the IFQ 

halibut, CDQ halibut or IFQ sablefish 

transferred.

(D) A Registered Buyer must maintain 

a copy of each dockside sales receipt as 

described in § 679.5(l).

(v) Transfer directly from the landing 

site to a processing facility (CDQ 

halibut, IFQ halibut, IFQ sablefish, or 

CR crab only). A PTR is not required for 

transportation of unprocessed IFQ 

halibut, IFQ sablefish, CDQ halibut, or 

CR crab directly from the landing site to 

a facility for processing, provided the 

following conditions are met:

(A) A copy of the IFQ landing report 

receipt (Internet receipt) documenting 

the IFQ landing accompanies the 

offloaded IFQ halibut, IFQ sablefish, or 

CDQ halibut while in transit.

(B) A copy of the CR crab landing 

report receipt (Internet receipt) 

documenting the IFQ landing 

accompanies the offloaded CR crab 

while in transit.

(C) A copy of the IFQ landing report 

or CR crab landing report receipt is 

available for inspection by an 

authorized officer.

(D) The Registered Buyer submitting 

the IFQ landing report or RCR 

submitting the CR crab landing report 

completes a PTR for each shipment from 

the processing facility pursuant to 

paragraph (g)(1) of this section.

(3) Time limits and submittal. The 

operator of a mothership or catcher/

processor, the manager of a shoreside 

processor or SFP, the Registered Buyer, 

or RCR must:

(i) Record all product transfer 

information on a PTR within 2 hours of 

the completion of the shipment.

(ii) Submit a PTR by facsimile or 

electronic file to OLE, Juneau, AK (907–

586–7313), by 1200 hours, A.l.t., on the 

Tuesday following the end of the 

applicable weekly reporting period in 

which the shipment occurred.

(iii) If any information on the original 

PTR changes prior to the first 

destination of the shipment, submit a 

revised PTR by facsimile or electronic 

file to OLE, Juneau, AK (907–586–7313), 

by 1200 hours, A.l.t., on the Tuesday 

following the end of the applicable 

weekly reporting period in which the 

change occurred and indicate the 

confirmation number of the original 

PTR.

(4) Required information. The 

operator of a mothership or catcher/

processor, the manager of a shoreside 

processor or SFP, the Registered Buyer, 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63253

or RCR must include the following 

information on a PTR:

(i) Original or revised PTR. Whether a 

submittal is an original or revised PTR. 

If revised, record the confirmation 

number of the original PTR.

(ii) Shipper information. Name, 

telephone number, and facsimile 

number of the representative. According 

to the following table:

If you are shipping... Enter under ‘‘Shipper’’... 

(A) Non-IFQ groundfishYour processor’s 

name, Federal fisheries or Federal 

processor permit 

number.

If you are shipping... Enter under ‘‘Shipper’’... 

(B) IFQ halibut, CDQ 

halibut or IFQ sablefish

Your Registered 

Buyer name and 

permit number.

(C) CR crab Your RCR name 

and permit number.

(D) Non-IFQ groundfish, IFQ halibut, 

CDQ halibut or IFQ 

sablefish, and CR 

crab on the same 

PTR

(1) Your processor’s 

name and Federal 

fisheries permit 

number or Federal 

processor permit 

number, 

(2) Your Registered 

Buyer’s name and 

permit number, and

(3) Your RCR name 

and permit number.

(iii) Receiver information. Using 

descriptions from the following table, 

enter receiver information, date and 

time of product transfer, location of 

product transfer (e.g., port, position 

coordinates, or city), mode of 

transportation, and intended route:

If you are the shipper 

and... 

Then enter... 

Receiver Date & time of product 

transfer 

Location of product transfer Mode of transportation 

and intended route 

(A) Receiver is on land 

and transfer involves one 

van, truck, or vehicle.

Receiver name and Federal fisheries or Federal 

processor permit number 

(if any).

Date and time when shipment leaves the plant.Port or city of product 

transfer

Name of the shipping 

company; destination city 

and state or foreign country.

(B) Receiver is on land 

and transfer involves multiple vans, trucks, or vehicles.

Receiver name and Federal fisheries or Federal 

processor permit number 

(if any).

Date and time when loading of vans or trucks is 

completed each day.

Port or city of product 

transfer

Name of the shipping 

company; destination city 

and state or foreign country.

(C) Receiver is on land 

and transfer involves one 

airline flight.

Receiver name and Federal fisheries or Federal 

processor permit number 

(if any).

Date and time when shipment leaves the plant.Port or city of product 

transfer

Name of the airline company; destination airport 

city and state.

(D) Receiver is on land 

and transfer involves multiple airline flights.

Receiver name and Federal fisheries or Federal 

processor permit number 

(if any).

Date and time of shipment 

when the last airline flight 

of the day leaves.

Port or city of product 

transfer

Name of the airline company(s); destination airport(s) city and state.

(E) Receiver is a vessel 

and transfer takes occurs 

at sea.

Vessel name and call sign Start and finish dates and 

times of transfer.

Transfer position coordinates in latitude and longitude, in degrees and 

minutes.

The first destination of the 

vessel.

(F) Receiver is a vessel 

and transfer takes place in 

port.

Vessel name and call sign Start and finish dates and 

times of transfer.

Port or position of product 

transfer.

The first destination of the 

vessel.

(G) Receiver is an agent 

(buyer, distributor, or shipping agent) and transfer is 

in a containerized van(s).

Agent name and location 

(city, state).

Transfer start and finish 

dates and times.

Port, city, or position of 

product transfer.

Name (if available) of the 

vessel transporting the 

van; destination port.

(H) You are aggregating 

individual retail sales for 

human consumption. (see 

paragraph 679.5(g)(2)).

‘‘RETAIL SALES’’ Date of transfer. Port or city of product 

transfer

n/a

(I) You are aggregating individual bait sales during a 

day onto one PTR 

(non-IFQ groundfish only).

‘‘BAIT SALES’’ Date of transfer. Port or city of product 

transfer

n/a

63254 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

If you are the shipper 

and... 

Then enter... 

Receiver Date & time of product 

transfer 

Location of product transfer Mode of transportation 

and intended route 

(J) Non-IFQ Groundfish 

only. You are aggregating 

wholesale non-IFQ 

groundfish product sales 

by species during a single 

day onto one PTR and 

maintaining invoices detailing destinations for all of 

the product for inspection 

by an authorized officer.

‘‘WHOLESALE SALES’’ Time of the first sale of 

the day; time of the last 

sale of the day.

Port or city of product 

transfer

n/a

(iv) Products shipped. The operator, 

manager, Registered Buyer, or RCR must 

record the following information for 

each product shipped:

(A) Species code and product code.

(1) For non-IFQ groundfish, IFQ halibut, 

IFQ sablefish, and CDQ halibut, the 

species code and product code (Tables 

1 and 2 to this part).

(2) For CR crab, the species code and 

product code (Tables 1 and 2 to 50 CFR 

part 680).

(B) Species weight. Use only if 

recording 2 or more species with 2 or 

more product types contained within 

the same production unit. Enter the 

actual scale weight of each product of 

each species to the nearest kilogram or 

pound (indicate which). If not 

applicable, enter ‘‘n/a’’ in the species 

weight column. If using more than one 

line to record species in one carton, use 

a brace ‘‘}’’ to tie the carton information 

together.

(C) Number of units. Total number of 

production units (blocks, trays, pans, 

individual fish, boxes, or cartons; if 

iced, enter number of totes or 

containers).

(D) Unit weight. Unit weight (average 

weight of single production unit as 

listed in ‘‘No. of Units’’ less packing 

materials) for each species and product 

code in kilograms or pounds (indicate 

which).

(E) Total weight. Total weight for each 

species and product code of shipment 

less packing materials in kilograms or 

pounds (indicate which).

(F) Total or partial offload. (1) If a 

mothership or catcher/processor, the 

operator must indicate whether fish or 

fish products are left onboard the vessel 

(partial offload) after the shipment is 

complete.

(2) If a partial offload, for the products 

remaining on board after the transfer, 

the operator must enter: species code, 

product code, and total product weight 

to the nearest kilogram or pound 

(indicate which) for each product.

* * * * *

(k) U.S. Vessel Activity Report 

(VAR)—(1) Fish or fish product other 

than crab onboard. Except as noted in 

paragraph (k)(4) of this section, the 

operator of a catcher vessel greater than 

60 ft (18.3 m) LOA, a catcher/processor, 

or a mothership required to hold a 

Federal fisheries permit issued under 

this part and carrying fish or fish 

product onboard must complete and 

submit a VAR by facsimile or electronic 

file to OLE, Juneau, AK (907–586–7313) 

before the vessel crosses the seaward 

boundary of the EEZ off Alaska or 

crosses the U.S.-Canadian international 

boundary between Alaska and British 

Columbia.

(2) Combination of non-IFQ 

groundfish with IFQ halibut, CDQ 

halibut, IFQ sablefish or CR crab. If a 

vessel is carrying non-IFQ groundfish 

and IFQ halibut, CDQ halibut, IFQ 

sablefish or CR crab, the operator must 

submit a VAR in addition to an IFQ 

Departure Report required by paragraph 

(l)(4) of this section.

(3) Revised VAR. If fish or fish 

products are landed at a port other than 

the one specified on the VAR, the 

operator must submit a revised VAR 

showing the actual port of landing 

before any fish are offloaded.

(4) Exemption: IFQ Departure Report.

A VAR is not required if a vessel is 

carrying only IFQ halibut, CDQ halibut, 

IFQ sablefish, or CR crab onboard and 

the operator has submitted an IFQ 

Departure Report required by paragraph 

(l)(4) of this section.

(5) Information required. (i) Whether 

original or revised VAR.

(ii) Name and Federal fisheries permit 

number of vessel.

(iii) Type of vessel (whether catcher 

vessel, catcher/processor, or 

mothership).

(iv) Name, daytime telephone number 

(including area code), and facsimile 

number and COMSAT number (if 

available) of representative.

(v) Return report. ‘‘Return,’’ for 

purposes of this paragraph, means 

returning to Alaska. If the vessel is 

crossing the seaward boundary of the 

EEZ off Alaska or crossing the U.S.-

Canadian international boundary 

between Alaska and British Columbia 

into U.S. waters, indicate a ‘‘return’’

report and enter:

(A) Intended Alaska port of landing 

(see Table 14 to this part);

(B) Estimated date and time (hour and 

minute, Greenwich mean time) the 

vessel will cross the boundary; and

(C) The estimated position 

coordinates in latitude and longitude 

where the vessel will cross.

(vi) Depart report. ‘‘Depart’’ means 

leaving Alaska. If the vessel is crossing 

the seaward boundary of the EEZ off 

Alaska and moving out of the EEZ or 

crossing the U.S.-Canadian international 

boundary between Alaska and British 

Columbia and moving into Canadian 

waters, indicate a ‘‘depart’’ report and 

enter:

(A) The intended U.S. port of landing 

or country other than the United States;

(B) Estimated date and time (hour and 

minute, Greenwich mean time) the 

vessel will cross the boundary; and

(C) The estimated position 

coordinates in latitude and longitude 

where the vessel will cross.

(vii) The Russian Zone. Indicate 

whether the vessel is returning from 

fishing in the Russian Zone or is 

departing to fish in the Russian Zone.

(viii) Fish or fish products. For all fish 

or fish products (including 

non-groundfish) on board the vessel, 

enter:

(A) Harvest zone code;

(B) species codes;

(C) product codes; and

(D) total fish product weight in lbs or 

to the nearest 0.001 mt (2.20 lb).

(l) IFQ halibut, CDQ halibut, IFQ 

sablefish, or CR crab R&R. In addition 

to the R&R requirements in this section, 

in 50 CFR 680.5 with respect to CR crab, 

and as prescribed in the annual 

management measures published in the 

Federal Register pursuant to § 300.62 of 

this title, the following reports and 

authorizations are required, when 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63255

applicable: IFQ Prior Notice of Landing, 

Product Transfer Report (see § 679.5(g)), 

IFQ landing report, IFQ Transshipment 

Authorization, and IFQ Departure 

Report.

* * * * *

(2) * * *

(iii) * * *

(M) After the Registered Buyer enters 

the landing data in the Internet 

submission form(s) and receipts are 

printed, the Registered Buyer, or his/her 

representative, and the IFQ cardholder 

or CDQ cardholder must sign the 

receipts to acknowledge the accuracy of 

the IFQ landing report.

* * * * *

(iv) Submittals. Except as indicated in 

paragraph (l)(2)(iv)(C) of this section, 

IFQ landing reports must be submitted 

electronically to OLE, Juneau, AK by 

using the Internet as indicated below:

* * * * *

(C) Manual landing report. Waivers 

from the Internet reporting requirement 

can only be granted in writing on a 

case-by-case basis by a local clearing 

officer. If a waiver is granted, manual 

landing instructions must be obtained 

from OLE, Juneau, AK, at 800-304-4846 

(Select Option 1). Registered Buyers 

must complete and submit manual 

landing reports by facsimile to OLE, 

Juneau, AK, at 907-586-7313. When a 

waiver is issued, the following 

additional information is required: 

whether the manual landing report is an 

original or revised; and name, telephone 

number, and facsimile number of 

individual submitting the manual 

landing report.

(D) Properly debited landing. A 

properly concluded printed Internet 

submission receipt or a manual landing 

report receipt which is sent by facsimile 

from OLE to the Registered Buyer, and 

which is then signed by both the 

Registered Buyer and cardholder 

constitutes confirmation that OLE 

received the landing report and that the 

cardholder’s account is properly 

debited. A copy of each receipt must be 

maintained by the Registered Buyer as 

described in § 679.5(l).

(3) * * *

(i) No person may transship processed 

IFQ halibut, CDQ halibut, IFQ sablefish, 

or CR crab between vessels without 

authorization by a local clearing officer. 

Authorization from a local clearing 

officer must be obtained for each 

instance of transshipment at least 24 

hours before the transshipment is 

intended to commence.

* * * * *

(4) IFQ departure report—(i) General 

requirements—(A) Time limit and 

submittal. A vessel operator who 

intends to make a landing of IFQ 

halibut, CDQ halibut, IFQ sablefish, or 

CR crab at any location other than in an 

IFQ regulatory area or in the State of 

Alaska must submit an IFQ Departure 

Report, by telephone, to OLE, Juneau, 

AK, at 800–304–4846 or 907–586–7163 

between the hours of 0600 hours, A.l.t., 

and 2400 hours, A.l.t.

(B) Completion of fishing. A vessel 

operator must submit an IFQ Departure 

Report after completion of all fishing 

and prior to departing the waters of the 

EEZ adjacent to the jurisdictional waters 

of the State of Alaska, the territorial sea 

of the State of Alaska, or the internal 

waters of the State of Alaska when IFQ 

halibut, CDQ halibut, IFQ sablefish, or 

CR crab are on board.

(C) Permit—(1) Registered Crab 

Receiver permit. A vessel operator 

submitting an IFQ Departure Report for 

CR crab must have a Registered Crab 

Receiver permit.

(2) Registered Buyer permit. A vessel 

operator submitting an IFQ Departure 

Report for IFQ halibut, CDQ halibut, or 

IFQ sablefish must have a Registered 

Buyer permit.

(D) First landing of any species. A 

vessel operator submitting an IFQ 

Departure Report must submit IFQ 

landing reports for all IFQ halibut, CDQ 

halibut, IFQ sablefish, and CR crab on 

board at the same time and place as the 

first landing of any IFQ halibut, CDQ 

halibut, IFQ sablefish, or CR crab.

(E) Permits on board. (1) A vessel 

operator submitting an IFQ Departure 

Report to document IFQ halibut, IFQ 

sablefish, or CR crab must have one or 

more IFQ cardholders on board with a 

combined IFQ balance equal to or 

greater than all IFQ halibut, IFQ 

sablefish, and CR crab on board the 

vessel.

(2) A vessel operator submitting an 

IFQ Departure Report to document CDQ 

halibut must ensure that one or more 

CDQ cardholders are on board with 

enough remaining CDQ halibut balance 

to harvest amounts of CDQ halibut equal 

to or greater than all CDQ halibut on 

board.

(ii) Required information. When 

submitting an IFQ Departure Report, the 

vessel operator must provide the 

following information:

(A) Intended date, time (A.l.t.), and 

location of landing;

(B) Vessel name and ADF&G vessel 

registration number;

(C) Vessel operator’s name and 

Registered Buyer permit or Registered 

Crab Receiver permit number;

(D) Halibut IFQ, halibut CDQ, 

sablefish IFQ, and CR crab permit 

numbers of IFQ and CDQ cardholders 

on board;

(E) Area of harvest. (1) If IFQ or CDQ 

halibut, then halibut regulatory areas 

(see Figure 15 to this part).

(2) If IFQ sablefish, then sablefish 

regulatory areas (see Figure 14 to this 

part).

(3) If CR crab, then the crab 

rationalization fishery code (see Table 1 

to part 680).

(F) Estimated total weight as 

appropriate of IFQ halibut , CDQ 

halibut, IFQ sablefish, or CR crab on 

board (lb/kg/mt).

(iii) Revision to Departure Report. A 

vessel operator who intends to make an 

IFQ landing at a location different from 

the location named on the IFQ 

Departure report must submit a revised 

report naming the new location at least 

12 hours in advance of the offload. 

Revisions must be submitted by 

telephone, to OLE, Juneau, AK, at 800–

304 4846 or 907 586 7163 between the 

hours of 0600 hours, A.l.t., and 2400 

hours, A.l.t.

* * * * *

7. In § 679.7, revise paragraph (a)(15) 

and (k)(1)(iii), remove and reserve 

paragraphs (k)(2)(ii), (k)(3)(iii), (k)(4)(ii), 

and remove paragraph (k)(8) to read as 

follows:

§ 679.7 Prohibitions.

* * * * *

(a) * * *

(15) Federal processor permit.

Receive, purchase or arrange for 

purchase, discard, or process groundfish 

harvested in the GOA or BSAI by a 

shoreside processor or SFP that does not 

have on site a valid Federal processor 

permit issued pursuant to § 679.4(f).

* * * * *

(k) * * *

(1) * * *

(iii) Processing BSAI crab. Use a listed 

AFA catcher/processor to process any 

crab species harvested in the BSAI.

* * * * *

8. In § 679.28, add a new paragraph 

(b)(1)(v) and revise paragraph (f)(4)(i) to 

read as follows:

§ 679.28 Equipment and operational 

requirements.

* * * * *

(b) * * *

(1) * * *

(v) Exceptions. A scale manufacturer 

or their representative may request that 

NMFS approve a custom built automatic 

hopper scale under the following 

conditions:

(A) The scale electronics are the same 

as those used in other scales on the 

Regional Administrator’s list of scales 

eligible for approval;

63256 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(B) Load cells have received 

Certificates of Conformance from NTEP 

or OIML;

(C) The scale compensates for motion 

in the same manner as other scales 

made by that manufacturer which have 

been listed on the Regional 

Administrator’s list of scales eligible for 

approval;

(D) The scale, when installed, meets 

all of the requirements set forth in 

paragraph 3 of Appendix A to this part, 

except those requirements set forth in 

paragraph 3.2.1.1.

* * * * *

(f) * * *

(4) * * *

(i) Contact the NMFS Enforcement 

Division by Facsimile at 907-586-7703 

and provide: the VMS transmitter ID, 

the vessel name, the Federal Fisheries 

Permit number or Federal Crab Vessel 

Permit number.

* * * * *

9. In § 679.31, revise paragraph (d) to 

read as follows:

§ 679.31 CDQ reserves.

* * * * *

(d) Crab CDQ reserves. Crab CDQ 

reserves for crab species governed by 

the Crab Rationalization Program are 

specified at § 680.40 (a)(1). For Norton 

Sound red king crab, 7.5 percent of the 

guideline harvest level specified by the 

State of Alaska is allocated to the crab 

CDQ reserve.

10. In § 679.43, revise paragraph (a) to 

read as follows:

§ 679.43 Determinations and appeals.

(a) General. This section describes the 

procedure for appealing initial 

administrative determinations made 

under part 300, part 679, and part 680. 

This section does not apply to initial 

administrative determinations made 

under § 679.30(d).

* * * * *

§ 679.65 [Reserved]

11. Remove and reserve § 679.65.

12. In part 679, Tables 14a, 14b, and 

15 are revised; and Tables 13 and 14c 

are added to read as follows:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63257

TABLE 13 TO

PART 679

—

TRANSFER

FORM

SUMMARY

Submit Issue Possess 

If participant type is ... And has ........ Fish prod- uct onboard And is involved in this ac- tivity VAR

(§ 679.5(k))

PTR

(§ 679.5(g))

Trans-ship

(§ 679.5(l)(3))

Departure Report

(§ 679.5(l)(4))

Dockside Sales 

Receipt

(§ 679.5(g)(1)(v))

Landing Receipt

(§ 679.5(g)(1)(vi))

Catcher vessel greater than 60 ft LOA, mothership or catcher/processor

Only non-IFQ groundfish. Vessel leaving or entering Alaska

X

Catcher vessel greater than 60 ft LOA, mothership or catcher/processor

Only IFQ sablefish, IFQ halibut, CDQ halibut, or CR crab

Vessel leaving Alaska X

Catcher vessel greater than 60 ft LOA, mothership or catcher/processor

Combination of IFQ sablefish, IFQ halibut, CDQ halibut, or CR crab and non-IFQ groundfish

Vessel leaving Alaska X X

Mothership, catcher/processor, shoreside processor, or SFP Non-IFQ groundfish Transfer of product XRegistered Buyer IFQ sablefish, IFQ halibut 

or CDQ halibut

Transfer of product X

Registered Crab Receiver CR crab Transfer of product XA person holding a valid IFQ permit, IFQ card, and Registered Buyer permit

IFQ sablefish, IFQ halibut or CDQ halibut

Transfer of product XXX

Registered Buyer IFQ sablefish, IFQ halibut, or CDQ halibut Transfer from landing site to Registered Buyer’s 

processing facility

XX

Registered Crab Receiver CR crab Transfer from landing site 

to RCR’s processing facility

XX

Vessel operator Processed IFQ sablefish, 

IFQ halibut, CDQ halibut, or CR crab

Transshipment between vessels

XXXX

‘‘X’’ indicates under what circumstances each report is submitted.‘‘XX’’ indicates that the document must accompany the transfer of IFQ species from landing site to processor.‘‘XXX’’ indicates receipt must be issued to each receiver in a dockside sale.‘‘XXXX’’ indicates authorization must be obtained 24 hours in advance.

63258 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 14A TO PART 679--PORT OF

LANDING CODES1: ALASKA

Port Name NMFS 

Code 

ADF&G 

Code 

Adak 186 ADA

Akutan, Akutan Bay 101 AKU

Alitak 103 ALI

Anchorage 105 ANC

Angoon 106 ANG

Aniak n/a ANI

Anvik n/a ANV

Atka 107 ATK

Auke Bay 136 JNU

Beaver Inlet 119 DUT

Bethel n/a BET

Captains Bay 119 DUT

Chefornak 189 n/a

Chignik 113 CHG

Cordova 115 COR

Craig 116 CRG

Dillingham 117 DIL

Douglas 136 JNU

Dutch Harbor/Unalaska 119 DUT

Egegik 122 EGE

Ekuk n/a EKU

Elfin Cove 123 ELF

Emmonak n/a EMM

Excursion Inlet 124 XIP

False Pass 125 FSP

Fairbanks n/a FBK

Galena n/a GAL

Glacier Bay n/a GLB

Glennallen n/a GLN

Gustavus 127 GUS

Haines 128 HNS

Halibut Cove 130 n/a

Homer 132 HOM

Hoonah 133 HNH

Hydaburg n/a HYD

Hyder 134 HDR

TABLE 14A TO PART 679--PORT OF

LANDING CODES1: ALASKA—Continued

Port Name NMFS 

Code 

ADF&G 

Code 

Juneau 136 JNU

Kake 137 KAK

Kaltag n/a KAL

Kasilof 138 KAS

Kenai 139 KEN

Kenai River 139 KEN

Ketchikan 141 KTN

King Cove 142 KCO

King Salmon 143 KNG

Kipnuk 144 n/a

Klawock 145 KLA

Kodiak 146 KOD

Kotzebue n/a KOT

La Conner n/a LAC

Mekoryuk 147 n/a

Metlakatla 148 MET

Moser Bay n/a MOS

Naknek 149 NAK

Nenana n/a NEN

Nikiski (or Nikishka) 150 NIK

Ninilchik 151 NIN

Nome 152 NOM

Nunivak Island n/a NUN

Old Harbor 153 OLD

Other Alaska1 499 UNK

Pelican 155 PEL

Petersburg 156 PBG

Port Alexander 158 PAL

Port Armstrong n/a PTA

Port Bailey 159 PTB

Port Graham 160 GRM

Port Lions n/a LIO

Port Moller n/a MOL

Port Protection 161 n/a

Quinhagak 187 n/a

TABLE 14A TO PART 679--PORT OF

LANDING CODES1: ALASKA—Continued

Port Name NMFS 

Code 

ADF&G 

Code 

Sand Point 164 SPT

Savoonga 165 n/a

Seldovia 166 SEL

Seward 167 SEW

Sitka 168 SIT

Skagway 169 SKG

Soldotna n/a SOL

St. George 170 STG

St. Mary n/a STM

St. Paul 172 STP

Tee Harbor 136 JNU

Tenakee Springs 174 TEN

Togiak 176 TOG

Toksook Bay 177 n/a

Tununak 178 n/a

Ugashik n/a UGA

Unalakleet n/a UNA

Valdez 181 VAL

Wasilla n/a WAS

Whittier 183 WHT

Wrangell 184 WRN

Yakutat 185 YAK

1 To report a landing at a location not currently assigned a location code number: use 

the code for ‘‘Other’’ for the state or country at 

which the landing occurs and notify NMFS of 

the actual location so that the list may be updated. For example, to report a landing for 

Levelock, Alaska which currently has no code 

assigned, use code ‘‘499’’ ‘‘Other AK.’’

TABLE 14B TO PART 679—PORT OF

LANDING CODES: NON-ALASKA

(CALIFORNIA, OREGON, CANADA, 

WASHINGTON) 

Port Name NMFS 

Code 

ADF&G 

Code 

CALIFORNIA

Eureka 500 EUR

Other California1 599 n/a

CANADA

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63259

TABLE 14B TO PART 679—PORT OF

LANDING CODES: NON-ALASKA

(CALIFORNIA, OREGON, CANADA, 

WASHINGTON)—Continued

Port Name NMFS 

Code 

ADF&G 

Code 

Other Canada1 899 n/a

Port Edward 802 PRU

Prince Rupert 802 PRU

OREGON

Astoria 600 AST

Newport 603 NPT

Other Oregon1 699 n/a

Portland n/a POR

Warrenton 604 n/a

WASHINGTON

Anacortes 700 ANA

TABLE 14B TO PART 679—PORT OF

LANDING CODES: NON-ALASKA

(CALIFORNIA, OREGON, CANADA, 

WASHINGTON)—Continued

Port Name NMFS 

Code 

ADF&G 

Code 

Bellingham 702 n/a

Blaine 717 BLA

Everett 704 n/a

La Conner 708 LAC

Olympia n/a OLY

Other Washington1 799 n/a

Seattle 715 SEA

Tacoma n/a TAC

1 To report a landing at a location not currently assigned a location code number: use 

the code for ‘‘Other’’ for the state or country at 

which the landing occurs and notify NMFS of 

the actual location so that the list may be updated. For example, to report a landing for 

Vancouver, which currently has no code assigned, use ‘‘899’’ ‘‘Other Canada.’’

TABLE 14C TO PART 679—AT-SEA OPERATION TYPE CODES TO BE USED

AS PORT CODES FOR VESSELS

MATCHING THIS TYPE OF OPERATION

Code Description 

FCP Floating catcher processor

FLD Floating domestic 

mothership

IFP Inshore floating processor 

– processing in State of 

Alaska waters only

TABLE 15 TO PART 679—GEAR CODES, DESCRIPTIONS, AND USE (X INDICATES WHERE THIS CODE IS USED) 

Name of Gear 

Use Alphabetic Code to Complete the 

Following: 

Use Numeric Code to Complete the Following: 

Alpha 

Gear 

Code 

NMFS 

Logbooks & 

Paper 

Forms1

Electronic 

WPR & 

Check-in/

Check-out 

Code1

Numeric 

Gear 

Code 

Shoreside 

Electronic 

Logbook 

(SPELR) 

IFQ 

Internet 

& Forms 

CR 

Crab ADF&G 

Diving OTH X X 11 X X

Dredge OTH X X 22 X X

Dredge, hydro/mechanical OTH X X 23 X X

Fish wheel OTH X X 08 X X

Gillnet, drift OTH X X 03 X X

Gillnet, herring OTH X X 34 X X

Gillnet, set OTH X X 04 X X

Gillnet, sunken OTH X X 41 X X

Hand line/jig/troll (IFQ name: hand troll) n/a 05 X X X

Handpicked OTH X X 12 X X

Hatchery n/a 77 X X

Hook-and-line HAL X X 61 X X X

Jig, mechanical (IFQ name: jigs) JIG X X 26 X X X

Net, dip OTH X X 13 X X

Net, ring OTH X X 10 X X

Other/specify OTH X X 99 X X

Pair trawl (1) 37 X

63260 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 15 TO PART 679—GEAR CODES, DESCRIPTIONS, AND USE (X INDICATES WHERE THIS CODE IS USED)—Continued

Name of Gear 

Use Alphabetic Code to Complete the 

Following: 

Use Numeric Code to Complete the Following: 

Alpha 

Gear 

Code 

NMFS 

Logbooks & 

Paper 

Forms1

Electronic 

WPR & 

Check-in/

Check-out 

Code1

Numeric 

Gear 

Code 

Shoreside 

Electronic 

Logbook 

(SPELR) 

IFQ 

Internet 

& Forms 

CR 

Crab ADF&G 

Pot POT X X 91 X X X X

Pound OTH X X 21 X X

Seine, purse OTH X X 01 X X

Seine, beach OTH X X 02 X X

Shovel OTH X X 18 X X

Trap OTH X X 90 X X

Trawl, beam (1) 17 X X

Trawl, double otter (1) 27 X X

Trawl, nonpelagic/bottom NPT X X 07 X X

Trawl, pelagic/midwater PTR X X 47 X X

Troll, dinglebar TROLL X X 25 X X X

Troll, power gurdy TROLL X X 15 X X X

Weir OTH X X 14 X X

1For groundfish logbooks, forms, electronic WPR, electronic check-in/out reports: all trawl gear must be reported as either nonpelagic trawl 

(NPT) or pelagic trawl (PTR).

13. Add part 680 to read as follows:

PART 680—SHELLFISH FISHERIES OF 

THE EXCLUSIVE ECONOMIC ZONE 

OFF ALASKA

Subpart A—General

Sec.

680.1 Purpose and scope.

680.2 Definitions.

680.3 Relation to other laws.

680.4 Permits.

680.5 Recordkeeping and reporting (R&R).

680.6 Crab economic data report (EDR).

680.7 Prohibitions.

680.8 Facilitation of enforcement.

680.9 Penalties.

Subpart B—Management Measures

680.20 Arbitration System.

680.21 Crab fishery cooperatives.

680.22 Sideboard protections for GOA 

groundfish fisheries.

680.23 Equipment and operational 

requirements.

680.30 [Reserved]

Subpart C—Individual Fishing Quota 

Management Measures

680.40 Quota Share (QS), Processor QS 

(PQS), Individual Fishing Quota (IFQ), 

and Individual Processor Quota (IPQ) 

Issuance.

680.41 Transfer of QS and IFQ.

680.42 Limitations on use of QS, PQS, IFQ, 

and IPQ.

680.43 Determinations and appeals.

680.44 Cost recovery.

Table 1 to Part 680—Crab Rationalized (CR) 

Fisheries

Table 2 to Part 680—Crab Species Codes

Table 3a to Part 680—Crab Delivery 

Condition Codes

Table 3b to Part 680—Crab Disposition or 

Product Codes

Table 4 to Part 680—Crab Process Codes

Table 5 to Part 680—Crab Size

Table 6 to Part 680—Crab Grade

Table 7 to Part 680—Eligibility for Initial 

Issuance of Crab QS by Crab QS Fishery

Table 8 to Part 680—Initial QS and PQS Pool 

for Each Crab QS Fishery

Table 9 to Part 680—Eligibility for Initial 

Issuance of Crab PQS by Crab QS Fishery

Authority: 16 U.S.C. 1862.

Subpart A—General

§ 680.1 Purpose and scope.

Regulations in this part implement 

policies developed by the North Pacific 

Fishery Management Council and 

approved by the Secretary of Commerce 

in accordance with the 

Magnuson-Stevens Fishery 

Conservation and Management Act. In 

addition to part 600 of this chapter, 

these regulations implement the 

following:

(a) Fishery Management Plan (FMP) 

for Bering Sea and Aleutian Islands 

King and Tanner Crabs. Regulations in 

this part govern commercial fishing for, 

and processing of, king and Tanner 

crabs in the Bering Sea and Aleutian 

Islands Area pursuant to section 313(j) 

of the Magnuson-Stevens Act, including 

regulations implementing the Crab 

Rationalization Program for crab 

fisheries in the Bering Sea and Aleutian 

Islands Area, and including regulations 

superseding State of Alaska regulations 

applicable to the commercial king and 

Tanner crab fisheries in the Exclusive 

Economic Zone (EEZ) of the Bering Sea 

and Aleutian Islands Area that are 

determined to be inconsistent with the 

FMP.

(b) License Limitation Program.

Commercial fishing for crab species not 

included in the Crab Rationalization 

Program for crab fisheries of the Bering 

Sea and Aleutian Islands Area remains 

subject to the License Limitation 

Program for the commercial crab 

fisheries in the Bering Sea and Aleutian 

Islands Area under part 679 of this 

chapter.

§ 680.2 Definitions.

In addition to the definitions in the 

Magnuson-Stevens Act, in 50 CFR part 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63261

600, and § 679.2 of this chapter, the 

terms used in this part have the 

following meanings:

Adak community entity means the 

non-profit entity incorporated under the 

laws of the state of Alaska that 

represents the community of Adak and 

has a board of directors elected by the 

residents of Adak.

Affiliation means a relationship 

between two or more entities in which 

one directly or indirectly owns or 

controls a 10-percent or greater interest 

in, or otherwise controls another, or a 

third entity directly or indirectly owns 

or controls a 10-percent or greater 

interest in, or otherwise controls both. 

For the purpose of this definition, the 

following terms are further defined:

(1) Entity. An entity may be an 

individual, corporation, association, 

partnership, joint-stock company, trust, 

or any other type of legal entity, any 

receiver, trustee in bankruptcy or 

similar official or liquidating agent, or 

any organized group of persons whether 

incorporated or not, that holds direct or 

indirect interest in:

(i) QS, PQS, IFQ, or IPQ; or,

(ii) For purposes of the EDR, a vessel 

or processing plant operating in CR 

fisheries.

(2) Indirect interest. An indirect 

interest is one that passes through one 

or more intermediate entities. An 

entity’s percentage of indirect interest in 

a second entity is equal to the entity’s 

percentage of direct interest in an 

intermediate entity multiplied by the 

intermediate entity’s direct or indirect 

interest in the second entity.

(3) Controls a 10-percent or greater 

interest. An entity controls a 10-percent 

or greater interest in a second entity if 

the first entity:

(i) Controls a 10-percent ownership 

share of the second entity, or

(ii) Controls 10-percent or more of the 

voting stock of the second entity.

(4) Otherwise controls. An entity 

otherwise controls another when the 

first entity has the power through any 

other means whatsoever to exercise a 

controlling influence over the 

management or policies of the other 

entity, unless such power is solely the 

result of an official position with such 

entity.

Arbitration IFQ means:

(1) Class A CVO IFQ held by a person 

who is not a holder of PQS or IPQ and 

who is not affiliated with any holder of 

PQS or IPQ,

(2) Prior to July 1, 2008, CVC IFQ held 

by a person who is not a holder of PQS 

or IPQ and who is not affiliated with 

any holder of PQS or IPQ that the holder 

has elected to submit to the Arbitration 

System, and

(3) After July 1, 2008, Class A CVC 

IFQ held by a person who is not a 

holder of PQS or IPQ and is not 

affiliated with any holder of PQS or IPQ.

(4) IFQ held by a crab harvesting 

cooperative so long as no member of 

that crab harvesting cooperative:

(i) Holds PQS or IPQ; or

(ii) Is affiliated with a person who 

holds PQS or IPQ.

Arbitration QS means:

(1) CVO QS held by a person who is 

not a holder of PQS or IPQ and is not 

affiliated with any holder of PQS or IPQ,

(2) Prior to July 1, 2008, CVC QS held 

by a person who is not a holder of PQS 

or IPQ and is not affiliated with any 

holder of PQS or IPQ and that the 

holder has elected to submit to the 

arbitration process,

(3) After July 1, 2008, CVC QS held 

by a person who is not a holder of PQS 

or IPQ and is not affiliated with any 

holder of PQS or IPQ .

Arbitration System means the system 

established by the contracts required by 

§ 680.20 including the process by which 

the Market Report and Non-Binding 

Price Formula are produced and the 

Binding Arbitration process.

Assessed value means the most recent 

value for a vessel and gear provided in 

a marine survey.

Auditor means an examiner employed 

by, or under contract to, the data 

collection agent to verify data submitted 

in an economic data report.

Blind data means any data collected 

from the economic data report by the 

data collection agent that are 

subsequently amended by removing 

personal identifiers, including, but not 

limited to social security numbers, crew 

permit numbers, names and addresses, 

Federal fisheries permit numbers, 

Federal processor permit numbers, 

Federal tax identification numbers, 

State of Alaska vessel registration and 

permit numbers, and by adding in their 

place a nonspecific identifier.

Box size means the capacity of a crabpacking container in kilograms or 

pounds.

BSAI crab means those crab species 

governed under the Fishery 

Management Plan (FMP) for Bering Sea/

Aleutian Islands King and Tanner Crabs.

BSAI Crab Capacity Reduction 

Program means the program authorized 

by Public Law 106-554, as Amended by 

Public Law 107-20 and Public Law 

107-117.

BSAI crab fisheries means those crab 

fisheries governed under the Fishery 

Management Plan (FMP) for Bering Sea/

Aleutian Islands King and Tanner Crabs.

Captain means, for the purposes of 

the EDR, a vessel operator.

Catcher/Processor (CP) means a vessel 

that is used for catching crab and 

processing that crab.

Catcher vessel means a vessel that is 

used for catching crab and that does not 

process crab on board.

CDQ community means a community 

eligible to participate in the Western 

Alaska Community Development 

Program under subpart C of 50 CFR part 

679.

CDQ group means a CDQ group as 

that term is defined at 50 CFR 679.2.

Committed IFQ means:

(1) Any Arbitration IFQ for which the 

holder of such IFQ has agreed or 

committed to delivery of crab harvested 

with the IFQ to the holder of previously 

uncommitted IPQ and for which the 

holder of the IPQ has agreed to accept 

delivery of that crab, regardless of 

whether such agreement specifies the 

price or other terms for delivery or

(2) Any Arbitration IFQ for which, on 

or after the date which is 25 days prior 

to the opening of the first crab fishing 

season in the QS crab fishery for such 

IFQ, the holder of the IFQ has 

unilaterally committed to delivery of 

crab harvested with the IFQ to the 

holder of previously uncommitted IPQ, 

regardless of whether the IFQ and IPQ 

holders have reached an agreement that 

specifies the price or other terms for 

delivery.

Committed IPQ means any IPQ for 

which the holder of such IPQ has 

received a commitment of delivery from 

a holder of Arbitration IFQ such that the 

Arbitration IFQ is committed IFQ, 

regardless of whether the Arbitration 

IFQ and IPQ holders have reached an 

agreement that specifies the price or 

other terms for delivery.

CP standard price means price, 

expressed in U.S. dollars per raw crab 

pound, for all CR crab landed by a CP 

as determined for each crab fishing year 

by the Regional Administrator and 

documented in a CP standard price list 

published by NMFS.

Crab cooperative IFQ means the 

annual catch limit of IFQ crab that may 

be harvested by a crab harvesting 

cooperative that is lawfully allocated a 

harvest privilege for a specific portion of 

the TAC of a CR fishery.

Crab cost recovery fee liability means 

that amount of money, in U.S. dollars, 

owed to NMFS by a CR allocation 

holder or RCR as determined by 

multiplying the appropriate ex-vessel 

value of the amount of CR crab debited 

from a CR allocation by the appropriate 

crab fee percentage.

Crab fee percentage means that 

positive number no greater than 3 

percent determined for each crab fishing 

year by the Regional Administrator and 

63262 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

used to calculate the crab cost recovery 

fee liability for a CR allocation holder 

under the Crab Rationalization Program.

Crab fishing year means the period 

from July 1 of one calendar year through 

June 30 of the following calendar year.

Crab grade means a grading system to 

describe the quality of crab.

(1) Grade 1 means standard or 

premium quality crab, and

(2) Grade 2 means below standard 

quality crab.

Crab Individual Fishing Quota (Crab 

IFQ) means the annual catch limit of a 

CR fishery that may be harvested by a 

person who is lawfully allocated a 

harvest privilege for a specific portion of 

the TAC of a CR fishery with the 

following designations or with the 

designation as a crab IFQ hired master:

(1) Catcher Vessel Crew IFQ (CVC)

means a permit to annually harvest, but 

not process, a CR crab on board a vessel.

(2) Catcher Vessel Owner IFQ (CVO)

means a permit to annually harvest, but 

not process, a CR crab on board a vessel.

(i) Class A IFQ means IFQ that is 

required to be delivered to a processor 

holding unused IPQ.

(ii) Class B IFQ means IFQ that is not 

required to be delivered to a processor 

holding unused IPQ.

(3) Catcher/Processor Owner IFQ 

(CPO) means a permit to annually 

harvest and process a CR crab with that 

vessel.

(4) Catcher/Processor Crew IFQ (CPC)

means a permit to annually harvest and 

process a CR crab with that vessel.

Crab IFQ hired master means a person 

who holds a crab IFQ hired master 

permit issued under § 680.4.

Crab IFQ permit holder means the 

person identified on an IFQ permit.

Crab LLP license history means for 

any particular crab LLP license: the total 

legal landings made on the vessel or 

vessels that gave rise to that license and 

any total legal landings made under the 

authority of that license.

Crab quota share (crab QS) means a 

permit the face amount of which is used 

as the basis for the annual calculation 

and allocation of a person’s crab IFQ 

with the following designations:

(1) Catcher vessel crew CVC QS

means a permit the face amount of 

which is used as the basis for the annual 

calculation and allocation of crab IFQ to 

qualified persons.

(2) Catcher vessel owner (CVO) QS

means a permit the face amount of 

which is used as the basis for the annual 

calculation and allocation of crab IFQ to 

qualified persons.

(3) Catcher/processor owner (CPO) QS

means a permit the face amount of 

which is used as the basis for the annual 

calculation and allocation of crab IFQ to 

qualified persons.

(4) Catcher/processor crew (CPC) QS

means a permit the face amount of 

which is used as the basis for the annual 

calculation and allocation of crab IFQ to 

qualified persons.

Crab QS fishery means those CR 

fisheries under Table 1 to this part that 

require the use of QS and PQS and their 

resulting IFQ and IPQ to harvest and 

process IFQ crab.

Crab QS program means the 

individual fishing quota (IFQ) or 

individual processing quota (IPQ) 

programs for CR crab of the BSAI off 

Alaska and governed by regulations 

under this part.

Crab QS regional designation means 

the designation of QS or PQS and the 

associated IFQ and IPQ subject to 

regional delivery requirements in this 

part.

Crab Rationalization (CR) crab means 

those crab species subject to 

management under the Crab 

Rationalization Program described in 

Table 1 to this part.

Crab Rationalization (CR) Program

means the individual fishing quota 

(IFQ), individual processing quota 

(IPQ), Community Development Quota 

(CDQ), and the Adak community 

allocation programs, including all 

management, monitoring, and 

enforcement components, for Bering 

Sea/Aleutian Islands King and Tanner 

Crabs in waters off Alaska governed by 

the regulations of this part.

Crab rationalized (CR) allocation

means any allocation of CR crab 

authorized under the QS/IFQ, PQS/IPQ, 

CDQ, or the Adak community allocation 

programs.

Crab rationalized (CR) fisheries means 

those fisheries defined in Table 1 to part 

680.

Crew means:

(1) Any individual, other than the 

captain or fisheries observers, working 

on a vessel that is engaged in fishing.

