46016 Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Proposed Rules 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Parts 300 and 679 

[Docket No. 161222999–7884–01] 

RIN 0648–BG57 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Authorize 

Recreational Quota Entity To 

Participate in the Halibut IFQ Program 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: NMFS issues a proposed rule 

that would authorize formation of a 

recreational quota entity (RQE) that 

could participate in the Pacific Halibut 

and Sablefish Individual Fishing Quota 

Program in International Pacific Halibut 

Commission Regulatory Areas 2C and 

3A in the Gulf of Alaska. The RQE 

would be authorized to purchase and 

hold a limited amount of commercial 

halibut quota share that would yield 

additional pounds of recreational 

fishing quota on an annual basis to 

augment the amount of halibut available 

for harvest in the charter halibut fishery. 

The RQE would provide a mechanism 

for a compensated reallocation of a 

portion of commercial halibut quota 

share to the charter halibut fishery. This 

proposed rule is necessary to promote 

social and economic flexibility in the 

charter halibut fishery, and is intended 

to promote the goals and objectives of 

the Northern Pacific Halibut Act of 

1982, and other applicable laws. 

DATES: Submit comments on or before 

November 17, 2017. 

ADDRESSES: You may submit comments 

on this document, identified by NOAA– 

NMFS–2016–0158, by any of the 

following methods: 

• Electronic Submission: Submit all 

electronic public comments via the 

Federal e-Rulemaking Portal. Go to 

www.regulations.gov/ 

#!docketDetail;D=NOAA-NMFS-2016- 

0158, click the ‘‘Comment Now!’’ icon, 

complete the required fields, and enter 

or attach your comments. 

• Mail: Submit written comments to 

Glenn Merrill, Assistant Regional 

Administrator, Sustainable Fisheries 

Division, Alaska Region NMFS, Attn: 

Ellen Sebastian. Mail comments to P.O. 

Box 21668, Juneau, AK 99802–1668. 

Instructions: Comments sent by any 

other method, to any other address or 

individual, or received after the end of 

the comment period, may not be 

considered by NMFS. All comments 

received are a part of the public record 

and will generally be posted for public 

viewing on www.regulations.gov 

without change. All personal identifying 

information (e.g., name, address), 

confidential business information, or 

otherwise sensitive information 

submitted voluntarily by the sender will 

be publicly accessible. NMFS will 

accept anonymous comments (enter 

‘‘N/A’’ in the required fields if you wish 

to remain anonymous). 

Electronic copies of the 

Environmental Assessment, Regulatory 

Impact Review (RIR), and the Initial 

Regulatory Flexibility Analysis (IRFA) 

(collectively, Analysis) prepared for this 

action are available from 

www.regulations.gov or from the NMFS 

Alaska Region Web site at 

alaskafisheries.noaa.gov. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this rule may 

be submitted by mail to NMFS at the 

above address; by email to OIRA_

Submission@omb.eop.gov; or by fax to 

202–395–5806. 

FOR FURTHER INFORMATION CONTACT: Kurt 

Iverson, 907–586–7228, Kurt.Iverson@

noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Authority for Action 

The International Pacific Halibut 

Commission (IPHC) and NMFS manage 

fishing for Pacific halibut (Hippoglossus 

stenolepis) through regulations 

established under authority of the 

Northern Pacific Halibut Act of 1982 

(Halibut Act). The IPHC adopts 

regulations governing the Pacific halibut 

(halibut) fishery under the Convention 

between the United States and Canada 

for the Preservation of the Halibut 

Fishery of the North Pacific Ocean and 

Bering Sea (Convention), signed at 

Ottawa, Ontario, on March 2, 1953, as 

amended by a Protocol Amending the 

Convention (signed at Washington, DC, 

on March 29, 1979). For the United 

States, regulations developed by the 

IPHC are subject to acceptance by the 

Secretary of State with concurrence 

from the Secretary of Commerce. After 

acceptance by the Secretary of State and 

the Secretary of Commerce, NMFS 

publishes the IPHC regulations in the 

Federal Register as annual management 

measures pursuant to 50 CFR 300.62. 

The final rule implementing IPHC 

regulations for the 2017 fishing season 

was published March 7, 2017 (82 FR 

12730). IPHC regulations affecting sport 

fishing for halibut and vessels in the 

charter fishery in IPHC Regulatory Areas 

2C (Southeast Alaska) and Areas 3A 

(South Central Alaska) may be found in 

sections 3, 25, and 28 of that final rule 

(82 FR 12730, March 7, 2017). 

The Halibut Act, at sections 773c(a) 

and (b), provides the Secretary of 

Commerce with general responsibility to 

carry out the Convention and the 

Halibut Act. In adopting regulations that 

may be necessary to carry out the 

purposes and objectives of the 

Convention and the Halibut Act, the 

Secretary of Commerce is directed to 

consult with the Secretary of the 

department in which the U.S. Coast 

Guard is operating, which is currently 

the Department of Homeland Security. 

The Halibut Act, at section 773c(c), 

also provides the North Pacific Fishery 

Management Council (Council) with 

authority to develop regulations, 

including limited access regulations, 

that are in addition to, and not in 

conflict with, approved IPHC 

regulations. Regulations developed by 

the Council may be implemented by 

NMFS only after approval by the 

Secretary of Commerce. The Council has 

exercised this authority in the 

development of halibut fishery 

management measures, codified at 50 

CFR parts 300.65, 300.66, and 300.67. 

The Council also developed the 

Individual Fishing Quota (IFQ) Program 

for the commercial halibut and sablefish 

fisheries, codified at 50 CFR part 679. 

Management of halibut in the IFQ 

Program is authorized under section 773 

of the Halibut Act. 

Management of the Halibut Fishery 

Description of the Action Area 

This proposed action would change 

halibut fishery management in IPHC 

Regulatory Areas 2C and 3A. These 

regulatory areas are referred to as ‘‘IFQ 

Regulatory Areas’’ throughout the IFQ 

Program regulations at 50 CFR part 679 

and as ‘‘Commission Regulatory Areas’’ 

throughout the halibut management 

regulations at 50 CFR parts 300.65, 

300.66, and 300.67. These terms are 

synonymous with ‘‘IPHC Regulatory 

Areas’’ and may be used 

interchangeably throughout this 

document. This preamble uses the term 

‘‘Area 2C’’ and ‘‘Area 3A’’ to refer to 

IPHC Regulatory Areas 2C and 3A, 

respectively. Additional information on 

the action area is provided in Section 

2.3 of the Analysis. 

Background on the Halibut Fishery 

The harvest of halibut in Alaska 

occurs in three fisheries—the 

commercial, sport, and subsistence 


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fisheries. The commercial halibut 

fishery is managed under the IFQ 

Program. The sport fishery includes 

unguided and guided anglers. Guided 

anglers are commonly called ‘‘charter’’ 

anglers because they fish from chartered 

vessels. Throughout this preamble, the 

term ‘‘charter fishery’’ is used to refer to 

the fishery prosecuted by guided 

anglers. The subsistence fishery 

provides an opportunity for rural 

residents and members of an Alaska 

Native tribe to retain halibut for 

personal use or customary trade. The 

following sections of the preamble 

summarize charter fishery management 

and aspects of the commercial IFQ 

fishery that are relevant for the 

proposed RQE Program. 

Charter Halibut Fishery 

Sport fishing activities for halibut in 

Areas 2C and 3A are subject to different 

regulations, depending on whether 

those activities are guided or unguided. 

Guided sport fishing (charter fishing) for 

halibut is subject to charter restrictions 

under Federal regulations that are 

generally more restrictive than the 

regulations for unguided anglers. 

Charter fishery regulations apply if a 

charter vessel guide is providing 

assistance, for compensation, to a 

person who is sport fishing, to take or 

attempt to take fish during any part of 

a charter vessel fishing trip. Unguided 

anglers typically use their own vessels 

and equipment, or they may rent a 

vessel and fish with no assistance from 

a guide. 

Over the years, the Council and 

NMFS have developed specific 

management programs for the charter 

fishery to achieve allocation and 

conservation objectives. The Council 

and NMFS have developed these 

management programs with the intent of 

maintaining stability and economic 

viability in the charter fishery by 

establishing: (1) Limits on the number of 

charter vessel operators; (2) allocations 

of halibut to the charter fishery that vary 

with abundance; and (3) a process for 

determining annual charter angler 

harvest restrictions to limit charter 

fishery harvest to the established 

allocations. 

