Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Proposed Rules 15685 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We determined that this proposed AD 

would not have federalism implications 

under Executive Order 13132. This 

proposed AD would not have a 

substantial direct effect on the States, on 

the relationship between the national 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify this proposed regulation: 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979), and 

3. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

You can find our regulatory 

evaluation and the estimated costs of 

compliance in the AD Docket. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The FAA amends § 39.13 by adding 

the following new AD: 

Boeing: Docket No. FAA–2009–0288; 

Directorate Identifier 2008–NM–214–AD. 

Comments Due Date 

(a) We must receive comments by May 22, 

2009. 

Affected ADs 

(b) None. 

Applicability 

(c) This AD applies to Boeing Model 737– 

600, –700, –700C, –800, –900 and –900ER 

series airplanes, certificated in any category, 

as identified in Boeing Special Attention 

Service Bulletin 737–57–1293, dated 

November 13, 2008. 

Unsafe Condition 

(d) This AD results from a report received 

of leaking fuel from the wing leading edge 

area at the inboard end of the number 5 

leading edge slat. We are issuing this AD to 

prevent flammable fluids from accumulating 

in the wing leading edge and draining 

inboard and onto the engine exhaust nozzle, 

which could result in a fire. 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified, unless the 

actions have already been done. 

Corrective Actions 

(f) Within 24 months after the effective 

date of this AD, modify the fluid drain path 

in the wing leading edge area, forward of the 

wing front spar, and do all applicable related 

investigative and corrective actions, by 

accomplishing all applicable actions 

specified in the Accomplishment 

Instructions of Boeing Special Attention 

Service Bulletin 737–57–1293, dated 

November 13, 2008. Do all applicable related 

investigative and corrective actions before 

further flight. 

Alternative Methods of Compliance 

(AMOCs) 

(g)(1) The Manager, Seattle Aircraft 

Certification Office (ACO), FAA, has the 

authority to approve AMOCs for this AD, if 

requested using the procedures found in 14 

CFR 39.19. Send information to ATTN: Sam 

Spitzer, Aerospace Engineer, Propulsion 

Branch, ANM–140S, FAA, Seattle Aircraft 

Certification Office, 1601 Lind Avenue, SW., 

Renton, Washington 98057–3356; telephone 

(425) 917–6510; fax (425) 917–6590. 

(2) To request a different method of 

compliance or a different compliance time 

for this AD, follow the procedures in 14 CFR 

39.19. Before using any approved AMOC on 

any airplane to which the AMOC applies, 

notify your appropriate principal 

maintenance inspector (PMI) or principal 

avionics inspector (PAI), as appropriate, or 

lacking a principal inspector, your local 

Flight Standards District Office. The AMOC 

approval letter must specifically reference 

this AD. 

Issued in Renton, Washington, on March 

12, 2009. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. E9–7769 Filed 4–6–09; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 665 

[Docket No. 080304370–9128–01] 

RIN 0648–AW52 

Fisheries in the Western Pacific; 

Compensation to Commercial 

Bottomfish and Lobster Fishermen due 

to Fishery Closures in the 

Papahanaumokuakea Marine National 

Monument, Northwestern Hawaiian 

Islands 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

public comments. 

SUMMARY: The Consolidated 

Appropriations Act, 2008, authorizes 

the Secretary of Commerce (Secretary), 

through NMFS, to provide monetary 

compensation to eligible Northwestern 

Hawaiian Islands (NWHI) commercial 

lobster permit holders who were, and 

commercial bottomfish permit holders 

who will be, displaced by fishery 

closures resulting from establishment of 

the Papah naumoku kea Marine 

National Monument (Monument) in the 

NWHI. This proposed rule describes 

and seeks public comment on a permit 

compensation proposal, which 

identifies eligible permit holders and 

describes the permit valuation 

methodology. Holders of NWHI 

commercial Federal bottomfish and 

lobster permits who voluntarily accept 

monetary compensation would be 

required to surrender their permits and 

leave the fisheries. 

DATES: Comments must be received by 

May 4, 2009. 

ADDRESSES: You may submit comments 

on the proposed rule, identified by 

0648–AW52, by either of the following 

methods: 

• Electronic Submission: Submit all 

electronic public comments via the 

Federal e–Rulemaking Portal 

www.regulations.gov; or 

• Mail: William L. Robinson, Regional 

Administrator, NMFS, Pacific Islands 

Region (PIR), 1601 Kapiolani Blvd., 

Suite 1110, Honolulu, HI 96814–4700. 