(2) For the purposes of the EDR, each 

employee on a vessel, excluding the 

captain, that participated in any CR 

fishery.

Custom processing means processing 

of crab undertaken on behalf of another 

person.

Data collection agent (DCA) means 

the entity selected by the Regional 

Administrator to distribute an economic 

data report (EDR) to a person required 

to complete it, to receive the completed 

EDR, to review and verify the accuracy 

of the data in the EDR, and to provide 

those data to authorized recipients.

Days at Sea means, for the purposes 

of the EDR, the number of days spent at 

sea while fishing for crab, including 

travel time to and from fishing grounds.

Economic data report (EDR) means 

the report of cost, labor, earnings, and 

revenue data for catcher vessels, 

catcher/processors, shoreside crab 

processors, and stationary floating crab 

processors participating in CR fisheries.

Eligible crab community (ECC) means 

a community in which at least 3 percent 

of the initial allocation of processor 

quota share of any crab fishery is 

allocated. The specific communities 

include:

(1) CDQ Communities.

(i) Akutan;

(ii) False Pass;

(iii) St. George; and

(iv) St. Paul.

(2) Non-CDQ Communities.

(i) Dutch Harbor;

(ii) Kodiak;

(iii) King Cove;

(iv) Port Moller; and

(v) Adak.

Eligible crab community (ECC) entity

means a non-profit organization 

specified under § 680.41(j)(2) that is 

designated by an ECC other than Adak 

to represent it for the purposes of 

engaging in the right of first refusal of 

transfer of crab PQS or IPQ outside the 

ECC under contract provisions set forth 

under § 680.40(m). For those ECCs that 

also are CDQ communities, the ECC 

entity is the CDQ group to which the 

ECC is a member.

Eligible crab community organization 

(ECCO) means a non-profit organization 

that represents at least one ECC as 

defined in this part and that has been 

approved by the Regional Administrator 

to obtain by transfer and hold crab QS 

and to lease IFQ resulting from the crab 

QS on behalf of an ECC.

Eligible community resident means, 

for purposes of the Crab QS program, 

any individual who:

(1) Is a citizen of the United States;

(2) Has maintained a domicile in the 

ECC from which the individual requests 

to lease crab IFQ for at least 12 

consecutive months immediately 

preceding the time when the assertion 

of residence is made and who is not 

claiming residency in another 

community, state, territory, or country; 

and

(3) Is otherwise eligible to receive crab 

QS or IFQ by transfer.

Ex-vessel value means:

(1) For the shoreside processing 

sector. The total U.S. dollar amount of 

all compensation, monetary and 

non-monetary, including any 

retro-payments, received by a CR 

allocation holder for the purchase of any 

CR crab debited from the CR allocation 

described in terms of raw crab pounds.

(2) For the catcher/processor sector.

The total U.S. dollar amount of CR crab 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63263

landings as calculated by multiplying 

the number of raw crab pounds debited 

from the CR allocation by the 

appropriate CP standard price 

determined by the Regional 

Administrator.

Finished pounds means the total 

weight of processed product, not 

including container, in pounds.

IFQ account means the amount of 

crab IFQ in round pounds that is held 

by a person at any particular time for a 

crab QS fishery, sector, region, and 

class.

IFQ crab means crab species listed in 

Table 1 to this part subject to 

management under the crab QS 

program.

Initial processor quota share pool

means the total number of processor 

quota share units for each crab QS 

fishery which is the basis of initial 

processor quota share allocations.

Initial quota share pool means the 

total number of non-processor quota 

share units for each CR fishery which is 

the basis of initial QS allocations.

Individual processor quota (IPQ)

means the annual amount of crab that 

may be processed by a person who is 

lawfully allocated a processing privilege 

for a specific portion of the TAC for a 

CR fishery.

IPQ account means the amount of 

crab IPQ in round pounds that is held 

by a person at any particular time for a 

CR fishery and region.

Landing means the transfer of raw 

crab harvested by a vessel prior to that 

crab being reported on a CR crab 

landing report.

(1) For catcher/processors, the amount 

of crab retained during a reporting 

period constitutes a landing.

(2) For catcher vessels, the amount of 

crab landed from the boat at a single 

location/time constitutes a landing.

Lease of QS/IFQ or PQS/IPQ means a 

temporary, annual transfer of crab IFQ 

or IPQ without the underlying QS or 

PQS.

Leaseholder means, for purposes of 

the EDR, a person who:

(1) Is identified as the leaseholder in 

a written lease of a catcher vessel, 

catcher/processor, shoreside crab 

processor, or stationary floating crab 

processor, or

(2) Pays the expenses of a catcher 

vessel, catcher/processor, shoreside crab 

processor, or stationary floating crab 

processor, or

(3) Claims expenses for the catcher 

vessel, catcher/processor, shoreside crab 

processor, or stationary floating crab 

processor as a business expense on 

schedule C of his/her Federal income 

tax return or on a state income tax 

return.

Mutual Agreement for purposes of the 

Arbitration System means the consent 

and agreement of Arbitration 

Organizations that represent an amount 

of Arbitration QS equal to more than 50 

percent of all the Arbitration QS in a 

fishery, and an amount of PQS equal to 

more than 50 percent of all the PQS in 

a fishery based upon the Annual 

Arbitration Organization Reports.

Newly constructed vessel means, for 

the purposes of initial QS issuance, a 

vessel on which the keel was laid by 

June 10, 2002.

Official crab rationalization record

means the information prepared by the 

Regional Administrator about the legal 

landings and legal processing by vessels 

and persons in the BSAI crab fisheries 

during the qualifying periods specified 

at § 680.40.

Processing, or to process means the 

preparation of, or to prepare, crab to 

render it suitable for human 

consumption or storage. This includes, 

but is not limited to, cooking, canning, 

butchering, sectioning, freezing or icing.

Processor quota share (PQS) means a 

permit the face amount of which is used 

as the basis for the annual calculation 

and allocation of an IPQ.

Raw crab pounds means the recorded 

weight of crab in pounds at landing or 

prior to processing.

Registered crab receiver (RCR) means 

a person holding an RCR Permit issued 

by the Regional Administrator.

Right of First Refusal (ROFR) means 

the contractual provisions set forth 

under § 680.40(m) between the holders 

of PQS and ECC entities for the 

opportunity of ECCs to exercise the right 

to purchase PQS proposed to be 

transferred by a holder of PQS in an 

ECC.

Seafood Marketing Association 

Assessment (SMAA) means the seafood 

processing assessment collected by 

processing firms and buyers from 

fishery harvesters for the State of 

Alaska.

Share payment means an amount of 

monetary compensation (not salary or 

wages) based on gross or net earnings of 

a BSAI crab fishing vessel.

Shoreside crab processor means any 

person or vessel that receives, 

purchases, or arranges to purchase 

unprocessed crab, except a catcher/

processor or a stationary floating crab 

processor.

Stationary floating crab processor 

(SFCP) means a vessel of the United 

States that remains anchored or 

otherwise remains stationary while 

receiving or processing in the waters of 

the State of Alaska.

Uncommitted IFQ means any 

Arbitration IFQ that is not Committed 

IFQ.

Uncommitted IPQ means any IPQ that 

is not Committed IPQ.

U.S. Citizen means:

(1) Any individual who is a citizen of 

the United States; or

(2) Any corporation, partnership, 

association, or other entity that is 

organized under Federal, state, or local 

laws of the United States or that may 

legally operate in the United States.

§ 680.3 Relation to other laws.

(a) King and Tanner crab. (1) 

Additional laws and regulations 

governing the conservation and 

management of king crab and Tanner 

crab in the BSAI area are contained in 

50 CFR part 679, Alaska Statutes at A.S. 

16, and Alaska Administrative Code at 

5 AAC Chapters 34, 35, and 39.

(2) The Alaska Administrative Code 

(at 5 AAC 39.130) governs reporting and 

permitting requirements using the 

ADF&G ‘‘Intent to Operate’’ registration 

form and ‘‘Fish Tickets.’’

(b) Sport, personal use, and 

subsistence. (1) For State of Alaska 

statutes and regulations governing sport 

and personal use crab fishing other than 

subsistence fishing, see Alaska Statutes, 

Title 16—Fish and Game; 5 AAC 

Chapters 47 through 77.

(2) For State of Alaska statutes and 

regulations governing subsistence 

fishing for crab, see Alaska Statutes, 

Title 16—Fish and Game; 5 AAC 02.001 

through 02.625.

§ 680.4 Permits.

Persons participating in the CR crab 

fisheries are required to possess the 

permits described in this section. 

Approval of applications under this part 

may be conditioned on the payment of 

fees under § 680.44 or the submission of 

an EDR as described under § 680.6.

(a) Crab QS Permit. Crab QS is issued 

by the Regional Administrator to 

persons who successfully apply for an 

initial allocation under § 680.40 or to 

receive QS by transfer under § 680.41. 

Once issued, a QS permit is valid until 

modified by transfer under § 680.41; or 

the permit is revoked, suspended, or 

modified pursuant to § 679.43 or under 

15 CFR part 904.

(b) Crab PQS Permit. Crab PQS is 

issued by the Regional Administrator to 

persons who successfully apply for an 

initial allocation under § 680.40 or 

receive PQS by transfer under § 680.41. 

Once issued, a PQS permit is valid until 

modified by transfer under § 680.41 or 

until the permit is revoked, suspended, 

or modified pursuant to § 679.43 or 

under 15 CFR part 904.

63264 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(c) Crab IFQ Permit. (1) A Crab IFQ 

Permit authorizes the person identified 

on the permit to harvest crab in the 

fishery identified on the permit at any 

time the fishery is open during the crab 

fishing year for which the permit is 

issued, subject to conditions of the 

permit. A crab IFQ permit is valid in the 

following circumstances:

(i) Until the end of the crab fishing 

year for which the permit is issued;

(ii) Until the amount harvested is 

equal to the amount specified on the 

permit;

(iii) Until the permit is modified by 

transfers under § 680.41; or

(iv) Until the permit is revoked, 

suspended, or modified pursuant to 

§ 679.43 or under 15 CFR part 904.

(2) A legible copy of any Crab IFQ 

Permit must be carried on board the 

vessel used by the permitted person at 

all times that such crab are retained on 

board.

(3) A Crab IFQ Permit is issued on an 

annual basis by the Regional 

Administrator to persons who hold crab 

QS of the type specified by the QS and 

who have submitted a complete Annual 

Application for Crab IFQ/IPQ Permit 

that is subsequently approved by the 

Regional Administrator.

(d) Crab IPQ Permit. (1) A Crab IPQ 

Permit authorizes the person identified 

on the permit to process the IFQ crab 

identified on the permit, subject to 

conditions of the permit, until the 

amount processed is equal to the 

amount specified on the permit or until 

the permit is revoked, suspended, or 

modified under 15 CFR part 904. An 

IPQ permit is valid in the following 

circumstances:

(i) Until the end of the crab fishing 

year for which the permit is issued;

(ii) Until the amount harvested is 

equal to the amount specified on the 

permit;

(iii) Until the permit is modified by 

transfers under § 680.41; or

(iv) Until the permit is revoked, 

suspended, or modified pursuant to 

§ 679.43 or under 15 CFR part 904.

(2) A legible copy of a Crab IPQ 

Permit authorizing processing of IFQ 

crab must be retained on the premises 

or vessel used by the permitted person 

to process the IFQ crab at all times that 

such crab are retained on the premises 

or vessel.

(3) A Crab IPQ Permit is issued on an 

annual basis by the Regional 

Administrator to persons who hold crab 

processor QS of the type specified by 

the QS and who have submitted a 

complete Annual Application for Crab 

IFQ/IPQ Permit that is subsequently 

approved by the Regional 

Administrator. A complete application 

must be submitted no later than August 

1 of the crab fishing year for which a 

person is applying to receive IFQ or 

IPQ. If a complete application is not 

submitted by this date, that person will 

not receive IFQ or IPQ for that crab 

fishing year.

(e) Contents of Annual Application 

for Crab IFQ/IPQ permit. A person 

applying for an Annual Crab IFQ or IPQ 

permit must include the following 

information:

(1) Applicant information. (i) 

Applicant’s name and NMFS Person ID;

(ii) Applicant’s date of birth or, if a 

non-individual, date of incorporation;

(iii) Applicant’s social security 

number (optional) or tax identification 

number;

(iv) Applicant’s permanent business 

mailing address and any temporary 

mailing address the applicant wishes to 

use;

(v) Applicant’s telephone number, 

facsimile number, and e-mail address;

(2) Crab IFQ or IPQ Permit 

identification. (i) Indicate Crab QS 

fishery(ies) for which applicant is 

applying to receive IFQ or IPQ by type;

(ii) Indicate (YES or NO) whether 

applicant has joined a crab cooperative; 

if YES, indicate cooperative’s name;

(3) Affidavit of affiliation. A 

completed affidavit of affiliation 

declaring any and all affiliations, as the 

term ‘‘affiliation’’ is defined at § 680.2, 

with any PQS permit holders. An 

affidavit of affiliation will include 

affirmations by the applicant pertaining 

to relationships that may involve direct 

or indirect ownership or control of the 

delivery of IFQ and any supplemental 

documentation deemed necessary by 

NMFS to determine whether an 

affiliation exists;

(i) Whether any entity holding PQS or 

IPQ owns, directly or indirectly, 10 

percent or more of the applicant for IFQ 

or IPQ;

(ii) Whether any entity that holds PQS 

or IPQ is affiliated with the applicant, 

as affiliation is defined in § 680.2;

(iii) If the answer is YES to either 

paragraph (e)(3)(i) or (e)(3)(ii) of this 

section, provide a list of all PQS or IPQ 

holders with which you are affiliated, 

including: full name, business mailing 

address, and business telephone 

number.

(4) Identification of ownership 

interests. If the applicant is not an 

individual, the names of all persons, to 

the individual level, holding an 

ownership interest in the entity and the 

percentage ownership each person and 

individual holds in the applicant;

(5) Certification of applicant. The 

applicant must sign and date the 

application certifying that all 

information is true, correct, and 

complete to the best of his/her 

knowledge and belief. Print the name of 

the applicant. If the application is 

completed by an authorized 

representative, proof of authorization 

must accompany the application.

(6) EDR submission. Verification that 

a current EDR was submitted to the DCA 

for this applicant, if required under 

§ 680.6.

(f) Crab IFQ Hired Master Permit. (1) 

A Crab IFQ Hired Master Permit 

authorizes the individual identified on 

the permit to harvest and land IFQ crab 

for debit against the specified Crab IFQ 

Permit until the Crab IFQ Hired Master 

Permit expires or is revoked, suspended, 

or modified under 15 CFR part 904 or 

on request of the Crab IFQ Permit 

holder.

(2) A legible copy of an IFQ Hired 

Master Permit must be on board a vessel 

used to harvest IFQ crab at all times 

such crab are retained on board. Except 

as specified in § 680.42, an individual 

who is issued a Crab IFQ Hired Master 

Permit must remain aboard the vessel 

used to harvest IFQ crab with that 

permit during the crab QS fishing trip 

and at the landing site until all crab 

harvested under that permit are 

offloaded and the landing report for 

such crab is completed.

(3) Contents of Application for Crab 

IFQ Hired Master Permit. A complete 

application for a Crab IFQ Hired Master 

Permit must include the following:

(i) Purpose of application. Whether 

the application is to add or to delete a 

hired master and identification of crab 

permit(s) for which this application is 

submitted;

(ii) Permit holder information. (A) 

Name and NMFS Person ID;

(B) Social security number (optional) 

or tax ID number;

(C) Permanent business mailing 

address, and any temporary mailing 

address the applicant wishes to use, 

business telephone number, facsimile 

number, and e-mail address (if 

available);

(iii) Identification of vessel upon 

which crab IFQ will be harvested. (A) 

Vessel Name, ADF&G vessel registration 

number, USCG documentation number;

(B) Indicate whether (YES or NO) the 

applicant owns at least a 10 percent 

ownership interest in the vessel the 

Crab IFQ hired master will use to fish 

permit holder’s IFQ. If YES, provide 

documentation of applicant’s 10-percent 

ownership interest.

(iv) Crab IFQ hired master permit 

holder information. Complete a separate 

section for each crab IFQ hired master.

(A) Name and NMFS Person ID;

(B) Social security number (optional);

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63265

(C) Date of birth of hired master;

(D) Permanent business mailing 

address, and any temporary mailing 

address the applicant wishes to use, 

business telephone number, facsimile 

number, and e-mail address (if 

available).

(v) Applicant certification. The 

applicant must sign and date the 

application certifying that all 

information is true, correct, and 

complete to the best of his/her 

knowledge and belief. If the application 

is completed by an authorized 

representative, then a proof of 

authorization must accompany the 

application.

(g) RCR permit. (1) An RCR permit is 

issued on an annual basis. An RCR 

permit is valid during the crab fishing 

year for which it is issued until the RCR 

permit expires or is revoked, suspended, 

or modified under 15 CFR part 904.

(2) An RCR permit is required for:

(i) Any person who receives 

unprocessed CR crab from the person(s) 

who harvested the crab;

(ii) The owner or operator of a vessel 

that processes CR crab at sea; and

(iii) Any person required to submit a 

Departure Report under 50 CFR 

679.5(l)(4).

(3) Contents of Application for RCR 

permit. A complete application for an 

RCR permit must include verification 

that any and all fees owed by the 

applicant are paid and that a current 

EDR was submitted to the DCA for this 

applicant, if required under § 680.6. In 

addition, the applicant must include the 

following information:

(i) Indicate whether the application is 

a renewal of an existing RCR permit, an 

amendment to an existing RCR permit, 

or a request for a new RCR permit. If a 

renewal of or amendment to an existing 

RCR permit, include the applicant’s 

RCR permit number;

(ii) Applicant identification. (A) Name 

and NMFS Person ID of the applicant;

(B) Applicant’s social security number 

or tax ID number;

(C) Name of contact person for the 

applicant, if applicant is not an 

individual;

(D) Permanent business mailing 

address;

(E) Physical land-based location of 

facility including street, city, and state, 

at which the RCR operates. A separate 

RCR permit is required for each facility;

(F) Physical location of vessel 

including port name and position 

coordinates in latitude and longitude to 

the nearest minute; and

(G) Business telephone number, 

facsimile number, and e-mail address (if 

available).

(iii) Type of activity. Type of receiving 

or processing activity whether catcher/

processor or shoreside processor;

(iv) Individual responsible for the 

submission of the EDR. (A) Name of the 

designated representative submitting the 

EDR required at § 680.6 on behalf of the 

RCR;

(B) Business mailing address, 

telephone number, facsimile number, 

and e-mail address, if different from the 

RCR’s contact information;

(v) Application certification. The 

applicant must sign and date the 

application certifying that all 

information is true, correct, and 

complete to the best of his/her 

knowledge and belief. If the application 

is completed by an authorized 

representative, then a proof of 

authorization must accompany the 

application.

(vi) Verification that a current EDR 

was submitted to the DCA for this 

applicant, if required under § 680.6.

(h) Federal Crab Vessel Permit. The 

owner of a vessel must have a Federal 

Crab Vessel Permit on board that vessel 

when used to fish for CR crab.

(1) A Federal Crab Vessel Permit is 

issued on an annual basis and is in 

effect from the date of issuance through 

the end of the current crab fishing year, 

unless it is revoked, suspended, or 

modified under § 600.735 or § 600.740.

(2) A Federal Crab Vessel Permit may 

not be surrendered at any time during 

the crab fishing year for which it is 

issued.

(3) Contents of Application for 

Federal Crab Vessel Permit. A complete 

application for a Federal Crab Vessel 

Permit must include verification that a 

current EDR was submitted to the DCA 

for this applicant, if required under 

§ 680.6, and the following information:

(i) Indicate whether (YES or NO) the 

application amends an existing Federal 

Crab Vessel permit; if YES, indicate 

permit number of the existing permit;

(ii) Owner information. The name(s), 

permanent business mailing address, 

social security number (voluntary) or 

tax ID, business telephone number, 

business facsimile number, business 

e-mail address (if available) of all vessel 

owners, and the name of any person or 

company (other than the owner) that 

manages the operation of the vessel;

(iii) Vessel information. The vessel’s 

name and home port (city and state), 

ADF&G processor code, whether a 

vessel of the United States, USCG 

documentation number, and ADF&G 

vessel registration number, vessel’s LOA 

(in feet), registered length (in feet), gross 

tonnage, net tonnage, and shaft 

horsepower.

(iv) Type of vessel operation. Indicate 

the type of operations the vessel may 

conduct during a crab fishing year.

(v) Designated representative for EDR.

The name, permanent business mailing 

address, business telephone number, 

business facsimile number, and 

business e-mail address of the 

designated representative.

(vi) Applicant certification. The 

owner(s) of the vessel must sign and 

date the application certifying that all 

information is true, correct, and 

complete to the best of his/her 

knowledge and belief. Print the 

applicant name. If the application is 

completed by an authorized 

representative, then a proof of 

authorization must accompany the 

application.

(4) Transfer. A Federal Crab Vessel 

Permit issued under this paragraph is 

not transferable or assignable and is 

valid only for the vessel for which it is 

issued.

(5) Amended Application. The holder 

of a Federal Crab Vessel Permit must 

submit an amended application for a 

Federal Crab Vessel Permit within 60 

days of the date of change in:

(i) The ownership of the vessel. A 

copy of the current USCG 

documentation for the vessel showing 

the change in ownership must 

accompany the amended application.

(ii) The individual responsible for 

submission of the EDR on behalf of the 

vessel’s owner(s).

(i) Annual Crab Harvesting 

Cooperative IFQ Permit. See § 680.21.

(j) Issuance. The Regional 

Administrator may issue or amend a 

Crab QS, PQS, IFQ, and IPQ Permit or 

a Crab IFQ Hired Master Permit 

annually or at other times as needed 

under this part.

(k) Transfer. Crab QS, PQS, IFQ and 

IPQ permits and Federal Crab Vessel 

Permits issued under § 680.4 are not 

transferable, except as provided under 

§ 680.41. Crab IFQ Hired Master 

Permits, RCR permits, and crab 

cooperative permits issued under this 

section are not transferable.

(l) Inspection. The holder of a Crab 

IFQ Permit, Crab IPQ Permit, or Crab 

IFQ Hired Master Permit must present a 

legible copy of the permit on request of 

any authorized officer or RCR receiving 

a crab IFQ landing. The operator of a 

vessel used to fish for BSAI crab must 

present the original Federal Crab Vessel 

Permit on request of any authorized 

officer or RCR receiving a crab IFQ 

landing. A legible copy of the RCR 

permit must be present at the location 

of a crab IFQ landing and must be made 

available by an individual representing 

63266 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

the RCR for inspection on request of any 

authorized officer.

§ 680.5 Recordkeeping and reporting 

(R&R).

(a) General requirements—(1) 

Recording and reporting crab. Any CR 

crab harvested that is retained, landed, 

received or processed, and crab that 

cannot be processed, must be recorded 

and reported.

(2) Responsibility. The following 

participants in the CR crab fisheries are 

responsible for complying with the 

applicable R&R requirements provided 

in paragraph (a)(2)(v) of this section:

(i) The owner and operator of any 

vessel used to harvest or process CR 

crab;

(ii) A crab IFQ permit holder or crab 

IFQ hired master;

(iii) A crab IPQ permit holder or the 

manager of a crab IPQ permit holder;

(iv) An RCR, including an RCR that 

receives CR crab for custom processing, 

and an RCR that is the operator of a 

catcher vessel;

(v) The persons that are responsible 

for specific reports, forms, and records 

are specified in the following table:

Recordkeeping and Reporting Report Person Responsible Reference 

(A) Product Transfer Report (PTR) Owner and operator of catcher/processor; Owner and 

manager of shoreside processor or SFCP; RCR

§ 679.5(g)

(B) U.S. Vessel Activity Report (VAR) Owner and operator of vessel § 679.5(k)

(C) Transhipment Authorization Owner or operator of catcher/

processor; RCR

§ 679.5(l)(3)

(D) IFQ Departure Report Owner and operator of vessel § 679.5(l)(4)

(E) CR crab Landing Report RCR § 680.5(b)

(F) Catcher/processor offload report RCR § 680.5(c)

(G) Eligible Crab Community Organization (ECCO) 

Annual Report for an Eligible Crab Community (ECC)

ECCO § 680.5(d)

(H) RCR Fee Submission Form RCR § 680.5(e)

(I) Crab Economic Data Report (EDR) Owners or leaseholders of a 

catcher vessel, catcher/processor, shoreside processor, or 

SFCP

§ 680.6

(3) Representative. Designation of a 

representative to complete R&R 

requirements does not relieve the 

person(s) responsible for compliance or 

ensuring compliance with this section.

(4) Submittal of information. A person 

must submit to NMFS all information, 

records, and reports required in this 

section in English and in a legible, 

timely, and accurate manner, based on 

A.l.t.; if handwritten or typed, in 

indelible ink.

(5) Alteration of records. A person 

may not alter or change any entry or 

record submitted to NMFS, except that 

an inaccurate, incomplete, or incorrect 

entry or record may be corrected after 

notifying the Regional Administrator at 

the address and fax number listed on 

each form.

(6) Inspection of records. A person 

responsible for R&R under paragraph 

(a)(2)(i) of this section must make 

available for inspection all reports, 

forms, scale receipts, and CR crab 

landing report receipts upon the request 

of an authorized officer for the time 

periods indicated in paragraph (a)(7) of 

this section.

(7) Retention of records. A person 

responsible for R&R under paragraph 

(a)(2)(i) of this section must retain all 

reports and receipts as follows:

(i) On site. Until the end of the crab 

fishing year during which the records 

were made and for as long thereafter as 

crab or crab products recorded in the 

records are retained onboard the vessel 

or onsite at the facility; and

(ii) For 3 years. For 3 years after the 

end of the crab fishing year during 

which the records were made.

(8) Landing verification and 

inspection. Each CR crab landing and all 

crab retained on board the vessel 

making a CR crab landing are subject to 

verification and inspection by 

authorized officers.

(9) Sampling. Each CR crab landing 

and all crab retained onboard a vessel 

making a CR crab landing are subject to 

sampling by authorized officers and 

observers.

(b) Interagency electronic reporting 

system (IERS). The RCR must obtain at 

his or her own expense, hardware, 

software, and Internet connectivity to 

support Internet submissions of the CR 

crab landing report on the IERS.

(1) IERS application for user ID. Each 

RCR and permit holder must submit a 

data-entry application to the Regional 

Administrator to provide information 

needed to process account access into 

the IERS. The IERS will provide a web 

page where the applicant will enter 

information. The IERS will validate that 

all required information is submitted, 

that the information entered is in correct 

format, and also that the requested user 

ID is not already in use. The IERS will 

generate a PDF document from the 

information entered by the applicant. 

The user will sign and submit the form. 

An agency user will review the form, 

confirm that the user should be 

authorized for the system, and will 

activate the user on the IERS. The IERS 

will then send the user an email telling 

them they can now use their new user 

ID.

(2) Contents of the IERS. The IERS 

application for user ID must contain the 

following information:

(i) Date of application;

(ii) Name of applicant (user);

(iii) Processor name and location (city 

and state);

(iv) Business telephone number, 

facsimile number, and e-mail address;

(v) Requested user ID;

(vi) Initial password;

(vii) Security question;

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63267

(viii) Security answer;

(ix) Processor code(s);

(x) Federal processor permit 

number(s);

(xi) RCR permit number(s);

(xii) Registered buyer permit 

number(s);

(xiii) Signature of applicant and date 

signed. Signature of applicant on form 

means that RCR or permit holder, as 

appropriate, agrees to use access 

privileges to the IERS for purposes of 

submitting legitimate fishery landing 

reports and to safeguard the user ID and 

password to prevent their use by 

unauthorized persons.

(xiv) Signature of plant manager and 

date signed. Signature of plant manager 

ensures that the applicant is authorized 

to submit landing reports for the 

processor identification number(s) 

listed.

(c) CR crab landings—(1) Joint and 

several liability. The CR crab permit 

holder and crab IFQ hired master are 

required to provide accurate 

information to the RCR to complete the 

CR crab landing report.

(2) Reporting. Any CR crab not 

previously reported must be reported by 

the RCR on any day when CR crab is 

landed.

(3) Submission requirement. An RCR 

is required to submit a CR crab landing 

report to the Regional Administrator for 

each catcher vessel landing.

(4) Properly debited landing. All 

retained crab catch must be weighed, 

reported and debited from the 

appropriate IFQ or IPQ account under 

which the catch was harvested, as 

appropriate. A properly debited Internet 

receipt from the IERS or a manual 

landing report receipt constitutes 

confirmation that NMFS received the 

CR crab landing report and that the 

permit holder’s account is properly 

debited. The receipt must be signed and 

dated by both the RCR and permit 

holder.

(5) Remain at landing site. Except for 

landings of CR crab processed at sea, 

once the landing has commenced, the 

CR crab permit holder or crab IFQ hired 

master and the harvesting vessel may 

not leave the landing facility until the 

CR crab account is properly debited (as 

defined in paragraph (c)(4) of this 

section).

(6) No movement of CR crab. The 

landed crab may not be moved from the 

facility where it is landed until the CR 

crab landing report is received by the 

Regional Administrator, and the IFQ 

permit holder’s or IPQ permit holder’s 

account is properly debited (as defined 

in paragraph (c)(4) of this section. A 

properly printed Internet submission 

receipt, or a receipt from another 

NMFS-approved reporting method, 

must be signed by both the RCR and 

permit holder. This receipt constitutes 

confirmation that NMFS received the 

CR crab landing report and that the 

permit holder’s account is properly 

debited.

(7) Time limits. (i) A landing of CR 

crab may commence at any time.

(ii) For CR crab harvested under a 

CPO or CPC permit, an RCR must 

submit a completed CR crab landing 

report to NMFS within 6 hours of the 

end of each calendar day (A.l.t.) in 

which the CR crab was harvested.

(iii) For CR crab harvested on a 

catcher/processor, the owner or operator 

is required to submit a daily CR crab 

landing report to NMFS within 6 hours 

of the end of each calendar day (A.l.t.) 

in which CR crab was harvested.

(8) IERS CR landing report procedure.

(i) An RCR must enter his or her 

authorized user ID and password to 

access the IERS. An RCR obtains a user 

ID by submitting to NMFS an IERS 

application for user ID (see paragraph 

(b)(1) of this section).

(ii) The CR crab permit holder must 

provide his or her name, NMFS person 

ID number, crab permit holder permit 

number, and his or her own password 

or personal identification number (PIN), 

if required, to enter a CR crab landing 

report.

(iii) A person who for any reason is 

unable to properly submit an electronic 

CR crab landing report or debit a 

landing as required under paragraph (c) 

of this section must telephone NMFS at 

800-304-4846;

(iv) The address of the NMFS Alaska 

Region Internet site will be provided to 

all RCRs receiving crab;

(9) Contents of CR landing report. The 

RCR must accurately enter the following 

information in a CR crab landing report:

(i) RCR permit number;

(ii) ADF&G processor code of first 

purchaser;

(iii) CFEC permit number;

(iv) Vessel name;

(v) Valid year of CFEC license;

(vi) Valid year of processor permit;

(vii) CR fishery code from Table 1 to 

this part;

(viii) Indicate (YES or NO) if a portion 

of the harvested CR crab was delivered 

to another processor; if YES, indicate 

the other processor’s name and 

associated crab fish ticket number;

(ix) Indicate (YES or NO) whether all 

CR crab are removed from the vessel;

(x) Management program: IFQ, CDQ, 

or Adak. If CDQ enter CDQ group 

number;

(xi) ADF&G vessel registration 

number of the delivering vessel;

(xii) Date fishing began;

(xiii) Date of the CR crab landing;

(xiv) Number of pot lifts in each 

ADF&G statistical area;

(xv) Number of crew. Enter crew 

including operator and excluding 

observer(s);

(xvi) Number of observers;

(xvii) ADF&G fish ticket number;

(xviii) Type of processing operation. If 

shoreside processor, enter port code 

from Tables 14a or 14b to part 679. If 

catcher/processor, enter operation type 

from Table 14c to part 679.

(xix) ADF&G statistical area of harvest 

reported by the IFQ permit holder;

(xx) Species code of catch from Table 

2 to this part;

(xxi) Delivery-condition code of catch 

from Table 3 to this part.

(xxii) Number of crabs retained 

(optional);

(xxiii) Price per pound;

(xxiv) Total value for each species of 

CR crab reported;

(xxv) Scale weight of live crab in 

pounds;

(xxvi) Scale weight of deadloss in 

pounds;

(xxvii) Scale weight of crab retained 

for personal use in pounds; and

(xxviii) Gear code to describe gear 

used to harvest CR crab (see Table 15 to 

50 CFR part 679).

(10) Custom processing. In addition to 

the information required in paragraph 

(b)(6) of this section, if custom 

processing CR crab, enter the name and 

ADF&G processor code of that other 

person;

(11) CDQ and Adak landings. Instead 

of the information described in 

paragraph (b)(6) of this section, an RCR 

who receives a landing of CR crab 

harvested under the CDQ or Adak 

community allocation programs must 

submit for each landing the following 

information for each CR fishery and 

species:

(i) RCR permit number;

(ii) CR fishery code from Table 1 to 

this part;

(iii) Crab species code from Table 2 to 

this part;

(iv) Type of crab, either CDQ or Adak 

community allocation;

(v) If CDQ, enter CDQ group number;

(vi) Crab species amount. Enter the 

initial accurate scale weight(s) in raw 

crab pounds landed or processed at sea;

(vii) Price per pound; and

(viii) Total value for each species of 

CR crab reported (optional).

(12) Required signature. After the RCR 

enters the landing and/or processing 

data in the Internet submission form(s) 

or other electronic method approved by 

NMFS, the RCR and the IFQ permit 

holder must sign the printed receipts to 

acknowledge the accuracy of the CR 

crab landing report.

63268 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(d) Catcher/processor offload report.

The owner or operator of a catcher/

processor that harvested CR crab must 

complete a catcher/processor offload 

report at the time of offload of CR crab 

and attach a scale printout showing 

gross product offload weight.

(1) Contents of catcher/processor 

offload report. The catcher/processor 

offload report must include the 

following:

(i) Name, ADF&G processor code, and 

Federal crab vessel permit number of 

the catcher/processor;

(ii) Fishing start date and time;

(iii) Fishing stop date and time;

(iv) Product code from Table 3 to this 

part

(v) Total gross weight of product 

offload, including glaze and packaging;

(vi) Estimated glaze percentage;

(vii) Case count and average box 

weight (lb or kg);

(viii) Net weight of crab product (lb or 

kg);

(ix) Completion date and time of 

catcher/processor offload;

(x) Location (port) of catcher/

processor offload (see Tables 14a and 

14b to part 679);

(xi) ADF&G fish ticket number.

(2) The RCR must submit 

electronically or by fax the catcher/

processor offload report and a copy of 

the scale printout within 2 hours of 

completion of offload to the Regional 

Administrator at Facsimile No. 

(907-586-7465).

(e) ECCO Annual Report for an ECC.

(1) Annually by June 30, each ECCO 

must submit a complete annual report 

on its CR crab activity for the prior crab 

fishing year for each ECC represented by 

the ECCO. The ECCO must submit a 

copy of the annual report to the 

governing body of each community 

represented by the ECCO and to the 

Regional Administrator, NMFS, Alaska 

Region; P.O. Box 21668; Juneau, AK 

99802.

(2) Contents of ECCO Annual Report.

A complete annual report must include 

the following information for the IFQ 

derived from the QS held by the ECCO:

(i) Name, ADF&G vessel registration 

number, USCG documentation number, 

length overall (LOA), and home port of 

each vessel from which the IFQ was 

harvested;

(ii) Name and business addresses of 

individuals employed as crew members 

when fishing the IFQ;

(iii) Criteria used by the ECCO to 

distribute IFQ leases among eligible 

community residents;

(iv) Description of efforts made to 

ensure that IFQ lessees employ crew 

members who are eligible community 

residents of the ECC aboard vessels on 

which IFQ derived from QS held by a 

ECCO is being fished;

(v) Description of the process used to 

solicit lease applications from eligible 

community residents of the ECC on 

whose behalf the ECCO is holding QS;

(vi) Names and business addresses 

and amount of IFQ requested by each 

individual applying to receive IFQ from 

the ECCO;

(vii) Any changes in the bylaws of the 

ECCO, board of directors, or other key 

management personnel;

(viii) Copies of minutes, bylaw 

changes, motions, and other relevant 

decision making documents from ECCO 

board meetings.

(f) RCR fee submission form. (See 

§ 680.44.)

(1) Applicability. An RCR who 

receives any CR crab per § 680.44 or the 

RCR’s authorized representative must 

submit a complete RCR Fee Submission 

Form electronically, by mail, or by 

facsimile to the Regional Administrator. 

Mail to: Regional Administrator, NMFS, 

Alaska Region; Attn: Operations, 

Management, & Information Division 

(OMI); P.O. Box 21668; Juneau, AK 

99802-1668; Facsimile No. 

(907-586-7354). RCRs may also submit 

an RCR Fee Submission Form 

electronically to NMFS via forms 

available from RAM or on the RAM area 

of the Alaska Region Home Page at 

http://www.fakr.noaa.gov/ram.

(2) Due date and submittal. The 

reporting period of the RCR Fee 

Submission Form shall be the crab 

fishing year. An RCR must submit any 

crab cost recovery fee liability 

payment(s) and the RCR Fee Submission 

Form to NMFS electronically or to the 

address provided at paragraph (e)(1) of 

this section not later than July 31 

following the crab fishing year in which 

the payment for CR crab landings were 

made.

(3) Required information. An RCR 

must accurately record on the RCR Fee 

Submission Form the following 

information:

(i) Identification of the RCR. (A) 

Printed full name and NMFS person ID 

of RCR;

(B) Social security number or Federal 

tax identification number;

(C) Permanent or temporary business 

mailing address;

(D) Business telephone number, 

business facsimile number, and 

business e-mail address (if available).

(E) Certification of applicant. Printed 

name and signature of applicant and 

date signed. If authorized 

representative, attach authorization to 

application.

(ii) Method of Payment (see § 680.44 

(a)(4)). The RCR must indicate the form 

of payment for fees including personal 

check, bank certified check (cashier’s 

check), money order, or credit card. If 

credit card, the RCR must submit the 

card number, expiration date, amount of 

payment, name as printed on the card, 

signature of the card holder, and date of 

signature.

(g) Product transfer report. (See 

§ 679.5(g).)

(h) U.S. Vessel activity report (VAR).

(See § 679.5(k).)

(i) Transshipment authorization. (See 

§ 679.5(l)(3).)

(j) IFQ departure report. (See 

§ 679.5(l)(4).)

(k) Catcher vessel longline and pot 

daily fishing logbook (DFL) and catcher/

processor daily cumulative production 

logbook (DCPL). (See § 679.5 (c)).

§ 680.6 Crab economic data report (EDR).

(a) Catcher vessel historical EDR. (1) 

NMFS will select catcher vessels from a 

list of known catcher vessels that made 

at least one landing from fisheries listed 

in Table 1 to this part between January 

1, 1998, through December 31, 2004, 

and will publish a Federal Register

notice identifying vessels whose 

existing or former owners and 

leaseholders are required to submit an 

EDR, as follows:

(i) Owners or leaseholders of catcher 

vessels that participated in the BSAI 

crab fisheries between January 1, 1998, 

through December 31, 2004 and have 

qualified for or hold QS, PQS, IFQ, or 

IPQ under this Program.

(ii) Owners or leaseholders of catcher 

vessels that participated in the BSAI 

crab fisheries between January 1, 1998, 

through December 31, 2004, that did not 

qualify for and receive QS, PQS, IFQ, or 

IPQ, but are participants at any time 

since January 23, 2004, in the BSAI crab 

fisheries.

(2) Time limit. The owner or 

leaseholder of the identified vessels 

must submit the historical EDR to the 

DCA 60 days after the Federal Register

notice notifying owners or leaseholders 

to the address provided on the form.

(3) Instructions. Instructions for 

submitting a catcher vessel historical 

EDR and certification page are specified 

in the following table:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63269

If you were ... And ... You must complete and submit ... 

(i) The catcher vessel owner 

as described in paragraph 

(a)(1) of this section

(A) You harvested BSAI crab in the vessel described 

at paragraph (a)(4)(ii)(B) of this section and were notified by NMFS to submit an EDR for selected years.

Entire EDR for each year that BSAI crab was harvested.

(B) No one harvested BSAI crab in the vessel described at paragraph (a)(4)(ii)(B) of this section and 

were notified by NMFS to submit an EDR for selected 

years.

EDR certification pages.

(C) You leased the vessel to another party, and harvested no BSAI crab in the vessel described at paragraph (a)(4)(ii)(B) of this section and were notified by 

NMFS to submit an EDR for selected years.

(1) EDR certification pages. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the vessel during 

the NMFS-selected years.

(D) You leased the vessel for a portion of the year to 

another party, but harvested some BSAI crab in the 

vessel described at paragraph (a)(4)(ii)(B) of this section and were notified by NMFS to submit an EDR for 

selected years.

(1) Entire EDR for each year that BSAI crab was harvested. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the vessel during 

the NMFS-selected years.

(ii) The leaseholder as described in paragraph (a)(1) 

of this section

You harvested BSAI crab in the vessel described at 

paragraph (a)(4)(ii)(B) of this section vessel and were 

notified by NMFS to submit an EDR for selected 

years.

Entire EDR for each year that BSAI crab was harvested.

(4) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. The 

owner or leaseholder must submit the 

completed EDR certification pages only, 

and must attest that they meet the 

conditions exempting them from 

submitting the EDR, by signing and 

dating the certification pages (see 

paragraph (a)(3) of this section).

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

year for which the vessel is selected;

(B) Catcher vessel information: Vessel 

name, company name, USCG 

documentation number, ADF&G vessel 

registration number, Federal crab vessel 

permit number, crab LLP license 

number(s), estimated market value of 

vessel and equipment, and replacement 

value of vessel and equipment.

(C) Owner information: Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available).

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing this report. (1) 

Indicate whether the person completing 

this report is the owner or leaseholder;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(5) EDR. The owner or leaseholder 

must record the following information 

on an EDR:

(i) Crab activity chart. Complete a 

crab activity chart by entering the 

following information: CR fishery code 

(see Table 1 to this part), ADF&G Fish 

ticket number(s), number of days at sea, 

average crew size, and number of pots 

lost (if applicable).

(ii) Crab sales gross revenue. CR 

fishery code, pounds sold, and gross 

revenue.

(iii) CDQ crab lease costs. CR fishery 

code, pounds leased, and total cost of 

lease.

(iv) Crab harvesting labor costs. CR 

fishery code, number of crew earning 

shares, total crew share payment, and 

captain’s share payment.

(v) BSAI crab crew residence 

information. For each employee in the 

calendar year being reported, record 

location of residence and number of 

employees that reside in each location 

as follows:

(A) If Alaska, enter primary city of 

residence.

(B) If state other than Alaska, enter 

primary state of residence.

(C) If country other than United 

States, enter primary country of 

residence.

(vi) BSAI crab-specific vessel costs.

For the fishing year being reported, 

record insurance premiums (for hull, 

property and indemnity, and pollution), 

insurance deductible fees, quantity and 

cost of pots purchased, line, and other 

crab fishing gear purchases, pounds and 

cost of bait by species, gallons and cost 

of fuel, cost of lubrication and hydraulic 

fluids, cost of food and provisions for 

crew, other crew costs, freight costs of 

supplies shipped to you for the vessel, 

freight costs for landed crab, storage, 

observer costs, fish taxes, and other 

crab-specific costs.

(vii) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: improvements for vessel, gear 

and equipment; repair and maintenance 

(R&M) expenses for vessel, gear and 

equipment; other vessel overhead 

expenses; and other vessel-specific costs 

(specify).

(viii) Labor payment details. (A) 

Indicate whether the following expenses 

were deducted (by circling 1) or not 

deducted (by circling 2) from the total 

revenue before calculating the crew 

share: Fuel and lubrication, food and 

63270 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

provisions, bait, fish tax, observer costs, 

CDQ fish, freight, gear loss, and other 

(specify).

(B) Indicate percentage of the net 

share that was applied to boat share and 

crew share (including captain).

(ix) Prorating information. Enter the 

totals for the vessel for the calendar year 

in all fisheries for each of the following 

categories: days at sea, revenue, pounds 

retained, and labor costs.

(b) Catcher vessel annual EDR—(1) 

Requirement. On or before May 1 of 

each year, beginning with Year 2005, 

any owner or leaseholder of a catcher 

vessel that landed crab from a CR 

fishery must submit to the DCA, at the 

address provided on the form, an EDR 

for annual data for the previous year.

