[Federal Register Volume 70, Number 196 (Wednesday, October 12, 2005)]
[Proposed Rules]
[Pages 59296-59311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20344]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 050921244-5244-01; I.D. 091305A]
RIN 0648-AP38


Fisheries Off West Coast States and in the Western Pacific; 
Pacific Coast Groundfish Fishery; Limited Entry Fixed Gear Sablefish 
Fishery Permit Stacking Program

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 issues this proposed rule to implement portions of 
Amendment 14 to the Pacific Coast Groundfish Fishery Management Plan 
(FMP) for 2007 and beyond. Amendment 14, approved by NOAA in August 
2001, created a permit stacking program for limited entry permits with 
sablefish endorsements. This proposed rule would implement regulatory 
measures from Amendment 14 that the agency could not set in place in 
time for the 2001 through 2006 primary sablefish seasons. Amendment 14 
was intended to improve safety in the primary sablefish fishery and to 
provide greater season flexibility for sablefish fishery participants.

DATES: Comments must be submitted in writing by December 12, 2005.

ADDRESSES: You may submit comments on the proposed rule to implement 
further limited entry sablefish permit stacking program regulations, 
identified by 091305A, by any of the following methods:
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#0b4a666e656f666e657f3a3f6925657c794b65646a6a256c647d"><span class="__cf_email__" data-cfemail="12537f777c767f777c662326703c7c6560527c7d73733c757d64">[email protected]</span></a>. Include I.D 091305A in 
the subject line of the message.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Fax: 206-526-6736, Attn: Jamie Goen
    <bullet> Mail: D. Robert Lohn, Administrator, Northwest Region, 
NMFS, 7600 Sand Point Way NE., Seattle, WA 98115-0070
    Copies of Amendment 14 and its Environmental Assessment/Regulatory 
Impact Review (EA/RIR) are available from Donald McIsaac, Executive 
Director, Pacific Fishery Management Council (Council), 7700 NE 
Ambassador Place, Portland, OR 97220. Copies of the Supplemental 
Initial Regulatory Flexibility Analysis (IRFA) are available from D. 
Robert Lohn, Administrator, Northwest Region, NMFS, 7600 Sand Point Way 
NE., Seattle, WA 98115-0070.
    Send comments on the reporting burden estimate or any other aspect 
of the collection-of-information requirements in this proposed rule to 
Jamie Goen or Kevin Ford, Northwest Region, NMFS, and to David Rostker, 
Office of Management and Budget (OMB), by e-mail at <a href="/cdn-cgi/l/email-protection#084c697e616c575a677b7c636d7a4867656a266f677e"><span class="__cf_email__" data-cfemail="84c0e5f2ede0dbd6ebf7f0efe1f6c4ebe9e6aae3ebf2">[email protected]</span></a>,or fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT: Jamie Goen or Kevin Ford (Northwest 
Region, NMFS), phone: 206-526-4646 or 206-526-6115; fax: 206-526-6736 
and; e-mail: <a href="/cdn-cgi/l/email-protection#4f252e22262a6128202a210f21202e2e61282039"><span class="__cf_email__" data-cfemail="bed4dfd3d7db90d9d1dbd0fed0d1dfdf90d9d1c8">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#2a414f5c4344044c45584e6a44454b4b044d455c"><span class="__cf_email__" data-cfemail="7a111f0c1314541c15081e3a14151b1b541d150c">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Electronic Access

    This Federal Register document is also accessible via the internet 
at the website of the Office of the Federal Register: http://www.gpoaccess.gov/fr/index.html.
    NMFS is proposing this rule to implement those portions of 
Amendment 14 to the FMP that NMFS was unable to implement in time for 
the 2001 through 2006 primary sablefish seasons. Amendment 14 
implemented a permit stacking program for limited entry permits with 
sablefish endorsements. This proposed rule is based on recommendations 
of the Council, under the authority of the Pacific Coast Groundfish FMP 
and the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act). The portions of Amendment 14 that were 
implemented for the 2001 primary sablefish season significantly 
increased safety in the fishery, allowed individual fishery 
participants to more fully use their existing vessel capacity, and 
reduced overall capacity in the primary fixed gear sablefish fishery. 
This proposed rule would not change any of those benefits, but would 
further complete the implementation of Amendment 14 by preventing 
excessive fleet consolidation, ensuring processor access to sablefish 
caught in the primary season, and maintaining the character of the 
fleet through owner-on-board requirements. The background and rationale 
for the Council's recommendations are summarized below. The discussion 
below also explains why NMFS will not be implementing the Council's 
recommendation for a hail-in requirement for vessels delivering primary 
season sablefish. Furthermore, it summarizes some modifications to the 
permit stacking program that the Council is considering for future 
implementation.
    Further detail appears in the EA/RIR prepared by the Council for 
Amendment 14 and in the proposed and final rule to implement Amendment 
14 for the 2001 primary sablefish season. The proposed rule for the 
2001 season was published on June 8, 2001 (66 FR 30869), the final rule 
was published on August 7, 2001 (66 FR 41152), and a correction to the 
final rule was published on August 30, 2001 (66 FR 45786).

Background

    For many years, sablefish harvested by the limited entry, fixed 
gear fleet north of 36[deg] N. lat. has been separated into a small, 
year-round daily trip limit fishery and a primary season fishery (from 
April 1 through October 31). Annually, about 85 percent of the limited 
entry fixed gear sablefish allocation has been taken in the primary 
season fishery. Before 1997, the Council managed harvest in the primary 
season fishery without vessel cumulative limits by setting the season 
length short enough to ensure that the fishery would not exceed its 
quota. Capitalization in the fixed gear sablefish fleet increased

[[Page 59297]]

over time and the Council needed to set ever shorter primary seasons to 
control catch levels. By 1996, the fleet was able to take the bulk of 
the primary season sablefish catch in a 5 day fishery.
    This evolution to a derby-style fishery induced the Council to make 
a series of management changes intended to rationalize fishing effort 
and improve safety for primary season fishery participants. Amendment 9 
to the FMP introduced a sablefish endorsement program that limited the 
number of vessels allowed to participate in the primary season fishery. 
Limited entry permit holders with at least 16,000 lb (7,257 mt) of 
sablefish landed in any one year from 1984 through 1994 received 
sablefish endorsements. This program was intended to restrict primary 
season fishery participation to those permit holders with historical 
participation in and dependence upon the sablefish fishery.
    Following Amendment 9, the Council further separated participation 
in the primary season sablefish fishery by introducing the three-tier 
program in 1998. This program divided sablefish-endorsed permits into 3 
tiers based on historical landings associated with those permits. Under 
the three-tier program, a participant in the primary season may land an 
amount of sablefish up to the cumulative limit associated with his/her 
permit. Qualifications for each of the 3 tiers were based on the 
cumulative sablefish landings associated with a permit over the same 
1984 through 1994 period: at least 898,000 lb (407.33 mt) to qualify 
for Tier 1, less than 898,000 lb (407.33 mt) but more than 380,000 lb 
(172.36 mt) to qualify for Tier 2, and less than 380,000 lb (172.36 mt) 
but at least the minimum 16,000 lb (7,257 mt) to qualify for Tier 3. 
The three-tier system also set a between-tier ratio to describe the 
relationship between the cumulative limits that would be available to 
each tier during the primary season fishery. That ratio is 1 (Tier 3): 
1.75 (Tier 2):3.85 (Tier 1). For example, if Tier 3 had a cumulative 
limit of 10,000 lb (4,536 mt), Tier 2 would have a corresponding 
cumulative limit of 17,500 lb (7,938 mt), and Tier 1 would have a 
corresponding cumulative limit of 38,500 lb (17,463 mt).
    While the three-tier program somewhat slowed the pace of the 
primary season fishery, the season was still less than 10 days long in 
each of the primary seasons from 1998 to 2000. Even under the three-
tier program, the Council had to set the seasons short enough to ensure 
that not all participants would be able to catch the full cumulative 
limits of sablefish associated with their permits. A fishery where all 
participants have the opportunity to catch a cumulative limit and all 
are able to catch that limit is an Individual Fishing Quota (IFQ) 
fishery as defined by the Magnuson-Stevens Act. At the time, the 
Magnuson-Stevens Act, as amended by Public Law 106-554, included a 
moratorium on the implementation of new IFQ programs through October 1, 
2002. (The moratorium has since been lifted). However, via Public Law 
106-554, Congress exempted from the moratorium a Pacific Council IFQ 
program for the fixed gear sablefish fishery that: (1) allows the use 
of more than one limited entry groundfish permit per vessel; and/or (2) 
sets cumulative trip limit periods, up to 12 months in any calendar 
year, that allow fishing vessels a reasonable opportunity to harvest 
the full amount of the associated trip limits. Amendment 14 to the FMP 
implements a permit stacking program that meets these moratorium 
exemption requirements.

Amendment 14

    The Council approved Amendment 14 at its November 2000 meeting and 
clarified its intent on implementing Amendment 14 at its November 2001 
and April 2002 meetings. Amendment 14 introduced a permit stacking 
program to the limited entry, fixed gear primary sablefish fishery. 
Under this permit stacking program, a vessel owner may register up to 3 
sablefish-endorsed permits for use with their vessel to harvest each of 
the primary season sablefish cumulative limits associated with the 
stacked permits. By exempting the Pacific Coast fixed gear permit 
stacking program from the IFQ moratorium, Congress removed the need to 
set short seasons designed to prevent participants from catching their 
full cumulative limits. Amendment 14 allows a season up to 7 months 
long, from April 1 through October 31, which allows an ample period for 
vessels to pursue their primary season sablefish cumulative limits. 
Beginning in 2002, NMFS implemented the full April 1 through October 31 
season via the Pacific Coast groundfish final specifications and 
management measures published on March 7, 2002 (67 FR 10490).
    Provisions subject to the regulatory review process required under 
the Paperwork Reduction Act (PRA) and a longer NMFS application and 
permitting process were reserved for a second set of proposed 
regulations for 2002 and beyond. In its June 8, 2001, proposed rule, 
NMFS announced its intention to divide Amendment 14 implementation into 
two separate regulatory processes. Implementation of this latter 
portion of Amendment 14 was further postponed in 2002 to allow time for 
NMFS to return to the Council for further clarification. On February 
14, 2002, NMFS notified fixed gear permit holders by letter to let them 
know the agency would be requesting further clarification from the 
Council. NMFS received further clarification at the Council's April 
2002 meeting.
    The regulatory changes proposed with this Federal Register document 
would implement permit stacking regulations that include the following 
provisions: permit owners and permit holders would be required to 
document their ownership interests in their permits to ensure that no 
person holds or has ownership interest in more than 3 permits; an 
owner-on-board requirement for permit owners who did not own sablefish-
endorsed permits as of November 1, 2000; an opportunity for permit 
owners to add a spouse as co-owner; vessels that do not meet minimum 
frozen sablefish historic landing requirements would not be allowed to 
process sablefish at sea; permit transferors would be required to 
certify sablefish landings during mid-season transfers; and, a 
definition of the term ``base permit.''

Documenting Permit Ownership Interest and Adding a Spouse as Co-owner

    Amendment 14 includes several ownership-related provisions. (1) No 
partnership or corporation may own a sablefish-endorsed limited entry 
permit unless that partnership or corporation owned a sablefish-
endorsed permit as of November 1, 2000 (also referred to as 
grandfathered or first generation permit owner). NMFS announced this 
November 1, 2000, control date in an Advance Notice of Proposed 
Rulemaking on April 3, 2001 (66 FR 17681). Partnerships or corporations 
that owned permits as of November 1, 2000, may continue to have 
ownership interest in those same permits and may purchase or hold 
additional permits up to the 3-permit limit; however, partnerships or 
corporations that owned a permit before November 1, 2000, and 
subsequently sell all of their sablefish-endorsed permits, will lose 
the privilege of continuing to own sablefish-endorsed permits if they 
do not buy another permit within one year. Any permits sold after 
November 1, 2000, may only be sold to an individual person or to 
partnerships or corporations that had ownership interest in a 
sablefish-endorsed permit before November 1, 2000.

