31430 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

FDC date State City Airport FDC number SIAP

05/04/00 ....... TX Houston .................................. George Bush Intercontinental

Airport/Houston.

FDC 0/4632 ILS RWY 8, AMDT 18G.

This Replaces FDC 0/4292.

05/05/00 ....... ID Driggs ..................................... Driggs-Reed Memorial ........... FDC 0/4702 GPS-A, ORIG-A.

05/05/00 ....... IN Evansville ............................... Evansville Regional ................ FDC 0/4678 NDB OR GPS RWY 22,

AMDT 12.

05/05/00 ....... MO Fort Leonard Wood ................ Waynesville Regional Arpt at

Forney Field.

FDC 0/4721 GPS RWY 32, ORIG.

05/05/00 ....... OH Middletown ............................. Hook Field Muni ..................... FDC 0/4746 LOC RWY 23, AMDT 7D.

05/08/00 ....... IN Evansville ............................... Evansville Regional ................ FDC 0/4786 VOR OR GPS RWY 4, AMDT

5.

05/09/00 ....... GUA Agana ..................................... Guam Intl ................................ FDC 0/4825 GPS RWY 24R ORIG.

05/09/00 ....... IL Freeport .................................. Albertus .................................. FDC 0/4819 NDB RWY 6, ORIG-A.

05/09/00 ....... IL Freeport .................................. Albertus .................................. FDC 0/4820 LOC RWY 24, ORIG-A.

05/09/00 ....... IL Freeport .................................. Albertus .................................. FDC 0/4821 VOR OR GPS RWY 24,

AMDT 6A.

05/09/00 ....... MO Fredericktown ......................... Fredericktown Regional .......... FDC 0/4809 RNAV RWY 19, ORIG.

This replaces FDC 0/4021.

05/09/00 ....... MO Fredericktown ......................... Fredericktown Regional .......... FDC 0/4810 RNAV RWY 1, ORIG.

This replaces FDC 0/4054.

05/09/00 ....... MO Marshall .................................. Marshall Memorial Muni ......... FDC 0/4833 RNAV RWY 36, ORIG-A.

05/09/00 ....... MO Marshall .................................. Marshall Memorial Muni ......... FDC 0/4834 RNAV RWY 18, ORIG-A.

05/09/00 ....... WI Madison .................................. Dane County Regional-Truax

Field.

FDC 0/4827 ILS RWY 18, AMDT 7B

05/10/00 ....... CA Burbank .................................. Burbank-Glendale-Pasadena FDC 0/4849 NDB RWY 8 AMDT 2A.

This replaces FDC 0/4211 IN

TL00–11

[FR Doc. 00–12560 Filed 5–17–00; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 902

50 CFR Part 600

[Docket No. 980812215–0109–02; I.D.

072898D] 648–AK76

Magnuson-Stevens Act Provisions;

Fishing Capacity Reduction Program

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Interim final rule; request for

public comments.

SUMMARY: NMFS issues interim final

framework regulations specifying

procedures for requesting and

conducting fishing capacity reduction

programs (reduction programs). A

reduction program pays harvesters in a

fishery with too much fishing capacity

either to surrender their fishing permits

for that fishery or both to surrender all

their fishing permits and withdraw their

fishing vessels from all fishing.

Reduction costs can be paid by postreduction harvesters, taxpayers, or

others. The intent is to decrease excess

harvesting capacity, increase the

economic efficiency of harvesting, and

facilitate the conservation and

management of fishery resources in each

fishery in which NMFS conducts a

reduction program.

DATES: This interim final rule is

effective June 19, 2000. Comments must

be received on or before June 19, 2000.

ADDRESSES: Copies of the Regulatory

Impact Review may be obtained from

Michael L. Grable, Chief, Financial

Services Division, NMFS, 1315 EastWest Highway, Silver Spring, MD

20910–3282. Written comments should

be sent to Michael L. Grable at the above

address. Comments also may be sent,

via facsimile, to (301) 713–1306. NMFS

will not accept comments sent by e-mail

or the Internet. Comments involving the

reporting burden estimates or any other

aspects of the collection of information

requirements contained in this interim

final rule should be sent to both Michael

L. Grable and to the Office of

Information and Regulatory Affairs,

Office of Management and Budget

(OMB), Washington, D.C. 20503 (ATTN:

NOAA Desk Officer).

FOR FURTHER INFORMATION CONTACT:

Michael L. Grable,

(301) 713-2390.

SUPPLEMENTARY INFORMATION:

Background

Many U.S. fisheries have excess

fishing capacity. Excess fishing capacity

decreases earnings, complicates

management, and imperils conservation.

To provide for fishing capacity

reduction programs, Congress amended

the Magnuson-Stevens Fishery

Conservation and Management Act

(Magnuson-Stevens Act) by adding

section 312(b)-(e) (16 U.S.C. 1861a(b)-

(e)). To finance reduction costs,

Congress amended Title XI of the

Merchant Marine Act, 1936 (Title XI),

by adding new sections 1111 and 1112.

The Title XI provisions involving

fishing capacity reduction loans have

been codified at 46 U.S.C. App. 1279f

and g.

This action adds a subpart L to 50

CFR part 600 establishing framework

regulations for requesting and

conducting fishing capacity reduction

programs. These framework regulations

were published as a proposed rule on

February 11, 1999 (64 FR 6854–6869),

with a public comment period that

ended on April 12, 1999.

While NMFS received numerous

comments on the proposed rule

(addressed in more detail below), it

believes further comment on the revised

capacity reduction referenda provisions

would be useful.

Comments on Proposed Rule and

Responses

NMFS received comments from 24

entities. Most of the comments are from

organizations that represent the views of

many parties. All but one of the

comments supported fishing capacity

reduction, although many comments

disagreed with some aspects of the

proposed rule. The following

summarizes the comments and gives

NMFS’ responses.

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31431

Comment Issue 1: Five comments

addressed interest rates for loans

financing capacity reduction costs.

Three comments said that a reduction

loan interest rate 2 percent higher than

the interest cost for borrowing loan

capital from the U.S. Treasury is

unnecessary, burdensome, and

counterproductive.

One comment said that the interim

final rule should state whether the

reduction loan interest rate is fixed or

adjustable and that the interest rate

projected for reduction planning

purposes can change before reduction

implementation.

One comment said that there should

be no interest prepayment penalties.

Response: A reduction loan interest

rate 2 percent higher than NMFS’

interest cost is required by the statute

(46 U.S.C. App. 1279g).

Reduction loan interest rates depend

on prevailing yields on comparable

maturity Treasury obligations at the

time the U.S. Treasury Department

establishes the interest rate NMFS must

pay on loan capital borrowed from the

U.S. Treasury. The actual interest rate

NMFS charges for a specific reduction

loan could be higher or lower than the

interest rates projected for reduction

planning purposes. The projection of an

interest rate could occur many months

before the disbursement of reduction

loan funds. The interim final rule

revises the proposed rule to more fully

address this issue (see § 600.1012(b) and

(c) and the definition of ‘‘Treasury

percentage’’ in § 600.1000).

All reduction loan interest rates are

fixed rather than adjustable. There is no

prepayment penalty.

Comment Issue 2: Ten comments

involved the reduction program process.

Six comments said that referenda

about industry fee systems should occur

earlier in the reduction process. Most

believed that, until referenda first

demonstrate the fishing industry’s

willingness to pay for financed

reduction programs, fishery

management councils (FMCs) will be

reluctant to process fishery management

plan (FMP) amendments

complementing reduction programs and

industry will be reluctant to submit

reduction bids. Some also believed that

industry will be reluctant to prepare

business plans until after successful

referenda.

Three comments said that the

reduction process would be shorter if all

its components were concurrent.

One comment said that the process for

reduction loans should be kept as

simple as possible, or the fishing

industry will seek subsidized reduction

programs rather than financed ones.

Two comments said that pre-bidding

referenda should involve ranges of

projected reduction results, with a

minimum acceptable level.

Response: NMFS based the proposed

rule’s process for financed reduction

programs on two concepts. First,

industry reduction proponents and an

FMC should demonstrate their

commitment to a reduction program by

establishing, at the time of making a

reduction program request, everything

necessary for prompt and reliable

reduction program completion. Second,

reduction bidding results need to be

known before a referendum asks postreduction harvesters to commit

themselves to repaying a reduction loan.

NMFS acknowledges that FMCs may

be reluctant to invest the time and

resources necessary to prepare and

process FMP reduction amendments,

and industry may be reluctant to submit

reduction bids, unless referenda have

first demonstrated the industry’s

willingness to pay for financed

reduction programs. The interim final

rule revises the proposed rule in many

places to better address these concerns

(see, particularly, § 600.1010).

The interim final rule provides for

pre-bidding referenda and, if necessary,

a post-bidding referendum as well. The

necessary pre-bidding referendum can

occur at any time after an FMC requests

a reduction program and before NMFS

proposes a plan and regulations to

implement the program. Each prebidding referendum is based on a

reduction loan amount not greater than

the maximum specified in the business

plan being sufficient to reduce at least

the minimum amount of fishing

capacity specified in the business plan.

A post-bidding referendum occurs only

if the maximum reduction loan amount

is insufficient to reduce at least the

minimum amount of fishing capacity.

If an initial pre-bidding referendum

occurs before the FMC adopts any FMP

reduction amendment necessary, the

referendum is based on the FMP

reduction amendment that the business

plan specifies. If afterwards, the

referendum is based on the FMP

reduction amendment that the FMC

adopts.

If the initial pre-bidding referendum

is successful, the reduction process

proceeds. If the referendum precedes

any FMP reduction amendment

necessary, a second pre-bidding

referendum is required if, in NMFS’

judgment, the adopted FMP reduction

amendment differs materially from the

FMP reduction amendment that the

business plan specifies. A material

difference would, for example, be a

post-reduction harvesting allocation for

the harvesters who must repay a

reduction loan that is less than the

allocation specified in the business

plan. The second pre-bidding

referendum is to determine whether the

referendum voters approve an industry

fee system despite any such material

difference.

If the initial pre-bidding referendum

is unsuccessful, the reduction process

then either ceases or is suspended

pending an appropriate amendment of

the business plan.

The interim final rule requires the

business plan to specify the maximum

amount of a reduction loan and the

minimum amount of fishing capacity

this must be sufficient to reduce. The

interim final rule also requires the

business plan to provide guidance about

when pre-bidding referenda should

occur.

Under the interim final rule, a

reduction request from an FMC based

on a business plan serves as the FMC’s

endorsement, in principle, of all aspects

of the business plan that depend on the

FMC’s action (see § 600.1003(g)).

Endorsement in principle does not,

however, mean that the FMC will

eventually vote to recommend

implementing the business plan’s

concept of an FMP reduction

amendment. Implementing any FMP

reduction amendment necessary

remains subject to all the requirements

applicable to all other FMP

amendments. Endorsement in principle

merely means that the FMC has taken

whatever action the FMC deems

necessary to endorse the business plan

(including the business plan’s proposed

FMP reduction amendment) by

requesting NMFS to initiate a reduction

program based on the business plan.

Subsequent consideration, in

accordance with the ordinary

Magnuson-Stevens Act process, of the

FMP reduction amendment may result

either in no FMP amendment or one

that differs from the business plan

specifications.

Nevertheless, an FMC may not make

a reduction request based on a business

plan that the FMC does not endorse in

principle. If an FMC cannot endorse the

business plan in principle, the FMC

should not make a reduction request.

If reduction bidding achieves, with a

reduction loan not greater than the

maximum amount that the business

plan specifies, at least the minimum

amount of fishing capacity reduction

that the business plan specifies, then a

post-bidding referendum does not

occur. A post-bidding referendum

occurs only if bidding does not achieve

at least the minimum reduction for not

more than the maximum reduction loan.

31432 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

Any necessary post-bidding referendum

is to determine whether the referendum

voters approve an industry fee system

for a reduction less than the minimum.

This pre- and post-bidding approach

should solve several problems. First, the

approach should solve the problem of

an FMC not wanting to make a large

time and resource investment in an FMP

reduction amendment without

assurance that the industry is willing to

repay a reduction loan. The business

plan’s survey (§ 600.1003(n)(12) in the

interim final rule) of potential

referendum voters should provide an

FMC with enough assurance for the

FMC to make a reduction request based

upon that business plan. A successful

pre-bidding referendum reinforces this

assurance before an FMC invests time

and resources in an FMP reduction

amendment.

Second, allowing a second prebidding referendum should solve the

problem of an actual FMP reduction

amendment that differs materially from

the FMP reduction amendment

specified in the business plan.

Third, allowing a post-bidding

referendum should solve the problem of

reduction bidding results that do not

achieve at least the minimum amount of

fishing capacity reduction that the

business plan specifies for a reduction

loan whose principal amount is not

greater than the maximum that the

business plan specifies.

Finally, the approach eliminates the

need for a linear processing sequence

that precludes concurrent work on

different parts of the reduction process.

The revision allows the FMP reduction

amendment process to proceed

concurrently with the rest of the

reduction process that occurs before

NMFS proposes a plan and regulations

to implement a reduction program. All

other components of the reduction

process, up to NMFS’ publication of a

plan and regulations implementing each

reduction program, may now occur

before an FMC prepares and processes,

and NMFS approves, an FMP reduction

amendment. The FMP reduction

amendment must still, however, be in

place before NMFS proposes the

reduction plan and implementing

regulations.

A completed business plan, however,

remains essential both to an FMC’s

reduction request and the pre-bidding

referendum that follows. Without a

completed business plan, the FMC

cannot fully know what it is endorsing

in principle, NMFS does not fully know

what the FMC and the industry is

requesting, and referendum voters do

not fully know for what they are voting.

The interim final rule requires that

the business plan specify the maximum

reduction cost and the minimum

reduction that must be achieved for that

cost. This achieves the same result as

specifying ranges of projected reduction

results, with a minimum acceptable

level.

Comment Issue 3: Five comments

involved payment and collection of the

reduction loan repayment fee.

All 5 comments, to one degree or

another, said that the proposed rule’s

fee payment and collection provisions

are too costly, burdensome, or

complicated.

One comment said that fish buyers in

California, Washington, and Oregon

collect other fees for state and industry

groups, and that the interim final rule

should allow the payment and

collection of the reduction loan

repayment fee to conform to established

regional practices.

One comment said that the fee

payment and collection provisions

provide an incentive for ‘‘kickbacks’’

based on misreported fish deliveries,

and that this could change the

assumptions upon which accurate catch

reporting depends.

One comment said that these

provisions do not accommodate fish

buyers paying for fish on a periodic,

rather than a trip, basis.

One comment said that collecting the

fee that repays reduction loans is not the

fish buyers’ business, and that the fish

buyers’ cost of collecting the fee could

itself be considered an illegal fee under

the Magnuson-Stevens Act.

One comment said that, because bank

rules about interest bearing accounts

vary widely from state to state, some

fish buyers might be able to offset some

fee collection costs by interest earnings

while others might not. The comment

said that this violates section 301(a)(4)

of the Magnuson-Stevens Act.

One comment said that fee collection

audits are unrestricted.

One comment said that fish buyers are

the enforcers of fee collection, without

protection against fish sellers who might

sue them. If a fish buyer deducts the fee

over a fish seller’s protest, the fish buyer

risks the fish seller’s legal action. Fish

buyers refusing to buy fish from fish

sellers who refuse to pay the fee (the

alternative to deducting the fee over the

fish seller’s protest) is inconsistent with

the business of buying fish.

One comment said that the proposed

rule’s provision about state

confidentiality requirements not

preventing NMFS’ access to fish tickets

places fish buyers in an impossible

position.

One comment said that many fish

buyers will be unaware of their fee

collection responsibilities.

Response: The proposed rule is a

framework rule involving matters

common to all reduction programs.

Some aspects of a framework rule will

apply, without exception, to all

reduction programs. Other aspects of the

framework rule may be inappropriate

for application to some reduction

programs in some reduction fisheries.

Nevertheless, these aspects provide a

framework against which everyone can

measure the circumstances of different

reduction programs in different

reduction fisheries. The rule’s fee

collection, deposit, disbursement,

accounting, record keeping, and

reporting procedures are of the latter

type. § 253.27(q)(10), § 253.36(f), and

§ 253.37(h) of the proposed rule provide

sufficient opportunity for approaches in

each reduction program different from

the framework approach. Nevertheless,

the interim final rule revises the

proposed rule to require business

planners to consult with fish buyers

before including in their business plan

any special circumstances in their

reduction fishery that might require

some fee provisions different from the

framework provisions (see § (n)(9)).

Thus, the interim final rule provides

opportunity for reduction program to

accommodate the circumstances of, and

practices, in different fisheries as long

as accommodation does not jeopardize

the intent and purpose of the framework

rule provisions.

There are substantial penalties for

misreporting catches and otherwise

failing to pay and collect the fees due.

The rule’s fee accounting and reporting

provisions require documentation that

provides ample audit opportunity, and

NMFS intends to audit sufficiently to

ensure compliance.

NMFS believes the time at which fish

sellers deliver fee fish to fish buyers is

the most appropriate time for the fish

sellers to pay and the fish buyers to

collect the fee. The interim final rule,

however, revises the proposed rule to

provide for paying and collecting fees

on bonuses at the time the bonuses first

become known rather than at the time

the fish sellers deliver the fee fish

involving the bonuses to fish buyers (see

§ 600.1013(c)(2)).

The Magnuson-Stevens Act requires

fish buyers to collect the fee. Interest

earnings on collected fee revenues

might allow, depending on state

banking regulations, some fish buyers to

offset some of the costs of discharging

this statutory obligation.

A reduction loan can involve up to

$100 million repaid on a incidental

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31433

basis amortized over 20 years by many

fish sellers, and collected by many fish

buyers, as a small percentage of variable

revenue from many fishing trips. This

loan collection environment is

susceptible to considerable

nonperformance and fraud. Due

diligence requires audit and, where

necessary, enforcement.

Auditing is not, however,

unrestricted. The rule restricts audits to

those ‘‘reasonably necessary...to ensure

proper fee payment, collection, deposit,

disbursement, record keeping, and

reporting.’’ The rule also restricts audits

to ‘‘reasonable times and places...’’

NMFS does not intend any greater

auditing burden than reasonable due

diligence requires for the proper

repayment of reduction loans. Audits

may either be random (deterrent) or

triggered by circumstances that indicate

fee payment and collection activities

inconsistent with this rule’s

requirements, but will not be more

frequent or burdensome than needed to

fulfill due diligence.

NMFS does not anticipate that fish

sellers will violate these regulations by

refusing to pay the fee. If any do, this

does not excuse fish buyers from failing

to comply with these regulations, either

by collecting the fee over the fish

seller’s protest or by refusing to buy fish

from fish sellers from whom fish buyers

are unable to collect the fee as the

Magnuson-Stevens Act requires.

The interim final rule does not

contain the proposed rule’s provision

about fish tickets and state

confidentiality requirements.

