[Federal Register Volume 65, Number 78 (Friday, April 21, 2000)]
[Proposed Rules]
[Pages 21385-21393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9749]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 000331092-0092-01; I.D. 030100F]
RIN 0648-AM42


Fisheries of the Exclusive Economic Zone Off Alaska; License 
Limitation Program for the Scallop Fishery

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Commerce.

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS proposes regulations to implement Amendment 4 to the 
Fishery Management Plan for the Scallop Fishery off Alaska (FMP), which 
would create a license limitation program (scallop LLP) for the scallop 
fishery. If adopted, this program would limit the number of 
participants and reduce fishing capacity in the scallop fishery off 
Alaska. This action is proposed to achieve the conservation and 
management goals for the scallop fishery and is intended to further the 
objectives of the FMP.

DATES: Comments on the proposed rule must be submitted on or before 
June 5, 2000.

ADDRESSES: Comments on this proposed rule should be submitted to Sue 
Salveson, Assistant Regional Administrator, Sustainable Fisheries 
Division, Alaska Region, NMFS, P.O. Box 21668, Juneau, AK 99802-1668, 
Attn: Lori Gravel. Comments may also be sent via facsimile (fax) to 
907-586-7465. Comments will not be accepted if submitted via e-mail or 
Internet. Courier or hand delivery of comments may be made to NMFS in 
the Federal Building, Room 453, Juneau, AK. Copies of Amendment 4 to 
the Scallop FMP, and the Environmental Assessment/Regulatory Impact 
Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) prepared 
for the amendment are available from the North Pacific Fishery 
Management Council, 605 West 4<SUP>th</SUP> Ave., Suite 306, Anchorage, 
AK 99501-2252; telephone 907-271-2809.

FOR FURTHER INFORMATION CONTACT: Gretchen Harrington, 907-586-7228, or 
<a href="/cdn-cgi/l/email-protection#baddc8dfced9d2dfd494d2dbc8c8d3d4ddced5d4fad4d5dbdb94ddd5cc"><span class="__cf_email__" data-cfemail="c7a0b5a2b3a4afa2a9e9afa6b5b5aea9a0b3a8a987a9a8a6a6e9a0a8b1">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The North Pacific Fishery Management Council 
(Council) prepared the FMP under the authority of the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act). Under 
the FMP, management of all aspects of the scallop fishery, except 
limited access, is delegated to the State of Alaska (State). Federal 
regulations governing the scallop fishery appear at 50 CFR parts 600 
and 679. State regulations governing the scallop fishery appear in the 
Alaska Administrative Code (AAC) at 5 AAC Chapter 38--Miscellaneous 
Shellfish.
    State regulations establish guideline harvest levels (GHL) for 
different scallop registration areas, fishing seasons, open and closed 
fishing areas, observer coverage requirements, bycatch limits, gear 
restrictions, and measures to limit processing efficiency (including a 
ban on the use of mechanical shucking machines and a limitation on crew 
size). The gear regulations limit vessels to using no more than two, 
15-ft (4.5 m) dredges, except in Cook Inlet (State Registration Area H) 
where vessels are limited to using a single 6-ft (1.8 m) scallop 
dredge.
    The Council has submitted Amendment 4 for Secretarial review, and a 
Notice of Availability of the amendment was published March 8, 2000 (65 
FR 12500) with comments on the FMP amendment invited through May 8, 
2000. Comments may address the FMP amendment, the proposed rule, or 
both, but must be received by May 8, 2000, to be considered in the 
approval/disapproval decision on the FMP amendment.

Management Background and Need for Action

Historic Management of the Scallop Fishery

    The scallop resource off Alaska has been commercially exploited for 
more than 30 years. Weathervane scallop stocks off Alaska were first 
commercially explored by a few vessels in 1967. The fishery grew 
rapidly over the next 2 years with about 19 vessels harvesting almost 2 
million lb (907.2 metric tons (mt)) of shucked meats. Since then, 
vessel participation and harvests have fluctuated greatly, but have 
remained below the peak participation and harvests experienced in the 
late 1960s. Between 1969 and 1991, about 40 percent of the annual 
scallop harvest came from State waters. Since 1991, Alaska scallop 
harvests have increasingly occurred in Federal waters. Before 1990, 
about two-thirds of the scallop harvest was taken off Kodiak Island and 
about one-third from the Yakutat area, with harvests from other areas 
making minor contributions to overall landings. The increased harvests 
in the 1990s occurred with new exploitation in the Bering Sea. The 
fishery has occurred almost exclusively in Federal waters in recent 
years, but some fishing in State waters occurs off Yakutat, Dutch 
Harbor, and Adak.
    Before the early 1990s, the Council concluded that the State's 
scallop management program provided sufficient conservation and 
management of the Alaska scallop resource and did not need to be 
duplicated by Federal regulation. The State concurred with this 
position under the premise that all vessels participating in the Alaska 
scallop fishery were registered under the laws of the State and fell 
under the State's management jurisdiction.

Initial Federal Involvement in the Fishery

    By 1992, fishery participants and management agencies developed 
growing concerns about excessive fishing capacity and exploitation in 
the scallop fishery. The Council was presented with information 
indicating that the stocks of weathervane scallops were fully exploited 
and that any increase in fishing effort could be detrimental to the 
stocks. Information indicated that dramatic changes in age composition 
had occurred during the period 1980-1990, with commensurate declines in 
harvest. In the early 1990s, many fishermen abandoned historical 
fishing areas and searched for new areas to maintain catch levels. 
Increased numbers of small scallops were reported in the catch. These 
events raised conservation concerns because scallops are highly 
susceptible to local depletion and boom/bust cycles worldwide.
    The perceived need to limit access to the fishery was the primary 
motivation for the Council to begin its consideration of Federal 
management of the scallop fishery in 1992. The Council believed that 
Federal action was necessary because existing State statutes precluded 
a State vessel moratorium

[[Page 21386]]

and, at that time, the State did not have authority under the Magnuson-
Stevens Act to restrict access in Federal waters. The Council began 
analysis of a variety of options for Federal management of the scallop 
fishery in Federal waters off Alaska, and a vessel moratorium was 
proposed as an essential element of a Federal management regime to 
stabilize the size and capacity of the scallop fleet while the Council 
considered permanent limited entry alternatives for the fishery. In 
September 1993, the Council tentatively identified its preferred 
alternative for a Federal FMP for the scallop fishery--a Federal vessel 
moratorium and shared management authority with the State. A draft FMP 
and analysis were released to the public in November 1993.
    In April 1994, the Council and its advisory bodies reviewed the 
draft FMP, received public testimony, and adopted the draft FMP for the 
scallop fishery, which proposed to establish a vessel moratorium and 
delegate most other routine management measures to the State. Under the 
draft FMP, non-limited access measures would be delegated to the State 
based on the premise that all vessels fishing for scallops in the 
Federal waters off Alaska also would be registered with the State. The 
Council recognized the potential problem of unregistered vessels 
fishing in Federal waters, but noted that all vessels fishing for 
scallops in Federal waters were registered in Alaska and that no 
information was available to indicate that vessels would not continue 
to register with the State.