The charter fisheries in Areas 2C and 

3A are currently managed under the 

Charter Halibut Limited Access Program 

(CHLAP) and the Catch Sharing Plan 

(CSP). The CHLAP limits the number of 

operators in the charter fishery, while 

the CSP establishes annual allocations 

to the charter and commercial fisheries 

and describes a process for determining 

annual management measures to limit 

charter harvest to the allocations in each 

management area. The CHLAP and the 

CSP are summarized below and 

described in more detail in Section 4.4 

of the Analysis. 

Historic and Current Management 

Measures for the Charter Fishery 

The CHLAP and CSP were developed 

in response to increasing harvests in the 

charter fisheries in Areas 2C and 3A 

over the past 20 years. Until 2003, 

charter and unguided anglers were 

managed under the same two-halibut 

daily bag limit in all IPHC Regulatory 

Areas in Alaska. Since 2003, charter 

management measures have become 

more restrictive in Areas 2C and 3A, 

where most charter fishing occurs, as 

NMFS and the IPHC have sought to 

limit charter harvests to specific harvest 

limits. In 2003, NMFS implemented a 

final rule to establish a guideline 

harvest level (GHL) that identified target 

harvest limits for the charter fishery in 

Areas 2C and 3A (68 FR 47256, August 

8, 2003). After the GHL was 

implemented, NMFS and the IPHC 

implemented a variety of additional 

management measures in Areas 2C and 

3A in an effort to constrain charter 

fishery harvests to the harvest limits 

established by the GHL. Section 4.4.2.2 

of the Analysis describes historical 

catch limits, regulations, and harvest in 

the charter fisheries in Areas 2C and 3A. 

In Area 2C, charter anglers have only 

been allowed to harvest a bag limit of 

one halibut per person, per day since 

2009. Implementation of a one-halibut 

daily bag limit was intended to keep 

charter fishery harvests to 

approximately the Area 2C GHL. In the 

years following implementation of the 

one-fish bag limit, additional 

restrictions were required to maintain 

harvest near the Area 2C GHL, including 

a prohibition on halibut harvest by 

charter captains and crew, limits on the 

maximum number of lines that could be 

deployed, maximum size limits, and 

beginning in 2012, a reverse slot limit 

that allows charter vessel anglers to 

retain halibut that are either below or 

above a specific size range. With the 

implementation of the CSP in 2014, 

charter fishery management became 

more restrictive in Area 2C to maintain 

charter fishery harvests within the Area 

2C CSP allocations. In 2017, the charter 

fishery in Area 2C has a catch limit of 

915,000 pounds and is managed under 

a one-fish daily bag limit with a reverse 

slot limit that allows retention of a 

halibut of 44 inches or less, or 80 inches 

or more, and a prohibition on the 

harvest of halibut by skippers or crew. 

Charter management measures for Area 

2C are summarized in Table 4–10 of the 

Analysis. 

In Area 3A, a two-fish daily bag limit 

with no size limits was maintained until 

the CSP went into effect in 2014. Since 

2014, the Area 3A charter fishery has 

continued to be managed under a twofish daily bag limit, but management 

measures have become increasingly 

restrictive each year to maintain charter 

fishery harvests within the CSP 

allocation. In 2017, the charter fishery 

in Area 3A has a catch limit of 

1,890,000 pounds and is managed under 

a two-fish daily bag limit with a 28-inch 

maximum size limit on one fish; a 4-fish 

annual limit for each charter fishery 

angler; closures to charter fishing on 

Wednesdays throughout the year; 

closures to charter fishing during three 

specific Tuesdays in the summer; a limit 

of only one charter trip per day per 

vessel (and per charter halibut permit); 

and a prohibition on the harvest of 

halibut by skippers or crew. Charter 

management measures for Area 3A are 

summarized in Table 4–11 of the 

Analysis. 

Charter Halibut Limited Access Program 

(CHLAP) 

NMFS implemented the CHLAP in 

January 2010 (75 FR 554, January 5, 

2010). The CHLAP established Federal 

charter halibut permits (CHPs) that are 

required for operators in the charter 

halibut fishery in Areas 2C and 3A. 

NMFS determined the eligibility of 

applicants and issued CHPs in 2010. 

CHPs were required for participation in 

the charter halibut fishery beginning in 

2011. NMFS implemented the CHLAP, 

based on recommendations by the 

Council, to meet allocation objectives in 

the charter halibut fishery. Specifically, 

this program provides stability in the 

fishery by limiting the number of 

charter vessels that may participate in 

Areas 2C and 3A. The CHLAP also 

issues a limited number of permits to 

non-profit corporations representing 

specified rural communities and to U.S. 

military morale programs for service 

members. 

Since implementation of the CHLAP, 

all vessel operators in Areas 2C and 3A 

with charter anglers on board must have 

an original, valid permit on board 

during every charter vessel fishing trip 

on which halibut are caught and 

retained. CHPs are endorsed for the 

appropriate IPHC Regulatory Area (Area 

2C or Area 3A) and the maximum 

number of anglers that may catch and 

retain halibut on a charter vessel fishing 

trip, ranging from 4 to 38 anglers. 

Complete regulations for the CHLAP 

are published at §§ 300.65, 300.66, and 

300.67. Additional details on the 

development and rationale for the 

CHLAP can be found in the proposed 


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rule for the CHLAP (74 FR 18178, April 

21, 2009). 

Catch Sharing Plan for IPHC Regulatory 

Areas 2C and 3A 

The CSP was implemented by NMFS 

in January 2014 (78 FR 75844, December 

12, 2013). The CSP replaced the GHL 

that was in place from 2004 through 

2013 for managing the charter fisheries 

in Areas 2C and 3A. The CSP 

establishes commercial IFQ and charter 

fishery allocations that vary 

proportionally with changing levels of 

annual halibut abundance and that are 

intended to balance the differing needs 

of the commercial IFQ and charter 

fisheries over a wide range of halibut 

abundance in Areas 2C and 3A. Under 

the CSP, the IPHC divides a combined 

catch limit for Areas 2C and 3A into 

separate annual catch limits for the 

commercial IFQ and charter halibut 

fisheries pursuant to the CSP’s 

allocation formulas. 

The CCLs for Areas 2C and 3A are 

specified by the IPHC during an 

iterative process that takes place each 

year. In late November of each year, the 

IPHC begins the process of assessing the 

halibut resource, and provides a 

preliminary estimate of exploitable 

biomass of halibut. The exploitable 

biomass is the amount of halibut that 

could be available for harvest by 

commercial, sport, and subsistence 

fisheries. The IPHC determines the 

exploitable biomass using a 

combination of harvest data from the 

commercial, sport, and subsistence 

fisheries, and information collected 

during scientific surveys and sampling 

of halibut bycatch in other fisheries. The 

IPHC calculates the Total Constant 

Exploitation Yield (CEY), or the target 

level for total removals (in net pounds) 

for each IPHC regulatory area, by 

multiplying the estimate of exploitable 

biomass by the harvest rate specified for 

that IPHC regulatory area. For Areas 2C 

and 3A, the IPHC subtracts estimates of 

other removals from the Total CEY. 

Other removals include unguided sport 

harvest, subsistence harvest, and 

bycatch of halibut in non-target 

commercial fisheries. In Areas 2C and 

3A, the remaining CEY, after other 

removals are subtracted, is the Fishery 

CEY. For Areas 2C and 3A, the Fishery 

CEY is equal to the annual combined 

catch limit for the commercial IFQ 

fishery and the charter fishery. This 

process is depicted in Figure 4–1 of the 

Analysis. 

A fixed percentage of the annual CCLs 

for Area 2C and 3A is allocated to the 

commercial IFQ and charter fisheries 

(for additional detail see Figures 4–3 

and 4–4 in the Analysis). The fixed 

percentage allocation to each fishery 

varies with halibut abundance and 

differs between Areas 2C and 3A. 