The interim final rule requires fish

buyers to maintain the records and to

submit the reports specified in

§ 600.1014(d) (or whatever alternative

records and reports might be specified,

under § 600.1014(j), in the

implementation regulations for each

reduction program). If landing records

that a state requires contain some or all

of the data that § 600.1014(d) requires

and state confidentiality provisions do

not prevent NMFS’ access to the records

maintained for the state, then fish

buyers can use those records to meet

appropriate portions of the

§ 600.1014(d) requirements. If, however,

state confidentiality provisions make

those records unavailable to NMFS,

then fish buyers will be required to

maintain separate records that meet the

requirements of § 600.1014(d).

Where it becomes necessary to audit

the reports that fish buyers submit in

compliance with § 600.1014(d), trip

tickets (or equivalent accounting records

establishing the pounds of fee fish

purchased and the price paid) are

essential audit documentation. If, for

any reason, any state law or regulation

makes it illegal for fish buyers to keep

separate records that involve some or all

of the same data as the landing records

that the fish buyers keep for state

purposes, then a financed reduction

program will not be possible unless

there is a change in the state law or

regulations to give NMFS access to the

records necessary for administration of

reduction loans. The interim final rule

revises the proposed rule accordingly

(see § 600.1003(n)(11)(i) and

§ 600.1014(f) and (g)).

Existing regulations require many fish

buyers to have dealer permits, so NMFS

often knows who the authorized fish

buyers are. The rule also requires each

business plan to include information

about fish buyers who can, after

reduction, reasonably be expected to

have fee collection responsibilities. The

rule requires NMFS to notify, both by a

Federal Register notice and by mailed

notification to fish buyers of whom

NMFS is aware, all fish buyers about

their fee collection responsibilities.

Comment Issue 4: Four comments

involved exempting reduction requests

preceding publication of the proposed

rule from some aspects of the interim

final rule.

All four comments generally said that

various parties had expended much

effort and expense on two reduction

requests that substantially preceded

NMFS’s publishing the proposed rule.

The proposed rule required the FMCs

and the business planners for these two

reduction requests to start at the

beginning of a process of which they

were unaware before NMFS published

the proposed rule. Thus, these parties

would have to expend additional time

and money for the sole purpose of

resubmitting their requests to conform

with the interim final rule. This may be

inequitable, because NMFS assured the

parties involved that the lack of a

proposed rule would not deter NMFS

from processing their reduction requests

as far as possible without a interim final

rule. The interim final rule should

ensure expeditious consideration of

these two reduction requests.

Response: On November 27, 1997, the

Pacific FMC submitted a request for a

financed reduction program in the

fishery for Pacific coast groundfish

(limited entry trawl fishery). On October

10, 1997, the North Pacific FMC

submitted a request for a financed

reduction program in the fishery for

Bering Sea and Aleutian Islands king

and tanner crab. Industry proponents

have since prepared business plans for

each of these requests. The business

planners and the FMCs have already

expended considerable effort on these

business plans and reduction requests.

Both requests and their acceptances

preceded, by many months, the

publication of the proposed rule. NMFS

agrees that it is counterproductive to

now require the FMCs to resubmit these

two reduction requests. The FMCs do

not, consequently, have to resubmit

these two reduction requests in

accordance with the process in the

interim final rule. However, the

business planners and the FMCs will

have to submit some additional

information required by the interim

final rule. After review of both plans

and the interim final rule, NMFS will

specify this additional information.

Comment Issue 5: Six comments

concerned proposed rule provisions that

allow financed reduction programs to

involve only fishing permits in the

reduction fishery, rather than requiring

reduction programs to involve all

fishing permits held by reduction

program participants. These comments

were evenly divided between

supporting and opposing these

provisions.

Three comments supported the

proposed rule provisions. These

comments generally said that it is

impractical and unreasonable to require

post-reduction harvesters in reduction

fisheries to pay for the cost of reducing

fishing permits in non-reduction

fisheries, and otherwise agreed with the

proposed rule’s preamble discussion of

this aspect.

Three comments opposed the

proposed rule provisions. These

comments generally said that reducing

only the fishing permits in the reduction

fishery causes reduction program

fishing vessels to shift their effort from

the reduction fishery to any nonreduction fisheries for which the vessels

also have fishing permits. The goal of

each reduction program should be

removing the fishing capacity involved

in a reduction program from all fishing

rather than just fishing in the reduction

fishery. To enable this result, one of

these comments said that the interim

final rule must define the term ‘‘fishery’’

differently than the Magnuson-Stevens

Act does.

One comment said that the proposed

rule provisions are inconsistent with the

objective in section 312(b)(2) of the

Magnuson-Stevens Act because the

proposed rule provisions merely shift

reduction costs to other fisheries in

which reduction participants’ vessels

might also have fishing permits rather

than obtaining the maximum sustained

reduction in fishing capacity at the least

cost.

Another comment said that all

reduction programs should involve

31434 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

analysis of the reduction programs’

impact on non-reduction fisheries and

that it is unacceptable and contrary to

the Magnuson-Stevens Act for

improvements in a reduction fishery to

occur at the expense of any other

fishery.

Response: The Magnuson-Stevens Act

authorizes conducting reduction

programs, like fishery management

plans, on a fishery-by-fishery basis.

Each reduction program must occur

within a fishery that meets the

Magnuson-Stevens Act’s definition of

‘‘fishery’’. This requires each reduction

program to occur in ‘‘one or more stocks

of fish which can be treated as a unit for

purposes of conservation and

management and which are identified

on the basis of geographical, scientific,

technical, recreational, and economic

characteristics...’’ and to involve

‘‘fishing for such stocks...’’ The objective

in section 312(B)(2) of the MagnusonStevens Act relates to each reduction

program in each reduction fishery.

While section 312(b)(2)(A) of the

Magnuson-Stevens Act authorizes

reductions that include both fishing

permit revocations and fishing vessel

scrappings (or title restrictions that

prevent future fishing), section

312(b)(2)(B) also authorizes reductions

that are restricted to fishing permit

revocations alone.

In a financed program, the postreduction harvesters in the reduction

fishery are paying for fishing capacity

reduction. They are retiring excess

capacity in their fishery. The

Government is simply lending them the

money to do this. NMFS should not

require a borrower composed of postreduction harvesters to spend any of the

borrower’s reduction loan proceeds on

reducing fishing capacity that the

borrower does not want to reduce. This

includes reducing capacity in nonreduction fisheries, which benefits

parties other than the borrower.

In a subsidized program, however, the

taxpayers are paying the cost of

reducing fishing capacity. The taxpayers

can choose, through their Government,

the fishing capacity reduction

alternative that provides the broadest

fishery conservation and management

benefit. This may include withdrawing

fishing vessels (either by scrapping

them or imposing title restrictions that

prevent their fishing) and revoking all

fishing permits associated with the

scrapped vessels that are not

individually transferable. Individually

transferable fishing permits in nonreduction fisheries could not, however,

be revoked as part of such a reduction

program (because these permits may be

used by vessels other than the vessels

whose fishing is prevented by scrapping

or title restriction). Revoking

individually transferable fishing permits

in non-reduction fisheries would

require separate reduction programs in

the non-reduction fisheries involved.

A financed reduction program is, in

essence, a contribution from postreduction harvesters in a reduction

fishery to fisheries conservation and

management in that fishery. It is a

contribution that is in the best economic

interest of the post-reduction harvesters,

but, nonetheless, it is their voluntary

contribution. NMFS should not limit the

opportunities for satisfying the statutory

purposes by requiring post-reduction

harvesters willing to repay the cost of

buying and retiring fishing permits in

their reduction fishery to also pay the

cost of buying and retiring fishing

permits in non-reduction fisheries. It is

not in the taxpayers’ interest to do so,

because the net effect may be to limit

most reduction programs to those whose

entire cost the taxpayers bear. This is

true because harvesters in reduction

fisheries are generally unlikely to

approve industry fee systems in

reduction fisheries for repaying

reduction loans that benefit harvesters

in non-reduction fisheries.

In the interim final rule’s revision of

the proposed rule, business planners

have the option of reducing only fishing

permits in the reduction fishery or both

doing that and withdrawing fishing

vessels by scrapping or title restriction.

The latter enables the revocation of all

permits, except individually

transferrable ones in non-reduction

fisheries, associated with withdrawn

vessels. Although business planners

may voluntarily choose to withdraw

fishing vessels, either by scrapping them

or imposing title restrictions that

prevent their fishing, FMCs may not

require business planners to do so.

There is, however, one exception

where a financed reduction program

should always include the reduction of

fishing permits that involve species

other than those in the reduction

fishery. That exception is fishing

permits that merely allow the incidental

catch of non-reduction species during

directed fishing for reduction species.

Once the directed fishing permits are

bought and retired, the incidental

fishing permits are of no further use. In

addition to being useless, the incidental

fishing permits were always a corollary

of the directed fishing permits, and

should be revoked along with the

directed fishing permits. Accordingly,

the interim final rule revises the

proposed rule in this respect (see

§ 600.1011(d)).

The interim final rule also revises the

proposed rule to require business

planners and FMCs to consider the

effect on non-reduction fisheries of

financed reduction programs that

involve only fishing permits in the

reduction fishery (see § 600.1003(l) and

§ 600.1003(n)(9)).

NMFS notes that there may be other

potential alternatives to deal with this

situation. One alternative might be

combining fisheries for fishery

conservation and management

purposes, which might then allow a

financed reduction program to relate to

the combined fishery rather than just to

one of the fisheries. Another alternative

might be conducting a separate financed

(indeed, even subsidized) program in a

fishery that a reduction program in

another fishery affects. Both these

potential alternatives would avoid one

group of post-reduction harvesters

paying for another group’s benefit.

Comment Issue 6: Two comments

concerned post-reduction fish

allocations in financed reduction

programs that do not involve all the

harvesters in the reduction fishery. For

example, say, a reduction fishery

involves both longline and pot gear, but

the financed reduction program in that

reduction fishery involves only fishing

permits for the longline gear.

One comment supported, and one

comment opposed, allocations of this

type and the proposed rule’s treatment

of this issue. The supporting comment

said that allocation of the post-reduction

resource protects the investment of the

post-reduction harvesters who must

repay a reduction loan as well as the

interest as the Federal Government in

ensuring the reduction loan’s

repayment. The opposing comment said

that the allocation might damage the

operators of non-reduction fishing gear

who may have been less responsible for

overfishing and, thus, creating the crisis

in the fishery to which the financed

reduction program relates.

Response: NMFS believes postreduction allocation is essential in

financed reduction programs that

involve fewer than all the harvesters in

a reduction fishery.

Assume that a fishery is composed of

‘‘A’’ gear fishermen and ‘‘B’’ gear

fishermen, each group has a prereduction allocation equal to 50 percent

of the fishery’s total allowable catch,

and the ‘‘A’’ gear fishermen encumber

themselves with a 20-year debt to pay

for buying and retiring 50 percent of the

‘‘A’’ gear fishing permits. Unless their

post-reduction allocation stays at 50

percent of the fishery’s total allowable

catch, there is no economic incentive for

the ‘‘A’’ gear fishermen to pay for

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31435

buying half of the pre-reduction ‘‘A’’

gear fishing permits. Similarly, neither

does the government have the requisite

assurance that up to 5 percent of the

‘‘A’’ gear fishermen’s post-reduction trip

proceeds will be sufficient to repay the

reduction loan over a 20-year period.

Without post-reduction allocations,

there is little economic incentive either

for the reduction borrowers to borrow or

for the reduction lender to lend, and the

taxpayers may, consequently, be called

upon to pay for most reduction

programs of this type.

Moreover, it is inequitable for ‘‘A’’

gear fishermen to pay for a benefit that

‘‘B’’ gear fishermen receive without

payment. Business plans for, and FMPs

complementing, financed reduction

programs that involve only one of

several gear types within a reduction

fishery must adequately address this

critical issue sufficiently to provide

economic incentive both for reduction

borrowers and the reduction lender.

Financed reduction programs cannot

usefully address the possibility that

allocations to gear operators who some

perceive as less responsible harvesters

may have impacted allocations to other

gear operators who some perceive as

more responsible harvesters.

Comment Issue 7: Two comments

involved consultation with fishing

communities and other interested

parties during reduction program

development. One comment pointed

out, in the context of reduction

programs that involve only fishing

permits in a reduction fishery, that the

law requires this consultation. The other

comment said that, if NMFS consults

with conservation organizations (and

other interested parties who are,

presumably, not directly involved in the

reduction fishery), ‘‘those entities must

have their own substantiated fishery

and economic data base [sic] to be

considered a valid consulting

participants [sic], or we will challenge

their participation. No more rhetoric of

how many people they represent, they

will deal in facts and not personal

agenda generalities.’’

Response: The statutory reduction

provisions require consultation ‘‘as

appropriate, with Councils, Federal

agencies, State and regional authorities,

affected fishing communities,

participants in the fishery, conservation

organizations, and other interested

parties throughout the development and

implementation of any...’’ reduction

program.

Comment Issue 8: One comment

addressed the potential for the eventual

replacement of the fishing capacity that

reduction programs remove from

reduction fisheries (and other comments

also indirectly involved this issue). The

comment expressed concern about the

potential for post-reduction fishing

capacity to gradually expand through

the post-reduction adoption of new

technology and the pre-reduction

existence of latent fishing capacity. This

comment said that analysis of the

Fishing Capacity Reduction

Demonstration Program and the Fishing

Capacity Reduction Initiative in the

Northeast multispecies fishery suggests

that the existence of significant latent

fishing capacity will result in little or no

long-term reduction in the multispecies

fishery’s fishing capacity.

Response: The reduction programs in

the Northeast multispecies fishery were

authorized under the Interjurisdictional

Fisheries Act rather than under the

Magnuson-Stevens Act. The

Interjurisdictional Fisheries Act does

not address the issue involved in this

comment, but the reduction provisions

of the Magnuson-Stevens Act do. The

reduction provisions of the MagnusonStevens Act require FMPs for reduction

fisheries to prevent the replacement of

fishing capacity removed by the

program through a moratorium on new

entrants, restrictions on vessel upgrades,

and other effort control measures, taking

into account the full potential fishing

capacity of the fleet (16 U.S.C.

1861a(b)(1)(B)(i)).

The proposed rule addresses this

statutory provision by requiring each

reduction request (and, in the instance

of financed reduction programs, each

business plan) to demonstrate how the

FMP complies with this statutory

provision or will comply with it after an

FMP reduction amendment. The interim

final rule continues this requirement.

Comment 9: NMFS should evaluate

the efficacy of each reduction program

two years after the reduction program’s

implementation. The evaluation should

help identify areas where capacity leaks

back into the fishery and will help in

designing future reduction programs. It

will take a few more reduction programs

to iron out the difficulties in designing

efficient reduction programs, and postprogram evaluation will be critical.

Response: NMFS agrees. NMFS will

include post-reduction evaluations as

part of the SAFE reports under 50 CFR

600.315(e).

Comment 10: Reduction is an

extremely valuable tool to remove

capital from fisheries in a rational and

orderly fashion. Many of the proposed

rule’s elements will allow capacity

reduction to move forward.

Response: NMFS agrees.

Comment 11: The proposed rule does

not define ‘‘capacity’’. If this is

intentional in order to provide

flexibility in constructing reduction

programs this should be stated. The

proposed rule’s preamble uses ‘‘excess

capacity’’, but does not define the term.

‘‘Excess capacity’’ could mean either

that there are more vessels than

necessary for maximum economic

efficiency or that the capacity exceeds

the resource’s ability to support the

capacity. The use of ‘‘full potential

fishing capacity’’ highlights this

problem. Defining these terms has

enormous implications for interpreting

the regulations and these definitions

should undergo public comment before

their adoption. Alternatively, the

interim final rule should state that

definitions for these terms will be

included in the program

implementation regulations.

Response: The term ‘‘excess capacity’’

did not appear in the proposed rule (the

term appeared only once in the

proposed rule’s preamble).

The statutory term ‘‘full potential

fishing capacity’’ appeared once in the

proposed rule (in the definition of the

term ‘‘non-replacement requirement’’)

and once in the proposed rule’s

preamble.

The appropriate context in which to

make distinctions between concepts like

‘‘more vessels in a fishery than are

necessary for maximum economic

efficiency’’ and ‘‘capacity in the

fishery...[exceeding] what the resources

can support’’ is implementation of the

Magnuson-Stevens Act’s provision that

authorizes a reduction program only if

the reduction program ‘‘is necessary to

prevent or end overfishing, rebuild

stocks of fish, or achieve measurable

and significant improvements in the

conservation and management of the

fishery.’’ Each reduction program must

meet one of these criteria. For the sake

of flexibility, NMFS does not qualify

these criteria further. Each reduction

request must make its best case on the

merits of the request’s own particulars.

Comment 12: ‘‘Reduction fishery’’

traditionally refers to fisheries that

convert fish to meal and/or oil.

Substitute ‘‘buyback fishery’’ for

‘‘reduction fishery’’.

Response: ‘‘Fishing capacity

reduction’’ is the operative statutory

term. NMFS chose, for brevity’s sake, to

define a fishery in which reduction is

proposed or occurs as a ‘‘reduction

fishery’’ rather than a ‘‘fishing capacity

reduction fishery’’. The interim final

rule defines the term ‘‘reduction

fishery’’ sufficiently to distinguish this

term from a fishery involving the

production of fish meal and oil.

Comment 13: The interim final rule

should ‘‘include criteria that will be

used to determine...’’ a reduction loan’s

31436 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

repayment period. A repayment period

can be longer than the maximum 5

percent repayment fee might otherwise

indicate.

Response: The amount annually

required to service debt is a function of

principal, interest, and the repayment

term. Business planners must propose

an annual reduction loan debt service

burden that post-reduction harvesters

are likely to be willing to undertake in

return for a finite reduction in fishing

capacity. Harvester referenda must

subsequently approve this. Subject to

the statutory constraints (maximum 5

percent fee and maximum 20-year

repayment period), NMFS will

accommodate each business plan’s debt

service proposal unless the

circumstances of the reduction program

involved clearly warrant doing

otherwise.

Comment 14: Failure to address how

in-kind compensation (e.g., dock space,

ice) affects the delivery value used to

calculate the reduction loan repayment

fee could result in ‘‘creative

reimbursement arrangements to avoid

fees.’’ The interim final rule should

avoid this result by addressing this

issue.

Response: The fee rate required to

repay reduction loans is applied to

‘‘delivery value’’. The proposed rule’s

definition of ‘‘delivery value’’ excludes

in-kind compensation because ‘‘delivery

value’’, as defined in the proposed rule,

is the ‘‘full, fair market value...in an

arm’s length transaction...’’ Full, fair

market value in an arm’s length

transaction cannot, by definition,

include in-kind compensation. In-kind

compensation cannot, consequently, be

used to avoid the fee. Nevertheless, the

interim final rule revises the proposed

rule’s definition of ‘‘delivery value’’ to

clarify that the term includes ‘‘the value

of in kind compensation or all other

goods or services exchanged in lieu of

cash.’’ (see the definition of ‘‘delivery

value’’ in § 600.1000).