[[Page 59298]]

    (2) No person, partnership, or corporation in combination may have 
ownership interest in or hold more than 3 sablefish-endorsed permits 
either simultaneously or cumulatively over the primary season, except 
for an individual person, or partnerships or corporations that had 
ownership interest in more than 3 sablefish-endorsed permits as of 
November 1, 2000. An individual person, or partnerships or corporations 
that had ownership interest in 3 or more sablefish-endorsed permits as 
of November 1, 2000, may not acquire additional permits either by 
purchase or holding beyond those sablefish-endorsed permits owned on 
November 1, 2000, until they own fewer than 3 permits; at that time 
they may acquire additional permits but may not exceed the ownership 
cap of 3 permits.
    (3) A partnership or corporation will lose the exemptions provided 
in paragraphs (1) and (2) of this section on the effective date of any 
change in the ownership of a corporation or partnership from that which 
existed on November 1, 2000. [Note: In cases where multiple 
corporations or partnership are listed on a permit, NMFS will treat 
them as one new entity for purposes of the permit count and 
grandfathered status. For example, if Smith, Inc. and Jones, Inc. are 
listed as owning a permit together since before November 1, 2000, they 
will be grandfathered as ``Smith, Inc. and Jones, Inc.'' and this 
entity will be counted as owning that 1 permit. If Jones, Inc. did not 
also own a permit on its own before November 1, 2000, it would not be a 
grandfathered corporation and could not own a permit after November 1, 
2000. Any change in Smith, Inc. and/or Jones, Inc. would affect 
``Smith, Inc. and Jones, Inc.'' as listed on the permit.] A ``change'' 
in the partnership or corporation means the addition of a partner or 
shareholder to the corporate or partnership membership. This definition 
of ``change'' will apply to any person added to the corporation or 
partnership since November 1, 2000, including any family member of an 
existing shareholder or partner. A change in membership is not 
considered to have occurred if a member dies or becomes legally 
incapacitated and a trustee is appointed to act on his behalf, nor if 
the ownership of shares among existing members changes, nor if a member 
leaves the corporation or partnership and is not replaced. Changes in 
the ownership of publicly held stock will not be deemed changes in 
ownership of the corporation. Changes in the partnership or corporation 
must be reported to NMFS' Sustainable Fisheries Division (SFD) within 
15 days of the addition of a new partner or shareholder.
    (4) An individual person who did not own a sablefish-endorsed 
permit as of November 1, 2000, and who purchases a sablefish-endorsed 
permit after November 1, 2000, will be required to be on board the 
vessel registered for use with the permit when that vessel is fishing 
for sablefish against the primary sablefish tier limits associated with 
the permit(s) registered for use with that vessel. (Also known as the 
``owner-on-board'' requirement.)
    To implement these four major permit ownership provisions, NMFS 
will need to determine which individuals have an ownership interest in 
the partnerships and corporations that own and/or hold sablefish-
endorsed permits. As of November 2000, about 40 partnerships or 
corporations were owners of sablefish-endorsed permits (this number 
only includes business entities denoted as corporation, general 
partnership, limited partnership, etc.). Similarly, about 40 
partnerships or corporations were holders of sablefish-endorsed permits 
with seven of those being different from the partnerships or 
corporations that were given as permit owners. Once NMFS obtains the 
names of all of the individuals who had ownership interest in a 
sablefish-endorsed permit as of November 1, 2000, as well as all of the 
individuals that had ownership interest in or held a sablefish endorsed 
permit after November 1, 2000, the agency will be better able to 
implement the Amendment 14 provision that restricts the number of 
permits each person has ownership interest in or holds to three 
permits. If a person who has not owned all their permits since November 
1, 2000, is found to have ownership interest in or hold more than 3 
permits, NMFS will void all current permits, including any 
grandfathered permits owned or held by partnerships or corporations, 
and reissue all permits in an ``unidentified'' status meaning that the 
permits cannot be fished, until such time as that individual can prove 
they have ownership interest in or hold no more than 3 permits. [Note: 
A permit cannot be fished if it is in ``unidentified'' status. The 
permit must be registered for use with the vessel being used to land 
the groundfish as specified in 50 CFR 660.333(a).] For example, if a 
person is found to have ownership interest in five permits, three of 
which were owned as of November 1, 2000, NMFS will issue all five 
permits, including any permits shared with other individuals, 
partnerships or corporations, into ``unidentified'' status until that 
person sells at least two of their permits so that they own or hold no 
more than three permits. If a person had ownership interest in five 
permits as of November 1, 2000, and still has ownership interest in 
those five permits and does not own or hold additional permits, none of 
the permits would be moved into the ``unidentified'' status.
    While the Council recommended that permit owners would be required 
to document their ownership interests in their permits to ensure that 
no person holds or has ownership interest in more than 3 permits, NMFS 
has determined that permit holders that are corporations or 
partnerships would also be required to document their ownership 
interests for purposes of the permit count which was implemented with 
the first round of permit stacking regulations in August 2001. 
Therefore, NMFS has interpreted the Council's recommendation to not 
just require permit owners, but also permit holders to document their 
ownership interests in their permits to ensure that no person holds or 
has ownership interest in more than 3 permits. For purposes of 
establishing the permit count for each permit owner and permit holder, 
each individual who is listed as owner on the permit or is listed as 
having an ownership interest as part of a corporation or partnership 
will be counted as owning or holding one permit. In cases where a 
husband and wife are listed as co-owners of the same permit, both 
individuals will be counted as owning one permit each. However, if the 
husband is listed on the permit as the sole owner of that permit, only 
the husband will be counted as owning that permit for purposes of 
restrictions and exemptions on the number of permits a person may own 
or hold.
    If a permit owner who owned the permit as of November 1, 2000, 
conveys a permit to their spouse upon their death, the conveyed permit 
will count toward the permit ownership limits for that spouse. 
``Spouse'' means a person who is legally married to another person as 
recognized by state law (i.e., one's wife or husband). If the spouse 
already owns or holds 3 permits, he/she will not be permitted to retain 
this additional permit, unless he/she conveys ownership of or no longer 
holds one of his/her existing permits.
    If a couple were married as of November 1, 2000, but only one 
spouse was listed on the permit as the permit owner at that time, the 
spouse of the listed permit owner would not be exempt from the owner-
on-board requirement. However, NMFS realizes permit owners could not 
have foreseen the implications of not listing their spouse under the 
detailed provisions of

[[Page 59299]]

the permit stacking program adopted by the Council. Therefore, permit 
owners who were married as of the control date (November 1, 2000) and 
who wish to add their spouse as co-owner on their permit(s) may correct 
NMFS' permit ownership records as of that control date. Permit owners 
may add a not-listed spouse as a co-owner without losing their 
grandfathered status. As previously mentioned, in cases where a couple, 
married as of November 1, 2000, are listed as co-owners of the same 
permit, both individuals will be counted as owning one permit each and 
will have grandfathered status as a partnership as defined at Sec.  
660.302. An individual within the married couple will not, however, be 
able to retain their exemption from owner-on-board requirements if they 
choose to buy another permit as an individual and did not own a permit 
as an individual as of the control date in NMFS ``corrected'' records 
(i.e., NMFS records after allowing a not-listed spouse to be added as 
co-owner). Members of partnerships and corporations will not be allowed 
to add their spouses to the corporate ownership listing as of November 
1, 2000, for purposes of exempting them from the owner-on-board 
requirements. (Note: NMFS defines a ``partnership'' as two or more 
individuals, partnerships, or corporations, or combinations thereof, 
who have ownership interest in a permit, including married couples and 
legally recognized trusts and partnerships, such as limited 
partnerships (LP), general partnerships (GP), and limited liability 
partnerships (LLP).)
    Upon publication of these regulations in the Federal Register, NMFS 
will send a form to permit owners with one individual listed as of 
November 1, 2000, to allow married individuals who wish to declare 
their spouses as having permit ownership interest as of November 1, 
2000. If the permit owner fails to return the form by July 1, 2006, the 
permit name on record with SFD as of November 1, 2000, will remain on 
the permit. If the permit owner has been married since the control 
date, chooses not to add their spouse as a co-owner and the permit 
owner listed on the permit thereafter dies, the spouse will not be 
exempt from the owner-on-board requirement should the spouse inherit 
the permit. SFD will not accept any declarations to add a spouse as co-
owner for couples married as of the control date after the July 1, 
2006, deadline.
    For corporations and partnerships, NMFS will send a form to legally 
recognized corporations and partnerships (i.e., permit owners other 
than individuals) that currently own or hold sablefish-endorsed permits 
that requests a listing of the names of all shareholders or partners as 
of November 1, 2000, and a second listing of that same information as 
of the current date in 2006. NMFS may require a copy of the United 
States Coast Guard Abstract of Title as proof of vessel ownership for 
permit holders and/or owners and may require articles of incorporation 
or other documentation deemed necessary for proof of corporate or 
partnership ownership. If a corporation or partnership fails to return 
the completed form by the deadline date of July 1, 2006, NMFS will send 
a second written notice to delinquent entities requesting the completed 
form be returned by a revised deadline date of August 1, 2006. If the 
permit owning entity fails to return the completed form by that second 
deadline date, August 1, 2006, NMFS will void their existing permit(s) 
and reissue the permit(s) with a vessel registration given as 
``unidentified'' until such time that the completed form is provided to 
NMFS. For purposes of determining changes in partnerships/corporations 
in succeeding years, NMFS will send the form to corporations and 
partnerships as part of the annual permit renewal process.
    Failure to report or false reporting of ownership interest in 
federal limited entry groundfish permits to NMFS may be subject to 
federal civil or criminal penalties.

Owner-on-board Requirement

    As mentioned above, an individual person who owns sablefish-
endorsed permits, but who did not have an ownership interest in a 
sablefish-endorsed permit as of November 1, 2000, would be required to 
be on board the vessel registered for use with that permit during any 
groundfish fishing operations within the primary season fishery while 
that permit's primary sablefish season limits are being taken. (Note: 
An individual person, or partnerships or corporations that hold(s) a 
sablefish-endorsed permit, but does not own a sablefish-endorsed 
permit, are not subject to the owner-on-board requirements.) The 
Council included this provision in Amendment 14 as a way of ensuring 
that the fixed gear sablefish fleet would maintain its character, by 
requiring that only fishermen control sablefish-endorsed permits and 
moving toward a fishery where permit owners are working onboard the 
vessel during fishing operations.
    The sablefish permit stacking program is essentially an IFQ 
program. A concern about IFQ programs is that if fishing privileges are 
for sale, individuals or business entities who do not fish could buy 
those privileges. Allowing individuals or business entities who do not 
fish to own fishing privileges and then rent those privileges out to 
fishers is often referred to as ``share-cropping'' the fishing 
privileges. Members of the West Coast sablefish fleet were concerned 
that without an owner-on-board provision, permit ownership could flow 
out of fishing communities and into the hands of speculative non-
fishing buyers. To ensure that only fishers could buy into the 
sablefish fleet, the Council included an owner-on-board provision in 
Amendment 14.
    Under this proposed rule, an individual who purchased a sablefish-
endorsed permit after November 1, 2000, would be required to be on 
board the vessel registered for use with that permit when the vessel is 
participating in any groundfish fishery during the primary season and 
fishing on that permit's sablefish limits until that vessel has taken 
that permit's primary sablefish season limits. Once the primary 
sablefish season starts, any sablefish landings made by a vessel 
registered for use with a sablefish-endorsed permit count against that 
vessel's primary season limit(s). This aspect of the owner-on-board 
requirement prevents unnecessary sablefish discard by ensuring that if 
sablefish is taken incidentally in fisheries targeting other 
groundfish, that sablefish will not be discarded and will count against 
the primary season fishery limits. All permit owners who are subject to 
the owner-on-board requirements would be notified in a letter from NMFS 
in 2006 and prior to the start of the primary sablefish season on April 
1, 2007.
    Permit owners who are subject to the owner-on-board requirement may 
request an emergency exemption from the requirement in cases of death, 
illness, or injury of the permit owner that prevents the permit owner 
from participating in the fishery. This exemption would ensure that a 
permit owner's family could receive the sablefish income associated 
with a permit if the permit owner himself is unable to participate in 
the groundfish fishery through death, illness, or injury. In the case 
of death of a permit owner, the estate of the deceased permit owner is 
afforded a grace period from the owner-on-board requirement for up to 3 
years after the death of the individual or until such time as there is 
settlement of the permit owner's estate and the permit is transferred 
to the beneficiary, whichever is earlier. In the interim