Unregulated Fishing and the Closure of Federal Waters

    During the time proposed regulations to implement the Council's 
proposed FMP were being developed, a vessel, which was presumed to have 
canceled its State registration, began fishing for scallops in Federal 
waters in the Prince William Sound Registration Area. The State 
previously had closed these waters to fishing by State-registered 
vessels because the GHL level of 50,000 lb (22.7 mt) of shucked meats 
had been taken. The State was unable to stop this uncontrolled fishing 
activity due to uncertainty whether the vessel was fishing outside 
State jurisdiction. The U.S. Coast Guard boarded the vessel in question 
and was informed that 54,000 lb (24.5 mt) of shucked scallop meats were 
on board. This amount, combined with the 50,000 lb (22.7 mt) of shucked 
meats already taken by State-registered vessels meant that the State's 
GHL for the Prince William Sound Registration Area was exceeded by over 
100 percent.
    On February 17, 1995, the Council held an emergency teleconference 
to address concerns about uncontrolled fishing for scallops in Federal 
waters by vessels fishing outside the States's jurisdiction. The 
Council requested that NMFS implement an emergency rule to close 
Federal waters to fishing for scallops to prevent overfishing of the 
scallop stocks. NMFS approved the Council's request and closed Federal 
waters off Alaska to fishing for scallops by emergency rule on February 
23, 1995 (60 FR 11054, March 1, 1995).
    After the unregulated fishing event that warranted the emergency 
rule, the Council and NMFS determined that the Council's draft FMP was 
no longer appropriate. As a result, the draft FMP was not submitted for 
review by NMFS. To respond to the need for Federal management of the 
scallop fishery once the emergency rule expired, the Council prepared a 
second draft FMP and adopted it. That FMP was subsequently approved by 
NMFS on July 26, 1995. The only management measure authorized and 
implemented under the FMP was an interim 1 year closure of Federal 
waters off Alaska to fishing for scallops (60 FR 42070, August 15, 
1995). The interim closure prevented uncontrolled fishing for scallops 
in Federal waters while the Council developed a Federal scallop 
management program. The Council recommended this approach because the 
suite of alternative management measures necessary to support a 
controlled fishery for scallops in Federal waters could not be 
prepared, reviewed, and implemented before the emergency rule expired.

Amendment 1: State-Federal Management Regime

    During 1995, the Council prepared Amendment 1 to the FMP to replace 
the interim closure with a joint State-Federal management regime. 
Amendment 1 was approved by NMFS on July 10, 1996 (61 FR 38099). 
Amendment 1 established a joint State-Federal management regime under 
which NMFS implemented Federal scallop regulations that duplicated most 
State scallop regulations, including definitions of scallop 
registration areas and districts, scallop fishing seasons, closed 
waters, gear restrictions, efficiency limits, crab bycatch limits, 
scallop catch limits, inseason adjustments, and observer coverage 
requirements. This joint State-Federal management regime was designed 
as a temporary measure to prevent unregulated fishing in Federal waters 
until changes in the Magnuson-Stevens Act would enable the Council to 
delegate management of the fishery to the State. Federal waters were 
re-opened to fishing for scallops on August 1, 1996.

Amendment 2: Vessel Moratorium

    On March 5, 1997, NMFS approved Amendment 2 to the FMP, which 
established a temporary moratorium on the entry of new vessels into the 
scallop fishery in Federal waters off Alaska. NMFS published a final 
rule implementing the vessel moratorium on April 11, 1997 (62 FR 
17749). To qualify its owner for a moratorium permit, a vessel must 
have made a legal landing of scallops during 1991, 1992, or 1993, or 
during at least 4 separate years from 1980 through 1990. The moratorium 
remains in effect through June 30, 2000, or until replaced by a 
permanent limited access system. Eighteen vessel owners qualified for 
moratorium permits under the Federal vessel moratorium.

Amendment 3: Delegate Management Authority to the State

    While the joint State-Federal management regime established under 
Amendment 1 enabled NMFS to reopen the EEZ to fishing for scallops, it 
proved to be cumbersome in practice. Every management action, including 
inseason openings and closures, had to be coordinated so that State and 
Federal actions were simultaneously effective. State scallop managers 
were constrained in their ability to rapidly implement management 
decisions because they had to coordinate each action with NMFS and 
provide sufficient lead-time for publication of the action in the 
Federal Register.
    The purpose of maintaining duplicate regulations at the State and 
at the Federal level was to prevent unregulated fishing by vessels not 
registered under the laws of the State. By 1997, the State-Federal 
management regime established under Amendment 1 no longer was necessary 
to prevent unregulated fishing for scallops in Federal waters because 
the Sustainable Fisheries Act of 1996 amended section 306 of the 
Magnuson-Stevens Act to provide authority for the FMP to delegate to 
the State management responsibility for the scallop fishery in Federal 
waters off Alaska.
    Amendment 3 delegated to the State the authority to manage all 
aspects of the scallop fishery in Federal waters, except limited 
access, including the authority to regulate vessels not registered 
under the laws of the State. The final rule implementing Amendment 3 
was published on July 17, 1998 (63 FR 38501). Amendment 3 simplified 
scallop management in the

[[Page 21387]]

Federal waters off Alaska by eliminating the unnecessary duplication of 
regulations at the State and Federal levels.

Amendment 5: Essential Fish Habitat (EFH)

    Amendment 5 to the FMP responds to new EFH requirements of section 
303 of the Magnuson-Stevens Act. The notice of approval of Amendment 5 
was published on April 26, 1999 (64 FR 20216). This amendment describes 
and identifies EFH for the scallop fishery, includes provisions to 
minimize to the extent practicable adverse effects on such habitat 
caused by fishing, and identifies other actions to encourage the 
conservation and enhancement of such habitat.

Amendment 6: Overfishing Definitions

    Amendment 6, also required by recent changes in the Magnuson-
Stevens Act, amended the FMP by redefining overfishing, optimum yield 
(OY), and maximum sustainable yield for the scallop resource. 
Amendmentse 6 was approved on March 3, 1999 (64 FR 11390). This 
amendment improved management of the scallop fisheries by providing the 
tools to (1) prevent overfishing; (2) achieve OY on a continuing basis; 
and (3) minimize bycatch. Amendment 6 also added information to the FMP 
on the State's bycatch monitoring and reduction programs such as at-sea 
catch sampling, area closures, bycatch limits, and gear restrictions.