Comment 15: The proposed rule’s

definition of ‘‘fee fish’’ requires fishing

vessels in a post-reduction fishery to

pay the reduction loan repayment fee on

fish harvested incidentally to the

targeted reduction species. The

definition of this term should allow

each reduction program to define the

‘‘fee fish’’ that will be used to calculate

the fee. Some fisheries may have an

incidental catch of ‘‘fee fish’’, and the

interim final rule should ‘‘clearly state

that incidental catches in non reduction

program fisheries are not subject to the

fee unless those fisheries are included

in the referendum for a financed

reduction program.’’

Response: The term ‘‘fee fish’’, as

defined in the interim final rule, means

all fish harvested from the reduction

fishery. The term fee fish excludes fish

harvested incidentally while fishing for

fish not included in the reduction

fishery. The term ‘‘reduction fishery’’, as

defined in the interim final rule, means

the fishery or portion of a fishery to

which a program applies. The reduction

fishery must specify each included

species, as well as any limitations by

gear type, size of fishing vessel,

geographic area, and any other relevant

factor. Except in extraordinary

instances, the interim final rule’s intent

is to limit fee fish to those that are

directly rather than incidentally

harvested.

Comment 16: The proposed rule

requires a reduction request to list all

parties who are authorized to fish in the

proposed reduction fishery and to

specify the catch allocated to those

parties for the past five years. The

proposed rule also requires a business

plan to analyze the proposed reduction

loan’s cost effectiveness based on the

best historical fishing revenue and

expense date available in the reduction

fishery. NMFS is a likely source for this

information, but these data are

considered confidential at the

individual fishing vessel level required

by the regulations. The regulations in 50

CFR 600 Subpart E state that this type

of information can only be released to

NMFS employees or contractors, state

employees, and Council staff or

contractors. Thus, business planners

will not have access to this information.

The interim final rule should address

this by requiring NMFS to provide, in

an aggregate form, the data business

planners need.

Response: The proposed rule intends

catch allocation data to be aggregate

data for all parties authorized to fish in

the reduction fishery rather than

individual data for each such party. The

interim final rule revises the proposed

rule to make this intent clearer (see

§ 600.1003(j) and § 600.1005(f)).

Section 253.27(q)(5)(1) of the

proposed rule merely requires that

business plans include the ‘‘Best

historical fishing revenue and expense

data (and any other relevant

productivity measures) available in the

reduction fishery.’’ This neither requires

these data to be provided at the

individual fishing vessel or fishing

permit level nor requires those data to

be identified with specific fishing

vessels or fishing permits. The interim

final rule revises this aspect of the

proposed rule to clarify that NMFS

seeks the ‘‘best and most representative

historical...data... available...’’ (see

§ 600.1003(n)(5)(l)).

NMFS does not know, in every fishery

that may become the subject of a

reduction request (which includes

fisheries managed by states), who may

have the best available data. NMFS may

have these data for some fisheries, but

may not have them for others. The

fishing industry itself generally is the

source of these data, and, if adequate

data have not been elsewhere gathered,

business planners must arrange to make

available sufficiently representative data

from the industry in order to make the

business planners’ case.

This aspect of the rule does not

require NMFS to violate data

confidentiality, and NMFS intends,

upon request, to make available to

business planners, in a way that does

not violate data confidentiality,

whatever useful data NMFS has.

Comment 17: The proposed rule

requires the FMCs to provide the names

and addresses of fishing permit holders

authorized to fish in a reduction fishery,

but NMFS (as the permitting authority)

has the most current information and

should supply the information itself.

Response: NMFS has these data for

fishing permits in Federal fisheries.

Nevertheless, the referenda aspect of the

statutory reduction provisions requires

NMFS, ‘‘in consultation with the

FMC...’’ to ‘‘identify, to the extent

practicable, and notify all permit or

vessel owners who would be affected by

the...’’ (16 U.S.C. App. 1861a) reduction.

The proposed rule was premised on the

assumption that an FMC would ask

NMFS for the data needed to complete

this aspect of a reduction request,

examine the data NMFS provided, and,

where necessary, consult with NMFS

about any aspect of the data before

confirming the data by including them

in a reduction request to NMFS. NMFS

continues to believe this is the most

appropriate approach. Moreover,

reduction programs can involve state, as

well as Federal, fisheries, and NMFS

may not have these data for fishing

permits in state fisheries.

The interim final rule revises the

proposed rule to clarify that NMFS is a

source of Federal fishing permit data

(see § 600.1003(i) and § 600.1005(e)).

Comment 18: The proposed rule

requires the FMCs to provide the names

and addresses of likely post-reduction

fish buyers, but NMFS has this

information in NMFS’ dealer permit

database and should, consequently,

remove this requirement.

Response: The proposed rule requires

business planners, not FMCs, to provide

this information (although FMCs must

include business plans with reduction

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31437

requests). NMFS may not always have

these data even for all Federal fisheries,

let alone state fisheries. Where NMFS

has these data, however, NMFS will be

pleased to supply the data to business

planners for their review, (where

appropriate) revision, and inclusion in

their business plans. Where NMFS does

not have these data, business planners

must produce the data for inclusion in

their business plans.

Comment 19: Business planners must

be able to gauge the amount of time

NMFS will take to implement reduction.

The regulations should specify a

maximum time for the agency to do this.

Response: NMFS will process

reduction requests as quickly as NMFS

can, but cannot specify time limits for

doing so.

Comment 20: Reduction amendments

to FMPs may not always be necessary to

accommodate reduction because ‘‘some

Councils may be able to adjust

management plans through a framework

adjustment rather than a full plan

amendment.’’ The interim final rule

should change ‘‘reduction amendment’’

to ‘‘reduction amendment or framework

adjustment.’’

Response: The interim final rule

revises the proposed rule’s definition of

the term ‘‘reduction amendment’’ to

include framework adjustments (see the

definition of this term in § 600.1000).

Comment 21: In some cases, latent

fishing permits may be held by parties

who do not own fishing vessels. The

basis of the referendum voter lists

should be explained (‘‘in particular,

whether it is based on vessels or

permits’’). The proposed rule ‘‘does not

state if a reduction program could

apportion voting rights based on

landings, permit categories, days-at-sea

usage, or other criteria.’’ Referenda

results ‘‘may require as much as onethird of the industry to fund a program

they oppose.’’ This could both be unfair

and make designing successful

reductions difficult. In a fishery where

the few catch most of the fish, the many

who catch few of the fish could force

the former into a reduction they oppose.

(The example given is a 100 permit

fishery where 20 percent of the fishing

permit holders catch 80 percent of the

fish). ‘‘The interim final rule should

clearly state how voting rights are

apportioned...[and should allow

apportionment] based on relative

criteria determined by the designers of

the program.’’ The proposed rule does

not specify what happens if an eligible

voter is inadvertently omitted. The

interim final rule should provide for an

appeal process prior to referendum

ballot distribution.

Response: Referenda voters under the

statutory reduction provisions are

‘‘permit or vessel owners who would be

affected by the program...’’ The rule

mirrors the statutory language by

including either fishing vessel owners

or fishing permit owners as potential

referenda voters. Nevertheless, because

reduction programs can occur only in

limited access fisheries, NMFS believes

referenda voters will always be those

who hold fishing permits at the time of

the referenda.

The proposed rule requires each

reduction implementation plan to

include the names and addresses of all

parties eligible to vote in a referendum.

The interim final rule, however, revises

the proposed rule to allow referenda

before reduction implementation plans.

This requires public comment about

voter eligibility to occur earlier in the

reduction process. Consequently, the

interim final rule also revises the

proposed rule to make the names and

addresses of eligible voters subject to

public comment by including them in

the Federal Register notice that NMFS

publishes when NMFS accepts a request

for a financed reduction program (see

§ 600.1003(i) and § 600.1004(a)).

During the proposed rule’s

formulation, NMFS considered the

possibility of apportioning referenda

votes according to various criteria.

NMFS believed, however, that the most

equitable approach in the greatest

number of cases is a one fishing permit/

one vote rule. NMFS still believes this.

NMFS believes that the concern in this

comment might be better addressed by

an FMC. This Council, by refusing to

request a reduction program (based on

a business plan that allows the many

who catch little to force a reduction of

their fishing permits on the few who

catch much) unless it appears to be in

the best conservation and management

interest of the reduction fishery and in

the best economic interest of all postreduction harvesters in the reduction

fishery. However, NMFS does not, for a

variety of reasons, anticipate that this

hypothetical situation will often occur.

Initiating a financed reduction program

requires NMFS, for example, to

determine that post-reduction harvesters

will be able to repay the reduction loan.

If, prospectively, the cost of buying 80

percent of the fishing permits that

produce 20 percent of the fish were so

high that the remaining 20 percent of

fishing permit holders could not, with

20 percent more fish to harvest,

reasonably afford to repay that cost over

20 years at a maximum fee limited to 5

percent of ex-vessel landings, then

NMFS could decide not to initiate the

reduction program.

Comment 22: The interim final rule

should address the impact of fishing

vessels or fishing permits being sold,

bankruptcies, and corporate

dissolutions during the interim between

bid acceptance and actual fishing

capacity reduction.

Response: Bids are irrevocable offers.

NMFS’ acceptance of bids creates

reduction contracts that entitle NMFS to

specific performance of the contract

obligations. This is as far as NMFS can

reasonably go to ensure that reduction

contracts culminate in the reduction

results upon which referenda are based.

NMFS will, as a matter of course, take

whatever legal action may be available

to NMFS to enforce specific

performance of reduction contracts, but

cannot predict the outcome of

hypothetical future events. NMFS

realizes that some circumstances (e.g.,

bankruptcy) could conceivably delay or

prevent NMFS’ enforcing specific

performance, but NMFS will have to

deal with these circumstances as they

present themselves during the conduct

of each reduction program.

Nevertheless, the interim final rule

revises the proposed rule to more

specifically address the impact of these

potential occurrences (see § 600.1011,

particularly § 600.1011(f) and (g)).

Comment 23: ‘‘There may be a long

period between bidding and actual

implementation of the program. While

at some point the bidders must commit

to participation...they should...[be able

to] withdraw up to the

point...referendum ballots are

prepared.’’

Response: The proposed rule requires

NMFS immediately after bid closing to

accept bids, notify bidders, and conduct

a referendum.

The proposed rule also requires

NMFS to tally all ballots and notify all

referendum voters, within seven

business days after the last day for

receipt of ballots, of the referendum

results.

Additionally, in response to other

comments about the proposed rule, the

interim final rule revises the proposed

rule to restrict post-bidding referenda to

situations in which bidding results are

insufficient for the maximum reduction

loan amount specified in the business

plan to reduce the minimum amount of

fishing capacity specified in the

business plan (see § 600.1010(c)).

NMFS will do everything possible to

keep the elapsed time between bid

closing and actual reduction as short as

possible. NMFS fully realizes the

commercial necessity of doing so.

31438 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

NMFS’ reduction experience in the

Northeast multispecies fishery

demonstrates that irrevocable bids are

essential to effective reduction.

Irrevocability will limit bidding to

fishing permit or fishing vessel owners

who are serious about reduction. This

will also prevent the situation in which

bid results that initially conformed with

a business plan’s capacity reduction

specifications become nonconforming

because of subsequent bid withdrawals.

Comment 24: Invitations to bid

‘‘should include projections of the

benefits of capacity reduction on the

management plan for the subject

species, notice of possible capital gains

tax liabilities, and other limitations such

as to CCF contributions. This

information may not be readily apparent

to permit holders.’’

Response: The reduction plan that

NMFS publishes in the Federal Register

will, for each financed reduction

program, ‘‘describe in detail all relevant

aspects of implementing...’’ each

reduction program. NMFS believes the

reduction plan may be the better place

to discuss, if appropriate, any matters

like those involved in this comment.

Invitations to bid are contractual in

nature, and NMFS believes they should

focus only on contractual matters.

Comment 25: The interim final rule

‘‘should specify that NMFS will follow

established standards for conducting

referenda.’’ The proposed rule does not

specify that voting would be conducted

by secret ballot, but the interim final

rule should.

Response: NMFS does not know to

what standards this comment refers.

The interim final rule revises the

proposed rule to clarify ballot

confidentiality (see § 600.1010(d)(10)).

Comment 26: Where reduction

programs involve withdrawing fishing

vessels from fishing, the proposed rule

requires state registered fishing vessels

to always be scrapped (rather than

either being scrapped or having their

titles restricted). This complicates

reduction programs involving both

Federally registered and state registered

fishing vessels, and may increase

reduction cost or put owners of stateregistered fishing vessels at a

disadvantage. Some states may have the

ability to impose title restrictions that

will prevent the future use of stateregistered fishing vessels in other

fisheries. Fishing vessels not required to

be scrapped should not be allowed to be

sold to other countries if they exacerbate

overcapacity in (presumably) any other

fishery in the world. ‘‘Vessels should

also not be allowed to be sold to

foreigners and then enter a fishery in

U.S. waters that may not be subject to

U.S. jurisdiction.’’

Response: Although some states may

have this title-restriction ability, NMFS

has no way of ensuring that these states

will enforce such title restrictions for as

long as the fishing vessels exist.

Moreover, little may prevent a fishing

vessel owner whose fishing vessel title

has been restricted in one State from reregistering the vessel in another state

that cannot or will not similarly restrict

the vessel’s title. Federal title

restrictions for Federally-documented

fishing vessels are effective for

reduction purposes, but state title

restrictions for state-registered fishing

vessels may not always be effective.

For the reasons stated in the preamble

to the proposed rule, NMFS does not

believe it should, for fishing vessels

involved in financed reduction

programs, impose any non-statutory use

restrictions. No foreign country need

allow these fishing vessels to be

registered under the country’s national

flag or harvest fisheries resources under

the country’s national jurisdiction if the

country believes that this registration is

inconsistent with: the country’s

economic interests, the country’s

fisheries conservation and management

responsibilities, the country’s

obligations under treaties or

international law, or any other aspect of

the country’s sovereign affairs. Finally,

all vessels fishing in U.S. waters are

subject to U.S. jurisdiction.

Comment 27: The interim final rule

should state that reduction loan

repayment is the only basis for postreduction fee increases. The interim

final rule should ‘‘describe the criteria

NMFS will use to increase the fee

amount rather than extend the period of

the payback... This should include a

determination that the increased fee will

not result in a significant impact on

...[post-reduction fishermen or

communities].’’

Response: The only statutory

authority NMFS has for any reduction

fee (including the subsequent increase

of an initial fee) is repayment of a

reduction loan. Absent specific

circumstances that clearly warrant the

contrary, NMFS has no particular

preference, in the instance of a

reduction loan whose initial maturity

was shorter than the statutory

maximum, for either fee increases or

longer repayment periods. NMFS will

certainly attempt to avoid significantly

adverse effects on post-reduction

harvesters and fishing communities,

but, where actual gross revenue

experience in a reduction fishery clearly

indicates the projected need for a fee

increase in order to repay a reduction

loan within the maximum maturity,

NMFS is obliged to increase the fee up

to and including the maximum fee.

Comment 28: Harvesters base their

referenda votes on the fee rate projected

to be necessary to repay the reduction

loan. Additional fees during the time

that post-reduction harvesters are

paying the reduction loan repayment fee

may become an economic burden. The

interim final rule should prohibit the

adoption of additional fees (e.g., for

observer programs, for research or

enforcement costs) during the period the

industry is paying back reduction loan.

Response: Neither the reduction

framework rule nor reduction

regulations implementing any reduction

program can control matters not

pertinent to fishing capacity reduction.

Fees involving matters other than the

repayment of reduction loans may

become necessary or advisable at some

time during the 20 years during which

reduction loans are repayable. While

NMFS will always attempt to avoid fees

that have significant adverse impacts,

neither the reduction framework rule

nor reduction program implementation

regulation can prohibit whatever nonreduction fees may become necessary or

advisable in the future. Furthermore, a

reduction program should make the

fishery economical and paying

reduction fees should not be overly

burdensome.

Comment 29: The proposed rule’s

requirement that the fishing industry

submit business plans and the FMCs

make certain other submissions places

an enormous burden on the industry

and the Councils—or, for state requests,

on the states—to prepare capacity

reduction programs. This shifts the

burden of preparation from the

Secretary to the Council and the

industry. This is a shift that has not

been accompanied by an increase in

Council resources. Business plans

should not always be required. The

interim final rule should allow

flexibility in determining the lead

authority for the preparation of a

financed reduction program or,

alternatively, NMFS should

immediately identify resources that will

be made available to Councils to meet

the requirements imposed by the

regulation.

Response: For the reasons stated in

the preamble to the proposed rule,

NMFS believes that the business plan

requirements appropriately place, on a

reduction’s industry proponents, the

burden of developing proposals for

financed reduction programs. NMFS

realizes that business plans require

industry to undertake a large effort. This

is, however, no different from planning

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31439

for other business investments. NMFS

views financed reduction programs as

post-reduction harvesters making

business investments in their economic

future by retiring some of their

competition, thereby increasing their

harvests of finite natural resources.

NMFS can lend post-reduction

harvesters the money required to make

this investment. As a lender, however,

it is not appropriate for NMFS to do the

business planning that may determine

whether the investment succeeds or

fails. Moreover, no one is more qualified

to do this business planning than the

harvesters affected by the plan and who

will be required to mortgage, in effect,

up to 5 percent of their future gross

revenue over as much as 20 years to

repaying the reduction investment’s

cost. Reduction planning is expensive,

but so is most business planning.

Reduction planning may, however, from

time-to-time be eligible for grants. The

Saltonstall-Kennedy Fisheries Research

and Development Program’s fiscal year

2000 grant cycle includes reduction

planning.

Although FMCs have the lesser

burden of reviewing, rather than

preparing, business plans, the burden is

one that cannot reasonably be avoided.

It is the FMCs’ responsibility to manage

and conserve the national fisheries.

Determining if a reduction program will

assist in this is integral to an FMC’s

mandate. The reduction framework rule

is not the proper venue for addressing

FMC personnel or resource matters.

Comment 30: ‘‘By failing to list the

four possible funding sources included

in the statute, the proposed rule sends

a strong message that reduction

programs must be industry funded. The

interim final rule should clearly identify

possible funding sources and

...emphasize that industry funding is

only one way to finance a reduction

program.’’

Response: Financed reduction

programs, in which the direct

beneficiaries of a reduction program

repay the programs’ cost, are the

preferred way of funding most reduction

programs. The proposed rule, however,

also equally addressed subsidized

reduction programs, in which the

taxpayers or other contributors fund

reduction program costs. These are the

only two basic methods of funding

reduction program costs. Under the

proposed rule, if any portion of a

reduction program’s cost is funded by a

reduction loan, the reduction program is

a financed reduction program. All other

reduction programs are subsidized

reduction programs, even though three

different statutory funding sources are

included in this category: (1)

appropriations under the reduction

provisions of the Magnuson-Stevens

Act, (2) appropriations under the

Saltonstall-Kennedy Act, and (3)

contributions from States or other

public or private sources. In the first 2

funding sources for subsidized

reduction programs, Federal taxpayers

provide the subsidy; in the third, State

taxpayers or other public or private

entities provide the subsidy. There

appears to be no functional reason for

the reduction framework rule to

separately address the 3 different

sources of subsidized funding.