(2) Instructions. Instructions for 

submitting a catcher vessel annual EDR 

and certification page are specified in 

the following table:

If you are ... And ... You must complete and submit ... 

(i) The catcher vessel owner (A) You harvested BSAI crab in the vessel described 

at paragraph (b)(3)(ii)(B) of this section during this calendar year.

Entire EDR

(B) No one harvested BSAI crab in the vessel described at paragraph (b)(3)(ii)(B) of this section during 

this year.

EDR certification pages

(C) You leased the vessel to another party, and harvested no BSAI crab in the vessel described at paragraph (b)(3)(ii)(B) of this section during this calendar 

year.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the vessel during 

this calendar year.

(D) You leased the vessel for a portion of the year to 

another party, but harvested some BSAI crab in the 

vessel described at paragraph (b)(3)(ii)(B) of this section during this calendar year.

(1) Entire EDR 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the vessel during 

this calendar year.

(ii) The leaseholder You harvested BSAI crab in the vessel described at 

paragraph (b)(3)(ii)(B) of this section vessel during this 

calendar year.

Entire EDR

(3) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. The 

owner or leaseholder must submit the 

completed EDR certification pages only, 

and must attest that they meet the 

conditions exempting them from 

submitting the EDR, by signing and 

dating the certification pages.

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

year of reporting year;

(B) Catcher vessel information.

Catcher vessel name, company name, 

USCG documentation number, ADF&G 

vessel registration number, Federal Crab 

Vessel Permit number, crab LLP license 

number(s), estimated market value of 

vessel and equipment, and replacement 

value of vessel and equipment;

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available);

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing this report. (1) 

Indicate whether the person completing 

this report is the owner or leaseholder;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(4) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) Season interval chart. Complete a 

season interval chart by entering the 

following information: calendar year, 

season interval number, CR fishery 

code(s) (see Table 1 to this part), ADF&G 

fish ticket number, number of days at 

sea, average crew size, and number of 

pots lost (if applicable).

(ii) Crab sales gross revenue. Season 

interval number, species code, pounds 

sold, and gross revenue;

(iii) CDQ and IFQ crab leases. Season 

interval number, species code, pounds 

leased, and total cost of leasing the 

quota;

(iv) Crab harvesting labor costs—(A) 

Standard crew payment (shares) for 

non-IFQ crew and/or captains. Season 

interval number, number of crew 

earning shares, crew share payment, and 

captain’s share payment;

(B) Payments to IFQ-holding crew 

and/or captains. Season interval 

number, number of crew contributing 

IFQ shares, pounds of IFQ contributed 

by crew, total payment to crew for IFQ 

and shares (for all fish caught, and 

residual profit on their IFQ), pounds of 

IFQ contributed by captain, and 

payment to captain for IFQ and shares 

(for all fish caught, and residual profit 

on their IFQ);

(v) BSAI crab crew identification—(A) 

Employees with crew license. Alaska 

Commercial Crew license number or the 

State of Alaska Commercial Fisheries 

Entry Commission (CFEC) gear operator 

permit number, and location of crew 

residence (city and state);

(B) Employees without crew license.

Location of residence and the number of 

employees that reside in each location 

as follows:

(1) If Alaska, enter primary city of 

residence;

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63271

(2) If state other than Alaska, enter 

primary state of residence; or

(3) If country other than United 

States, enter primary country of 

residence.

(vi) BSAI crab-specific vessel costs.

Insurance premiums (hull, property and 

indemnity, and pollution), insurance 

deductible fees, pots purchased, line 

and other gear purchases, pounds and 

cost of bait by species, gallons and cost 

of fuel, lubrication and hydraulic fluids, 

food and provisions for crew, other crew 

costs, freight costs of supplies shipped 

to you for the vessel, freight costs for 

landed crab, storage, observer costs, fish 

taxes, other crab-specific costs (specify), 

and fishing cooperative costs.

(vii) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: improvements in vessel, gear, 

and equipment (city and state where 

purchased); R&M for vessel gear, and 

equipment (city and state where repairs 

were made); other vessel overhead 

expenses; and other vessel-specific costs 

(specify).

(viii) Labor payment details. (A) 

Indicate whether the following expenses 

were deducted from the total revenue 

before calculating the crew share: Fuel 

and lubrication, food and provisions, 

bait, fish tax, observer costs, CDQ fish, 

IFQ leases, freight, gear loss, and other 

(specify);

(B) Indicate percentage of the net 

share that is applied to boat share and 

crew share (including captain).

(ix) Prorating information. Enter the 

totals for the vessel, for the calendar 

year in all fisheries for each of the 

following categories: days at sea, 

revenue, pounds retained, and labor 

costs.

(c) Catcher/processor historical EDR—

(1) Requirement. Any owner or 

leaseholder of a catcher/processor that 

harvested or processed BSAI crab in the 

calendar years 1998, 2001, or 2004 must 

submit to the DCA, at the address 

provided on the form, an EDR for 

historical data for each of the specified 

calendar years, if they:

(i) Qualified for or hold QS, PQS, IFQ, 

or IPQ under this program;

(ii) Did not qualify for and receive QS, 

PQS, IFQ, or IPQ, but are participants at 

any time since January 23, 2004, in the 

BSAI crab fisheries.

(2) Time limit. Any owner or 

leaseholder of the catcher/processor 

described in paragraph (c)(4)(ii)(B) of 

this section must submit the historical 

EDR to the DCA by [DATE 60 DAYS 

AFTER THE DATE OF 

EFFECTIVENESS OF THE FINAL 

RULE] at the address provided on the 

form.

(3) Instructions. Instructions for 

submitting a catcher/processor 

historical EDR and certification page are 

specified in the following table:

If you were ... And ... You must complete and submit ... 

(i) The catcher/processor 

owner described in paragraph (c)(1) of this section

(A) You processed BSAI crab in the vessel described 

at paragraph (c)(4)(ii)(B) of this section during 1998, 

2001, or 2004.

Entire EDR for each year that BSAI crab was processed.

(B) No one processed BSAI crab in the vessel described at paragraph (c)(4)(ii)(B) of this section during 

1998, 2001, or 2004.

EDR certification pages for each year that no one 

processed BSAI crab.

(C) You leased your catcher/processor to another 

party, and processed no BSAI crab in the vessel described at paragraph (c)(4)(ii)(B) of this section during 

1998, 2001, or 2004.

(1) EDR certification pages. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the catcher/processor during 1998, 2001, or 2004.

(D) You leased your catcher/processor for a portion of 

the year to another party, but processed some BSAI 

crab in the vessel described at paragraph (c)(4)(ii)(B) 

of this section during1998, 2001, or 2004.

(1) Entire EDR for each year that BSAI crab was processed. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the catcher/processor during 1998, 2001, or 2004.

(ii) The leaseholder described in paragraph (c)(1) 

of this section

You processed BSAI crab in the vessel described at 

paragraph (c)(4)(ii)(B) of this section during 1998, 

2001, or 2004.

Entire EDR for each year that BSAI crab was processed.

(4) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification page either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. If the 

owner or leaseholder did not process 

BSAI crab in 1998, 2001, or 2004, he or 

she must submit the completed EDR 

certification pages only, and must attest 

that he or she meets the conditions 

exempting him or her from submitting 

the EDR, by signing and dating the 

certification pages, for each year of 

1998, 2001, or 2004 that this applies.

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages;

(A) Calendar year of EDR. Calendar 

year corresponding to 1998, 2001, or 

2004;

(B) Catcher/processor information.

Catcher/processor name, company 

name, USCG documentation number, 

ADF&G processor code, Crab Processor 

Permit number, crab LLP license 

number(s), estimated market value of 

vessel and equipment, and replacement 

value of vessel and equipment.

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available).

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

63272 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(E) Person completing this report. (1) 

Indicate whether the person completing 

this report is the owner or leaseholder;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(5) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) BSAI crab activity chart. Complete 

a crab activity chart by entering the 

following information: CR fishery code 

(see Table 1 to this part); dates covered 

(beginning and ending day, month and 

year); number of days at sea; number of 

crab processing days, and number of 

pots lost (if applicable).

(ii) BSAI crab production. CR fishery 

code, raw crab pounds, product code, 

process code, crab size, crab grade, box 

size, finished pounds, and whether 

custom processed (yes or no).

(iii) Crab harvesting labor costs. CR 

fishery code, number of crew earning 

shares, total crew share payment, and 

captain’s share payment.

(iv) Crab processing labor costs. CR 

fishery code, number of crew with pay 

determined by processing work, average 

number of crab processing positions, 

and total processing labor payment.

(v) BSAI crab crew residence 

identification. For each employee in the 

calendar year being reported, record 

location of residence and number of 

employees that reside in each location 

as follows:

(A) If Alaska, enter primary city of 

residence;

(B) If state other than Alaska, enter 

primary state of residence;

(C) If country other than United 

States, enter primary country of 

residence;

(vi) BSAI crab custom processing 

done for you. CR fishery code, raw 

pounds supplied to custom processors, 

raw pounds purchased from custom 

processors, product code, process code, 

crab size, crab grade, box size, finished 

pounds, and processing fee.

(vii) Raw crab purchases from 

delivering vessels. CR fishery code, crab 

size, crab grade, raw pounds purchased, 

and gross payment.

(viii) CDQ Crab Costs (leases). CR 

fishery code, pounds leased, and total 

cost.

(ix) Annual BSAI crab sales. Record 

the following information on crab sales 

to affiliated entities and to unaffiliated 

entities: species code, product code, 

process code, crab size, crab grade, box 

size, finished pounds, and gross 

revenue.

(x) BSAI crab-specific vessel costs.

Insurance premiums (hull, property and 

indemnify, and pollution); insurance 

deductible fees; total of fisheries taxes 

which includes the Alaska fisheries 

business tax, Alaska fisheries resource 

landing tax, SMAA taxes, and other 

local sales tax on raw fish; pots 

purchased (quantity and cost); line and 

other crab fishing gear purchases; bait 

(by each CR fishery code, species, 

pounds and cost); fuel (by CR fishery 

code, gallons and cost); lubrication and 

hydraulic fluids; food and provisions for 

crew; other crew costs; processing and 

packaging materials, equipment and 

supplies; re-packing costs, broker fees 

and promotions for BSAI crab sales (by 

CR fishery code); observer costs (by CR 

fishery code); freight costs for supplies 

to the vessel; freight and handling costs 

for processed crab products from the 

vessel; product storage; waste disposal; 

and other crab-specific costs (specify).

(xi) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: improvements in vessel, gear, 

and equipment; R&M for vessel gear, 

and equipment; number of employees 

and salaries for foremen, managers, and 

other employees not included in direct 

labor costs; other vessel overhead 

expenses; and other vessel-specific costs 

(specify).

(xii) BSAI crab custom processing 

performed for others. CR Fishery code, 

product code, process code, whether 

OUR CRAB or THEIR CRAB, and 

processing revenue.

(xiii) Prorating information. Enter the 

totals for the year for the vessel in all 

fisheries for each of the following 

categories: processing days, days at sea, 

revenue, pounds processed, pounds 

retained, and labor costs.

(xiv) Labor payment details. (A) 

Indicate whether the following expenses 

were deducted (by circling 1) or not 

deducted (by circling 2) from the total 

revenue before calculating the crew 

share: Fuel and lubrication, food and 

provisions, bait, fish tax, observer costs, 

CDQ fish, freight, gear loss, and other 

(specify).

(B) Indicate percentage of the net 

share that was applied to boat share and 

harvesting crew share (including 

captain).

(C) If processing workers were paid on 

a share system, indicate percentage of 

the net share (if applicable) that was 

applied to processing workers based on 

product value or net share.

(d) Catcher/processor annual EDR—

(1) Requirement. On or before May 1 of 

each year, beginning with Year 2005, 

any owner or leaseholder of a catcher/

processor that landed or processed crab 

from a CR fishery must submit to the 

DCA, at the address provided on the 

form, an EDR for annual data for the 

previous year.

(2) Instructions. Instructions for 

submitting a catcher/processor annual 

EDR and certification page are specified 

in the following table:

If you are ... And ... You must complete and submit ... 

(i) The catcher/processor 

owner

(A) You processed BSAI crab in the vessel described 

at paragraph (d)(3)(ii)(B) of this section during this calendar year.

Entire EDR

(B) No one processed BSAI crab in the vessel described at paragraph (d)(3)(ii)(B) of this section during 

this calendar year.

EDR certification pages

(C) You leased all of your IPQ to another party, and 

processed no BSAI crab in the vessel described at 

paragraph (d)(3)(ii)(B) of this section during this calendar year.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63273

If you are ... And ... You must complete and submit ... 

(D) You leased portions of your IPQ to another party, 

but processed some BSAI crab in the vessel described at paragraph (d)(3)(ii)(B) of this section during 

this calendar year.

(1) Entire EDR 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

(ii) The leaseholder described in paragraph (d)(1) 

of this section

You processed BSAI crab in the vessel described at 

paragraph (d)(3)(ii)(B) of this section during this calendar year.

Entire EDR

(3) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. The 

owner or leaseholder must submit the 

completed EDR certification pages only, 

and must attest that they meet the 

conditions exempting them from 

submitting the EDR, by signing and 

dating the certification pages.

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

year for the reporting year;

(B) Catcher/processor information.

Catcher/processor name, company 

name, USCG documentation number, 

ADF&G processor code, Crab Processor 

Permit number, crab LLP license 

number(s), estimated market value of 

vessel and equipment, and replacement 

value of vessel and equipment.

(C) Owner information. Owner name, 

title, business telephone number, 

facsimile number, and e-mail address (if 

available).

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing this report. (1) 

Indicate whether the person completing 

this report is the owner or leaseholder;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(4) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) Season interval chart. Complete a 

season interval chart by entering the 

following information: Calendar year, 

season interval number, CR fishery code 

(see Table 1 to this part), dates covered, 

number of days at sea, number of crab 

processing days, and number of pots 

lost (if applicable).

(ii) BSAI crab production. Season 

interval number, species code, raw 

pounds, product code, process code, 

crab size, crab grade, box size, finished 

pounds, and whether custom processed 

(Yes or No).

(iii) Harvesting labor costs. Record the 

following information for crew if they 

harvest crab only, or harvest and 

process crab.

(A) Standard crew payment (shares) 

for non-IFQ contributing crew and/or 

captains. Season interval number, 

number of crew earning shares, crew 

share payment, and captain’s share 

payment.

(B) Payments to IFQ-holding crew 

and/or captains. Season interval 

number, number of crew contributing 

IFQ shares, pounds of IFQ contributed 

by crew, total payment to crew for IFQ 

and shares, pounds of IFQ contributed 

by captain, and payment to captain for 

IFQ and shares.

(iv) Crab processing labor costs.

Season interval number, number of crew 

with pay determined by processing 

work, average number of crab 

processing positions, and total 

processing labor payment.

(v) BSAI crab crew identification—(A) 

Employees with crew license. Alaska 

Commercial Crew license number or the 

CFEC gear operator permit number, and 

location of crew residence (city and 

state).

(B) Employees without crew license.

Location of residence and the number of 

employees that reside in each location 

as follows:

(1) If Alaska, enter primary city of 

residence.

(2) If state other than Alaska, enter 

primary state of residence, or

(3) If country other than United 

States, enter primary country of 

residence.

(vi) BSAI crab custom processing 

done for you. Season interval number, 

species code, raw pounds supplied to 

custom processors, raw pounds 

purchased from custom processors, 

product code, process code, crab size, 

crab grade, box size, finished pounds, 

and processing fee.

(vii) Raw crab purchases from 

delivering vessels. Season interval 

number, species code, crab size, crab 

grade, raw pounds purchased, and gross 

payment.

(viii) CDQ and IFQ crab costs (leases).

For CDQ and IFQ leases enter season 

interval number, species code, pounds 

leased, and total cost.

(ix) Annual BSAI crab sales. For 

affiliated entities and unaffiliated 

entities enter species code, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

gross revenue.

(x) BSAI crab-specific vessel costs.

Insurance premiums (hull, property and 

indemnity, and pollution); insurance 

deductible fees; total of fisheries taxes 

which include the Alaska fisheries 

business tax, Alaska fisheries resource 

landing tax, SMAA taxes, and other 

local sales tax on raw fish; pots 

purchased by city and state (quantity 

and cost); line and other crab fishing 

gear purchases by city, state, and cost; 

bait (by each season interval number by 

city and state, species, pounds, and 

cost); fuel in gallons and cost by season 

interval number, city and state; 

lubrication and hydraulic fluids by city 

and state; food and provisions for crew; 

other crew costs; processing and 

packaging materials, equipment and 

supplies by city and state; re-packing 

costs; broker fees and promotions for 

BSAI crab sales (by season interval 

number); observer costs (by season 

interval number); freight costs for 

products to the vessel; freight and 

handling costs for processed crab 

products from the vessel; product 

storage; waste disposal; other crabspecific costs (specify), and fishing 

cooperative costs.

(xi) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

63274 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: improvements for vessel, gear, 

and equipment (by city and state); R&M 

for vessel, gear, and equipment (by city 

and state); number of employees and 

salaries for foremen, managers and other 

employees not included in direct labor 

costs; other vessel overhead expenses; 

and other vessel-specific costs (specify).

(xii) BSAI crab custom processing 

performed for others. Season interval 

number, species code, product code, 

process code, whether OUR CRAB or 

THEIR CRAB, and processing revenue.

(xiii) Prorating information. Enter the 

totals for the year for the vessel in all 

fisheries for each of the following 

categories: processing days, days at sea, 

revenue, pounds processed, pounds 

retained, and labor costs.

(xiv) Labor payment details. (A) 

Indicate whether the following expenses 

were deducted (by circling 1) or not 

deducted (by circling 2) from the total 

revenue before calculating the crew 

share: Fuel and lubrication, food and 

provisions, bait, fish tax, observer costs, 

CDQ fish, IFQ leases, freight, gear loss, 

and other (specify).

(B) Indicate percentage of the net 

share that is applied to boat share and 

harvesting crew share (including 

captain).

(C) If processing workers are paid on 

a share system, indicate percentage of 

the net share (if applicable) that is 

applied to processing workers based on 

product value or net share.

(e) Stationary floating crab processor 

(SFCP) historical EDR—(1) 

Requirement. Any owner or leaseholder 

of an SFCP that processed CR fisheries 

crab in the calendar years 1998, 2001, or 

2004 must submit to the DCA, at the 

address provided on the form, an EDR 

for historical data for each of the 

specified calendar years, if they:

(i) Qualified for or hold QS, PQS, IFQ, 

or IPQ under this program;

(ii) Did not qualify for and receive QS, 

PQS, IFQ, or IPQ, but are participants at 

any time since January 23, 2004, in the 

BSAI crab fisheries.

(2) Time limit. Any owner or 

leaseholder of the SFCP described in 

paragraph (e)(4)(ii)(B) of this section 

must submit the historical EDR to the 

DCA by [DATE 60 DAYS AFTER THE 

DATE OF EFFECTIVENESS OF THE 

FINAL RULE] at the address provided 

on the form.

(3) Instructions. Instructions for 

submitting an SFCP historical EDR and 

certification page are specified in the 

following table:

If you were ... And ... You must complete and submit ... 

(i) The SFCP owner described in paragraph (e)(1) 

of this section

(A) You processed BSAI crab in the SFCP described 

at paragraph (e)(4)(ii)(B) of this section during 1998, 

2001, or 2004.

Entire EDR for each year that BSAI crab was processed.

(B) No one processed BSAI crab in the SFCP described at paragraph (e)(4)(ii)(B) of this section during 

1998, 2001, or 2004.

EDR certification pages for each year that no one 

processed BSAI crab.

(C) You leased your SFCP to another party, and processed no BSAI crab in the SFCP described at paragraph (e)(4)(ii)(B) of this section during 1998, 2001, or 

2004.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the SFCP during 

1998, 2001, or 2004.

(D) You leased your SFCP a portion of the time to another party, but processed some BSAI crab in the 

SFCP described at paragraph (e)(4)(ii)(B) of this section during 1998, 2001, or 2004.

(1) Entire EDR for each year that BSAI crab was processed. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the SFCP during 

1998, 2001, or 2004.

(ii) The leaseholder described in paragraph (e)(1) 

of this section

You operated the SFCP described at paragraph 

(e)(4)(ii)(B) of this section and processed some BSAI 

crab during 1998, 2001, or 2004.

Entire EDR for each year that BSAI crab was processed.

(4) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. If the 

owner or leaseholder did not process 

BSAI crab in 1998, 2001, or 2004, he or 

she must submit the completed EDR 

certification pages only, and must attest 

that he or she meets the conditions 

exempting him or her from submitting 

the EDR, by signing and dating the 

certification pages, for each year of 

1998, 2001, or 2004 that this applies.

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

years corresponding to 1998, 2001, or 

2004;

(B) SFCP information. SFCP name, 

company name, USCG documentation 

number, ADF&G processor code, Crab 

Processor Permit number, crab LLP 

license number(s), estimated market 

value of vessel and equipment, and 

replacement value of vessel and 

equipment.

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available).

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative, who is an 

individual for responding to questions 

on the EDR, and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing this report. (1) 

Indicate whether the person completing 

this report is the owner, leaseholder, or 

designated representative;

(2) If the owner is the person 

completing this report, check the correct 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63275

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, business 

telephone number, facsimile number, 

and e-mail address (if available).

(5) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) BSAI crab production. CR fishery 

code (see Table 1 to this part); number 

of crab processing days, dates covered 

(beginning and ending day, month, and 

year); raw pounds purchased, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

whether custom processed (Yes or No).

(ii) Crab processing labor costs. CR 

fishery code, average number of crab 

positions, total man-hours, and total 

labor payment.

(iii) BSAI Crab crew residence 

identification. Location of residence and 

the number of employees that reside in 

each location as follows:

(A) If Alaska, enter primary city of 

residence.

(B) If state other than Alaska, enter 

primary state of residence.

(C) If country other than United 

States, enter primary country of 

residence.

(iv) BSAI crab custom processing 

done for you. CR fishery code, raw 

pounds supplied to custom processors, 

raw pounds purchased from custom 

processors, product code, process code, 

crab size, crab grade, box size, finished 

pounds, and processing fee.

(v) Raw crab purchases from 

delivering vessels. CR fishery code, crab 

size, crab grade, raw pounds purchased, 

and gross payment.

(vi) Annual BSAI crab sales. Record 

the following information on crab sales 

to affiliated entities and to unaffiliated 

entities: species code, product code, 

process code, crab size, crab grade, box 

size, finished pounds, and gross 

revenue.

(vii) BSAI crab-specific vessel data.

Total of fisheries taxes which include 

the Alaska fisheries business tax, SMAA 

taxes, and other local sales tax on raw 

fish; processing and packaging 

materials, equipment, and supplies; 

food and provisions; other costs for 

direct crab labor; insurance deductible 

fees; re-packing costs; broker fees and 

promotions for BSAI crab sales (by CR 

fishery code); observer costs (by CR 

fishery code); freight costs for supplies 

to the vessel; freight and handling costs 

for processed crab products from the 

vessel; product storage; waste disposal; 

and other crab-specific costs (specify).

(viii) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: fuel, electricity, lubrication 

and hydraulic fluids; improvements for 

vessel and equipment; R&M for vessel 

and equipment; number of employees 

and salaries for foremen, managers and 

other employees not included in direct 

labor costs; other vessel overhead 

expenses; and other vessel-specific costs 

(specify).

(ix) BSAI crab custom processing 

performed for others. CR fishery code, 

product code, process code, whether 

OUR CRAB or THEIR CRAB, and 

processing revenue.

(x) Prorating information. Enter the 

totals for the calendar year for the vessel 

in all fisheries for each of the following 

categories: processing days, revenue, 

pounds processed, and processing labor 

costs.

(f) Stationary floating crab processor 

(SFCP) annual EDR—(1) Requirement.

On or before May 1 of each year, 

beginning with Year 2005, any owner or 

leaseholder of an SFCP that processed 

crab from a CR fishery must submit to 

the DCA, at the address provided on the 

form, an EDR for annual data for the 

previous year.

(2) Instructions. Instructions for 

submitting an SFCP annual EDR and 

certification page are specified in the 

following table:

If you are ... And ... You must complete and submit ... 

(i) The SFCP owner (A) You processed BSAI crab in the SFCP described 

at paragraph (f)(3)(ii)(B) of this section during this calendar year.

Entire EDR

(B) No one processed BSAI crab in the SFCP described at paragraph (f)(3)(ii)(B) of this section during 

this calendar year.

EDR certification pages

(C) You leased all of your IPQ to another party and 

processed no BSAI crab in the SFCP described at 

paragraph (f)(3)(ii)(B) of this section during this calendar year.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

(D) You leased a portion of your IPQ to another party, 

but processed some BSAI crab in the SFCP described 

at paragraph (f)(3)(ii)(B) of this section during this calendar year.

(1) Entire EDR 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

(ii) The leaseholder described in paragraph (f)(1) of 

this section

You operated the SFCP described at paragraph 

(f)(3)(ii)(B) of this section and processed some BSAI 

crab during this calendar year.

Entire EDR

(3) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. The 

owner or leaseholder must submit the 

completed EDR certification pages only, 

and must attest that they meet the 

conditions exempting them from 

submitting the EDR, by signing and 

dating the certification pages (see 

paragraph (e)(2) of this section).

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

63276 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(A) Calendar year of EDR. Calendar 

year of the reporting year;

(B) SFCP information. SFCP name, 

company name, USCG documentation 

number, ADF&G processor code, Crab 

Processor Permit number, crab LLP 

license number(s), estimated market 

value of vessel and equipment, and 

replacement value of vessel and 

equipment.

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available).

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing the report. (1) 

Indicate whether the person completing 

this report is the owner, leaseholder, or 

designated representative;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here; and

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(4) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) Season interval chart. Complete a 

season interval chart by entering the 

following information: season interval 

number, number of crab processing 

days, dates covered (beginning and 

ending day, month, and year), species 

code, raw pounds, product code, 

process code, crab size, crab grade, box 

size, finished pounds, and whether 

custom processed (Yes or No).

(ii) Crab processing labor costs.

Season interval number, average 

number of crab processing positions, 

total man-hours, and total processing 

labor payment.

(iii) BSAI Crab crew residence 

identification. Location of residence and 

the number of employees that reside in 

each location as follows:

(A) If Alaska, enter primary city of 

residence.

(B) If state other than Alaska, enter 

primary state of residence.

(C) If country other than United 

States, enter primary country of 

residence.

(iv) BSAI crab custom processing 

done for you. Season interval number, 

species code, raw pounds supplied to 

custom processors, raw pounds 

purchased from custom processors, 

product code, process code, crab size, 

crab grade, box size, finished pounds, 

and processing fee.

(v) Raw crab purchases from 

delivering vessels. Season interval 

number, species code, crab size, crab 

grade, raw pounds purchased, and gross 

payment.

(vi) Annual BSAI crab sales. For 

affiliated entities and unaffiliated 

entities enter species code, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

gross revenue.

(vii) BSAI crab-specific vessel costs.

Total of fisheries taxes which includes 

the Alaska fisheries business tax, SMAA 

taxes, and other local sales tax on raw 

fish; processing and packaging 

materials, equipment and supplies by 

city and state; food and provisions; 

other costs for direct crab labor; 

insurance deductible fees; re-packing 

costs; broker fees and promotions for 

BSAI crab sales (by season interval 

number); observer costs (by season 

interval number); freight costs for 

supplies to the vessel; freight and 

handling costs for processed crab 

products from the vessel; product 

storage; waste disposal; and other crabspecific costs (specify).

(viii) Vessel-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: fuel, electricity, lubrication 

and hydraulic fluids; improvements in 

vessel, gear and equipment (by city and 

state); R&M for vessel, gear and 

equipment (by city and state); number of 

employees and salaries for foremen, 

managers and other employees not 

included in direct labor costs; other 

vessel overhead expenses; and other 

vessel-specific costs (specify).

(ix) BSAI crab custom processing 

performed for others. Season interval 

number, species code, product code, 

process code, whether OUR CRAB or 

THEIR CRAB, and processing revenue.

(x) Prorating information. Enter the 

totals for the year for the vessel in all 

fisheries for each of the following 

categories: processing days, revenue, 

pounds processed, and processing labor 

costs.

(g) Shoreside processor historical 

EDR—(1) Requirement. Any owner or 

leaseholder of a shoreside processor 

who processed CR fisheries crab in the 

calendar years 1998, 2001, or 2004 must 

submit to the DCA, at the address 

provided on the form, an EDR for 

historical data for each of the specified 

calendar years, if they:

(i) Qualified for or hold QS, PQS, IFQ, 

or IPQ under this Program;

(ii) Did not qualify for and receive 

QS,PQS, IFQ, or IPQ, but are 

participants at any time since January 

23, 2004, in the BSAI crab fisheries.

(2) Time limit. Any owner or 

leaseholder of the shoreside processor 

described in paragraph (g)(4)(ii)(B) of 

this section must submit the historical 

EDR to the DCA by [DATE 60 DAYS 

AFTER THE DATE OF 

EFFECTIVENESS OF THE FINAL 

RULE] at the address provided on the 

form.

(3) Instructions. Instructions for 

submitting a shoreside processor 

historical EDR and certification page are 

specified in the following table:

If you were ... And ... You must complete and submit ... 

(i) The shoreside processor 

owner described in paragraph (g)(1) of this section

(A) You processed BSAI crab in the plant described at 

paragraph (g)(4)(ii)(B) of this section during 1998, 

2001, or 2004.

Entire EDR for each year that BSAI crab was processed

(B) No one processed BSAI crab in the plant described at paragraph (g)(4)(ii)(B) of this section during 

1998, 2001, or 2004.

EDR certification pages for each year that no one 

processed BSAI crab.

(C) You leased your shoreside processor to another 

party, and processed no BSAI crab in the plant described at paragraph (g)(4)(ii)(B) of this section during 

1998, 2001, or 2004.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the shoreside processor during 1998, 2001, or 2004.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63277

If you were ... And ... You must complete and submit ... 

(D) You leased your shoreside processor for a portion 

of the time to another party, but processed some BSAI 

crab in the plant described at paragraph (g)(4)(ii)(B) of 

this section during 1998, 2001, or 2004.

(1) Entire EDR for each year that BSAI crab was processed. 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the shoreside processor during 1998, 2001, or 2004.

(ii) The leaseholder described in paragraph (g)(1) 

of this section

You operated the plant described at paragraph 

(g)(4)(ii)(B) of this section and processed some BSAI 

crab during 1998, 2001, or 2004.

Entire EDR for each year that BSAI crab was processed

(4) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. If the 

owner or leaseholder did not process 

BSAI crab in 1998, 2001, or 2004, he or 

she must submit the completed EDR 

certification pages only, and must attest 

that he or she meets the conditions 

exempting him or her from submitting 

the EDR, by signing and dating the 

certification pages for each year of 1998, 

2001, or 2004 that this applies;

(ii) Required information. The owner 

or leaseholder must submit the 

following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

years corresponding to 1998, 2001, or 

2004;

(B) Shoreside processor information.

Shoreside processor name, company 

name, crab processor permit number, 

ADF&G processor code, physical 

location of land-based plant (street 

address, city, state, zip code), borough 

assessed value of plant and equipment, 

year assessed, and estimated value of 

plant and equipment;

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available);

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing the report. (1) 

Indicate whether the person completing 

this report is the owner, leaseholder, or 

designated representative;

(2) If the owner is the person 

completing the report, check the correct 

box. The information provided above 

does not need to be repeated here.

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(5) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) BSAI crab production. CR fishery 

code (see Table 1 to this part); number 

of crab processing days, dates covered 

(beginning and ending day, month, and 

year); raw pounds purchased, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

whether custom processed (Yes or No).

(ii) Crab processing labor costs. CR 

fishery code, average number of crab 

processing positions, total man-hours, 

and total processing labor payment.

(iii) BSAI Crab crew residence 

identification. Location of residence and 

the number of employees that reside in 

each location as follows:

(A) If Alaska, enter primary city of 

residence.

(B) If state other than Alaska, enter 

primary state of residence.

(C) If country other than United 

States, enter primary country of 

residence.

(iv) BSAI crab custom processing 

done for you. CR fishery code, raw 

pounds supplied to custom processors, 

raw pounds purchased from custom 

processors, product code, process code, 

crab size, crab grade, box size, finished 

pounds, and processing fee.

(v) Raw crab purchases from 

delivering vessels. CR fishery code, crab 

size, crab grade, raw pounds purchased, 

and gross payment.

(vi) Annual BSAI crab sales. For 

affiliated entities and unaffiliated 

entities enter species code, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

gross revenue.

(vii) BSAI crab-specific plant costs.

Total fisheries taxes which include the 

Alaska fisheries business tax, SMAA 

taxes, and other local sales tax on raw 

fish; processing and packaging 

materials, equipment and supplies; food 

and provisions; other costs for direct 

crab labor; insurance deductible fees; 

re-packing costs, broker fees and 

promotions for BSAI crab sales by CR 

fishery code; observer costs by CR 

fishery code; freight costs for supplies to 

the plant; freight and handling costs for 

processed crab products from the plant; 

product storage; water, sewer, and waste 

disposal; and other crab specific costs 

(specify).

(viii) Plant-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities.: fuel, electricity, lubrication, 

and hydraulic fluids; improvements in 

plant, and equipment; R&M for existing 

plant and equipment; number of 

employees and salaries for foremen, 

managers and other employees not 

included in direct labor costs; other 

plant overhead expenses; and other 

plant-specific costs (specify).

(ix) BSAI crab custom processing 

done for others. CR fishery code, 

product code, process code, whether 

OUR CRAB or THEIR CRAB, and 

processing revenue.

(x) Prorating information. Enter the 

totals for this plant, for the year in all 

fisheries for each of the following 

categories: processing days, revenue, 

pounds processed, and processing labor 

costs.

(h) Shoreside processor annual EDR—

(1) Requirement. On or before May 1 of 

each year, beginning with Year 2005, 

any owner or leaseholder of a shoreside 

processor that processed crab from a CR 

fishery must submit to the DCA, at the 

address provided on the form, an EDR 

for annual data for the previous year.

(2) Instructions. Instructions for 

submitting a shoreside processor annual 

EDR and certification page are specified 

in the following table:

63278 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

If you are ... And ... You must complete and submit ... 

(i) The shoreside processor 

owner

(A) You processed BSAI crab in the plant described at 

paragraph (h)(3)(ii)(B) of this section during this calendar year.

Entire EDR

(B) No one processed BSAI crab in the plant described at paragraph (h)(3)(ii)(B) of this section during 

this calendar year.

EDR certification pages

(C) You leased all of your IPQ to another party, and 

processed no BSAI crab in the plant described at 

paragraph (h)(3)(ii)(B) of this section during this calendar year.

(1) EDR certification pages 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

(D) You leased portions of your IPQ to another party, 

but processed some BSAI crab in the plant described 

at paragraph (h)(3)(ii)(B) of this section during this calendar year.

(1) Entire EDR 

(2) Provide the name, address, and telephone number 

of the person to whom you leased the IPQ during this 

calendar year.

(ii) The leaseholder described in paragraph (h)(1) 

of this section

You operated the plant described at paragraph 

(h)(3)(ii)(B) of this section and processed some BSAI 

crab during this calendar year.

Entire EDR

(3) EDR certification pages. (i) The 

owner or leaseholder must submit the 

EDR certification pages either:

(A) As part of the entire EDR. The 

owner or leaseholder must submit the 

completed EDR certification pages as 

part of the entire EDR and must attest 

to the accuracy and completion of the 

EDR by signing and dating the 

certification pages; or

(B) As a separate document. The 

owner or leaseholder must submit the 

completed EDR certification pages only, 

and must attest that they meet the 

conditions exempting them from 

submitting the EDR, by signing and 

dating the certification pages.

(ii) The owner or leaseholder must 

submit the following information on the 

certification pages:

(A) Calendar year of EDR. Calendar 

year for the reporting year;

(B) Shoreside processor information.

Shoreside processor name, company 

name, crab processor permit number, 

ADF&G processor code, physical 

location of land-based plant (street 

address, city, state, zip code), borough 

assessed value of plant and equipment, 

estimated value of plant and equipment, 

and year assessed.

(C) Owner information. Owner name, 

title, and business telephone number, 

facsimile number, and e-mail address (if 

available);

(D) Designated representative. Any 

owner or leaseholder may appoint a 

designated representative who is an 

individual for responding to questions 

on the EDR and must ensure that the 

designated representative complies with 

the regulations in this part. The 

designated representative is the primary 

contact person for the DCA on issues 

relating to data required in the EDR.

(E) Person completing the report. (1) 

Indicate whether the person completing 

this report is the owner, leaseholder, or 

designated representative;

(2) If the owner is the person 

completing this report, check the correct 

box. The information provided above 

does not need to be repeated here.

(3) Name of person, title, and business 

telephone number, facsimile number, 

and e-mail address (if available).

(4) EDR. The owner or leaseholder 

must record the following information 

on an EDR.

(i) Season interval chart. Complete a 

season interval chart by entering the 

following information: season interval 

number, number of crab processing 

days, dates covered (beginning and 

ending day, month, and year), species 

code, raw pounds, product code, 

process code, crab size, crab grade, box 

size, finished pounds, and whether 

custom processed (Yes or No).

(ii) Crab processing labor costs.

Season interval number, average 

number of crab processing positions, 

total man-hours, and total processing 

labor payment.

(iii) BSAI Crab crew residence 

identification. Location of residence and 

the number of employees that reside in 

each location as follows:

(A) If Alaska, enter primary city of 

residence.

(B) If state other than Alaska, enter 

primary state of residence.

(C) If country other than United 

States, enter primary country of 

residence.

(iv) BSAI crab custom processing 

done for you. Season interval number, 

species code, raw pounds supplied to 

custom processors, raw pounds 

purchased from custom processors, 

product code, process code, crab size, 

crab grade, box size, finished pounds, 

and processing fee.

(v) Raw crab purchases from 

delivering vessels. Season interval 

number, species code, crab size, crab 

grade, raw pounds purchased, and gross 

payment.

(vi) Annual BSAI crab sales. For 

affiliated entities and unaffiliated 

entities enter species code, product 

code, process code, crab size, crab 

grade, box size, finished pounds, and 

gross revenue.

(vii) BSAI crab-specific plant costs.

Total of fisheries taxes which include 

the Alaska fisheries business tax, SMAA 

taxes, and other local sales tax on raw 

fish; processing and packaging 

materials, equipment and supplies by 

city and state; food and provisions; 

other costs for direct crab labor; 

insurance deductible fees; re-packing 

costs; broker fees and promotions for 

BSAI crab sales by season interval 

number; observer costs by season 

interval number; freight costs for 

supplies to the plant; freight and 

handling costs for processed crab 

products from the plant; product 

storage; water, sewer, and waste 

disposal; and other crab specific costs 

(specify).

(viii) Plant-specific costs. Record the 

total for each category. If the reported 

total expense should not be attributed 

solely to BSAI crab operations, please 

place an ‘‘X’’ in the PRORATE OVER 

ALL ACTIVITIES column. The analyst 

will prorate this amount over all vessel 

activities: fuel, electricity, lubrication, 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63279

and hydraulic fluids; improvements in 

plant, and equipment by city and state; 

R&M for existing plant and equipment 

by city and state; number of employees 

and salaries for foremen, managers and 

other employees not included in direct 

labor costs; other plant overhead 

expenses; and other plant-specific costs 

(specify).

(ix) BSAI crab custom processing 

performed for others. Season interval 

number, species code, product code, 

process code, whether OUR CRAB or 

THEIR CRAB, and processing revenue.

(x) Prorating information. Enter the 

totals for the year for this plant in all 

fisheries for each of the following 

categories: processing days, revenue, 

pounds processed, and processing labor 

costs.

(i) Verification of data. (1) The DCA 

shall conduct verification of information 

with the owner or leaseholder.

(2) The owner or leaseholder must 

respond to inquiries by the DCA within 

15 days of the date of issuance of the 

inquiry.

(3) The owner or leaseholder must 

provide copies of additional data to 

facilitate verification by the DCA. The 

DCA auditor may review and request 

copies of additional data provided by 

the owner or leaseholder, including but 

not limited to: previously audited or 

reviewed financial statements, 

worksheets, tax returns, invoices, 

receipts, and other original documents 

substantiating the data.

(j) The DCA is authorized to request 

voluntary submission of economic data 

specified herein from persons who are 

not required to submit an EDR under 

this paragraph (j).

§ 680.7 Prohibitions.

In addition to the general prohibitions 

specified in § 600.725 of this chapter, it 

is unlawful for any person to do any of 

the following:

(a) Receiving and processing CR crab.

(1) Process any CR crab that has not 

been weighed by an RCR on a scale 

approved by the State in which the RCR 

is located and that meets the 

requirements described in § 680.23(f); or 

onboard a catcher/processor on a scale 

approved by NMFS as described in 

§ 680.23(e).

(2) Receive CR crab harvested under 

an IFQ permit in any region other than 

the region for which the IFQ permit is 

designated.

(3) Use IPQ on board a vessel outside 

of the territorial sea or internal waters 

of the State of Alaska.

(4) Use IPQ in any region other than 

the region for which the IPQ is 

designated.

(5) Receive any crab harvested under 

a Class A IFQ permit in excess of the 

total amount of unused IPQ held by the 

RCR.

(6) Receive crab harvested under a 

Class B IFQ permit on a vessel if that 

vessel was used to harvest and process 

any crab in that crab QS fishery during 

the same crab fishing year.

(7) Receive PQS or IPQ by transfer if 

you hold Class B IFQ.

(b) Landing CR crab. (1) Remove 

retained and unprocessed CR crab from 

a vessel at any location other than to an 

RCR operating under an approved catch 

monitoring plan as described in 

§ 680.23(g).

(2) Remove any CR crab processed at 

sea from any vessel before completing a 

landing report, as defined at § 680.5(f), 

for all such CR crab onboard.

(3) Resume fishing for CR crab or take 

CR crab on board a vessel once a 

landing has commenced and until all 

CR crab are landed.

(4) Fail to remove all processed crab 

harvested under a CPO or a CPC IFQ 

permit to an onshore location within the 

United States, accessible by road or 

regularly scheduled air service, and to 

weigh that crab product on a scale 

approved by the State in which the crab 

is weighed.

(5) Fail to remain at a landing site 

when IFQ crab is being landed and until 

such time as the landing report for that 

landing is complete.

(6) Make an IFQ crab landing except 

by an individual who holds either an 

IFQ crab permit or a Crab IFQ Hired 

Master Permit issued under § 680.4 in 

his or her name.

(7) Fish for or land BSAI crab without 

the original Federal Crab Vessel Permit 

issued to a vessel on board that vessel.

(8) Make an IFQ crab landing without 

the following on board: a copy of the 

IFQ crab permit to be debited for the 

landing; and, if applicable, a copy of the 

Crab IFQ Hired Master Permit issued 

under § 680.4 in the name of the person 

making the landing.

(9) For a Crab IFQ Hired Master to 

make an IFQ crab landing on any vessel 

other than the vessel named on the Crab 

IFQ Hired Master Permit.

(c) Harvest crab. (1) Harvest any BSAI 

crab with any vessel not named on a 

valid Federal Crab Vessel Permit.

(2) Harvest IFQ crab with any vessel 

that does not use functioning VMS 

equipment as required by § 680.23.

(3) Harvest on any vessel more IFQ 

crab than are authorized under § 680.42.

(4) Harvest crab under a CVC or a CPC 

IFQ permit unless the person named on 

the IFQ permit is on board that vessel.

(5) Harvest crab under a CPO or CPC 

permit unless all scales used to weigh 

crab, or used by an observer for 

sampling crab, have passed an inseason 

scale test according to § 680.23(e)(1).

(d) Recordkeeping and reporting. (1) 

Fail to submit information on any 

report, application, or statement 

required under this part.

(2) Submit false information on any 

report, application, or statement 

required under this part.

(e) Permits. (1) Retain IFQ crab 

without a valid crab IFQ permit for that 

fishery on board the vessel.

(2) Retain IFQ crab on a vessel in 

excess of the total amount of 

unharvested crab IFQ, for a crab QS 

fishery that is currently held by all crab 

IFQ permit holders or Crab IFQ Hired 

Masters aboard the vessel.

(3) Receive Class B IFQ by transfer if 

a person holds PQS or IPQ.

(4) Receive Class B IFQ by transfer if 

you are affiliated with a person who 

holds PQS or IPQ.