Amendment 4: License Limitation Program

    The Council adopted Amendment 4 to the FMP in February 1999. If 
approved and implemented as proposed, an LLP would replace the existing 
Federal moratorium program on the entry of new vessels to the scallop 
fishery, which is scheduled to expire on June 30, 2000.
    The Council designed Amendment 4 in response to extensive public 
testimony that the scallop fishery suffered from excessive harvesting 
capacity. In 1996, members of the scallop industry submitted a proposal 
to the Council for an LLP. Industry members proposed an LLP to limit 
access to the fishery because they believed that they would suffer 
economic hardship if latent moratorium permits were activated. 
``Latent'' permits refer to permits for vessels that received a 
moratorium permit but that currently are not active in the fishery. 
Public testimony indicated that fishermen could not break even (i.e., 
their average costs of fishing for scallops would not at least equal 
their average gross income from scallops landed), if the number of 
vessels fishing for scallops increased. This conclusion is supported by 
the economic analysis in the EA/RIR/IRFA for Amendment 4 and is 
demonstrated by recent participation in the fishery of an average of 
nine vessels since 1995.
    Beginning February 1998, the Council reviewed participation, and 
other data from the scallop fishery, considered public testimony, and 
developed a problem statement and alternatives for analysis of an LLP 
to replace the existing vessel moratorium.
    The Council developed six alternatives and two options for the LLP. 
These alternatives ranged from no action to a program that would issue 
nine licenses, which is half the number of moratorium permits. The 
alternatives and options are described in the EA/RIR/IRFA (see 
ADDRESSES). Under the Council's preferred alternative the qualification 
criteria for initial allocation of licences, if adopted, would result 
in a total of nine licenses. The Council adopted the most restrictive 
alternative and options to create an LLP that would reduce the number 
of participants in the fishery and eliminate growth in harvesting 
capacity. The Council's intention is to reduce effort to approach a 
sustainable fishery with maximum net benefits to the Nation, as 
required by the Magnuson-Stevens Act. This proposed rule would 
implement the Council's preferred alternative and options.

Operational Aspects

1. General

    The LLP would limit access to the commercial scallop fisheries in 
the exclusive economic zone (EEZ) off Alaska. A qualified person who 
applies as prescribed would receive a license(s) that would authorize 
that person to catch and retain scallops. Initial allocation of 
licenses would be based on the eligibility qualifications discussed 
here.

2. Nature of Scallop LLP Licenses and Qualification Periods

    A scallop LLP license is a permit that grants the person named on 
the license (i.e., the license holder) the privilege of catching and 
retaining scallops in Federal waters off Alaska. Once initially issued 
using criteria discussed here, a scallop LLP license would be 
transferable, subject to NMFS approval, to an eligible transferee(s). 
Each license would specify certain endorsements and limitations, 
including the name and address of the license holder, the maximum 
length overall (MLOA) of the vessel on which the license could be used, 
and (as appropriate) limitations on scallop dredging gear that could be 
deployed from the vessel. A scallop LLP license would represent a 
privilege (not a property right) that could be amended or revoked at 
any time without compensation.
    A scallop LLP license would be initially issued to an eligible 
applicant who held, on February 8, 1999 (the date of Council action), 
either a State or Federal moratorium permit and who used the permit to 
make legal landings of scallops in the qualifying period. The 
qualifying period for the scallop LLP would be from January 1, 1996, 
through October 9, 1998. Legal landings of scallops would have to be 
made in at least 2 of the 3 calendar years during this period. A legal 
landing is defined in regulations (Sec. 679.2) as a landing in 
compliance with Federal and State commercial fishing regulations in 
effect at the time of the landing.
    A license would authorize the license holder to catch and retain 
scallops in Federal waters off Alaska. The license holder could be an 
individual or a corporate person consistent with the definition of 
``person'' in the Magnuson-Stevens Act, and the license holder would 
not be required to be on board a vessel when it is catching and 
retaining scallops. An original copy of the scallop LLP license would 
be required to be onboard the vessel at that time. Although a scallop 
LLP license would not be vessel specific, the length overall of any 
vessel that is catching and retaining scallops under the terms of the 
license would be constrained by the MLOA specified on the license. In 
addition, the license would specify any gear limitations. The license 
also would be transferable, subject to NMFS review and approval of an 
application to transfer the license and the eligibility of the proposed 
transferee to receive a license by transfer.
    A scallop LLP license would replace the existing scallop moratorium 
permit and would require possession of a moratorium permit as a 
criterion for a license. To qualify for a Federal scallop moratorium 
permit, a vessel must have made a minimum of 1 legal landing of 
scallops harvested from any waters off Alaska during 1991, 1992, or 
1993, or during at least 4 separate years from 1980 through 1990 
(Sec. 679.4(g)(3)).
    The State moratorium qualification period was established either 
for a Statewide moratorium permit or a Cook Inlet moratorium permit. 
For the Statewide moratorium qualification period, a vessel owner must 
have harvested and landed at least 1,000 lb

[[Page 21388]]

(0.45 mt) of scallops from State waters during 1995 or 1996, and during 
each of at least 4 years between 1984 and 1996, inclusive. For the Cook 
Inlet moratorium qualification period, a person must have harvested and 
landed at least 1,000 lbs (0.45 mt) of scallops from Cook Inlet during 
1994 or 1996, and during each of at least 3 years between 1984 and 
1996, inclusive.
    The scallop LLP eligibility criteria that require an applicant to 
have held a moratorium permit and to have made legal landings of 
scallops during the scallop LLP qualifying period are designed to 
account for past and recent participation in the scallop fishery. A key 
criterion for qualifying for a scallop LLP license is being named on a 
State or Federal moratorium permit. Hence, persons who were eligible 
for a vessel moratorium permit but did not apply or receive one could 
not now be eligible for a scallop LLP license. Also, the proposed 
requirement to have an original scallop LLP license on board while 
catching and retaining scallops would prevent a license holder from 
using more than one vessel at once for that purpose, unless the license 
holder was named on more than one license (see ``ownership caps'' 
below).

3. Gear Endorsements

    Generally, the proposed scallop LLP licenses would have no area or 
gear endorsements. Scallop LLP licenses would authorize their holders 
to catch and retain scallops in all waters off Alaska that are open for 
scallop fishing. However, licenses premised on the legal landings of 
scallops harvested only from Cook Inlet (State Registration Area H) 
during the qualifying period would have a gear endorsement that would 
limit allowable gear to a single 6-foot (1.8 m) dredge when fishing for 
scallops in any area. Otherwise, licenses premised on the legal 
landings of scallops harvested from other areas outside Cook Inlet 
during the qualifying period would have no gear endorsement. Existing 
State regulations limit gear size to two 15-foot (4.5 m) dredges in all 
other areas. The purpose of this restriction is to prevent expansion in 
overall fishing capacity by not allowing relatively small operations in 
Cook Inlet to increase their fishing capacity. Persons who qualified 
from Cook Inlet scallop harvests would be allowed to operate in any 
area open to scallop fishing.