Comment 31: Different industry

groups may present competing business

plans to the FMCs. The proposed rule

does not provide criteria for deciding

what industry groups have standing.

‘‘Do the FMCs decide which proposals

are forwarded to the Secretary for

review? How will specific reduction

proposals be compared and how will

the choice be made between them?’’ The

interim final rule should allow the

FMCs to decide what reduction request

to forward to NMFS, but should clearly

explain the criteria the FMCs should

consider in making this decision.

Response: NMFS believes it is best to

leave this to the FMCs’ discretion.

NMFS cannot, in a fishery subject to an

FMC’s jurisdiction, undertake a

reduction program unless the FMC first

requests NMFS to do so. Consequently,

the FMCs have discretion to entertain

reduction proposals from whatever

industry reduction proponents the

FMCs deem appropriate. The FMCs may

reject proposals, merge or consolidate

proposals, or accept proposals as

submitted. If the industry proponents of

a financed reduction program and the

appropriate FMC cannot come to

agreement about a prospective reduction

program, it makes little sense for the

FMC to request a financed reduction

program. In financed reduction

programs, NMFS believes the FMCs

should defer to representative business

planners who make a strong case for

increasing the economic efficiency of

post-reduction harvesters in the

reduction fishery and, most particularly,

for the widespread industry support that

successful referenda require. Proposals

for financed reduction programs that do

not potentially enjoy widespread

industry support will fail and waste

much time, effort, and resources.

Comment 32: Reduction ‘‘is important

for the preservation of natural resources

and the economic stability of American

fisheries.’’

Response: NMFS agrees.

Comment 33: The requirement that a

proposed reduction be lawful at the

time of reduction must be made clear.

No person or government body can

guarantee what will be lawful in the

future. Future judicial interpretation is

always an unknown. As long as a

proposed reduction is not known to be

unlawful at the time it is requested, all

such requirements should be deemed

satisfied.

Response: All reduction programs

will be lawful at the time of their

occurrence, and NMFS agrees that no

one can guarantee what will be lawful

in the future.

Comment 34: The proposed rule is

sufficient for fisheries under Federal

jurisdiction. For state-managed

fisheries, however, it would be useful to

have a sample request and business plan

accessible at NMFS’ web site.

Response: The proposed rule outlined

the required contents of reduction

requests and business plans for both

Federal and state fisheries. NMFS does

not have any samples that NMFS could

post at NMFS’ web site. NMFS is,

however, willing to advise all parties

about reduction in any appropriate way

NMFS can.

Comment 35: The proposed rule ‘‘has

been thoughtfully and thoroughly

developed...’’ and ‘‘has great merit and

practical application ...’’ to the salmon

driftnet and purse seine fishery in

Bristol Bay, Alaska.

Response: NMFS notes this comment.

Comment 36: ‘‘In some

cases...industry-funded license

reductions may represent the only

viable alternative to achieving needed

reductions of capacity. In complex

fisheries, overcapacity and inadequate

management in any major fishery can

lead to adverse consequences for other

fisheries.’’

Response: NMFS agrees.

Comment 37: Where fishing permit

reductions involve Bristol Bay and

Chignic, the number of fishing permits

bought back from local residents must

be proportional with the number of

fishing permits bought back from parties

who do not reside in Alaska. 1,325

Bristol Bay salmon fishing permits were

initially issued to residents of the

Bristol Bay and Chignic watershed

region. Today, only about 900 of these

remain owned by local residents. Each

fishing permit sold to non-residents of

the local area results in the loss of 2

crewmen jobs from the local economy.

This devastates the local economy.

Response: A framework rule involving

matters common to all reduction

programs is not the appropriate place to

address this matter.

Comment 38: The ‘‘technical

requirements for information ...[should

not be] implemented in a way that the

available databases and their managers

31440 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

cannot accommodate. Flexibility to

meet the data variability and personnel

constraints should be clearly provided.’’

Response: It is not clear to what

‘‘technical requirements for

information’’ this comment related.

Requiring unavailable data is

nonfunctional. The interim final rule is

a framework rule common to all

reduction programs, and NMFS will

accommodate specific data or technical

information circumstances that do not

reasonably allow individual requests for

reduction programs to comply with the

framework rule. The interim final rule

revises the proposed rule to provide

flexibility in this and other respects (see

§ 600.1001(f)).

Comment 39: Reduction planners

(either industry business planners or

Government reduction planners) will be

unqualified to fully understand fisheries

complexity and to ‘‘comprehensively

formulate a feasible...plan.’’ Theoretical

reduction plans might not achieve the

intended purpose, and might have

unplanned impacts on ‘‘the permit

holder, vessel owner, financiers, and

buyers (fish fee collectors)...’’

Experience demonstrates that

‘‘decisions are reached to appease

political agendas, therefore, constituents

of the fisheries will not take a plan or

program at face value.’’ Industry

members will incur substantial expense

in analyzing reduction plans. Reduction

plans will involve a major economic

impact on small fishery businesses. The

‘‘massive economic data that will be

required...’’ may be nonexistent.

Response: Financed reduction

programs are based on business plans

that the fishing industry itself develops.

When FMCs request financed reduction

programs, they must base their requests

on those business plans. If NMFS

undertakes financed reduction

programs, NMFS must, to the greatest

extent possible, base these programs on

those business plans. Moreover, all

fishing permit holders or fishing vessel

owners affected have the opportunity,

through a referendum, to approve or

reject the business plans upon which

financed reduction programs are based.

A financed reduction program is not

possible unless at least two-thirds of

those voting in a referendum approve

the fee necessary to repay a reduction

loan.

Subsidized reduction programs are

based on implementation plans that

NMFS develops from general FMC

recommendations. The rule provides

ample opportunity for the views of all

affected parties to be heard and duly

considered.

Whether to offer one’s fishing

capacity for reduction in either a

financed or subsidized reduction

program is the voluntary decision of

each fishing permit holder and/or

fishing vessel owner.

Comment 40: A business plan should

be subjected to a referendum of fishing

permit holders and fishing vessel

owners. Additionally, the fish buyers

that are responsible for collecting the fee

that repays a reduction loan should vote

in a referendum about (presumably) the

‘‘fee collection, disbursement, and

accounting...’’ aspects of the reduction.

Moreover, a referendum committee of

fishing vessel and fishing permit owners

and fish buyers should review the

results of all referenda involving

financed reduction programs ‘‘to

alleviate [sic] any questions by the

fishery as to the valid tally of support

or non-support...’’ A subsidized

reduction program should also be

subjected to a referendum of fishing

permit and fishing vessel owners.

Response: The Magnuson-Stevens Act

reduction provisions authorize

referenda only for fee payers (fish

sellers), not fee collectors (fish buyers).

Fish buyers pay no fee, and cannot vote

in referenda about fee payment. The

statutory reduction provisions do not

authorize referenda for subsidized

reduction programs, where no one

either pays or collects a fee. Those

provisions do, however, require NMFS

to consult with fish sellers, fish buyers,

and all other affected parties through

the development and implementation of

subsidized reduction programs.

NMFS is the referendum authority

under the statutory reduction

provisions, and NMFS believes it can

competently exercise this authority.

NMFS does not, consequently, perceive

a need for fish-seller and fish-buyer

committees that will review referenda

results. Moreover, the fact that referenda

may sometimes follow irrevocable

bidding precludes any referenda review

or collaboration that lengthens the time

between the submission of irrevocable

bids and completing the reduction

programs to which the bids relate.

Comment 41: It is good ‘‘that industry

is expected to pay for...[reduction] in

the long run.’’, but landing taxes are

already high (‘‘nearly 10 percent off the

top for salmon in

Alaska...’’) This, combined with the

high cost of business and depressed

markets, threatens the survival of many

family fishing businesses. Further

landing taxes should be minimal. As an

alternative, consider putting ‘‘a large tax

[25 percent or more] on the sales of

permits.’’

Response: In financed reduction

programs, the industry’s business plans

project the amount by which fishing

capacity is reduced and the prospective

fee rate necessary to pay for that

reduction. Fee rates are based on postreduction gross revenue that can only be

projected over the life of the reduction

loans, but all business is planned on the

basis of future income that can only be

projected. For a financed reduction loan

to be possible, affected fishing vessel or

fishing permit owners must vote in a

referendum to approve the fee necessary

to repay a reduction loan of a certain

maximum amount whose disbursement

in the form of reduction payments will

reduce fishing capacity by a certain

minimum amount. Business planners

are unlikely to suggest a fee higher than

post-reduction producers are reasonably

likely to be able to pay, and, in the event

they do, referenda voters are unlikely to

approve a higher fee. Post-reduction fee

rates may increase if post-reduction

gross revenue proves to be lower than

projected at the time of reduction, but

may never exceed 5 percent of gross

revenue. NMFS has no authority to

consider the alternative this comment

suggested.

Comment 42: The proposed rule is a

‘‘very well done plan on how to

implement. It is believable, do-able, and

very much needed in the fishing

industry.’’

Response: NMFS notes this comment.

Comment 43: The comment applauds

this avenue to reduce overcapitalization,

return economic viability to fishing, and

resolve many concerns (including

bycatch and habitat) that the race for

fish creates. Reductions reduces

fishermen’s pressure by eliminating

‘‘derby fisheries.’’

Response: NMFS agrees that fishing

capacity reduction can help improve

fisheries economics and fisheries

conservation and management.

Comment 44: The fee for fish

processed at sea cannot equitably be

calculated in the same way as the fee for

raw fish delivered ashore. Using

appropriate recovery rates, NMFS

should convert processed fish to the

fish’s round weight equivalent and

calculate the fee based on the ex-vessel

price for raw fish. If there is an ex-vessel

price for raw fish delivered at sea,

NMFS should use this. If not, NMFS

should use the ex-vessel price for raw

fish delivered ashore. Where all fish in

a reduction fishery are processed and

delivered at sea, NMFS must devise an

appropriate proxy for a raw-fish, exvessel price. The fee should, in all cases,

be based on the ex-vessel price for raw

fish, rather than on the value that at-sea

processing adds.

Response: NMFS considered this

issue during the proposed rule’s

formulation, but elected in the proposed

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31441

rule to define ‘‘delivery value’’ and

associated terms in a way that required

payment of the reduction loan

repayment fee based on fish in whatever

form the fish existed at the time that the

party who harvested the fish first

delivered the fish for value to an

unrelated fish buyer. This resulted, for

fish harvested and processed at sea by

the same party, in applying the fee rate

to a higher delivery value than for fish

delivered unprocessed and

subsequently processed ashore by an

unrelated fish buyer. There are good

arguments for and against this approach,

but, on balance, the more equitable way

to resolve this issue is, as this comment

suggests, to apply the fee to unprocessed

fish. Doing so, however, creates

considerable problems of its own.

One primary problem is a formula for

accurately and efficiently converting the

weight of processed fish to the weight

of unprocessed fish. Another is a

common value for unprocessed fish

(prices may vary from time to time and

from fish buyer to fish buyer).

Nevertheless, the interim final rule

revises the proposed rule to make the

fee payable on the basis of the value of

unprocessed fish. The interim final rule

requires each business plan, for fisheries

in which related parties both catch and

process fish at sea, to formulate an

accurate and efficient means of

converting processed weight to

unprocessed weight and of commonly

valuing unprocessed fish (see, in

§ 600.1000, the definition of the terms

‘‘delivery value’’, ‘‘processed fish’’, and

‘‘unprocessed fish’’ and, in

§ 600.1003(n)(11), the new business

plan requirement in this respect).

Comment 45: The framework rule

represents an ‘‘excellent job of distilling

common sense answers from some very

difficult and complex issues.’’

Response: NMFS notes the comment.

Comment 46: The reduction loan

repayment fee is the delivery value of

fee fish times the fee rate. The definition

of ‘‘delivery value’’, however, excludes

‘‘any deductions whatsoever’’ from the

price that a fish buyer pays a fish seller

when the fish seller first delivers fish to

the fish buyer. This excludes

‘‘weighbacks’’ (small, unmarketable fish

that the fish buyer deducts from the

weight of delivered fish upon which the

fish buyer calculates the delivery value).

To comply with the statute’s restriction

of the fee to no more than 5 percent of

ex-vessel value, the fee rate must be

applied to the net weight of delivered

fish (landed fish minus ‘‘weighbacks’’).

Response: Representative fish tickets

provided with this comment deduct the

weight of weighbacks from the gross

weight of fee fish delivered before

applying the purchase price per pound

to the resulting net weight. Under these

circumstances, the fee is not, as the

proposed rule defined the relevant term,

applied to the weighbacks because the

fish buyer did not pay any ‘‘delivery

value’’ for the weighbacks because they

were deducted from the total weight of

delivered fish before calculating the

‘‘delivery value’’ on the net weight of

delivered fish. The rule bases the fee on

whatever value fish buyers pay fish

sellers for fish subject to the fee (see the

definition of the term ‘‘delivery value’’

in § 600.1000).

Comment 47: This comment

supported fishing capacity reduction,

but is frustrated that ‘‘the system’’

moves so slowly.

Response: NMFS will expedite the

process as much as it possibly can, but

fishing capacity reduction is a complex

undertaking. The FMP amendment

required to complement each reduction

program may become a major source of

delay in implementing each reduction

program.

Comment 48: The reduction concept

is ‘‘totally objectionable and immoral.’’

Allowing ‘‘two thirds of the fishermen

in a fishery...’’ to authorize the fee

system required to repay a loan forces

the other one third to repay a loan they

do not want. The commenter objects to

‘‘forced loans.’’ The commenter does not

‘‘believe in borrowing...’’, and ‘‘objects]

to being forced to pay back a loan to stay

fishing.’’ Government should not be in

the business of making loans. Reduction

programs will not increase the price of

post-reduction fish. The reduction

concept ‘‘has the potential to force out

small boat owners.’’

Response: NMFS notes the comment.

The Magnuson-Stevens Act authorizes

reduction programs and specifies the

way in which they must be conducted.

This rule implements the Act.

The reduction concept has the

potential to reduce fishing capacity of

every size, but decisions about whether

to offer any fishing capacity for

reduction are always the voluntary

decisions of individual fishing permit

and/or fishing vessel owners.

Comment 49: Reduction might have

the collateral effect of putting some

shoreline processors out of business,

because fewer fishing vessels could

result in the need for fewer shoreline

processors.

Response: Absent concurrent

reductions in total allowable catches,

post-reduction harvests will require the

same fish processing capacity as prereduction harvests. NMFS hopes that

fewer harvesters catching the same

amount of fish will not always mean a

need for fewer processors, but it

sometimes unavoidably may.

Nevertheless, the statutory objective of

the reduction provisions of the

Magnuson-Stevens Act is to reduce

fishing capacity.

Comment 50: ‘‘Congress made it very

clear in the Sustainable Fisheries Act of

1996 that all capacity reduction plans

must achieve measurable and significant

improvements in the conservation and

management of the fishery in

question...’’

Response: The rule reflects this aspect

of the statutory reduction provisions.

Summary of Revisions

The proposed rule was Subpart D of

50 CFR Part 253. The interim final rule,

however, is subpart L of 50 CFR Part

600.

The following sections of the interim

final rule revise the proposed rule:

(1) § 600.1000. This section is revised

to add some terms, delete some terms,

rename some terms, and amend the

definition of some terms. Added terms

include: ‘‘address of record’’, ‘‘bid’’,

‘‘business week’’, ‘‘fair market value’’,

‘‘fishing capacity reduction

specifications’’, ‘‘net delivery value’’,

‘‘post-bidding referendum’’, ‘‘prebidding referendum’’, ‘‘processed fish’’,

‘‘reduction amendment specifications’’,

‘‘request’’, ‘‘treasury percentage’’,

‘‘unprocessed fish’’, and ‘‘vote’’. Deleted

terms include: ‘‘consistency

requirement’’, ‘‘control requirement’’,

‘‘Council’’, ‘‘necessity requirement’’,

and ‘‘nonreplacement requirement’’.

Renamed terms include: ‘‘program

plan’’, which becomes ‘‘implementation

plan’’; ‘‘program regulations’’, which

becomes ‘‘implementation regulations’’;

and ‘‘management plan’’, which

becomes ‘‘controlling fishery

management plan or program (CFMP)’’.

Amended definitions include

‘‘borrower’’, ‘‘delivery value’’, ‘‘fee

fish’’, ‘‘fish buyer’’, ‘‘fish delivery’’,

‘‘fish seller’’, ‘‘reduction amendment’’,

‘‘reduction fishery’’, and ‘‘reduction

payment’’.

(2) § 600.1001(f). This section is

added to provide for waivers of

framework rule provisions in order to

accommodate special circumstances in

particular reduction fisheries.

(3) § 600.1002. This section is new. It

encompasses four general requirements,

three of which were, in the proposed

rule, terms defined in § 253.25. This

new section required conforming

revisions of various other sections of the

proposed rule.

(4) § 600.1003. Paragraph (g) of this

section is revised to require each request

for a financed reduction program to

include the FMC’s endorsement in

principle of any reduction amendment

31442 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

to the FMP that the business plan

proposes. Paragraph (i) of this section is

revised to clarify that NMFS is a source

for the fishing permit data that this

section requires in requests for financed

reduction programs. Paragraph (j) of this

section is revised to clarify that financed

reduction program requests require

aggregate, rather than individual, catch

data. Paragraph (n)(11) of this section is

revised to require the business plan

included in each financed reduction

request to evaluate the need for fee

payment and collection provisions in

each reduction fishery’s implementation

regulations different from the fee

collection provisions in the framework

rule.

(5) § 600.1005. Paragraph (e) of this

section is revised to clarify that NMFS

is a source for the fishing permit data

that this section requires in requests for

subsidized reduction programs.

Paragraph (f) of this section is revised to

clarify that financed reduction program

requests require aggregate, rather than

individual, catch data.

(6) § 600.1010. This section is revised

extensively to provide for referenda

preceding reduction amendments to

FMPs as well as other referenda that

may be required by no longer limiting

referenda to those following reduction

bidding. This also required

appropriately revising other sections of

the proposed rule that referenced

referenda. Paragraph (d)(10) of this

section is revised to establish the

confidentiality of referenda ballots.

(7) § 600.1011. This section,

particularly paragraphs (f) and (g), is

revised to clarify the effect of reduction

payments that NMFS is unable to make

because of reduction contract nonperformance.

(8) § 600.1012. This section is new.

Paragraphs (b) and (c) of this section

pertain to reduction loan interest rates,

including the effect of any difference

between prospective and actual

reduction loan interest rates. The

balance of this new section pertains to

the reduction loan obligation, including

principal amount, repayment term, and

penalties for non-payment or noncollection.