(f) Use IPQ as collateral or otherwise 

leverage IPQ to acquire an ownership 

interest in Class B IFQ.

(g) Possess, buy, sell, or transport any 

crab harvested or landed in violation of 

any provision of this part.

(h) Violate any other provision under 

this part.

(i) Conduct any fishing contrary to 

notification of inseason action closure, 

or adjustment issued under § 680.22.

§ 680.8 Facilitation of enforcement.

See § 600.730 of this chapter.

§ 680.9 Penalties.

(a) Any person committing, or a 

fishing vessel used in the commission 

of, a violation of the Magnuson-Stevens 

Act, or any regulation issued under the 

Magnuson-Stevens Act, is subject to the 

civil and criminal penalty provisions, 

permit sanctions, and civil forfeiture 

provisions of the Magnuson-Stevens 

Act, to part 600 of this chapter, to 15 

CFR part 904 (Civil Procedures), and to 

other applicable law. Penalties include 

but are not limited to permanent or 

temporary sanctions to PQS, QS, IPQ, 

IFQ, or RCR permits.

(b) In the event a holder of any IPQ 

is found by a court of competent 

jurisdiction, either in an original action 

in that court or in a proceeding to 

enforce or review the findings or orders 

of any Government agency having 

jurisdiction under the antitrust laws, to 

have violated any of the provisions of 

antitrust laws in the conduct of the 

licensed activity, the Secretary of 

Commerce may revoke all or a portion 

of such IPQ. The antitrust laws of the 

United States include, but are not 

limited to, the following Acts:

(1) The Sherman Act, 15 U.S.C. 1-7;

63280 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(2) The Wilson Tariff Act, 15 U.S.C. 

8-11;

(3) The Clayton Act, 15 U.S.C. 12-27; 

and

(4) The Federal Trade Commission 

Act, 15 U.S.C. 12 and 45(a).

Subpart B—Management Measures

§ 680.20 Arbitration System.

(a) Applicability—(1) Arbitration 

System. All CVO and CVC QS, PQS, 

Arbitration IFQ, Class A IFQ holders, 

and IPQ holders must enter the 

contracts as prescribed in this section 

that establish the Arbitration System. 

Certain parts of the Arbitration System 

are voluntary for some parties, as 

specified in this section. All contract 

provisions will be enforced by parties to 

those contracts.

(2) Open negotiation. At any time 

prior to the first crab fishing season for 

that crab fishing year for that crab QS 

fishery, any holder of uncommitted IFQ 

may negotiate with any holder of 

uncommitted IPQ, the price and 

delivery terms for that season or for 

future seasons for any uncommitted IFQ 

and IPQ. QS holders, uncommitted IFQ 

holders and PQS or IPQ holders may 

freely contact each other and initiate 

open negotiations.

(b) Eligibility for Arbitration System—

(1) Arbitration Organization. The 

following persons are the only persons 

eligible to join an Arbitration 

Organization:

(i) Holders of CVO and CVC QS,

(ii) Holders of PQS,

(iii) Holders of Arbitration IFQ,

(iv) Holders of Class A IFQ affiliated 

with a PQS or IPQ holder, and

(v) Holders of IPQ.

(2) Persons Eligible to Use Negotiation 

and Binding Arbitration Procedures.

The following persons are the only 

persons eligible to enter contracts with 

a Contract Arbitrator to use the 

negotiation and Binding Arbitration 

procedures described in paragraph (h) of 

this section to resolve price and delivery 

disputes or negotiate remaining contract 

terms not previously agreed to by IFQ 

and IPQ holders under other negotiation 

approaches:

(i) Holders of Arbitration IFQ; and

(ii) Holders of IPQ.

(3) Persons Ineligible to Use 

Negotiation and Binding Arbitration 

Procedures. Holders of IFQ or QS that 

are affiliated with holders of PQS or IPQ 

are ineligible to enter contracts with a 

Contract Arbitrator to use the 

negotiation and Binding Arbitration 

procedures described in paragraph (h) of 

this section to resolve price and delivery 

disputes or negotiate remaining contract 

terms not previously agreed to by IFQ 

and IPQ holders under other negotiation 

approaches.

(c) Preseason requirements for joining 

an Arbitration Organization. All holders 

of CVO and CVC QS, PQS, Arbitration 

IFQ, Class A IFQ, and IPQ must join and 

maintain a membership in an 

Arbitration Organization as specified in 

paragraph (d) of this section. All holders 

of QS, PQS, CVO or CVC IFQ, or IPQ 

must join an Arbitration Organization at 

the following times:

(1) For QS holders and PQS holders 

except as provided for in paragraph 

(c)(3) of this section, not later than May 

1 of each year for the crab fishing year 

that begins on July 1 of that year.

(2) For IFQ holders and IPQ holders, 

not later than 15 days after the issuance 

of IFQ and IPQ for that crab QS fishery.

(3) During 2005, QS and PQS holders 

must join an Arbitration Organization as 

described in paragraph (d) of this 

section not later than July 1, 2005.

(d) Formation process for an 

Arbitration Organization. (1) Arbitration 

Organizations must be formed to select 

and contract a Market Analyst, Formula 

Arbitrator, Contract Arbitrator(s), and 

establish the Arbitration System, 

including the payment of costs of 

arbitration, described in this section for 

each crab QS fishery. All persons 

defined in paragraph (b)(1) of this 

section must join an Arbitration 

Organization.

(i) Arbitration QS/IFQ Arbitration 

Organization. Holders of Arbitration QS 

and Arbitration IFQ must join an 

Arbitration QS/IFQ Arbitration 

Organization. This Arbitration 

Organization may not have members 

who are not holders of Arbitration QS 

or Arbitration IFQ. Arbitration QS 

holders and Arbitration IFQ holders 

may join separate Arbitration QS/IFQ 

Arbitration Organizations. The 

mechanism for forming an Arbitration 

Organization is determined by the 

members of the organization.

(ii) PQS/IPQ Arbitration 

Organization. Holders of PQS or IPQ 

must join a PQS/IPQ Arbitration 

Organization. This Arbitration 

Organization may not have members 

who are not holders of PQS or IPQ. PQS 

holders and IPQ holders may join 

separate PQS/IPQ Arbitration 

Organizations. The mechanism for 

forming an Arbitration Organization is 

determined by the members of the 

organization.

(iii) Affiliated QS/IFQ Arbitration 

Organization. Holders of CVO QS or 

Class A IFQ affiliated with a PQS or IPQ 

holder must join an Affiliated QS/IFQ 

Arbitration Organization. This 

Arbitration Organization may not have 

members who are not holders of QS or 

IFQ affiliated with a PQS or IPQ holder. 

CVO QS holders and Class A IFQ 

holders may join separate Affiliated QS/

IFQ Arbitration Organizations. The 

mechanism for forming an Arbitration 

Organization is determined by the 

members of the organization.

(iv) No person may be a member of 

more than one Arbitration Organization 

for a crab QS fishery during a crab 

fishing year.

(2) Each Arbitration Organization 

must submit a complete Annual 

Arbitration Organization report to 

NMFS. A complete report must include:

(i) A copy of the business license of 

the Arbitration Organization;

(ii) A statement identifying the 

members of the organization and the 

amount of Arbitration QS and 

Arbitration IFQ, Non-Arbitration QS 

and Non-Arbitration IFQ, or PQS and 

IPQ held by each member and 

represented by that Arbitration 

Organization;

(iii) QS, PQS, IFQ, and IPQ ownership 

information on the members of the 

organization;

(iv) Management organization 

information, including:

(A) The bylaws of the Arbitration 

Organization;

(B) A list of key personnel of the 

management organization including, but 

not limited to, the board of directors, 

officers, representatives, and any 

managers;

(v) The name of the Arbitration 

Organization, permanent business 

mailing addresses, name of contact 

persons and additional contact 

information of the managing personnel 

for the Arbitration Organization, 

resumes of management personnel; and

(vi) A copy of all minutes of any 

meeting held by the Arbitration 

Organization or any members of the 

Arbitration Organization.

(3) An Arbitration Organization, with 

members who are QS or PQS holders, 

must submit a complete Annual 

Arbitration Organization Report to 

NMFS by electronic mail to the Regional 

Administrator, National Marine 

Fisheries Service, or by mail addressed 

to the Regional Administrator, National 

Marine Fisheries Service, Post Office 

Box 21668, Juneau, Alaska 99802 by:

(i) June 15, 2005 for the crab fishing 

year beginning on July 1, 2005.

(ii) May 1 of each subsequent year for 

the crab fishing year beginning on July 

1 of that year.

(4) An Arbitration Organization, with 

members who are IFQ or IPQ holders, 

must submit a complete Annual 

Arbitration Organization Report to 

NMFS by electronic mail to the Regional 

Administrator, National Marine 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63281

Fisheries Service, or by mail addressed 

to the Regional Administrator, National 

Marine Fisheries Service, Post Office 

Box 21668, Juneau, Alaska 99802 by not 

later than 15 days after the issuance of 

IFQ and IPQ for that crab QS fishery.

(e) Role of Arbitration Organization(s) 

and annual requirements. (1) The 

members of each Arbitration 

Organization must enter into a contract 

that specifies the terms and conditions 

of participation in the organization.

(i) The contract with members of an 

Arbitration QS/IFQ Arbitration 

Organization, or a PQS/IPQ Arbitration 

Organization shall include the terms, 

conditions, and provisions specified in 

paragraph (e)(2) of this section.

(ii) The contract with members of an 

Affiliated QS/IFQ Arbitration 

Organization shall include the terms, 

conditions, and provisions in paragraph 

(e)(3) of this section.

(2) Provisions for Arbitration QS/IFQ 

Arbitration Organizations, and PQS/IPQ 

Arbitration Organizations—(i) Selection 

of Market Analyst, Formula Arbitrator, 

and Contract Arbitrator(s). A provision 

authorizing the Arbitration Organization 

to act on behalf of its members in the 

selection of and contracting with the 

Market Analyst, Formula Arbitrator, and 

Contract Arbitrator(s) under paragraph 

(e)(4) of this section.

(ii) Agreement to participate in the 

arbitration process. A provision 

authorizing the Arbitration Organization 

to require its members to use the 

Lengthy Season Approach, Share 

Matching Approach, and Binding 

Arbitration defined under paragraph (h) 

of this section.

(iii) Confidentiality of information. A 

provision that a member that is a party 

to a Binding Arbitration proceeding 

shall sign a confidentiality agreement 

with the party with whom it is 

arbitrating stating they will not disclose 

at any time to any person any 

information received from the Contract 

Arbitrator or any other party in the 

course of the arbitration. That 

confidentiality agreement shall specify 

the potential sanctions for violating the 

agreement.

(iv) Provision of information to 

members. A provision requiring the 

Arbitration Organization to provide to 

its members:

(A) A copy of the contracts for the 

Market Analyst, Formula Arbitrator, and 

Contract Arbitrator for each fishery in 

which the member participates;

(B) A provision that requires the 

Arbitration Organization to deliver the 

Market Report and the Non-Binding 

Price Formula for each fishery in which 

the member participates within 5 days 

of its release.

(v) Information release. (A) A 

provision requiring that the Arbitration 

Organization deliver to NMFS any data, 

information, and documents generated 

pursuant to this section.

(B) In the case of a PQS/IPQ 

Arbitration Organization(s),

(1) A provision that requires the 

Arbitration Organization to provide for 

the delivery of the names of and contact 

information for its members who hold 

uncommitted IPQ, and to identify the 

regional designations and amounts of 

such uncommitted IPQ, to any persons 

that hold uncommitted Arbitration IFQ 

and prohibits the disclosure of any 

information received under this 

provision to any person except those 

holders of uncommitted Arbitration 

IFQ. The provision will require that 

information concerning uncommitted 

IPQ be updated within 24 hours of a 

change of any such information, 

including any commitment of IPQ, and 

that information be provided to those 

persons that hold uncommitted 

Arbitration IFQ. This provision may 

include a mechanism to provide 

information to uncommitted Arbitration 

IFQ holders through a secure website, or 

through other electronic means;

(2) A provision that requires the 

Arbitration Organization to arrange for 

the delivery to all holders of 

uncommitted Arbitration IFQ the terms 

of a decision of a Contract Arbitrator in 

a Binding Arbitration proceeding 

involving a member that holds 

uncommitted IPQ within 24 hours of 

notice of that decision. This provision 

may include a mechanism to provide 

information to uncommitted Arbitration 

IFQ holders through a secure website, or 

through other electronic means; and

(3) A provision that requires the 

holders of uncommitted IPQ to provide 

information concerning such 

uncommitted IPQ as necessary for the 

Arbitration Organization to comply with 

this paragraph and prohibits the 

disclosure of any such information by a 

member to any person, except as 

directed therein.

(vi) Costs. A provision that authorizes 

the Arbitration Organization to enter 

into a contract with all other arbitration 

organizations for the payment of the 

costs of arbitration as specified under 

this section.

(A) Payment of costs for arbitration.

(1) The arbitration organizations must 

establish a contract that requires the 

payment of all costs of the Market 

Analyst, Formula Arbitrator, and 

Contract Arbitrator(s), dissemination of 

information concerning uncommitted 

IPQ to holders of uncommitted 

Arbitration IFQ, and the costs of such 

persons associated with lengthy season 

approach, share matching approach, 

Binding Arbitration, quality and 

performance disputes, to be shared 

equally by all IPQ holders and 

Arbitration IFQ holders and Class A IFQ 

holders.

(2) These costs shall be shared based 

on the amount of IPQ or IFQ held by 

each person.

(3) These costs shall be divided so 

that the IPQ holders pay 50 percent of 

the costs and the Arbitration IFQ and 

Class A IFQ holders pay 50 percent of 

the costs.

(4) PQS holders shall advance all 

costs and shall collect the contribution 

of Class A IFQ holders at landing 

subject to terms mutually agreed by the 

arbitration organizations.

(vii) Negotiation methods. A 

provision that prohibits the Arbitration 

Organization from engaging in any 

contract negotiations on behalf of its 

members, except for those necessary to 

hire the Market Analyst, Formula 

Arbitrator, and Contract Arbitrator(s).

(viii) Transfer of QS, PQS, IFQ, or 

IPQ. A provision under which members 

of the Arbitration Organization agree 

that any transfer of QS, PQS, IFQ or IPQ 

shall be conditioned on the purchaser of 

such Arbitration QS, PQS, Arbitration 

IFQ, or Non-Arbitration Class A IFQ, or 

IPQ being a member of an Arbitration 

Organization that satisfies all of the 

applicable requirements of this section 

and such purchase being subject to all 

of provisions of the Arbitration System 

that apply to the holder of the 

transferred QS, PQS, IFQ, or IPQ.

(ix) Enforcement of the contract.

Violations of the contract shall be 

enforced under civil law.

(3) Provisions applying to Affiliated 

QS/IFQ Arbitration Organizations. The 

provisions that allow for the provision 

of information to members, payment of 

costs, limits on the transfer of QS, PQS, 

IFQ, and IPQ, and enforcement of the 

contract as described under paragraphs 

(e)(iv), (vi),(viii), and (ix) will apply to 

the contract among members of an 

Affiliated QS/IFQ Arbitration 

Organization(s).

(4) Process for selecting of Market 

Analyst, Formula Arbitrator, and 

Contract Arbitrator(s). (i) For each crab 

fishing year, QS holders who are 

members of Arbitration QS/IFQ 

Arbitration Organization(s) and PQS 

holders who are members of PQS/IPQ 

Arbitration Organization(s), by mutual 

agreement, will select one Market 

Analyst, one Formula Arbitrator, and 

Contract Arbitrator(s) for each crab QS 

fishery. The number of Contract 

Arbitrators selected for each fishery will 

be subject to the mutual agreement of 

those arbitration organizations. The 

63282 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

selection of the Market Analyst and the 

Formula Arbitrator must occur in time 

to ensure the Market Report and 

non-binding price formula are produced 

within the time line established in 

paragraph (e)(4)(ii).

(ii) The arbitration organizations 

representing Arbitration QS holders or 

PQS holders in a crab fishery shall 

establish by mutual agreement the 

contractual obligations of the Market 

Analyst, Formula Arbitrator, and 

Contract Arbitrator(s) for each fishery, 

which shall provide that the Market 

Report and Non-Binding Price Formula 

are produced not later than 50 days 

prior to the first crab fishing season for 

that crab QS fishery in that crab fishing 

year except as provided in paragraph 

(e)(6) of this section. The contractual 

obligations of the Market Analyst, the 

Formula Arbitrator and Contract 

Arbitrators will be enforced by the 

parties to the contract.

(iii) The same person may be chosen 

for the positions of Market Analyst and 

Formula Arbitrator for a fishery.

(iv) A person selected to be a Contract 

Arbitrator may not be the Market 

Analyst or Formula Arbitrator, and shall 

not be in the employ or otherwise 

associated with the Market Analyst or 

Formula Arbitrator, for that fishery.

(5) Notification to NMFS. Not later 

than June 1 for that crab fishing year, 

except as provided in paragraph (e)(6) of 

this section, the arbitration 

organizations representing the holders 

of Arbitration QS and PQS in each 

fishery shall notify NMFS of the persons 

selected as the Market Analyst, Formula 

Arbitrator, and Contract Arbitrator(s) for 

the fishery by electronic mail addressed 

to the Regional Administrator, National 

Marine Fisheries Service, or by mail 

addressed to the Regional 

Administrator, National Marine 

Fisheries Service, Post Office Box 

21668, Juneau, Alaska 99802. The 

arbitration organizations shall include a 

list of arbitration organizations that 

mutually agreed to the selection of the 

Market Analyst, Formula Arbitrator, and 

Contract Arbitrator(s) and signatures of 

representatives of those arbitration 

organizations and a copy of the contract 

with Market Analyst, the Formula 

Arbitrator, and each Contract Arbitrator. 

The notification must include a 

curriculum vitae and other relevant 

biographical material for each of these 

individuals.

(6) First-year implementation. During 

2005:

(i) Selection of and establishment of 

the contractual obligations of the Market 

Analyst, Formula Arbitrator, and 

Contract Arbitrator(s) as required under 

this section shall occur not later than 

July 30, 2005; and

(ii) The Market Report and 

Non-Binding Price Formula shall be 

produced not later than 25 days prior to 

the first crab fishing season for that crab 

QS fishery in that crab fishing year as 

required under this section.

(f) Roles and standards for the Market 

Analyst and process for producing the 

Market Report. (1) For each crab QS 

fishery, the Arbitration QS/IFQ 

Arbitration Organizations and the PQS/

IPQ Arbitration Organizations shall 

establish a contract with the Market 

Analyst to produce a Market Report for 

the fishery. The terms of this contract 

must specify that the Market Analyst 

must produce a Market Report that shall 

provide an analysis of the market for 

products of that fishery.

(2) The contract with the Market 

Analyst must specify that:

(i) The Market Analyst shall base the 

Market Report:

(A) On a survey of the market for crab 

products produced by the fishery.

(B) Information provided by the IPQ 

and IFQ holders regarding market 

conditions and expectations.

(iii) To the extent IPQ and IFQ 

holders provide information requested 

by the Market Analyst, they must 

provide such information directly to the 

Market Analyst and not to any other IPQ 

holder or IFQ holder, except that IFQ 

holders that are members of any single 

crab harvesting cooperative may share 

such information with other members of 

the same crab harvesting cooperative 

who are authorized to participate in the 

arbitration system.

(iv) The Market Analyst:

(A) May meet with IFQ holders who 

are members of any single crab 

harvesting cooperative collectively;

(B) Shall meet with IPQ holders 

individually

(C) Shall meet with distinct crab 

harvesting cooperatives individually;

(D) Shall meet with IFQ holders who 

are not members of the same crab 

harvesting cooperatives individually.

(v) The information provided to the 

Market Analyst by IPQ and IFQ holders 

must be historical information based on 

activities occurring more than three 

months prior to the generation of the 

Market Report.

(vi) The Market Analyst shall keep 

confidential the identity of the source of 

any particular information contained in 

the report. The Market Analyst may note 

generally the sources from which it 

gathered information. The report shall:

(A) Include only data that is based on 

information regarding activities 

occurring more than three months prior 

to the generation of the Market Report;

(B) Include only statistics for which 

there are at least five providers reporting 

data upon which each statistic is based 

and for which no single provider’s data 

represents more than 25 percent of a 

weighted basis of that statistic; and

(C) Sufficiently aggregate any 

information disseminated in the report 

such that it would not identify specific 

price information by an individual 

provider of information.

(vii) The Market Report shall consider 

the following factors:

(A) Current ex-vessel prices, 

including ex-vessel prices received for 

crab harvested under Class A, Class B, 

and CVC IFQ permits;

(B) Consumer and wholesale product 

prices for the processing sector and the 

participants in the arbitration 

(recognizing the impact of sales to 

affiliates on wholesale pricing);

(C) Innovations and developments of 

the harvesting and processing sectors 

and the participants in the arbitration 

(including new product forms);

(D) Efficiency and productivity of the 

harvesting and processing sectors 

(recognizing the limitations on 

efficiency and productivity arising out 

of the management program structure);

(E) Quality (including quality 

standards of markets served by the 

fishery and recognizing the influence of 

harvest strategies on the quality of 

landings);

(F) The interest of maintaining 

financially healthy and stable harvesting 

and processing sectors;

(G) Safety and expenditures for 

ensuring adequate safety;

(H) Timing and location of deliveries; 

and

(I) The cost of harvesting and 

processing less than the full IFQ or IPQ 

allocation (underages) to avoid penalties 

for overharvesting IFQ and a mechanism 

for reasonably accounting for deadloss.

(viii) There shall only be one annual 

Market Report for each fishery.

(ix) The Market Analyst shall not 

issue interim or supplemental reports 

for each fishery;

(3) The Market Analyst shall not 

disclose any information to any person 

not required under this section.

(4) The contract with the Market 

Analyst must specify that the Market 

Analyst will provide the Market Report 

not later than 50 days prior to the first 

crab fishing season for that crab QS 

fishery in that crab fishing year to:

(i) Each Arbitration Organization in 

that fishery;

(ii) NMFS by electronic mail to the 

Regional Administrator, National 

Marine Fisheries Service, or addressed 

to the Regional Administrator, National 

Marine Fisheries Service, Post Office 

Box 21668, Juneau, Alaska 99802.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63283

(iii) The Formula Arbitrator and any 

Contract Arbitrator(s) for the fishery.

(g) Roles and standards for the 

Formula Arbitrator. (1) For each crab QS 

fishery, the Arbitration QS/IFQ 

Arbitration Organizations and the PQS/

IPQ Arbitration Organizations shall 

establish a contract with the Formula 

Arbitrator to develop a Non-Binding 

Price Formula.

(2) The contract with the Formula 

Arbitrator must specify that:

(i) The Formula Arbitrator will 

conduct a single annual fleet-wide 

analysis of arbitrations to establish a 

Non-Binding Price Formula under 

which a fraction of the weighted average 

first wholesale prices for crab products 

from the fishery may be used to set an 

ex vessel price.

(ii) The Non-Binding Price Formula 

shall:

(A) Be based on the historical 

distribution of first wholesale revenues 

between fishermen and processors in 

the aggregate based on arm’s length first 

wholesale prices and ex vessel prices, 

taking into consideration the size of the 

harvest in each year; and

(B) Establish a price that preserves the 

historical division of revenues in the 

fishery while considering the following:

(1) Current ex-vessel prices, including 

ex-vessel prices received for crab 

harvested under Class A, Class B, and 

CVC IFQ permits;

(2) Consumer and wholesale product 

prices for the processing sector and the 

participants in arbitrations (recognizing 

the impact of sales to affiliates on 

wholesale pricing);

(3) Innovations and developments of 

the harvesting and processing sectors 

and the participants in arbitrations 

(including new product forms);

(4) Efficiency and productivity of the 

harvesting and processing sectors 

(recognizing the limitations on 

efficiency and productivity arising out 

of the management program structure);

(5) Quality (including quality 

standards of markets served by the 

fishery and recognizing the influence of 

harvest strategies on the quality of 

landings);

(6) The interest of maintaining 

financially healthy and stable harvesting 

and processing sectors;

(7) Safety and expenditures for 

ensuring adequate safety;

(8) Timing and location of deliveries; 

and

(9) The cost of harvesting and 

processing less than the full IFQ or IPQ 

allocation (underages) to avoid penalties 

for overharvesting IFQ and a mechanism 

for reasonably accounting for deadloss.

(C) Include identification of various 

relevant factors such as product form, 

delivery time, and delivery location.

(D) Consider the ‘‘highest arbitrated 

price’’ for the fishery from the previous 

crab fishing season, where the ‘‘highest 

arbitrated price≥means the highest 

arbitrated price for arbitrations of IPQ 

and Arbitration IFQ which represent a 

minimum of at least 7 percent of the IPQ 

resulting from the PQS in that fishery. 

For purposes of this process, the 

Formula Arbitrator may aggregate up to 

three arbitration findings to collectively 

equal a minimum of 7 percent of the 

IPQ. When arbitration findings are 

aggregated with 2 or more entities, the 

lesser of the arbitrated prices of the 

arbitrated entities included to attain the 

7 percent minimum be considered for 

the highest arbitrated price.

(iii) The Non-Binding Price Formula 

may rely on any relevant information 

available to the Formula Arbitrator, 

including, but not limited to,

(A) Information provided by the QS, 

PQS, IPQ and IFQ holders in the fishery; 

and

(B) The Market Report for the fishery.

(iv) The Formula Arbitrator:

(A) May meet with IFQ holders who 

are members of any single crab 

harvesting cooperative collectively;

(B) Shall meet with IPQ holders 

individually

(C) Shall meet with distinct crab 

harvesting cooperatives individually;

(D) Shall meet with IFQ holders who 

are not members of the same crab 

harvesting cooperatives individually.

(v) The Formula Arbitrator may 

request any relevant information from 

QS, PQS, IPQ, and IFQ holders in the 

fishery, but the Formula Arbitrator shall 

not have subpoena power.

(vi) May obtain information from 

persons other than QS, PQS, IPQ, and 

IFQ holders in the fishery, if those 

persons agree to provide such data. Any 

information that is provided must be 

based on activities occurring more than 

three months prior to the date of 

submission to the Formula Arbitrator;

(vii) Shall keep confidential the 

information that is not publicly 

available and not disclose the identity of 

the persons providing specific 

information; and

(viii) The contract with the Formula 

Arbitrator must specify that the Formula 

Arbitrator will provide the non-binding 

price formula not later than 50 days 

prior to the first crab fishing season for 

that crab QS fishery in that crab fishing 

year to:

(A) Each Arbitration Organization in 

that fishery;

(B) NMFS by electronic mail to the 

Regional Administrator, National 

Marine Fisheries Service, or addressed 

to the Regional Administrator, National 

Marine Fisheries Service, Post Office 

Box 21668, Juneau, Alaska 99802.

(C) The Market Analyst and all 

Contract Arbitrators in the fishery.

(ix) The Formula Arbitrator shall not 

disclose any information to any person 

not required under this section, except 

as permitted by paragraph (j) of this 

section.

(h) Roles and standards for the 

Contract Arbitrator(s). (1) For each crab 

QS fishery, the Arbitration QS/IFQ 

Arbitration Organizations and PQS/IPQ 

Arbitration Organizations shall establish 

a contract with all Contract Arbitrators 

in that fishery that specifies that each 

Contract Arbitrator may be selected to 

resolve a dispute concerning the terms 

of delivery, price, or other factors in the 

fishery.

(2) Selection of Contract Arbitrators.

The contract with the Contract 

Arbitrator shall specify the means by 

which the Contract Arbitrator will be 

selected to resolve specific disputes. 

This contract must specify that for any 

dispute for which the Contract 

Arbitrator is selected, that the Contract 

Arbitrator will comply with the last best 

offer arbitration method as set forth in 

this section.

(3) Negotiation and Binding 

Arbitration Procedure. The contract 

with the Contract Arbitrator(s) shall 

specify the following approaches for 

negotiation and Binding Arbitration 

among members of the Arbitration 

Organizations:

(i) Restrictions on collective 

negotiation. An IFQ and IPQ holder may 

negotiate individually. Groups of IFQ 

holders may negotiate collectively with 

an IPQ holder only under the following 

provisions:

(A) Members of a crab harvesting 

cooperative may participate collectively 

with other members of the same crab 

harvesting cooperative in Binding 

Arbitration except as otherwise 

provided under this section.

(B) Members of different crab 

harvesting cooperatives shall not 

participate collectively.

(C) IPQ holders shall not participate 

collectively. Only one IPQ holder can 

enter into Binding Arbitration with any 

IFQ holder or IFQ holder(s).

(D) An Arbitration Organization 

cannot negotiate on behalf of a member. 

This shall not prohibit the members of 

an Arbitration IFQ Arbitration 

Organization from negotiation as a crab 

harvesting cooperative under the FCMA.

(ii) Open negotiations. At any time 

prior to the date of the first crab fishing 

seas on a crab fishing year for that crab 

QS fishery, any holder of Arbitration QS 

or uncommitted IFQ may negotiate with 

any holder of PQS or uncommitted IPQ, 

63284 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

the price and delivery terms for that 

season for any uncommitted IFQ and 

IPQ.

(A) Arbitration QS or Arbitration IFQ 

holders and PQS or IPQ holders may 

freely contact each other and initiate 

open negotiations;

(B) If Arbitration QS or Arbitration 

IFQ holders and PQS or IPQ holders do 

not reach an agreement on price, 

delivery terms, or other terms, a party to 

the contract may initiate Binding 

Arbitration in accordance with the 

procedures specified in this section in 

order to resolve disputes in those price, 

delivery terms, or other terms.

(iii) Lengthy season approach. (A) 

Prior to the date of the first crab fishing 

season for that crab QS fishery in that 

crab fishing year an IPQ holder and one 

or more holders of Arbitration IFQ may 

choose to adopt a Lengthy Season 

approach.

(B) A Lengthy Season approach 

allows an IPQ holder and an Arbitration 

IFQ holder to agree to postpone 

negotiation of specific contract terms 

until a time during the crab fishing year 

as agreed upon by the Arbitration IFQ 

holder and IPQ holder participating in 

the negotiation. The Lengthy Season 

approach allows the Arbitration IFQ 

holders and IPQ holder involved in the 

negotiation to postpone Binding 

Arbitration, if necessary, until a time 

during the crab fishing year. If the 

parties ready a final agreement on the 

contract terms, Binding Arbitration is 

not necessary.

(C) If an IPQ holder and one or more 

Arbitration IFQ holder(s) are unable to 

reach an agreement on whether to adopt 

a Lengthy Season approach, they may 

agree to request a Binding Arbitration or 

mediation to assist the parties in 

determining whether to adopt a Lengthy 

Season approach. The parties may 

request a Contract Arbitrator to act as a 

mediator. If the mediation proves 

unsuccessful, the parties enter Binding 

Arbitration to determine whether to 

adopt a lengthy season approach.

(1) Binding Arbitration may begin 

immediately with the same Contract 

Arbitrator.

(2) If the Contract Arbitrator serves as 

a mediator in an unsuccessful 

mediation, either party may request 

another Contract Arbitrator for the 

Binding Arbitration.

(iv) Share Matching. (A) At any time 

after the issuance of IFQ and IPQ for a 

crab QS fishery but not earlier than 25 

days prior to the first crab fishing season 

for a crab QS fishery in the crab fishing 

year, holders of uncommitted 

Arbitration IFQ may choose to commit 

the delivery of harvests of crab to be 

made with that uncommitted 

Arbitration IFQ to a holder of 

uncommitted IPQ.

(B) To commit Arbitration IFQ, the 

holder of uncommitted IFQ must offer 

an amount of Arbitration IFQ not less 

than 50 percent of the Arbitration IFQ 

holder’s total uncommitted Arbitration 

IFQ.

(C) Any holder of uncommitted IPQ 

must accept all proposed Arbitration 

IFQ commitments, up to the amount of 

its uncommitted IPQ. The commitment 

of IPQ will take place on receipt of 

notice from the holder of uncommitted 

Arbitration IFQ of the intention to 

commit that IFQ.

(D) After matching, an Arbitration IFQ 

holder and an IPQ holder may either 

decide to enter Binding Arbitration or, 

with the consent of both the Arbitration 

IFQ holder and IPQ holder, enter 

mediation to reach agreement on 

contract terms. The Arbitration IFQ 

holder and IPQ holder may request a 

Contract Arbitrator to act as a mediator 

to facilitate an agreement.

(1) If the mediation proves 

unsuccessful, Binding Arbitration may 

begin immediately with the same 

Contract Arbitrator.

(2) If the Contract Arbitrator serves as 

a mediator in an unsuccessful 

mediation, either party may request 

another Contract Arbitrator for the 

Binding Arbitration.

(v) Initiation of Binding Arbitration.

Except for the Lengthy Season 

approach, at any point more than 15 

days prior to the date of the first crab 

fishing season for a crab QS fishery an 

Arbitration IFQ holder or IPQ holder 

may initiate a Binding Arbitration. 

Binding Arbitration is initiated after the 

Arbitration IFQ holder notifies an IPQ 

holder and the Contract Arbitrator(s), or 

the IPQ holder has notified the 

Arbitration IFQ holder and the Contract 

Arbitrator(s). Binding Arbitration may 

be initiated to resolve price, terms of 

delivery, and other disputes arising 

from:

(A) Open Negotiation among 

Arbitration IFQ holders and IPQ 

holders;

(B) Lengthy Season Approach;

(C) Share Matching; or

(D) Performance Disputes.

(vi) Joining a Binding Arbitration 

Proceeding. Any Arbitration IFQ holder 

may join a Binding Arbitration 

proceeding as a party by providing 

notice to the IPQ holder and the 

Contract Arbitrator(s).

(vii) Arbitration Schedule Meeting.

The Contract Arbitrator shall meet with 

all parties to a Binding Arbitration 

proceeding as soon as possible once a 

Binding Arbitration proceeding has 

been initiated for the sole purpose of 

establishing a schedule for the Binding 

Arbitration. This schedule shall include 

the date by which the IPQ holder and 

Arbitration IFQ holder(s) must submit 

their last best offer and any supporting 

materials, and any additional meetings 

or mediation if agreed to by all parties. 

This meeting will discuss the schedule 

of the Binding Arbitration proceedings 

and not address terms of last best offers.

(viii) Terms of Last Best Offers. The 

Contract Arbitrator will meet with the 

parties to the Binding Arbitration 

proceeding to determine the matters that 

must be included in the last best offer, 

which may include a fixed price or a 

price over a time period specified by the 

parties, a method for adjusting prices 

over a crab fishing year, or an advance 

price paid at the time of delivery.

(ix) Submission of Last Best Offers.

The parties to a Binding Arbitration 

proceeding shall each submit to the 

Contract Arbitrator(s) a last best offer 

defining all the terms specified for 

inclusion in a last best offer by the 

Contract Arbitrator. An Arbitration IFQ 

holder that is a crab harvesting 

cooperative may submit a last best offer 

that defines terms for the delivery of 

crab harvested by members of that crab 

harvesting cooperative with IFQ held by 

the cooperative. An Arbitration IFQ 

holder that is not a crab harvesting 

cooperative may submit a last best offer 

that defines the term of delivery of crab 

harvested with IFQ held by that person. 

The IPQ holder that is a party to the 

proceeding shall submit a single offer 

that defines terms for delivery of crab 

harvested with all IFQ that are subject 

to the proceedings.

(x) Arbitration Decisions. The 

Contract Arbitrator(s) shall decide 

among each offer received from an 

Arbitration IFQ holder and the offer 

received from the IPQ holder. Each 

arbitration decision shall result in a 

binding contract between the IPQ holder 

and theArbitration IFQ holder defined 

by the terms of the offer selected by 

Contract Arbitrator(s).

(xi) Announcement of Decisions. (A) 

If last best offers are submitted at least 

15 days before the first crab fishing 

season for that crab fishing year for that 

crab QS fishery, arbitration decisions 

shall be issued no later than 10 days 

before the first crab fishing season for 

that crab fishing year for that crab QS 

fishery. Otherwise, the Contract 

Arbitrator will notify the parties of the 

arbitration decision within 5 days of the 

parties submitting their last best offers.

(B) The Contract Arbitrator will notify 

the parties by providing each 

Arbitration IFQ holder and IPQ holder 

that is a party to the Binding Arbitration 

proceeding, a copy of any decision. The 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63285

decision is binding on the parties to the 

Binding Arbitration proceeding.

(4) Basis for the Arbitration Decision.

The contract with the Contract 

Arbitrator shall specify that the Contract 

Arbitrator will be subject to the 

following provisions when deciding 

which last best offer to select:

(i) The Contract Arbitrator’s decision 

shall:

(A) Be based on the historical 

distribution of first wholesale revenues 

between fishermen and processors in 

the aggregate based on arm’s length first 

wholesale prices and ex vessel prices, 

taking into consideration the size of the 

harvest in each year; and

(B) Establish a price that preserves the 

historical division of revenues in the 

fishery while considering the following:

(1) Current ex-vessel prices, including 

ex-vessel prices received for crab 

harvested under Class A, Class B, and 

CVC IFQ permits;

(2) Consumer and wholesale product 

prices for the processing sector and the 

participants in the arbitration 

(recognizing the impact of sales to 

affiliates on wholesale pricing);

(3) Innovations and developments of 

the harvesting and processing sectors 

and the participants in the arbitration 

(including new product forms);

(4) Efficiency and productivity of the 

harvesting and processing sectors 

(recognizing the limitations on 

efficiency and productivity arising out 

of the management program structure);

(5) Quality (including quality 

standards of markets served by the 

fishery and recognizing the influence of 

harvest strategies on the quality of 

landings);

(6) The interest of maintaining 

financially healthy and stable harvesting 

and processing sectors;

(7) Safety and expenditures for 

ensuring adequate safety;

(8) Timing and location of deliveries; 

and

(9) The cost of harvesting and 

processing less than the full IFQ or IPQ 

allocation (underages) to avoid penalties 

for overharvesting IFQ and a mechanism 

for reasonably accounting for deadloss.

(C) Consider the Non-Binding Price 

Formula established in the fishery by 

the Formula Arbitrator.

(ii) The Contract Arbitrator’s decision 

may rely on any relevant information 

available to the Contract Arbitrator, 

including, but not limited to:

(A) Information provided by the QS, 

PQS, IPQ and IFQ holders in the fishery 

regarding the factors identified in 

paragraph (h)(4)(i) of this section; and

(B) The Market Report for the fishery.

(iii) Each of the Arbitration IFQ 

holder and the IPQ holder that are party 

to the proceeding may provide the 

Contract Arbitrator with additional 

information to support its last best offer. 

The Contract Arbitrator must receive 

and consider all data submitted by the 

parties.

(iv) The Contract Arbitrator may 

request specific information from the 

Arbitration IFQ holder(s) and IPQ 

holder that would be useful in reaching 

a final decision. The Contract Arbitrator 

will not have subpoena power and it is 

in the sole discretion of the person from 

whom information is requested as to 

whether to provide the requested 

information.

(5) Limits on the Release of Data. The 

parties to a Binding Arbitration 

proceeding shall be precluded from full 

access to the information provided to 

the Contract Arbitrator.

(i) Arbitration IFQ holders that are 

party to an arbitration proceeding shall 

have access only to information 

provided directly by the IPQ holder to 

the Contract Arbitrator for that Binding 

Arbitration proceeding.

(ii) IPQ holders that are party to an 

arbitration proceeding shall have access 

only to information provided directly by 

an Arbitration IFQ holder to the 

Contract Arbitrator for that Binding 

Arbitration proceeding.

(iii) The Contract Arbitrator shall keep 

confidential the information provided 

by any QS, PQS, IFQ, or IPQ holders in 

the fishery and not disclose the identity 

of the persons providing specific 

information except as provided in 

paragraph (h)(6) of this section.

(6) Information Provided to NMFS.

The contract with the Contract 

Arbitrator must specify that the Contract 

Arbitrator provide NMFS with:

(i) A copy of any minutes from any 

meeting attended by that Contract 

Arbitrator between or among any PQS or 

IPQ holders concerning any negotiations 

under this section.

(ii) Any last-best offers made during 

the Binding Arbitration process, 

including all contract details, the names 

of other participants in the arbitration, 

and whether the bid was accepted by 

the Contract Arbitrator; and

(iii) A copy of any information, data, 

or documents given by the Contract 

Arbitrator to any person who is not a 

party to the particular arbitration for 

which that information was provided. 

The Contract Arbitrator must identify 

the arbitration to which those 

information, data, or documents apply, 

and the person to whom those 

information, data, or documents were 

provided.

(iv) The Contract Arbitrator must 

provide any information, documents, or 

data required under this paragraph to 

NMFS via mail to the Administrator, 

Alaska Region, NMFS, P.O. Box 21668, 

Juneau, AK 99802-1668, or 

electronically not later than 30 days 

prior to the end of the crab fishing year 

for which the open negotiation or 

arbitration applied.

(7) Enforcement of Binding 

Arbitration decisions. The decision of 

the Contract Arbitrator for Binding 

Arbitration shall be enforced among the 

parties to that arbitration.

(8) Failure of Contract Arbitrator(s).

Except as provided for in paragraph 

(h)(6)(v) of this section, the failure of a 

Contract Arbitrator to perform shall be 

enforced by the Arbitration 

Organizations.

(9) Availability of Terms and 

Conditions of an Arbitration Decision.

Each party to an Arbitration must make 

the terms and conditions of an 

arbitration decision available to that 

party’s Arbitration Organization in order 

for the Arbitration Organization to make 

such information available to 

uncommitted Arbitration IFQ holders 

that may wish to opt-in to those terms 

as described in paragraph (h)(10) of this 

section within 5 days of receiving the 

request for that information.

(10) Post Binding Arbitration opt-in.

(i) An Arbitration IFQ holder with 

uncommitted IFQ, may opt-in to any 

contract that results from a completed a 

Binding Arbitration procedure with any 

IPQ holder that has uncommitted IPQ.

(A) All the terms from the arbitrated 

contract will apply.

(B) Once exercised, the opt-in results 

in a contract that is binding on both the 

Arbitration IFQ and IPQ holder.

(ii) To initiate the opt-in process, the 

holder of uncommitted Arbitration IFQ 

will notify the holder of uncommitted 

IPQ in writing of its intent to opt-in.

(iii) Holders of uncommitted 

Arbitration IFQ may opt-in to a contract 

resulting from a completed Binding 

Arbitration procedure with a person that 

holds uncommitted IPQ for that fishery.

(iv) If the IPQ holder and the 

Arbitration IFQ holder are unable to 

resolve a dispute regarding whether the 

opt-in offer is consistent with the 

original contract from the completed 

Binding Arbitration procedure, the 

dispute may be decided by the Contract 

Arbitrator to the original arbitration that 

resulted in the contract to which the 

Arbitration IFQ holder is seeking to 

opt-in. The Contract Arbitrator will 

decide only whether the proposed 

opt-in terms are consistent with the 

original contract.

(11) Performance disputes. If an IPQ 

holder and an Arbitration IFQ holder 

are unable to resolve disputes regarding 

the obligations to perform specific 

63286 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

contract provisions after substantial 

negotiations or when time is of the 

essence, the issues of that dispute shall 

be submitted for Binding Arbitration 

before a Contract Arbitrator for that 

fishery.

(i) Binding Arbitration resulting from 

a performance dispute can occur at any 

point during or after the crab fishing 

year. The dispute must be raised by the 

IPQ holder or the Arbitration IFQ 

holder. Arbitration of that performance 

dispute must be initiated prior to the 

date of the first crab fishing season for 

the following crab fishing year in that 

crab QS fishery.

(ii) Performance dispute arbitration 

shall follow the same procedures 

described for a Binding Arbitration in 

paragraph (h) of this section.

(iii) If the arbitration proves 

unsuccessful or a party fails to abide by 

the arbitration decision, a party may 

pursue available contract remedies.

(iv) The costs of arbitrating 

performance disputes shall be provided 

from the general fees collected by the 

arbitration organizations pursuant to 

paragraph (h) of this section.

(v) The Contract Arbitrator may assign 

fees to any party bringing frivolous 

complaints. Any such fees shall be paid 

by the party and not from the fees 

collected under paragraph (e)(2)(vi) of 

this section.

(12) Quality disputes. When disputes 

regarding the quality of the harvested 

crab arise within the context of an 

existing contract, the parties may settle 

the disputes within the context of the 

arbitration system according to the 

following:

(i) In cases where the IPQ holder and 

Arbitration IFQ holder(s) have agreed to 

a formula-based price for crab but where 

they cannot reach an agreement on the 

quality and price of the crab, the IPQ 

holder and Arbitration IFQ holder(s) 

will receive their share of the value of 

the amount of crab delivered based on 

the provisions of the contract.