Overall, the charter fishery’s relative 

share of the CCL is higher when the CCL 

is lower, but lower when the CCL is 

higher. At current levels of abundance, 

the charter fishery is allocated 

approximately 18 percent of the CCLs 

for both Areas 2C and 3A, and the 

commercial IFQ fishery is allocated 

approximately 82 percent. The IPHC 

multiplies the CSP allocation 

percentages for Area 2C and 3A by the 

annual CCL in that area to calculate the 

commercial and charter halibut 

allocations in net pounds. Fisheryspecific catch limits are calculated by 

deducting separate estimates of wastage 

(i.e., the mortality of discarded fish) 

from the commercial IFQ and charter 

fishery allocations (see Figure 4–1 of the 

Analysis). NMFS publishes the CCLs 

and associated allocations in the 

Federal Register as part of the IPHC 

annual management measures pursuant 

to 50 CFR 300.62. The process for 

determining commercial IFQ and 

charter catch limits under the CSP is 

described in more detail in Section 

4.4.1.2.1 of the Analysis. 

Additional detail on the development 

and rationale for the CSP can be found 

in preamble for the CSP proposed rule 

(78 FR 39122, June 28, 2013), and in the 

final rule implementing the CSP (78 FR 

75844, December 12, 2013). 

Process for Setting Annual Management 

Measures 

The CSP also describes a public 

process by which the Council develops 

recommendations to the IPHC for 

charter angler harvest restrictions 

(annual management measures) that are 

intended to limit harvest to the annual 

charter fishery catch limit in Areas 2C 

and 3A. The process for setting annual 

management measures is described in 

more detail in Section 4.4.1.2.2 of the 

Analysis. Key elements of the process 

are summarized below. 

Each year in October, the Council’s 

Charter Halibut Management Committee 

(Charter Committee) reviews charter 

harvest in Areas 2C and 3A during the 

current year in relation to the charter 

catch limit. Staff from the Alaska 

Department of Fish and Game, Council, 

and NMFS provide an analysis to 

predict harvest for the upcoming year 

under a range of alternative 

management measures. Some of these 

measures may directly restrict the 

number or size of fish that may be 

retained (e.g., daily bag limits, trip 

limits, annual limits, and size limits). 

Some of these measures may indirectly 

restrict the number of halibut that may 

be retained (e.g., day of week closures, 

or prohibition on harvest by skipper and 

crew). After reviewing this analysis, the 

Charter Committee makes 

recommendations on possible 

management measures for Areas 2C and 

3A to be analyzed for the coming year. 

In December of each year, the Council 

considers the recommendations of the 

Charter Committee, the analysis on 

projected charter harvests under a range 

of management measures, and any 

additional information. After 

considering public input, the Council 

selects management measures to 

recommend to the IPHC that are 

intended to keep charter harvest within 

the charter fishery allocation in Area 2C 

and Area 3A under a range of different 

CCLs that may be established by the 

IPHC. 

At its annual meeting in January of 

each year, the IPHC allocates the CCL 

for Area 2C and Area 3A between the 

commercial IFQ fishery and the charter 

fishery for that year based on the CSP 

regulations at 50 CFR 300.65. The IPHC 

takes into account Council 

recommendations, any additional 

information available to the IPHC, and 

input from the public and IPHC staff. 

After considering this information and 

other information on the abundance of 

the halibut resource in Areas 2C and 3A, 

the IPHC adopts CCLs for Areas 2C and 

3A and charter halibut management 

measures designed to keep charter 

harvest in Area 2C and Area 3A within 

the catch limits specified under the CSP 

for the adopted CCLs. Once accepted by 

the Secretary of State with the 

concurrence of the Secretary of 

Commerce, NMFS publishes in the 

Federal Register the charter halibut 

management measures for each area as 

part of the IPHC annual management 

measures. 

Guided Angler Fish Program 

In 2014, as part of the CSP, NMFS 

implemented the Guided Angler Fish 

(GAF) Program to authorize limited 

annual transfers of commercial halibut 

IFQ as GAF to qualified CHP holders. 

The GAF Program provides additional 

harvest opportunities for charter 

anglers. Using GAF, qualified CHP 

holders may offer charter anglers the 

opportunity to retain halibut up to the 

limit for unguided anglers when charter 

management measures limit charter 

anglers to a more restrictive harvest 

limit. For example, if charter 

management regulations in Area 2C 

restrict charter anglers to a one-halibut 

daily bag limit, a charter angler could 

retain one halibut and use one GAF to 

retain a second halibut, bringing the 

retained amount to two halibut—the 


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same daily bag limit that applies to 

unguided anglers. The GAF Program is 

described in more detail in Section 

4.4.1.2.4 of the Analysis and in the 

proposed rule for the CSP (78 FR 39122, 

June 28, 2013). Regulations 

implementing the GAF Program are at 

§§ 300.65, 679.5, 679.41, 679.42, and 

679.45. A brief summary of the key 

elements of the GAF Program is 

provided below. 

In order to receive GAF, an IFQ 

holder and a CHP holder receiving GAF 

must submit an application to NMFS for 

review and approval. Guided Angler 

Fish transfers may be between separate 

IFQ and CHP holders, or a person 

holding both IFQ and a CHP can transfer 

their IFQ to himself or herself as GAF. 

Upon approval of the transfer 

application, NMFS issues a GAF permit 

to the holder of the CHP. Once the 

transfer is approved, the GAF permit 

holder may offer additional GAF harvest 

opportunities to anglers on board the 

vessel on which the operator’s GAF 

permit and the assigned CHP are used. 

NMFS issues GAF in whole numbers 

of halibut based on a conversion factor 

from IFQ pounds. Conversion factors are 

based on the average net weights of GAF 

harvested in the applicable IPHC 

Regulatory Area (Area 2C or 3A) during 

the previous year. Average weights are 

determined from data that charter vessel 

guides report directly to NMFS. For 

2017, 74 pounds of IFQ yields one GAF 

in Area 2C, and 42 pounds of IFQ yields 

one GAF in Area 3A. Based on selfreported data, CHP holders have paid 

more than $5 per pound of IFQ 

transferred as GAF in Area 2C and 3A, 

making GAF quite expensive, especially 

in Area 2C (see Section 4.4.2.3 in the 

Analysis for additional detail). In part 

due to the high costs of leasing GAF, 

annual participation has been low, 

averaging about 48,000 pounds per year 

from 2014 through 2016. 

Three restrictions on GAF transfers 

were implemented with the GAF 

Program. First, IFQ holders in Area 2C 

are limited to transferring up to 1,500 

pounds or 10 percent, whichever is 

greater, of their initially-issued annual 

halibut IFQ for use as GAF. In Area 3A, 

IFQ holders may transfer up to 1,500 

pounds or 15 percent, whichever is 

greater, of their initially-issued annual 

halibut IFQ for use as GAF. Second, no 

more than 400 GAF will be assigned 

during one year to a GAF permit 

assigned to a holder of a CHP that is 

endorsed for six or fewer anglers. Third, 

no more than a total of 600 GAF will be 

assigned during one year to a GAF 

permit assigned to a holder of a CHP 

endorsed for more than six anglers. The 

restrictions on transfers of GAF are 

intended to prevent a particular 

individual, corporation, or other entity 

from acquiring an excessive share of 

halibut fishing privileges as GAF. 

NMFS’ costs associated with 

management, data collection, and 

enforcement of the GAF Program are 

recoverable through IFQ Program Cost 

Recovery fees. The IFQ permit holder is 

responsible for paying IFQ Program Cost 

Recovery fees on all pounds of IFQ 

landed as GAF. The fee calculation is 

based on the standard price calculated 

by NMFS, aggregated to IPHC 

Regulatory Area 2C or 3A. 

Commercial Individual Fishing Quota 

(IFQ) Fishery 

The commercial halibut and sablefish 

fisheries off Alaska are managed under 

the IFQ Program (November 9, 1993; 58 

FR 59375). The IFQ Program was 

implemented in 1995. The commercial 

halibut fishery is also referred to as the 

‘‘directed halibut fishery.’’ The IFQ 

Program limits access to the commercial 

directed halibut fishery to those persons 

holding halibut quota share (QS) in 

specific management areas. A more 

detailed description of QS allocation 

and management is provided in Section 

4.5.1 of the Analysis and summarized 

here. 