4. Vessel Length

    The length overall (LOA) of a vessel is defined at Sec. 679.2. Each 
scallop LLP license would specify the maximum LOA (MLOA) of a vessel 
that could be used under the authority of the license. The specified 
MLOA would be equal to the LOA of the longest vessel used by the 
applicant to make legal scallop landings during the qualifying years. 
The purpose of the MLOA provision is to restrict growth of harvesting 
capacity in the fishery, thus furthering the goals of the LLP.

5. Harvest Requirements

    A legal landing is defined at Sec. 679.2 as a landing in compliance 
with Federal and State commercial fishing regulations in effect at the 
time of the landing. Only legal landings of scallops would qualify the 
applicant for a scallop LLP license. To qualify for a scallop license, 
the applicant would be required to have used his/her moratorium permit 
on a qualified vessel to make one legal landing of scallops in each of 
any 2 calendar years from January 1, 1996, through October 9, 1998.

6. Scallop LLP License Recipients

    A license would be issued only to an eligible applicant meeting the 
eligibility criteria described here. In addition, an eligible applicant 
would have to have been eligible on February 8, 1999 (the date of final 
Council action on the LLP), to document a fishing vessel under Chapter 
121 of Title 46, U.S.C. This law establishes criteria regarding the 
citizenship of a person who may own a U.S. fishing vessel. The proposed 
regulation would require that the same citizenship standards apply to 
the eligibility for a scallop LLP license. Actual ownership of a 
fishing vessel under this statute on February 8, 1999, however, would 
not be required.

7. Application Process for Scallop LLP Licenses

    A one-time application period of no less than 15 days would be 
specified by notification in the Federal Register. If the LLP is 
approved, NMFS anticipates that the application period for LLP licenses 
will be in May or June of 2000. All applications for licenses would 
have to be submitted during the time period specified for applying for 
a license. Applications postmarked after the ending date for the 
application period would be denied.
    To evaluate and verify an applicant's eligibility claim, NMFS would 
compile an official LLP record for the scallop LLP containing 
information on qualified persons who hold moratorium permits and used 
the permits to participate in the scallop fishery during the qualifying 
period. The official scallop LLP record would contain only complete and 
verifiable information that would be used for the purpose of 
determining eligibility for a license, including information on vessels 
that participated in the scallop fishery during the relevant time 
periods, vessel ownership, and the dates, location, and numbers of 
qualifying landings of scallops made by those vessels.
    If a scallop LLP application is submitted during the application 
period, NMFS would compare the claims on the application with the 
official LLP record. If the claims on the application are supported by 
the information in the official LLP record, the application would be 
approved and, following the expiration of the application period, the 
licence could be issued. If the claims are not verified using 
information in the official LLP record, the applicant would be so 
notified and would be provided 60 days to submit information (or 
evidence) to support the unverified claims. For example, an applicant 
could provide State fish tickets to verify legal landings not found in 
the official LLP record. Or, an applicant could provide a sales 
contract verifying vessel ownership. Unsubstantiated or incompletely 
verified claims would not be accepted. If an applicant demonstrates 
that the claims submitted in the application are correct and sufficient 
to qualify the applicant for a license, NMFS could issue a license to 
the applicant at the conclusion of the evidentiary period.
    If information in the application is not substantiated or verified 
at the conclusion of the 60-day evidentiary period, NMFS would issue an 
initial administrative determination (IAD) including reasons why the 
application is not accepted. Applicants then would be provided with an 
opportunity to appeal that IAD to the NMFS Office of Administrative 
Appeals, under Sec. 679.43.
    During the pendency of an administrative adjudication leading to a 
final agency action, NMFS would issue an interim (temporary, non-
transferable) licence to an applicant who was authorized to participate 
in the fishery in the year before the IAD is issued and who makes a 
credible claim to eligibility under the scallop LLP regulations. A 
decision to withhold an interim licence could be appealed to the Office 
of Administrative Appeals. An applicant who was issued a license the 
previous year would be eligible for a non-transferable interim license 
pending the final resolution of his or her claim pursuant to the 
license renewal provisions of 5 U.S.C. 558. The non-transferable 
interim license would authorize the applicant to catch and retain 
scallops and would be effective until final agency action. At that 
time, the person who appealed would receive either a transferable 
license, or no

[[Page 21389]]

license, depending on the final agency action.

8. Transfer Process for Scallop LLP Licenses

    The transfer process for scallop LLP licenses would enable a 
license holder to request a transfer of an LLP license to any person 
(designated transferee) who meets the eligibility requirements. 
Eligibility requirements would include (1) the designated transferee 
being eligible to document a fishing vessel under Chapter 121, Title 
46, U.S.C., (2) the parties to the transfer having no fines, civil 
penalties, other payments due and outstanding, or outstanding permit 
sanctions resulting from Federal fishing violations, and (3) the 
transfer not causing the designated transferee to exceed a two-license 
limit contained in the Council's preferred alternative (see ``Ownership 
Caps'' below).
    A complete application would have to be submitted to the 
Administrator, Alaska Region, NMFS (Regional Administrator) for 
approval before a transfer could occur. Application forms would be 
available on request. NMFS would return incomplete applications to the 
applicant and would identify specific information that is necessary to 
make the application complete. Information that would be required in 
the application includes (1) identification information for all parties 
to the transfer, (2) identification number of the license to be 
transferred, (3) declaration that the designated transferee is a U.S. 
Citizen, (5) a copy of the contract or sales agreement for the 
transfer, (6) other information the Regional Administrator may require, 
and (7) the notarized signatures of the parties to the transfer.
    This proposed rule also would provide for transfers pursuant to 
requests by court order, operation of law, or the terms of a security 
agreement. This provision considers that some transfers might not be 
voluntarily requested by the license holder. Under those circumstances, 
the Regional Administrator would review the information in the transfer 
application or other document and determine whether the requested 
transfer would conflict with other provisions of the scallop LLP 
regulations.

9. Ownership Caps

    A person, corporation, or entity would be prohibited from holding 
more than two scallop licenses at one time. A person who holds two 
scallop licenses could not receive an additional scallop license by 
transfer until the number of scallop licenses which that person holds 
is less than two.
    The two-license ownership cap is intended to prevent, as required 
by national standard 4 of the Magnuson-Stevens Act, any person from 
obtaining an excessive share of harvest privileges in the scallop 
fishery. The Council determined that holding more than two scallop LLP 
licenses would constitute an excessive share in the context of this 
relatively small fishery.