[[Page 59300]]

before the estate is settled, if the deceased permit owner was subject 
to the owner-on-board requirements, the estate of the deceased permit 
owner can send a letter to NMFS with a copy of the death certificate, 
requesting an exemption from the owner-on-board requirements until 
either the estate is settled or for up to 3 years after the time of 
death, whichever is earlier. An exemption from the owner-on-board 
requirements would be conveyed in a letter from NMFS to the estate of 
the permit owner and this letter would be required to be on the vessel 
during fishing operations. This grace period allows the estate a period 
of time in which to transfer the permit to an individual and also 
allows the estate to hire a skipper to fish the permit while the estate 
is being settled. Once the permit is transferred, the new owner would 
be subject to the owner-on-board requirements. If, after the estate is 
settled, the spouse inherits and therefore owns the permit and the 
deceased permit owner was grandfathered, but the spouse was not listed 
on the permit as grandfathered, the spouse would be a second generation 
owner and would be required to be on board the vessel while the permit 
is being fished.
    An exemption due to injury or illness would be effective only 
through the end of the calendar year in which it was granted. In order 
to receive an exemption due to injury or illness, the permit owner must 
submit a letter to NMFS requesting an exemption from the owner-on-board 
requirement, explaining the need for the exemption, and providing 
documentation from a certified medical practitioner detailing why the 
permit owner is unable to continue to be onboard a fishing vessel. In 
order to extend an emergency medical exemption for a succeeding year, 
the permit owner must submit a new request to NMFS and provide 
documentation from a certified medical practitioner detailing why the 
permit owner is still unable to be onboard a fishing vessel. An 
emergency exemption would be conveyed in a letter from NMFS to the 
permit owner and this letter would be required to be on the vessel 
during fishing operations. All emergency exemptions will be evaluated 
by NMFS and a decision will be made by SFD in writing to the permit 
owner within 60 days of receipt of the original exemption request. 
Emergency medical exemptions will be granted by NMFS for no more than 
three consecutive or total years. NMFS will consider any exemption 
granted for less than 12 months in a year to count as one year against 
the 3-year cap.
    An individual person, or partnerships or corporations who continue 
to own at least one sablefish-endorsed permit that was owned as of 
November 1, 2000, would be exempt from the owner-on-board requirement. 
If a person, partnership, or corporation that is exempt from the owner-
on-board requirement no longer owns at least one sablefish-endorsed 
permit for a period greater than one year, that permit owner would no 
longer be exempt from the owner-on-board requirement. However, a 
person, partnership, or corporation that is exempt from the owner-on-
board requirement could sell all of its permits, buy another sablefish-
endorsed permit within 1 year of the date the last permit was approved 
for transfer, and retain its exemption from the owner-on-board 
requirements. A person that is part of a grandfathered partnership or 
corporation could buy additional permits as an individual, up to the 
limit of three per individual, but the individual would not be exempt 
from the owner-on-board requirements with the new permit. However, if 
the individual was part of grandfathered partnership or corporation in 
which they were the only remaining individual (i.e., all other 
individuals with ownership interest had left the partnership or 
corporation), this individual would still be considered as a 
grandfathered partnership or corporation in NMFS records. Thus, permits 
owned by this individual under the partnership or corporation would be 
exempt from the owner-on-board requirements. This individual could also 
buy additional permits under the partnership or corporation, up to the 
limit of 3 per individual, and would remain exempt from the owner-on-
board requirements with the additional permits.
    Additionally, a person, partnership, or corporation that qualified 
for the owner-on-board exemption, but later divested their interest in 
a permit or permits, may retain rights to an owner-on-board exemption 
as long as that person, partnership, or corporation purchases another 
permit within one year of the date that the final rule for these owner-
on-board requirements is implemented. A partnership or corporation 
could only purchase a permit if it has not added or changed individuals 
since November 1, 2000, excluding individuals that have left the 
partnership or corporation or that have died. NMFS would send out a 
letter to all individuals, partnerships or corporations who owned a 
permit as of November 1, 2000, and who no longer own a permit to notify 
them that they would qualify as a grandfathered permit owner if they 
choose to buy a permit within one year from the date the final rule for 
these owner-on-board requirements is effective.
    If the individuals who have an ownership interest in the 
corporation or partnership change from those owning the partnership or 
corporation as of November 1, 2000, by adding another individual(s), 
that partnership or corporation will lose its exemption from both the 
owner-on-board requirements and from the provision that allows only an 
individual person to own a sablefish-endorsed permit. Thus, a husband 
and wife who own a permit could not add a sibling or child to the 
permit without losing their first generation status and losing their 
exemption from the provision that only allows an individual person to 
own permits. Similarly, a fisherman who wants to take on a new partner 
because an existing partner is retiring could not add that new partner 
without losing his first generation status and his exemption from the 
provision that only allows an individual to own permits. In the case of 
a grandfathered corporation such as ``Smith, Inc. and Jones, Inc.,'' 
viewed as one corporation in NMFS records, Jones, Inc. could not add a 
new member without causing ``Smith, Inc. and Jones, Inc.'' to lose it's 
grandfathered status. However, an individual person, or partnerships 
and corporations may continue to hold sablefish-endorsed permits (e.g., 
through a lease arrangement) from any permit owner (exempt from owner-
on-board or not) and remain exempt from the owner-on-board 
requirements, even if their membership has changed or they did not hold 
a sablefish-endorsed permit as of November 1, 2000.
    As mentioned above, if a couple was married as of November 1, 2000, 
but only one spouse was listed as the permit owner at that time, the 
spouse of the listed permit owner would not be exempt from the owner-
on-board requirement. NMFS will allow an opportunity for those 
grandfathered permit owners who wish to add their spouses as co-owners 
on their permits to correct NMFS' permit ownership records as of that 
control date (November 1, 2000). Permit owners may then add not-listed 
spouses as co-owners without losing their grandfathered statuses. Their 
new grandfathered status will be as a partnership, as defined at Sec.  
660.302, which includes married couples. Individual permit owners will 
lose their individual grandfathered status when they add their not-
listed spouse unless they also owned at least one permit as

[[Page 59301]]

an individual and did not retroactively add a spouse as co-owner on 
that permit. The process that NMFS will follow for adding a spouse as 
co-owner is described in the ownership interest section of this 
proposed rule. As previously mentioned, in cases where married couples 
are listed as co-owners of the same permit, both individuals will be 
counted as owning one permit each and will have grandfathered status as 
a partnership, as defined at Sec.  660.302. An individual within the 
married couple will not, however, be able to retain their exemption 
from owner-on-board requirements if they choose to buy another permit 
as an individual and did not own a permit as an individual as of the 
control date in NMFS ``corrected'' records (i.e., NMFS records after 
allowing a not-listed spouse to be added as co-owner). Members of 
partnerships and corporations will not be allowed to add their spouses 
as of November 1, 2000, for purposes of exempting those spouses from 
the owner-on-board requirements or the provision that only allows 
individuals to own or hold permits.
    Because only the owners of non-exempt permits that are being fished 
during the trip are required to be on board, enforcement agents must be 
able to determine which permits are being fished and which owner should 
be on board. In order to enforce the owner-on-board provision, NMFS is 
requesting that the states require that the groundfish Federal limited 
entry permit number be written on state fish landing receipts (i.e., 
fish tickets). At the April 2002 Council meeting in Portland, OR, the 
Council and NMFS requested that the States of Washington, Oregon, and 
California modify their fish tickets to require a space for recording 
the permit number under which a landing is made. The states agreed to 
consider modifying their fish tickets, but requested time to consider 
the implications of such a modification and could not guarantee that 
action would be taken in time for implementation of the second set of 
the permit stacking regulations. Currently, only the State of 
California has added a line for permit information on their state fish 
tickets and enters that information into the fish ticket database, 
PacFIN. Until a new fish ticket design is available, states should 
require that permit numbers be written somewhere on the fish ticket, as 
appropriate. Ultimately, it would be beneficial to have these Federal 
limited entry permit numbers entered into the PacFIN database so that 
enforcement could query a given permit number and their associated fish 
ticket landings. However, until such time, having the permit number on 
the paper fish ticket would allow hand searching of paper fish tickets 
for investigations. This request is also being made to aid in 
enforcement of mid-season transfers, discussed later in this proposed 
rule. Adding a permit number to the fish ticket is expected to aid 
enforcement by creating a record of which sablefish permit was being 
fished on a given fishing trip. Thus, if enforcement boarded a vessel 
at sea or as they were coming into port, enforcement could record which 
owners were on board. At a later time, they could then verify which 
permit the sablefish landings were credited to on the fish ticket and 
double check that the owner of that permit was on board if they were 
not exempt from the owner-on-board provisions.
    At a minimum, the permit number associated with a landing should be 
recorded on the fish ticket and entered into the PacFIN database for 
tracking and enforcement reasons. If Washington and Oregon do not 
require that permit numbers be written on the fish tickets and entered 
into the PacFIN database, NMFS may require all permit owners who are 
subject to the owner-on-board requirement to be onboard the vessel when 
that vessel is fishing for groundfish until all sablefish tiers 
associated with that vessel during the primary season have been fished 
(e.g., even if landings are only being attributed to one permit at a 
time but all three permits are subject to the owner-on-board 
requirement, all three permit owners would be required to be onboard 
the vessel until that vessel has finished the primary season and 
completed their landings against all three permits). Conversely, if 
Washington and Oregon require the permit number on the fish ticket, 
only those permit owners who are subject to the owner-on-board 
requirement need to be onboard the vessel when that vessel is fishing 
for sablefish against a specific sablefish permit (e.g., if landings 
are only being attributed to one permit at a time and that permit is 
subject to the owner-on-board requirement, only that permit owner would 
be required to be onboard the vessel when that vessel is fishing 
against that permit).