The IFQ Program assigned QS by 

IPHC Regulatory Area based on certain 

thresholds of historical participation in 

the commercial halibut fishery. NMFS 

initially issued QS to qualified 

participants beginning in 1994. Once QS 

was issued, NMFS allows QS to be 

transferred from initial recipients to 

individuals meeting specific eligibility 

requirements. The GAF Program does 

not authorize the transfer of QS from the 

commercial IFQ fishery for use in the 

charter fishery. QS provides individual 

harvesting privileges that are allocated 

on an annual basis through the issuance 

of IFQ permits. 

An annual IFQ permit authorizes the 

holder to harvest a specified amount of 

halibut in a designated IPHC Regulatory 

Area. The specific amount of IFQ (in net 

pounds) is determined by the number of 

QS units held, the total number of QS 

units issued in a specific IPHC 

Regulatory Area, and the total amount of 

the halibut catch limit allocated by the 

IPHC in a particular year. If the 

abundance of halibut decreases over 

time, the catch limit will decrease and, 

subsequently, the number of pounds on 

a person’s annual IFQ permit also will 

decrease. By providing an exclusive 

privilege to harvest a certain amount of 

the catch limit at the beginning of the 

season, and by extending the season 

over a longer period, the IFQ Program 

allows QS holders to determine where 

and when to fish, how much gear to 

deploy, and how much overall 

investment to make in harvesting. 

The Council and NMFS developed the 

IFQ Program with several goals in mind. 

Particularly applicable to this proposed 

action, the IFQ Program was designed to 

preserve an owner-operated fleet and to 

limit consolidation of QS ownership. To 

accomplish these goals, the IFQ Program 

was designed to control transferability 

of QS through: (1) Limits on the amount 

of QS that can be owned or controlled 

by individuals and companies (QS 

transfer and use caps); (2) vessel size 

categories that limit the size of vessels 

that can use the annual allocations 

resulting from the QS; (3) restrictions on 

who can purchase catcher vessel QS; 

and (4) limitations on leasing certain 

categories of QS. 

Halibut QS is designated as one of 

four QS categories (also called ‘‘vessel 

categories’’ or ‘‘size categories’’ of QS). 

The term ‘‘vessel class’’ is also 

sometimes used, but the term 

‘‘category’’ will be used in this preamble 

to be consistent with the term used in 

regulation. These categories include Acategory for freezer catcher-processor 

vessels; B-category for vessels greater 

than 60 ft length overall (LOA); Ccategory for vessels 36 ft to 60 ft LOA; 

and D-category for vessels 35 ft or less 

LOA. The term ‘‘catcher vessel QS’’ 

refers to QS that can be used to catch, 

but cannot be used to process, halibut 

at sea (i.e., B-, C-, and D-category QS). 

Halibut QS also has a designation of 

‘‘blocked’’ or ‘‘unblocked.’’ Blocked QS 

must be sold as a unit, and cannot be 

separated. No person may hold more 

than three blocks of halibut QS in any 

IFQ regulatory area. The purpose of the 

QS block provision was to ensure that 

the smallest, most affordable QS would 

remain available to a part-time fleet of 

smaller operators in order to maintain 

some of the fleet diversity that existed 

prior to the IFQ Program’s 

implementation, and to reduce potential 

disruption to isolated Alaska fishing 

communities. The preamble to the 

proposed rule for the IFQ Program, 

published on December 3, 1992 (57 FR 

57130), describes the IFQ Program in 

more detail. 

Community Quota Entity Program 

After implementation of the IFQ 

Program, the total amount of QS held by 

residents of small, coastal communities 

and the number of IFQ holders 

substantially declined. To alleviate the 

social and economic impacts of this 

consolidation on rural communities, the 

Council revised the IFQ Program in 

2004 to allow a distinct set of remote 

coastal communities with few economic 


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alternatives to purchase and hold 

catcher vessel QS in Areas 2C, 3A, and 

3B (69 FR 23681, April 30, 2004). This 

action was implemented in order to 

help ensure access to and sustain 

participation in the commercial halibut 

and sablefish fisheries. Eligible 

communities can form non-profit 

corporations called Community Quota 

Entities (CQEs) to purchase catcher 

vessel QS. The IFQ resulting from the 

QS must be leased (i.e., made available 

for fishing) to community residents 

annually. 

NMFS determined that CQE eligibility 

applied to 46 Alaskan communities, 

based on certain criteria for size, 

accessibility, and historical 

participation in the halibut or sablefish 

fisheries. Eligible communities must 

establish a non-profit corporation to 

become a CQE. The non-profit 

corporation must submit an application 

to NMFS detailing its organization, 

structure, and proposed procedures for 

leasing IFQ to community residents 

(among other requirements). If NMFS 

approves the application, a CQE may 

form to represent that community and 

the CQE may obtain QS by transfer. 

Currently, 28 communities have formed 

non-profit corporations and have 

applied for and been approved to obtain 

QS by transfer. Of those 28 CQEs, 4 have 

purchased QS. Community Quota 

Entities may also apply to NMFS to be 

able to participate in the CHLAP by 

purchasing CHPs, and are authorized to 

receive Community Charter Halibut 

Permits which is similar to a CHP, but 

available only to CQEs. To date, 20 

CQEs have applied for and been issued 

Community Charter Halibut Permits. 

Although CQE’s may also receive CHPs 

by purchasing (i.e., transferring) them 

from non-CQE permit holders, no CQE 

has received any CHPs by transfer to 

date. 

Although CQEs are subject to different 

constraints than individual QS holders 

in the IFQ Program, in some cases, the 

CQE is subject to the same limitations 

as individual permit holders in the IFQ 

Program. For example, each CQE is held 

to the same QS use caps (i.e., ownership 

caps) as an individual holder. In other 

cases, the CQE is subject to less 

restrictive measures to provide for the 

differing purpose and use of the QS 

when held by communities. For 

example, the vessel size categories do 

not apply to QS when held by CQEs. In 

yet other cases, the CQE is subject to 

more restrictive measures than 

individuals, in part to protect existing 

holders and preserve entry-level 

opportunities for fishermen residing in 

fishery-dependent communities that are 

not are not eligible to form a CQE. For 

example, CQEs cannot purchase 

D-category halibut QS in Area 2C. In 

addition, there are caps on the amount 

of QS that all CQEs combined can 

purchase, and CQEs cannot lease more 

than 50,000 pounds of halibut IFQ to an 

individual resident. A detailed list of 

provisions specifically applicable to 

CQEs is provided in Section 4.5.2 of the 

Analysis. 

Purpose and Need for Proposed Rule 

Currently, the charter fishery is 

limited to harvesting its percentage of 

the Area 2C or 3A combined catch limit 

it is allocated under the CSP. Charter 

catch limits increase or decrease as total 

halibut abundance increases or 

decreases. When halibut abundance is 

relatively low, as it has been in recent 

years compared to abundance trends in 

the 1990s and 2000s, the charter 

allocations under the CSP are lower, 

resulting in more restrictive annual 

management measures. 

The only way that charter operators 

can currently provide more opportunity 

to charter clients than the established 

management measures allow for in their 

area is through participation in the GAF 

Program by individual charter operators. 

Because of the current restrictions on 

charter harvests under the existing 

charter allocations under the CSP and 

the limited flexibility for charter 

operators to provide additional harvest 

opportunities to their clients, the charter 

fishery has expressed its desire to find 

a market-based mechanism to increase 

its overall allocation of the halibut 

resource. 

Based on these concerns, in 2015, the 

Council initiated the analytic process to 

develop a ‘‘market-based mechanism’’ to 

allow a non-profit entity (similar to a 

CQE) to purchase and hold a limited 

amount of commercial halibut QS on 

behalf of charter anglers. The intent of 

the Council was to provide additional 

harvest opportunity and less restrictive 

annual harvest measures for charter 

anglers in times of low halibut 

abundance, while complying with total 

halibut removals under the catch limits 

established by the IPHC under the CSP. 

In initiating this effort, the Council 

sought to balance the objectives of 

participants in the charter fishery 

without undermining the goals of the 

IFQ Program or creating significant 

adverse impacts to other halibut sectors. 

A complete history of the development 

of this proposed action is described in 

Section 2.2 of the Analysis. 