(ii) In quality disputes where the 

Arbitration IFQ holders prefer to use 

actual ex-vessel price and not a 

formula-based price and a dispute arises 

regarding crab quality and price, the 

dispute should be referred to a mutually 

agreeable independent quality specialist 

firm. This independent quality 

specialist firm will determine the price 

to be paid to the IPQ holder and IFQ 

holder(s). The IPQ holder and 

Arbitration IFQ holder(s) with this 

quality dispute shall share the cost of 

hiring the specialist firm and agree to 

abide by its findings according to the 

terms of their agreement.

§ 680.21 Crab fishery cooperatives.

This section governs the formation 

and operation of crab harvesting 

cooperatives. A crab harvesting 

cooperative is a group of crab QS 

holders who have chosen to form a 

cooperative under the 1934 Fisherman’s 

Collective Marketing Act (15 U.S.C. 521) 

in order to combine and collectively 

manage their crab IFQ through a crab 

cooperative IFQ permit issued by 

NMFS.

(a) Types of cooperatives governed 

under this section. The regulations in 

this section apply only to crab 

harvesting cooperatives that have 

formed for the purpose of applying for 

and of fishing under a crab cooperative 

IFQ fishing permit issued by NMFS.

(b) Membership requirements. A crab 

harvesting cooperative is limited to QS 

holders who hold any amount of CPO, 

CVO, CPC, or CVC and who, NMFS has 

determined, are eligible to receive IFQ.

(1) Minimum number of members.

Each crab harvesting cooperative must 

include at least four unique QS holding 

entities. A unique QS holding entity is 

a QS holder or group of affiliated QS 

holders that are not affiliated with any 

other QS holders or QS holding entities 

in the cooperative. For the purpose of 

this paragraph, the term ‘‘affiliation’’ is 

defined at § 680.2.

(2) Voluntary nature of membership.

Membership in a crab harvesting 

cooperative is voluntary. No person may 

be required to join a crab harvesting 

cooperative, and no crab harvesting 

cooperative may be required to accept a 

member who the cooperative chooses 

not to accept.

(3) Limitations on membership in a 

crab harvesting cooperative. A QS 

holder who also holds PQS or IPQ, is 

affiliated with a person who holds PQS 

or IPQ, processes Class B IFQ, or is 

affiliated with a person that processes 

Class B IFQ is prohibited from joining 

a crab harvesting cooperative.

(4) Membership is all or nothing.

Upon joining a cooperative, each QS 

holder must allow all of his or her QS 

holdings to be used by the cooperative 

for conversion to cooperative IFQ.

(5) Membership in more than one 

cooperative prohibited. A QS holder 

may not hold simultaneous 

memberships in more than one crab 

harvesting cooperative.

(c) Legal and organizational 

requirements for crab harvesting 

cooperatives. A crab harvesting 

cooperative must meet the following 

legal and organization requirements 

before it is eligible to apply for a 

cooperative IFQ permit:

(1) Registered business entity. Each 

crab harvesting cooperative must be 

formed as a partnership, corporation, or 

other legal business entity that is 

registered under the laws of one of the 

50 states or the District of Columbia.

(2) Fisherman’s Collective Marketing 

Act of 1934. Each crab harvesting 

cooperative must be formed in 

accordance with the requirements of the 

Fisherman’s Collective Marketing Act of 

1934 (15 U.S.C. 521).

(3) Appointment of a designated 

representative. Each crab harvesting 

cooperative must appoint a designated 

representative to act on the 

cooperative’s behalf and serve as contact 

point for NMFS for questions regarding 

the operation of the cooperative. The 

designated representative may be a 

member of the cooperative or some 

other individual authorized by the 

cooperative to act on its behalf.

(d) Application for annual crab 

harvesting cooperative IFQ permits. A 

crab harvesting cooperative IFQ permit 

is an annual permit issued to a 

cooperative that establishes an annual 

catch limit of crab that is based on the 

collective QS holdings of the members 

of the cooperative. A crab harvesting 

cooperative IFQ permit will list the IFQ 

amount held by the cooperative and 

identify the members of the cooperative. 

Each cooperative will be issued a 

separate IFQ permit for each type of QS 

held by a member (or members) of the 

cooperative.

(1) June 30 application deadline. Each 

crab harvesting cooperative annually 

must submit to and be received by 

NMFS by June 30, a completed 

application for annual crab harvesting 

cooperative IFQ permit, together with 

the signed annual application for crab 

IFQ/IPQ permit forms of all the 

members of the cooperative.

(2) Contents of application for annual 

crab harvesting cooperative IFQ permit. 

A completed application must contain 

the following information:

(i) Cooperative identification. (A) The 

cooperative’s legal name;

(B) Type of business entity under 

which the cooperative is organized;

(C) State in which the cooperative is 

legally registered as a business entity;

(D) Name of the cooperative’s 

designated representative;

(E) Permanent business address, 

telephone number, facsimile number, 

and e-mail address (if available) for the 

cooperative or its designated 

representative;

(F) Signature of the cooperative’s 

designated representative and the date 

signed.

(ii) Members of the cooperative. Full 

name and NMFS Person ID number of 

each member of the cooperative. Attach 

the completed and signed Annual 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63287

Application for Crab IFQ/IPQ Permit for 

all members of the cooperative;

(iii) Affiliation declaration. Indicate 

(YES or NO) whether any member of the 

cooperative is affiliated with an entity 

that holds IPQ or PQS, or that processes 

IFQ crab (other than a catcher/processor 

that processes only its own catch). If 

YES, your cooperative is not eligible to 

receive a cooperative IFQ permit.

(iv) Additional documentation. In 

order to file a complete application, 

attach the following documents to this 

application:

(A) A copy of the business license 

issued by the state in which the 

cooperative is registered as a business 

entity;

(B) A copy of the articles of 

incorporation or partnership agreement 

of the cooperative; and

(C) A copy of the cooperative 

agreement signed by the members of the 

cooperative (if different from paragraph 

(d)(3)(iii)(B) of this section).

(4) Issuance of cooperative IFQ 

permits. Upon receipt of a completed 

Application for an Annual Crab 

Harvesting Cooperative IFQ Permit that 

is subsequently approved, NMFS will 

issue one-year crab harvesting 

cooperative IFQ permits to the 

cooperative. The crab harvesting 

cooperative IFQ permits will list the 

crab IFQ amounts that are generated by 

the aggregate QS holdings of all 

members of the cooperative for each 

fishery, region, sector, and A/B share 

categories except that all CVC and CPC 

QS held by the members of a 

cooperative will be converted to CVO 

and CPO IFQ, respectively.

(5) Appeals. A cooperative or person 

who is adversely affected by an initial 

administrative determination (IAD) that 

is associated with the issuance of a crab 

cooperative IFQ permit may appeal the 

IAD using the appeals procedures 

described in § 679.43.

(e) Restrictions on fishing under a 

crab cooperative IFQ permit. The 

following restrictions govern the fishing 

for IFQ crab under a crab cooperative 

IFQ permit:

(1) Maintenance of permit on board.

A copy of a crab cooperative IFQ permit 

must be maintained on board any vessel 

that is being used to harvest crab under 

the permit.

(2) Persons eligible to harvest crab 

under a cooperative IFQ permit. Only 

the following persons are eligible to 

harvest crab under a cooperative IFQ 

permit:

(i) Cooperative members. Members of 

the cooperative to whom the IFQ permit 

is issued.

(ii) Hired masters. Hired masters 

operating a vessel in which at least a 10 

percent ownership share is held by a 

member of the cooperative to whom the 

IFQ permit is issued. Cooperatives 

wishing to employ a hired master must 

apply for and receive a Crab IFQ Hired 

Master Permit using the procedures 

described in § 680.4(f).

(3) Liability. Each member of a 

cooperative is responsible for ensuring 

that members of the cooperative and 

Crab IFQ hired masters of the 

cooperative comply with all regulations 

applicable to fishing for CR crab.

(f) Transfers by members of a 

cooperative. The following requirements 

address transfers of QS, IFQ, PQS, and 

IPQ by members of a cooperative.

(1) Transfer of QS by members of a 

cooperative. A member of a cooperative 

may buy or sell QS at any time using the 

transfer procedures described in 

§ 680.41. However, transfers of QS that 

occur after the June 30 deadline for 

cooperative IFQ permit applications 

will not be reflected in the type or 

amount of IFQ permit issued to the 

cooperative for the subsequent fishing 

season.

(2) Transfer of individually held IFQ 

by members of a cooperative. A member 

of a cooperative may buy or sell 

individually held IFQ using the transfer 

procedures described in § 680.41. 

However a member of a cooperative 

who holds any amount of IFQ loses the 

vessel use cap exemption for any vessel 

used to fish any amount of individually 

held IFQ.

(3) Transfer of cooperative IFQ by 

members of a cooperative. A member of 

a cooperative may not buy or sell 

cooperative IFQ. Cooperative IFQ may 

only be transferred between two 

cooperatives.

(4) Acquisition of PQS and IPQ by 

members of a cooperative. A member of 

a cooperative is prohibited from 

acquiring any amount of PQS or IPQ 

during the valid duration of the 

cooperative IFQ permit.

(g) Transfers by crab harvesting 

cooperatives. The following 

requirements address transfers of QS, 

IFQ, PQS, and IPQ by crab harvesting 

cooperatives that have been issued 

cooperative IFQ permits.

(1) Acquisition of QS, PQS, and IPQ 

prohibited. A crab harvesting 

cooperative that has been issued a 

cooperative IFQ permit is prohibited 

from acquiring any amount of QS, PQS, 

or IPQ for the valid duration of the 

cooperative IFQ permit. A crab 

harvesting cooperative that acquires any 

amount of QS, PQS, or IPQ becomes 

ineligible to receive a crab cooperative 

IFQ permit.

(2) Transfer of individually held IFQ.

A crab harvesting cooperative may 

acquire individually held IFQ using the 

transfer procedures described in 

§ 680.41. Any individually held IFQ 

acquired by a crab harvesting 

cooperative will be converted to 

cooperative IFQ when the transfer is 

processed by NMFS.

(3) Transfer of cooperative IFQ.

Cooperative IFQ may be transferred only 

between two crab harvesting 

cooperatives that have been issued 

cooperative IFQ permits using the 

transfer procedures described in 

§ 680.41. A crab harvesting cooperative 

is prohibited from transferring any 

amount of cooperative IFQ to any entity 

that is not a crab harvesting cooperative 

operating under a cooperative IFQ 

permit.

(h) Inseason changes to cooperative 

membership. The following 

requirements address inseason changes 

to cooperative membership.

(1) Eligible membership changes. A 

crab harvesting cooperative may add a 

new member if that person becomes 

eligible to join the cooperative through 

the acquisition of any amount of the QS 

upon which the cooperative’s annual 

IFQ permit was based provided that the 

person acquiring the QS in question has 

been determined by NMFS to be eligible 

to hold IFQ. Likewise, a crab harvesting 

cooperative may remove a member if 

that person no longer holds any of the 

QS upon which the cooperative’s 

annual IFQ permit was based.

(2) Inseason membership changes are 

voluntary. A crab harvesting cooperative 

is not required to add or remove 

members during the fishing season to 

reflect inseason transfers of QS. Each 

cooperative is free to establish its own 

process for deciding whether or not to 

admit new members or to remove 

existing members during the fishing 

season to reflect changes in the 

ownership of QS. No cooperative is 

required to admit a new QS holder that 

the cooperative chooses not to admit, 

regardless of whether the person in 

question has acquired any amount of QS 

upon which the cooperative’s annual 

IFQ is based. If a cooperative chooses to 

make inseason membership changes, 

then it must comply with § 680.21(h)(3).

(3) Application for an inseason 

change in cooperative membership. A 

crab harvesting cooperative must notify 

NMFS of any inseason changes to 

cooperative membership by submitting 

a revised Application for an Annual 

Crab Harvesting Cooperative IFQ Permit 

together with any revised supporting 

documents that are required to be 

submitted with the application. The 

revised Application for an Annual Crab 

Harvesting Cooperative IFQ Permit must 

be accompanied by a cover letter that 

63288 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

indicates the revisions that have been 

made. Upon approval of the 

membership change, NMFS will issue a 

revised annual cooperative IFQ permit 

that reflects the change in membership. 

A new member may not fish on behalf 

of a cooperative except as a crab IFQ 

hired master until NMFS issues a 

revised annual cooperative IFQ permit 

that reflects the change in membership.

(4) Successors-in-interest. If a member 

of a cooperative dies (in the case of an 

individual) or dissolves (in the case of 

a business entity), the QS held by that 

person will be transferred to the legal 

successor-in-interest. However, the 

cooperative IFQs generated by that 

person’s QS holdings remain under the 

control of the cooperative for the valid 

duration of the cooperative IFQ permit. 

Each cooperative is free to establish its 

own internal procedures for admitting a 

successor-in-interest during the fishing 

season to reflect the transfer of QS due 

to the death of or dissolution of a QS 

holder. These regulations do not require 

any cooperative to admit a 

successor-in-interest that the 

cooperative chooses not to admit. If a 

cooperative chooses to admit the 

successor-in-interest for membership, 

then the cooperative must comply with 

§ 680.21(h)(3).

§ 680.22 Sideboard protections for GOA 

groundfish fisheries.

The regulations in this section restrict 

the owners of vessels with a history of 

participation in the Bering Sea snow 

crab (C. opilio) fishery from using the 

increased flexibility provided by the CR 

Program to expand their level of 

participation in GOA groundfish 

fisheries. These restrictions, commonly 

known as ‘‘sideboards,’’ limit directed 

fishing for GOA Pacific cod by such 

vessels to their aggregate historical 

levels and prohibit directed fishing in 

the GOA for all other groundfish species 

except sablefish.

(a) Vessels and LLP licenses subject to 

sideboard restrictions. The sideboard 

fishing restrictions described in this 

section are based on a vessel’s fishing 

history and apply both to the fishing 

vessel itself and to any LLP license 

generated by that vessel’s fishing 

history. The criteria used to determine 

which vessels and LLP licenses are 

subject to GOA groundfish sideboard 

fishing restrictions are as follows:

(1) Vessels subject to GOA groundfish 

sideboard directed fishing closures. Any 

vessel that NMFS has determined meets 

one or both of the following criteria is 

subject to GOA groundfish sideboard 

directed fishing closures issued under 

paragraph (e) of this section.

(i) Any non-AFA vessel that made a 

legal landing of Bering Sea snow crab 

(C. opilio) between January 1, 1996, and 

December 31, 2000, that generated any 

amount of Bering Sea snow crab (C. 

opilio) fishery QS, and

(ii) Any vessel named on an LLP 

license that was generated in whole or 

in part by the fishing history of a vessel 

meeting the criteria in paragraph 

(a)(1)(i) of this section.

(2) Vessels prohibited from directed 

fishing for Pacific cod in the GOA. Any 

vessel that NMFS has determined meets 

either of the following two criteria is 

prohibited from directed fishing for 

Pacific cod in the GOA:

(i) Any vessel subject to GOA 

groundfish sideboard closures under 

paragraph (a)(1)(i) of this section that 

landed less than 50 mt (110,231 lb) of 

groundfish harvested from the GOA 

between January 1, 1996, and December 

31, 2000, and

(ii) Any vessel named on an LLP 

license that was generated in whole or 

in part by the fishing history of a vessel 

meeting the criteria in paragraph 

(a)(2)(i) of this section.

(3) Vessels exempt from Pacific cod 

sideboard closures in the GOA. Any 

vessel that NMFS has determined meets 

one or both of the following criteria is 

exempt from sideboard directed fishing 

closures for Pacific cod in the GOA:

(i) Any vessel subject to GOA 

groundfish closures under paragraph 

(a)(1)(i) of this section that landed less 

than 100,000 lb (45,359 kg) of Bering 

Sea snow crab (C. opilio) and more than 

500 mt (1,102,311 lb) of Pacific cod from 

the GOA between January 1, 1996, and 

December 31, 2000; and

(ii) Any vessel named on an LLP 

license that was generated in whole or 

in part by the fishing history of a vessel 

meeting the criteria in paragraph 

(a)(3)(i) of this section.

(b) Notification of affected vessel 

owners and LLP licence holders. After 

NMFS determines which vessels and 

LLP licenses meet the criteria described 

in paragraph (a) of this section, NMFS 

will inform each vessel owner and LLP 

license holder in writing of the type of 

sideboard restriction and issue a revised 

Federal fisheries permit and/or LLP 

license that displays the restriction on 

the face of the permit or license.

(c) Appeals. A vessel owner or LLP 

license holder who believes that NMFS 

has incorrectly identified his or her 

vessel or LLP license as meeting the 

criteria for a GOA groundfish sideboard 

restriction may request reconsideration. 

All requests for reconsideration must be 

submitted in writing to the RAM 

Division, Alaska Region, NMFS, 

together with any documentation or 

evidence supporting the request. If the 

request for reconsideration is denied, 

affected persons may appeal using the 

procedures described at § 680.43.

(d) Determination of GOA groundfish 

sideboard ratios. Sideboard ratios for 

each GOA groundfish species other than 

sablefish, species group, season, and 

area for which annual specifications are 

made, are established according to the 

following formulas:

(1) Pacific cod. The sideboard ratios 

for Pacific cod are calculated by 

dividing the aggregate retained catch of 

Pacific cod by vessels that are subject to 

sideboard directed fishing closures 

under paragraph (a)(1) of this section 

and that do not meet the criteria in 

paragraphs (a)(2) or (a)(3) of this section 

and by the total retained catch of Pacific 

cod from the GOA by all groundfish 

vessels between 1996 and 2000.

(2) Groundfish other than Pacific cod.

The sideboard ratios for groundfish 

species and species groups other than 

Pacific cod are calculated by dividing 

the aggregate landed catch by vessels 

subject to sideboard directed fishing 

closures under paragraph (a)(1) of this 

section by the total landed catch of that 

species by all groundfish vessels 

between 1996 and 2000.

(e) Conversion of sideboard ratios into 

annual harvest limits. NMFS will 

convert sideboard ratios into annual 

harvest limits according to the following 

procedures.

(1) Annual harvest limits. Annual 

harvest limits for each groundfish 

species will be established by 

multiplying the sideboard ratios 

calculated under paragraph (d) of this 

section by the interim and final TACs in 

each area for which a TAC is specified. 

If a TAC is further apportioned by 

season, the sideboard harvest limit also 

will be apportioned by season in the 

same ratio as the overall TAC. The 

resulting harvest limits expressed in 

metric tons will be published in the 

annual GOA groundfish harvest 

specification notices.

(2) Sideboard directed fishing 

allowance. If the Regional Administrator 

determines that a harvest limit for a 

species or species group has been or 

will be reached, the Regional 

Administrator may establish a sideboard 

directed fishing allowance for the 

species or species group applicable only 

to the group of crab vessels to which the 

sideboard limit applies.

(3) If the Regional Administrator 

determines that a harvest limit is 

insufficient to support a directed fishery 

for that species or species group, then 

the Regional Administrator may set the 

sideboard directed fishing allowance at 

zero for that species or species group.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63289

(4) Directed fishing closures. Upon 

attainment of a sideboard directed 

fishing allowance, the Regional 

Administrator will publish notification 

in the Federal Register prohibiting 

directed fishing for the species or 

species group in the specified subarea, 

regulatory area, or district. A directed 

fishing closure effective for the duration 

of the fishing year or season.

§ 680.23 Equipment and operational 

requirements.

(a) Catcher Vessel requirements. A 

catcher vessel used to harvest CR crab 

must:

(1) Carry and use a VMS as described 

in paragraph (d) of this section.

(2) Land all retained crab to an RCR 

operating under an approved catch 

monitoring plan as described in 

paragraph (g) of this section.

(b) Catcher/Processor requirements. A 

catcher/processor used to harvest CR 

crab must:

(1) Carry and use a VMS as described 

in paragraph (d) of this section.

(2) Weigh all retained crab to be 

processed on board, in its raw form, on 

a scale approved by NMFS as described 

in paragraph (e) of this section.

(3) Land all retained crab not 

processed on board at an RCR.

(4) Land all product processed on 

board at a shoreside location in the 

United States accessible by road or 

regularly scheduled air service and 

weigh that product on a scale approved 

by the State where the product is 

landed.

(5) Provide an approved observer 

work area that meets the requirements 

in paragraph (h) of this section.

(c) RCR requirements. An RCR must:

(1) Ensure that all CR crab landings 

are weighed on a scale approved by the 

State where the landing takes place.

(2) Ensure that all crab landing and 

weighing be conducted as specified in 

an approved crab monitoring plan as 

described in paragraph (g) of this 

section, and that a copy of the crab 

monitoring plan is made available to 

NMFS personnel or authorized officer 

upon demand.

(d) Vessel Monitoring System (VMS) 

requirements—(1) General 

requirements. General VMS 

requirements concerning the approval 

and installation of VMS components 

and the responsibilities of vessel owners 

and operators are detailed at 

§ 679.28(f)(1) through (5).

(2) VMS Transmission Requirements.

A vessel’s transmitter must be 

transmitting if:

(i) The vessel is operating in any 

reporting area (see definitions at § 679.2) 

off Alaska; and

(ii) The vessel has crab pots or crab 

pot hauling equipment, or a crab pot 

launcher onboard; and

(iii) The vessel has received a Federal 

Crab Vessel Permit at any time during 

the crab fishing year.

(e) Scales approved by NMFS. To be 

approved by NMFS, a scale used to 

weigh crab at sea must meet the type 

evaluation and initial inspection 

requirements set forth in § 679.28(b)(1) 

and (2). Once a scale is installed on a 

vessel and approved by NMFS for use, 

it must be reinspected annually as 

described in § 679.28(b)(2) and must be 

tested daily and meet the maximum 

permissible error (MPE) requirements 

described in paragraph (e)(1) of this 

section.

(1) At-sea scale tests. To verify that 

the scale meets the MPEs specified in 

this paragraph, the vessel operator must 

test each scale or scale system used to 

weigh CR crab one time during each 

24-hour period when use of the scale is 

required. The vessel owner must ensure 

that these tests are performed in an 

accurate and timely manner.

(i) Belt scales. The MPE for the daily 

at-sea scale tests is plus or minus 3 

percent of the known weight of the test 

material. The scale must be tested by 

weighing at least 400 kg (882 lb) of crab 

or an alternative material supplied by 

the scale manufacturer on the scale 

under test. The known weight of the test 

material must be determined by 

weighing it on a platform scale 

approved for use under § 679.28 (b)(7).

(ii) Automatic hopper scales. An 

automatic hopper scale must be tested at 

its minimum and maximum capacity 

with approved test weights. Test 

weights must be placed in the bottom of 

the hopper unless an alternative testing 

method is approved by NMFS. The MPE 

for the daily at-sea scale tests is plus or 

minus 2 percent of the weight of the 

approved test weights.

(iii) Platform scales used for observer 

sampling. A platform scale used for 

observer sampling must be tested at 10, 

25, and 50 kg (or 20, 50, and 100 lb if 

the scale is denominated in pounds) 

using approved test weights. The MPE 

for the daily at-sea scale test is plus or 

minus 0.5 percent if the scale is used to 

determine the known weight of test 

material for the purpose of testing a belt 

scale. If the scale is not used for that 

purpose, the MPE for the daily at-sea 

scale test is plus or minus 1 percent.

(iv) Approved test weights. Each test 

weight must have its weight stamped on 

or otherwise permanently affixed to it. 

The weight of each test weight must be 

annually certified by a National Institute 

of Standards and Technology approved 

metrology laboratory or approved for 

continued use by the NMFS authorized 

inspector at the time of the annual scale 

inspection.

(v) Requirements for all scale tests.

(A) Notify the observer at least 15 

minutes before the time that the test will 

be conducted, and conduct the test 

while the observer is present.

(B) Conduct the scale test and record 

the following information on the at-sea 

scale test report form:

(1) Vessel name;

(2) Month, day, and year of test;

(3) Time test started to the nearest 

minute;

(4) Known weight of test weights;

(5) Weight of test weights recorded by 

scale;

(6) Percent error as determined by 

subtracting the known weight of the test 

weights from the weight recorded on the 

scale, dividing that amount by the 

known weight of the test weights, and 

multiplying by 100; and

(7) Sea conditions at the time of the 

scale test.

(C) Maintain the test report form on 

board the vessel until the end of the 

crab fishing year during which the tests 

were conducted, and make the report 

forms available to observers, NMFS 

personnel, or an authorized officer. In 

addition, the vessel owner must retain 

the scale test report forms for 3 years 

after the end of the crab fishing year 

during which the tests were performed. 

All scale test report forms must be 

signed by the vessel operator.

(2) Scale maintenance. The vessel 

owner must ensure that the vessel 

operator maintains the scale in proper 

operating condition throughout its use, 

that adjustments made to the scale are 

made so as to bring the performance 

errors as close as practicable to a zero 

value, and that no adjustment is made 

that will cause the scale to weigh 

inaccurately.

(3) Printed reports from the scale. The 

vessel owner must ensure that the 

printed reports are provided as required 

by this paragraph. Printed reports from 

the scale must be maintained on board 

the vessel until the end of the year 

during which the reports were made 

and be made available to NMFS or 

NMFS authorized personnel. In 

addition, the vessel owner must retain 

printed reports for 3 years after the end 

of the year during which the printouts 

were made.

(i) Reports of catch weight and 

cumulative weight. Reports must be 

printed at least once every 24 hours 

prior to submitting a CR crab landing 

report as described in § 680.5. Reports 

must also be printed before any 

information stored in the scale 

computer memory is replaced. Scale 

63290 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

weights must not be adjusted by the 

scale operator to account for the 

perceived weight of water, mud, debris, 

or other materials. Scale printouts must 

show:

(A) The vessel name and Federal 

fisheries or processor permit number;

(B) The weight of each load in the 

weighing cycle (hopper scales only);

(C) The date and time the information 

was printed;

(D) The total amount weighed since 

the last printout was made; and

(E) The total cumulative weight of all 

crab or other material weighed on the 

scale.

(ii) Printed report from the audit trail.

The printed report must include the 

information specified in sections 

2.3.1.8, 3.3.1.7, and 4.3.1.8 of appendix 

A to 50 CFR 679. The printed report 

must be provided to the authorized 

scale inspector at each scale inspection 

and must also be printed at any time 

upon request of NMFS staff or other 

NMFS-authorized personnel.

(iii) Platform scales used for observer 

sampling. A platform scale used for 

observer sampling is not required to 

produce a printed record unless that 

scale is also used to obtain raw weight 

for a CR crab landing report.

(4) Scale installation requirements.

Unless otherwise approved by NMFS, a 

scale used to obtain raw weight for a CR 

crab landing report must be installed 

such that:

(i) From the location where the 

observer samples unsorted crab, the 

observer can ensure that all crab are 

being weighed;

(ii) The scale may not be installed in 

a manner that facilitates bypassing. It 

must not be possible for the scale 

inspector and an assistant to bypass the 

scale with 100 kg (220 lb) of test 

material in less than 20 seconds.

(f) Scales approved by the state. Scale 

requirements in this paragraph are in 

addition to those requirements set forth 

by the State in which the scale is 

approved, and nothing in this paragraph 

may be construed to reduce or 

supersede the authority of the State to 

regulate, test, or approve scales within 

the State. Scales used to weigh CR crab 

that are also required to be approved by 

the State must meet the following 

requirements:

(1) Verification of approval. The scale 

must display a valid State sticker 

indicating that the scale was inspected 

and approved within the previous 12 

months.

(2) Visibility. An RCR must ensure 

that the scale and scale display are 

visible simultaneously. NMFS 

personnel or NMFS authorized 

personnel, including observers, must be 

allowed to observe the weighing of crab 

on the scale and be allowed to read the 

scale display at all times.

(3) Printed scale weights. (i) An RCR 

must ensure that printouts of the scale 

weight of each delivery or offload are 

made available to NMFS personnel or to 

NMFS authorized personnel, including 

observers, at the time printouts are 

generated. An RCR must maintain 

printouts on site until the end of the 

fishing year during which the printouts 

were made and make them available 

upon request by an authorized officer 

for 3 years after the end of the fishing 

year during which the printout was 

made.

(ii) A scale used to weigh any portion 

of a landing of CR crab or an offload of 

CR crab product must produce a printed 

record for each landing, or portion of 

each landing, weighed on that scale. 

The printed record must include:

(A) The RCR’s name;

(B) The weight of each load in the 

weighing cycle;

(C) The total weight of crab in each 

landing, or portion of the landing that 

was weighed on that scale.

(D) The date and time the information 

is printed; and

(E) The name and ADF&G vessel 

registration number of the vessel making 

the delivery. The scale operator may 

write this information on the scale 

printout in pen at the time of landing.

(4) Inseason scale testing. Scales used 

to weigh CR crab must be tested by RCR 

personnel when testing is requested by 

NMFS-staff or by NMFS-authorized 

personnel.

(i) Inseason testing criteria. To pass an 

inseason test, NMFS staff or 

NMFS-authorized personnel will verify 

that the scale display and printed 

information are clear and easily read 

under all conditions of normal 

operation, that weight values are visible 

on the display until the value is printed, 

and that the scale does not exceed the 

maximum permissible errors specified 

in the following table:

Test Load in Scale 

Divisions 

Maximum Error in 

Scale Divisions 

(A) 0-500 1

(B) 501-2,000 2

(C) 2,001-4,000 3

(D) >4,000 4

(ii) Test weight requirements. Scales 

must be tested with the amount and 

type of weight specified for each scale 

type in the following tables under 

paragraphs (f)(4)(ii)(A) through 

(f)(4)(ii)(D) of this section:

(A) Automatic hopper 0 to 150 kg (0 

to 300 lb) capacity.

Certified Test Weights Other Test Material 

(1) Minimum 

weighment or 10 kg 

(20 lb), whichever is 

greater

Minimum

(2) Maximum Maximum

(B) Automatic hopper > 150 kg (300 

lb) capacity.

Certified Test Weights Other Test Material 

(1) Minimum 

weighment or 10 kg 

(20 lb), whichever is 

greater

Minimum

(2) 25 percent of 

maximum of 150 kg 

(300 lb), whichever is 

greater

Maximum

(C) Platform, flatbed or hanging scales 

less than 150 kg (300 lb) capacity.

Certified Test Weights Other Test Material 

(1) 10 kg (20 lb) Not Acceptable

(2) Midpoint Not Acceptable

(3) Maximum Not Acceptable

(D) Platform, flatbed or hanging scales 

> 150 kg (300 lb) capacity.

Certified Test Weights Other Test Material 

(1) 10 kg (20 lb) Not Acceptable

(2) 12.5 percent of 

maximum or 75 kg 

(150 lb), whichever is 

greater

50 percent of maximum or 75 kg (150 

lb), whichever is 

greater

(3) 25 percent of 

maximum or 150 kg 

(300 lb), whichever is 

greater

75 percent of maximum or 150 kg 

(300 lb), whichever 

is greater

(iii) Certified test weights. An RCR 

must ensure that there are sufficient test 

weights on-site to test each scale used 

to weigh CR crab. Each test weight used 

for inseason scale testing must have its 

weight stamped on or otherwise 

permanently affixed to it. The weight of 

each test weight must be certified by a 

National Institute of Standards and 

Technology approved metrology 

laboratory every 2 years.

(iv) Other test material. When 

permitted in paragraph (f)(4)(ii) of this 

section, a scale may be tested with test 

material other than certified test 

weights.

(g) Crab Monitoring Plans (CMP). A 

CMP is a plan submitted by an RCR for 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63291

each location or processing vessel where 

the RCR wishes to take deliveries of CR 

crab. The CMP must detail how the RCR 

will meet the catch monitoring 

standards detailed in paragraph (g)(5) of 

this section. An RCR that processes only 

CR crab harvested under a CPO or CPC 

IFQ permit is not required to prepare a 

CMP.

(1) CMP Approval. NMFS will 

approve a CMP if it meets all the 

performance standards specified in 

paragraph (g)(5) of this section. The 

location or vessel identified in the CMP 

may be inspected by NMFS prior to 

approval of the CMP to ensure that the 

location conforms to the elements 

addressed in the CMP. If NMFS 

disapproves a CMP, the plant owner or 

manager may resubmit a revised CMP or 

file an administrative appeal as set forth 

under the administrative appeals 

procedures described in § 679.43.

(2) Inspection scheduling. The time 

and place of a CMP inspection may be 

arranged by submitting a written request 

for an inspection to NMFS, Alaska 

Region. An inspection must be 

requested no less than 10 working days 

before the requested inspection date. 

NMFS staff will conduct CMP 

inspections in any port located in the 

United States that can be reached by 

regularly scheduled commercial air 

service. The inspection request must 

include:

(i) Name and signature of the person 

submitting the application and the date 

of the application;

(ii) Address, telephone number, 

facsimile number, and e-mail address (if 

available) of the person submitting the 

application; and

(iii) A proposed CMP detailing how 

the RCR will meet each of the standards 

in paragraph (g)(5) of this section.

(3) Approval period. NMFS will 

approve a CMP for 1 year if it meets the 

performance standards specified in 

paragraph (e)(2) of this section. An 

owner or manager must notify NMFS in 

writing if changes are made in plant 

operations or layout that do not conform 

to the CMP.

(4) Changing an approved CMP. An 

RCR may change an approved CMP by 

submitting a CMP addendum to NMFS. 

Depending on the nature and magnitude 

of the change requested, NMFS may 

require a CMP inspection as described 

in paragraph (g)(2) of this section. A 

CMP addendum must contain:

(i) Name and signature of the person 

submitting the addendum;

(ii) Address, telephone number, 

facsimile number and e-mail address (if 

available) of the person submitting the 

addendum; and

(iii) A complete description of the 

proposed CMP change.

(5) CMP standards—(i) Crab sorting 

and weighing requirements. All crab, 

including crab parts and crab that are 

dead or otherwise unmarketable, 

delivered to the RCR must be sorted and 

weighed by species. The CMP must 

detail how and where crab are sorted 

and weighed.

(ii) Scales used for weighing crab. The 

CMP must identify by serial number 

each scale used to weigh crab and 

describe the rationale for its use.

(iii) Scale testing procedures. Scales 

identified in the CMP must be accurate 

within the limits specified in paragraph 

(f)(4)(i) of this section. For each scale 

identified in the CMP a testing plan 

must be developed that:

(A) Describes the procedure the plant 

will use to test the scale;

(B) Lists the test weights and 

equipment required to test the scale;

(C) Lists where the test weights and 

equipment will be stored; and

(D) Lists the names of the personnel 

responsible for conducting the scale 

testing.

(iv) Printed record. An RCR must 

ensure that the scale produces a 

complete and accurate printed record of 

the weight of each species in a landing. 

All of the crab in a delivery must be 

weighed on a scale capable of producing 

a complete printed record as described 

in paragraph (e)(3) of this section. A 

printed record of each landing must be 

printed before the RCR submits a CR 

crab landing report.

(v) Observation area. Each CMP must 

designate an observation area. The 

observation area is a location designated 

on the CMP where an individual may 

monitor the offloading and weighing of 

crab. The observation area must meet 

the following standards:

(A) Access to the observation area.

The observation area must be freely 

accessible to observer, NMFS staff or 

enforcement aides at any time during 

the effective period of the CMP.

(B) Monitoring the offloading and 

weighing of crab. From the observation 

area, an individual must have an 

unobstructed view or otherwise be able 

to monitor the entire offload of crab 

between the first location where crab are 

removed from the boat and a location 

where all sorting has taken place and 

each species has been weighed.

(C) Other Requirements. The 

observation area must be sheltered from 

the weather and not exposed to 

unreasonable safety hazards.

(vi) Plant liaison. The CMP must 

designate a plant liaison. The plant 

liaison is responsible for:

(A) Orienting new observers, NMFS 

staff and enforcement aides to the plant;

(B) Assisting in the resolution of 

observer concerns; and

(C) Informing NMFS if changes must 

be made to the CMP.

(vii) Drawing to scale of delivery 

location. The CMP must be 

accompanied by a drawing to scale of 

the delivery location or vessel showing:

(A) Where and how crab are removed 

from the delivering vessel;

(B) The observation area;

(C) The location of each scale used to 

weigh crab; and

(D) Each location where crab is sorted.

(viii) Single geographic location. All 

offload and weighing locations detailed 

in a CMP must be located on the same 

vessel or in the same geographic 

location. If a CMP describes facilities for 

the offloading of vessels at more than 

one location, it must be possible to see 

both locations simultaneously.

(h) Catcher/processor Observer Work 

Areas. A crab catcher/processor must 

provide 2 observer work areas at any 

time when the vessel is catching or 

processing CR crab. All of the space and 

equipment required for the work station 

must be available to the observer at all 

times while an observer work area is 

required. A vessel required to provide 

observer work areas must:

(1) Provide an observer work area for 

sampling unsorted crab. The work area 

must be no less than 6 square meters 

and not less than 1 meter on each side. 

The work area must be located within 

3 meters of where the vessel crew sort 

crab and must provide unobstructed 

access to that crab.

(2) Provide an observer work area for 

sampling retained crab. The work area 

must be no less than 1 meter on each 

side. The work area must be located 

downstream from the scale used to 

weigh total catch and upstream from the 

area where crab are butchered.

(3) The observer work area for 

sampling retained crab must be 

provided with a NMFS-approved 

platform scale located within 5 meters 

of the work area. Clear and unobstructed 

passage must be provided between the 

scale and the observer work area. The 

scale must be accompanied by approved 

test weights sufficient to test the scale 

at 10, 25, and 50 kg (or 25, 50, and 100 

lb if scale is denominated in lb). The 

scale may be used by vessel crew but 

must be available to the observer at all 

times.

(4) Both observer work areas must be 

protected from extreme weather and 

unreasonable safety hazards.

(5) Vessel crew may use the observer 

work areas, but the entire area must be 

63292 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

available to the observer whenever the 

observer is working in the area.

(6) The vessel owner must prepare a 

diagram, drawn to scale, showing the 

location of both observer work areas. 

The diagram must be retained on board 

the vessel whenever the vessel is 

harvesting or processing crab quota.

§ 680.30 [Reserved]

Subpart C—Individual Fishing Quota 

Management Measures

§ 680.40 Quota Share (QS), Processor QS 

(PQS), Individual Fishing Quota (IFQ), and 

Individual Processor Quota (IPQ) Issuance.

(a) Crab QS and Crab QS Fisheries. (1) 

With the exception of the WAI golden 

king crab fishery, the Regional 

Administrator shall annually apportion 

10 percent of the TAC specified by the 

State of Alaska for each of the fisheries 

described in Table 1 to this part to the 

Western Alaska CDQ program. Ten 

percent of the TAC in the Western 

Aleutian Islands golden king crab 

fishery will be allocated to the Adak 

community entity. The remaining TACs 

for the crab QS fisheries will be 

apportioned for use by qualified QS 

holders in each fishery.

(2) Crab harvested and retained in 

each crab QS fishery may be harvested 

and retained only by persons holding 

the appropriate crab IFQ for that crab 

QS fishery.

(3) Official Crab Rationalization 

Record. The official crab rationalization 

record will be used to determine the 

amount of QS that is to be allocated for 

each crab QS fishery. The official crab 

rationalization record is presumed to be 

correct. An applicant for QS has the 

burden to prove otherwise. For the 

purposes of creating the official crab 

rationalization record the Regional 

Administrator will presume the 

following:

(i) An LLP license is presumed to 

have been used onboard the same vessel 

from which that LLP is derived, unless 

documentation is provided establishing 

otherwise.

(ii) If more than one person is 

claiming legal landings or legal 

processing activities during the same 

time at the same processing facility or 

onboard the same vessel, then each 

person eligible to receive QS or PQS 

based on those legal landings or legal 

processing activities will receive any QS 

or PQS issued divided in equal 

proportion among all eligible recipients 

for that time period unless the 

applicants can provide written 

documentation establishing an 

alternative means for distributing the 

QS or PQS resulting from the activities 

during that time period.

(b) QS Sectors and Regional 

Designations—(1) General. The Regional 

Administrator shall initially assign to 

qualified persons, crab QS that are 

specific to the crab QS fisheries defined 

in paragraph (a)(1) of this section. The 

crab QS amount issued will be based on 

legal landings made on vessels 

authorized to participate in those 

fisheries in four QS sectors:

(i) Catcher Vessel Owner (CVO) QS 

shall be initially issued to qualified 

persons defined in paragraph (b)(3) of 

this section based on legal landings of 

unprocessed crab. CVO QS shall yield 

annual IFQ designated as defined under 

paragraph (h)(2) of this section.

(ii) Catcher Vessel Crew (CVC) QS 

shall be initially issued to qualified 

persons defined in paragraph (b)(3) of 

this section based on legal landings of 

unprocessed crab. CVC QS shall yield 

annual IFQ designated as CVC as 

defined under paragraph (h)(3) of this 

section. After July 1, 2008, CVC QS shall 

yield an annual IFQ of CVC Class A or 

CVC Class B as defined under paragraph 

(h)(2) of this section.

(iii) Catcher/Processor Owner (CPO) 

QS shall be initially issued to qualified 

persons defined in paragraph (b)(3) of 

this section based on legal landings of 

crab that were harvested and processed 

on the same vessel. CPO QS shall yield 

annual IFQ designated as CPO as 

defined under paragraph (h)(4) of this 

section.

(iv) Catcher/Processor Crew (CPC) QS 

shall be initially issued to qualified 

persons defined in paragraph (b)(3) of 

this section based on legal landings of 

crab that were harvested and processed 

on the same vessel. CPC QS shall yield 

annual IFQ designated as CPC as 

defined under paragraph (h)(5) of this 

section.

(2) Regional Designations. (i) Regional 

designations apply to:

(A) North QS if the legal landings that 

gave rise to the QS for a crab QS fishery 

were landed in the Bering Sea subarea 

north of 56°20′ N. lat.; or

(B) South QS if the legal landings that 

gave rise to the QS for a crab QS fishery 

were not landed in the North Region;

(1) CVO QS allocated to the WAI crab 

QS fishery; and

(2) CVC QS for the WAI crab QS 

fishery prior to July 1, 2008.

(C) West QS for a portion of the QS 

allocated to the WAG crab QS fishery 

subject to the provisions under 

§ 680.40(c)(4);

(ii) Regional designations do not 

apply (Undesignated QS) to:

(A) Crab QS for the BST crab QS 

fishery;

(B) Crab QS for that portion of the 

WAG QS fishery not regionally 

designated for the West region;

(C) CVC QS prior to July 1, 2008;

(D) CPO QS unless that QS is 

transferred to the CVO QS sector, in 

which case the regional designation is 

made by the recipient of the resulting 

CVO QS at the time of transfer; and

(E) CPC QS.

(iii) The specific regional designations 

that apply to each of the crab QS 

fisheries are specified in the following 

table:

Crab QS Fishery North Region South Region West Region Undesignated Region 

(A) EAG X X

(B) WAG X X

(C) BST X

(D) BSS X X

(E) BBR X X

(F) PIK X X

(G) SMB X X

(H) WAI X

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63293

(3) Qualified person means, for the 

purposes of QS issuance, a person, as 

defined in § 679.2, who at the time of 

application for QS meets the following 

criteria for each of the QS sectors:

(i) CVO QS. Holds one or more 

permanent, fully transferable crab LLP 

licenses and is a citizen of the United 

States;

(ii) CPO QS. (A) Holds one or more 

permanent, fully transferable crab LLP 

licenses with a Catcher/Processor 

designation and is a citizen of the 

United States;

(B) Harvested and processed at sea 

any crab species in any BSAI crab 

fishery during the years 1998 or 1999.

(iii) CVC QS and CPC QS. (A) Is an 

individual who is a citizen of the United 

States, or his or her successor-in-interest 

if that individual is deceased;

(B) Has historical participation in the 

fishery demonstrated by being the 

individual named on a State of Alaska 

Interim Use Permit who made at least 

one legal landing per year for any 3 

qualifying years under that permit based 

on data from fish tickets maintained by 

the State of Alaska. The qualifying years 

are described in Column C of Table 7 to 

this part.

(C) Has recent participation in the 

fishery demonstrated by being the 

individual named on a State of Alaska 

Interim Use Permit who made at least 

one legal landing under that permit in 

any 2 of 3 seasons based on data from 

fish tickets maintained by the State of 

Alaska. Those seasons are defined in 

Column D of Table 7 to this part; except 

that the requirement for recent 

participation does not apply to be a 

qualified individual to receive QS if:

(1) The legal landings that qualify the 

individual for QS in the PIK crab QS 

fishery were made from a vessel that is 

less than 60 feet length overall; or

(2) If the individual who is otherwise 

eligible to receive an initial issuance of 

QS died while working as part of a 

harvesting crew in any U.S. commercial 

fishery.