Exemptions for Vessels Processing Sablefish at Sea

    Sablefish caught off the West Coast are often processed and frozen 
for the Japanese market, but the manner of processing varies along the 
West Coast. Because of the varied ocean bottom topography, some 
sablefish fishing grounds are closer to shoreside processing plants 
than others. Larger-sized sablefish tend to bring higher prices, but 
those large fish are usually found in deep water farther offshore. In 
areas where the sablefish grounds are within a single day's round trip 
from port, fishers might bring their sablefish to the processor whole. 
Processors remove the landed fish's head and guts, then glaze and 
freeze the sablefish body as quickly as possible to ensure that the 
processed product meets the high standards of the Japanese fish market. 
Fishers who operate farther than a day's trip from port might remove 
the head and guts from their sablefish before landing them at the 
processor to preserve the quality of the fish's flesh throughout 
fishing and processing operations. Depending on the care that a fisher 
takes in heading and gutting his/her sablefish, the processor may have 
to re-clean the fish before freezing and glazing it for sale.
    Because of the primary sablefish fishery's history as a short 
season, fishers have traditionally pulled sablefish out of the ocean as 
quickly as possible and have left most or all of the processing to the 
processors. With a longer primary sablefish season, fishers could 
operate at a more leisurely pace and do more of their own processing. 
If a significant portion of the sablefish-endorsed fishers were to 
begin operating as their own processors, however, the shoreside 
processing plants would be deprived of their traditional sablefish-
generated income. The value of sablefish taken with fixed gear and sold 
as processed product by West Coast processors was $9-10 million in 1999 
and $10-11 million in 2000. Those amounts include sablefish taken in 
the daily trip limit fisheries and are based on round weight of 
sablefish landed in 1999 and 2000 with a product recovery rate range of 
56-60 percent of round weight. With implementation of a prohibition on 
processing sablefish at sea, revenues in sold sablefish product for 
shoreside processors would be expected to remain similar to those 
amounts reported before the control date of November 1, 2000.
    To ensure that shoreside processing plants would continue to have 
access to sablefish landed from the primary sablefish fishery, the 
Council included a provision in Amendment 14 that prohibits vessels 
from processing their sablefish at sea. ``Processing'' is defined at 50 
CFR 660.302 as, ``the preparation or packaging of groundfish to render 
it suitable for human consumption, retail sale, industrial uses or 
long-term storage, including, but not limited to, cooking, canning, 
smoking, salting, drying, filleting, freezing, or rendering

[[Page 59302]]

into meal or oil, but does not mean heading and gutting unless 
additional preparation is done.''
    Although most West Coast sablefish vessels have not traditionally 
processed their sablefish catch, there are a few vessels that may have 
a history of processing sablefish. To acknowledge investments these 
vessel owners have made in on board freezing and processing equipment, 
Amendment 14 includes an exception to the at-sea processing prohibition 
for vessels that froze at least 2,000 lb (907.2 mt) round weight of 
sablefish landings in any one year of 1998, 1999, or 2000. Because the 
control date for this exemption is also November 1, 2000, frozen 
sablefish landings from 2000 would have to have occurred before that 
date. The best evidence of a vessel having made frozen sablefish 
landings would be state fish tickets for landed sablefish accompanied 
by receipts for frozen sablefish from fish buyers or exporters. The 
qualifying landings of frozen sablefish must have occurred during the 
primary sablefish fishery season, must have been taken in waters from 
0-200 nautical miles offshore of the states of Washington, Oregon or 
California, and the vessel owner must have had a valid sablefish-
endorsed limited entry permit at the time the qualifying fish were 
landed.
    NMFS expects that fewer than five vessels owners will apply for an 
at-sea processing exemption. NMFS SFD will send a letter to sablefish-
endorsed permit owners and/or fixed gear vessel owners announcing the 
qualification requirements for the at-sea processing exemption. Permit 
and/or vessel owners who believe that they qualify for an at-sea 
processing exemption would have at least 60 days to provide NMFS SFD 
with evidence of their frozen sablefish landings via an application to 
be provided by NMFS. The permit and/or vessel owner must submit an 
application and supporting evidence to SFD no later than July 1, 2006. 
The application will be available from NMFS in hard copy and online at 
http://www.nwr.noaa.gov/1sustfsh/permits/prmits01.htm. NMFS SFD would 
then have 30 days to review the submitted evidence and make 
determinations on whether an applicant vessel qualifies for the at-sea 
processing exemption. Persons whose vessels qualify for the at-sea 
processing exemption will be issued a letter from NMFS to carry aboard 
their vessels.
    Permit and/or vessel owners who are initially denied the at-sea 
processing exemption but who believe that they have further evidence to 
demonstrate their qualifications for the exemption will have 30 days 
from the NMFS SFD denial decision to appeal the decision to the 
Regional Administrator. No appeals will be accepted after September 1, 
2006. An at-sea processing exemption would be issued if the permit and/
or vessel owner demonstrates that his vessel has met the exemption 
qualification requirements. Unlike the initial limited entry permitting 
process, there are no hardship allowances for appealing denials and 
there will be no industry appeal board to review appeals of exemption 
denials. A complete list of the vessels exempted from the at-sea 
processing prohibition would be published in the Federal Register in 
the fall of 2006. This exemption would apply only to the vessel while 
it is registered for use with a sablefish-endorsed limited entry 
permit. The exemption would not be associated with any of the permits 
registered for use with the vessel and would not be transferable to any 
other vessel, including other vessels belonging to that same permit 
and/or vessel owner. Further, the exemption would expire if the vessel 
itself is sold or otherwise transferred to a new owner.

Mid-season Transfers

    With the longer season, there are more opportunities for permit 
owners to transfer their permits mid-season. Permit transfers will 
still be constrained by limited entry program regulations at 50 CFR 
660.335(e) and (f), which allow a permit to be transferred between 
vessels only once per calendar year and which make all permit transfers 
effective on the first day of a major cumulative limit period. Major 
cumulative limit periods begin on January 1, March 1, May 1, July 1, 
September 1 and November 1. While permits may only be transferred 
between vessels once per calendar year, changes in the permit owner or 
holder may occur at any time during the calendar year and as often as 
necessary. However, regardless of whether there is a change in the 
vessel registered to the permit and the permit owner/holder or just a 
change in the permit owner/holder, any of these actions would require a 
certification from the permit owner of the amount of sablefish landings 
to date. If a permit owner wishes to transfer a sablefish-endorsed 
permit mid-season, he/she will have to certify the cumulative amount of 
sablefish taken to date with that permit on a NMFS permit transfer 
form. In addition, the individual either leasing or buying the permit 
(the transferee) must acknowledge the cumulative amount of sablefish 
landed to date by signing the transfer form and maintaining the permit 
onboard the vessel. Under already existing regulations at 660.303(c), 
the transferee would also be required to retain onboard any fish 
tickets associated with landings made against that transferred permit, 
including any landings made previously on the permit during the 
cumulative limit period (i.e., the primary sablefish season). This mid-
season certification is required for enforcement purposes as it is a 
means to associate specific amounts of landings to date with an 
aggregate amount reported on fish tickets for a particular permit 
owner.
    In addition to the certification of sablefish landings to date, a 
space will be provided on the landings certification portion of the 
permit transfer form that requests the sale or lease price of the 
permit. Providing this sale or lease price to NMFS is optional. This 
information is being requested so that NMFS may build a database on 
permit sale prices. This database would be useful in analyzing economic 
trends and the value of the sablefish fishery.
    If during a post-season audit of landings associated with a permit, 
the landings exceed the amount available to be landed on the permit, 
enforcement measures may be taken against any party that had ownership 
interest in the permit during the calendar year. The vessel owner or 
operator may also be held liable. It is a violation of both state and 
Federal law to give false or incomplete information on fish tickets.
    At the April 2002 Council meeting in Portland, OR, the Council and 
NMFS requested that the States of Washington, Oregon, and California 
modify their fish tickets to require a space for recording the permit 
number under which a landing is made. The states agreed to consider 
modifying their fish tickets, but requested time to consider the 
implications of such a modification and could not guarantee that action 
would be taken in time for implementation of the second set of the 
permit stacking regulations. Currently, only the State of California 
has added a line for permit information on their state fish tickets. 
Until a new fish ticket design is available, states should require that 
permit numbers be written somewhere on the fish ticket, as appropriate, 
and that the permit number be added into the PacFIN database. If 
Washington and Oregon do not require that permit numbers be written on 
the fish tickets and entered into the PacFIN database, NMFS may not 
allow mid-season transfers due to this provision being unenforceable.

[[Page 59303]]

Defining the Term ``Base Permit''

    Under Amendment 14, each vessel participating in the primary 
sablefish fishery must be registered for use with at least one permit 
with a length endorsement appropriate to that vessel. Any additional 
permits need not match the vessel's length (50 CFR 660.334(c)). At 
Section 14.2.4, the FMP describes a base permit in a permit stacking 
program as the initial permit needed to participate in the limited 
entry fishery, and subject to all of the requirements for limited entry 
permit ownership qualifications, and permit gear and length 
endorsements. The FMP further allows that any requirements and 
additional privileges for permits stacked on to base permits may be 
authorized in a Federal rulemaking. Amendment 14 and its implementing 
regulations describe the requirements and privileges associated with 
stacking sablefish-endorsed limited entry permits.
    This proposed rule would clarify that the permit registered for use 
with a vessel that is appropriate to that vessel's length is considered 
the ``base'' permit. If more than one permit registered for use with 
the vessel has an appropriate length endorsement for that vessel, NMFS 
SFD will designate a base permit by selecting the permit that has been 
registered to the vessel for the longest time. If the permit owner 
objects to NMFS selection of the base permit, the permit owner may send 
a letter to NMFS SFD requesting the change and the reasons why. If the 
permit requested to be changed to the base permit matches the length of 
the vessel, NMFS SFD will reissue the permit with the new base permit.
    At least one sablefish-endorsed permit must match the length of the 
vessel that will be fishing against the permit's landing limits, as 
required by current regulations at 50 CFR 660.334(c). Outside of the 
primary season, the vessel would operate under the per vessel 
cumulative limit restrictions appropriate to the gear of the base 
permit. Defining this term would not change the effect of limited entry 
permit regulations, but would provide further clarity in the 
regulations for both NMFS and for the public.

Hail-in Requirement - Initial Council Recommendation not Proposed by 
NMFS

    In adopting Amendment 14, the Council also recommended several 
regulatory measures to implement the permit stacking program. One of 
those recommendations was to require fishers to provide 6 hours advance 
notice to NMFS Enforcement when making a sablefish landing in the 
primary sablefish season. Fishers were to provide landings times, hail 
weights, and landings locations as part of the hail-in procedure. This 
hail-in requirement was based on a similar requirement in place for the 
sablefish/halibut fisheries off Alaska. For the Alaska fisheries, the 
hail-in requirement was intended to prevent quota landings violations 
by giving enforcement officers an opportunity to meet the incoming 
vessel to inspect its catch.
    NMFS has subsequently determined that this hail-in requirement 
would be unnecessarily burdensome for fishers and less useful in 
enforcing West Coast fisheries regulations than it may be in Alaska 
waters. Over 1,000 vessels participate in the sablefish/halibut IFQ 
fisheries off Alaska, each landing a vessel-specific amount of fish 
based on that vessel's particular quota share amount with many landings 
occurring in remote locations. In the West Coast primary sablefish 
fishery, there are only 164 sablefish-endorsed permits, which means 
that no more than 164 vessels could participate in the fishery. 
Additionally, each permit is assigned to one of 3 tiers, which means 
that there is a limited number of possible landings amounts available 
to the vessels participating in the primary fishery. This relatively 
simple cumulative limit system and the small number of vessels involved 
make a hail-in requirement unnecessary. NMFS does not now have hail-in 
requirements for any other West Coast groundfish species or fishery and 
does not believe that primary sablefish season cumulative limit 
management differs significantly enough from the rest of the groundfish 
fishery's cumulative limit management to warrant this additional 
enforcement and reporting burden.
    NMFS consulted with the Council on this issue at the Council's 
October 29 through November 2, 2001, meeting in Millbrae, CA. The 
Council, its Enforcement Consultants and its Groundfish Advisory 
Subpanel concurred with the NMFS decision to not propose the hail-in 
requirement for implementation in the West Coast sablefish fishery.