(9) § 600.1013(c)(2). This paragraph is

revised to clarify that the fee applicable

to post-delivery fish bonuses is paid and

collected when the bonuses first become

known rather than when fish sellers first

deliver fish to fish buyers.

(10) § 600.1015. This section is new.

This provision is necessary to ensure

prompt payment.

(11) § 600.1016. This section is new.

This provision is necessary to ensure

compliance.

The interim final rule further revises

the proposed rule to make the rule

briefer, clearer, and more internally

consistent.

NOAA codifies its OMB control

numbers for information collection at 15

CFR part 902. Part 902 collects and

displays the control numbers OMB

assigned to NOAA’s information

collection requirements pursuant to the

Paperwork Reduction Act (PRA). This

interim final rule codifies OMB control

number 0648–0376 and OMB control

number 0648–0413 for Part 600 Subpart

L—Fishing Vessel Capacity Reduction.

Classification

The Assistant Administrator for

Fisheries, NMFS, determined that this

interim final rule is consistent with the

Magnuson-Stevens Act and other

applicable laws.

This interim final rule has been

determined to be significant for

purposes of E.O. 12866, and a

Regulatory Impact Review has been

prepared by NMFS (see ADDRESSES).

The Chief Counsel for Regulation of

the Department of Commerce certified

to the Chief Counsel for Advocacy of the

Small Business Administration when

this rule was proposed that, if adopted

as proposed, it would not have a

significant economic impact on a

substantial number of small entities.

NMFS received no comments about this

certification. Because this interim final

rule only establishes a framework for

implementing future reduction

programs in specific reduction fisheries,

each future reduction program will

require its own implementation

regulations and analysis of effects on

small entities. As a result, a regulatory

flexibility analysis was not prepared.

Notwithstanding any other provision

of 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 interim final rule contains new

collection of information requirements

subject to the PRA that have been

approved by OMB, under OMB Control

No. 0648–0376. The estimates of the

public reporting burden for these

requirements are: 6,634 hours for

developing a business plan, 4 hours per

voter for a referendum, four hours to

make a bid, 10 minutes per fishing trip

to maintain records on transactions, 2

hours for a buyer’s monthly report, 4

hours for a buyer’s annual report, 2

hours for a buyer/seller report (where

either a buyer refuses to a fee or the

seller refuses to pay the fee to the

buyer), and 270 hours for state approval

of a business plan and amendments to

a state fishery management plan.

Emergency clearance has also been

obtained under OMB Control Number

0648-0413 to conduct, in accordance

with the interim final rule’s revised

referenda procedures, more than one

referendum for each reduction program

if the circumstances of a reduction

program require multiple referenda. The

response time per voter for these

referenda is 4 hours. NMFS intends to

ask OMB for a three-year extension of

the clearance for these requirements,

which are currently only approved on

an emergency basis.

The response time estimates above

include the time needed for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

revising the collection of information.

Send comments regarding the

extension of the emergency clearance or

any other aspect of the collection of

information requirements contained in

this rule, including the burden hour

estimates, and suggestions for reducing

the burdens to NMFS (see ADDRESSES)

and to OMB (see ADDRESSES).

List of Subjects

15 CFR Part 902

Reporting and recordkeeping

requirements.

50 CFR Part 600

Fishing capacity reduction, Fisheries,

Fishing permits, Fishing vessels,

Intergovernmental relations, Loan

programs-business, Reporting and

recordkeeping requirements.

Dated: May 8, 2000.

Penelope D. Dalton,

Assistant Administrator for Fisheries,

National Marine Fisheries Services.

For the reasons set out in the

preamble, 15 CFR part 902, chapter IX,

is amended and 50 CFR part 600 is

amended as follows:

15 CFR Chapter IX

PART 902—NOAA INFORMATION

COLLECTION REQUIREMENTS UNDER

THE PAPERWORK REDUCTION ACT;

OMB CONTROL NUMBERS

1. The authority citation for part 902

continues to read as follows:

Authority: 44 U.S.C. 3501 et seq.

2. In § 902.1, the table in paragraph (b)

is amended by adding under 50 CFR the

following entries in numerical order:

§ 902.1 OMB control numbers assigned

pursuant to the Paperwork Reduction Act.

* * * * *

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31443

(b) * * *

CFR part or section

where the information

collection requirement

is located

Current OMB control

number (All numbers

begin with 0648–)

*******

50 CFR

*******

600.1001 - 0376

600.1003 - 0376

600.1005 - 0376

600.1006 - 0376

600.1009 - 0376

600.1010 - 0376 and–0413

600.1011 - 0376

600.1012 - 0376

600.1013 - 0376

600.1014 - 0376

*******

3. The authority citation for 50 CFR

part 600 continues to read as follows:

Authority: 5 U.S.C. 561 and 16 U.S.C. 1801

et seq.

4. In § 600.5, a paragraph (c) is added

to read as follows:

§ 600.5 Purpose and scope.

* * * * *

(c) This part also governs fishing

capacity reduction programs under the

Magnuson-Stevens Act.

5. A subpart L is added to read as

follows:

50 CFR Chapter VI

PART 600 MAGNUSON-STEVENS ACT

PROVISIONS

Subpart L—Fishing Capacity Reduction

Sec.

600.1000 Definitions.

600.1001 Requests.

600.1002 General requirements.

600.1003 Content of a request for a financed

program.

600.1004 Accepting a request for, and

determinations about initiating, a

financed program.

600.1005 Content of a request for a

subsidized program.

600.1006 Accepting a request for, and

determinations about conducting, a

subsidized program.

600.1007 Reduction amendments.

600.1008 Implementation plan and

implementation regulations.

600.1009 Bids.

600.1010 Referenda.

600.1011 Reduction methods and other

conditions.

600.1012 Reduction loan.

600.1013 Fee payment and collection.

600.1014 Fee collection deposits,

disbursements, records, and reports.

600.1015 Late charges.

600.1016 Enforcement.

600.1017 Prohibitions and penalties.

600.1018 Implementation regulations for

each program. [Reserved]

Subpart L—Fishing Capacity

Reduction

Authority: 16 U.S.C. 1861a(b)–(e).

§ 600.1000 Definitions.

In addition to the definitions in the

Magnuson-Stevens Fishery

Conservation and Management Act

(Magnuson-Stevens Act) and in § 600.10

of this title, the terms used in this

subpart have the following meanings:

Address of Record means the business

address of a person, partnership, or

corporation. Addresses listed on permits

or other NMFS records are presumed to

be business addresses, unless clearly

indicated otherwise.

Bid means the price a vessel owner or

reduction fishery permit holder requests

for reduction of his/her fishing capacity.

It is an irrevocable offer in response to

the invitation to bid in § 600.1009.

Borrower means, individually and

collectively, each post-reduction fishing

permit holder and/or fishing vessel

owner fishing in the reduction fishery.

Business plan means the document

containing the information specified in

§ 600.1003(n) and required to be

submitted with a request for a financed

program.

Business week means a 7-day period,

Saturday through Friday.

Controlling fishery management plan

or program (CFMP) means either any

fishery management plan or any state

fishery management plan or program,

including amendments to the plan or

program, pursuant to which a fishery is

managed.

Delivery value means:

(1) For unprocessed fish, all

compensation that a fish buyer pays to

a fish seller in exchange for fee fish; and

(2) For processed fish, all

compensation that a fish buyer would

have paid to a fish seller in exchange for

fee fish if the fee fish had been

unprocessed fish instead of processed

fish.

Delivery value encompasses fair

market value, as defined herein, and

includes the value of all in-kind

compensation or all other goods or

services exchanged in lieu of cash. It is

synonymous with the statutory term

‘‘ex-vessel value’’ as used in section 312

of the Magnuson Act.

Deposit principal means all collected

fee revenue that a fish buyer deposits in

a segregated account maintained at a

federally insured financial institution

for the sole purpose of aggregating

collected fee revenue before sending the

fee revenue to NMFS for repaying a

reduction loan.

Fair market value means the amount

that a buyer pays a seller in an arm’s

length transaction or, alternatively,

would pay a seller if the transaction

were at arm’s length.

Fee means the amount that fish buyers

deduct from the delivery value under a

financed reduction program. The fee is

the delivery value times the reduction

fishery’s applicable fee rate under

section 600.1013.

Fee fish means all fish harvested from

a reduction fishery involving a financed

program during the period in which any

amount of the reduction loan remains

unpaid. The term fee fish excludes fish

harvested incidentally while fishing for

fish not included in the reduction

fishery.

Final development plan means the

document NMFS prepares, under

§ 600.1006(b) and based on the

preliminary development plan the

requester submits, for a subsidized

program.

Financed means funded, in any part,

by a reduction loan.

Fish buyer means the first ex-vessel

party who:

(1) in an arm’s—length transaction,

purchases fee fish from a fish seller;

(2) takes fish on consignment from a

fish seller; or

(3) otherwise receives fish from a fish

seller in a non arm’s-length transaction.

Fish delivery means the point at

which a fish buyer first purchases fee

fish or takes possession of fee fish from

a fish seller.

Fishing capacity reduction

specifications means the minimum

amount of fishing capacity reduction

and the maximum amount of reduction

loan principal specified in a business

plan.

Fish seller means the party who

harvests and first sells or otherwise

delivers fee fish to a fish buyer.

Fishery Management Plan (FMP)

means any Federal fishery management

plan, including amendments to the

plan, that the Secretary of Commerce

approves or adopts pursuant to section

303 of the Magnuson-Stevens Act.

Fund means the Fishing Capacity

Reduction Fund, and each subaccount

for each program, established in the U.S.

Treasury for the deposit into, and

disbursement from, all funds, including

all reduction loan capital and all fee

revenue, involving each program.

Implementation plan means the plan

in § 600.1008 for carrying out each

program.

31444 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

Implementation regulations mean the

regulations in § 600.1008 for carrying

out each program.

Net delivery value means the delivery

value minus the fee. 

Post-bidding referendum means a

referendum that follows bidding under

§ 600.1009.

Post-reduction means after a program

reduces fishing capacity in a reduction

fishery.

Pre-bidding referendum means a

referendum that occurs at any time after

a request for a financed program but

before a proposal under § 600.1008 of a

implementation plan and

implementation regulations.

Preliminary development plan means

the document specified in § 600.1005(g)

and required to be submitted with a

request for a subsidized program.

Processed fish means fish in any form

different from the form in which the fish

existed at the time the fish was first

harvested, unless any such difference in

form represents, in the reduction fishery

involved, the standard ex-vessel form

upon which fish sellers and fish buyers

characteristically base the delivery

value of unprocessed fish.

Program means each instance of

reduction under this subpart, in each

reduction fishery—starting with a

request and ending, for a financed

program, with full reduction loan

repayment. 

Reduction means the act of reducing

fishing capacity under any program.

Reduction amendment means any

amendment, or, where appropriate,

framework adjustment, to a CFMP that

may be necessary for a program to meet

the requirements of this subpart.

Reduction amendment specifications

mean the reduction amendment to a

CFMP specified in a business plan.

Reduction contract means the

invitation to bid under § 600.1009,

together with each bidder’s irrevocable

offer and NMFS’ conditional or nonconditional acceptance of each such bid

under § 600.1009.

Reduction cost means the total dollar

amount of all reduction payments to

fishing permit owners, fishing vessel

owners, or both, in a reduction fishery.

Reduction fishery means the fishery

or portion of a fishery to which a

program applies. The reduction fishery

must specify each included species, as

well as any limitations by gear type,

fishing vessel size, geographic area, and

any other relevant factor(s).

Reduction loan means a loan, under

section 1111 and section 1112 of Title

XI of the Merchant Marine Act, 1936, as

amended (46 U.S.C. 1279f and g App.),

for financing any portion, or all, of a

financed program’s reduction cost and

repayable by a fee under, and in

accordance with, § 600.1012,

§ 600.1013, and § 600.1014.

Reduction payment means the Federal

Government’s fishing capacity reduction

payment to a fishing permit owner,

fishing vessel owner, or both, under a

reduction contract. Additionally, it is

payment for reduction to each bidder

whose bid NMFS accepts under

§ 600.1009. In a financed program each

reduction payment constitutes a

disbursement of a reduction loan’s

proceeds and is for either revoking a

fishing permit or both revoking a fishing

permit and withdrawing a vessel from

fishing either by scrapping or title

restriction.

Reduction permit means any fishing

permit revoked in a program in

exchange for a reduction payment under

a reduction contract.

Reduction vessel means any fishing

vessel withdrawn from fishing either by

scrapping or title restriction in exchange

for a reduction payment under a

reduction contract.

Referendum means the voting process

under § 600.1010 for approving the fee

system for repaying a reduction loan.

Request means a request, under

§ 600.1001, for a program.

Requester means a Council for a

fishery identified in § 600.1001(c), a

state governor for a fishery identified in

§ 600.1001(d), or the Secretary for a

fishery identified in § 600.1001(e).

Scrap means to completely and

permanently reduce a fishing vessel’s

hull, superstructures, and other fixed

structural components to fragments

having value, if any, only as raw

materials for reprocessing or for other

non-fisheries use.

Subsidized means wholly funded by

anything other than a reduction loan.

Treasury percentage means the

annual percentage rate at which NMFS

must pay interest to the U.S. Treasury

on any principal amount that NMFS

borrows from the U.S. Treasury in order

to generate the funds with which to later

disburse a reduction loan’s principal

amount.

Unprocessed fish means fish in the

same form as the fish existed at the time

the fish was harvested, unless any

difference in form represents, in the

reduction fishery involved, the standard

ex-vessel form upon which fish sellers

and fish buyers characteristically base

the delivery value of unprocessed fish.

Vote means a vote in a referendum.

§ 600.1001 Requests.

(a) A Council or the Governor of a

State under whose authority a proposed

reduction fishery is subject may request

that NMFS conduct a program in that

fishery. Each request shall be in writing

and shall be submitted to the Director,

Office of Sustainable Fisheries, NMFS.

Each request shall satisfy the

requirements of § 600.1003 or

§ 600.1005, as applicable, and enable

NMFS to make the determinations

required by § 600.1004 or § 600.1006, as

applicable.

(b) NMFS cannot conduct a program

in any fishery subject to the jurisdiction

of a Council or a state unless NMFS first

receives a request from the Council or

the governor to whose jurisdiction the

fishery is subject.

(c) For a fishery subject to the

jurisdiction of a Council, only that

Council can or must make the request.

If the fishery is subject to the

jurisdiction of two or more Councils,

those Councils must make a joint

request. No Council may make a

request, or join in making a request,

until after the Council conducts a public

hearing about the request.

(d) For a fishery subject to the

jurisdiction of a State, only the

Governor of that State can make the

request. If the fishery is subject to the

jurisdiction of two or more states, the

Governors of those States shall make a

joint request. No Governor of a State

may make a request, or join in making

a request, until the State conducts a

public hearing about the request.

(e) For a fishery under the direct

management authority of the Secretary,

NMFS may conduct a program on

NMFS’ own motion by fulfilling the

requirements of this subpart that

reasonably apply to a program not

initiated by a request.

(f) Where necessary to accommodate

special circumstances in a particular

fishery, NMFS may waive, as NMFS

deems necessary and appropriate,

compliance with any specific

requirements under this subpart not

required by statute.

§ 600.1002 General requirements.

(a) Each program must be: (1)

Necessary to prevent or end overfishing,

rebuild stocks of fish, or achieve

measurable and significant

improvements in the conservation and

management of the reduction fishery;

(2) Accompanied by the appropriate

environmental, economic and/or

socioeconomic analyses, in accordance

with applicable statutes, regulations, or

other authorities; and

(3) Consistent with the CFMP,

including any reduction amendment, for

the reduction fishery.

(b) Each CFMP for a reduction fishery

must: (1) Prevent the replacement of

fishing capacity removed by the

program through a moratorium on new

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31445

entrants, restrictions on vessel upgrades,

and other effort control measures, taking

into account the full potential fishing

capacity of the fleet;

(2) Establish a specified or target total

allowable catch or other measures that

trigger closure of the fishery or

adjustments to reduce catch; and

(3) Include, for a financed program in

a reduction fishery involving only a

portion of a fishery, appropriate

provisions for the post-reduction

allocation of fish between the reduction

fishery and the rest of the fishery that

both protect the borrower’s reduction

investment in the program and support

the borrower’s ability to repay the

reduction loan.

§ 600.1003 Content of a request for a

financed program.

A request for a financed program

shall:

(a) Specify the reduction fishery.

(b) Project the amount of the

reduction and specify what a reduction

of that amount achieves in the reduction

fishery.

(c) Specify whether the program is to

be wholly or partially financed and, if

the latter, specify the amount and

describe the availability of all funding

from sources other than a reduction

loan.

(d) Project the availability of all

Federal appropriation authority or other

funding, if any, that the financed

program requires, including the time at

which funding from each source will be

available and how that relates to the

time at which elements of the reduction

process are projected to occur.

(e) Demonstrate how the program

meets, or will meet after an appropriate

reduction amendment, the requirements

in § 600.1002(a).

(f) Demonstrate how the CFMP meets,

or will meet after an appropriate

reduction amendment, the requirements

in § 600.1002(b).

(g) If a reduction amendment is

necessary, include an actual reduction

amendment or the requester’s

endorsement in principle of the

reduction amendment specifications in

the business plan. Endorsement in

principle is non-binding.

(h) Request that NMFS conduct, at the

appropriate time, a referendum under

§ 600.1010 of this subpart.

(i) List the names and addresses of

record of all fishing permit or fishing

vessel owners who are currently

authorized to harvest fish from the

reduction fishery, excluding those

whose authority is limited to

incidentally harvesting fish from the

reduction fishery during directed

fishing for fish not in the reduction

fishery. The list shall be based on the

best information available to the

requester. The list shall take into

account any limitation by type of fishing

gear operated, size of fishing vessel

operated, geographic area of operation,

or other factor that the proposed

program involves. The list may include

any relevant information that NMFS

may supply to the requester.

(j) Specify the aggregate total

allowable catch in the reduction fishery

during each of the preceding 5 years and

the aggregate portion of such catch

harvested by the parties listed under

paragraph (i) of this section.

(k) Specify the criteria for determining

the types and number of fishing permits

or fishing permits and fishing vessels

that are eligible for reduction under the

program. The criteria shall take into

account:

(1) The characteristics of the fishery;

(2) Whether the program is limited to

a particular gear type within the

reduction fishery or is otherwise limited

by size of fishing vessel operated,

geographic area of operation, or other

factor;

(3) Whether the program is limited to

fishing permits or involves both fishing

permits and fishing vessels;

(4) The reduction amendment

required;

(5) The needs of fishing communities;

(6) Minimizing the program’s

reduction cost; and

(7) All other relevant factors.

(l) Include the requester’s assessment

of the program’s potential impact on

fisheries other than the reduction

fishery, including an evaluation of the

likely increase in participation or effort

in such other fisheries, the general

economic impact on such other

fisheries, and recommendations that

could mitigate, or enable such other

fisheries to mitigate, any undesirable

impacts.