Consistency With Section 303(b)(6) of the Magnuson-Stevens Act

    Any FMP or FMP amendment that establishes a limited access system 
to achieve OY must take into account the factors listed in section 
303(b)(6) of the Magnuson-Stevens Act. These factors include (1) 
present participation in the fishery, (2) historical fishing practices 
in, and dependence on, the fishery, (3) the economics of the fishery, 
(4) the capability of fishing vessels in the fishery to engage in other 
fisheries, (5) the cultural and social framework relevant to the 
fishery and any affected fishing communities, and (6) any other 
relevant considerations.
    The administrative record for the scallop LLP is replete with 
examples of the Council considering the issues enumerated in the 
section 303(b)(6) guidelines. The requirement for a moratorium permit 
and the qualifying period requirement is an example of the Council 
balancing present participation in the fishery and historical practices 
in, and dependence on, the fishery. The Council chose legal landings in 
multiple years, 1996 through 1998, as the qualification for present 
participation.
    The economics of the fishery was taken into account primarily 
through the breakeven analysis. The breakeven analysis in the EA/RIR/
IRFA provides an estimate of the scallop harvest necessary to cover 
annual operating and fixed costs of typical scallop fishing vessels and 
indicates relative profitability of an average vessel in the scallop 
fishery. The analysis demonstrates that the breakeven point depends 
primarily on two factors, the exvessel price paid for scallops and the 
total landings of scallops. Based on the analysis, the Council 
estimated that about nine vessels would be able to operate in the 
fishery at the breakeven level assuming total landings of 1.3 million 
lb (590 mt) and an exvessel price of $6.02 per lb. More vessels would 
be able to participate at the breakeven level if harvest quotas or 
prices increased and fewer if they decreased. Recent landings (1996-97) 
have been less than the assumed breakeven volume although the average 
price has been slightly higher than the assumed breakeven exvessel 
price. Based on these recent data, only about six vessels could 
participate in the fishery at the breakeven level.
    Overcapitalization in the industry and excessive harvesting 
capacity is an endemic condition in many fisheries that reduces the 
value of those fisheries to the Nation and potentially leads to other 
biological and efficiency problems. Authorizing more vessels to operate 
in the scallop fishery than could on average breakeven, arguably would 
be authorizing excess harvesting capacity. The Council took this matter 
into account in consideration of the economics of the fishery. Hence, 
the Council's recommended qualification criteria likely would result in 
more vessels qualified to operate in the scallop fishery especially in 
years of low scallop abundance; however, significantly fewer would be 
authorized under the LLP than under the current moratorium.
    The concern for the capability of a vessel displaced from one 
fishery to enter another fishery is for the individual owner of that 
displaced vessel and not the fishery as a whole. Most vessels in the 
scallop fisheries are unique; making the necessary modifications to 
them so that they could enter other fisheries may be prohibitive. Some 
of the vessels that participate in the Alaska scallop fishery also 
participate in scallop fisheries in other regions of the country. 
Therefore, vessels that do not qualify for a license under this LLP 
program may qualify for licenses to fish for scallops in other regions, 
such as the Atlantic scallop fishery.
    The Council carefully evaluated the cultural and social framework 
relevant to the scallop fishery, and the impacts of the scallop LLP on 
coastal communities. Public testimony before the Council exemplified 
the need for a limited access program to ensure a valuable and 
productive scallop fishery in the future.

Fisheries Impact Statement

    Section 303(a)(9) of the Magnuson-Stevens Act requires any FMP or 
FMP amendment to include a fishery impact statement, which assesses, 
specifies, and describes the likely effects of the proposed 
conservation and management measures on participants in the affected 
fisheries, fishing communities, and participants in fisheries in 
adjacent areas.
    The scallop LLP would place limitations on current participants in 
the affected fisheries. First, current participants in the Cook Inlet 
scallop

[[Page 21390]]

fishery would be limited to using a single 6-ft (1.8 m) dredge in all 
waters. Second, vessel replacements and upgrades would be limited by 
the MLOA specified on the license. Third, and most important, current 
participants would have to meet the specific eligibility criteria of 
the LLP to receive a license authorizing participation in the scallop 
fishery.
    Although the scallop LLP would exclude some current participants 
who did not fish during the qualifying period, these excluded persons 
could gain access to the affected fisheries by obtaining a license 
through transfer. Likewise, new entrants into the fishery can obtain a 
licence through transfer.
    The GHLs for the affected fisheries are not expected to change if 
the scallop LLP were implemented. Implementation of the scallop LLP 
also would not affect fishery product flow, total revenues derived from 
the affected fisheries, or regional distribution of vessel ownership. 
The scallop LLP will ameliorate, but not totally eliminate, 
overcapacity, overcapitalization, and vessel safety concerns 
perpetuated under status quo management.
    Due to the geographical location of the affected fisheries, no 
scallop fisheries exist in adjacent areas under the authority of other 
regional fishery management councils. However, participants in 
fisheries in other areas could face increased pressures from new 
entrants excluded from the affected fisheries. This increased pressure 
is expected to be nominal, in any case, because of the increasingly 
small number of open access scallop fisheries available in the EEZ off 
the coast of the United States. In fact, the scallop LLP is intended to 
prevent just the opposite effect (i.e., a surge of new entrants to the 
scallop fisheries in the EEZ off Alaska) resulting from persons who 
have been excluded from fisheries in other parts of the EEZ.