Proposed Recreational Quota Entity for 

Area 2C and Area 3A 

Overview 

In December 2016, the Council 

recommended the implementation of an 

RQE Program. This proposed RQE 

Program would provide a mechanism 

for the charter fishery to compensate the 

commercial IFQ fishery for halibut QS 

purchased from the commercial sector 

to increase the charter annual catch 

limits. The halibut RFQ that would 

result from that QS would provide 

potentially greater harvest opportunities 

to the clients of charter operators within 

Areas 2C and 3A. 

The Council and NMFS considered a 

no-action alternative to maintain the 

status quo (no RQE Program) and an 

alternative to authorize an RQE 

Program. The Council and NMFS also 

considered a broad range of elements 

and options to determine: The number 

of RQEs that could form; the amount 

and type of QS that could be purchased 

and held by the RQE; the process for 

setting annual management measures; 

how the RQE Program should interact 

with the GAF and CQE Programs; how 

the RQE could use funds, the 

organizational structure of the RQE; and 

the appropriate reporting requirements 

for the RQE. The specific elements and 

options recommended by the Council 

and proposed by NMFS are described 

below. The entire suite of elements and 

options considered, and the predicted 

effects of those elements and options 

(including the no-action alternative) are 

evaluated in detail in the Analysis. 

The Council stated that the principal 

objective of this proposed rule is to 

promote social and economic flexibility 

in the charter fishery by authorizing the 

development of an entity that would be 

eligible to purchase and hold 

commercial halibut QS in Areas 2C and 

3A, thereby providing additional 

harvest opportunities to charter anglers. 

This proposed rule is intended to 

promote long-term efficiency in the use 

of the halibut resource by allowing 

transfers of QS between commercial QS 

holders and the charter fishery, through 

an RQE, under a ‘‘willing buyer and 

willing seller’’ approach. 

Description of Proposed Rule 

This proposed rule would allow an 

RQE to be established as an eligible 

entity to purchase halibut QS in Area 2C 

and Area 3A, with limitations, for use 

by the charter fishery as a whole. Using 

a structure similar to a CQE, the RQE 

would be an eligible participant in the 

IFQ Program and could purchase Area 

2C and 3A halibut QS for use by all 

charter halibut anglers in the respective 


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area. Any halibut QS purchased by the 

RQE would be held by this entity for the 

common use of charter halibut anglers. 

If approved, Federal regulations would 

be amended to allow the RQE to acquire 

QS. 

Halibut QS held by the RQE would 

generate annual pounds of recreational 

fishing quota (RFQ), a type of annual 

harvest privilege similar to IFQ that 

would have special requirements that 

pertain only to the RQE. RFQ would be 

calculated in the same manner as IFQ. 

Under this proposed rule, the specific 

amount of RFQ (in net pounds) would 

be determined by the number of QS 

units held by the RQE as of October 1 

of the preceding calendar year, the total 

number of halibut QS units issued in 

Area 2C or 3A as of January 15 of the 

year the IFQ or RFQ is issued, and the 

total amount of halibut allocated to the 

commercial IFQ fisheries in Areas 2C 

and 3A for that year. 

Although the amount of RFQ would 

be calculated in the same way as IFQ, 

it would be subject to different 

requirements. The additional pounds of 

RFQ for each regulatory area would be 

combined with the charter catch limit 

determined under the CSP to calculate 

an adjusted charter catch limit for the 

year for Area 2C or 3A. Annual charter 

management measures for Areas 2C and 

3A would be analyzed, recommended to 

the IPHC, and adopted for 

implementation based on the estimated 

adjusted charter catch limits. 

Recreational Fishing Quota held by the 

RQE would be available for harvest by 

all charter anglers aboard registered 

charter vessels of any size, regardless of 

the QS category from which that RFQ 

originated. Under this proposed rule, 

RFQ could not be transferred as GAF. 

Unless specified in this proposed rule, 

regulations that refer only to IFQ permit 

holders would not apply to the RQE. 

Likewise, unless specified in this 

proposed rule, regulations that refer 

only to IFQ would not apply to RFQ. 

This proposed rule would not change 

the underlying allocations to the 

commercial IFQ fishery and charter 

fishery specified in the CSP, and would 

not change the total QS pool. Therefore, 

the QS holders in the commercial IFQ 

fishery who do not transfer QS to the 

RQE would receive the same amount of 

IFQ pounds issued for their QS units 

regardless of the amount of QS 

transferred to, and held by, the RQE. 

Provisions of Proposed Rule 

RQE Organizational Structure 

The Council recommends and NMFS 

proposes to allow the establishment of 

an RQE as a qualified non-profit entity 

registered under the laws of the State of 

Alaska and recognized as exempt from 

Federal income tax by the Internal 

Revenue Service (IRS) to purchase and 

hold halibut QS for use by the charter 

fishery. The QS held by an RQE could 

yield RFQ annually. This proposed rule 

would allow a single non-profit entity to 

form to represent and manage separate 

QS holdings for Areas 2C and 3A. 

The Council and NMFS considered an 

option to allow formation of two RQEs, 

one to represent Area 2C and another in 

Area 3A, but ultimately decided that 

one RQE would provide administrative 

efficiencies for purchasing and 

managing commercial QS. The Council 

and NMFS initially considered allowing 

multiple RQEs within Area 2C and 3A, 

but recommended against that structure 

to avoid potential competition against 

each other to purchase QS, and to 

reduce potential administrative costs. 

The structure of the RQE is proposed 

to be similar to non-profits established 

to hold QS under the CQE Program. The 

Council recommended and NMFS 

proposes that the RQE be a non-profit 

entity to help ensure it represents the 

interests of the charter operators, 

whereas a for-profit entity could result 

in increased costs. The Council has 

consistently recommended, and NMFS 

has consistently approved the use of 

non-profit entities for the purposes of 

holding QS in other limited access 

programs. The proposed RQE 

organizational structure is consistent 

with past practice. Also, a non-profit 

entity that is independent of the Federal 

or state governments could more 

quickly and more flexibly take 

advantage of favorable market 

conditions for purchasing QS than a 

program administered by the Federal or 

state governments. More information on 

the structure of the proposed RQE is 

provided in section 4.8.1.1 of the 

Analysis. 

NMFS proposes new definitions in 

§ 679.2 for ‘‘Recreational fishing quota 

(RFQ)’’ and ‘‘Recreational quota entity 

(RQE).’’ 

Eligibility 

The Council recommended 

establishment of a single RQE that is a 

qualified non-profit entity registered 

with the IRS to purchase and hold 

commercial halibut QS for use by the 

guided halibut sector.’’ To implement 

this recommendation, NMFS proposes 

requirements specifying that the RQE 

must be a qualified non-profit entity 

registered under the laws of the State of 

Alaska and recognized as exempt from 

Federal income tax by the IRS. Nonprofit status is a state law concept and 

does not directly apply to Federal tax 

law. A non-profit organization may be 

eligible for certain benefits, such as state 

sales, property and income tax 

exemptions. Although most Federal taxexempt organizations are non-profit 

organizations, being recognized as a 

non-profit organization at the state level 

does not automatically grant the 

organization exemption from Federal 

income tax. To qualify as exempt from 

Federal income tax, an organization 

must seek recognition of exemption 

from Federal income tax under section 

501(a) of the Internal Revenue Code. 

This proposed rule would establish 

specific requirements for an entity to be 

authorized as the RQE. To be approved 

as the entity eligible to purchase and 

hold halibut QS, the applicant wishing 

to become the RQE would be required 

to demonstrate it is a non-profit entity 

registered under the laws of the State of 

Alaska by submitting to NMFS the 

articles of incorporation and 

management organization information, 

including bylaws and a list of key 

personnel including, but not limited to, 

the board of directors, officers, 

representatives, and managers. 

Articles of incorporation are public 

documents that must be filed with the 

state agency where the corporation 

becomes incorporated (e.g., with 

Alaska’s Division of Corporations, 

Business, and Professional Licensing). 

NMFS proposes that the RQE would 

need to be incorporated within the State 

of Alaska consistent with incorporation 

requirements applicable to CQEs. 