(m) Include any other information or

guidance that would assist NMFS in

developing an implementation plan and

implementation regulations.

(n) Include a business plan, prepared

by, or on behalf of, knowledgeable and

concerned harvesters in the reduction

fishery, that:

(1) Specifies a detailed reduction

methodology that accomplishes the

maximum sustained reduction in the

reduction fishery’s fishing capacity at

the least reduction cost and in the

minimum period of time, and otherwise

achieves the program result that the

requester specifies under paragraph (b)

of this section. The methodology shall:

(i) Establish the appropriate point for

NMFS to conduct a pre-bidding

referendum and be sufficiently detailed

to enable NMFS to readily:

(A) Design, propose, and adopt a

timely and reliable implementation

plan,

(B) Propose and issue timely and

reliable implementation regulations,

(C) Invite bids,

(D) Accept or reject bids, and

(E) Complete a program in accordance

with this subpart, and

(ii) Address, consistently with this

subpart:

(A) The contents and terms of

invitations to bid,

(B) Bidder eligibility,

(C) The type of information that

bidders shall supply,

(D) The criteria for accepting or

rejecting bids,

(E) The terms of bid acceptances,

(F) Any referendum procedures in

addition to, but consistent with, those in

§ 600.1010, and

(G) All other technical matters

necessary to conduct a program;

(2) Projects and supports the

reduction fishery’s annual delivery

value during the reduction loan’s

repayment period based on documented

analysis of actual representative

experience for a reasonable number of

past years in the reduction fishery;

(3) Includes the fishing capacity

reduction specifications upon which

both the pre-bidding referendum and

the bidding under § 600.1009 will be

based. The reduction loan’s maximum

principal amount cannot, at the interest

rate projected to prevail at the time of

reduction, exceed the principal amount

that can be amortized in 20 years by 5

percent of the projected delivery value;

(4) States the reduction loan’s

repayment term and the fee rate, or

range of fee rates, prospectively

necessary to amortize the reduction loan

over its repayment term;

(5) Analyzes and demonstrates the

ability to repay the reduction loan at the

minimum reduction level and at various

reduction-level increments reasonably

greater than the minimum one, based on

the:

(i) Best and most representative

historical fishing revenue and expense

data and any other relevant productivity

measures available in the reduction

fishery, and

(ii) Projected effect of the program on

the post-reduction operating economics

of typical harvesters in the reduction

fishery, with particular emphasis on the

extent to which the reduction increases

the ratio of delivery value to fixed cost

and improves harvesting’s other

relevant productivity measures;

(6) Demonstrates how the business

plan’s proposed program meets, or will

31446 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

meet after an appropriate reduction

amendment, the requirements in

§ 600.1002(a);

(7) Demonstrates how the CFMP

meets, or will meet after an appropriate

reduction amendment, the requirements

in § 600.1002(b);

(8) Includes, if a reduction

amendment is necessary, the reduction

amendment specifications upon which

the pre-bidding referendum will be

based;

(9) Includes an assessment of the

program’s potential impact on fisheries

other than the reduction fishery,

including an evaluation of the likely

increase in participation or effort in

such other fisheries, the general

economic impact on such other

fisheries, and recommendations that

could mitigate, or enable such other

fisheries to mitigate, any undesirable

impacts;

(10) Specifies the names and

addresses of record of all fish buyers

who can, after reduction, reasonably be

expected to receive deliveries of fee fish.

This shall be based on the best

information available, including any

information that NMFS may be able to

supply to the business planners;

(11) Specifies, after full consultation

with fish buyers, any special

circumstances in the reduction fishery

that may require the implementing

regulations to contain provisions in

addition to, or different from, those

contained in § 600.1013 and/or

§ 600.1014 in order to accommodate the

circumstances of, and practices in, the

reduction fishery while still fulfilling

the intent and purpose of § 600.1013

and/or § 600.1014—including, but not

limited to:

(i) In the case of reduction fisheries in

which state data confidentiality laws or

other impediments may negatively

affect the efficient and effective conduct

of the same, specification of who needs

to take what action to resolve any such

impediments, and

(ii) In the case of reduction fisheries

in which some fish sellers sell

unprocessed, and other fish sellers sell

processed fish to fish buyers,

specification of an accurate and efficient

method of establishing the delivery

value of processed fish; and

(12) Demonstrates by a survey of

potential voters, or by any other

convincing means, a substantial degree

of potential voter support for the

business plan and confidence in its

feasibility.

(o) Include the requester’s statement

of belief that the business plan, the

CFMP, the reduction amendment

specifications, and all other request

aspects constitute a complete, realistic,

and practical prospect for successfully

completing a program in accordance

with this subpart.

§ 600.1004 Accepting a request for, and

determinations about initiating, a financed

program.

(a) Accepting a request. Once it

receives a request, NMFS will review

any request for a financed program to

determine whether the request conforms

with the requirements of § 600.1003. If

the request does not conform, NMFS

will return the request with guidance on

how to make the request conform. If the

request conforms, NMFS shall accept it

and publish a notice in the Federal

Register requesting public comments on

the request. Such notice shall state the

name and address of record of each

eligible voter, as well as the basis for

having determined the eligibility of

those voters. This shall constitute notice

and opportunity to respond about

adding eligible voters, deleting

ineligible voters, and/or correcting any

voter’s name and address of record. If,

in NMFS’ discretion, the comments

received in response to such notice

warrants it, or other good cause

warrants it, NMFS may modify such list

by publishing another notice in the

Federal Register.

(b) Determination about initiating a

financed program. After receipt of a

conforming request for a financed

program, NMFS will, after reviewing

and responding to any public comments

received in response to the notice

published in the Federal Register under

paragraph (a) of this section, initiate the

program if NMFS determines that: (1)

The program meets, or will meet after an

appropriate reduction amendment, the

requirements in § 600.1002(a);

(2) The CFMP meets, or will meet

after an appropriate reduction

amendment, the requirements in

§ 600.1002(b);

(3) The program, if successfully

implemented, is cost effective;

(4) The reduction requested

constitutes a realistic and practical

prospect for successfully completing a

program in accordance with this subpart

and the borrower is capable of repaying

the reduction loan. This includes

enabling NMFS to readily design,

propose, and adopt a timely and reliable

implementation plan as well as propose

and issue timely and reliable

implementation regulations and

otherwise complete the program in

accordance with this subpart; and

(5) The program accords with all other

applicable law;

§ 600.1005 Content of a request for a

subsidized program.

A request for a subsidized program

shall:

(a) Specify the reduction fishery.

(b) Project the amount of the

reduction and specify what a reduction

of that amount achieves in the reduction

fishery.

(c) Project the reduction cost, the

amount of reduction cost to be funded

by Federal appropriations, and the

amount, if any, to be funded by other

sources.

(d) Project the availability of Federal

appropriations or other funding, if any,

that completion of the program requires,

including the time at which funding

from each source will be available and

how that relates to the time at which

elements of the reduction process are

projected to occur.

(e) List the names and addresses of

record of all fishing permit or fishing

vessel owners who are currently

authorized to harvest fish from the

reduction fishery, excluding those

whose authority is limited to

incidentally harvesting fish from the

reduction fishery during directed

fishing for fish not in the reduction

fishery. The list shall be based on the

best information available to the

requester, including any information

that NMFS may supply to the requester,

and take into account any limitation by

type of fishing gear operated, size of

fishing vessel operated, geographic area

of operation, or other factor that the

proposed program involves.

(f) Specify the aggregate total

allowable catch in the reduction fishery

during each of the preceding 5 years and

the aggregate portion of such catch

harvested by the parties listed under

paragraph (e) of this section.

(g) Include a preliminary

development plan that: (1) Specifies a

detailed reduction methodology that

accomplishes the maximum sustained

reduction in the reduction fishery’s

fishing capacity at the least cost and in

a minimum period of time, and

otherwise achieves the program result

that the requester specifies under

paragraph (b) of this section. The

methodology shall:

(i) Be sufficiently detailed to enable

NMFS to prepare a final development

plan to serve as the basis for NMFS to

readily design, propose, and adopt a

timely and reliable implementation plan

and propose and issue timely and

reliable implementation regulations,

and

(ii) Include:

(A) The contents and terms of

invitations to bid,

(B) Eligible bidders,

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31447

(C) The type of information that

bidders shall supply,

(D) The criteria for accepting or

rejecting bids, and

(E) The terms of bid acceptances;

(2) Specifies the criteria for

determining the types and numbers of

fishing permits or fishing permits and

fishing vessels that are eligible for

reduction under the program. The

criteria shall take into account:

(i) The characteristics of the fishery,

(ii) Whether the program is limited to

a particular gear type within the

reduction fishery, or is otherwise

limited by size of fishing vessel

operated, geographic area of operation,

or other factor,

(iii) Whether the program is limited to

fishing permits or involves both fishing

permits and fishing vessels,

(iv) The reduction amendment

required,

(v) The needs of fishing communities,

and

(vi) The need to minimize the

program’s reduction cost; and

(3) Demonstrates the program’s cost

effectiveness.

(h) Demonstrate how the program

meets, or will meet after an appropriate

reduction amendment, the requirements

in § 600.1002(a).

(i) Demonstrate how the CFMP meets,

or will meet after an appropriate

reduction amendment, the requirements

in § 600.1002(b)(1) and (2).

(j) Specify any other information or

guidance that assists NMFS in preparing

a final development plan and a

proposed implementation plan and

proposed implementation regulations.

(k) Include the requester’s statement

of belief that the program constitutes a

reasonably realistic and practical

prospect for successfully completing a

program in accordance with this

subpart.

§ 600.1006 Accepting a request for, and

determinations about conducting, a

subsidized program.

(a) Accepting a request. NMFS will

review any request for a subsidized

program submitted to NMFS to

determine whether the request conforms

with the requirements of § 600.1005. If

the request does not conform, NMFS

will return it with guidance on how to

make the request conform. If the request

conforms, NMFS shall accept it and

publish a notice in the Federal Register

requesting public comments about the

request.

(b) Final development plan. After

receipt of a conforming request, NMFS

will prepare a final development plan if

NMFS determines that the reduction

requested constitutes a realistic and

practical prospect for successfully

completing a program in accordance

with this subpart. This includes

enabling NMFS to readily design,

propose, and adopt a timely and reliable

implementation plan as well as propose

and issue timely and reliable

implementation regulations and

otherwise complete the program in

accordance with this subpart. NMFS

will, as far as possible, base the final

development plan on the requester’s

preliminary development plan. Before

completing the final development plan,

NMFS will consult, as NMFS deems

necessary, with the requester, Federal

agencies, state and regional authorities,

affected fishing communities,

participants in the reduction fishery,

conservation organizations, and other

interested parties in preparing the final

development plan.

(c) Reaffirmation of the request. After

completing the final development plan,

NMFS will submit the plan to the

requester for the requester’s

reaffirmation of the request. Based on

the final development plan, the

reaffirmation shall: (1) Certify that the

final development plan meets, or will

meet after an appropriate reduction

amendment, the requirements in

§ 600.1002(a);

(2) Certify that the CFMP meets, or

will meet after an appropriate reduction

amendment, the requirements in

§ 600.1002(b)(1) and (2); and

(3) Project the date on which the

requester will forward any necessary

reduction amendment and, if the

requester is a Council, proposed

regulations to implement the reduction

amendment. The requester shall base

any necessary reduction amendment on

the final development plan.

(d) Determinations about conducting

a subsidized program. After NMFS’

receipt of the requester’s reaffirmation,

any required reduction amendment, and

any proposed regulations required to

implement the amendment, NMFS will

initiate the program if NMFS determines

that: (1) The program meets, or will

meet after an appropriate reduction

amendment, the requirements in

§ 600.1002(a);

(2) The CFMP meets, or will meet

after an appropriate reduction

amendment, the requirements in

§ 600.1002(b)(1) and (2); and

(3) The program is reasonably capable

of being successfully implemented;

(4) The program, if successfully

implemented, will be cost effective; and

(5) The program is in accord with all

other applicable provisions of the

Magnuson-Stevens Act and this subpart.

§ 600.1007 Reduction amendments.

(a) Each reduction amendment may

contain provisions that are either

dependent upon or independent of a

program. Each provision of a reduction

amendment is a dependent provision

unless the amendment expressly

designates the provision as

independent.

(b) Independent provisions are

effective without regard to any

subsequent program actions.

(c) Dependent provisions are initially

effective for the sole limited purpose of

enabling initiation and completion of

the pre-reduction processing stage of a

program.

(d) All dependent provisions of a

reduction amendment for a financed

program are fully in force and effect for

all other purposes only when NMFS

either: (1) For bidding results that

conform to the fishing capacity

reduction specifications and are not

subject to any other condition, notifies

bidders, under § 600.1009(e)(3), that

reduction contracts then exist between

the bidders and the United States; or

(2) For bidding results that do not

conform to the fishing capacity

reduction specifications or are subject to

any other condition, notifies bidders

whose bids NMFS had conditionally

accepted, under § 600.1010 (d)(8)(iii),

that the condition pertaining to the

reduction contracts between them and

the United States is fulfilled.

(e) If NMFS does not, in accordance

with this subpart and any special

provisions in the implementation

regulations, subsequently make all

reduction payments that circumstances,

in NMFS’ judgment, reasonably permit

NMFS to make and, thus, complete a

program, no dependent provisions shall

then have any further force or effect for

any purpose and all final regulations

involving such dependent provisions

shall then be repealed.

§ 600.1008 Implementation plan and

implementation regulations.

(a) As soon as practicable after

deciding to initiate a program, NMFS

will prepare and publish, for a 60-day

public comment period, a proposed

implementation plan and

implementation regulations. During the

public comment period, NMFS will

conduct a public hearing of the

proposed implementation plan and

implementation regulations in each

state that the program affects.

(b) To the greatest extent practicable,

NMFS will base the implementation

plan and implementation regulations for

a financed program on the business

plan. The implementation plan for a

financed program will describe in detail

31448 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

all relevant aspects of implementing the

program, including:

(1) The reduction fishery;

(2) The reduction methodology;

(3) The maximum reduction cost;

(4) The maximum reduction loan

amount, if different from the maximum

reduction cost;

(5) The reduction cost funding, if any,

other than a reduction loan;

(6) The minimum acceptable

reduction level;

(7) The potential amount of the fee;

(8) The criteria for determining the

types and number of fishing permits or

fishing permits and fishing vessels

eligible to participate in the program;

(9) The invitation to bid and bidding

procedures;

(10) The criteria for determining bid

acceptance;

(11) The referendum procedures; and

(12) Any relevant post-referendum

reduction procedures other than those

in the implementation regulations or

this subpart.

(c) NMFS will base each

implementation plan and

implementation regulations for a

subsidized program on the final

development plan. The implementation

plan will describe in detail all relevant

aspects of implementing the program,

including: (1) The reduction fishery;

(2) The reduction methodology;

(3) The maximum reduction cost;

(4) The reduction-cost funding, if any,

other than Federal appropriations;

(5) The criteria for determining the

types and number of fishing permits or

fishing permits and fishing vessels

eligible to participate in the program;

(6) The invitation to bid and bidding

procedures;

(7) The criteria for determining bid

acceptance; and

(8) Any relevant post-bidding program

procedures other than those in the

implementation regulations or this

subpart.

(d) The implementation regulations

will:

(1) Specify, for invitations to bid,

bids, and reduction contracts under

§ 600.1009:

(i) Bidder eligibility,

(ii) Bid submission requirements and

procedures,

(iii) A bid opening date, before which

a bidder may not bid, and a bid closing

date, after which a bidder may not bid,

(iv) A bid expiration date after which

the irrevocable offer contained in each

bid expires unless NMFS, before that

date, accepts the bid by mailing a

written acceptance notice to the bidder

at the bidder’s address of record,

(v) The manner of bid submission and

the information each bidder shall

supply for NMFS to deem a bid

responsive,

(vi) The conditions under which

NMFS will accept or reject a bid,

(vii) The manner in which NMFS will

accept or reject a bid, and

(viii) The manner in which NMFS

will notify each bidder of bid

acceptance or rejection;

(2) Specify any other special

referendum procedures or criteria; and

(3) Specify such other provisions, in

addition to and consistent with those in

this subpart, necessary to regulate the

individual terms and conditions of each

program and reduction loan. This

includes, but is not limited to:

(i) Provisions for the payment of costs

and penalties for non-payment, noncollection, non-deposit, and/or nondisbursement of the fee in accordance

with § 600.1013 and § 600.1014,

(ii) Prospective fee rate

determinations, and

(iii) Any other aspect of fee payment,

collection, deposit, disbursement,

accounting, record keeping, and/or

reporting.

(e) NMFS will issue final

implementation regulations and adopt a

final implementation plan within 45

days of the close of the public-comment

period.

(f) NMFS may repeal the final

implementation regulations for any

program if: (1) For a financed program,

the bidding results do not conform to

the fishing capacity reduction

specifications or a post-bidding

referendum does not subsequently

approve an industry fee system based on

the bidding results;

(2) For a subsidized program, NMFS

does not accept bids; and

(3) For either a financed program or

a subsidized program, if NMFS is

unable to make all reduction payments

due to a material adverse change.

§ 600.1009 Bids.

(a) Each invitation to bid, bid, bid

acceptance, reduction contract, and

bidder—or any other party in any way

affected by any of the foregoing—under

this subpart is subject to the terms and

conditions in this section: (1) Each

invitation to bid constitutes the entire

terms and conditions of a reduction

contract under which:

(i) Each bidder makes an irrevocable

offer to the United States of fishing

capacity for reduction, and

(ii) NMFS accepts or rejects, on behalf

of the United States, each bidder’s offer;

(2) NMFS may, at any time before the

bid expiration date, accept or reject any

or all bids;

(3) For a financed program in which

bidding results do not conform to the

fishing capacity reduction

specifications, NMFS’ acceptance of any

bid is subject to the condition that the

industry fee system necessary to repay

the reduction loan is subsequently

approved by a successful post-bidding

referendum conducted under

§ 600.1010. Approval or disapproval of

the industry fee system by post-bidding

referendum is an event that neither the

United States nor the bidders can

control. Disapproval of the industry fee

system by an unsuccessful post-bidding

referendum fully excuses both parties

from any performance and fully

discharges all duties under any

reduction contract;

(4) For a financed program in one

reduction fishery that is being

conducted under appropriate

implementation regulations

simultaneously with another financed

program in another reduction fishery,

where the acceptance of bids for each

financed program is conditional upon

successful post-bidding referenda

approving industry fee systems for both

financed programs, NMFS’ acceptance

of all bids is, in addition to any

condition under paragraph (a)(3) of this

section, also subject to the additional

conditions that both referenda approve

the industry fee systems required for

both financed programs–-all as

otherwise provided in paragraph (a)(3)

of this section;

(5) Upon NMFS’ acceptance of the bid

and tender of a reduction payment, the

bidder consents to:

(i) The revocation, by NMFS, of any

reduction permit, and

(ii) Where the program also involves

the withdrawal of reduction vessels

from fishing:

(A) Title restrictions imposed by the

U.S. Coast Guard on any reduction

vessel that is federally documented to

forever prohibit and effectively prevent

any future use of the reduction vessel

for fishing in any area subject to the

jurisdiction of the United States or any

state, territory, commonwealth, or

possession of the United States, or

(B) Where reduction vessel scrapping

is involved and the reduction vessel’s

owner does not comply with the

owner’s obligation under the reduction

contract to scrap the reduction vessel,

take such measures as necessary to

cause the reduction vessel’s prompt

scrapping. The scrapping will be at the

reduction vessel owner’s risk and

expense. Upon completion of scrapping,

NMFS will take such action as may be

necessary to recover from the reduction

vessel owner any cost or expense NMFS

incurred in causing the reduction vessel

to be scrapped and any other damages

NMFS may have incurred and such

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31449

owner shall be liable to the United

States for such cost, expenses, and

damages;

(6) Money damages not being an

adequate remedy for a bidder’s breach of

a reduction contract, the United States

is, in all particulars, entitled to specific

performance of each reduction contract.