Classification

    At this time, NMFS has not determined that this proposed rule is 
consistent with the national standards of the Magnuson-Stevens Act and 
other applicable laws. NMFS, in making that determination, will take 
into account the data, views, and comments received during the comment 
period.
    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.
    The Council prepared an EA/RIR/IRFA for the scallop LLP, which 
describes the management background, the purpose and need for action, 
the management alternatives, and the socio-economic impacts of the 
alternatives. It estimates the total number of small entities affected 
by this action, and analyzes the economic impact on those small 
entities as required by the Regulatory Flexibility Act. The IRFA 
describes the economic impacts this proposed rule, if adopted, would 
have on small entities. A summary of the IRFA follows:
    All fishing operations that would be affected by this proposed rule 
are considered to be small entities. The proposed rule would apply to 
any entity that wanted to fish for scallops after June 30, 2000. NMFS 
estimates this number to be 18. The two principal impacts on small 
fishing enterprises due to this proposal would be an exclusion of some 
existing scallop vessels from the fishery and a limitation on the entry 
of new vessels.
    The LLP may restrict the ability of new, small entities to enter 
the fishery, although access is not denied because the licenses would 
be transferable. New entrants could purchase licenses, however, this 
would increase the entry costs into the scallop fishery. Alternatively, 
small fishing firms owning non-qualifying vessels may experience a 
decrease in value of their investment to the extent that the vessel's 
opportunities have been limited. The impact of license limitation is to 
restrict the opportunities of some vessel owners, yet offer a 
stabilized economic environment for affected small businesses that 
qualify for continued participation in the Alaska scallop fishery. The 
benefits would accrue to vessels remaining in the fishery by preventing 
a further erosion of per-vessel net returns and operating efficiency.
    The scallop LLP also would impact those small entities that only 
fished inside of Cook Inlet during the qualifying period by limiting 
the size of dredge the vessel could operate in the future to a single 
6-ft (1.8 m) dredge. Those small entities could use their licenses to 
harvest scallops statewide and would not be limited to harvesting 
scallops in Cook Inlet.
    No known Federal rules duplicate, overlap, or conflict with the 
proposed rule. The LLP would supersede the existing Federal moratorium 
program for the scallop fisheries.
    This proposed rule would impose recordkeeping and reporting 
requirements on affected vessels by requiring collection of information 
through license and transfer applications. These requirements are 
necessary to provide information to NMFS for the implementation and 
management of the scallop LLP.
    The Council considered the following alternatives that could reduce 
economic impacts on small entities.
    The Council considered alternatives ranging from complete open 
access to a variety of limited entry programs with ranges from 9-11 
vessels. The combinations of individual vessels that would qualify 
under the alternatives also varies. The Council also considered 
different criteria for area endorsements that would have resulted in 
different vessels gaining access to different fishing areas. Because 
this proposed rule would address allocation of a limited resource, 
alternatives that would minimize economic impacts on any one small 
entity would necessarily increase economic impacts on all other small 
entities. The Council's preferred alternative to address the 
overcapitalized scallop fishery would affect small entities more 
negatively than the alternatives that were not preferred.
    Options for vessel reconstruction and replacement include:
    No restrictions on reconstruction or replacement; MLOA of 120 
percent of the LOA of the vessel on January 23, 1993; and MLOA of 120 
percent of the LOA of the vessel on which the permit was used in 1996 
or 1997. The Council's preferred alternative would not allow increases 
in vessel length. The MLOA would be the LOA of the qualifying vessel on 
February 8, 1999, unless the moratorium permit was used on a longer 
vessel in the recent qualifying period, in which case the MLOA would be 
limited to the LOA of the longest vessel used in the recent qualifying 
period.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act (PRA), unless that 
collection of information displays a valid Office of Management and 
Budget (OMB) Control Number.
    This proposed rule contains collection-of-information requirements 
subject to review and approval by OMB under the PRA. These collection-
of-information requirements have been submitted to OMB for approval. 
Public reporting burden for this collection of information is estimated 
to be an average of 2 hours per response for an application for initial 
issuance, 1 hour per response for an application for transfer, and 4 
hours per response for an appeal. These response times include the time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data

[[Page 21391]]

needed, and completing and reviewing the collection of information.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to NMFS 
(see ADDRESSES), and to OMB at the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC. 20503 (Attn: 
NOAA Desk Officer).
    The President has directed Federal agencies to use plain language 
in their communications with the public, including regulations. To 
comply with that directive, we seek public comment on any ambiguity or 
unnecessary complexity arising from the language used in this proposed 
rule.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Reporting and record keeping requirements.

    Dated: April 13, 2000.
Andrew A. Rosenberg,
Deputy Asst. Administrator for Fisheries, National Marine Fisheries 
Service.
    For reasons set out in the preamble, 50 CFR part 679 is proposed to 
be amended as follows:

PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

    1. The authority citation for part 679 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq., 1801 et seq., and 3631 et seq.

    2. In Sec. 679.1, paragraphs (j)(3) and (j)(4) are added to read as 
follows:


Sec. 679.1  Purpose and scope.

* * * * *
    (j) * * *
    (3) Regulations in this part implement the license limitation 
program for the commercial scallop fishery in the EEZ off Alaska.
    (4) Regulations in this part govern the commercial fishing for 
scallops by vessels of the United States using authorized gear within 
the EEZ off Alaska.
    3. In Sec. 679.2, the definition for ``Scallop License'' is added 
in alphabetical order and the definitions ``Eligible applicant'', 
``License holder'', ``Maximum LOA (MLOA)''paragraph (1) and the first 
sentence in paragraph (2) introductory text, and ``Official LLP 
record''are revised, and in the definition``Qualified Person'', 
paragraph (2) is revised and paragraph (3) is added to read as follows:


Sec. 679.2  Definitions.

* * * * *
    Eligible applicant means a qualified person who submitted an 
application during the application period announced by NMFS and:
    (1) For a groundfish license or crab species license, who owned a 
vessel on June 17, 1995, from which the minimum number of documented 
harvests of license limitation groundfish or crab species were made in 
the relevant areas during the qualifying periods specified in 
Sec. 679.4(k)(4) and (k)(5), unless the fishing history of that vessel 
was transferred in conformance with the provisions in paragraph (2) of 
this definition; or
    (2) For a groundfish license or crab species license, to whom the 
fishing history of a vessel from which the minimum number of documented 
harvests of license limitation groundfish or crab species were made in 
the relevant areas during the qualifying periods specified in 
Sec. 679.4(k)(4) and (k)(5) has been transferred or retained by the 
express terms of a written contract that clearly and unambiguously 
provides that the qualifications for a license under the LLP have been 
transferred or retained; or
    (3) For a crab species license, who was an individual who held a 
State of Alaska permit for the Norton Sound king crab summer fishery in 
1993 and 1994, and who made at least one harvest of red or blue king 
crab in the relevant area during the period specified in 
Sec. 679.4(k)(5)(ii)(G), or a corporation that owned or leased a vessel 
on June 17, 1995, that made at least one harvest of red or blue king 
crab in the relevant area during the period in Sec. 679.4(k)(5)(ii)(G), 
and that was operated by an individual who was an employee or a 
temporary contractor; or
    (4) For a scallop license, who qualifies for scallop license as 
specified at Sec. 679.4(g)(2) of this part; or
    (5) Who is an individual that can demonstrate eligibility pursuant 
to the provisions of the Rehabilitation Act of 1973 at 29 U.S.C. 794 
(a).
* * * * *
    License holder means the person who is named on a currently valid 
groundfish license, crab species license, or scallop license.
* * * * *
    Maximum LOA (MLOA) means:
    (1) With respect to the scallop license limitation program, the 
MLOA is equal to the length overall on February 8, 1999, of the longest 
vessel used to make legal landings of scallops during the scallop LLP 
qualification period January 1, 1996, through October 9, 1998, 
specified at Sec. 679.4(g)(2)(iii) of this part.
    (2) With respect to the groundfish and crab species license 
limitation program, the LOA of the vessel on June 24, 1992, unless the 
vessel was less than 125 ft (38.1 m) on June 24, 1992, then 1.2 times 
the LOA of the vessel on June 24, 1992, or 125 ft (38.1 m), whichever 
is less. * * *
* * * * *
    Official LLP record means the information prepared by the Regional 
Administrator about vessels that were used to participate in the 
groundfish or crab fisheries during qualified periods for the 
groundfish and crab License Limitation Program (LLP) specified at 
Sec. 679.4(k) and in the scallop fisheries during the qualifying 
periods for the scallop LLP specified at Sec. 679.4(g). Information in 
the official LLP record includes vessel ownership information, 
documented harvests made from vessels during the qualification periods, 
and vessel characteristics. The official LLP record is presumed to be 
correct for the purpose of determining eligibility for licenses. An 
applicant for a license under the LLP will have the burden of proving 
that information submitted in an application that is inconsistent with 
the official LLP record is correct.
* * * * *
    Qualified Person means:
* * * * *
    (2) With respect to the groundfish and crab species license 
limitation program, a person who was eligible on June 17, 1995, to 
document a fishing vessel under Chapter 121, Title 46, U.S.C.
    (3) With respect to the scallop license limitation program, a 
person who was eligible on February 8, 1999, to document a fishing 
vessel under Chapter 121, Title 46, U.S.C.
* * * * *
    Scallop license means a license issued by NMFS that authorizes the 
license holder to catch and retain scallops pursuant to the conditions 
specified on the license.
* * * * *
    4. In Sec. 679.4, paragraph (g) is revised to read as follows:


Sec. 679.4  Permits.

* * * * *

[[Page 21392]]

    (g) Scallop License Limitation Program (LLP).--(1) General 
requirements. In addition to the permit and licensing requirements 
prescribed in this part, each vessel within the EEZ off Alaska that is 
catching and retaining scallops, must have an original scallop LLP 
license on board at all times it is catching and retaining scallops. 
This scallop LLP license, issued by NMFS, authorizes the person named 
on the license to catch and retain scallops in compliance with 
regulations of the State of Alaska and only with a vessel that does not 
exceed the MLOA specified on the license and the gear designation 
specified on the license.
    (2) Qualifications for a scallop LLP license. A scallop LLP license 
will be issued to an eligible applicant who:
    (i) Is a qualified person;
    (ii) Was named on a State of Alaska scallop moratorium permit or 
Federal scallop moratorium permit on February 8, 1999;
    (iii) Used the moratorium permit held on February 8, 1999 to make 
legal landings of scallops in each of any 2 calendar years from January 
1, 1996, through October 9, 1998; and
    (iv) Submitted a complete application for a scallop license during 
the application period specified pursuant to paragraph (g)(4) of this 
section.
    (3) Scallop license conditions and endorsements. A scallop license 
authorizes the license holder to catch and retain scallops only if the 
vessel length and gear used do not exceed the vessel length and gear 
endorsements specified on the license.
    (i) An MLOA will be specified on the scallop license equal to the 
LOA on February 8, 1999, of the longest vessel used to make legal 
landings of scallops during the scallop LLP qualifying period specified 
in paragraph (g)(2)(iii) of this section.
    (ii) If the eligible applicant was a moratorium permit holder with 
a Scallop Registration Area H (Cook Inlet) endorsement and did not make 
a legal landing of scallops caught outside of Area H during the 
qualification period specified in paragraph (g)(2)(iii) of this 
section, the license will have a gear endorsement restricting gear to a 
single 6 ft (1.8 m) dredge in all areas.
    (4) Application for a scallop license. (i) General. The Regional 
Administrator will issue a scallop license to an applicant if a 
complete application is submitted by or on behalf of the applicant 
during the specified application period, and if that applicant meets 
all the criteria for eligibility in this part. An application that is 
postmarked or hand delivered after the ending date for the application 
period for the scallop LLP specified in the Federal Register will be 
denied. An application form will be sent to the last known address of 
the person identified as an eligible applicant by the official LLP 
record. An application form may be requested from the Regional 
Administrator.
    (ii) Application Period. For the scallop license, an application 
period of no less than 15 days will be specified by notification in the 
Federal Register and other information sources deemed appropriate by 
the Regional Administrator.
    (iii) Contents of application. To be complete, an application for a 
scallop license must be signed and dated by the applicant, or the 
individual representing the applicant, and contain the following 
information, as applicable:
    (A) Scallop Moratorium Permit number under which legal landings of 
scallops were made during the qualification period specified in 
paragraph (g)(2)(iii) of this section;
    (B) Name, business address, telephone number, FAX number, and 
social security number or tax ID number of the applicant, and whether 
the applicant is a U.S. citizen or a U.S. business;
    (C) Name of the managing company, if any;
    (D) Evidence of legal landings in the qualifying years and 
registration areas;
    (E) For the vessel(s) being used as basis for eligibility for a 
license, the name, state registration number (e.g., ADF&G number), the 
USCG documentation number, and valid evidence of the LOA on February 8, 
1999, of the longest vessel used by the applicant during the 
qualification period specified in paragraph (g)(2)(iii) of this 
section.
    (iv) Successor-in-interest. If an applicant is applying as the 
successor-in-interest to an eligible applicant, an application, to be 
complete, also must contain valid evidence proving the applicant's 
status as a successor-in-interest to that eligible applicant and:
    (A) Valid evidence of the death of that eligible applicant at the 
time of application, if the eligible applicant was an individual; or
    (B) Valid evidence that the eligible applicant is no longer in 
existence at the time of application, if the eligible applicant is not 
an individual.
    (v) Application evaluation. The Regional Administrator will 
evaluate an application submitted during the specified application 
period and compare all claims in the application with the information 
in the official LLP record. Claims in the application that are 
consistent with information in the official LLP record will be accepted 
by the Regional Administrator. Inconsistent claims in the application, 
unless verified by evidence, will not be accepted. An applicant who 
submits inconsistent claims, or an applicant who fails to submit the 
information specified in paragraphs (g)(4)(iii) and (g)(4)(iv) of this 
section, will be provided a 60-day evidentiary period pursuant to 
paragraph (g)(4)(vii) of this section to submit the specified 
information, submit evidence to verify his or her inconsistent claims, 
or submit a revised application with claims consistent with information 
in the official LLP record. An applicant who submits claims that are 
inconsistent with information in the official LLP record has the burden 
of proving that the submitted claims are correct.
    (vi) Additional information or evidence. The Regional Administrator 
will evaluate additional information or evidence to support an 
applicant's inconsistent claims submitted within the 60-day evidentiary 
period pursuant to paragraph (g)(4)(vii) of this section. If the 
Regional Administrator determines that the additional information or 
evidence meets the applicant's burden of proving that the inconsistent 
claims in his or her application are correct, the official LLP record 
will be amended and the information will be used in determining whether 
the applicant is eligible for a license. However, if the Regional 
Administrator determines that the additional information or evidence 
does not meet the applicant's burden of proving that the inconsistent 
claims in his or her application is correct, the applicant will be 
notified by an initial administrative determination, pursuant to 
paragraph (g)(4)(viii) of this section, that the applicant did not meet 
the burden of proof to change the information in the official LLP 
record.
    (vii) 60-day evidentiary period. The Regional Administrator will 
specify by letter a 60-day evidentiary period during which an applicant 
may provide additional information or evidence to support the claims 
made in his or her application, or to submit a revised application with 
claims consistent with information in the official LLP record, if the 
Regional Administrator determines that the applicant did not meet the 
burden of proving that the information on the application is correct 
through evidence provided with the application. Also, an applicant who 
fails to submit information as specified in paragraphs (g)(4)(iii) and 
(g)(4)(iv) of this section will have 60 days to provide that 
information. An applicant will be limited to one 60-day evidentiary 
period. Additional information or evidence, or a revised application,