(4) Qualification for Initial Allocation 

of QS—(i) Qualifying Year. The 

qualifying years for each crab QS fishery 

are described in Column B of Table 7 to 

this part.

(ii) Legal landing of crab means, for 

the purpose of initial allocation of QS, 

crab harvested during the qualifying 

years specified in Column B of Table 7 

to this part and landed in compliance 

with state and Federal permitting, 

landing, and reporting regulations in 

effect at the time of the landing.

(A) Legal landings exclude any 

deadloss, fishing conducted under a 

scientific activity permit, or the fishery 

conducted under the Western Alaska 

CDQ program.

(B) Landings made onboard a vessel 

that gave rise to a crab LLP licence or 

made under the authority of an LLP 

license are non-severable from the crab 

LLP license until QS has been issued for 

those legal landings.

(C) Landings may only be used once 

for each QS sector for the purposes of 

allocating QS.

(D) Landings made from vessels 

which are used for purposes of receiving 

compensation through the BSAI Crab 

Capacity Reduction Program may not be 

used for the allocation of CVO QS or 

CPO QS.

(E) Legal landings for purposes of 

allocating QS for a crab QS fishery only 

include those landings that resulted in 

the issuance of an LLP license endorsed 

for that crab QS fishery, or landings that 

were made in that crab QS fishery under 

the authority of an LLP license endorsed 

for that crab QS fishery.

(iii) Documentation. Evidence of legal 

landings shall be limited to State of 

Alaska fish tickets.

(c) Calculation of QS allocation—(1) 

General. (i) For each permanent, fully 

transferable crab LLP license under 

which an applicant applies, CVO and 

CPO QS will be based on legal landings 

that resulted in the issuance of that 

license or from legal landings that were 

made under the authority of that 

license.

(ii) For each State of Alaska Interim 

Use Permit under which an applicant 

applies for CVC QS or CPC QS, the 

initial allocation of QS will be based on 

the legal landings that were made under 

the authority of that permit.

(2) Computation for Initial Issuance of 

QS. (i) Based on the official crab 

rationalization record the Regional 

Administrator shall derive the annual 

harvest denominator (AHD) that 

represents the amount of legally landed 

crab in each crab QS fishery in each 

qualifying year as established in column 

B of Table 7 to this part.

(ii) The initial QS pool is described in 

Table 8 to this part.

(iii) A person’s initial allocation of QS 

shall be based on a percentage of the 

legal landings for the applicable sector 

in each crab QS fishery:

(A) Associated with crab LLP licenses 

held by the applicant for CVO or CPO 

QS; or

(B) Authorized under a State of 

Alaska Interim Use Permit held by the 

applicant for CVC or CPC QS.

(iv) As shown in the formulas under 

this paragraph (c)(2)(iv), the allocation 

of CVO and CPO QS for each crab QS 

fishery ‘‘f’’ based on each fully 

transferable LLP license ‘‘l’’ held by a 

qualified person shall be calculated by 

the Regional Administrator as follows:

(A) Sum legal landings for each 

qualifying year, as described in Column 

B of Table 7 to this part, and divide that 

amount by the AHD for that year as 

follows:

(è legal landingslf / AHDf) × 100 = 

Percentage of the AHDlf

(B) In those fisheries where only a 

subset of the qualifying years are 

applied, the Regional Administrator will 

use the years that yield the highest 

percentages of each AHD as calculated 

in paragraph (c)(2)(iv)(A) of this section.

(C) Sum the highest percentages of the 

AHD’s for that license as calculated 

under paragraph (c)(2)(iv)(B) of this 

section and divide by the number in 

Column E of Table 7 to this part (Subset 

of Qualifying Years). This yields the 

Average Percentage as presented in the 

following equation:

è Percentages of the AHDlf / Subset of 

Qualifying Yearsf = Average Percentagelf

(D) Divide the Average percentage in 

paragraph (c)(2)(iv)(C) of this section for 

a license and fishery by the Sum of all 

Average Percentages for all licenses for 

that fishery as presented in the 

following equation:

Average Percentagelf / è Average 

Percentagesf = Percentage of the Total 

Percentageslf

(E) Multiply the Percentage of the 

Total Percentages in paragraph 

(c)(2)(iv)(E) of this section by the Initial 

QS Pool as described in Table 8 to this 

part. This yields the unadjusted number 

of QS units derived from a license for 

a fishery.

(F) Multiply the unadjusted number 

of QS units in paragraph (c)(2)(iv)(E) of 

this section by 97 percent. This yields 

the number of QS units to be allocated.

(G) Determine the percentage of legal 

landings in the subset of qualifying 

years associated with a LLP license with 

a catcher/processor designation that 

were processed on that vessel and 

multiply the amount calculated in 

paragraph (c)(2)(iv)(F) of this section by 

this percentage. This yields the amount 

of CPO QS to be allocated.

(H) Determine the percentage of legal 

landings in the subset of qualifying 

years associated with a LLP license that 

were not processed on that vessel and 

multiply the amount calculated in 

paragraph (c)(2)(iv)(F) of this section by 

this percentage. This yields the amount 

of CVO QS to be allocated.

(I) Determine the percentage of legal 

landings associated with an LLP license 

in the subset of qualifying years that 

were delivered in each region as defined 

in § 680.40(b)(2). The amount calculated 

in paragraph (c)(2)(iv)(H) of this section 

is multiplied by the percentage for each 

region.

63294 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(J) The percentage calculated in 

paragraph (c)(2)(iv)(I) of this section 

may be adjusted according to the 

provisions at paragraphs (c)(3) and (c)(4) 

of this section.

(v) As shown in the formulas under 

this paragraph (c)(2)(v), the allocation of 

CVC and CPC QS for each crab QS 

fishery ‘‘f’’ based on each State of 

Alaska Interim Use Permit ‘‘i’’ held by 

each qualified person shall be 

calculated by the Regional 

Administrator as follows:

(A) Sum legal landings for each 

qualifying year as described in Column 

C of Table 7 to this part and divide that 

amount by the AHD for that year using 

the following equation:

(è legal landingsif / AHDf) × 100 = 

Percentage of the AHDif

(B) In those fisheries where only a 

subset of the qualifying years are 

applied, the Regional Administrator will 

use the years that yield the highest 

percentages of the AHD as calculated in 

paragraph (c)(2)(v)(A) of this section.

(C) Sum the highest percentages of the 

AHDs for that license calculated under 

paragraph (c)(2)(v)(B) of this section and 

divide by the number in Column E of 

Table 7 to this part (Subset of Qualifying 

Years). This yields the Average 

Percentage as presented in the following 

equation:

è Percentages of the THDlf / Subset of 

Qualifying Yearsf = Average Percentageif

(D) Divide the Average Percentage in 

paragraph (c)(2)(v)(C) of this section for 

a permit and fishery by the Sum of all 

Average Percentages for all permits for 

that fishery as presented in the 

following equation:

Average Percentageif / è Average 

Percentagesf = Percentage of the Total 

Percentagesif

(E) Multiply the Percentage of the 

Total Percentages in paragraph 

(c)(2)(v)(E) of this section by the Initial 

QS Pool as described in Table 8 to this 

part. This yields the unadjusted number 

of QS units derived from a permit for a 

fishery.

(F) Multiply the unadjusted number 

of QS units in paragraph (c)(2)(v)(E) of 

this section by 3 percent. This yields the 

number of QS units to be allocated.

(G) Determine the percentage of legal 

landings in the subset of qualifying 

years associated with a permit that were 

processed on that vessel and multiply 

the amount calculated in paragraph 

(c)(2)(v)(F) of this section by this 

percentage. This yields the amount of 

CPC QS to be allocated.

(H) Determine the percentage of legal 

landings in the subset of qualifying 

years associated with a permit that were 

not processed on that vessel and 

multiply the amount calculated in 

paragraph (c)(2)(v)(F) of this section by 

this percentage. This yields the amount 

of CVC QS to be allocated.

(I) Determine the percentage of legal 

landings associated with a permit in the 

subset of qualifying years that were 

delivered in each region as defined in 

paragraph (b)(2) of this section. The 

amount calculated in paragraph 

(c)(2)(v)(H) of this section is multiplied 

by the percentage for each region.

(J) The percentage calculated in 

paragraph (c)(2)(v)(I) of this section may 

be adjusted according to the provisions 

at paragraphs (c)(3) and (c)(4) of this 

section. The amount calculated in 

paragraph (c)(2)(v)(H) of this section is 

multiplied by the percentage for each 

region. These regional QS designations 

do not apply in the CVC QS sector until 

July 1, 2008.

(vi) Sunken vessel provisions. (A) If a 

person applies for CVO QS or CPO QS 

based, in whole or in part, on the 

activities of a vessel that sank, the 

Regional Administrator shall presume 

landings for that vessel for the crab 

fishing years between the time of vessel 

loss and the replacement of the vessel 

under § 679.40(k)(5)(v). These presumed 

landings shall be equivalent to 50 

percent of the average legal landings for 

the qualifying years established in 

Column B of Table 7 to this part 

unaffected by the sinking. If the vessel 

sank during a qualifying year, the legal 

landings for that year will not be used 

as the basis for presumed landings;

(B) If a person applies for CVO QS or 

CPO QS based, in whole or in part, on 

the activities of a vessel that sank and:

(1) The person who owned the vessel 

that sank would have been denied 

eligibility to replace a sunken vessel 

under the provisions of Public Law 

106-554; and

(2) The vessel that sank was replaced 

with a newly constructed vessel, with 

that vessel under construction no later 

than June 10, 2002. For purposes of this 

section a vessel is considered under 

construction once the keel for that 

vessel has been laid; and

(3) The newly constructed vessel 

participated in any Bering Sea crab 

fishery no later than October 31, 2002;

(4) Then the Regional Administrator 

shall presume landings for that vessel 

for the crab fishing years between the 

time of vessel loss and the replacement 

of the vessel. These presumed landings 

shall be equivalent to 50 percent of the 

average legal landings for the qualifying 

years established in Column B of Table 

7 to this part unaffected by the sinking. 

If the vessel sank during a qualifying 

year, the legal landings for that year will 

not be used as the basis for presumed 

landings.

(vii) Interim LLP license history 

exemption. An applicant for CVO or 

CPO QS who:

(A) Deployed a vessel in a crab QS 

fishery under the authority of an interim 

LLP license;

(B) Transferred a permanent fully 

transferable LLP license for use in that 

crab QS fishery to insure that the vessel 

would remain authorized to participate 

in the fishery following the invalidation 

of the interim LLP license; and

(C) Received that permanent fully 

transferable LLP license by transfer 

before January 1, 2002, may choose to 

use as the legal landings which are the 

basis for QS allocation on his or her 

Application for Crab QS or PQS either:

(D) The legal landings made on that 

vessel that gave rise to the interim crab 

LLP license for that crab QS fishery 

prior to the transfer of the permanent 

fully transferable LLP license for use on 

that vessel; or

(E) The legal landings made on the 

vessel that gave rise to the permanent 

fully transferable LLP license and the 

legal landings made under the authority 

of that same LLP license in that crab QS 

fishery prior to January 1, 2002.

(3) Adjustment of CVO and CVC QS 

allocation for North and South regional 

designation. The Regional 

Administrator may adjust the regional 

designation of QS to ensure that it is 

initially allocated in the same 

proportion as the regional designation of 

PQS for that crab QS fishery. A person 

(p) who would receive QS based on the 

legal landings in only one region, will 

receive QS with only that regional 

designation. A person who would 

receive QS with more than one regional 

designation for that crab QS fishery 

would have his or her QS holdings 

regionally adjusted on a pro rata basis 

as follows:

(i) Determine the ratio of the Initial 

PQS pool in the North and South 

regions.

(ii) Multiply the Initial QS pool by the 

ratio of North and South PQS. This will 

yield the target North QS pool and the 

target South QS pool.

(iii) Sum the QS for all persons who 

are eligible to receive North QS. This is 

the unadjusted North QS pool.

(iv) Repeat the procedure in 

paragraph (c)(3)(iii) of this section for 

the South Region. This is the unadjusted 

South QS pool.

(v) To calculate the amount of North 

QS available to all persons holding both 

North and South region QS, subtract the 

amount of QS for persons receiving 

North QS only from the unadjusted 

North QS pool as presented in the 

following equation:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63295

Unadj. North QS - North QS only = North 

QS for [North & South] QS holders.

(vi) To calculate the amount of South 

QS available to all persons holding both 

North and South region QS, subtract the 

amount of QS for persons receiving 

South QS only from the unadjusted 

South QS pool as presented in the 

following equation:

Unadj. South QS - South QS only = South 

QS for [North & South] QS holders.

(vii) Subtract the Unadjusted North 

QS pool from the Target North QS pool 

to calculate the number of QS units that 

will be applied to the North QS pool to 

adjust the regional designations. This 

amount is the Adjustment Amount as 

presented in the following equation:

Unadj. North QS - Target North QS pool = 

Adjustment Amount

(viii) Divide the Adjustment Amount 

by the unadjusted North QS pool for 

North and South QS holders. This 

yields the regional adjustment factor 

(RAF) for each person as presented in 

the following equation:

Adj. Amount / unadjusted North QS pool 

for [North & South] QS holders = RAF

(ix) For each person who holds both 

North and South Region QS, the QS 

adjustment (QS Adj. (p) to that person’s 

Unadjusted North QS is expressed in 

the following equation as:

QS adj. p = Unadjusted North QS p × RAF

(x) If the QS adjustment for person (p) 

is negative, the QS adjustment for that 

person is subtracted from that person’s 

unadjusted North QS amount and added 

to that person’s unadjusted South QS. If 

the QS adjustment for person (p) is 

positive, the QS adjustment for that 

person is added to that person’s 

unadjusted North QS amount and 

subtracted from that person’s 

unadjusted South QS. These 

adjustments will yield the regional 

adjustment QS amounts for that person.

(4) Regional designation of Western 

Aleutian Islands golden king crab. Fifty 

percent of the CVO and CVC QS that is 

issued in the WAG crab QS fishery will 

be initially issued with a West regional 

designation. The West regional 

designation applies to QS for delivery 

West of 174° N. longitude. The 

remaining 50 percent of the CVO and 

CVC QS initially issued for this fishery 

is not subject to regional designation 

(Undesignated QS). A person (p) who 

would receive QS based on the legal 

landings in only one region, will receive 

QS with only that regional designation. 

A person who would receive QS with 

more than one regional designation for 

that crab QS fishery would have his or 

her QS holdings regionally adjusted on 

a pro rata basis as follows:

(i) The West QS pool is equal to 50 

percent of the initial QS pool.

(ii) The Undesignated QS pool is 

equal to 50 percent of the initial QS 

pool.

(iii) Sum the QS for all persons who 

are eligible to receive West QS. This is 

the unadjusted West QS pool.

(iv) Repeat the procedure in 

paragraph (c)(4)(iii) of this section for 

the Undesignated Region. This is the 

unadjusted Undesignated QS pool.

(v) To calculate the amount of West 

QS available to all persons holding both 

West and Undesignated region QS, 

subtract the amount of QS for persons 

receiving West QS only from the 

unadjusted West QS pool as presented 

in the following equation:

Unadj. West QS - West QS only = West QS 

for [West & Undesignated] QS holders

(vi) To calculate the amount of 

Undesignated QS available to all 

persons holding both West and 

Undesignated region QS, subtract the 

amount of QS for persons receiving 

Undesignated QS only from the 

unadjusted Undesignated QS pool as 

presented in the following equation:

Unadj. Undesignated QS - Undesignated 

QS only = Undesignated QS for [West 

&Undesignated] QS holders

(vii) Subtract the Unadjusted West QS 

pool from the Target West QS pool to 

calculate the number of QS units that 

will be applied to the West QS pool to 

adjust the regional designations. This 

amount is the Adjustment Amount as 

presented in the following equation:

Unadj. West QS - Target West QS pool = 

Adjustment Amount

(viii) Divide the Adjustment Amount 

by the unadjusted West QS pool for 

West and Undesignated QS holders. 

This yields the regional adjustment 

factor (RAF) for each person as 

presented in the following equation:

Adj. Factor / unadjusted West QS pool for 

West & Undesignated QS holders = RAF

(ix) For each person who holds both 

unadjusted West and Undesignated 

Region QS, the QS adjustment (QS Adj. 

p) to that person’s Unadjusted West QS 

is expressed in the following equation 

as:

QS adj. p = Unadjusted West QS p × RAF

(x) If the QS adjustment for person (p) 

is negative, the QS adjustment for that 

person is added to that person’s 

unadjusted West QS amount and 

subtracted from that person’s 

unadjusted Undesignated QS. If the QS 

adjustment for person (p) is negative, 

the QS adjustment for that person is 

subtracted from that person’s 

unadjusted West QS amount and added 

to that person’s unadjusted 

Undesignated QS. These adjustments 

will yield the regional adjustment QS 

amounts for that person.

(d) Crab PQS and Crab PQS 

Fisheries—(1) General. The Regional 

Administrator shall initially assign to 

qualified persons defined in paragraph 

(d)(3) of this section crab PQS specific 

to crab QS fisheries defined in 

paragraph (a)(1) of this section. The crab 

PQS amount issued will be based on 

total legal processing of crab made in 

those crab QS fisheries. PQS shall yield 

annual IPQ as defined under paragraph 

(j) of this section.

(2) Regional Designations. For each 

crab QS fishery, PQS shall be initially 

regionally designated based on the legal 

processing that gave rise to the PQS as 

follows:

(i) North PQS if the processing that 

gave rise to the PQS for a crab QS 

fishery occurred in the Bering Sea 

subarea north of 56°20′ N. lat.; or

(ii) South PQS if the processing that 

gave rise the PQS for a crab QS fishery 

did not occur in the North Region, and 

PQS allocated to the WAI crab QS 

fishery; or

(iii) West PQS for a portion of the PQS 

allocated to the WAG crab QS fishery 

subject to the provisions under 

paragraph (e)(2) of this section; or

(iv) Regional designations do not 

apply (Undesignated) to:

(A) That portion of the WAG crab QS 

fishery that is not regionally designated 

as West Region PQS; and

(B) The BST crab QS fishery.

(v) The specific regional designations 

that apply to PQS in each of the crab QS 

fisheries are described in paragraph 

(b)(2)(iii) of this section.

(3) Qualified person, for the purposes 

of PQS issuance, means a person, as 

defined at § 679.2, who at the time of 

application for PQS is a U.S. citizen, or 

a U.S. corporation, partnership, 

association, or other entity, and who:

(i) Legally processed any crab QS 

species established in paragraph (a)(1) 

of this section during 1998 or 1999 as 

demonstrated on the official crab 

rationalization record; or

(ii) Did not legally process any crab 

QS species during 1998 or 1999 

according to the official crab 

rationalization record, but who:

(A) Processed BSS crab QS species in 

each crab season for that fishery during 

the period from 1988 through 1997; and

(B) From January 1, 1996, through 

June 10, 2002, invested in a processing 

facility, processing equipment, or a 

vessel for use in processing operations, 

including any improvements made to 

existing facilities with a total 

expenditure in excess of $1,000,000; or

(C) Is the person to whom the history 

of legal processing of crab has been 

transferred by the express terms of a 

written contract that clearly and 

unambiguously provides that such legal 

processing of crab has been transferred. 

63296 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

This provision would apply only if that 

applicant for PQS:

(1) Legally processed any crab QS 

species established in § 680.40(a)(1) 

during 1998 or 1999, as demonstrated 

on the official crab rationalization 

record; or

(2) Received history of crab 

processing that was legally processed 

during 1998 or 1999, as demonstrated 

on the official crab rationalization 

record.

(iii) Qualified persons, or their 

successors-in-interest, must exist at the 

time of application for PQS;

(iv) A former partner of a dissolved 

partnership or a former shareholder of a 

dissolved corporation who would 

otherwise qualify as a person may apply 

for PQS in proportion to his or her 

ownership interest in the dissolved 

partnership or corporation;

(v) Evidence of ownership interest in 

a dissolved partnership or corporation, 

association, or other entity shall be 

limited to corporate documents (e.g., 

articles of incorporation) or notarized 

statements signed by each former 

partner, shareholder or director, and 

specifying their proportions of interest; 

and

(vi) A person who has acquired a 

processing corporation, partnership, or 

other entity that has a history of legal 

processing of crab is presumed to have 

received by transfer all of that history of 

legal processing of crab unless a clear 

and unambiguous contract establishes 

otherwise.

(4) Qualification for Initial Allocation 

of PQS—(i) Year. The qualifying years 

for each crab QS fishery are designated 

in Table 9 to this part.

(ii) Ownership interest. Evidence of 

ownership interest in a dissolved 

partnership or corporation, association, 

or other entity shall be limited to 

corporate documents (e.g., articles of 

incorporation) or notarized statements 

signed by each former partner, 

shareholder or director, and specifying 

their proportions of interest.

(iii) Legal Processing of crab means, 

for the purpose of initial allocation of 

PQS, raw crab pounds processed in the 

crab QS fisheries designated under 

paragraph (a)(1) of this section in 

compliance with state and Federal 

permitting, landing, and reporting 

regulations in effect at the time of the 

landing. Legal processing excludes any 

deadloss, fishing conducted under a 

scientific activity permit, or fishing 

conducted under the Western Alaska 

CDQ program.

(iv) Documentation. Evidence of legal 

processing shall be limited to State of 

Alaska fish tickets, except that:

(A) NMFS may use information from 

a State of Alaska Commercial Operators 

Annual Report, State of Alaska fishery 

tax records, or evidence of direct 

payment from a receiver of crab to a 

harvester if that information indicates 

that the receiver of crab differs from the 

receiver indicated on State of Alaska 

fish ticket records; however:

(B) Information on State of Alaska fish 

tickets shall be presumed to be correct 

for the purpose of determining evidence 

of legal processing of crab. An applicant 

will have the burden of proving the 

validity of information submitted in an 

application that is inconsistent with the 

information on the State of Alaska fish 

ticket. Except that NMFS may use 

information from a State of Alaska 

Commercial Operators Annual Report, 

State of Alaska fishery tax records, or 

documentation of direct payment from a 

receive of crab to a harvester if that 

information indicated that the receiver 

of crab differs from the receiver 

indicated on State of Alaska fish ticket 

records.

(e) Calculation of PQS allocation—(1) 

Computation for Initial Issuance of PQS.

(i) The Regional Administrator shall 

establish the Total Processing 

Denominator (TPD) which represents 

the amount of legally processed raw 

crab pounds in each crab QS fishery in 

each qualifying year.

(ii) For each crab QS fishery, the 

percentage of the initial PQS pool that 

will be distributed to each qualified 

person shall be based on their 

percentage of the TPD according to the 

following procedure.

(A) Sum the raw crab pounds 

processed for each person.

(B) Divide the sum calculated in 

paragraph (e)(1)(ii)(A) of this section by 

the TPD. Multiply by 100. This yields a 

person’s percentage of the TPD.

(C) Sum the TPD percentages of all 

persons.

(D) Divide the percentage for a person 

calculated in paragraph (e)(1)(ii)(B) of 

this section by the sum calculated in 

paragraph (e)(1)(ii)(C) of this section for 

all persons. This yields the average 

percentage of the TPD for a person.

(E) Multiply the amount calculated in 

paragraph (e)(1)(ii)(D) of this section by 

the PQS pool for that crab QS fishery as 

that amount is defined in Table 8 to this 

part.

(F) Determine the percentages of 

legally processed crab that were 

processed in each region. The 

percentages calculated in paragraph 

(e)(1)(ii)(E) of this section are multiplied 

by the amount determined within each 

regional designation. Regional 

designations will apply to that PQS 

according to the provisions established 

in paragraphs (d)(2) and (e)(2) of this 

section.

(2) Regional designation of Western 

Aleutian Islands golden king crab. (i) 

Fifty percent of the PQS that is issued 

in the WAG crab QS fishery will be 

issued with a West regional designation. 

The West regional designation applies 

to PQS for processing west of 174° N. 

long. The remaining 50 percent of the 

PQS issued for this fishery is 

undesignated region PQS.

(ii) If a person owns a crab processing 

facility that is located in the West region 

at the time of application, that person 

will receive West PQS only. If a person 

applies to receive PQS and does not 

own a crab processing facility located in 

the West region at the time of 

application, then that person will 

receive West region and Undesignated 

Region PQS. Expressed algebraically, for 

any person (p) allocated both West 

region PQS and undesignated region 

PQS the formula is as follows:

(A) PQSWest = PQS × 0.50

(B) PQSUnd. = PQS × 0.50

(C) PQSWest for PQSWest & Und. holders = 

PQSWest ¥ PQSWest only

(D) PQSWest for Personp = PQSp × PQSWest

for PQSWest & Und. holders/(PQSWest for 

PQSWest & Und. holders + PQSUnd)

(E) PQSUnd. for Personp = PQSp × PQSUnd./

(PQSUnd. for PQSWest & Und. holders + PQSUnd.)

(iii) For purposes of the allocation of 

PQS in the WAG crab fishery:

(A) Ownership of a processing facility 

is defined as:

(1) A sole proprietor; or

(2) A relationship between two or 

more entities in which a person directly 

or indirectly owns a 10 percent or 

greater interest in another, or a third 

entity directly or indirectly owns a 10 

percent or greater interest in both.

(B) A processing facility is a shoreside 

crab processor or a stationary floating 

crab processor.

(f) Application process—(1) General.

The Regional Administrator will issue 

QS and/or PQS to an applicant if an 

Application for Crab QS or PQS is 

completed and is submitted by or on 

behalf of the applicant during the 

specified application period, and if the 

applicant meets all criteria for eligibility 

and allocation as specified at paragraphs 

(b)(3) and (d)(3) of this section.

(i) The Regional Administrator will 

send application materials to the person 

identified by NMFS as an eligible 

applicant based on the official crab 

rationalization record. An application 

form may also be obtained from the 

Internet or requested from the Regional 

Administrator.

(ii) An Application for Crab QS or 

PQS may be submitted by mail, P.O. 

Box 21668, Juneau, AK 99802, facsimile, 

907-586-7557, or hand delivery to the 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63297

National Marine Fisheries Service, 709 

West 9th Street, Room 420A, Juneau, 

AK.

(iii) An application that is 

postmarked, faxed, or hand delivered 

after the ending date for the application 

period for the Crab QS Program 

specified in the Federal Register will be 

denied.

(2) Contents of application. A 

complete Application for Crab QS or 

PQS must be signed by the applicant, or 

the individual representing the 

applicant, and include the following, as 

applicable:

(i) Type of QS or PQS for which the 

person is applying.

(A) If applying for CVO QS or CPO 

QS, answer questions (f)(2)(ii) through 

(f)(2)(iv) of this section;

(B) If applying for CVC QS or CPC QS, 

answer questions (f)(2)(ii), (f)(2)(iii) and 

(f)(2)(v) of this section;

(C) If applying for PQS, answer 

questions (f)(2)(ii), (f)(2)(iii) and 

(f)(2)(vi) of this section.

(ii) Applicant information.

(A) The name, permanent business 

mailing address, business telephone, 

business facsimile, business e-mail of 

the applicant;

(B) NMFS Person ID (if applicable);

(C) Tax ID/social security number 

(SSN);

(D) Indicate (YES or NO) whether 

applicant is a U.S. citizen; if YES, his or 

her date of birth;

(E ) Indicate (YES or NO) whether 

applicant is a U.S. corporation, 

association, or other business entity; if 

YES, the date of incorporation;

(F) Indicate (YES or NO) whether 

applicant is deceased; if YES, date of 

death. A copy of the death certificate 

must be attached to the application;

(G) Indicate (YES or NO) whether 

applicant described in paragraph 

(f)(2)(ii)(E) of this section is no longer in 

existence; if YES, date of dissolution. 

Valid evidence of dissolution must be 

attached to the application;

(iii) Type of crab QS;

(iv) CVO or CPO QS;

(A) For vessels whose catch histories 

are being claimed for purpose of the 

crab QS program: include name of the 

vessel, ADF&G vessel registration 

number, USCG documentation number, 

moratorium crab permit number(s) or 

crab LLP license number(s) held by the 

applicant and used on that vessel, 

qualifying years or seasons fished, and 

dates during which those permits were 

used on that vessel;

(B) Indicate (YES or NO) whether 

applicant purchased an LLP crab license 

and vessel identification if a person 

purchased an LLP crab license prior to 

January 1, 2002, for purposes of 

remaining in a crab QS fishery. If YES, 

include LLP crab license number, 

ADF&G vessel registration number, 

USCG documentation number, and 

name of vessel.

(C) Indicate (YES or NO) whether QS 

is being claimed for a vessel that was 

lost or destroyed. If YES, include the 

vessel name, ADF&G registration 

number, USCG documentation number 

of the lost or destroyed vessel, and the 

date the vessel was destroyed or lost;

(D) Indicate (YES or NO) whether the 

lost or destroyed vessel described in 

paragraph (f)(2)(iv)(C) of this section 

was replaced with a newly constructed 

vessel. If YES, include the vessel name, 

ADF&G vessel registration number, 

USCG documentation number of the 

replacement vessel, date of vessel 

construction, date of entry into the 

fishery, and provide documentation of 

participation by October 31, 2002 by the 

new vessel in a Bering Sea crab fishery;

(E) Indicate (YES or NO) whether 

applying for CPO QS. If YES, attach 

documentation of processing crab 

onboard a vessel authorized by an LLP 

crab license in 1998 or 1999, including 

harvest area, date of landing, and crab 

species;

(v) CVC or CPC QS.

(A) Indicate (YES or NO) whether 

applicant has at least one landing in 

three of the qualifying years for each 

crab species for which applying for QS 

(see Table 7 to this part).

(B) Indicate (YES or NO) whether 

applicant is a recent participant in a 

crab QS fishery. Recent participation is 

defined in Table 7 to this part.

(C) In answer to paragraph (f)(2)(v)(B) 

of this section in YES, enter State of 

Alaska Interim Use Permit number, 

name, ADF&G vessel registration 

number, USCG documentation number 

of vessel on which harvesting occurred; 

qualifying years or seasons fished by QS 

fishery, and the dates during which 

those permits were used on that vessel;

(D) Indicate (YES or NO) whether a 

person is applying as the 

successor-in-interest to an eligible 

applicant. If YES, attach to the 

application documentation proving the 

person’s status as a successor-in-interest 

to and valid evidence of the death of 

that eligible applicant;

(vi) Processor QS.

(A) Indicate (YES or NO) whether 

applicant processed any of the crab 

species included in the Crab QS 

program (see Table 1 to this part) in 

1998 or 1999.

(B) If answer to paragraph (f)(2)(vi)(A) 

of this section is YES, enter the 

following information for each 

processing facility where QS crab were 

processed through which applicant is 

claiming eligibility for BSAI crab PQS:

(1) Facility name and ADF&G 

processor code;

(2) Qualifying years or seasons by 

fishery;

(C) If answer to paragraph (f)(2)(vi)(A) 

of this section is NO, indicate (YES or 

NO) whether applicant is claiming 

eligibility under hardship provisions;

(D) If answer to paragraph (f)(2)(vi)(C) 

is YES, both of the following provisions 

must apply to a processor to obtain 

hardship provisions; attach 

documentation of both to the 

application:

(1) Processed QS crab in 1998 or 1999, 

or processed BSS crab between 1988 

and 1997; and

(2) Invested a total expenditure of 

$1,000,000 for any processing facility, 

processing equipment, or a vessel for 

use in processing operations, including 

any improvements made to existing 

facilities made from 1996 to 2002;

(E) Indicate (YES or NO) whether 

applicant has entered into a Community 

Right of First Refusal (ROFR) contract, 

pertaining to the transfer of any PQS 

and/or IPQ issued as a result of this 

application, with a community. If YES, 

attach to the application the following:

(1) Copy of signed contract for 

community ROFR consistent with 

paragraph (f)(3) of this section;

(2) Contract that the legal processing 

history and rights to apply for and 

receive PQS based on that legal 

processing history have been transferred 

or retained; and

(3) Any other information deemed 

necessary by the Regional 

Administrator.

(F) If applicant is applying to receive 

WAG PQS, indicate (YES or NO) 

whether applicant owns a crab 

processing facility in the West region 

(see paraggraph (b)(2)(iii) of this 

section);

(vii) Applicant signature and 

certification. Printed name and 

signature of applicant and date signed. 

If the application is completed by an 

authorized representative, then a proof 

of authorization must accompany the 

application.

(3) Contract provisions for community 

right of first refusal (ROFR) in 

Application for Crab QS or PQS. (i) To 

be complete, an Application for Crab QS 

or PQS from a person based on legal 

processing that occurred in an ECC must 

also include a contract for ROFR that 

includes the terms listed in paragraph 

(m) of this section and is signed by the 

applicant for initial allocation of PQS 

and the ECC entity designated under 

§ 680.41(j)(2).

63298 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(ii) To be complete, an Application for 

Crab QS or PQS from a person based on 

legal processing that occurred in the 

Gulf of Alaska north of a line at 56°20′

N. lat. must also include a contract for 

ROFR that includes the terms listed in 

paragraph (m) of this section and is 

signed by the applicant for initial 

allocation of PQS and the ECC entity 

designated by the by the City of Kodiak 

and Kodiak Island Borough under 

§ 680.41(j)(2).

(4) Application evaluation. The 

Regional Administrator will evaluate 

Applications for Crab QS and PQS 

submitted during the specified 

application period and compare all 

claims in the application with the 

information in the official crab 

rationalization record. Claims in the 

application that are consistent with 

information in the official crab 

rationalization record will be accepted 

by the Regional Administrator. 

Inconsistent claims in the Applications 

for Crab QS or PQS, unless verified by 

documentation, will not be accepted. 

An applicant who submits inconsistent 

claims, or an applicant who fails to 

submit the information specified in 

paragraph (f)(2) of this section, will be 

provided a single 30-day evidentiary 

period as provided in paragraph (f)(5) of 

this section to submit the specified 

information, submit evidence to verify 

his or her inconsistent claims, or submit 

a revised application with claims 

consistent with information in the 

official crab rationalization record. An 

applicant who submits claims that are 

inconsistent with information in the 

official crab rationalization record has 

the burden of proving that the submitted 

claims are correct.

(5) Additional information or 

evidence. The Regional Administrator 

will evaluate additional information or 

evidence to support an applicant’s 

inconsistent claims submitted prior to 

or within the 30-day evidentiary period. 

If the Regional Administrator 

determines that the additional 

information or evidence meets the 

applicant’s burden of proving that the 

inconsistent claims in his or her 

application are correct, the official crab 

rationalization record will be amended 

and the information will be used in 

determining whether the applicant is 

eligible for QS or PQS. However, if the 

Regional Administrator determines that 

the additional information or evidence 

does not meet the applicant’s burden of 

proving that the inconsistent claims in 

his or her application are correct, the 

applicant will be notified by an IAD, 

that the applicant did not meet the 

burden of proof to change the 

information in the official crab 

rationalization record.

(6) 30-day evidentiary period. The 

Regional Administrator will specify by 

letter a single 30-day evidentiary period 

during which an applicant may provide 

additional information or evidence to 

support the claims made in his or her 

application, or to submit a revised 

application with claims consistent with 

information in the official crab 

rationalization record, if the Regional 

Administrator determines that the 

applicant did not meet the burden of 

proving that the information on the 

application is correct through evidence 

provided with the application. Also, an 

applicant who fails to submit 

information as specified in paragraphs 

(b)(3)(iii) and (b)(3)(iv) of this section 

will have 30 days to provide that 

information. An applicant will be 

limited to one 30-day evidentiary period 

per application. Additional information 

or evidence, or a revised application, 

received after the 30-day evidentiary 

period specified in the letter has expired 

will not be considered for purposes of 

the IAD.

(7) Right of First Refusal (ROFR) 

Contract Provisions. If an applicant 

submits an Application for Crab QS and 

PQS that does not contain the contract 

provisions for community ROFR, as 

specified in paragraphs (f)(2)(vi)(E) and 

(m) of this section, then the Regional 

Administrator will not prepare an IAD 

on unverified claims or issue QS or PQS 

until such contract provisions have been 

submitted.

(8) Initial administrative 

determinations (IAD). The Regional 

Administrator will prepare and send an 

IAD to the applicant following the 

expiration of the 30-day evidentiary 

period if the Regional Administrator 

determines that the information or 

evidence provided by the applicant fails 

to support the applicant’s claims and is 

insufficient to rebut the presumption 

that the official crab rationalization 

record is correct, or if the additional 

information, evidence, or revised 

application is not provided within the 

time period specified in the letter that 

notifies the applicant of his or her 

30-day evidentiary period. The IAD will 

indicate the deficiencies in the 

application, including any deficiencies 

with the information, the evidence 

submitted in support of the information, 

or the revised application. The IAD will 

also indicate which claims cannot be 

approved based on the available 

information or evidence. An applicant 

who receives an IAD may appeal 

pursuant to § 679.43. An applicant who 

avails himself or herself of the 

opportunity to appeal an IAD will not 

receive crab QS or PQS until after the 

final resolution of that appeal in the 

applicant’s favor.

(g) Annual allocation of IFQ. IFQ is 

assigned based on the underlying QS. 

The Regional Administrator shall assign 

crab IFQs to each person who holds QS 

and submits a complete Annual 

Application for Crab IFQ/IPQ Permit as 

described under § 680.4. IFQ will be 

assigned to a crab QS fishery with the 

appropriate regional designation, QS 

sector, and IFQ class. This amount will 

represent the maximum amount of crab 

that may be harvested from the specified 

crab QS fishery by the person to whom 

it is assigned during the specified crab 

fishing year, unless the IFQ assignment 

is changed by the Regional 

Administrator because of an approved 

transfer, unless revoked, suspended, or 

modified under 15 CFR part 904.

(h) Calculation of annual IFQ 

allocation—(1) General. The annual 

allocation of IFQ to any person (p) in 

any crab QS fishery (f) will be based on 

the TAC of crab for that crab QS fishery 

less the allocation to the Western Alaska 

CDQ Program (‘‘CDQ Reserve’’) and 

Western Aleutian Islands golden king 

crab fishery. Expressed algebraically, 

the annual IFQ allocation formula is as 

follows:

(i) IFQ TACf = TACf - (CDQ reservef

+ Allocation for the Western Aleutian 

Island golden king crab fishery)

(ii) IFQpf = IFQ TACf × (QSpf/QS 

poolf).

(2) Class A/B IFQ. (i) QS shall yield 

Class A or Class B IFQ if:

(A) Initially assigned to the CVO QS 

sector;

(B) Transferred to the CVO QS sector 

from the CPO QS sector; or

(C) After July 1, 2008, if initially 

issued to the CVC QS sector.

(3) Class A IFQ will be assigned to all 

eligible recipients.

(4) Class B IFQ will be assigned to all 

eligible recipients except that Class B 

IFQ will not be issued to:

(i) Any person who holds PQS or IPQ;

(ii) Any person who holds QS and is 

affiliated with a person who holds PQS 

or IPQ. Affiliation will be determined 

based on an annual affidavit by each QS 

holder submitted as part of the Annual 

Application to for Crab IFQ/IPQ Permit.

(5) Class A/B IFQ issuance ratio. (i) 

Class A and Class B IFQ shall be 

assigned on an annual basis such that 

the total amount of Class A and B IFQ 

assigned in a crab fishing year in each 

crab QS fishery for each region will be 

in a ratio of 90 percent Class A IFQ and 

10 percent Class B IFQ.

(ii) The Regional Administrator will 

determine the amount of Class A and 

Class B IFQ that is assigned to a person 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63299

eligible to hold IFQ. This is calculated 

by allocating 90 percent of the IFQ TAC 

(TAC a) to Class A IFQ. A portion of the 

IFQ TAC a is allocated to persons 

eligible to hold only Class A IFQ (TAC 

a only), the remaining IFQ TAC (TAC r) 

is allocated for harvest by a person (p) 

eligible to receive both Class A IFQ and 

Class B IFQ. Expressed algebraically, for 

an individual person (p) eligible to hold 

both Class A and Class B IFQ the annual 

allocation formula is as follows:

(A) TACa = IFQ TAC × 0.90

(B) TACr = TACa ¥ TACa only

(C) IFQap = TACr / (IFQ TAC ¥ TACa only) 

× IFQp

(D) IFQbp = IFQp ¥ IFQap

(6) CVC IFQ. (i) QS that is initially 

allocated to the CVC QS sector shall 

yield CVC IFQ.

(ii) After July 1, 2008, CVC IFQ will 

be assigned as CVC Class A and CVC 

Class B IFQ under the provisions 

established in paragraph (h)(5)(ii) of this 

section.

(7) CPO IFQ. (i) QS that is initially 

allocated to the CPO QS sector shall 

yield CPO IFQ.

(ii) CPO IFQ is not subject to regional 

designation.

(8) CPC IFQ. (i) QS that is initially 

allocated to the CPC QS sector shall 

yield CPC IFQ.

(ii) CPC IFQ is not subject to regional 

designation.

(9) QS amounts for IFQ calculation.

For purposes of calculating IFQs for any 

crab fishing year, the amount of a 

person’s QS and the amount of the QS 

pool for any crab QS fishery will be the 

amounts on record with the Alaska 

Region, NMFS, at the time of 

calculation.

(i) Annual allocation of IPQ. IPQ is 

assigned based on the underlying PQS. 

The Regional Administrator shall assign 

crab IPQs to each person who submits 

a complete Annual Application for Crab 

IFQ/IPQ Permit as described under 

§ 680.4. Each assigned IPQ will be 

specific to a crab QS fishery with the 

appropriate regional designation. This 

amount will represent the maximum 

amount of crab that may be received 

from the specified crab QS fishery by 

the person to whom it is assigned 

during the specified crab fishing year, 

unless the IPQ assignment is changed by 

the Regional Administrator because of 

an approved transfer or unless revoked, 

suspended, or modified under 15 CFR 

part 904.

(j) Calculation of annual IPQ 

allocation—(1) General. The annual 

allocation of TAC to PQS and the 

resulting IPQ in any crab QS fishery (f) 

is the Class A IFQ TAC (TAC a). A 

person’s annual IPQ is based on the 

amount of PQS held by a person (PQS 

p) divided by the PQS pool for that crab 

QS fishery for all PQS holders (PQS 

pool f). Expressed algebraically, the 

annual IPQ allocation formula is as 

follows:

IPQpf = TACaf × PQSpf/PQS poolf.

(2) PQS amounts for IPQ calculation.

For purposes of calculating IPQs for any 

crab fishing year, the amount of a 

person’s PQS and the amount of the 

PQS pool for any crab PQS fishery will 

be the amounts on record with the 

Alaska Region, NMFS, at the time of 

calculation.

(k) Timing for Issuance of IFQ or IPQ.

IFQ and IPQ will be issued once the 

TAC for that crab QS fishery in that crab 

fishing year has been specified by the 

State of Alaska. All IFQ and IPQ for all 

persons will be issued once for a crab 

fishing year for a crab QS fishery. QS 

issued after NMFS has issued annual 

IFQ for a crab QS fishery for a crab 

fishing year will not result in IFQ for 

that crab QS fishery for that crab fishing 

year.

(l) Harvesting and processing 

privilege. QS and PQS allocated or 

permits issued pursuant to this part do 

not represent either an absolute right to 

the resource or any interest that is 

subject to the ‘‘takings’’ provision of the 

Fifth Amendment of the U.S. 

Constitution. Rather, such QS, PQS, or 

permits represent only a processing 

privilege that may be revoked or 

amended pursuant to the 

Magnuson-Stevens Act and other 

applicable law.

(m) Contract terms for community 

right of first refusal (ROFR). The 

contract for ROFR required for the 

Application for Crab QS or PQS under 

paragraph (f)(2) of this section must 

include the following terms:

(1) The ROFR will apply to transfers 

of:

(i) PQS, and

(ii) IPQ, if more than 20 percent of the 

IPQ resulting from PQS held by that 

person that is derived from legal 

processing that occurred in that ECC is 

used outside of that ECC in a crab 

fishing year.

(2) Any proposed sale of PQS to 

another person, and any associated IPQ 

or other goods and appurtenances 

attached to that sale, must be provided 

to the ECC entity under the exact same 

terms and agreements for the exercise of 

ROFR.

(3) If a PQS holder legally uses IPQ 

outside of the ECC for which those IPQ 

are designated, than that use of IPQ is 

exempt from ROFR. If such IPQ is used 

outside the ECC by the PQS holder for 

a period of three consecutive crab 

fishing years, than those PQS and IPQ 

are forever exempt from ROFR. This 

provision only applies if the PQS holder 

holds the IPQ and uses that IPQ during 

the three crab fishing year period 

without transfer or lease to another 

holder.