This includes, but is not limited to, the

scrapping of a reduction vessel;

(7) Any reduction payment is

available, upon timely and adequately

documented notice to NMFS, to satisfy

liens, as allowed by law, against any

reduction permit/and or reduction

vessel; provided, however, that:

(i) No reduction payment to any

bidder either relieves the bidder of

responsibility to discharge the

obligation which gives rise to any lien

or relieves any lien holder of

responsibility to protect the lien

holder’s interest,

(ii) No reduction payment in any way

gives rise to any

liability of the United States for the

obligation underlying any lien,

(iii) No lien holder has any right or

standing, not otherwise provided by

law, against the United States in

connection with the revocation of any

reduction permit or the title restriction

or scrapping of any reduction vessel

under this subpart, and

(iv) This subpart does not provide any

lien holder with any right or standing to

seek to set aside any revocation of any

reduction permit or the title restriction

or scrapping of any reduction vessel for

which the United States made, or has

agreed to make, any reduction payment.

A lien holder is limited to recovery

against the holder of the reduction

permit or the owner of the reduction

vessel as otherwise provided by law;

and

(8) Each invitation to bid may specify

such other terms and conditions as

NMFS believes necessary to enforce

specific performance of each reduction

contract or otherwise to ensure

completing each program. This

includes, but is not limited to, each

bidder’s certification, subject to the

penalties in § 600.1017, of the bidder’s

full authority to submit each bid and to

dispose of the property involved in the

bid in the manner contemplated by each

invitation to bid.

(b) NMFS will not invite bids for any

program until NMFS determines that:

(1) Any necessary reduction amendment

is fully and finally approved and all

provisions except those dependent on

the completion of reduction are

implemented;

(2) The final implementation plan is

adopted and the final implementation

regulations are issued;

(3) All required program funding is

approved and in place, including all

Federal appropriation and

apportionment authority;

(4) Any reduction loan involved is

fully approved;

(5) Any non-Federal funding involved

is fully available at the required time for

NMFS disbursement as reduction

payments; and

(6) All other actions necessary to

disburse reduction payments, except for

matters involving bidding and postbidding referenda, are completed.

(c) After making the affirmative

determinations required under

paragraph (b) of this section, NMFS will

publish a Federal Register notice

inviting eligible bidders to offer to the

United States, under this subpart,

fishing capacity for reduction.

(d) NMFS may extend a bid closing

date and/or a bid expiration date for a

reasonable period. NMFS may also issue

serial invitations to bid if the result of

previous bidding, in NMFS’ judgment,

warrant this.

(e) After the bid expiration date,

NMFS will: (1) Analyze responsive bids;

(2) Determine which bids, if any,

NMFS accepts; and

(3) Notify, by U.S. mail at each

bidder’s address of

record, those bidders whose bids

NMFS accepts that a reduction contract

now exists between them and the

United States—subject, where

appropriate, to the conditions provided

for elsewhere in this subpart.

(f) NMFS will keep confidential the

identity of all bidders whose bids NMFS

does not accept. In financed programs

where bidding results do not conform to

the fishing capacity reduction

specifications, NMFS also will keep

confidential the identity of all bidders

whose bids NMFS does accept until

after completing a successful postbidding referendum under § 600.1010.

§ 600.1010 Referenda.

(a) Referendum success. A

referendum is successful if at least twothirds of the ballots that qualify to be

counted as referendum votes under

subparagraph (d)(6) of this section are

cast in favor of an industry fee system.

(b) Pre-bidding referendum—(1)

Initial referendum. An initial prebidding referendum shall be conducted

for each financed program. The business

plan shall, subject to this subpart,

determine the chronological

relationship of the initial pre-bidding

referendum to other pre-bidding aspects

of the reduction process sequence. The

initial pre-bidding referendum shall be

based on the fishing capacity reduction

specifications. If the initial pre-bidding

referendum precedes the adoption of

any necessary reduction amendment,

the initial pre-bidding referendum shall

also be based on the reduction

amendment specifications. If the initial

pre-bidding referendum follows the

adoption of any necessary reduction

amendment, the initial pre-bidding

referendum shall also be based on the

adopted reduction amendment;

(2) Successful initial pre-bidding

referendum. If the initial pre-bidding

referendum is successful, the reduction

process will proceed as follows:

(i) If the initial pre-bidding

referendum follows reduction

amendment adoption, no second prebidding referendum shall be conducted,

(ii) If the initial pre-bidding

referendum precedes reduction

amendment adoption, a second prebidding referendum shall be conducted

if, in NMFS’ judgment, the reduction

amendment subsequently adopted

differs, in any respect materially

affecting the borrower’s reduction

investment in the program and the

borrower’s ability to repay the reduction

loan, from the reduction amendment

specifications upon which the initial

pre-bidding referendum successfully

occurred. The sole purpose of any

second pre-bidding referendum shall be

to determine whether the voters

authorize an industry fee system despite

any such difference between the

reduction amendment specifications

and a subsequently adopted reduction

amendment.

(3) Unsuccessful initial pre-bidding

referendum. If the initial pre-bidding

referendum is unsuccessful, the

reduction process will either cease or

NMFS may suspend the process

pending an appropriate amendment of

the business plan and the request.

(c) Post-bidding referendum. A postbidding referendum shall occur only if,

in NMFS’ judgment, the result of

bidding under § 600.1009 does not

conform, in any material respect, to the

fishing capacity reduction specifications

and such result justifies, in NMFS’

judgment, conducting a post-bidding

referendum. Bidding that results in

reducing fishing capacity in any amount

not less than the minimum fishing

capacity reduction amount for any

reduction loan amount not more than

the maximum reduction loan amount,

and otherwise achieves all material

requirements of the fishing capacity

reduction specifications, shall conform

to the fishing capacity reduction

specifications. The sole purpose of any

post-bidding referendum shall be to

determine whether voters authorize an

industry fee system for bidding that

results in reducing fishing capacity in

31450 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

any amount materially less than the

minimum amount in the fishing

capacity reduction specifications.

(d) NMFS will conduct referenda in

accordance with the following: (1)

Eligible voters. The parties eligible to

vote in each referendum are the parties

whose names are listed as being eligible

to vote in the notice published in the

Federal Register under § 600.1004(a);

(2) Ballot issuance. NMFS will mail,

by U.S. certified mail, return receipt

requested, a ballot to each eligible voter.

Each ballot will bear a randomly

derived, 5-digit number assigned to each

eligible voter. Each ballot will contain a

place for the voter to vote for or against

the proposed industry fee system and a

place, adjacent to the 5-digit number, for

the signature of the fishing permit or

fishing vessel owner to whom the ballot

is addressed or, if the fishing permit or

fishing vessel owner is an organization,

the person having authority to vote and

cast the ballot on the organization’s

behalf. Each ballot will contain a place

for the person signing the ballot to print

his or her name. NMFS will enclose

with each ballot a specially-marked,

postage-paid, pre-addressed envelope

that each voter shall use to return the

ballot to NMFS;

(3) Voter certification. Each ballot will

contain a certification, subject to the

penalties set forth in § 600.1017, that the

person signing the ballot is the fishing

permit or fishing vessel owner to whom

the ballot is addressed or, if the fishing

permit or fishing vessel owner is an

organization, the person having

authority to vote and cast the ballot on

the organization’s behalf;

(4) Information included on a ballot.

Each ballot mailing will:

(i) Summarize the referendum’s

nature and purpose,

(ii) Specify the date by which NMFS

must receive a ballot in order for the

ballot to be counted as a qualified vote,

(iii) Identify the place on the ballot for

the voter to vote for or against the

proposed industry fee system, the place

on the ballot where the voter shall sign

the ballot, and the purpose of the return

envelope,

(iv) For each pre-bidding referendum,

state:

(A) The fishing capacity reduction

specifications,

(B) The reduction loan’s repayment

term, and

(C) The fee rate, or range of fee rates,

prospectively necessary to amortize the

reduction loan over the loan’s term,

(v) For each initial pre-bidding

referendum that precedes reduction

amendment adoption, state the

reduction amendment specifications,

(vi) For each initial pre-bidding

referendum that follows reduction

amendment adoption, summarize the

material aspects of the reduction

amendment adopted,

(vii) For each second pre-bidding

referendum, summarize how the

adopted reduction amendment

materially differs from the reduction

amendment specifications upon which a

successful initial pre-bidding

referendum occurred and how this

material difference affects the

borrower’s reduction investment in the

program and the borrower’s ability to

repay the reduction loan,

(viii) For each post-bidding

referendum, specify the actual bidding

results that do not conform to the

fishing capacity reduction

specifications, and

(ix) State or include whatever else

NMFS deems appropriate;

(5) Enclosures to accompany a ballot.

Each ballot mailing will include:

(i) A specially-marked, postage-paid,

and pre-addressed envelope that a voter

must use to return the original of a

ballot to NMFS by whatever means of

delivery the voter chooses, and

(ii) Such other materials as NMFS

deems appropriate;

(6) Vote qualification. A completed

ballot qualifies to be counted as a vote

if the ballot:

(i) Is physically received by NMFS on

or before the last day NMFS specifies for

receipt of the ballot,

(ii) Is cast for or against the proposed

industry fee system,

(iii) Is signed by the voter,

(iv) Is the original ballot NMFS sent

to the voter bearing the same 5-digit

number that NMFS assigned to the

voter, and

(v) Was returned to NMFS in the

specially-marked envelope that NMFS

provided for the ballot’s return;

(6) Vote tally and notification. NMFS

will:

(i) Tally all ballots qualified to be

counted as referendum votes,

(ii) Notify, by U.S. mail at the address

of record, all eligible voters who

received ballots of:

(A) The number of potential voters,

(B) The number of actual voters who

returned a ballot,

(C) The number of returned ballots

that qualified to be counted as

referendum votes,

(D) The number of votes for and the

number of votes against the industry fee

system, and

(E) Whether the referendum was

successful and approved the industry

fee system or unsuccessful and

disapproved the industry fee system,

and

(iii) If a successful referendum is a

post-bidding referendum, NMFS will, at

the same time and in the same manner,

also notify the bidders whose bids were

conditionally accepted that the

condition pertaining to the reduction

contracts between them and the United

States is fulfilled;

(7) Conclusiveness of referendum

determinations. NMFS’ determinations

about ballot qualifications and about all

other referendum matters, including,

but not limited to, eligible voters and

their addresses of record, are conclusive

and final as of the date NMFS makes

such determinations. No matter

respecting such determinations shall

impair, invalidate, avoid, or otherwise

render unenforceable any referendum,

reduction contract, reduction loan, or

fee payment and collection obligation

under § 600.1013 and § 600.1014

necessary to repay any reduction loan;

(8) Ballot confidentiality. NMFS will

not voluntarily release the name of any

party who voted. NMFS will restrict the

availability of all voter information to

the maximum extent allowed by law;

and

(9) Conclusive authorization of

industry fee system. Each successful

referendum conclusively authorizes

NMFS’ imposition of an industry fee

system—including the fee payment,

collection, and other provisions

regarding fee payment and collection

under § 600.1013 and § 600.1014—to

repay the reduction loan for each

financed program that NMFS conducts

under this subpart.

§ 600.1011 Reduction methods and other

conditions.

(a) Reduction permits or reduction

permits and reduction vessels. Each

program may involve either the

surrender and revocation of reduction

permits or both the surrender and

revocation of reduction permits and the

withdrawal from fishing either by title

restriction or by scrapping of reduction

vessels. No financed program may,

however, require such title restriction or

scrapping of reduction vessels unless

the business plan voluntarily includes

the same.

(b) Reduction permit revocation and

surrender. Each reduction permit is,

upon NMFS’ tender of the reduction

payment for the reduction permit,

forever revoked. Each reduction permit

holder shall, upon NMFS’ tender of the

reduction payment, surrender the

original reduction permit to NMFS. The

reduction permit holder, upon NMFS’

tender of the reduction payment, forever

relinquishes any claim associated with

the reduction permit and with the

fishing vessel that was used to harvest

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31451

fishery resources under the reduction

permit that could qualify the reduction

permit holder or the fishing vessel

owner for any present or future limited

access system fishing permit in the

reduction fishery.

(c) Reduction vessel title restriction or

scrapping. For each program that

involves reduction vessel title

restriction or scrapping: (1) Each

reduction vessel that is subject to title

restriction only and is thus not required

to be scrapped, is, upon NMFS’ tender

of the reduction payment, forever

prohibited from any future use for

fishing in any area subject to the

jurisdiction of the United States or any

State, territory, possession, or

commonwealth of the United States.

NMFS will request that the U.S. Coast

Guard permanently restrict each such

reduction vessel’s title to exclude the

reduction vessel’s future use for fishing

in any such area;

(2) Each reduction vessel owner

whose reduction vessel is required to be

scrapped shall, upon NMFS’ tender of

the reduction payment, immediately

cease all further use of the reduction

vessel and arrange, without delay and at

the reduction vessel owner’s expense, to

scrap the reduction vessel to NMFS’

satisfaction, including adequate

provision for NMFS to document the

physical act of scrapping; and

(3) Each reduction vessel owner, upon

NMFS’ tender of the reduction payment,

forever relinquishes any claim

associated with the reduction vessel and

with the reduction permit that could

qualify the reduction vessel owner or

the reduction permit holder for any

present or future limited access system

fishing permit in the reduction fishery.

(d) Fishing permits in a non-reduction

fishery. A financed program that does

not involve the withdrawal from fishing

or scrapping of reduction vessels may

not require any holder of a reduction

permit in a reduction fishery to

surrender any fishing permit in any

non-reduction fishery or restrict or

revoke any fishing permit other than a

reduction permit in the reduction

fishery, except those fishing permits

authorizing the incidental harvesting of

species in any non-reduction fishery

during, and as a consequence of,

directed fishing for species in the

reduction fishery.

(e) Reduction vessels disposition.

Where a business plan requires the

withdrawal from fishing of reduction

vessels as well as the revocation of

reduction permits: (1) Each reduction

vessel that is not documented under

Federal law must in every case always

be scrapped, without regard to whether

a program is a financed program or a

subsidized program;

(2) No financed program may require

any disposition of a reduction vessel

documented under Federal law other

than the title restriction in paragraph (b)

of this section unless the business plan

volunteers to do otherwise; and

(3) Any subsidized program may

require the scrapping of reduction

vessels documented under Federal law.

(f) Reduction payments. NMFS will

disburse all reduction payments in the

amount and in the manner prescribed in

reduction contracts, except reduction

payments that a bidder’s reductioncontract nonperformance prevents

NMFS from disbursing. In financed

programs, the reduction loan’s principal

amount is the total amount of all

reduction payments that NMFS

disburses from the proceeds of a

reduction loan. Any reduction payment

that NMFS, because of a bidder’s

reduction-contract nonperformance,

disburses but subsequently recovers,

shall reduce the principal amount of the

reduction loan accordingly.

(g) Effect of reduction-contract

nonperformance. No referendum, no

reduction contract, no reduction loan,

and no fee payment and collection

obligation under § 600.1013 and

§ 600.1014 necessary to repay any

reduction loan, shall be impaired,

invalidated, avoided, or otherwise

rendered unenforceable by virtue of any

reduction contract’s nonperformance.

This is without regard to the cause of,

or reason for, nonperformance. NMFS

shall endeavor to enforce the specific

performance of all reduction contracts,

but NMFS’ inability, for any reason, to

enforce specific performance for any

portion of such reduction contracts shall

not relieve fish sellers of their obligation

to pay, and fish buyers of their

obligation to collect, the fee necessary to

fully repay the full reduction loan

balance that results from all reduction

payments that NMFS actually makes

and does not recover.

(h) Program completion. Other than

the payment and collection of the fee

that repays a reduction loan and any

other residual matters regarding

reduction payments and the disposition

of reduction permits and reduction

vessels, a program shall be completed

when NMFS tenders or makes all

reduction payments under all reduction

contracts that circumstances, in NMFS’

judgment, reasonably permit NMFS to

make.

§ 600.1012 Reduction loan.

(a) Obligation. The borrower shall be

obligated to repay a reduction loan. The

borrower’s obligation to repay a

reduction loan shall be discharged by

fish sellers paying a fee in accordance

with § 600.1013. Fish buyers shall be

obligated to collect the fee in

accordance with § 600.1013 and to

deposit and disburse the fee revenue in

accordance with § 600.1014.

(b) Principal amount, interest rate,

repayment term, and penalties for nonpayment or non-collection. The

reduction loan shall be: (1) In a

principal amount that shall be

determined by subsequent program

events under this subpart, but which

shall not exceed the maximum principal

amount in the fishing capacity

reduction specifications;

(2) At an annual rate, that shall be

determined by subsequent events, of

simple interest on the reduction loan’s

principal balance that shall equal 2

percent plus the Treasury percentage;

(3) Repayable over the repayment term

specified in the business plan or

otherwise determined by subsequent

events; and

(4) Subject to such provisions as

implementation regulations shall

specify for the payment of costs and

penalties for non-payment, noncollection, non-deposit, and/or nondisbursement in accordance with

§ 600.1013 and § 600.1014.

(c) Effect of prospective interest rate.

Any difference between a prospective

interest rate projected, for the purpose

of any aspect of reduction planning or

processing under this subpart, before

the U.S. Treasury determines the

Treasury percentage and an interest rate

first known after the U.S. Treasury

determines the Treasury percentage

shall not void, invalidate, or otherwise

impair any reduction contract, any

reduction loan repayment obligation, or

any other aspect of the reduction

process under this subpart. Should any

such difference result in a reduction

loan that cannot, at the maximum fee

rate allowed by law, be repaid, as

previously projected, within the

maximum maturity, any amount of the

reduction loan remaining unpaid at

maturity shall be repaid after maturity

by continuing fee payment and

collection under this subpart at such

maximum fee rate until the reduction

loan’s unpaid principal balance and

accrued interest is fully repaid. The

above notwithstanding, at the discretion

of the Secretary, the reduction contract

can be voided if a material adverse

change affects the reduction contract,

reduction loan obligation, or any other

aspect of the reduction process under

this subpart.