[[Page 21393]]

received after the 60-day evidentiary period specified in the letter 
has expired will not be considered for purposes of the initial 
administrative determination.
    (viii) Initial administrative determinations (IAD). The Regional 
Administrator will prepare and send an IAD to the applicant following 
the expiration of the 60-day evidentiary period if the Regional 
Administrator determines that the information or evidence provided by 
the applicant fails to support the applicant's claims and is 
insufficient to rebut the presumption that the official LLP record is 
correct, or if the additional information, evidence, or revised 
application is not provided within the time period specified in the 
letter that notifies the applicant of his or her 60-day evidentiary 
period. The IAD will indicate the deficiencies in the application, 
including any deficiencies with the information, the evidence submitted 
in support of the information, or the revised application. The IAD will 
also indicate which claims cannot be approved based on the available 
information or evidence. An applicant who receives and IAD may appeal 
pursuant to Sec. 679.43. An applicant who avails himself or herself of 
the opportunity to appeal an IAD will not receive a transferable 
license until after the final resolution of that appeal.
    (ix) Issuance of a non-transferable license. The Regional 
Administrator will issue a non-transferable license to the applicant on 
issuance of an IAD if required by the license renewal provisions of 5 
U.S.C. 558. A non-transferable license authorizes a person to catch and 
retain scallops as specified on the non-transferable license, and will 
have the specific endorsements and designations based on the claims in 
his or her application. A non-transferable license will expire upon 
final agency action.
    (5) Transfer of a Scallop License. (i) General. The Regional 
Administrator will approve the transfer of a scallop license if a 
complete transfer application is submitted to Restricted Access 
Management, Alaska Region, NMFS, and if the transfer meets all the 
eligibility criteria as specified in paragraph (g)(5)(ii) of this 
section. An application form may be requested from the Regional 
Administrator.
    (ii) Eligibility criteria for transfers. A scallop license can be 
transferred if:
    (A) The designated transferee is eligible to document a fishing 
vessel under Chapter 121, Title 46, U.S.C.;
    (B) The parties to the transfer do not have any fines, civil 
penalties, other payments due and outstanding, or outstanding permit 
sanctions resulting from Federal fishing violations;
    (C) The transfer will not cause the designated transferee to exceed 
the license cap in Sec. 679.7(i); and
    (D) The transfer does not violate any other provision specified in 
the part.
    (iii) Contents of transfer application. To be complete, an 
application for a scallop license transfer must be signed by the 
licence holder and the designated transferee, or the individuals 
representing them, and contain the following information, as 
applicable:
    (A) Name, business address, telephone number, FAX number, and 
social security number or tax ID number, of the license holder and of 
the designated transferee;
    (B) License number and total price being paid for the license;
    (C) Certification that the designated transferee is a U.S. Citizen, 
or a U.S. corporation, partnership, or other association;
    (D) A legible copy of a contract or sales agreement that specifies 
the license to be transferred, the license holder, the designated 
transferee, the monetary value or the terms of the license transfer; 
and
    (E) Other information the Regional Administrator deems necessary 
for measuring program performance.
    (iv) Incomplete applications. The Regional Administrator will 
return an incomplete transfer application to the applicant and identify 
any deficiencies if the Regional Administrator determines that the 
application does not meet all the criteria identified in paragraph 
(g)(5) of this section.
    (v) Transfer by court order, operation of law, or as part of a 
security agreement. The Regional Administrator will transfer a scallop 
license based on a court order, operation of law, or a security 
agreement if the Regional Administrator determines that the transfer 
application is complete and the transfer will not violate any of the 
provisions of this section.
    5. In Sec. 679.7, paragraphs (i)(3), and (i)(7) are revised, and 
new paragraphs (i)(1)(iv) and (i)(8) are added to read as follows:


Sec. 679.7  Prohibitions.

* * * * *
    (i) * * *
    (1) * * *
    (iv) Hold more than two scallop licenses in the name of that person 
at any time.
* * * * *
    (3) Conduct directed fishing for crab species without an original 
valid crab license, except as provided in Sec. 679.4(k)(2)
* * * * *
    (7) Lease a groundfish, crab species, or scallop license; or
    (8) Catch and retain scallops:
    (i) Without an original valid scallop license on board;
    (ii) Using a vessel with a MLOA greater than that specified on the 
scallop license;
    (iii) Using dredge gear contrary to a gear limitation specified on 
the scallop license.
    6. In Sec. 679.43, paragraphs (a) and (p) are revised to read as 
follows:


Sec. 679.43  Determinations and appeals.

    (a) General. This section describes the procedure for appealing 
initial administrative determinations made under part 679 of this 
title.
* * * * *
    (p) Issuance of a non-transferable license. A non-transferable 
license will be issued to a person upon acceptance of his or her appeal 
of an initial administrative determination denying an application for a 
license for license limitation groundfish, crab species under 
Sec. 679.4(k) or scallops under Sec. 679.4(g). This non-transferable 
license authorizes a person to conduct directed fishing for groundfish, 
crab species, or catch and retain scallops and will have specific 
endorsements and designations based on the person's claims in his or 
her application for a license. This non-transferable license expires 
upon the resolution of the appeal.
[FR Doc. 00-9749 Filed 4-20-00; 8:45 am]
BILLING CODE 3510-22-F


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