(4) If PQS is transferred and the IPQ 

derived from that PQS is used to process 

crab within the ECC for which that PQS 

is designated, ROFR cannot be exercised 

by the ECC entity while that PQS is 

used in that ECC. A use of crab in the 

ECC will exist if the purchaser of the 

PQS designated for that ECC contracts 

with the ECC entity to:

(i) Use at least 80 percent of the 

annual IPQ allocation in the ECC; or

(ii) Grant the community a ROFR on 

the PQS subject to the same terms and 

conditions required of the holder of the 

initial allocation of the PQS.

(5) All terms of any ROFR and 

contract entered into related to the 

ROFR will be enforced through civil 

contract law.

(6) An ECC entity can waive any 

ROFR. Written proof of any waivers of 

ROFR must be provided with any 

proposed transfer of PQS designated for 

an ECC under § 680.41(j) of this part.

(7) The right of first refusal may be 

exercised by the ECC entity by 

providing the PQS holder within 60 

days of receipt of a copy of the proposed 

contract for transfer of PQS:

(i) Notice of the intent to exercise 

ROFR, and

(ii) Earnest money in the amount of 10 

percent of the contract amount or 

$500,000 whichever is less.

(8) The ECC entity must perform all 

of the terms of the contract for the 

transfer of PQS within the longer of:

(i) One hundred and twenty days of 

receipt of the contract, or

(ii) In the time specified in the 

contract.

(9) Except as provided for at 

§ 680.41(j)(5), ROFR applies only to the 

ECC within which the legal processing 

that gave rise to the PQS occurred. If the 

ECC entity chooses not to exercise 

ROFR on the transfer of PQS, that PQS 

will no longer be subject to ROFR

(10) Any due diligence review 

conducted related to the exercise of a 

ROFR will be undertaken by a third 

party bound by a confidentiality 

agreement that protects any proprietary 

information from being released or 

made public.

§ 680.41 Transfer of QS and IFQ.

(a) General. (1) Transfer of crab QS, 

PQS, IFQ, or IPQ means any transaction, 

approved by NMFS, requiring QS or 

PQS, or the use thereof in the form of 

IFQ or IPQ, to pass from one person to 

another, permanently or for a fixed 

period of time, except that:

63300 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(2) A Crab IFQ Hired Master Permit 

issued by NMFS in the name of a vessel 

master employed by a person is not a 

transfer of crab QS or IFQ;

(3) The use of IFQ assigned to a crab 

harvesting cooperative and used within 

that cooperative is not a transfer of IFQ.

(b) Transfer procedure. (1) A person 

must establish eligibility to receive QS, 

PQS, IFQ, or IPQ by transfer.

(2) A person must submit a complete 

a transfer application that is 

subsequently approved by the Regional 

Administrator.

(i) Eligibility Applications.

Applications under this paragraph are 

required to establish eligibility to 

receive QS, PQS, IFQ, or IPQ by 

transfer. If a person is an initial issuee 

of QS an eligibility application is not 

required to receive QS, PQS, IFQ or IPQ 

by transfer. If a person is an initial 

issuee of PQS an eligibility application 

is not required to receive PQS or IPQ by 

transfer.

(A) Application for Eligibility to 

Receive QS/IFQ and PQS/IPQ by 

Transfer. This application is required to 

establish a person’s eligibility to receive 

QS, PQS, IFQ, or IPQ by transfer, if the 

person is not an ECCO.

(B) Application to Become an ECCO.

This application is required to establish 

a person’s eligibility to receive QS, PQS, 

IFQ, or IPQ by transfer, if the person is 

an ECCO.

(ii) Transfer applications. An 

application is required to transfer any 

amount of QS, PQS, IFQ, or IPQ. Any 

transfer application will not be 

approved until the necessary eligibility 

application in paragraph (b)(1)(i) of this 

section has been submitted and 

approved by NMFS:

(A) Application for Transfer of Crab 

QS/IFQ or PQS/IPQ. This application is 

required to transfer any amount of QS, 

PQS, IFQ, or IPQ from an entity that is 

not an ECCO or a crab harvesting 

cooperative;

(B) Application for Transfer of Crab 

QS/IFQ to or from an ECCO. This 

application is required to transfer any 

amount of QS or IFQ to or from an 

entity that is an ECCO.

(C) Application for Inter-cooperative 

Transfer. This application is required to 

transfer any amount of IFQ from an 

entity that is a crab harvesting 

cooperative to another crab harvesting 

cooperative.

(c) Eligibility to receive QS, PQS, IFQ, 

or IPQ by transfer. (1) Any person may 

apply to receive PQS or IPQ by transfer.

(i) To be eligible to receive QS, PQS, 

IFQ, or IPQ by transfer, a person must 

first meet the requirements specified in 

the following table:

Quota Type Eligible Person Eligibility Requirements 

(A) PQS Any person None.

(B) IPQ Any person None.

(C) CVO or CPO QS (1) A person initially issued QS No other eligibility requirements.

(2) An individual who is a U.S. citizen with at least 150 days of sea 

time as part of a harvesting crew in any U.S. 

commercial fishery.

(3) A corporation, partnership, or other entity with at least on individual member who is a U.S. 

citizen and who: 

(i) owns at least 20 percent of the corporation, 

partnership, or other entity; and

(ii) has at least 150 days of sea time as part of a 

harvesting crew in any U.S. commercial fishery.

(4) An ECCO that meets the eligibility requirements described 

under paragraphs (c)(3) and (c)(4) of this section.

(5) A CDQ Group no other eligibility requirements.

(D) CVO or CPO IFQ (1) All persons eligible for CVO or CPO QS according to the requirements in paragraph 

(c)(1)(i)(C)(5) of this section.

(2) A crab harvesting cooperative that meets the eligibility requirements under 

§ 680.21.

(E) CVC or CPC QS (1) An individual initially issued QS no other eligibility requirements.

(2) An individual who is a U.S. citizen with: 

(i) at least 150 days of sea time as part of a harvesting crew in any U.S. commercial fishery; and

(ii) recent participation in the 365 days prior to the 

transfer.

(F) CVC or CPC IFQ (1) All eligible persons for CVC or CPC QS according to the requirements in paragraph 

(c)(1)(i)(E) of this section.

(2) A crab harvesting cooperative that meets the eligibility requirements under 

§ 680.21.

(2) Application for Eligibility to 

Receive QS/IFQ and PQS/IPQ by 

Transfer. (i) Unless a person received 

crab QS by initial issuance, all persons, 

except non-profits seeking to become an 

ECCO, applying to receive QS, PQS, IFQ 

or IPQ must submit an Application for 

Eligibility to Receive QS/IFQ or PQS/

IPQ by Transfer, containing accurate 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63301

information, to the Regional 

Administrator. The Regional 

Administrator shall provide an 

Application for Eligibility to Receive 

QS/IFQ or PQS/IPQ by Transfer to any 

person on request.

(ii) Contents. A completed 

Application for Eligibility to Receive 

QS/IFQ or PQS/IPQ by Transfer must 

include the following:

(A) Type of QS, IFQ, PQS, or IPQ for 

which the applicant is seeking 

eligibility. Indicate type of QS, IFQ, 

PQS, IPQ for which applicant is seeking 

eligibility.

(1) If seeking CVO or CPO QS/IFQ, 

complete paragraphs (c)(2)(i)(B), 

(c)(2)(ii)(D) if applicable, (c)(2)(ii)(E), 

and (c)(2)(ii)(F) of this section;

(2) If seeking CVC or CPC QS/IFQ, 

complete paragraphs (c)(2)(i)(B), 

(c)(2)(ii)(C), (c)(2)(ii)(E), and (c)(2)(ii)(F) 

of this section;

(3) If seeking PQS/IPQ, complete 

paragraphs (c)(3)(iii)(B) and (c)(2)(iii)(F) 

of this section;

(B) Applicant information. (1) Name 

and NMFS Person ID, date of birth, and 

social security number or tax ID 

number;

(2) Permanent business mailing 

address, business telephone number, 

business facsimile number, and e-mail 

address (if available) of the applicant. A 

temporary business mailing address 

may be provided in addition to the 

permanent business mailing address.

(3) Indicate (YES or NO) whether the 

applicant is a U.S. citizen or U.S. 

corporation, partnership or other 

business entity. Applicants for CVO, 

CPO, CVC or CPC QS (and associated 

IFQ) must be U.S. Citizens or U.S. 

Corporations, Partnerships or Other 

Business Entity. Applicants for PQS 

(and associated IPQ) are not required to 

be U.S. Citizens.

(C) Eligibility for CVC or CPC shares.

Indicate (YES or NO) whether this 

transfer eligibility certificate (TEC) is 

intended for a person who wishes to 

buy CVC or CPC QS/IFQ. If YES, 

provide evidence of at least one delivery 

of a crab species in any crab QS fishery 

in the 365 days prior to submission of 

this form. Acceptable evidence of such 

delivery shall be limited to an ADF&G 

fish ticket imprinted with applicant’s 

State of Alaska permit card and signed 

by the applicant, an affidavit from the 

vessel owner, or a signed receipt for an 

IFQ crab landing on which applicant 

was acting as the permit holder’s crab 

IFQ hired master.

(D) U.S. Corporations, partnerships, 

or business entities. (1) Indicate (YES or 

NO) whether this application is 

submitted by a CDQ Group. If YES, 

complete paragraph (c)(2)(ii)(F) of this 

section;

(2) Indicate (YES or NO) whether this 

application is submitted on behalf of a 

corporation, partnership or other 

business entity (not including CDQ 

groups). If YES:

(i) At least one member of the 

corporation, partnership or other 

business entity that is applying to 

receive this TEC must provide evidence 

of at least 150 days as part of a 

harvesting crew in any U.S. commercial 

fishery. Identify the individual owner 

that meets the criteria and complete 

paragraph (c)(2)(D) of this section, 

providing this individual’s commercial 

fishing experience; Name, NMFS person 

ID, and SSN; and Business mailing 

address, business telephone number, 

and business facsimile number;

(ii) If a corporation, partnership, or 

other business entity, the applicant also 

must submit documentation showing at 

least 20 percent interest in the 

corporation, partnership, or other entity.

(E) Commercial fishing experience. (1) 

Species; enter any targeted species in a 

U.S. commercial fishery;

(2) Gear Type; enter any gear type 

used to legally harvest in a U.S. 

commercial fishery;

(3) Location; enter actual regulatory, 

statistical, or geographic harvesting 

location;

(4) Starting date and ending date of 

claimed fishing period (MMYY);

(5) Number of actual days spent 

harvesting crab;

(6) Duties performed while directly 

involved in the harvesting of crab (be 

specific):

(7) Name and ADF&G vessel 

registration number or USCG 

documentation number of the vessel 

upon which above duties were 

performed;

(8) Name of vessel owner;

(9) Name of vessel operator;

(10) Reference name. Enter the name 

of a person (other than applicant) who 

is able to verify the above experience;

(11) Reference’s relationship to 

applicant;

(12) Reference’s business mailing 

address and telephone number.

(F) Applicant certification. (1) Printed 

name and signature of applicant and 

date signed;

(2) Notary Public signature, date 

commission expires, and notary stamp 

or seal.

(G) Verification that the applicant 

applying for eligibility to receive crab 

QS/IFQ or PQS/IPQ by transfer has 

submitted an EDR if required to do so 

under § 680.6;

(H) A non-profit entity seeking 

approval to receive crab QS or IFQ by 

transfer on behalf of a ECC must first 

complete an Application to Become an 

ECCO (see paragraph (c)(4) of this 

section).

(3) Designation of an ECCO. (i) The 

appropriate governing body of each ECC 

must designate a non-profit organization 

to serve as the ECCO for that ECC. This 

designation must be submitted by the 

non-profit organization in its 

Application to Become an ECCO to 

transfer and hold QS on the behalf of 

that ECC.

(ii) If the non-profit entity is approved 

by NMFS to serve as the ECCO, then the 

appropriate governing body of the ECC 

must authorize the transfer of any QS 

from the ECCO.

(iii) The appropriate governing body 

for purposes of designating a non-profit 

organization for the Application to 

Become an ECCO, or approve the 

transfer of any QS from an ECCO in 

each ECC is as follows:

(A) If the ECC is also a community 

eligible to participate in the Western 

Alaska CDQ Program, then the CDQ 

group is the appropriate governing 

body;

(B) If the ECC is not a CDQ 

community and is incorporated as a 

municipality and is not located in a 

borough, then the municipal 

government is the appropriate governing 

body;

(C) If the ECC is not a CDQ 

community and is incorporated as a 

municipality and also located in a 

borough, then the municipality and 

borough jointly serve as the appropriate 

governing body and both must agree to 

designate the same non-profit 

organization to serve as the ECCO or 

authorize the transfer of QS from the 

ECCO; and

(D) If the ECC is not a CDQ 

community and is not incorporated as a 

municipality and is in a borough, then 

the borough in which the ECC is located 

is the appropriate governing body .

(iv) The appropriate governing body 

in each ECC may designate only one 

non-profit organization to serve as the 

ECCO for that community at any one 

time.

(4) Application to Become an ECCO.

Prior to initially receiving QS or IFQ by 

transfer on behalf of a specific ECC, a 

non-profit organization that intends to 

represent that ECC as a ECCO must 

submit an Application to Become an 

ECCO and have that application 

approved by the Regional 

Administrator.

(i) Contents of Application—(A) 

Applicant identification. (1) Name of 

the non-profit organization, taxpayer 

identification number, and NMFS 

Person ID;

63302 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(2) Permanent business mailing 

address;

(3) Name of contact persons, business 

phone, business fax, and e-mail address 

(if available);

(4) Name of community or 

communities represented by the 

non-profit organization;

(5) Name of contact person for the 

governing body of each community 

represented.

(B) Required attachments to the 

application. (1) The articles of 

incorporation under the laws of the 

State of Alaska for that non-profit 

organization;

(2) A statement indicating the ECC(s) 

represented by that non-profit 

organization for purposes of holding QS;

(3) The bylaws of the non-profit 

organization;

(4) A list of key personnel of the 

management organization including, but 

not limited to, the board of directors, 

officers, representatives, and any 

managers;

(5) Additional contact information of 

the managing personnel for the nonprofit organization and resumes of 

management personnel;

(6) A description of how the 

non-profit organization is qualified to 

manage QS on behalf of the ECC it is 

designated to represent, and a 

demonstration that the non-profit 

organization has the management skills 

and technical expertise to manage QS 

and IFQ; and

(7) A statement describing the 

procedures that will be used to 

determine the distribution of IFQ to 

residents of the ECC represented by that 

non-profit organization, including; 

procedures used to solicit requests from 

residents to lease IFQ, and criteria used 

to determine the distribution of IFQ 

leases among qualified community 

residents and the relative weighting of 

those criteria.

(C) Applicant certification. Printed 

name of applicant or authorized agent, 

notarized signature, and date signed, 

Notary Public signature and date when 

commission expires, and notary seal or 

stamp. If authorized agent, proof of 

authorization to act on behalf of the 

applicant must be provided with the 

application.

(d) Application for Transfer of Crab 

QS/IFQ or PQS/IPQ—(1) General. (i) An 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ must be approved by the 

Regional Administrator before the 

transferee may use the IFQ or IPQ to 

harvest or process crab QS species.

(ii) An Application for Transfer of 

Crab QS/IFQ or PQS/IPQ will not be 

approved until the Regional 

Administrator has reviewed the transfer 

agreement signed by the parties to the 

transaction. The Regional Administrator 

shall provide an Application for 

Transfer of Crab QS/IFQ or PQS/IPQ to 

any person on request or on the Internet 

at http://www.fakr.noaa.gov/. Persons 

who submit an Application for Transfer 

of Crab QS/IFQ or PQS/IPQ for approval 

will receive notification of the Regional 

Administrator’s decision to approve or 

disapprove the application, and if 

applicable, the reason(s) for 

disapproval, by mail, unless another 

communication mode is requested on 

the application.

(2) Contents. This application for 

transfer must be completed, signed, and 

notarized by both parties. A complete 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ must include the following 

information:

(i) Type of transfer. (A) Indicate type 

of transfer requesting;

(B) Indicate (YES or NO) whether this 

is a transfer of IFQ or IPQ only due to 

a hardship (medical emergency, etc.). If 

YES, provide documentation supporting 

the need for such transfer (doctor’s 

statement, etc.).

(C) If requesting transfer of PQS/IPQ, 

applications involving the transfer of 

PQS or IPQ (if applicable) outside the 

community in which the processing 

facility resides must include a statement 

by an authorized representative of that 

community indicating that the 

community has been offered the right of 

first refusal (ROFR) on the sale of the 

PQS or IPQ under the requirements of 

this section.

(ii) Transferor (Seller) information.

(A) The name and NMFS Person ID of 

the transferor (person currently holding 

the QS, PQS, IFQ, or IPQ), social 

security number or tax ID number;

(B) Permanent business mailing 

address, business telephone, business 

facsimile, and business e-mail address, 

and the transferor may also provide a 

temporary address for each transaction 

in addition to the permanent business 

mailing address;

(iii) Transferee (Buyer) information.

(A) The name and NMFS Person ID of 

the transferee (person receiving QS, PQS 

or IFQ, IPQ by transfer), social security 

number or tax ID number;

(B) Permanent business mailing 

address, business telephone, business 

facsimile, and business e-mail address, 

and the transferee may also provide a 

temporary address for each transaction 

in addition to the permanent business 

mailing address;

(iv) Transfer of QS or PQS and IFQ or 

IPQ. Complete the following 

information if QS or PQS and IFQ or 

IPQ are to be transferred together or if 

transferring only QS or PQS.

(A) QS species;

(B) QS type;

(C) Range of serial numbers to be 

transferred (shown on QS certificate) 

numbered to and from;

(D) Number of QS units to be 

transferred;

(E) Transferor (seller) IFQ or IPQ 

permit number;

(F) Indicate (YES or NO) whether 

remaining IFQ or IPQ pounds for the 

current fishing year should be 

transferred; if NO, specify the number of 

pounds to be transferred;

(G) If this is a transfer of CPO QS, 

indicate whether being transferred as 

CPO QS or CVO QS and PQS;

(H) If CPO QS is being transferred as 

both CVO QS and PQS, specify number 

of units of each;

(I) If CPO QS is being transferred as 

CVO QS, select region for which the QS 

is designated;

(v) Transfer of IFQ or IPQ only.

Complete the following information if 

transferring IFQ or IPQ only.

(A) QS species;

(B) IFQ/IPQ type;

(C) Range of serial numbers shown on 

QS certificate, numbered to and from;

(D) Number of IFQ or IPQ pounds to 

be transferred;

(E) Transferor (seller) IFQ or IPQ 

permit number; and

(F) Crab fishing year of the transfer.

(vi) Price paid for the QS, PQS and/

or IFQ, IPQ. The transferor must provide 

the following information:

(A) Indicate whether (YES or NO) a 

broker was used for this transaction; If 

YES, provide dollar amount paid in 

brokerage fees or percentage of total 

price;

(B) Provide the total amount paid for 

the QS/IFQ or PQS/IPQ in this 

transaction, including all fees;

(C) Provide the price per unit of QS 

(price divided by QS units) and the 

price per pound (price divided by IFQ 

or IPQ pounds) of IFQ or IPQ;

(D) Indicate all reasons that apply for 

transferring the QS/IFQ or PQS/IPQ.

(vii) Method of financing for the QS, 

PQS and/or IFQ, IPQ. The transferee 

must provide the following information:

(A) Indicate (YES or NO) whether QS/

IFQ or PQS/IPQ purchase will have a 

lien attached; if YES, provide the name 

of lien holder;

(B) Indicate one primary source of 

financing for this transfer;

(C) Indicate the sources used to locate 

the QS, PQS and/or IFQ, IPQ being 

transferred;

(D) Indicate the relationship, if any, 

between the transferor and the 

transferee

(E) Indicate (YES or NO) whether an 

agreement exists to return the QS/IFQ or 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63303

PQS/IPQ to the transferor or any other 

person, or with a condition placed on 

resale; If YES, explain;

(F) Attach a copy of the terms of 

agreement for the transfer, the bill of 

sale for QS or PQS, or lease agreement 

for IFQ or IPQ.

(G) Indicate whether an EDR was 

submitted, if required by § 680.6, and

(H) Whether all fees have been paid.

(viii) Notary information—(A) 

Certification of transferor. (1) Printed 

name and signature of transferor or 

authorized agent. If authorized agent, 

proof of authorization to act on behalf 

of the transferor must be provided with 

the application.

(2) Date signed; and

(3) Notary Public signature, date 

commission expires, and notary stamp 

or seal.

(B) Certification of transferee. (1) 

Printed name and signature of transferor 

or authorized agent. If authorized agent, 

proof of authorization to act on behalf 

of the transferee must be provided with 

the application.

(2) Date signed;

(3) Notary Public signature, date 

commission expires, and notary stamp 

or seal;

(C) Certification of authorized 

representative of community holding 

first ROFR. (1) Printed name and 

signature of authorized community 

representative;

(2) Date signed;

(3) Printed name of community; and

(4) Notary Public signature, date 

commission expires, and notary stamp 

or seal.

(ix) Attachments to the application 

and other conditions to be met. (A) 

Indicate whether the person applying to 

make or receive the QS, PQS, IFQ or IPQ 

transfer has submitted an EDR if 

required to do so under § 680.6; and

(B) Whether the person applying to 

make or receive the QS, PQS, IFQ or IPQ 

transfer has paid all fees, as required by 

§ 680.44.

(C) A written acknowledgment by an 

ECC entity for transfer of PQS or IPQ 

under paragraphs (j)(3) through (j)(5) of 

this section.

(D) All individuals applying to 

receive CVC QS or IFQ or CPC QS or 

IFQ by transfer must submit proof of at 

least one delivery of a crab QS species 

in any crab QS fishery in the 365 days 

prior to submission to NMFS of the 

Application for Transfer of QS/IFQ or 

PQS/IPQ. Proof of this landing is:

(1) Signature of the applicant on an 

ADF&G Fish Ticket; or

(2) An affidavit from the vessel owner 

attesting to that individual’s 

participation as a member of a fish 

harvesting crew on board a vessel 

during a landing of a crab QS species 

within the 365 days prior to submission 

of an Application for Transfer of Crab 

QS/IFQ or PQS/IPQ.

(e) Approval criteria for an 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ. (1) Except as provided in 

paragraph (i) of this section, an 

Application for Transfer of QS/IFQ or 

PQS/IPQ will not be approved until the 

Regional Administrator has determined 

that:

(i) The person applying to receive the 

QS, PQS, IFQ or IPQ meets the 

requirements of eligibility in paragraph 

(c) of this section;

(ii) The person applying for transfer 

and the person applying to receive QS 

or IFQ/IPQ have their original notarized 

signatures on the application;

(iii) No fines, civil penalties, or other 

payments due and owing, or 

outstanding permit sanctions, resulting 

from Federal fishery violations 

involving either party exist;

(iv) The person applying to receive 

QS, PQS, IFQ or IPQ currently exists;

(v) The transfer would not cause the 

person applying to receive the QS, PQS, 

IFQ or IPQ to exceed the use limits in 

this section;

(vi) The person applying to make or 

receive the QS, PQS, IFQ or IPQ transfer 

has paid all IFQ or IPQ fees described 

under § 680.44; or has timely appealed 

the IAD of underpayment as described 

under § 680.44;

(vii) The person applying to make or 

receive the QS, PQS, IFQ or IPQ transfer 

has submitted an EDR if required to do 

so under § 680.6;

(viii) In the case of the transfer of PQS 

or IPQ from an ECC, that the provisions 

for ROFR under paragraph (j) of this 

section have been met;

(ix) In the case of an individual 

applying to receive CVC QS or IFQ or 

CPC QS or IFQ, the individual has 

demonstrated active participation in a 

crab QS fishery in the 365 days prior to 

the submission of the application for 

transfer;

(x) Other pertinent information 

requested on the application for transfer 

has been supplied to the satisfaction of 

the Regional Administrator.

(f) Application for Transfer of Crab 

QS/IFQ to or from an ECCO. (1) An 

Application for Transfer of Crab QS/IFQ 

to or from an ECCO must be approved 

by the Regional Administrator before 

the transferee may use the IFQ to 

harvest or process crab QS species.

(2) An Application for Transfer of 

Crab QS/IFQ to or from an ECCO will 

not be approved until the Regional 

Administrator has reviewed and 

approved the transfer agreement signed 

by the parties to the transaction. The 

Regional Administrator shall provide an 

Application for Transfer of Crab QS/IFQ 

to or from an ECCO to any person on 

request or on the Internet at http://

www.fakr.noaa.gov/. Persons who 

submit an Application for Transfer of 

Crab QS/IFQ to or from an ECCO for 

approval will receive notification of the 

Regional Administrator’s decision to 

approve or disapprove the application, 

and if applicable, the reason(s) for 

disapproval, by mail, unless another 

communication mode is requested on 

the application.

(3) Contents. A complete Application 

for Transfer of Crab QS/IFQ to or from 

an ECCO includes the following:

(i) General requirements. (A) This 

form may only be used if an ECCO is the 

proposed transferor (seller) or the 

proposed transferee (buyer) of the QS or 

IFQ.

(B) The party to whom a ECCO is 

seeking to transfer the QS/IFQ must 

hold a Transfer Eligibility Certificate 

(TEC).

(C) If the ECCO is applying to 

permanently transfer QS, a 

representative of the community on 

whose behalf the QS is held must sign 

the application.

(D) If authorized representative 

represents either the transferor or 

transferee, proof of authorization to act 

on behalf of transferor or transferee 

must be attached to the application.

(ii) Transferor (seller) information.

The name, NMFS Person ID, social 

security number or Tax ID, permanent 

business mailing address, business 

telephone, business facsimile, and 

business e-mail address of the 

Transferor (person currently holding the 

QS or IFQ), and if transferor is an ECCO, 

the name of ECC represented by the 

ECCO. The transferor may also provide 

a temporary address for each transaction 

in addition to the permanent business 

mailing address;

(iii) Transferee (buyer) information.

The name, NMFS Person ID, social 

security number or Tax ID, permanent 

business mailing address, business 

telephone, business facsimile, and 

business e-mail of the transferee (person 

receiving QS or IFQ by transfer), and if 

transferee is an ECCO, name of 

community (ECC) represented by the 

ECCO. The transferee may also provide 

a temporary address for each transaction 

in addition to the permanent business 

mailing address;

(iv) Identification of QS/IFQ to be 

transferred. Complete the following 

information if QS and IFQ are to be 

transferred together or if transferring 

only QS.

(A) QS species;

(B) QS type;

63304 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(C) Number of QS or IFQ units to be 

transferred;

(D) Total QS units;

(E) Number of IFQ pounds;

(F) Range of serial numbers to be 

transferred (shown on QS certificate) 

numbered to and from;

(G) Name of community to which QS 

are currently assigned;

(H) Indicate (YES or NO) whether 

remaining IFQ pounds for the current 

fishing year should be transferred; if 

NO, specify the number of pounds to be 

transferred;

(v) Transfer of IFQ only. (A) IFQ 

permit number and year of permit;

(B) Actual number of IFQ pounds to 

be transferred.

(vi) Transferor Information, if an 

ECCO. Reason(s) for transfer:

(A) ECCO management and 

administration;

(B) Fund additional QS purchase;

(C) Participation by community 

residents;

(D) Dissolution of ECCO; and

(E) Other (please specify).

(vii) Transferor Information. The 

transferor must provide the following 

information:

(A) Whether (YES or NO) a broker was 

used for this transaction; If YES, provide 

dollar amount paid in brokerage fees or 

percentage of total price;

(B) Provide the total amount paid for 

the QS/IFQ in this transaction, 

including all fees;

(C) Provide the price per unit of QS 

(price divided by QS units) and the 

price per pound (price divided by IFQ 

or IPQ pounds) of IFQ or IPQ;

(D) Indicate all reasons that apply for 

transferring the QS/IFQ.

(viii) Transferee information. The 

transferee must provide the following 

information:

(A) Indicate (YES or NO) whether QS/

IFQ purchase will have a lien attached; 

if YES, provide the name of lien holder;

(B) Indicate one primary source of 

financing for this transfer;

(C) Indicate the sources used to locate 

the QS or IFQ being transferred;

(D) Indicate the relationship, if any, 

between the transferor and the 

transferee;

(E) Indicate (YES or NO) whether an 

agreement exists to return the QS or IFQ 

to the transferor or any other person, or 

with a condition placed on resale; If 

YES, explain;

(F) Attach a copy of the terms of 

agreement for the transfer, the bill of 

sale for QS, or lease agreement for IFQ.

(ix) Certification of transferor. (A) 

Printed name and signature of transferor 

or authorized agent. If authorized agent, 

proof of authorization to act on behalf 

of the transferor must be provided with 

the application.

(B) Date signed;

(C) Notary Public signature, date 

commission expires, and notary stamp 

or seal;

(x) Certification of transferee. (A) 

Printed name and signature of transferor 

or authorized agent. If authorized agent, 

proof of authorization to act on behalf 

of the transferee must be provided with 

the application.

(B) Date signed;

(C) Notary Public signature, date 

commission expires, and notary stamp 

or seal;

(xi) Certification of authorized 

representative of community. (A) 

Printed name, title and signature of 

authorized community representative;

(B) Date signed;

(C) Printed name of community;

(D) Notary Public signature, date 

commission expires, and notary stamp 

or seal;

(4) Attachments to the application 

and other conditions to be met. (i) 

Whether the person applying to make or 

receive the QS, PQS, IFQ or IPQ transfer 

has submitted an EDR if required to do 

so under § 680.6;

(ii) Whether the person applying for 

transfer and the person applying to 

receive the QS or IFQ/IPQ have paid all 

fees, as required by § 680.44.

(iii) A copy of the terms of agreement 

for the transfer, the bill of sale for QS 

or PQS, or lease agreement for IFQ or 

IPQ.

(iv) An affirmation that the individual 

receiving IFQ from an ECCO has been a 

permanent resident in the ECC for a 

period of 12 months prior to the 

submission of the Application for 

Transfer QS/IFQ to or from an ECCO on 

whose behalf the ECCO holds QS.

(v) Authorization of the appropriate 

governing body of an ECC, for any 

transfer of QS by the ECCO that holds 

QS on behalf of that ECC.

(g) Approval criteria for an 

Application for Transfer of Crab QS/IFQ 

to or from an ECCO. In addition to the 

criteria required for approval under 

§ 680.41(e), the following criteria are 

also required:

(1) The ECCO applying to receive or 

transfer crab QS has submitted a 

complete annual report(s) required by 

§ 680.5;

(2) The ECCO applying to transfer 

crab QS has provided information on 

the reasons for the transfer as described 

in paragraph (e) of this section; and

(3) An individual applying to receive 

IFQ from an ECCO is a permanent 

resident of the ECC in whose name the 

ECCO is holding QS.

(h) Inter-cooperative transfer—(1) 

Application. (i) A crab harvesting 

cooperative may only transfer its IFQ to 

another crab harvesting cooperative. 

Crab harvesting cooperatives wishing to 

engage in an inter-cooperative transfer 

must complete an Application for 

Inter-cooperative Transfer to transfer 

crab IFQ between crab harvesting 

cooperatives.

(ii) Contents. A complete application 

consists of the following items.

(A) Identification of Transferor 

(lessor). The name, NMFS Person ID, 

date of incorporation, Tax ID, name of 

crab harvesting cooperative’s 

representative, permanent business 

mailing address, business telephone, 

business facsimile, and business e-mail 

of the crab harvesting cooperative 

transferor. A temporary mailing address 

for each transaction may also be 

provided in addition to the permanent 

business mailing address.

(B) Identification of transferee 

(lessee). The name, NMFS Person ID, 

date of incorporation, Tax ID, name of 

crab harvesting cooperative’s 

representative, permanent business 

mailing address, business telephone, 

business facsimile, and business e-mail 

of the crab harvesting cooperative 

transferee. A temporary mailing address 

for each transaction may also be 

provided in addition to the permanent 

business mailing address.

(C) Crab cooperative IFQ to be 

transferred. The identification of the 

crab IFQ being transferred, including 

the type of crab cooperative IFQ being 

transferred, crab cooperative permit 

number, year that permit was issued, 

whether (YES or NO) all remaining 

pounds for the current fishing year are 

to be transferred, if NO, specify number 

of pounds to be transferred

(D) Transferor Information. Indicate 

whether (YES or NO) a broker was used 

. If YES, indicate dollar amount paid in 

brokerage fees or percentage of total 

price, the total amount being paid and 

the price per pound.

(E) Certification of Transferor. Printed 

name and signature of transferor or 

authorized agent and date signed, 

signature of Notary Public, date 

commission expires, and notary stamp 

or seal. If authorized agent, proof of 

authorization to act on behalf of the 

transferor must be provided with the 

application.

(F) Certification of Transferee. Printed 

name and signature of transferee or 

authorized agent and date sign, 

signature of Notary Public, date 

commission expires, and notary stamp 

or seal. If authorized agent, proof of 

authorization to act on behalf of the 

transferee must be provided with the 

application.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63305

(iii) Whether the person applying to 

make or receive the IFQ transfer has 

paid all fees, as required by § 680.44.

(iv) Original notarized signatures of 

both the transferee and transferor or 

authorized representative.

(2) Member of a crab harvesting 

cooperative receiving additional crab 

QS and/or IFQ by transfer. A member of 

a crab harvesting cooperative may 

receive additional crab QS and/or IFQ 

by transfer in accordance with transfer 

and use provisions at §§ 680.41 and 

680.42. A member of a crab harvesting 

cooperative may receive a separate 

annual IFQ permit or may transfer the 

IFQ to the members’s cooperative.

(3) Member of a crab harvesting 

cooperative transferring crab QS to 

someone outside the cooperative. A 

member of a crab harvesting cooperative 

may transfer any crab QS held by that 

person to any person qualified to 

receive crab QS by transfer as provided 

in this section.

(4) Member of a crab harvesting 

cooperative transferring the IFQ 

resulting from QS to a person outside 

the cooperative. Once a person joins a 

cooperative, that person may not 

transfer IFQ resulting from that person’s 

QS to anyone outside the cooperative. 

The cooperative may transfer the IFQ it 

controls on the behalf of a member of 

the cooperative to another cooperative if 

an Application for Inter-cooperative 

Transfer has been submitted and 

approved by NMFS.

(i) QS, PQS, IFQ, or IPQ accounts. QS, 

PQS, IFQ, or IPQ accounts affected by 

a transfer approved by the Regional 

Administrator will change on the date of 

approval. Any necessary IFQ or IPQ 

permits will be sent with the 

notification of approval if the receiver of 

the IFQ or IPQ permit has completed an 

Annual Application for Crab IFQ/IPQ 

Permit for the current fishing year as 

required under § 680.4.

(j) Eligible crab community right of 

first refusal (ROFR)—(1) Applicability—

(i) Exempt Fisheries. PQS and IPQ 

issued for the BST, WAG, or WAI crab 

QS fisheries are exempt from ROFR 

provisions.

(ii) Eligible Crab Communities (ECCs).

The ROFR extends to the ECCs and their 

associated governing bodies. The ROFR 

may be exercised by the ECC entity 

representing that ECC.

(2) Community representation—(i) 

CDQ Communities. Any ECC that is also 

a CDQ community shall designate the 

CDQ group to which it is a member as 

the ECC entity in the exercise of any 

ROFR.

(ii) Non-CDQ communities. (A) Any 

ECC that is a non-CDQ community must 

designate an ECC entity that will 

represent the community in the exercise 

of ROFR at least 30 days prior to the 

ending date for the initial application 

period for the crab QS program 

specified in the Federal Register.

(B) The ECC entity eligible to exercise 

the right of first refusal on behalf of an 

ECC will be identified by the governing 

body (s) of the ECC. If the ECC is 

incorporated under the laws of the State 

of Alaska, then the municipality is the 

governing body; if the ECC is 

incorporated and within an 

incorporated borough, then the 

municipality and borough are the 

governing bodies and must agree to 

designate the same ECC entity; if the 

ECC is not incorporated and in an 

incorporated borough, then the borough 

is the governing body.

(C) Each ECC may designate only one 

ECC entity to represent that community 

in the exercise of ROFR at any one time 

through a statement of support from the 

governing body of the ECC. That 

statement of support must be submitted 

to the Regional Administrator, National 

Marine Fisheries Service, Post Office 

Box 21668, Juneau, Alaska 99802, as a 

resolution from the City Council or 

other municipal body incorporated 

under the laws of the State of Alaska for 

that community at least 3 days prior to 

the ending date of the initial application 

period for the crab QS program under 

§ 680.40. The ECC entity eligible to 

exercise ROFR on behalf of an ECC must 

be identified in the contract submitted 

to NMFS as part of the application for 

PQS under § 680.40(m).

(D) The ECC ROFR is not assignable 

by the ECC entity.

(3) Transfer of PQS or IPQ from an 

ECC. Any transfer of PQS or IPQ from 

an ECC will not be approved by NMFS 

unless the ECC entity representing the 

ECC is a signatory on the contract 

submitted under § 680.40(m) and 

acknowledges in writing to the Regional 

Administrator that the community does 

not wish to exercise ROFR.

(4) Transfer of PQS within an ECC.

Any transfer of PQS within an ECC will 

not be approved by NMFS unless the 

ECC entity representing the ECC is a 

signatory on a contract submitted under 

§ 680.40(m) to exercise ROFR.

(5) Restrictions on transfer of PQS out 

of North Gulf of Alaska communities—

(i) Applicability. Any community in the 

Gulf of Alaska north of a line at 56°20′

N. lat.

(ii) Notification of PQS transfer. A 

PQS holder proposing to transfer PQS 

for use in processing outside any 

community identified under this 

paragraph must notify the ECC entity 

designated by the City of Kodiak and 

Kodiak Island Borough under paragraph 

(j)(2) of this section 30 days prior to the 

intended transfer of PQS out of the 

community.

(iii) ROFR in the North Gulf of Alaska.

The ECC entity designated by the City 

of Kodiak and Kodiak Island Borough 

will have the opportunity to exercise 

ROFR to purchase from a PQS holder 

any PQS proposed to be transferred for 

use in processing outside the 

community identified under paragraph 

(j)(5)(i) of this section consistent with 

contract provisions under § 680.40(m).

(k) Transfer of QS, PQS, IFQ or IPQ 

with restrictions. If QS, PQS, IFQ or IPQ 

must be transferred as a result of a court 

order, operation of law, or as part of a 

security agreement, but the person 

receiving the QS, PQS, IFQ or IPQ by 

transfer does not meet the eligibility 

requirements of this section, the 

Regional Administrator will approve an 

Application for Transfer of Crab QS/IFQ 

or PQS/IPQ with restrictions. The 

Regional Administrator will not assign 

IFQ or IPQ resulting from the restricted 

QS or PQS to any person. IFQ or IPQ 

with restrictions may not be used for 

harvesting or processing species covered 

under this program. The QS, PQS, IFQ 

or IPQ will remain restricted until:

(1) The person who received the QS, 

PQS, IFQ or IPQ with restrictions meets 

the eligibility requirements of this 

section and the Regional Administrator 

approves an application for eligibility 

for that person; or

(2) The Regional Administrator 

approves the application for transfer 

from the person who received the QS, 

PQS, IFQ or IPQ with restrictions to a 

person who meets the requirements of 

this section.

(l) Transfer of CVO, CPO, CVC, CPC 

QS or PQS—(1) General. PQS or QS may 

be transferred, with approval of the 

Regional Administrator, to persons 

qualified to receive PQS or QS by 

transfer. However, the Regional 

Administrator will not approve a 

transfer of any type of PQS or QS that 

would cause a person to exceed the 

maximum amount of PQS or QS 

allowable under the use limits provided 

for in § 680.42, except as provided for 

under § 680.41(k).

(2) CVO QS. Notwithstanding QS use 

limitations under § 680.42, CVO QS may 

be transferred to any person eligible to 

receive CVO or CPO QS as defined 

under paragraph (c) of this section.

(3) CPO QS. Persons holding CPO QS 

may transfer CPO QS as CVO QS and 

PQS to eligible recipients under the 

following provisions:

(i) Each unit of CPO QS shall yield 1 

unit of CVO QS, and 0.9 units of PQS; 

and

63306 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

(ii) The CVO QS and PQS derived 

from the transfer of CPO QS may be 

transferred separately, except that these 

shares must receive the same regional 

designation. The regional designation 

shall be determined at the time of 

transfer by the person receiving the CVO 

QS.

(4) CVC or CPC QS. Notwithstanding 

QS use limitations under § 680.42, CVC 

or CPC QS may be transferred to any 

person eligible to receive CVC or CPC 

QS as defined under paragraph (c) of 

this section. CVC and CPC QS may only 

be used in the sector for which it is 

originally designated.

(m) Transfer of IFQ or IPQ by Lease—

(1) IFQ derived from CVO or CPO QS.

IFQ derived from CVO or CPO QS may 

be transferred by lease until June 30, 

2010. IFQ derived from CVO or CPO QS 

must be leased:

(i) If the IFQ will be used on a vessel 

on which the QS holder has less than a 

10-percent ownership interest; or

(ii) If the IFQ will be used on a vessel 

on which the QS holder is not present.

(2) Ownership of a vessel means, for 

the purposes of this section:

(i) A sole proprietor; or

(ii) A relationship between 2 or more 

entities in which one directly or 

indirectly owns a 10 percent or greater 

interest in a vessel.

(3) IFQ derived from CVC QS or CPC 

QS. (i) IFQ derived from CVC or CPC QS 

may be transferred by lease only until 

June 30, 2008 unless the IFQ permit 

holder demonstrates a hardship.

(ii) In the event of a hardship, as 

described at paragraph (m)(2)(iii) in this 

section, a holder of CVC or CPC QS may 

lease the IFQ derived from this QS for 

the term of the hardship. However, the 

holder of CVC or CPC QS may not lease 

the IFQ under this provision for more 

than 2 crab fishing years total in any 10 

crab fishing year period. Such transfers 

are valid only during the crab fishing 

year for which an IFQ permit is issued 

and the QS holder must re-apply for any 

subsequent transfers.

(iii) An application for a transfer of 

IFQ under this provision will not be 

approved unless the QS holder can 

demonstrate a hardship by an inability 

to participate in the crab QS fisheries 

because:

(A) Of a medical condition of the QS 

holder. The QS holder is required to 

provide documentation of the medical 

condition from a licensed medical 

doctor who verifies that the QS holder 

cannot participate in the fishery because 

of the medical condition;

(B) Of a medical condition involving 

an individual who requires the QS 

holder’s care. The QS holder is required 

to provide documentation of the 

individual’s medical condition from a 

licensed medical doctor. The QS holder 

must verify that he or she provides care 

for that individual and that the QS 

holder cannot participate in the fishery 

because of the medical condition of that 

individual;

(C) Of the total or constructive 

physical loss of a vessel. The QS holder 

must provide evidence that the vessel 

was lost and could not be replaced in 

time to participate in the fishery for 

which the person is claiming a 

hardship.

(4) IPQ derived from PQS. IPQ 

derived from PQS may be leased.

(n) Survivorship transfer privileges.

(1) On the death of an individual who 

holds QS or PQS, the surviving spouse 

or, in the absence of a surviving spouse, 

a beneficiary designated pursuant to 

paragraph (m)(3) of this section, receives 

all QS, PQS and IFQ or IPQ held by the 

decedent by right of survivorship, 

unless a contrary intent was expressed 

by the decedent in a will. The Regional 

Administrator will approve an 

application for transfer to the surviving 

spouse or designated beneficiary when 

sufficient evidence has been provided to 

verify the death of the individual.

(2) A QS or PQS holder may provide 

the Regional Administrator with the 

name of the designated beneficiary from 

the QS or PQS holder’s immediate 

family to receive survivorship transfer 

privileges in the event of the QS or PQS 

holders death and in the absence of a 

surviving spouse.

(3) The Regional Administrator will 

approve, for 3 calendar years following 

the date of the death of an individual, 

an Application for Transfer of Crab QS/

IFQ or PQS/IPQ from the surviving 

spouse or, in the absence of a surviving 

spouse, a beneficiary from the QS or 

PQS holder’s immediate family 

designated pursuant to paragraph (m)(3) 

of this section to a person eligible to 

receive IFQ or IPQ under the provisions 

of this section, notwithstanding the 

limitations on transfers of IFQ and IPQ 

in this section and the use limitations 

under § 680.42.