Bylaws are private documents 

describing the organization’s operating 

procedures that are not filed with any 

government agency. The Council and 

NMFS chose to not specify how the 

board of directors of the RQE should be 

structured. The Council and NMFS 

considered options to require a certain 

number of board members representing 

different user groups, but ultimately 

decided that these decisions were best 

left to the RQE (see Section 4.8.1.6 of 

the Analysis). The Council intends that 

the RQE board should have the 

flexibility to tailor its composition in a 

way that best addresses the RQE’s 

needs. The Council noted that a 

representative of the Alaska Department 

of Revenue may sit as an ex-officio (nonvoting) member of the RQE board, and 

the Commissioner of the Alaska 

Department of Fish and Game, or their 

designee, may sit as a voting member of 

the RQE board; however, the Council 

did not intend be prescriptive with 

respect to RQE board membership. The 

Council intended for the RQE to 

determine whether these officials would 

be a member of the RQE board. For 

example, if funding for the RQE is 


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provided or administered by the State of 

Alaska, then a board member from the 

Alaska Department of Revenue might be 

beneficial; however, the Council 

intended for this determination to be at 

the discretion of the RQE. Because the 

Council intended for the RQE to have 

flexibility to select members of the RQE 

board, NMFS does not propose to 

specify the composition of the RQE 

board in regulation. 

In addition to demonstrating it is a 

non-profit corporation recognized by the 

State of Alaska, the applicant wishing to 

become the RQE would be required to 

demonstrate it has been granted an 

exemption from Federal income tax by 

the IRS by submitting to NMFS the IRS 

acknowledgement of the entity’s Federal 

tax exemption. 

NMFS proposes to require the 

approved RQE to maintain its non-profit 

and tax-exempt status, as described 

above. If the approved RQE entity does 

not meet this requirement, NMFS would 

not issue the RFQ that would otherwise 

be issued to the RQE based on its QS 

holdings. In addition, NMFS would 

provide the approved RQE entity with 

an opportunity to reinstate its non-profit 

and/or tax-exempt status. If the 

approved RQE entity does not 

demonstrate to NMFS that it is a 

qualified non-profit entity registered 

under the laws of the State of Alaska 

and recognized as exempt from federal 

income tax by the IRS by the established 

deadline, NMFS would issue an Initial 

Administrative Determination (IAD) to 

revoke the entity’s status as the 

approved RQE and to require the entity 

to divest its QS holdings. The entity 

would have the opportunity to appeal 

the IAD through the National Appeals 

Office under the provisions established 

at 15 CFR part 906. The application and 

procedures for approving the 

application to become an RQE would be 

modeled after the application and 

process for CQEs. The applicant would 

complete the ‘‘Application for a Nonprofit Corporation to be Designated as a 

Recreational Quota Entity (RQE)’’ and 

submit it to NMFS Alaska Region for 

review and approval. The application 

form would be available on the NMFS 

Alaska Region Web site at https://

alaskafisheries.noaa.gov/ after the 

effective date of the final rule, assuming 

a final rule is published. NMFS would 

approve the first complete RQE 

application it receives. NMFS would 

notify the RQE when its application has 

been approved. Once approved, NMFS 

would establish an account for QS and 

RFQ holdings when the RQE acquires 

QS. If NMFS disapproves the 

application, that determination could be 

appealed to the NOAA Fisheries 

National Appeals Office under the 

provisions established at 15 CFR part 

906. 

NMFS proposes adding a new 

paragraph § 679.41(n) to describe the 

application process and eligibility 

requirements for a prospective RQE. 

Restrictions on Transfers 

Under this proposed RQE Program, 

two-way transfers of QS would be 

allowed. Quota share acquired by the 

RQE could be transferred to an 

otherwise eligible participant in the 

commercial IFQ fishery. Because QS 

and the resulting IFQ used in the 

commercial IFQ fishery is subject to 

vessel categories and block designations 

on initially-issued QS—unlike the QS 

and resulting RFQ used by the RQE, 

which is exempt from such categories 

and designations—NMFS will track QS 

units, IFQ pounds, and vessel category 

and block designations that apply to 

ensure that original categories and 

designations for the commercial IFQ 

fishery are maintained during the 

transfer process. 

The Council recommended and 

NMFS proposes two-way transfers 

because it is expected that there would 

be variability from year to year in the 

amount of QS the RQE would be 

interested in using as RFQ. For example, 

if halibut biomass increases, the RQE 

may hold QS that is not needed to yield 

RFQ to provide additional opportunities 

for participants in the charter fishery, 

and may decide to sell a portion of its 

QS to an eligible buyers in the 

commercial fishery sector. 

NMFS proposes modifying § 679.42 to 

describe the QS transfer process for 

RQEs. 

Annual Limit on Transfers to an RQE 

This proposed rule would establish 

area-specific annual limits on the 

amount of halibut QS that can transfer 

to an RQE. The intended effect of these 

transfer limits is to limit the amount of 

halibut QS that could be transferred 

from the commercial IFQ fishery and 

used as RFQ in the charter fishery each 

year, and to minimize any abrupt 

negative impacts that may occur to 

participants in the commercial IFQ 

fishery or to CQEs due to additional 

competition in the QS market that could 

occur with the entry of an RQE. Annual 

transfer limits would allow users in the 

commercial IFQ and charter fisheries 

time to adapt business plans and 

personal strategies to changes in the 

composition of the fisheries. 

The Council recommended and 

NMFS proposes an annual transfer limit 

equivalent to 1 percent of the 

commercial QS units in Area 2C based 

on the 2015 pool of all QS categories 

(59,477,396 units). Based on the 2015 

QS pool, the RQE would be limited to 

receiving by transfer a maximum of 

594,774 units of Area 2C QS in a year. 

Even if the QS pool changes in future 

years, this proposed rule would fix the 

annual transfer limit in Area 2C at 

594,774 QS units. This will clearly 

define the limit for fishery participants 

and prevent a change in the limit if 

there are future changes in the Area 2C 

or 3A QS pools. For example, in 2017, 

the QS:IFQ ratio is 14.1209 QS units per 

pound of IFQ, and the annual transfer 

limit would be 42,120 pounds of IFQ for 

Area 2C. 

The Council recommended and 

NMFS proposes an annual transfer limit 

equivalent to 1.2 percent of the 

commercial QS pool in Area 3A based 

on the 2015 pool of all QS categories 

(184,893,008 units). For example, based 

on the 2015 QS pool, the RQE would be 

limited to receiving by transfer a 

maximum of 2,218,716 units of Area 3A 

QS in a year. Even if the QS pool 

changes in future years, this proposed 

rule would fix the annual transfer limit 

in Area 3A at 2,218,716 QS units. For 

example, in 2017, the QS:IFQ ratio is 

23.8911QS units per pound of IFQ, and 

the annual transfer limit would be 

92,868 pounds of IFQ for Area 3A. 

For both Area 2C and 3A, the Council 

and NMFS considered annual transfer 

limits between 0.5 and 5 percent and 

determined that 1 percent for Area 2C 

and 1.2 percent for Area 3A were the 

appropriate annual transfer limits 

because they would allow the RQE to 

reach the cumulative use limits on QS 

holding (discussed in the next section) 

in 10 years if the RQE purchased the 

maximum amount of QS in each area in 

each year after the RQE Program is 

implemented. The Council indicated 

that limiting annual transfers at these 

proposed limits and allowing the RQE 

to reach its maximum QS holdings over 

as few as 10 years would balance the 

desire to provide adequate additional 

harvest opportunity to charter anglers, 

while at the same time mitigating the 

potentially disruptive impacts on the 

QS market with the entry of the RQE. 

Therefore, the proposed annual limits 

are equal to 1/10 of the cumulative 

holdings limits. Annual transfer limits 

are discussed in further detail in Section 

4.8.1.2.2 of the Analysis. 

NMFS proposes adding a new 

paragraph at § 679.42(f)(8) to describe 

the annual transfer limits on QS for 

RQEs. 

Limit on Total QS Holdings by the RQE 

The Council recommended and 

NMFS proposes a limit on the total 


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amount of halibut QS that can be held 

by the RQE. This rule proposes that for 

Area 2C, the RQE could hold up to 10 

percent of the 2015 commercial QS 

pool. This proportion would be 

calculated based on the entire QS pool, 

including categories and blocks of QS 

units that the RQE would be prohibited 

from purchasing (discussed in the next 

sections of this preamble). Ten percent 

of the 2015 commercial QS pool equates 

to 5,947,740 units. 