Instructions: All comments received 

are a part of the public record and will 

generally be posted to 

www.regulations.gov without change. 

All personal identifying information (for 

example, name, address, etc.) submitted 

voluntarily by the commenter may be 

15686 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Proposed Rules 

publicly accessible. Do not submit 

confidential business information, or 

otherwise sensitive or protected 

information. NMFS will accept 

anonymous comments for publication 

and response, as appropriate (if you 

wish to remain anonymous, enter ‘‘NA’’ 

in the required name and organization 

fields). Attachments to electronic 

comments will be accepted in Microsoft 

Word or Excel, WordPerfect, or Adobe 

PDF file formats only. 

A regulatory impact review (RIR) that 

describes in more detail the permit 

valuation methodology, and an 

environmental assessment (EA) that 

analyzes the potential impacts of the 

proposed rule on the environment, are 

available from William L. Robinson (see 

ADDRESSES) and www.regulations.gov. 

An initial regulatory flexibility analysis 

(IRFA) is found in the section below. 

FOR FURTHER INFORMATION CONTACT: 

Toby Wood, Sustainable Fisheries 

Division, NMFS PIR, 808–944–2234. 

SUPPLEMENTARY INFORMATION: 

Electronic Access 

This proposed rule is also accessible 

on the World Wide Web at 

www.gpoaccess.gov/fr. 

Background 

On December 26, 2007, the President 

signed Public Law 110–161, the 

Consolidated Appropriations Act of 

2008. The Act authorizes the Secretary 

to provide a mechanism for 

compensating bottomfish and lobster 

fishermen who were impacted as a 

result of the creation of the Monument 

on June 15, 2006 (Proclamation 8031, 71 

FR 3644, June 26, 2006, as amended by 

Proclamation 8112, 72 FR 10031, March 

6, 2007). Final regulations governing the 

Monument require that any commercial 

lobster fishing permit be subject to a 

zero annual harvest limit. Those 

regulations permanently closed the 

NWHI lobster fishery. The NWHI 

commercial bottomfish fishery is 

allowed to operate until June 15, 2011, 

when it will be closed permanently (see 

71 FR 51134, August 29, 2006, and 50 

CFR 404.10). Funding is authorized to 

develop and implement a program to 

compensate eligible persons who held 

valid commercial Federal NWHI 

bottomfish and lobster permits at the 

time the Monument was created. The 

Act appropriates $6,697,500 and directs 

the Secretary to promulgate rulemaking 

for a voluntary capacity reduction 

program that does the following: 

(1) Identifies eligible NWHI 

bottomfish and lobster fishery permit 

holders affected by the establishment of 

the Monument; 

(2) Provides a mechanism to 

compensate eligible permit holders for 

no more than the economic value of 

their permits; and 

(3) In addition to the permit 

compensation provided under 

subparagraph (2) above, provides an 

optional funding mechanism whereby 

eligible participants may choose to 

receive additional compensation based 

on the value of their fishing vessel and 

gear, provided such vessels and gear 

will no longer be used for fishing. 

This proposed rule would identify 

eligible permit holders and establish a 

process for voluntary permit 

compensation. A voluntary vessel 

buyout program is contingent on the 

availability of funds following the 

permit compensation, and NMFS does 

not propose to carry out this optional 

mechanism until after the initial permit 

compensation is complete. If funds are 

available, NMFS would publish a 

separate proposed rule that describes 

and seeks public comment on a vessel 

and gear buyout program. 

Eligible Participants 

The Act defines ‘‘eligible 

participants’’ as individuals holding 

commercial Federal fishing permits for 

either lobster or bottomfish in the 

designated waters within the 

Monument, at the time the Monument 

was established on June 15, 2006. NMFS 

has preliminarily identified eligible 

participants as holders of eight valid 

commercial Federal permits for 

bottomfish, and holders of 15 valid 

commercial Federal permits for lobster. 

NMFS is not authorized to provide 

compensation to any persons not 

meeting the definition of ‘‘eligible 

participants’’ under the program 

described in this proposed rule. As a 

condition of participation in the 

proposed program, eligible permit 

holders who voluntarily accept and 

receive permit compensation must 

immediately surrender their NWHI 

fishing permit to NMFS and agree to 

relinquish any claim associated with 

each permit. 