Owner-in-Board Requirement - Future Implementation

    The Council is considering another qualifier to the owner-on-board 
exemptions for grandfathered individuals in partnerships or 
corporations based on the Groundfish Advisory Panel's recommendation. 
As previously mentioned, at the Council's April 2002 meeting, NMFS 
returned to the Council to seek clarification on the Council's intent 
with the owner-on-board requirement, including duration of owner-on-
board exemptions, time allotted to settle the estate of deceased 
owners, loss of exemption, and joint ownership of permits. While 
clarifying these issues, the Council stated that it also wished to 
consider allowing a person who had 30 percent or greater ownership 
interest in a partnership or corporation that was a first generation 
owner to be exempt from the owner-on-board provision if he/she wishes 
to own a permit under his/her own name, even if he/she did not own a 
permit under his/her own name as of November 1, 2000. The EA for the 
permit stacking program, dated October 2000, did not analyze the 
effects of allowing exemptions from the owner-on-board requirement for 
those individuals who had only 30 percent or greater ownership interest 
in a permit. Thus, further analysis and Council discussion is required 
before NMFS could consider this provision for implementation.
    NMFS is also considering implementing a phone-in declaration system 
to aid in enforcement of the owner-on-board requirement, if having the 
permit numbers on the fish tickets is not sufficient. The declaration 
system would require all sablefish endorsed permit owners, including 
those exempt from the owner-on-board requirement, to call into a phone-
in system and declare which permit(s) they will be fishing. Fishers 
would not need to call back into the system until they change the 
sablefish permit(s) they are currently fishing. For any permits 
reported on the phone-in declaration system, if not exempt from the 
owner-on-board requirement, the permit owner(s) would be expected to be 
onboard the vessel while fishing for sablefish. In addition to having 
permit numbers on state fish tickets, this would aid enforcement to 
determine, in a more timely manner, if the appropriate person was 
onboard.

Cap on Number of Permits Held - Future Implementation

    Under the Council's initial regulatory recommendations for 
implementing Amendment 14, no more than three sablefish-endorsed 
permits may be owned by an individual person, partnership or 
corporation, unless that individual person, partnership or corporation 
held more than 3 permits as of November 1, 2000. In June 2001, the 
Council clarified this recommendation, saying that it had intended to 
restrict each individual person, partnership or corporation to holding 
(owning or leasing) no more than 3 permits. The Council further 
clarified that the grandfathered exception to the three

[[Page 59304]]

permits restriction allowed only those individuals, partnerships or 
corporations that had owned more than 3 permits as of November 1, 2000, 
to continue to own those particular permits without acquiring (through 
owning or leasing) additional permits. This restriction was implemented 
through a final rule at 66 FR 41152, August 7, 2001.
    In 2002, the Council and NMFS received a request from a limited 
entry permit owner to revisit the limit on the number of permits an 
entity may own or hold. This permit owner wished to hold (lease) 
additional permits beyond those he already owned. During the Council's 
April 2002 meeting, the Council's Groundfish Advisory Subpanel (GAP) 
discussed the issue and voted to retain the current regulations, which 
limits the number of permits that can be owned or held to no more than 
three permits, unless a person, partnership or corporation owned more 
than three permits as of November 1, 2000. An individual person, or 
partnerships or corporations that owned more than three permits as of 
November 1, 2000, are limited to the number of permits owned as of that 
date. Of the GAP members present, eight favored the current regulations 
(status quo), four favored recommending a regulatory change and four 
abstained. After the GAP meeting, this issue was brought before the 
Council. The Council requested that the GAP look into alternatives that 
would revise the accumulation cap on the total permits an individual 
person, partnership or corporation could hold through leasing and 
report back to the Council at a later meeting. Due to the busy agenda 
of the GAP and the Council, this issue has not yet been revisited and 
would require further analysis before it could be implemented.

Permit Stacking Program Fee - Future Implementation

    NMFS is required under Section 304(d)(2) of the Magnuson-Stevens 
Act to collect fees from participants in an IFQ program to recover the 
actual costs directly related to the management and enforcement of the 
program. These fees shall not exceed 3 percent of the ex-vessel value 
of sablefish harvested under this IFQ program, to be collected as 
landings fees.
    NMFS implemented a fee system for its sablefish/halibut IFQ fishery 
in Alaska on March 20, 2000 (65 FR 14919) after a lengthy consultation 
with the fishing industry and in a rulemaking specific just to fee 
implementation. NMFS would like an opportunity to assess the Alaska fee 
program and the analyses associated with its implementation before 
proposing a fee system for West Coast sablefish-endorsed limited entry 
permit holders.
    NMFS has not yet analyzed the cost of managing and enforcing the 
sablefish endorsement program and will be better able to predict this 
cost once all of the other provisions of Amendment 14 are implemented. 
NMFS will issue a separate proposed rule to implement a fee system 
after assessing the applicability of the Alaska fee system to West 
Coast fisheries, estimating the NMFS cost of managing and enforcing the 
sablefish endorsement program, and consulting on the fee system with 
the Council and West Coast industry.

Classification

    NMFS has determined that the proposed rule is consistent with the 
Pacific Coast Groundfish FMP and preliminarily determined that the rule 
is consistent with the Magnuson-Stevens Act and other applicable laws.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    As required by section 603 of the Regulatory Flexibility Act (RFA), 
NMFS prepared a supplement to the IRFA originally prepared by the 
Council as part of the EA. The IRFA describes the economic impact this 
proposed rule, if adopted, would have on small entities. A description 
of the action, why it is being considered, and the legal basis for this 
action are contained at the beginning of this section in the preamble 
and in the SUMMARY section of the preamble. A copy of this analysis is 
available from the NMFS (see ADDRESSES). A summary of the analysis 
follows.
    This proposed rule would affect only the owners of the 164 limited 
entry permits with sablefish endorsements. These permit holders use 
longline or pot gear to participate in the limited entry, primary 
sablefish fishery. All of the permit owners and vessels in the Pacific 
Coast, limited entry, fixed gear fleet are considered small entities 
under Small Business Administration (SBA) standards.
    NMFS and the SBA have already considered whether Amendment 14 would 
significantly affect the small entities involved in the limited entry, 
fixed gear sablefish fishery. The agencies concluded that while 
Amendment 14 would have significant effects on the limited entry, fixed 
gear sablefish fleet, those effects would be positive improvements in 
the safety of the fishing season, and in business planning flexibility. 
These conclusions were described in the final rule to implement 
Amendment 14 for the 2001 fishing season (August 7, 2001, 66 FR 41152) 
and in the Final Regulatory Flexibility Analysis prepared for that 
rule.
    The regulatory changes proposed with this rule follow out of the 
regulations implementing Amendment 14 (August 7, 2001, final rule) for 
2007 and beyond. The regulatory changes in the August 7, 2001, final 
rule brought greater operational safety and more business planning 
flexibility to the participants in both the primary sablefish fishery 
and the daily trip limit fishery for sablefish. It allowed participants 
with greater harvest capacity to better match their sablefish 
cumulative limits with individual vessel capacity, it reduced overall 
primary fishery capacity, and it allowed the fishermen to use the 
longer season to fish more selectively and to increase their incomes by 
improving the quality of their ex-vessel product.
    The regulatory changes with this proposed rule will require permit 
owners and permit holders to document their ownership interests in 
sablefish-endorsed limited entry permits and is expected to have no 
effect on permit owners and permit holders beyond the time required to 
complete that documentation. The owner-on-board requirement will not 
affect the fishing behavior of persons who owned sablefish-endorsed 
permits before November 1, 2000, and will only affect those who 
consider purchasing permits after that time in that persons who do not 
wish to participate in fishing activities aboard a vessel may not wish 
to purchase sablefish-endorsed permits. Prohibiting vessels from 
processing sablefish at sea, if they do not meet minimum frozen 
sablefish historic landing requirements, is expected to simply maintain 
current sablefish landing and processing practices for both fishers and 
processors, therefore ensuring shore-based processors will continue to 
receive business from sablefish harvesters. Certification of current 
sablefish landings on a permit when conducting a mid-season permit 
transfer to another person is not expected to have any effect on permit 
owners or holders beyond the time required to complete the 
documentation. Defining the term ``base permit'' consistent with the 
FMP is not expected to have any effect on any participant in the 
groundfish fishery because it is only an administrative change. This 
rule is also not expected to have any effect on the 66 limited entry, 
fixed gear permit holders without sablefish endorsements because this 
program only applies to sablefish fishery participants with sablefish

[[Page 59305]]

endorsements (i.e., primary sablefish fishery participants). No Federal 
rules duplicate or conflict with these permit stacking regulations.
    The criteria used to evaluate whether this proposed rule would 
impose ``significant economic impacts'' are disproportionality and 
profitability. Disproportionality means that the regulations place a 
substantial number of small entities at a significant competitive 
disadvantage to large entities. Profitability means that the regulation 
significantly reduces profit for a substantial number of small 
entities. These criteria relate to the basic purpose of the RFA, i.e., 
to consider the effect of regulations on small businesses and other 
small entities. This proposed rule will not impose disproportionate 
affects between small and large business entities because all limited 
entry fixed gear vessels, including the sablefish endorsed vessels 
affected by this rule, are small business entities. As described in the 
above paragraph, Amendment 14 to the FMP and implementing regulations, 
including the August 7, 2001, final rule, increased business planning 
flexibility and profitability overall for the affected small 
businesses. This rule further implements provisions of Amendment 14, 
making the regulations more enforceable and maintaining the small 
business character of the fleet, and, therefore, is not expected to 
change the overall increased profitability of the fleet gained through 
the August 7, 2001, final rule. However, the owner-on-board requirement 
may decrease the overall profitability gained from implementation of 
the initial permit stacking provisions from Amendment 14. An economic 
analysis of the owner-on-board provision from the supplemental IRFA 
(see ADDRESSES) shows that the owner-on-board requirement may cost 
second generation permit owners approximately $40,400 per person per 
year or approximately $15 million in lost income for all second 
generation permit owners collectively discounted over a 20 year period. 
In addition, the permit value may decrease over time due to the reduced 
flexibility associated with use of the permit. Overall, when 
considering all of the provisions associated with Amendment 14, those 
implemented with the August 7, 2001, final rule and those that would be 
implemented through this rulemaking, profitability is still expected to 
increase over the previous sablefish 3-tier management system.
    The actions considered in this document are not expected to have 
significant impacts on small entities. Public comment is invited on 
adjustments that would reduce the impacts on small entities while 
achieving the regulatory objectives and on whether the analysis 
adequately takes into account impacts on small entities.
    In the EA/RIR prepared by the Council for this action (see 
ADDRESSES), two main alternatives were considered, a no action 
alternative and a permit stacking regime alternative. The topics 
considered under each of these alternatives were permit stacking, 
accumulation, season length, at-sea processing, permit ownership/owner-
on-board, and foreign control. Under the no action alternative, the 
primary limited entry, fixed gear sablefish fishery would continue 
under the 3-tier management program, with one permit associated with 
each participating vessel. In addition, permit stacking would not be 
allowed, the number of permits owned would not be limited, the season 
length would be 9-10 days and would likely shorten over time, vessels 
without sablefish endorsements would not be allowed to fish during the 
primary season, at-sea processing would be permitted, permit owners 
would not be required to be onboard their vessel during fishing 
operations, and any legal entity allowed to own a U.S. fishing vessel 
may own a permit.
    Under the permit stacking regime alternative, 12 provisions, many 
of which include suboptions, were considered for the topics (permit 
stacking, accumulation, season length, etc.). Thus, the permit stacking 
regime alternative consists of many sub-alternatives, depending on the 
combination of provisions and suboptions adopted by the Council. 
Provisions 1 (allow a basic permit stacking program), 2 (gear usage), 4 
(unstacking permits), and 8 (stacking non-sablefish limits and 
sablefish daily trip limits) address permit stacking. Provision 3 
(accumulation limits) addresses accumulation. Provisions 5 (season 
duration), 9 (opportunities for unendorsed vessels), 11 (advanced 
notice of landings), and 12 (stacking deadline) address season length. 
Provision 6 (processing prohibition and freezer vessel length) 
addresses at-sea processing. Provision 7 (individual ownership only and 
owner-on-board requirement) addresses permit ownership/owner-on-board. 
Provision 10 (U.S. citizenship requirement) addresses foreign control. 
As mentioned previously, the final rule for Amendment 14 implemented 
most of these provisions. This proposed rule would implement parts of 
the following provisions: 2, 6, and 7. The preferred alternative 
recommended by the Council and implemented by NMFS was the permit 
stacking regime alternative with only certain options within each 
provisions being adopted as preferred.
    The preferred alternative was selected because it best met the 
objectives of the action, which for the provisions implemented through 
this action (i.e., provisions 2, 6, and 7) included directing benefits 
towards fishing communities and preventing excessive concentration of 
harvest privileges. The EA/RIR for this action reviewed alternatives 
for their economic impacts. Of the provisions that would be implemented 
by this action, only provisions 6 and 7 may have economic effects. 
Provision 6 may prevent economic efficiencies from developing by 
restricting at-sea processing to vessels that processed at-sea as of 
November 1, 2000, and may limit a rise in permit prices from what they 
would have been if at-sea processing were allowed. Provision 7 may 
reduce flexibility which may in turn reduce efficiency and limit the 
rise in permit prices compared to if owner-on-board were not required 
and permits were not limited to ownership by individuals.
    This proposed rule contains a collection-of-information requirement 
subject to the PRA. This collection-of-information requirement has been 
submitted to OMB for approval. Proposed regulations further 
implementing provisions of Amendment 14 will require information 
collections to determine ownership interests of corporations/
partnerships that own or hold sablefish permits, to determine unlisted 
spouses wishing to be listed as co-owner of sablefish permits as of a 
prior date, to certify mid-season transfers and to determine 
eligibility of sablefish freezer longliner vessels to obtain an 
exemption from the ban on at-sea processing. A summary of the 
information requirements and burden estimates follows.
    To determine ownership interests, SFD would send an ownership 
interest form to the limited entry sablefish-endorsed permits that are 
owned or held by a corporation or partnership. The business entity 
would be requested to provide a list of all individuals who have an 
ownership interest in the corporation or partnership. The ownership 
interest form would document all individuals with an ownership interest 
in the partnership or corporation that owned a permit as of the control 
date, November 1, 2000, and would request a list of all individuals 
with an ownership interest in the partnership or corporation that owned 
or held a permit as of the current date. An authorized individual 
representing