This rule proposes a limit on QS 

holdings for Area 3A of 12 percent of 

the 2015 entire commercial QS pool, 

including categories and blocks of QS 

units that the RQE would be prohibited 

from purchasing. Twelve percent of the 

2015 commercial QS pool equates to 

22,187,161 units. 

As described in the previous section 

for annual transfer limits for the RQE, 

this proposed rule would fix the limits 

on total QS holdings by the RQE in 

regulations so that they are clearly 

defined for fishery participants and will 

not fluctuate if there are future changes 

in the Area 2C or 3A QS pools. 

The Council and NMFS considered 

limits that ranged from 5 to 20 percent 

of the 2015 QS pools in each area. The 

Council recommended and NMFS 

proposes 10 percent and 12 percent 

limits in Areas 2C and 3A, respectively, 

to provide a balance between providing 

ample opportunity for additional 

harvest opportunity for the charter 

fishery, while seeking to alleviate 

potential adverse impacts to commercial 

halibut participants from increased 

competition in the QS market and 

higher QS prices that could occur if the 

RQE were provided a higher limit on QS 

holdings by the RQE. The limits on RQE 

holdings of QS are discussed in further 

detail in Section 4.8.1.2.3 of the 

Analysis. 

NMFS proposes adding a new 

paragraph at § 679.42(f)(8) to describe 

the QS holding limits for the RQE. 

Limit on GAF Transfers as RQE 

Holdings Increase 

As part of the RQE Program, the 

Council recommends and NMFS 

proposes to limit the total amount of 

GAF that could be used annually by 

CHP holders by limiting the amount of 

GAF that could be transferred to the 

charter fishery as RQE QS holdings 

increase. 

Under existing regulations, a 

significant amount of GAF could be 

transferred to CHP holders each year. 

For example, based on 2015 data, if all 

QS holders transferred the maximum 

allowable amounts of IFQ as GAF to 

eligible CHP holders, 49.1 percent of the 

Area 2C IFQ and 35.5 percent of the 

Area 3A could potentially be transferred 

as GAF. However, actual participation 

in the GAF Program has been relatively 

low. From 2014 through 2016, less than 

1.25 percent of Area 2C IFQ, and less 

than 0.2 percent of Area 3A IFQ have 

been transferred as GAF in any year. 

Based on the cost to transfer IFQ as GAF 

noted earlier in this preamble, NMFS 

considers it very unlikely that 

participation in the GAF Program will 

increase substantially and approach the 

maximum allowable transfer limits. 

Notwithstanding that unlikelihood, the 

Council determined and NMFS agrees 

that limiting the amount of GAF that 

could be transferred to the charter 

fishery as RQE QS holdings increase 

appropriately balances the objective of 

establishing an RQE to further increase 

harvest opportunity in the charter 

fishery while minimizing the negative 

impacts that may result in the 

commercial IFQ fishery from transfers of 

QS. 

The Council recommended and 

NMFS proposes restricting GAF 

transfers so that in any year, the 

combined amount of RFQ and GAF 

transferred to CHP holders could not 

exceed a poundage equal to the 

maximum amount of pounds that could 

be issued as RFQ in Area 2C or 3A. 

The following two examples describe 

how NMFS would administer this 

provision in Area 2C. Under this 

proposed rule, in Area 2C the RQE may 

hold a maximum of 10 percent of the 

2015 Area 2C QS pool (5,947,740 units). 

These two examples use the 2017 

QS:IFQ ratio for Area 2C (14.1209 QS 

units per pound of IFQ), and the 2017 

conversion factor for IFQ to GAF for 

Area 2C (74 pounds of IFQ to yield one 

GAF). The first example assumes the 

RQE held the maximum amount of QS 

units (5,947,740 units) in Area 2C. 

Under this example, the RQE would be 

issued 421,201 pounds of RFQ 

(5,947,740 QS units/14.1209 QS:IFQ = 

421,201 pounds), and NMFS would not 

approve any transfers of GAF to CHP 

holders in Area 2C during that calendar 

year because the combined amount of 

RFQ and GAF transferred by CHP 

holders would exceed the cumulative 

limit for RFQ and GAF in Area 2C 

(421,201 pounds). The second example 

assumes the RQE held 50 percent of the 

RQE’s Area 2C cumulative QS limit (i.e., 

2,973,870 units). Under this example, 

the RQE would be issued 210,601 

pounds of RFQ (2,973,870 QS units/ 

14.1209 QS:IFQ = 210,601 pounds), and 

NMFS could approve GAF transfers to 

CHP holders equivalent to 210,601 

pounds of IFQ, or 2,845 GAF (210,600 

pounds/74 pounds of IFQ per GAF = 

2,845 GAF) during that calendar year 

before the combined amount of RFQ and 

GAF transferred to CHP holders would 

exceed as the cumulative limit for RFQ 

and GAF in Area 2C (421,201 pounds). 

Under this second example, NMFS 

would approve GAF transfers for CHP 

holders until 2,845 GAF had been 

transferred to CHP holders in Area 2C. 

Once 2,845 GAF had been transferred to 

CHP holders in Area 2C, NMFS would 

disapprove all subsequent transfers of 

GAF in Area 2C for the remainder of the 

calendar year. 

The Council and NMFS considered 

options that would not have restricted 

transfers of GAF even if the RQE 

reached its cumulative use limit of QS. 

The Council recommended and NMFS 

proposes limiting the total amount of 

annual poundage that could be 

reallocated to the charter fishery as RFQ 

and GAF to the cumulative use limit on 

RQE holdings. This limit was chosen, as 

described in the previous section of the 

preamble, to balance the concerns of 

commercial fishery participants about 

the increased potential for reallocation 

to the charter fishery with the interests 

of charter operators to increase harvest 

opportunities. The limit on GAF 

transfers as RQE QS holdings increase is 

discussed in further detail in Section 

4.8.1.2.4 of the Analysis. 

NMFS proposes adding a new 

paragraph at § 300.65(c)(5)(ii)(D)(1)(iv) 

to limit the transfer of IFQ to GAF as the 

RQE increases its holdings of QS. 

Vessel Category Restrictions 

The Council recommended and 

NMFS proposes limits on the amounts 

of QS the RQE could hold by vessel 

category in Areas 2C and 3A. The RQE 

would be limited to holding an amount 

equal to 10 percent of D-category QS 

and an amount equal to 10 percent of Bcategory QS, based on the 2015 QS 

pools, in Area 2C. Translated to QS 

units, this proposed rule would prohibit 

the RQE from holding more than 

889,548 units of D-category QS, and 

more than 265,524 units of B-category 

QS in Area 2C (see Table 4–40 of the 

Analysis). 

Under this proposed rule, the RQE 

would be prohibited from purchasing or 

holding D-category QS in Area 3A. The 

RQE could purchase any amount, up to 

the annual transfer and cumulative use 

limits of A-, B-, and C-category QS in 

Area 3A. 

The Council and NMFS considered 

the current composition of the QS pools 

in Areas 2C and 3A, and the potential 

impact on specific QS categories when 

proposing these regulations. D-category 

QS cannot be fished on vessels greater 

than 35 ft LOA in Area 3A or 2C. Thus, 

the proposed limits on the RQE 


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acquiring D-category shares is intended 

to maintain vessel size diversity in the 

commercial fleet. Additionally, the 

Council and NMFS noted that Dcategory QS tends to sell for a lower 

price and could therefore make it a 

desirable and accessible category of QS 

for the RQE to purchase (see Section 4.5 

of the Analysis). Therefore, the limits 

are being proposed to reduce the 

potential for the RQE to obtain so much 

D-category QS as to impact the size 

diversity of the commercial IFQ fishery 

fleet by substantially reducing the 

amount of QS available for small vessels 

in the commercial fleet. The proposed 

limits on D-category QS purchases are 

also intended to protect the opportunity 

for new entrants in the commercial 

fishery because these participants often 

use vessels that are 35 ft LOA or less. 