Proposed NWHI Permit Compensation 

Methodology 

NMFS proposes to determine the 

economic value of NWHI lobster and 

bottomfish Federal commercial fishing 

permits by using a proxy for the Net 

Present Value (NPV) of the permit that 

uses imputed (estimated) values in the 

absence of a documented market for the 

permits. NPV is commonly used in cash 

flow analyses to identify, evaluate, and 

compare the value of a particular 

investment. The components of the NPV 

calculation include (1) an initial base 

value, often revenue, for one or more 

years of fishing, (2) a discount rate to 

adjust the base value for the value of 

future earnings, and (3) the time period 

over which the base value will be 

discounted. For both lobster and 

bottomfish permits, NMFS proposes to 

use a discount rate of 2.7 percent (the 

real interest rate for a Treasury bond as 

prescribed by Office of Management and 

Budget, Circular A–4, Appendix C, 

revised January 2008 

(www.whitehouse.gov/omb/circulars/ 

a094/a94lappx–c.html) over a period 

of 30 years. This 30–yr period is based 

on the approximate life of a typical 

fishing vessel and the de facto reality 

that discounting outside a 30–yr time 

horizon returns low values. It is also the 

typical period of tax table depreciation, 

and is a standard time horizon for 

capital asset budgeting. 

The NPV formula accounts for the 

flow of the valuation variable over an 

agreed time period: 

where i is the year index, N is the length 

of the evaluation period, income to 

permit holder is the proxy for net 

revenue, and λ is the discount rate over 

the evaluation period. Because the 

discount rate is positive, the discounted 

NPV will necessarily be less than the 

total of individual payments were 

NMFS to propose making annual partial 

payments over the 30-year period. 

The proxy for NPV of net revenue is 

a multiple of annual gross revenue 

based on a variety of separate 

investigations of these relationships 

(which are not precise, but in which 

gross revenue has the benefit of being 

more transparent, within the constraints 


EP07ap09.005</GPH>
Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Proposed Rules 15687 

of Federal confidentiality statutes, and 

straightforward to calculate). 

While NMFS proposes to use standard 

NPV methodology to determine the 

economic value of commercial fishing 

permits in both the lobster and 

bottomfish fisheries, NMFS proposes 

two distinctly different time periods for 

the determination of the base value. 

NMFS proposes that this time period be 

the three consecutive years in which 

each fishery operated immediately prior 

to the designation of the Monument. 

These time periods are different for each 

fishery in recognition of different 

operational and historical circumstances 

of each fishery. 

Bottomfish 

NWHI bottomfish permits were/are 

not transferable, so there was no 

established market on which to 

determine their value. Thus, NMFS 

proposes to determine the economic 

value of each of the eight Federal 

bottomfish permits individually using 

the base value time period of 2003–05. 

That is, the NPV of each permit, 

individually, would reflect the average 

ex–vessel net revenue, calculated as the 

ex–vessel gross revenue proxy times a 

multiplier of approximately 2.5 that 

considers the discount rate, determined 

by NMFS examination of documented 

records for the 2003–05 time period. 

Thus, the economic value of each 

permit, and the NMFS compensation 

offer, will be different for each of the 

eight permit holders, based on the 

2003–05 fishing record associated with 

each permit (i.e., the average individual 

ex-vessel gross revenue for 2003–05 

multiplied by approximately 2.5). All 

imputed values will be updated to 

current dollar figures based on 

Consumer Price Indices. 

Lobster 

NWHI lobster permits were/are 

transferable, so it is theoretically 

possible to consider market exchange 

values were they available to NMFS. 

However, this would likely be 

problematic for several reasons. The 

NWHI lobster permit market is small, 

unmonitored, and has been largely 

inactive over the past eight years. In the 

later years of operation, the lobster 

fishery was undergoing operational 

changes including the formation of a 

cooperative to manage fishing capacity 

and costs, and to share revenue among 

permit holders. Also, some vessels were 

experimenting with higher value–added 

production methods to allow the export 

of live lobsters to Asian markets. All of 

these factors make it difficult to 

determine the economic value of each 

individual lobster permit. 

Thus, NMFS proposes to determine 

the economic value of each of the 15 

Federal lobster permits collectively 

using the base value time period of 

1997–99. That is, the NPV of each 

permit would use a similar ex–vessel 

gross revenue proxy to reflect the 

average ex–vessel net revenue for the 

fleet as a whole for the 1997–99 time 

period, times a multiplier of 

approximately 2.5 that considers the 

discount rate. Thus, the economic value 

of each permit, and the NMFS 

compensation offer, will be identical for 

all 15 permit holders. All imputed 

values will be updated to current dollar 

figures based on Consumer Price 

Indices. 