31452 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

§ 600.1013 Fee payment and collection.

(a) Amount. The fee amount is the

delivery value times the fee rate.

(b) Rate. NMFS will establish the fee

rate. The fee rate may not exceed 5

percent of the delivery value. NMFS

will establish the initial fee rate by

calculating the fee revenue annually

required to amortize a reduction loan

over the reduction loan’s term,

projecting the annual delivery value,

and expressing such fee revenue as a

percentage of such delivery value.

Before each anniversary of the initial fee

rate determination, NMFS will

recalculate the fee rate reasonably

required to ensure reduction loan

repayment. This will include any

changed delivery value projections and

any adjustment required to correct for

previous delivery values higher or lower

than projected.

(c) Payment and collection. (1) The

full fee is due and payable at the time

of fish delivery. Each fish buyer shall

collect the fee at the time of fish

delivery by deducting the fee from the

delivery value before paying, or

promising to pay, the net delivery value.

Each fish seller shall pay the fee at the

time of fish delivery by receiving from

the fish buyer the net delivery value, or

the fish buyer’s promise to pay the net

delivery value, rather than the delivery

value. Regardless of when the fish buyer

pays the net delivery value, the fish

buyer shall collect the fee at the time of

fish delivery;

(2) In the event of any post-delivery

payment for fee fish— including, but

not limited to bonuses—whose amount

depends on conditions that cannot be

known until after fish delivery, that

either first determines the delivery

value or later increases the previous

delivery value, the fish seller shall pay,

and the fish buyer shall collect, at the

time the amount of such post-delivery

payment first becomes known, the fee

that would otherwise have been due and

payable as if the amount of the postdelivery payment had been known, and

as if the post-delivery payment had

consequently occurred, at the time of

initial fish delivery;

(3)(i) Each fish seller shall be deemed

to be, for the purpose of the fee

collection, deposit, disbursement, and

accounting requirements of this subpart,

both the fish seller and the fish buyer,

and shall be responsible for all

requirements and liable for any

penalties under this subpart applicable

to fish sellers and/or fish buyers, each

time that a fish seller sells fee fish to:

(A) Any party whose place of business

is not located in the United States, who

does not take delivery or possession of

the fee fish in the United States, who is

not otherwise subject to this subpart, or

to whom or against whom NMFS cannot

otherwise apply or enforce this subpart,

(B) Any party who is a general foodservice wholesaler or supplier, a

restaurant, a retailer, a consumer, some

other type of end-user, or some other

party not engaged in the business of

buying fish from fish sellers for the

purpose of reselling the fish, either with

or without processing the fish, or

(C) Any other party who the fish seller

has good reason to believe is a party not

subject to this subpart or to whom or

against whom NMFS cannot otherwise

apply or enforce this subpart,

(ii) In each such case the fish seller

shall, with respect to the fee fish

involved in each such case, discharge,

in addition to the fee payment

requirements of this subpart, all the fee

collection, deposit, disbursement,

accounting, record keeping, and

reporting requirements that this subpart

otherwise imposes on the fish buyer,

and the fish seller shall be subject to all

the penalties this subpart provides for a

fish buyer’s failure to discharge such

requirements;

(4) Fee payment begins on the date

NMFS specifies under the notification

procedures of paragraph (d) of this

section and continues without

interruption at the fee rates NMFS

specifies in accordance this subpart

until NMFS determines that the

reduction loan is fully repaid. If a

reduction loan is, for any reason, not

fully repaid at the maturity of the

reduction loan’s original amortization

period, fee payment and collection shall

continue until the reduction loan is

fully repaid, notwithstanding that the

time required to fully repay the

reduction loan exceeds the reduction

loan’s initially permissible maturity.

(d) Notification. (1) At least 30 days

before the effective date of any fee or of

any fee rate change, NMFS will publish

a Federal Register notice establishing

the date from and after which the fee or

fee rate change is effective. NMFS will

then also send, by U.S. mail, an

appropriate notification to each affected

fish seller and fish buyer of whom

NMFS has notice;

(2) When NMFS determines that a

reduction loan is fully repaid, NMFS

will publish a Federal Register notice

that the fee is no longer in effect and

should no longer be either paid or

collected. NMFS will then also send, by

U.S. mail, notification to each affected

fish seller and fish buyer of whom

NMFS has knowledge;

(3) If NMFS fails to notify a fish seller

or a fish buyer by U.S. mail, or if the fish

seller or fish buyer otherwise does not

receive the notice, of the date fee

payments start or of the fee rate in

effect, each fish seller is, nevertheless,

obligated to pay the fee at the fee rate

in effect and each fish buyer is,

nevertheless, obligated to collect the fee

at the fee rate in effect.

(e) Failure to pay or collect. (1) If a

fish buyer refuses to collect the fee in

the amount and manner that this

subpart requires, the fish seller shall

then advise the fish buyer of the fish

seller’s fee payment obligation and of

the fish buyer’s fee collection obligation.

If the fish buyer still refuses to properly

collect the fee, the fish seller, within the

next 7 calendar days, shall forward the

fee to NMFS. The fish seller at the same

time shall also advise NMFS in writing

of the full particulars, including:

(i) The fish buyer’s and fish seller’s

name, address, and telephone number,

(ii) The name of the fishing vessel

from which the fish seller made fish

delivery and the date of doing so,

(iii) The quantity and delivery value

of each species of fee fish that the fish

seller delivered, and

(iv) The fish buyer’s reason, if known,

for refusing to collect the fee in

accordance with this subpart;

(2) If a fish seller refuses to pay the

fee in the amount and manner that this

subpart requires, the fish buyer shall

then advise the fish seller of the fish

buyer’s collection obligation and of the

fish seller’s payment obligation. If the

fish seller still refuses to pay the fee, the

fish buyer shall then either deduct the

fee from the delivery value over the fish

seller’s protest or refuse to buy the fee

fish. The fish buyer shall also, within

the next 7 calendar days, advise NMFS

in writing of the full particulars,

including:

(i) The fish buyer’s and fish seller’s

name, address, and telephone number,

(ii) The name of the fishing vessel

from which the fish seller made or

attempted to make fish delivery and the

date of doing so,

(iii) The quantity and delivery value

of each species of fee fish the fish seller

delivered or attempted to deliver,

(iv) Whether the fish buyer deducted

the fee over the fish seller’s protest or

refused to buy the fee fish, and

(v) The fish seller’s reason, if known,

for refusing to pay the fee in accordance

with this subpart.

(f) Implementation regulations at

variance with this section. If any special

circumstances in a reduction fishery

require, in NMFS’s judgment, fee

payment and/or collection provisions in

addition to, or different from, those in

this section in order to accommodate

the circumstances of, and practices in,

a reduction fishery while still fulfilling

the intent and purpose of this section,

Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations 31453

NMFS may, notwithstanding this

section, include such provisions in the

implementation regulations for such

reduction fishery.

§ 600.1014 Fee collection deposits,

disbursements, records, and reports.

(a) Deposit accounts. Each fish buyer

that this subpart requires to collect a fee

shall maintain a segregated account at a

federally insured financial institution

for the sole purpose of depositing

collected fee revenue and disbursing the

fee revenue directly to NMFS in

accordance with paragraph (c) of this

section.

(b) Fee collection deposits. Each fish

buyer, no less frequently than at the end

of each business week, shall deposit, in

the deposit account established under

paragraph (a) of this section, all fee

revenue, not previously deposited, that

the fish buyer collects through a date

not more than two calendar days before

the date of deposit. Neither the deposit

account nor the principal amount of

deposits in the account may be pledged,

assigned, or used for any purpose other

than aggregating collected fee revenue

for disbursement to the Fund in

accordance with paragraph (c) of this

section. The fish buyer is entitled, at

any time, to withdraw deposit interest,

if any, but never deposit principal, from

the deposit account for the fish buyer’s

own use and purposes.

(c) Deposit principal disbursement.

On the last business day of each month,

or more frequently if the amount in the

account exceeds the account limit for

insurance purposes, the fish buyer shall

disburse to NMFS the full amount of

deposit principal then in the deposit

account. The fish buyer shall do this by

check made payable to the Fund

subaccount to which the deposit

principal relates. The fish buyer shall

mail each such check to the Fund

subaccount lockbox that NMFS

establishes for the receipt of the

disbursements for each program. Each

disbursement shall be accompanied by

the fish buyer’s settlement sheet

completed in the manner and form that

NMFS specifies. NMFS will specify the

Fund subaccount lockbox and the

manner and form of settlement sheet by

means of the notification in

§ 600.1013(d).

(d) Records maintenance. Each fish

buyer shall maintain, in a secure and

orderly manner for a period of at least

3 years from the date of each transaction

involved, at least the following

information: (1) For all deliveries of fee

fish that the fish buyer buys from each

fish seller:

(i) The date of delivery,

(ii) The seller’s identity,

(iii) The weight, number, or volume of

each species of fee fish delivered,

(iv) The identity of the fishing vessel

that delivered the fee fish,

(v) The delivery value of each species

of fee fish,

(vi) The net delivery value,

(vii) The identity of the party to

whom the net delivery value is paid, if

other than the fish seller,

(viii) The date the net delivery value

was paid, and

(ix) The total fee amount collected;

(2) For all fee collection deposits to

and disbursements from the deposit

account:

(i) The dates and amounts of deposits,

(ii) The dates and amounts of

disbursements to the Fund’s lockbox

account, and

(iii) The dates and amounts of

disbursements to the fish buyer or other

parties of interest earned on deposits.

(e) Annual report. In each year, on the

date to be specified in each

implementation regulation, succeeding

the year during which NMFS first

implemented a fee, each fish buyer shall

submit to NMFS a report, on or in the

form NMFS specifies, containing the

following information for the preceding

year, or whatever longer period may be

involved in the first annual report, for

all fee fish each fish buyer purchases

from fish sellers: (1) Total weight,

number, or volume bought;

(2) Total delivery value paid;

(3) Total fee amounts collected;

(4) Total fee collection amounts

deposited by month;

(5) Dates and amounts of monthly

disbursements to each Fund lockbox

account;

(6) Total amount of interest earned on

deposits; and

(7) Depository account balance at

year-end.

(f) State records. If landing records

that a state requires from fish sellers

contain some or all of the data that this

section requires and state

confidentiality laws or regulations do

not prevent NMFS’ access to the records

maintained for the state, then fish

buyers can use such records to meet

appropriate portions of this section’s

recordkeeping requirements. If,

however, state confidentiality laws or

regulations make such records

unavailable to NMFS, then fish buyers

shall maintain separate records for

NMFS that meet the requirements of

this section. If any state law or

regulation prohibits fish buyers, or fish

sellers where appropriate, from keeping,

for the purpose of complying with any

requirement of this section, separate

records that involve some or all of the

same data elements as the landing

records that the fish buyers also keep,

for state purposes and under state law

or regulation, then a financed reduction

program will not be possible.

(g) Audits. NMFS or its agents may

audit, in whatever manner NMFS

believes reasonably necessary for the

duly diligent administration of

reduction loans, the financial records of

fish buyers and fish sellers in each

reduction fishery in order to ensure

proper fee payment, collection, deposit,

disbursement, accounting, record

keeping, and reporting. Fish buyers and

fish sellers shall make all records of all

program transactions involving postreduction fish harvests, fish deliveries,

and fee payments, collections, deposits,

disbursements, accounting, record

keeping, and reporting available to

NMFS or NMFS’ agents at reasonable

times and places and promptly provide

all requested information reasonably

related to these records that such fish

sellers and fish buyers may otherwise

lawfully provide. Trip tickets (or similar

accounting records establishing the

pounds of fee fish that each fish buyer

buys from each fish seller each time that

each fish buyer does so and each price

that each fish buyer then pays to each

fish seller for the fee fish) are essential

audit documentation.

(h) Confidentiality of records. NMFS

and NMFS’ auditing agents shall

maintain the confidentiality of all data

to which NMFS has access under this

section and shall neither release the

data nor allow the data’s use for any

purpose other than the purpose of this

subpart; provided, however, that NMFS

may aggregate such data so as to

preclude their identification with any

fish buyer or any fish seller and use

them in the aggregate for other

purposes).

(i) Refunds. When NMFS determines

that a reduction loan is fully repaid,

NMFS will refund any excess fee

receipts, on a last-in/first-out basis, to

the fish buyers. Fish buyers shall return

the refunds, on a last-in/first-out basis,

to the fish sellers who paid the amounts

refunded.

(j) Implementation regulations at

variance with this section. If any special

circumstances in a reduction fishery

require, in NMFS’s judgment, fee

collection deposit, disbursement, or

records provisions in addition to, or

different from, those in this section in

order to accommodate the

circumstances of, and practices in, a

reduction fishery while still fulfilling

the intent and purpose of this section,

NMFS may, notwithstanding this

section, include such provisions in the

implementation regulations for such

reduction fishery.

31454 Federal Register / Vol. 65, No. 97 / Thursday, May 18, 2000 / Rules and Regulations

§ 600.1015 Late charges.

The late charge to fish buyers for fee

payment, collection, deposit, and/or

disbursement shall be one and one-half

(1.5) percent per month, or the

maximum rate permitted by state law,

for the total amount of the fee not paid,

collected, deposited, and/or disbursed

when due to be paid, collected,

deposited, and/or disbursed. The full

late charge shall apply to the fee for

each month or portion of a month that

the fee remains unpaid, uncollected,

undeposited, and/or undisbursed.

§ 600.1016 Enforcement.

In accordance with applicable law or

other authority, NMFS may take

appropriate action against each fish

seller and/or fish buyer responsible for

non-payment, non-collection, nondeposit, and/or non-disbursement of the

fee in accordance with this subpart to

enforce the collection from such fish

seller and/or fish buyer of any fee

(including penalties and all costs of

collection) due and owing the United

States on account of the loan that such

fish seller and/or fish buyer should

have, but did not, pay, collect, deposit,

and/or disburse in accordance with this

subpart. All such loan recoveries shall

be applied to reduce the unpaid balance

of the loan.

§ 600.1017 Prohibitions and penalties.

(a) The following activities are

prohibited, and it is unlawful for any

party to: (1) Vote in any referendum

under this subpart if the party is

ineligible to do so;

(2) Vote more than once in any

referendum under this subpart;

(3) Sign or otherwise cast a ballot on

behalf of a voter in any referendum

under this subpart unless the voter has

fully authorized the party to do so and

doing so otherwise comports with this

subpart;

(4) Interfere with or attempt to hinder,

delay, buy, or otherwise unduly or

unlawfully influence any eligible voter’s

vote in any referendum under this

subpart;

(5) Submit a fraudulent,

unauthorized, incomplete, misleading,

unenforceable by specific performance,

or inaccurate bid in response to an

invitation to bid under this subpart or,

in any other way, interfere with or

attempt to interfere with, hinder, or

delay, any invitation to bid, any bid

submitted under any invitation to bid,

any reduction contract, or any other

reduction process in connection with

any invitation to bid;

(6) Revoke or attempt to revoke any

bid under this subpart;

(7) Fail to comply with the terms and

conditions of any invitation to bid, bid,

or reduction contract under this subpart,

including NMFS’ right under such

reduction contracts to specific

performance;

(8) Fail to fully and properly pay and

collect any fee due payable, and

collectible under this subpart or

otherwise avoid, decrease, interfere

with, hinder, or delay any such payment

and collection,

(9) Convert, or otherwise use for any

purpose other than the purpose this

subpart intends, any paid or collected

fee;

(10) Fail to fully and properly deposit

on time the full amount of all fee

revenue collected under this subpart

into a deposit account and disburse the

full amount of all deposit principal to

the Fund’s lockbox account—all as this

subpart requires;

(11) Fail to maintain full, timely, and

proper fee payment, collection, deposit,

and/or disbursement records or make

full, timely, and proper reports of such

information to NMFS–-all as this

subpart requires;

(12) Fail to advise NMFS of any fish

seller’s refusal to pay, or of any fish

buyer’s refusal to collect, any fee due

and payable under this subpart;

(13) Refuse to allow NMFS or agents

that NMFS designates to review and

audit at reasonable times all books and

records reasonably pertinent to fee

payment, collection, deposit,

disbursement, and accounting under

this subpart or otherwise interfere with,

hinder, or delay NMFS or it agents in

the course of their activities under this

subpart;

(14) Make false statements to NMFS,

any of the NMFS’ employees, or any of

NMFS’ agents about any of the matters

in this subpart;

(15) Obstruct, prevent, or

unreasonably delay or attempt to

obstruct, prevent, or unreasonably delay

any audit or investigation NMFS or its

agents conduct, or attempt to conduct,

in connection with any of the matters in

this subpart; and/or

(16) Otherwise materially interfere

with the efficient and effective conduct

of reduction and the repayment of

reduction loans under this subpart.

(b) Any party who violates one or

more of the prohibitions of paragraph (a)

of this section is subject to the full range

of penalties the Magnuson-Stevens Act

and 15 CFR part 904 provide—

including, but not limited to: civil

penalties, sanctions, forfeitures, and

punishment for criminal offenses—and

to the full penalties and punishments

otherwise provided by any other

applicable law of the United States.

(c) Additionally, NMFS may take any

and all appropriate actions, including

the communication of action at law,

against each party responsible for the

non-payment, non-collection, nondeposit, and/or non-disbursement in

accordance with § 600.1013 and/or

§ 600.1014 to enforce the United States’

receipt from such party of any fee—

including penalties and all costs of

collection—due and owing the United

States on account of the reduction loan

that such party should have, but did

not, pay, collect, deposit, and/or

disburse in accordance with § 600.1013

and/or § 600.1014. All such reduction

loan recoveries shall be applied to

reduce the unpaid balances of reduction

loans.

§ 600.1018 Implementation regulations for

each program. [Reserved]

[FR Doc. 00–12159 Filed 5–17–00; 8:45 am]

BILLING CODE 3510–22–F

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 884

[Docket No. 99N–1309]

Obstetrical and Gynecological

Devices; Classification of Female

Condoms

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is classifying the

preamendments female condom

intended for contraceptive and

prophylactic purposes. Under this rule,

the preamendments female condom is

being classified into class III (premarket

approval). This action is being taken

under the Federal Food, Drug, and

Cosmetic Act (the act), as amended by

the Medical Device Amendments of

1976, the Safe Medical Devices Act of

1990, and the FDA Modernization Act

of 1997.

DATES: This rule is effective June 19,

2000.

FOR FURTHER INFORMATION CONTACT:

Colin M. Pollard, Center for Devices and

Radiological Health (HFZ–470), Food

and Drug Administration, 9200

Corporate Blvd., Rockville, MD 20850,

301–594–1180.

SUPPLEMENTARY INFORMATION:

I. Background

In a proposal published in the Federal

Register of June 10, 1999 (64 FR 31164)