[[Page 59306]]

the corporation/partnership would certify (by signing/dating the form) 
that no additional individual with ownership interest had been added 
since the control date. The applicant would be required to provide a 
corporate resolution or other authorizing document that authorizes the 
person signing the form to do so on behalf of the business entity. NMFS 
may require a copy of the United States Coast Guard Abstract of Title 
as proof of ownership for permit holders and/or owners and may require 
articles of incorporation or other documentation deemed necessary for 
proof of corporate or partnership ownership. SFD would compare the 
ownership interest reported on the form from the two dates to determine 
if an additional individual(s) with ownership interest had been added 
to the business entity. If so, the business entity would lose its 
exempted status and be required to divest the permit to an individual 
owner or other eligible entity. Also, SFD staff would establish a 
permit count for every individual who owns or holds a sablefish 
endorsed permit as an individual or as part of a business entity to 
ensure limits on the number of permits that can be owned or held are 
not exceeded.
    After this initial mailing, future forms would be included in the 
annual permit renewal packages for those business entities that 
continue to own or hold a sablefish endorsed permit or would be 
required whenever a change in permit owner, permit holder, or vessel 
registration is requested. The estimated burden for this collection is 
70 respondents at 0.5 hours each, or 35 hours total. The U.S. Census 
Bureau's Nonemployer Statistics, 2001, is the most recent data 
available for determining burden costs for fishermen. Using an estimate 
from the U.S. Census Bureau's Nonemployer Statistics, 2001, as a proxy 
for annual income from sablefish fishing of $35,416 and breaking that 
into an hourly wage of $17.02, the burden for this collection would 
cost approximately $8.51 per respondent for the respondent's time, or 
$595.70 total.
    For the provision to add a not-listed spouse as permit co-owner, 
SFD would mail a cover letter and form to those permit owners who list 
one person as owner and where the owner has continued to own a 
sablefish endorsed permit since November 1, 2000. SFD would afford the 
opportunity to add a spouse as a co-owner on a voluntary, one-time only 
basis. Members of partnerships and corporations who have an interest in 
a permit owned since November 1, 2000, would not be allowed to add 
their spouses as a co-owner of the permit. The current permit owner 
would be required to provide a copy of the marriage certificate. SFD 
would allow the addition of a spouse who was married according to state 
law to an exempted permit owner as of November 1, 2000. After review 
and approval of the application, SFD would reissue the permit in the 
names of both spouses. SFD would use this information to update the 
list of permit owners and the permit counts associated with these 
individuals. Additionally, SFD would revise the list of permit owners 
entitled to grandfather privileges (i.e.; exempt from owner on board 
requirements). Spouses listed as co-owner would be subject to the 
limits on the number of permits that can be owned or held. The 
estimated burden for this collection is 12 respondents at 0.33 hours 
each, or 4 hours total. Using an estimate from the U.S. Census Bureau's 
Nonemployer Statistics, 2001, as a proxy for annual income from 
sablefish fishing of $35,416 and breaking that into an hourly wage of 
$17.02, the burden for this collection would cost approximately $5.62 
per respondent for the respondent's time, or $68.08 total.
    For mid-season transfers of sablefish-endorsed permits, a new 
section would be added to the existing permit transfer form, also known 
as ``Change of Vessel Registration, Permit Owner/Holder Application'' 
(i.e.; transfer form). All permit owners are currently required to use 
this form to request these changes to their permit. The new section to 
the existing transfer form would require the permit owner to provide 
the cumulative amount of pounds of sablefish harvested on the permit 
during the current primary sablefish season. The permit owner would 
certify that the cumulative landing amount is correct by signing and 
dating the form. Similarly, the individual either buying the permit or 
seeking to hold the permit (if different from owner) will be required 
to sign an acknowledgment of the cumulative amount of sablefish landed 
as given in this section. Further, SFD would request on a voluntary 
basis the permit sale price or lease price and term of the lease. The 
estimated burden for this collection is 25 respondents at 0.5 hours 
each, or 12.5 hours total. Using an estimate from the U.S. Census 
Bureau's Nonemployer Statistics, 2001, as a proxy for annual income 
from sablefish fishing of $35,416 and breaking that into an hourly wage 
of $17.02, the burden for this collection would cost approximately 
$8.51 per respondent for the respondent's time, or $212.75 total.
    For the sablefish at-sea processing exemption, SFD would prepare a 
one-time application for the purpose of determining which vessels are 
qualified for an exemption from the ban on at-sea processing. SFD would 
mail applications to all sablefish endorsed permit owners. Applicants 
would be required to provide evidence to support the number of pounds 
of sablefish processed at-sea as indicated on the form. Best evidence 
supporting the landings of processed sablefish would be state fish 
tickets for sablefish accompanied by sales receipts for frozen 
sablefish. A list of vessels that qualified for the exemption from the 
ban on processing and freezing sablefish at sea would be published in 
the Federal Register. The exemption would not be transferrable and 
would expire upon transfer of the vessel to a new owner. The estimated 
burden for this collection is 2 respondents at 30 minutes each, or 1 
hour total. Using an estimate from the U.S. Census Bureau's Nonemployer 
Statistics, 2001, as a proxy for annual income from sablefish fishing 
of $35,416 and breaking that into an hourly wage of $17.02, the burden 
for this collection would cost approximately $8.51 per respondent for 
the respondent's time, or $17.02 total.
    Operations and maintenance costs (copying, fax, mailing, notary) to 
the respondents are estimated to be less than $250 for all respondents 
on an annual basis. No fees will be charged to the respondents for any 
of the above information collections. Send comments regarding these 
burden estimates or any other aspect of the data requirements, 
including suggestions for reducing the burden, to NMFS (see ADDRESSES) 
and to David Rostker, OMB, by e-mail at <a href="/cdn-cgi/l/email-protection#1b5f7a6d727f444974686f707e695b747679357c746d"><span class="__cf_email__" data-cfemail="b2f6d3c4dbd6ede0ddc1c6d9d7c0f2dddfd09cd5ddc4">[email protected]</span></a>,or fax 
to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to 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.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including the practical utility of the 
information collection; 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.

[[Page 59307]]

List of Subjects in 50 CFR Part 660

    Administrative practice and procedure, American Samoa, Fisheries, 
Fishing, Guam, Hawaiian Natives, Indians, Northern Mariana Islands, 
Reporting and recordkeeping requirements.

    Dated: October 4, 2005.
William T. Hogarth,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR part 660 is 
proposed to be amended as follows:

PART 660--FISHERIES OFF WEST COAST STATES AND IN THE WESTERN 
PACIFIC

    1. The authority citation for part 660 continues to read as 
follows:

    Authority: 16 U.S.C. 1801 et seq.
    2. In Sec.  660.302, new definitions for ``Base permit,'' ``Change 
in partnership or corporation,'' ``Corporation,'' ``Partnership,'' 
``Spouse,'' and ``Stacking'' are added and the definition of ``Permit 
holder'' is revised in alphabetical order to read as follows:


Sec.  660.302  Definitions.

* * * * *
    Base permit, with respect to a limited entry permit stacking 
program, means a limited entry permit described at Sec.  660.333(a) 
registered for use with a vessel that meets the permit length 
endorsement requirements appropriate to that vessel, as described at 
Sec.  660.334(c).
* * * * *
    Change in partnership or corporation, means the addition of a new 
shareholder or partner to the corporate or partnership membership. This 
definition of a ``change'' will apply to any person added to the 
corporate or partnership membership since November 1, 2000, including 
any family member of an existing shareholder or partner. A change in 
membership is not considered to have occurred if a member dies or 
becomes legally incapacitated and a trustee is appointed to act on his 
behalf, nor if the ownership of shares among existing members changes, 
nor if a member leaves the corporation or partnership and is not 
replaced. Changes in the ownership of publicly held stock will not be 
deemed changes in ownership of the corporation.
* * * * *
    Corporation, is a legal, business entity, including incorporated 
(INC) and limited liability corporations (LLC).
* * * * *
    Partnership, is two or more individuals, partnerships, or 
corporations, or combinations thereof, who have ownership interest in a 
permit, including married couples and legally recognized trusts and 
partnerships, such as limited partnerships (LP), general partnerships 
(GP), and limited liability partnerships (LLP).
* * * * *
    Permit holder means a vessel owner as identified on the United 
States Coast Guard form 1270 or state motor vehicle licensing document.
* * * * *
    Spouse, means a person who is legally married to another person as 
recognized by state law (i.e., one's wife or husband).
* * * * *
    Stacking, is the practice of registering more than one limited 
entry permit for use with a single vessel (See Sec.  660.335(c)).
* * * * *
    3. In Sec.  660.303, paragraph (c) is revised to read as follows:


Sec.  660.303  Reporting and Recordkeeping.

* * * * *
    (c) Any person landing groundfish must retain on board the vessel 
from which groundfish is landed, and provide to an authorized officer 
upon request, copies of any and all reports of groundfish landings 
containing all data, and in the exact manner, required by the 
applicable state law throughout the cumulative limit period during 
which a landing occurred and for 15 days thereafter. For participants 
in the primary sablefish season (detailed at Sec.  660.372(b)), the 
cumulative limit period to which this requirement applies is April 1 
through October 31.
* * * * *
    4. In Sec.  660.306, paragraph (b)(3) is added and paragraphs (e) 
and (g)(2) are revised to read as follows:


Sec.  660.306  Prohibitions.