Implementation 

NMFS proposes to notify eligible 

permit holders in writing of their 

individual permit compensation offer, 

as determined by the compensation 

mechanism described herein. It is 

important to note that if the total 

economic value of all permits combined 

is greater than the authorized amount 

minus administrative costs associated 

with implementing the compensation 

program, then the amount of monetary 

compensation disbursed to all 

participants would be prorated. Within 

30 days of receipt of notification, each 

permit holder would need to review the 

permit compensation offer, and would 

be required to notify NMFS in writing 

of either their voluntary acceptance or 

non–acceptance of the compensation 

offer. Failure to inform NMFS of a 

decision (i.e., acceptance or non– 

acceptance decision) by the prescribed 

deadline date would be deemed a non– 

acceptance by the permit holder. This 

determination by NMFS of non– 

acceptance for compensation shall be 

deemed final and is not subject to 

agency appeal. 

At the conclusion of the 30-day 

response period, NMFS or its authorized 

contractor would review all responses 

from permit holders, identify those who 

have accepted NMFS’ offer of permit 

compensation, and disburse 

compensation funds to the permit 

holders who have accepted. A permit 

holder’s acceptance of compensation 

funds would immediately invalidate the 

holder’s Federal permit in the NWHI 

bottomfish and/or lobster fishery, as 

appropriate, and such permit would be 

immediately surrendered to NMFS. 

NMFS would notify the permit holder, 

at the time that compensation funds are 

disbursed, that his or her permit is no 

longer valid, and the vessel would no 

longer be eligible to participate in the 

fishery for which compensation has 

been received. Vessel owners who have 

not accepted NMFS’ offer of permit 

compensation are authorized to 

continue fishing in accordance with the 

terms and conditions of their respective 

permits, and to the extent otherwise 

permitted by law. Permit holders should 

note that commercial fishing for lobster 

in waters of the Monument is now 

prohibited, and that fishing for 

commercial bottomfish and associated 

pelagic species will be prohibited in 

waters of the Monument after June 15, 

2011. NMFS solicits comments on the 

proposed compensation methodology 

and process. 

Transferability of Compensation 

Given that the NWHI lobster fishery 

was closed permanently as a result of 

the designation of the Monument, any 

permit compensation would be 

provided to the holder of the permit that 

was valid on the date of the 

Monument’s designation, i.e., June 15, 

2006. Although the NWHI bottomfish 

fishery remains open until June 15, 

2011, the permits are not transferrable, 

so the bottomfish permit compensation 

would be available only to the holder of 

the permit at the time the compensation 

funds are disbursed. Since bottomfish 

permits are not transferable, any claim 

to permit compensation is both non– 

transferable and non–assignable. 

Accordingly, only the NWHI bottomfish 

permit holder of record shall be deemed 

an eligible participant for purposes of 

receiving permit compensation under 

this program. 

Future Vessel and Gear Buyout 

Compensation 

Contingent on the availability of 

appropriated funds after all permit 

compensation payouts have been made, 

NMFS proposes to offer compensation 

to buy back vessels and gear from 

eligible participants, based on the fair 

market value of the vessels and gear. For 

purposes of this proposed program, 

‘‘eligible participants’’ shall have the 

same meaning as described in the 

permit compensation program above. 

Because of the limited funds 

appropriated by Congress for this 

purpose, there is no guarantee that 

NMFS actually will offer compensation 

for any, or all, vessels and gear that 

otherwise may qualify for this program. 

NMFS proposes to use a standard 

approach in vessel buyout, i.e., reverse 

auction, where each eligible permit 

holder would specify a buyout price for 

retiring their vessel(s) from commercial 

fishing. NMFS would rank and accept 

bids, and disburse funds, beginning 

with the lowest bid and continuing 

through the bids sequentially until 

remaining funds were exhausted. Public 

15688 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Proposed Rules 

comments are sought on this approach 

and possible alternatives, including 

methods for valuing vessels and 

associated gear, and other standard 

approaches, such as a lottery system or 

blind auction. 