(o) Notification of Approval or 

Disapproval of Applications. (1) 

Applicants submitting any application 

under § 680.41 will be notified by mail 

of the Regional Administrator’s 

approval of an application. If the 

Regional Administrator will notify 

applicants if an application submitted 

under § 680.41 is disapproved. This 

notification of disapproval will include:

(i) The disapproved Application for 

Eligibility to Receive QS/IFQ or PQS/

IPQ by Transfer; and

(ii) An explanation why the 

application was not approved.

(2) Reasons for disapproval. Reasons 

for disapproval of an application 

include, but are not limited to:

(i) U.S. citizenship, where required;

(ii) Failure to meet minimum 

requirements for sea time as a member 

of a harvesting crew;

(iii) An incomplete application;

(iv) An untimely application;

(v) Fines, civil penalties, or other 

payments due and owing, or 

outstanding permit sanctions resulting 

from Federal fishery violations; or

(vi) Fees owed but not paid as 

assessed under § 680.44.

(3) Application deadline. The 

Regional Administrator will not approve 

any transfers of QS, PQS, IFQ, or IPQ in 

any crab QS fishery from August 1 until 

the date of the issuance of IFQ or IPQ 

for that crab QS fishery.

§ 680.42 Limitations on use of QS, PQS, 

IFQ, and IPQ.

(a) QS, PQS, IFQ and IPQ regional 

designation and IFQ class. The QS, 

PQS, IFQ or IPQ specified for one crab 

QS fishery may not be used to harvest 

or process crab in any other crab QS 

fishery.

(b) QS and IFQ use caps—(1) General.

Separate and distinct QS and IFQ use 

caps apply to all QS and IFQ categories 

pertaining to a given crab QS fishery 

with the following provisions:

(i) A person who receives an initial 

allocation of QS that exceeds the use 

cap listed in paragraph (b)(2) of this 

section are limited to hold no more than 

that amount. A person will not be 

issued QS in excess of the use cap 

established in this section based on QS 

derived from landings attributed to an 

LLP license obtained via transfer after 

June 10, 2002;

(ii) QS and IFQ use caps shall be 

based on the initial quota share pools 

used to determine initial allocations of 

QS;

(iii) Non-individuals holding QS will 

be required to provide, on an annual 

basis, ownership information as 

required in the Annual Application for 

Crab IFQ/IPQ Permit.

(2) Except for persons who hold PQS, 

or a CDQ group, a person may not, 

individually or collectively, hold:

(i) QS in amounts in excess of the 

amounts specified in the following 

table, unless that person’s QS was 

received in the initial allocation:

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63307

Fishery CVO/CPO Use Cap in QS 

Units 

CVC/CPC Use Cap in QS 

Units 

(A) 1.0 percent of the initial QS pool for BBR 3,880,000 120,000

(B) 1.0 percent of the initial QS pool for BSS 9,700,000 300,000

(C) 1.0 percent of the initial QS pool for BST 1,940,000 60,000

(D) 2.0 percent of the initial QS pool for PIK 582,000 18,000

(E) 2.0 percent of the initial QS pool for SMB 582,000 18,000

(F) 10.0 percent of the initial QS pool for EAG 970,000 30,000

(G) 10.0 percent of the initial QS pool for WAG 3,880,000 120,000

(H) 10.0 percent of the initial QS pool for WAI 5,820,000 180,000

(ii) Use IFQ in excess of the amount 

of IFQ that is yielded from the QS caps 

in paragraph (b)(2)(i) of this section, 

unless that IFQ is yielded from QS that 

was received by that person in the 

initial allocation of QS for that crab QS 

fishery.

(3) A CDQ Group may not:

(i) Hold QS in excess of more than the 

amounts of QS specified in the 

following table:

Fishery CDQ CVO/CPO Use Cap in QS Units 

(A) 5.0 percent of the initial QS pool for BBR 19,400,000

(B) 5.0 percent of the initial QS pool for BSS 48,500,000

(C) 5.0 percent of the initial QS pool for BST 9,700,000

(D) 10.0 percent of the initial QS pool for PIK 2,910,000

(E) 10.0 percent of the initial QS pool for SMB 2,910,000

(F) 20.0 percent of the initial QS pool for EAG 1,940,000

(G) 20.0 percent of the initial QS pool for WAG 7,760,000

(H) 20.0 percent of the initial QS pool for WAI 11,640,000

(ii) Use IFQ in excess of the amount 

of IFQ that is yielded from the QS caps 

in paragraph (b)(2)(i) of this section, 

unless that IFQ is yielded from QS that 

was received by that person in the 

initial allocation of QS for that crab QS 

fishery.

(4) A person who holds PQS may not 

individually or collectively:

(i) Hold QS in excess of the amounts 

specified in the following table:

Fishery CVO/CPO Use Cap in QS 

Units 

CVC/CPC Use Cap in QS 

Units 

(A) 5.0 percent of the initial QS pool for BBR 19,400,000 600,000

(B) 5.0 percent of the initial QS pool for BSS 48,500,000 1,500,000

(C) 5.0 percent of the initial QS pool for BST 9,700,000 300,000

(D) 5.0 percent of the initial QS pool for PIK 1,455,000 45,000

(E) 5.0 percent of the initial QS pool for SMB 1,455,000 45,000

(F) 5.0 percent of the initial QS pool for EAG 485,000 15,000

(G) 5.0 percent of the initial QS pool for WAG 1,940,000 60,000

(H) 5.0 percent of the initial QS pool for WAI 2,910,000 90,000

(ii) Use IFQ in excess of the amount 

of IFQ that is yielded from the QS caps 

in paragraph (b)(2)(i) of this section, 

unless that IFQ is yielded from QS that 

was received by that person in the 

initial allocation of QS for that crab QS 

fishery.

(5) Any person who receives an 

allocation of QS in excess of the use 

caps established in paragraph (b) of this 

section and who subsequently transfers 

any QS to another person so that the 

total amount of QS held by that person 

is less than the amount of the use caps 

in this paragraph will be subject to the 

63308 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

use caps established in this paragraph 

after that transfer.

(6) IFQ that is used by a crab 

harvesting cooperative is not subject to 

the use caps in paragraph (b) of this 

section.

(7) Non-individual persons holding 

QS will be required to provide, on an 

annual basis, a list of persons with an 

ownership interest in the nonindividual QS holder. This list of 

owners shall be provided to the 

individual level and will include the 

percentage of ownership held by each 

individual. This annual submission of 

information must be submitted as part 

of the Annual Application to for Crab 

IFQ/IPQ Permit. A person will be 

considered to be a holder of QS or IFQ 

for purposes of applying the QS and IFQ 

use caps in this paragraph of that 

person:

(i) Is the sole proprietor of an entity 

that holds QS or IFQ; or

(ii) Directly or indirectly owns a 10 

percent or greater interest in an entity 

that holds QS or IFQ.

(c) PQS and IPQ Use Caps. (1) A 

person may not:

(i) Hold more than 30 percent of the 

initial PQS pool in any crab QS fishery 

unless that person received an initial 

allocation of PQS in excess of this limit. 

A person will not be issued PQS in 

excess of the use caps established in this 

section based on PQS derived from the 

transfer of legal processing history after 

June 10, 2002.

(ii) Use IPQ in excess of the amount 

of IPQ that is yielded from the PQS caps 

in paragraph (C)(1)(i) of this section 

unless that IPQ is yielded from PQS that 

was received by that person in the 

initial allocation of PQS for that crab QS 

fishery.

(2) A person may not use more than 

60 percent of the IPQ issued in the BSS 

crab QS fishery with a North region 

designation during a crab fishing year.

(3) Non-individual persons holding 

PQS will be required to provide, on an 

annual basis, a list of persons with an 

ownership interest in the nonindividual PQS holder. This list of 

owners shall be provided to the 

individual level and will include the 

percentage of ownership held by each 

individual person. This annual 

submission of information must be 

submitted as part of the Annual 

Application for Crab IFQ/IPQ Permit. A 

person will be considered to be a holder 

of PQS for purposes of applying the PQS 

use caps in this paragraph if that 

persons:

(i) Is the sole proprietor of an entity 

that holds PQS; or

(ii) Directly or indirectly owns a 10 

percent or greater interest in an entity 

that holds PQS.

(4) The amount of IPQ issued in any 

crab fishing year shall not exceed:

(i) 175,000,000 raw crab pounds 

(79,378.6 mt) in the BSS crab QS 

fishery;

(ii) 20,000,000 raw crab pounds 

(9,071.8 mt) in the BBR crab QS fishery;

(iii) Any amount of Class A IFQ that 

is issued in excess of the amount of IPQ 

in the BSS or BBR crab QS fisheries that 

is not required to be delivered to an RCR 

with unused IPQ;

(iv) The amount of Class A IFQ issued 

in excess of the amount of IPQ issued 

in the BSS or BBR crab QS fisheries will 

be issued to all Class A IFQ recipients 

on a pro rata basis in proportion to the 

amount of Class A IFQ held by each 

person.

(5) Before July 1, 2007, IPQ for the 

BSS, BBR, PIK, SMB, and EAG crab QS 

fisheries may not be used to process 

crab outside the ECC in which the PQS 

from which that IPQ is derived. Except 

that, before July 1, 2007:

(i) Ten percent of the IPQs that are 

issued for a crab QS fishery or an 

amount of IPQ that yields up to 500,000 

raw crab pounds (226.7 mt) on an 

annual basis, whichever is less, may be 

leased for use in processing crab outside 

that ECC. The amount of IPQ that is 

issued on an annual basis for use in that 

ECC and the amount that may be leased 

outside that ECC will be established 

annually and will be divided on a pro 

rata basis among all IPQ permit holders 

issued IPQ for use in that ECC for that 

year;

(ii) IPQ in excess of the amounts 

specified in paragraph (c)(5)(i) of this 

section may be used outside the ECC for 

which that IPQ is designated if an 

unavoidable circumstance prevents crab 

processing within that ECC. For 

purposes of this section, an unavoidable 

circumstance exists if the specific intent 

to conduct processing for a crab QS 

species in that ECC was thwarted by a 

circumstance that was:

(A) Unavoidable;

(B) Unique to the IPQ permit holder, 

or to the processing facility used by the 

IPQ permit holder in that ECC;

(C) Unforeseen and reasonably 

unforeseeable to the IPQ permit holder;

(D) The circumstance that prevented 

the IPQ permit holder from processing 

crab in that ECC actually occurred; and

(E) The IPQ permit holder took all 

reasonable steps to overcome the 

circumstance that prevented the IPQ 

permit holder from conducting 

processing for that crab QS fishery in 

that ECC.

(iii) This provision does not exempt 

any IPQ permit holder from any regional 

processing requirements that may apply 

to that IPQ.

(6) Any person harvesting crab under 

a Class A CVO or CVC IFQ Permit, 

except as provided under § 680.42(c)(4), 

must deliver that crab:

(i) Only to RCRs with unused IPQ for 

the same QS fishery;

(ii) Only to an RCR in the region for 

which the QS and IFQ is designated.

(7) Any person harvesting crab under 

a Class B IFQ, CPO IFQ, CVC IFQ, or 

CPC IFQ permit may deliver that crab to 

any RCR.

(d) Vessel limitations. (1) Except for 

vessels that participate in a crab 

harvesting cooperative as described 

under § 680.20 and under the provisions 

described in paragraph (d)(4) of this 

section, no vessel may be used to 

harvest CVO or CPO IFQ in excess of the 

following percentages of the TAC for 

that crab QS fishery for that crab fishing 

year:

(i) 2.0 percent for BSS;

(ii) 2.0 percent for BBR;

(iii) 2.0 percent for BST;

(iv) 4.0 percent for PIK;

(v) 4.0 percent for SMB;

(vi) 20.0 percent for EAG;

(vii) 20.0 percent for WAG; or

(viii) 20.0 percent for the WAI crab 

QS fishery west of 179° W. long.

(2) CVC or CPC QS used on a vessel 

will not be included in determining 

whether a vessel use cap is met.

(3) An initial allocation of QS that 

results in an initial issuance of crab QS 

to a single person and that results in IFQ 

that is in excess of the vessel use caps 

described above allows that person to 

catch and retain crab harvested with 

that IFQ with a single vessel in excess 

of the vessel use caps as described in 

paragraph (e)(1) of this section provided 

that any transfers of a valid, fully 

transferable LLP license that resulted in 

the issuance of QS to that person 

occurred prior to June 10, 2002. Any 

subsequent transfers of a valid, fully 

transferable LLP license that resulted in 

the issuance of QS, or any transfers of 

QS to that person would not be 

exempted from these vessel use caps. 

However, two or more persons may not 

catch and retain their IFQ with one 

vessel in excess of these limitations.

(4) A vessel use cap would not apply 

to a vessel if all of the IFQ used on that 

vessel in a crab fishing year is IFQ held 

by a crab harvesting cooperative. This 

exemption is forfeited if that vessel is 

used to harvest any amount of IFQ not 

held by a crab harvesting cooperative 

during the same crab fishing year.

(5) A person holding CVC or CPC QS 

is required to be aboard the vessel upon 

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63309

which their IFQ is being harvested; 

unless the IFQ resulting from that QS 

has been leased to a qualified person 

under § 680.41 or has been converted 

into crab cooperative IFQ under 

§ 680.21.

(6) A person holding CVO or CPO QS 

does not have to be aboard the vessel 

being used to harvest their IFQ if they 

hold at least a 10 percent ownership 

interest in the vessel upon which the 

IFQ is to be harvested and are 

represented on board the vessel by a 

crab IFQ hired master employed by that 

QS holder as authorized under § 680.4.

(7) Ownership of a vessel means, for 

purposes of this section:

(i) A sole proprietor; or

(ii) Directly or indirectly owns a 10 

percent or greater interest in an entity 

that owns a vessel.

§ 680.43 Determinations and appeals.

See § 679.43 of this chapter.

§ 680.44 Cost recovery.

(a) Cost recovery fees—(1) 

Responsibility. The person documented 

on the IFQ, IPQ, CDQ, RCR, Commercial 

Fisheries Entry Commission (CFEC), or 

State of Alaska Commissioner’s permit 

as the permit holder at the time of a CR 

crab landing must comply with the 

requirements of this section.

(i) Subsequent transfer of IFQ, IPQ, 

CDQ, or QS does not affect the permit 

holder’s liability for noncompliance 

with this section.

(ii) Non-renewal of an RCR permit 

does not affect the permit holder’s 

liability for noncompliance with this 

section.

(2) Fee Liability determination. (i) All 

CR allocation holders and RCR permit 

holders will be subject to a fee liability 

for any CR crab debited from a CR 

allocation during a crab fishing year.

(ii) Fee liability must be calculated by 

multiplying the applicable fee 

percentage by the ex-vessel value of the 

CR crab received by the RCR at the time 

of receipt.

(iii) NMFS will provide a summary to 

all CR allocation and RCR permit 

holders available through a secure 

Internet site or on request during the 

last quarter of the crab fishing year. The 

summary will explain the fee liability 

determination including details of raw 

crab pounds debited from CR 

allocations by permit, port or 

port-group, species, date, and prices.

(3) Fee collection. (i) All RCRs who 

receive CR crab are responsible for 

submitting the cost recovery payment 

for all CR crab received.

(ii) All RCRs who receive CR crab in 

a crab fishing year must maintain and 

submit records for any crab cost 

recovery fees collected under the 

corresponding RCR permit.

(4) Payment—(i) Payment due date.

An RCR permit holder must submit any 

crab cost recovery fee liability 

payment(s) to NMFS at the address 

provided in paragraph (a)(4)(iii) of this 

section no later than July 31 of the crab 

fishing year following the crab fishing 

year in which the payment for a CR crab 

landing was made.

(ii) Payment recipient. Make payment 

payable to NMFS.

(iii) Payment address. Mail payment 

and related documents to the 

Administrator, Alaska Region, NMFS; 

Attn: Operations, Management, & 

Information Division (OMI); P.O. Box 

21668; Juneau, AK 99802-1668; 

Facsimile: 907-586-7354. Payments may 

also be submitted electronically to 

NMFS via forms available from RAM or 

on the RAM area of the Alaska Region 

Home Page at http://www.fakr.noaa.gov/

ram.

(iv) Payment method. Payment must 

be made in U.S. dollars by personal 

check drawn on a U.S. bank account, 

money order, bank certified check, or 

credit card.

(b) Ex-vessel value determination and 

use—(1) General. An RCR permit holder 

must use either the ex-vessel value 

determined for shoreside processors or 

the ex-vessel value determined for at-sea 

Catcher/Processors (CP), depending on 

their activity. Ex-vessel value includes 

all cash, services, or other goods-in-kind 

exchanged for CR crab.

(2) Shoreside Ex-vessel value.

Shoreside processing facilities must use 

the price paid at the time of purchase as 

ex-vessel value for the purposes of 

calculating fee liability. Shoreside 

processing facilities must include any 

subsequent retropayments as 

adjustments to the initial calculation of 

fee liability.

(3) Catcher/Processor Ex-vessel 

value—(i) General. Catcher/processors 

must use the corresponding CP standard 

price(s) as published in the Federal 

Register as ex-vessel value for the 

purposes of calculating fee liability.

(ii) Duty to publish list. As part of the 

summary described in paragraph 

(a)(2)(iii) of this section, the Regional 

Administrator will publish CP standard 

prices in the Federal Register during the 

last quarter of each crab fishing year. 

The CP standard prices will be 

described in U.S. dollars per raw crab 

pound, for CR crab debited from CR 

allocations during the previous crab 

fishing year.

(iii) Effective duration. The Regional 

Administrator may revise the CP 

standard prices annually by publication 

in the Federal Register. CP standard 

prices published in the Federal Register

by NMFS shall apply to all landings 

made in the same crab fishing year as 

the CP standard price publication and 

shall replace any CP standard prices 

previously provided by NMFS.

(iv) Determination. NMFS will 

calculate the CP standard prices to 

reflect, as closely as possible, the 

previous year’s average shoreside 

processor price by fishery and by 

species, and any variations in reported 

shoreside ex-vessel values of CR crab. 

The Regional Administrator will base 

CP standard prices on the following 

types of information:

(A) Landed pounds by CR crab, 

port-group, and month;

(B) Total shoreside ex-vessel value by 

CR crab, port-group, and month; and

(C) Price adjustments, including 

retro-payments.

(4) Fee liability calculation. All RCRs 

must base all fee liability calculations 

on the ex-vessel value that correlates to 

CR crab that is debited from a CR 

allocation and recorded in raw crab 

pounds.

(c) Crab fee percentage—(1) Default 

percentage. The crab fee percentage is 3 

percent of the ex-vessel value of crab 

unless adjusted by the Regional 

Administrator by publication in the 

Federal Register in accordance with 

paragraphs (c)(3) and (c)(4) of this 

section.

(i) The calculated crab fee percentage 

will be divided equally between the 

harvesting and processing sectors.

(ii) Catcher/processors must pay the 

full crab fee percentage determined by 

the fee percentage calculation for all CR 

crab debited from a CR allocation.

(2) Calculating fee percentage value.

Each year the Regional Administrator 

will calculate the fee percentage.

(i) Factors. In making the calculations 

the Regional Administrator will 

consider the following factors:

(A) The catch to which the crab cost 

recovery fee will apply;

(B) The projected ex-vessel value of 

that catch;

(C) The costs directly related to the 

management and enforcement of the 

Crab Rationalization Program;

(D) The funds available for the Crab 

Rationalization Program in the Limited 

Access System Administrative Fund 

(LASAF);

(E) Nonpayment of fee liabilities.

(ii) Methodology. In making the 

calculation, the Regional Administrator 

will use the following methodology:

Harvesting and Processing Sectors: [[100 ×

(DPC ¥ AB) / V] / (1 ¥ NPR)] × 0.5

Catcher/Processors: [100 × (DPC ¥ AB) / 

V] / (1 ¥ NPR)

63310 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

where:

DPC is the direct program costs for the 

Crab Rationalization Program for the 

previous fiscal year,

AB is the projected end of the year LASAF 

account balance for the Crab Rationalization 

Program, and

V is the projected ex-vessel value of the 

catch subject to the crab cost recovery fee 

liability for the current year, and NPR is the 

fraction of the fee assessments that is 

expected to result in nonpayment.

(3) Adjustments. During the first 

quarter of each crab fishing year, the 

Regional Administrator will consider 

adjusting the crab fee percentage. 

Consideration will be based on the 

calculations described in paragraph 

(c)(2) of this section.

(4) Publication. The Regional 

Administrator will make any 

adjustments in the crab fee percentage 

by publication in the Federal Register.

(5) Applicable percentage. The RCR 

permit holder must use the crab fee 

percentage in effect at the time a CR 

crab is debited from a CR allocation to 

calculate the crab cost recovery fee 

liability for such CR crab. The RCR 

permit holder must use the crab fee 

percentage in effect at the time a CR 

crab is debited from an CR allocation to 

calculate the crab cost recovery fee 

liability for any retro-payments for that 

CR crab.

(d) Underpayment of fee liability. (1) 

Under § 680.4, an applicant will not 

receive new IFQ, IPQ, or RCR permits 

until he or she submits a complete 

application. A complete application 

shall include full payment of an 

applicant’s complete crab cost recovery 

fee liability as reported by the RCR.

(2) If an RCR fails to submit full 

payment for crab cost recovery fee 

liability by the date described in 

paragraph (a)(4) of this section, the 

Regional Administrator may:

(i) At any time thereafter send an IAD 

to the RCR permit holder stating that the 

RCR permit holder’s estimated fee 

liability, as indicated by his or her own 

submitted information, is the crab cost 

recovery fee liability due from the RCR 

permit holder.

(ii) Disapprove any transfer of IFQ, 

IPQ, or QS to or from the RCR permit 

holder in accordance with § 680.41.

(3) If an RCR fails to submit full 

payment by the application deadline 

described at § 680.4(e), no IFQ or IPQ 

permit will be issued to that RCR for 

that crab fishing year.

(4) Upon final agency action 

determining that an RCR permit holder 

has not paid his or her crab cost 

recovery fee liability, the Regional 

Administrator may continue to 

withhold issuance of any new IFQ, IPQ, 

or RCR permit for any subsequent crab 

fishing years. If payment is not received 

by the 30th day after the final agency 

action, the matter will be referred to the 

appropriate authorities for purposes of 

collection.

(e) Over payment. Upon issuance of 

final agency action, any amount 

submitted to NMFS in excess of the crab 

cost recovery fee liability determined to 

be due by the final agency action will 

be returned to the RCR permit holder 

unless the permit holder requests the 

agency to credit the excess amount 

against the permit holder’s future crab 

cost recovery fee liability.

(f) Appeals and requests for 

reconsideration. An RCR permit holder 

who receives an IAD may either appeal 

the IAD pursuant to § 679.43 or request 

reconsideration. Within 60 days from 

the date of issuance of the IAD, the 

Regional Administrator may undertake 

reconsideration of the IAD on his or her 

own initiative. If a request for 

reconsideration is submitted or the 

Regional Administrator initiates 

reconsideration, the 60-day period for 

appeal under § 679.43 will begin anew 

upon issuance of the Regional 

Administrator’s reconsidered IAD. The 

Regional Administrator may undertake 

only one reconsideration of the IAD, if 

any. If an RCR permit holder fails to file 

an appeal of the IAD pursuant to 

§ 679.43 or request reconsideration 

within the time period provided, the 

IAD will become the final agency action. 

In any appeal or reconsideration of an 

IAD made under this section, an RCR 

permit holder has the burden of proving 

his or her claim.

(g) Fee Submission Form. An RCR 

must submit an RCR Permit Holder Fee 

Submission Form according to 

§ 680.5(e).

TABLE 1 TO PART 680—CRAB RATIONALIZED (CR) FISHERY

Code CR Fishery Boundary Description 

EAG Eastern Aleutian Islands golden (brown) king 

crab (Lithodes aequispinus)

In waters of the EEZ with: 

(1) an eastern boundary the longitude of Scotch Cap Light 

(164°44′ W. long.) to 53°30′ N. lat., then West to 165° W. long.

(2) a western boundary of 174° W. long., and

(3) a northern boundary of a line from the latitude of Cape 

Sarichef (54°36′ N. lat.) westward to 171° W. long., then north to 

55°30′ N. lat., then west to 174° W. long.

WAG Western Aleutian Islands golden (brown) king 

crab (Lithodes aequispinus)

In waters of the EEZ with: 

(1) an eastern boundary the longitude 174° W. long.,

(2) a western boundary the maritime Boundary Agreement Line as 

that line is described in the text of and depicted in the annex to the 

Maritime Boundary Agreement between the United States and the 

Union of Soviet Socialist Republics signed in Washington, June 1, 

1990, and as the Maritime Boundary Agreement Line as depicted on 

NOAA Chart No. 513 (6th edition, February 23, 1991) and NOAA 

Chart No. 514 (6th edition, February 16, 1991), and

(3) a northern boundary of a line from the latitude of 55°30′ N. 

lat., then west to the U.S.-Russian Convention line of 1867.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63311

TABLE 1 TO PART 680—CRAB RATIONALIZED (CR) FISHERY—Continued

Code CR Fishery Boundary Description 

BST Bering Sea Tanner crab (Chionoecetes 

bairdi)

In waters of the EEZ east of the maritime Boundary Agreement 

Line as that line is described in the text of and depicted in the 

annex to the Maritime Boundary Agreement between the United 

States and the Union of Soviet Socialist Republics signed in Washington, June 1, 1990, and as the Maritime Boundary Agreement 

Line as depicted on NOAA Chart No. 513 (6th edition, February 23, 

1991) and NOAA Chart No. 514 (6th edition, February 16, 1991) to 

171° W. long., and then south to 54°30′N. lat. with a southern 

boundary of 54°36′ N. lat.

BSS Bering Sea Snow crab (Chionoecetes opilio) In waters of the EEZ east of the maritime Boundary Agreement 

Line as that line is described in the text of and depicted in the 

annex to the Maritime Boundary Agreement between the United 

States and the Union of Soviet Socialist Republics signed in Washington, June 1, 1990, and as the Maritime Boundary Agreement 

Line as depicted on NOAA Chart No. 513 (6th edition, February 23, 

1991) and NOAA Chart No. 514 (6th edition, February 16, 1991) to 

171° W. long., and then south to 54°30′ N. lat. with a southern 

boundary of 54°36′ N.

BBR Bristol Bay red king crab (Paralithodes 

camtshaticus)

In waters of the EEZ with: 

(1) a northern boundary of 58°30′ N. lat.,

(2) a southern boundary of 54°36′ N. lat., and

(3) a western boundary of 168° W. long. and including all waters 

of Bristol Bay.

PIK Pribilof red king and blue king crab 

(Paralithodes camtshaticus and Paralithodes 

platypus)

In waters of the EEZ with: 

(1) a northern boundary of 58°30′ N. lat.,

(2) an eastern boundary of 168° W. long.,

(3) a southern boundary line from 54°36′ N. lat., 168° W. long., to 

54°36′ N. lat., 171° W. long., to 55°30′ N. lat., 171° W. long., to 

55°30′ N. lat., 173°30′ E. lat., and then westward to the maritime 

Boundary Agreement Line as that line is described in the text of and 

depicted in the annex to the Maritime Boundary Agreement between 

the United States and the Union of Soviet Socialist Republics signed 

in Washington, June 1, 1990, and as the Maritime Boundary Agreement Line as depicted on NOAA Chart No. 513 (6th edition, February 23, 1991) and NOAA Chart No. 514 (6th edition, February 16, 

1991).

SMB St. Matthew blue king crab (Paralithodes platypus)In waters of the EEZ with: 

(1) a northern boundary of 62° N. lat.,

(2) a southern boundary of 58°30′ N. lat., and

(3) a western boundary of the maritime Boundary Agreement Line 

as that line is described in the text of and depicted in the annex to 

the Maritime Boundary Agreement between the United States and 

the Union of Soviet Socialist Republics signed in Washington, June 

1, 1990, and as the Maritime Boundary Agreement Line as depicted 

on NOAA Chart No. 513 (6th edition, February 23, 1991) and NOAA 

Chart No. 514 (6th edition, February 16, 1991).

WAI Western Aleutian Islands red king crab 

(Paralithodes camtshaticus)

In waters of the EEZ with: 

(1) an eastern boundary the longitude 179° W. long.,

(2) a western boundary of the maritime Boundary Agreement Line 

as that line is described in the text of and depicted in the annex to 

the Maritime Boundary Agreement between the United States and 

the Union of Soviet Socialist Republics signed in Washington, June 

1, 1990, and as the Maritime Boundary Agreement Line as depicted 

on NOAA Chart No. 513 (6th edition, February 23, 1991) and NOAA 

Chart No. 514 (6th edition, February 16, 1991), and

(3) a northern boundary of a line from the latitude of 55°30′ N. 

lat., then west to the maritime Boundary Agreement Line as that line 

is described in the text of and depicted in the annex to the Maritime 

Boundary Agreement between the United States and the Union of 

Soviet Socialist Republics signed in Washington, June 1, 1990, and 

as the Maritime Boundary Agreement Line as depicted on NOAA 

Chart No. 513 (6th edition, February 23, 1991) and NOAA Chart No. 

514 (6th edition, February 16, 1991).

63312 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 2 TO PART 680—CRAB SPECIES CODES

Species 

Code Species Description 

900 Box Lopholithodes mandtii

910 Dungeness Cancer magister

921 Red king crab Paralithodes camtshaticus

922 Blue king crab Paralithodes platypus

923 Golden (brown) king crab Lithodes aequispinus

924 Scarlet king crab Lithodes couesi

931 Tanner crab Chionoecetes bairdi

932 Snow crab Chionoecetes opilio

933 Grooved Tanner crab Chionoecetes tanneri

934 Triangle Tanner crab Chionoecetes angulatus

940 Korean horsehair crab Erimacrus isenbeckii

951 Multispinus crab Paralomis multispinus

953 Verrilli crab Paralomis verrilli

TABLE 3A TO PART 680—CRAB

DELIVERY CONDITION CODES

(The condition of the fish or shellfish at the 

point it is weighed and recorded on the 

ADF&G fish ticket) 

Code Description 

01 Whole crab, live

79 Deadloss

TABLE 3B TO PART 680—CRAB

DISPOSITION OR PRODUCT CODES

Code Description 

80 Sections

95 Personal use - not 

sold

97 Other retained product (specify condition)

TABLE 4 TO PART 680—CRAB

PROCESS CODES

Process Code Description 

1 Fresh

18 Fresh/vacuum pack

2 Frozen

21 Frozen/block

22 Frozen/shatter pack

28 Frozen/vacuum pack

3 Salted/brined

6 Cooked

7 Live

0 Other (specify)

TABLE 5 TO PART 680—CRAB SIZE

Size Code Description 

1 Standard or large 

sized crab or crab 

sections.

2 Smaller size crab or 

crab sections, e.g., 

snow crab less than 

4 inches.

TABLE 6 TO PART 680—CRAB GRADE

Grade Code Description 

1 Standard or premium quality crab or 

crab sections.

2 Lower quality product, e.g., dirty 

shelled crab or a 

pack that is of lower 

quality than No. 1 

crab.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63313

TABLE 7 TO PART 680—ELIGIBILITY FOR INITIAL ISSUANCE OF CRAB QS BY CRAB QS FISHERY

Column A: Crab QS Fisheries 

Column B: Qualifying 

Years for CVO and 

CPO QS 

Column C: Qualifying 

Years for CVC and CPC 

QS 

Column D: Recent Participation Seasons for 

CVC and CPC QS 

Column E: Subset of 

Qualifying Years 

For each crab QS fishery the Regional Administrator shall calculate 

(see § 680.4(c)(2)):

CVO and CPO QS for 

any qualified person 

based on that person’s 

total legal landings of 

crab in each of the crab 

QS fisheries for any:

CVC and CPC QS for 

any qualified person 

based on that person’s 

legal landings on the 

State of Alaska fish ticket during:

In addition, each person 

receiving CVC or CPC 

QS, must have made at 

least one landing as recorded on a State of 

Alaska fish ticket in at 

least 2 of the last 3 fishing seasons in each of 

the crab QS areas as 

those seasons are described below:

The maximum number 

of qualifying years that 

can be used to calculate 

QS for each QS fishery 

are:

1. Eastern Aleutian Islands golden 

(brown) king crab (EAG) 5 years of the 5-year 

base period beginning 

on:

(1) September 1, 

1996 through December 

25, 1996;

(2) September 1, 

1997 though November 

24, 1997;

(3) September 1, 

1998 through November 

7, 1998;

(4) September 1, 

1999 through October 

25, 1999; and

(5) August 15, 2000 

through September 24, 

2000.

3 years of the 5-year 

base period beginning 

on:

(1) September 1, 

1996 through December 

25, 1996;

(2) September 1, 

1997 though November 

24, 1997;

(3) September 1, 

1998 through November 

7, 1998;

(4) September 1, 

1999 through October 

25, 1999; and

(5) August 15, 2000 

through September 24, 

2000.

(1) September 1 1999 

through October 25, 

1999.

(2) August 15, 2000 

through September 24, 

2000.

(3) August 15, 2001 

through September 10, 

2001.

5 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

2. Western Aleutian Islands golden 

(brown) king crab (WAG) 5 years of the 5-year 

base period beginning 

on:

(1) September 1, 

1996 through August 

31, 1997;

(2) September 1, 

1997 though August 31, 

1998;

(3) September 1, 

1998 through August 

31, 1999;

(4) September 1, 

1999 through August 

14, 2000; and

(5) August 15, 2000 

through March 30, 

2001.

3 years of the 5-year 

base period beginning 

on:

(1) September 1, 

1996 through August 

31, 1997;

(2) September 1, 

1997 though August 31, 

1998;

(3) September 1, 

1998 through August 

31, 1999;

(4) September 1, 

1999 through August 

14, 2000; and

(5) August 15, 2000 

through March 30, 

2001.

(1) September 1 1999 

through August 14, 

2000.

(2) August 15, 2000 

through March 28, 

2001.

(3) August 15 2001 

through March 30, 

2002.

5 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

63314 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 7 TO PART 680—ELIGIBILITY FOR INITIAL ISSUANCE OF CRAB QS BY CRAB QS FISHERY—Continued

Column A: Crab QS Fisheries 

Column B: Qualifying 

Years for CVO and 

CPO QS 

Column C: Qualifying 

Years for CVC and CPC 

QS 

Column D: Recent Participation Seasons for 

CVC and CPC QS 

Column E: Subset of 

Qualifying Years 

3. Bering Sea Tanner crab (BST)

4 years of the 6-year 

period beginning on:

(1) November 15, 

1992 through March 31, 

1993;

(2) November 1, 1993 

through November 10, 

1993;

(3) November 20, 

1993 through January 1, 

1994;

(4) November 1, 1994 

through November 21, 

1994;

(5) November 1, 1995 

through November 16, 

1995; and

(6) November 1, 1996 

through November 5, 

1996 and November 15, 

1996 through November 

27, 1996.

3 years of the 6-year 

period beginning on:

(1) November 15, 

1992 through March 31, 

1993;

(2) November 1, 1993 

through November 10, 

1993;

(3) November 20, 

1993 through January 1, 

1994;

(4) November 1, 1994 

through November 21, 

1994;

(5) November 1, 1995 

through November 16, 

1995; and

(6) November 1, 1996 

through November 5, 

1996 and November 15, 

1996 through November 

27, 1996.

in any 2 of the last 3 

seasons prior to June 

10, 2002 in the Eastern 

Aleutian Island golden 

(brown) king crab, 

Western Aleutian Island 

golden (brown) king 

crab, Bering Sea C. 

opilio crab, or Bristol 

Bay red king crab fisheries.

4 for CVO and CPO 

QS;and 3 for CVC and 

CPC QS.

4. Bering Sea snow crab (BSS)

4 years of the 5-year 

period beginning on:

(1) January 15, 1996 

through February 29, 

1996;

(2) January 15, 1997 

through March 21, 

1997;

(3) January 15, 1998 

through March 21, 

1998;

(4) January 15, 1999 

through March 22, 

1999; and

(5) April 1, 2000 

through April 8, 2000.

3 years of the 5-year 

period beginning on:

(1) January 15, 1996 

through February 29, 

1996;

(2) January 15, 1997 

through March 21, 

1997;

(3) January 15, 1998 

through March 21, 

1998;

(4) January 15, 1999 

through March 22, 

1999; and

(5) April 1, 2000 

through April 8, 2000.

(1) April 1, 2000 

through April 8, 2000.

(2) January 15, 2001 

through February 14, 

2001.

(3) January 15, 2002 

through February 8, 

2002.

4 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

5. Bristol Bay red king crab (BBR)

4 years of the 5-year 

QS base period beginning on:

(1) November 1, 1996 

through November 5, 

1996;

(2) November 1, 1997 

through November 5, 

1997;

(3) November 1, 1998 

through November 6, 

1998;

(4) October 15, 1999 

through October 20, 

1999; and

(5) October 16, 2000 

through October 20, 

2000.

3 years of the 5-year 

QS base period beginning on:

(1) November 1, 1996 

through November 5, 

1996;

(2) November 1, 1997 

through November 5, 

1997;

(3) November 1, 1998 

through November 6, 

1998;

(4) October 15, 1999 

through October 20, 

1999; and

(5) October 16, 2000 

through October 20, 

2000.

(1) October 16, 2000 

through October 20, 

2000.

(2) October 15, 2001 

though October 18, 

2001.

(3) October 15, 2002 

though October 18, 

2002.

4 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 63315

TABLE 7 TO PART 680—ELIGIBILITY FOR INITIAL ISSUANCE OF CRAB QS BY CRAB QS FISHERY—Continued

Column A: Crab QS Fisheries 

Column B: Qualifying 

Years for CVO and 

CPO QS 

Column C: Qualifying 

Years for CVC and CPC 

QS 

Column D: Recent Participation Seasons for 

CVC and CPC QS 

Column E: Subset of 

Qualifying Years 

6. Pribilof red king and blue king 

crab (PIK) 4 years of the 5-year 

period beginning on:

(1) September 15, 

1994 through September 21, 1994;

(2) September 15, 

1995 through September 22, 1995;

(3) September 15, 

1996 through September 26, 1996;

(4) September 15, 

1997 through September 29, 1997; and

(5) September 15, 

1998 through September 28, 1998.

3 years of the 5-year 

period beginning on:

(1) September 15, 

1994 through September 21, 1994;

(2) September 15, 

1995 through September 22, 1995;

(3) September 15, 

1996 through September 26, 1996;

(4) September 15, 

1997 through September 29, 1997; and

(5) September 15, 

1998 through September 28, 1998.

in any 2 of the last 3 

seasons prior to June 

10, 2002 in the Eastern 

Aleutian Island golden 

(brown) king crab, 

Western Aleutian Island 

golden (brown) king 

crab, Bering Sea C. 

opilio crab, or Bristol 

Bay red king crab fisheries, except that persons applying for an allocation to receive QS 

based on legal landings 

made aboard a vessel 

less than 60′ LOA at the 

time of harvest are exempt from this requirement.

4 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

7. St. Matthew blue king crab 

(SMB) 4 years of the 5-year 

period beginning on:

(1) September 15, 

1994 through September 22, 1994;

(2) September 15, 

1995 through September 20, 1995;

(3) September 15, 

1996 through September 23, 1996;

(4) September 15, 

1997 through September 22, 1997; and

(5) September 15, 

1998 through September 26, 1998.

3 years of the 5-year 

period beginning on:

(1) September 15, 

1994 through September 22, 1994;

(2) September 15, 

1995 through September 20, 1995;

(3) September 15, 

1996 through September 23, 1996;

(4) September 15, 

1997 through September 22, 1997; and

(5) September 15, 

1998 through September 26, 1998.

in any 2 of the last 3 

seasons prior to June 

10, 2002 in the Eastern 

Aleutian Island golden 

(brown) king crab, 

Western Aleutian Island 

golden (brown) king 

crab, Bering Sea C. 

opilio crab, or Bristol 

Bay red king crab fisheries.

4 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

8. Western Aleutian Islands red 

king crab (WAI) 3 years of the 4-year 

period beginning on:

(1) November 1, 1992 

through January 15, 

1993;

(2) November 1, 1993 

through February 15, 

1994;

(3) November 1, 1994 

through November 28, 

1994; and

(4) November 1, 1995 

through February 13, 

1996.

3 years of the 4-year 

period beginning on:

(1) November 1, 1992 

through January 15, 

1993;

(2) November 1, 1993 

through February 15, 

1994;

(3) November 1, 1994 

through November 28, 

1994; and

(4) November 1, 1995 

through February 13, 

1996.

in any 2 of the last 3 

seasons prior to June 

10, 2002 in the Eastern 

Aleutian Island golden 

(brown) king crab, 

Western Aleutian Island 

golden (brown) king 

crab, Bering Sea C. 

opilio crab, or Bristol 

Bay red king crab fisheries.

3 for CVO and CPO 

QS; and 3 for CVC and 

CPC QS.

TABLE 8 TO PART 680—INITIAL QS AND PQS POOL FOR EACH CRAB QS FISHERY

Crab QS Fishery Initial QS Pool Initial PQS Pool 

EAG - Eastern Aleutian Islands golden king crab 10,000,000 10,000,000

WAG - Western Aleutian Islands golden (brown) king crab 40,000,000 40,000,000

BST - Bering Sea Tanner crab C. bairdi 200,000,000 200,000,000

BSS - Bering Sea snow crab C. opilio 1,000,000,000 1,000,000,000

BBR - Bristol Bay red king crab 400,000,000 400,000,000

63316 Federal Register / Vol. 69, No. 209 / Friday, October 29, 2004 / Proposed Rules 

TABLE 8 TO PART 680—INITIAL QS AND PQS POOL FOR EACH CRAB QS FISHERY—Continued

Crab QS Fishery Initial QS Pool Initial PQS Pool 

PIK - Pribilof Islands red and blue king crab 30,000,000 30,000,000

SMB - St. Matthew blue king crab 30,000,000 30,000,000

WAI - Western Aleutian Islands red king crab 60,000,000 60,000,000

TABLE 9 TO PART 680—ELIGIBILITY FOR INITIAL ISSUANCE OF CRAB PQS BY CRAB QS FISHERY

Column A: For each crab 

QS fishery the Regional Administrator shall calculate: 

Column B: PQS for any qualified person based on that person’s total legal processing of crab in each of the 

crab QS fisheries for any... 

Eastern Aleutian Island golden (brown) king crab (EAG)4 years of the 4-year base period beginning on: 

(1) September 1, 1996 through December 25, 1996;

(2) September 1, 1997 though November 24, 1997;

(3) September 1, 1998 through November 7, 1998; and

(4) September 1, 1999 through October 25, 1999.

Western Aleutian Island 

golden (brown) king crab 

(WAG)

4 years of the 4-year base period beginning on: 

(1) September 1, 1996 through August 31, 1997;

(2) September 1, 1997 though August 31, 1998;

(3) September 1, 1998 through August 31, 1999; and

(4) September 1, 1999 through August 14, 2000.

Bering Sea C. bairdi crab 

(BST)

Equivalent to 50 percent of the total legally processed crab in the Bering Sea C. opilio fishery during the qualifying years established for the QS fishery; and 50 percent of the totally legally processed crab in the Bristol 

Bay red king crab fishery during the qualifying years established for that crab QS fishery.

Bering Sea C. opilio crab 

(BSS)

3 years of the 3-year period beginning on: 

(1) January 15, 1997 through March 21, 1997;

(2) January 15, 1998 through March 21, 1998; and

(3) January 15, 1999 through March 22, 1999.

Bristol Bay red king crab 

(BBR)

3 years of the 3-year QS base period beginning on: 

(1) November 1, 1997 through November 5, 1997;

(2) November 1, 1998 through November 6, 1998; and

(3) October 15, 1999 through October 20, 1999.

Pribilof Islands red and blue 

king crab (PIK)

3 years of the 3-year period beginning on: 

(1) September 15, 1996 through September 26, 1996;

(2) September 15, 1997 through September 29, 1997; and

(3) September 15, 1998 through September 28, 1998.

St. Matthew blue king crab 

(SMB)

3 years of the 3-year period beginning on: 

(1) September 15, 1996 through September 23, 1996;

(2) September 15, 1997 through September 22, 1997; and

(3) September 15, 1998 through September 26, 1998.

Western Aleutian Islands red 

king crab (WAI)

Equivalent to the total legally processed crab in the Western Aleutian Islands golden (brown) king crab fishery 

during the qualifying years established for that crab QS fishery.

[FR Doc. 04–24103 Filed 10–28–04; 8:45 am]

BILLING CODE 3510–22–S