* * * * *
    (b) * * *
    (3) Fail to retain on board a vessel from which sablefish caught in 
the primary sablefish season is landed, and provide to an authorized 
officer upon request, copies of any and all reports of sablefish 
landings against the sablefish endorsed permit's tier limit, or 
receipts containing all data, and made in the exact manner required by 
the applicable state law throughout the primary sablefish season during 
which such landings occurred and for 15 days thereafter.
* * * * *
    (e) Fixed gear sablefish fisheries. (1) Take, retain, possess or 
land sablefish under the cumulative limits provided for the primary 
limited entry, fixed gear sablefish season, described in Sec.  660.372, 
from a vessel that is not registered to a limited entry permit with a 
sablefish endorsement.
    (2) Take, retain, possess or land sablefish in the primary 
sablefish season described at Sec.  660.372(b) unless the owner of the 
limited entry permit registered for use with that vessel and 
authorizing the vessel to participate in the primary sablefish season 
is on board that vessel. Exceptions to this prohibition are provided at 
Sec.  660.372(b)(4)(i) and (ii).
    (3) Process sablefish taken in the limited entry primary sablefish 
fishery defined at Sec.  660.372 at sea, from a vessel that does not 
have a sablefish at-sea processing exemption, defined at Sec.  
660.334(e).
* * * * *
    (g) * * *
    (2) Make a false statement on an application for issuance, renewal, 
transfer, vessel registration, replacement of a limited entry permit, 
or a declaration of ownership interest in a limited entry permit.
* * * * *
    5. In Sec.  660.334, paragraph (e) is redesignated as paragraph 
(f), and is revised; paragraphs (c)(3), d)(4)(ii) and (iii) are 
revised, and paragraphs (d)(4)(iv) through (vi) and new paragraph (e) 
are added to read as follows:


Sec.  660.334  Limited entry permits endorsements.

* * * * *
    (c) * * *
    (3) Size endorsement requirements for sablefish-endorsed permits. 
Notwithstanding paragraphs (c)(1) and (2) of this section, when 
multiple permits are ``stacked'' on a vessel, as described in Sec.  
660.335(c), at least one of the permits must meet the size requirements 
of those sections. The permit that meets the size requirements of those 
sections is considered the vessel's ``base'' permit, as defined in 
Sec.  660.302. If more than one permit registered for use with the 
vessel has an appropriate length endorsement for that vessel, NMFS SFD 
will designate a base permit by selecting the permit that has been 
registered to the vessel for the longest time. If the permit owner 
objects to NMFS's selection of the base permit, the permit owner may 
send a letter to NMFS SFD requesting the change and the reasons for the 
request. If the permit requested to be changed to the base

[[Page 59308]]

permit is appropriate for the length of the vessel as provided for in 
paragraph (c)(2)(i) of this section, NMFS SFD will reissue the permit 
with the new base permit. Any additional permits that are stacked for 
use with a vessel participating in the limited entry primary fixed gear 
sablefish fishery may be registered for use with a vessel even if the 
vessel is more than 5 feet (1.5 meters) longer or shorter than the size 
endorsed on the permit.
* * * * *
    (d) * * *
    (4) * * *
    (ii) No individual person, partnership, or corporation in 
combination may have ownership interest in or hold more than 3 permits 
with sablefish endorsements either simultaneously or cumulatively over 
the primary season, except for an individual person, or partnerships or 
corporations that had ownership interest in more than 3 permits with 
sablefish endorsements as of November 1, 2000. The exemption from the 
maximum ownership level of 3 permits only applies to ownership of the 
particular permits that were owned on November 1, 2000. An individual 
person, or partnerships or corporations that had ownership interest in 
3 or more permits with sablefish endorsements as of November 1, 2000, 
may not acquire additional permits beyond those particular permits 
owned on November 1, 2000. If, at some future time, an individual 
person, partnership, or corporation that owned more than 3 permits as 
of November 1, 2000, sells or otherwise permanently transfers (not 
holding through a lease arrangement) some of its originally owned 
permits, such that they then own fewer than 3 permits, they may then 
acquire additional permits, but may not have ownership interest in or 
hold more than 3 permits.
    (iii) A partnership or corporation will lose the exemptions 
provided in paragraphs ((d)(4) (i) and (ii) of this section on the 
effective date of any change in the corporation or partnership from 
that which existed on November 1, 2000. A ``change'' in the partnership 
or corporation is defined at Sec.  660.302. A change in the partnership 
or corporation must be reported to SFD within 15 days of the addition 
of a new shareholder or partner.
    (iv) During 2006 when a permit's ownership interest is requested 
for the first time, NMFS anticipates sending a form to legally 
recognized corporations and partnerships (i.e., permit owners or 
holders that do not include only individual's names) that currently own 
or hold sablefish-endorsed permits that requests a listing of the names 
of all shareholders or partners as of November 1, 2000, and a listing 
of that same information as of the current date in 2006. Applicants 
will be provided at least 60 days to submit completed applications. If 
a corporation or partnership fails to return the completed form by the 
deadline date of July 1, 2006, NMFS will send a second written notice 
to delinquent entities requesting the completed form by a revised 
deadline date of August 1, 2006. If the permit owning or holding entity 
fails to return the completed form by that second date, August 1, 2006, 
NMFS will void their existing permit(s) and reissue the permit(s) with 
a vessel registration given as ``unidentified'' until such time that 
the completed form is provided to NMFS. For the 2007 fishing year and 
beyond, any partnership or corporation with any ownership interest in 
or that holds a limited entry permit with a sablefish endorsement shall 
document the extent of that ownership interest or the individuals that 
hold the permit with the SFD via the Identification of Ownership 
Interest Form sent to the permit owner through the annual permit 
renewal process defined at Sec.  660.335(a) and whenever a change in 
permit owner, permit holder, and/or vessel registration occurs as 
defined at Sec.  660.335(d) and (e). SFD will not renew a sablefish-
endorsed limited entry permit through the annual renewal process 
described at Sec.  660.335(a) or approve a change in permit owner, 
permit holder, and/or vessel registration unless the Identification of 
Ownership Interest Form has been completed. Further, if SFD discovers 
through review of the Identification of Ownership Interest Form that an 
individual person, partnership, or corporation owns or holds more than 
3 permits and is not authorized to do so under paragraph (d)(4)(ii) of 
this section, the individual person, partnership or corporation will be 
notified and the permits owned or held by that individual person, 
partnership, or corporation will be void and reissued with the vessel 
status as ``unidentified'' until the permit owner owns and/or holds a 
quantity of permits appropriate to the restrictions and requirements 
described in paragraph (d)(4)(ii) of this section. If SFD discovers 
through review of the Identification of Ownership Interest Form that a 
partnership or corporation has had a change in membership since 
November 1, 2000, as described in paragraph (d)(4)(iii) of this 
section, the partnership or corporation will be notified, SFD will void 
any existing permits, and reissue any permits owned and/or held by that 
partnership or corporation in ``unidentified'' status with respect to 
vessel registration until the partnership or corporation is able to 
transfer those permits to persons authorized under this section to own 
sablefish-endorsed limited entry permits.
    (v) For permit owners with one individual listed and who were 
married as of November 1, 2000, and who wish to add their spouse as co-
owner on their permit(s), NMFS will accept corrections to NMFS' permit 
ownership records. Permit owners may add a not-listed spouse as a co-
owner without losing their exemption from the owner-on-board 
requirements (i.e., grandfathered status). Their new grandfathered 
status will be as a partnership, as defined at Sec.  660.302 which 
includes married couples. Individual permit owners will lose their 
individual grandfathered status when they add their not-listed spouse 
unless they also owned at least one permit as an individual and did not 
retroactively add a spouse as co-owner on that permit. In cases where 
married couples are listed as co-owners of the same permit, both 
individuals will be counted as owning one permit each and will have 
grandfathered status as a partnership. An individual within the married 
couple will not, however, be able to retain their exemption from owner-
on-board requirements if they choose to buy another permit as an 
individual and did not own a permit as an individual as of the control 
date in NMFS ``corrected'' records (i.e., NMFS records after allowing a 
not-listed spouse to be added as co-owner). Members of partnerships and 
corporations will not be allowed to add their spouses to the corporate 
ownership listing as of November 1, 2000, for purposes of exempting 
them from the owner-on-board requirements. NMFS will send a form to 
permit owners with one individual listed on the permit as of November 
1, 2000, to allow married individuals who wish to declare their spouses 
as having permit ownership interest as of November 1, 2000. Applicants 
will be required to submit a copy of their marriage certificate as 
evidence of marriage. Applicants will be provided at least a 60 day 
period to submit an application to add a spouse as co-owner. Failure to 
return the completed form to NMFS SFD by July 1, 2006, will result in 
the individual listed on the permit in SFD records as of November 1, 
2000, remaining on the permit. SFD will not accept any declarations to 
add a spouse as co-owner for couples married as of

[[Page 59309]]

November 1, 2000, postmarked after the July 1, 2006, deadline.
    (vi) For an individual person, partnership, or corporation that 
qualified for the owner-on-board exemption, but later divested their 
interest in a permit or permits, they may retain rights to an owner-on-
board exemption as long as that individual person, partnership, or 
corporation obtains another permit within one year from the date the 
final rule for these owner-on-board requirements is effective. An 
individual person, partnership or corporation could only obtain a 
permit if it has not added or changed individuals since November 1, 
2000, excluding individuals that have left the partnership or 
corporation or that have died. NMFS would send out a letter to all 
individuals, partnerships or corporations who owned a permit as of 
November 1, 2000, and who no longer own a permit to notify them that 
they would qualify as a grandfathered permit owner if they choose to 
buy a permit within one year from the date the final rule is effective.
    (e) Sablefish at-sea processing prohibition and exemption--
    (1) General. Vessels are prohibited from processing sablefish at 
sea that were caught in the primary sablefish fishery without sablefish 
at-sea processing exemptions at Sec.  660.306(e)(3). A permit and/or 
vessel owner may get an exemption to this prohibition if his/her vessel 
meets the exemption qualifying criteria provided in paragraph (e)(2) of 
this section. The sablefish at-sea processing exemption is issued to a 
particular vessel and the permit and/or vessel owner who requested the 
exemption. The exemption is not part of the limited entry permit. The 
exemption is not transferable to any other vessel, vessel owner, or 
permit owner for any reason. The sablefish at-sea processing exemption 
will expire upon transfer of the vessel to a new owner or if the vessel 
is totally lost, as defined at Sec.  660.302.
    (2) Qualifying criteria. A sablefish at-sea processing exemption 
will be issued to any vessel registered for use with a sablefish-
endorsed limited entry permit that meets the sablefish at-sea 
processing exemption qualifying criteria and for which the owner 
submits a timely application. The qualifying criteria for a sablefish 
at-sea processing exemption are: at least 2,000 lb (907.2 mt), round 
weight, of frozen sablefish landed by the applicant vessel during any 
one calendar year in either 1998 or 1999, or between January 1 and 
November 1, 2000. The best evidence of a vessel having met these 
qualifying criteria will be receipts from frozen product buyers or 
exporters, accompanied by the fish tickets or landings receipts 
appropriate to the frozen product. Documentation showing investment in 
freezer equipment without also showing evidence of how poundage 
qualifications have been met is not sufficient evidence to qualify a 
vessel for a sablefish at-sea processing exemption. All landings of 
sablefish must have occurred during the regular and/or mop-up seasons 
and must have been harvested in waters managed under this part. 
Sablefish taken in tribal set aside fisheries or taken outside of the 
fishery management area, as defined at Sec.  660.302, does not meet the 
qualifying criteria.
    (3) Issuance process for sablefish at-sea processing exemptions.
    (i) The SFD will mail sablefish at-sea processing exemption 
applications to all limited entry permit owners with sablefish 
endorsements and/or fixed gear vessel owners and will make those 
applications available online at http://www.nwr.noaa.gov/1sustfsh/permits/prmits01.htm. Permit and/or vessel owners will have at least 60 
days to submit applications. A permit and/or vessel owner who believes 
that their vessel may qualify for the sablefish at-sea processing 
exemption will have until July 1, 2006, to submit evidence showing how 
their vessel has met the qualifying criteria described in this section 
at paragraph (e)(2) of this section. Paragraph (e)(4) of this section 
sets out the relevant evidentiary standards and burden of proof. SFD 
will not accept applications for the sablefish at-sea processing 
exemption postmarked after July 1, 2006.
    (ii) Within 30 days of the deadline or after receipt of a complete 
application, the SFD will notify applicants by letter of determination 
whether their vessel qualifies for the sablefish at-sea processing 
exemption. A person who has been notified by the SFD that their vessel 
qualifies for a sablefish at-sea processing exemption will be issued an 
exemption letter by SFD that must be onboard the vessel at all times. 
After the deadline for the receipt of applications has expired and all 
applications processed, SFD will publish a list of vessels that 
qualified for the sablefish at-sea processing exemption in the Federal 
Register.
    (iii) If a permit and/or vessel owner chooses to file an appeal of 
the determination under paragraph (e)(3)(ii) of this section, the 
appeal must be filed with the Regional Administrator within 30 days of 
the issuance of the letter of determination. The appeal must be in 
writing and must allege facts or circumstances, and include credible 
evidence demonstrating why the vessel qualifies for a sablefish at-sea 
processing exemption. The appeal of a denial of an application for a 
sablefish at-sea processing exemption will not be referred to the 
Council for a recommendation, nor will any appeals be accepted by SFD 
after September 1, 2006.
    (iv) Absent good cause for further delay, the Regional 
Administrator will issue a written decision on the appeal within 30 
days of receipt of the appeal. The Regional Administrator's decision is 
the final administrative decision of the Department of Commerce as of 
the date of the decision.
    (4) Evidence and burden of proof. A permit and/or vessel owner 
applying for issuance of a sablefish at-sea processing exemption has 
the burden to submit evidence to prove that qualification requirements 
are met. The following evidentiary standards apply:
    (i) A certified copy of the current vessel document (USCG or state) 
is the best evidence of vessel ownership and LOA.
    (ii) A certified copy of a state fish receiving ticket is the best 
evidence of a landing, and of the type of gear used.
    (iii) A copy of a written receipt indicating the name of their 
buyer, the date, and a description of the product form and the amount 
of sablefish landed is the best evidence of the commercial transfer of 
frozen sablefish product.
    (iv) Such other relevant, credible evidence as the applicant may 
submit, or the SFD or the Regional Administrator request or acquire, 
may also be considered.
    (f) Endorsement and exemption restrictions. ``A'' endorsements, 
gear endorsements, sablefish endorsements and sablefish tier 
assignments may not be transferred separately from the limited entry 
permit. Sablefish at-sea processing exemptions are associated with the 
vessel and not with the limited entry permit and may not be transferred 
at all.
* * * * *
    6. In Sec.  660.335, paragraphs (g)(2) through (g)(6) are 
redesignated as paragraphs (g)(3) through (g)(7) and a new paragraph 
(g)(2) is added; paragraphs, (c), (d)(1), (e)(1) and (e)(3) are 
revised; and paragraphs (a)(4) and (e)(4) are added to read as follows:


Sec.  660.335  Limited entry permits renewal, combination, stacking, 
change of permit owner or holder, and transfer.

    (a) * * *
    (4) Limited entry permits with sablefish endorsements, as described 
at

[[Page 59310]]

Sec.  660.334(d), will not be renewed until SFD has received complete 
documentation of permit ownership as required under Sec.  
660.334(d)(4)(iv).
* * * * *
    (c) Stacking limited entry permits. ``Stacking'' limited entry 
permits, as defined at Sec.  660.302, refers to the practice of 
registering more than one permit for use with a single vessel. Only 
limited entry permits with sablefish endorsements may be stacked. Up to 
3 limited entry permits with sablefish endorsements may be registered 
for use with a single vessel during the primary sablefish season 
described at Sec.  660.372. Privileges, responsibilities, and 
restrictions associated with stacking permits to participate in the 
primary sablefish fishery are described at Sec.  660.372 and at Sec.  
660.334(d).
    (d) * * *
    (1) General. The permit owner may convey the limited entry permit 
to a different person. The new permit owner will not be authorized to 
use the permit until the change in permit ownership has been registered 
with and approved by the SFD. The SFD will not approve a change in 
permit ownership for limited entry permits with sablefish endorsements 
that does not meet the ownership requirements for those permits 
described at Sec.  660.334 (d)(4). Change in permit owner and/or permit 
holder applications must be submitted to SFD with the appropriate 
documentation described at Sec.  660.335(g).
* * * * *
    (3) Sablefish-endorsed permits. If a permit owner submits an 
application to transfer a sablefish-endorsed limited entry permit to a 
new permit owner or holder (transferee) during the primary sablefish 
season described at Sec.  660.372 (generally April 1 through October 
31), the initial permit owner (transferor) must certify on the 
application form the cumulative quantity of primary season sablefish 
landed against that permit as of the application signature date for the 
then current primary season. The transferee must sign the application 
form acknowledging the amount of landings to date given by the 
transferor. This certified amount should match the total amount of 
primary season sablefish landings reported on state fish tickets. As 
required at Sec.  660.303(c), any person landing sablefish must retain 
on board the vessel from which sablefish is landed, and provide to an 
authorized officer upon request, copies of any and all reports of 
sablefish landings from the primary season containing all data, and in 
the exact manner, required by the applicable state law throughout the 
primary sablefish season during which a landing occurred and for 15 
days thereafter.
* * * * *
    (e) * * *
    (1) General. A permit may not be used with any vessel other than 
the vessel registered to that permit. For purposes of this section, a 
permit transfer occurs when, through SFD, a permit owner registers a 
limited entry permit for use with a new vessel. Permit transfer 
applications must be submitted to SFD with the appropriate 
documentation described at Sec.  660.335(g). Upon receipt of a complete 
application, and following review and approval of the application, the 
SFD will reissue the permit registered to the new vessel. Applications 
to transfer limited entry permits with sablefish endorsements, as 
described at Sec.  660.334(d), will not be approved until SFD has 
received complete documentation of permit ownership as required under 
Sec.  660.334(d)(4)(iv).
* * * * *
    (3) Effective date. Changes in vessel registration on permits will 
take effect no sooner than the first day of the next major limited 
entry cumulative limit period following the date that SFD receives the 
signed permit transfer form and the original limited entry permit. No 
transfer is effective until the limited entry permit has been reissued 
as registered with the new vessel.
    (4) Sablefish-endorsed permits. If a permit owner submits an 
application to register a sablefish-endorsed limited entry permit to a 
new vessel during the primary sablefish season described at Sec.  
660.372 (generally April 1 through October 31), the initial permit 
owner (transferor) must certify on the application form the cumulative 
quantity of primary season sablefish landed against that permit as of 
the application signature date for the then current primary season. The 
new permit owner or holder (transferee) associated with the new vessel 
must sign the application form acknowledging the amount of landings to 
date given by the transferor. This certified amount should match the 
total amount of primary season sablefish landings reported on state 
fish tickets. As required at Sec.  660.303(c), any person landing 
sablefish must retain on board the vessel from which sablefish is 
landed, and provide to an authorized officer upon request, copies of 
any and all reports of sablefish landings from the primary season 
containing all data, and in the exact manner, required by the 
applicable state law throughout the primary sablefish season during 
which a landing occurred and for 15 days thereafter.
* * * * *
    (g) Application and supplemental documentation. * * *
    (2) For a request to change a vessel registration and/or change in 
permit ownership or permit holder for sablefish-endorsed permits with a 
tier assignment for which a corporation or partnership is listed as 
permit owner and/or holder, an Identification of Ownership Interest 
Form must be completed and included with the application form.
* * * * *
    7. In Sec.  660.372, paragraph (b)(1) is revised and paragraph 
(b)(4) is added to read as follows:


Sec.  660.372  Fixed gear sablefish fishery management.

* * * * *
    (b) * * *
    (1) Season dates. North of 36E N. lat., the primary sablefish 
season for the limited entry, fixed gear, sablefish-endorsed vessels 
begins at 12 noon l.t. on April 1 and ends at 12 noon l.t. on October 
31, unless otherwise announced by the Regional Administrator through 
the routine management measures process described at Sec.  660.370(c).
* * * * *
    (4) Owner-on-Board Requirement. Any person who owns or has 
ownership interest in a limited entry permit with a sablefish 
endorsement, as described at Sec.  660.334(d), must be aboard the 
vessel registered for use with that permit at any time that the vessel 
has sablefish on board the vessel that count toward that permit's 
cumulative sablefish landing limit. This person must carry government 
issued photo identification while aboard the vessel. A permit owner is 
not obligated to be on board the vessel registered for use with the 
sablefish-endorsed limited entry permit during the primary sablefish 
season if:
    (i) The person, partnership or corporation had ownership interest 
in a limited entry permit with a sablefish endorsement prior to 
November 1, 2000. A person who has ownership interest in a partnership 
or corporation that owned a sablefish-endorsed permit as of November 1, 
2000, but who did not individually own a sablefish-endorsed limited 
entry permit as of November 1, 2000, is not exempt from the owner-on-
board requirement when he/she leaves the partnership or corporation and 
purchases another permit individually. A person, partnership, or 
corporation that is exempt from the owner-on-board requirement may sell 
all of their permits, buy another sablefish-endorsed

[[Page 59311]]

permit within up to a year from the date the last permit was approved 
for transfer, and retain their exemption from the owner-on-board 
requirements. Additionally, a person, partnership, or corporation that 
qualified for the owner-on-board exemption, but later divested their 
interest in a permit or permits, may retain rights to an owner-on-board 
exemption as long as that person, partnership, or corporation purchases 
another permit within one year of the date the final rule for these 
owner-on-board requirements is effective. A person, partnership or 
corporation could only purchase a permit if it has not added or changed 
individuals since November 1, 2000, excluding individuals that have 
left the partnership or corporation, or that have died.
    (ii) A person who owns or who has ownership interest in a 
sablefish-endorsed limited entry permit, in cases of death, illness, or 
injury of the permit owner, that prevents the permit owner from being 
onboard a fishing vessel. The person requesting the exemption must send 
a letter to NMFS requesting an exemption from the owner-on-board 
requirements, with appropriate evidence as described at Sec.  
660.372(b)(4)(ii)(A) or (B). All emergency exemptions for death, 
injury, or illness will be evaluated by NMFS and a decision will be 
made in writing to the permit owner within 60 days of receipt of the 
original exemption request.
    (A) Evidence of death of the permit owner shall be provided to NMFS 
in the form of a copy of a death certificate. In the interim before the 
estate is settled, if the deceased permit owner was subject to the 
owner-on-board requirements, the estate of the deceased permit owner 
may send a letter to NMFS with a copy of the death certificate, 
requesting an exemption from the owner-on-board requirements. An 
exemption due to death of the permit owner will be effective only until 
such time that the estate of the deceased permit owner has conveyed the 
deceased permit owner's permit to a beneficiary or up to three years 
after the date of death as proven by a death certificate, whichever is 
earlier. An exemption from the owner-on-board requirements will be 
conveyed in a letter from NMFS to the estate of the permit owner and is 
required to be on the vessel during fishing operations.
    (B) Evidence of illness or injury that prevents the permit owner 
from participating in the fishery shall be provided to NMFS in the form 
of a letter from a certified medical practitioner. This letter must 
detail the relevant medical conditions of the permit owner and how 
those conditions prevent the permit owner from being onboard a fishing 
vessel during the primary season. An exemption due to injury or illness 
will be effective only for the calendar year of the request for 
exemption, and will not be granted for more than three consecutive or 
total years. NMFS will consider any exemption granted for less than 12 
months in a year to count as one year against the 3-year cap. In order 
to extend an emergency medical exemption for a succeeding year, the 
permit owner must submit a new request and provide documentation from a 
certified medical practitioner detailing why the permit owner is still 
unable to be onboard a fishing vessel. An emergency exemption will be 
conveyed in a letter from NMFS to the permit owner and is required to 
be on the vessel during fishing operations.
* * * * *
[FR Doc. 05-20344 Filed 10-11-05; 8:45 am]
BILLING CODE 3510-22-S


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