Consistent with the purposes of this 

buyout, NMFS would require, as a 

condition of compensation, proof that 

the vessel and gear have been 

permanently removed from use in all 

U.S. commercial fisheries, as defined in 

46 U.S. Code § 12101(a). Proof of 

permanent removal from fisheries may 

be satisfied by taking any of the 

following actions: 

(1) Providing evidence of scrapping 

the vessel, which would require 

disassembly and/or scuttling the vessel 

in an ecologically safe manner. This 

method suggests additional costs which 

would need to be considered in the 

buyout process; or 

(2) Surrendering the vessel’s fishery 

endorsement and transferring the vessel 

to non-fishing uses. For example, 

vessels could be transferred to a U.S. 

public entity, a U.S. nonprofit 

organization, or a foreign national 

government for use in research 

(including fisheries research), 

education, training, humanitarian work, 

safety or law enforcement, etc., 

depending on the group’s objectives. 

NMFS proposes that vessel owners 

bear all costs associated with the 

scrapping or transfer of vessels that are 

bought out under this program. Funds 

received from the buyout compensation 

can be used for this purpose. 

Classification 

The NMFS Assistant Administrator 

has determined that this proposed rule 

is consistent with the Consolidated 

Appropriations Act of 2008 and other 

applicable laws, subject to further 

consideration after public comment. 

This proposed rule has been 

determined to be significant for 

purposes of Executive Order 12866. 

An IRFA was prepared, as required by 

section 603 of the Regulatory Flexibility 

Act. The IRFA describes the economic 

impact this proposed rule, if adopted, 

would have on small entities as follows. 

A description of the action, why it is 

being considered, and the legal basis for 

this action are found at the beginning of 

this section in the preamble and in the 

SUMMARY section of the preamble. 

The analysis follows: 

This proposed rule will impact the vessel 

owners who held 15 NWHI lobster permits 

and eight NWHI bottomfish permits at the 

time the Monument was designated. These 

permit holders were determined initially by 

NMFS to be eligible for compensation under 

The Act. The Small Business 

Administration’s accepted definition of a 

small fish harvester as a vessel that produces 

no more than $4.0 million in gross revenue 

annually. Using this definition, all permit 

holders who are eligible for compensation are 

defined as small entities. There are no 

disproportionate economic impacts from this 

action based on vessel size or home port. 

There are no recordkeeping, reporting, or 

other compliance requirements associated 

with this proposed rule. There are no Federal 

rules that duplicate, overlap, or conflict with 

this rule. There would be no adverse 

economic impact to any of the eligible NWHI 

bottomfish and lobster permit holders 

resulting from this rule. 

For bottomfish permit holders, the amount 

of monetary compensation would be derived 

from an NPV calculation using average exvessel net revenue projected over 30 years, 

and would be imputed as the ex-vessel gross 

revenue for 2003–05 times a multiplier of 

approximately 2.5, which is based on the 30– 

yr discount rate. 

The lobster permit holders would receive 

compensation in the form of equal payments 

derived from NPV of the fleet–wide average 

ex-vessel net revenue for 1997–99, and 

imputed using a similar ex-vessel gross 

revenue determination times the multiplier 

of approximately 2.5, based on the 30–yr 

discount rate. The 1997–99 period represents 

the last years that lobster fishing in the NWHI 

operated under NMFS harvest guidelines. 

The NPV for the lobster fishery would use 

the same discount rate and time period as the 

value imputed for bottomfish permit holders. 

The real interest rate for 30-year treasury 

notes and bonds as prescribed by Office of 

Management and Budget, Circular A–4, 

Appendix A, is 2.7 percent. 

While the intention is to base the imputed 

value on net revenue calculations, this is 

difficult given the unavailability of 

individual cost data. Therefore, NMFS will 

use a proxy for net revenue based on total, 

or gross, revenue. Since profit margins within 

each fishery are assumed to be similar, this 

would not affect relative amounts of 

compensation. In addition, with a relatively 

low real discount rate (2.7 percent) and long 

time frame (30 years), the differences 

between net and total revenues will be 

mitigated. 

NMFS will estimate the permit values 

using official NMFS and State of Hawaii 

commercial fishing records for the respective 

time periods. For a more thorough 

description of the methodology used to 

determine the economic values of these 

permits, see Appendix A to the RIR (see 

ADDRESSES). Any residual funds following 

the permit compensation program would be 

available for the vessel and gear buyout 

program using a standard vessel buyout 

approach, such as a reverse auction, lottery 

system, or blind auction. 

Authority: Pub. L. 110–161. 

Dated: April 2, 2009. 

Samuel D. Rauch III, 

Deputy Assistant Administrator for 

Regulatory Programs, National Marine 

Fisheries Service. 

[FR Doc. E9–7860 Filed 4–6–09; 8:45 am] 

BILLING CODE 3510–22–S