In Area 2C, B- and C-category QS also 

provide entry-level opportunities. A 

total prohibition on acquisition of Dcategory QS in Area 2C could put 

market pressure on other parts of the 

Area 2C QS market that are important 

for entry and diversity. While Ccategory QS makes up about 79 percent 

of the total Area 2C QS pool, B-category 

QS represents a relatively small 

percentage (4.5 percent, as shown in 

Table 4–19 of the Analysis). Therefore, 

the Council recommended and NMFS 

proposes limiting RQE QS purchases in 

Area 2C to 10 percent of the B-category 

QS pool (based on the 2015 QS pool). 

Because restrictions on B-category QS 

transfers would limit the QS market 

opportunity for the RQE in Area 2C, the 

Council recommended and NMFS 

proposes some limited opportunity in 

the D-category market to relieve some of 

the potential market pressure on the 

remaining C-category QS (10 percent of 

the D-category QS pool in Area 2C). 

These provisions would ensure that 

most of the B- and D-category QS are 

used in the commercial IFQ fishery and 

are intended to balance entry-level 

opportunities and fleet diversity in the 

commercial IFQ fishery, with potential 

benefits to the charter fishery from 

transfers of QS to the RQE. The 

proposed vessel category restrictions are 

discussed in more detail in Section 

4.8.1.2.5 of the Analysis. 

NMFS proposes adding a new 

paragraph at § 679.42(f)(8) describing 

RQE use limits for specific vessel 

categories of QS. 

Block Restrictions 

In addition to vessel category 

restrictions for the RQE, the Council 

recommended and NMFS proposes 

limits on the size of QS blocks that the 

RQE could purchase. The RQE would be 

prohibited from purchasing blocks of 

QS by category that equate to 1,500 

pounds or less (based on 2015 pounds). 

For Area 2C, this means that the RQE 

could not purchase blocked QS of 

24,250 units or less. For Area 3A, the 

RQE would be prohibited from 

purchasing blocked QS of 35,620 units 

or less. The Council recommended and 

NMFS proposes these prohibitions to 

ensure that small and more affordable 

blocks of QS remain available for 

purchase by new entrants and small 

businesses in the commercial IFQ 

fishery. The prohibition on the transfer 

of small blocks of QS will have limited 

impact on the total available market of 

QS that the RQE could purchase. Block 

restrictions are discussed in more detail 

in Section 4.8.1.3 of the Analysis. 

NMFS proposes to add a new 

paragraph at § 679.42(g)(1)(iii) to 

establish restrictions on the type and 

amount of blocked QS that the RQE can 

hold. 

Revisions for the Calculation of the 

Charter Catch Limit and Establishment 

of Annual Management Measures 

This proposed rule would also modify 

several regulations to facilitate the 

proper accounting of RFQ. This section 

describes the process that would be 

used annually to calculate the amount 

of RFQ and establish annual 

management measures. 

On October 1 of each year, the RQE’s 

QS holdings would be used as the basis 

for estimating the number of RFQ 

pounds to add to the charter allocation 

under the CSP for the following 

calendar year. This estimated combined 

allocation would be used to recommend 

the charter fishery management 

measures for the following year. The 

process and timeline for setting annual 

management measures would remain 

unchanged. Once the IPHC annual 

management measures are approved, 

typically in late February or early 

March, NMFS would issue pounds of 

RFQ to the RQE based on the number 

of QS units held by the RQE on October 

1 of the previous year to augment the 

charter catch limit established under the 

CSP. The Council recommended and 

NMFS proposes establishing October 1 

as the date for determining how many 

QS units would yield RFQ so that the 

Council’s Charter Committee and the 

Council would be able to estimate the 

pounds of RFQ that the RQE would 

receive in the following year and be able 

to factor that amount into its 

recommendations for charter 

management measures in the following 

year. 

The RFQ would not be issued to the 

RQE in the upcoming fishing year for 

any QS that the RQE received by 

transfer after October 1. If the RQE 

transfers QS that it holds on October 1 

to a recipient in the commercial IFQ 

fishery after that date, NMFS would not 

issue IFQ to the commercial recipient 

for that QS in the following calendar 

year. This approach is similar to the 

method used in the commercial fishery 

to allow the transfer of QS but not the 

IFQ once that IFQ has been used. In this 

case, NMFS would consider that RFQ is 

effectively ‘‘used’’ if it is assigned to the 

charter allocation for the following 

calendar year. If the RQE receives QS by 

transfer after October 1, that QS would 

not result in the issuance of RFQ for the 

following calendar year. However, if the 

RQE subsequently transferred any QS 

received by transfer after October 1 that 

did not result in RFQ back to the 

commercial IFQ fishery, NMFS would 

issue IFQ to the commercial recipient 

for that QS. 

In late November of each year, NMFS 

would estimate the pounds of RFQ that 

the QS units held by the RQE on 

October 1 would yield in the upcoming 

year based on the current year’s QS:IFQ 

ratio and the IPHC’s preliminary 

estimate of the possible combined catch 

limits in Areas 2C and 3A. 

In December of each year, the Council 

would recommend a range of potential 

charter management measures for Areas 

2C and 3A that would be expected to 

limit charter harvests in an area to the 

estimated charter catch limit plus the 

estimated supplemental pounds 

provided by the RFQ. 

NMFS proposes revising 

§ 679.40(c)(2) to clarify that NMFS 

would use the QS pool for the IFQ 

regulatory area, including Areas 2C and 

3A, on record with the Alaska Region, 

NMFS, on January 15 of that year for 

purposes of calculating the amount of 

IFQ and RFQ for that regulatory area for 

that year. This proposed revision to 

move the date of record from January 31 

to January 15 of each year would ensure 

that the IPHC would be able to 

determine the amount of IFQ and RFQ 

and the total allocations that would be 

assigned to the commercial IFQ and 

charter fisheries, respectively, when it 

adopts annual management measures at 

its annual meeting in late January. 

NMFS also proposes revising 

§ 300.65(c) to authorize the use of RFQ 

in the charter fishery, and to describe 

how and when QS holdings by the RQE 

would be calculated and added to the 

charter catch limit under the CSP. 

Redistribution of Excess RFQ 

The Council recommended and 

NMFS proposes a temporary 

redistribution of RFQ from the RQE to 

the commercial IFQ fishery if the RQE 


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holdings of QS provide a charter harvest 

opportunity greater than the unguided 

recreational management measures in 

either Area 2C or 3A. The current 

management measure for unguided 

recreational anglers in both areas is a 

daily bag limit of two halibut of any 

size. Under this proposed rule, NMFS 

would not issue annual RFQ in excess 

of the adjusted charter catch limit (the 

sum of the annual guided sport catch 

limit under the CSP and RFQ from the 

RQE’s QS holdings on October 1 of the 

previous year) needed for charter 

anglers to obtain the unguided 

recreational management measures for 

that area. 

The Council and the Analysis use the 

term ‘‘reallocate’’ to describe the 

temporary (1-year) redistribution of 

excess RFQ to the commercial IFQ 

fishery. NMFS notes that the term 

reallocate is often used in other 

regulations to describe a permanent 

transfer of harvest privileges from one 

group of participants to another. NMFS 

uses the term redistribute in this 

proposed rule to clarify for fishery 

participants and the public that the 

distribution of excess RFQ to 

commercial IFQ fishery participants is 

in effect for one year, and is not a 

permanent reallocation. 

The Council recommended and 

NMFS proposes the following process 

for the temporary redistribution of RFQ 

(as IFQ) to the commercial IFQ fishery, 

in the event that the RQE has QS 

holdings in excess of the amount 

needed to provide charter anglers with 

harvest opportunities equal to those for 

unguided recreational anglers. Each 

January, the IPHC will recommend 

charter fishery management measures 

for Areas 2C and 3A that are expected 

to limit charter harvest to the adjusted 

charter catch limit for each area (the 

sum of the annual guided sport catch 

limit under the CSP and the estimated 

amount of RFQ from the RQE’s QS 

holdings on October 1 of the previous 

year). 

After the IPHC recommends charter 

fishery management measures, NMFS 

will determine if a redistribution of 

excess RFQ is necessary. If the IPHC has 

adopted charter fishery management 

measures that are equivalent to the 

unguided recreational management 

measures in either Area 2C or 3A (e.g., 

a daily bag limit of two halibut of any 

size), NMFS would determine the 

amount of RFQ that would be needed to 

account for charter harvest in Area 2C 

and Area 3A under the recommended 

management measures and issue that 

amount as RFQ to supplement the 

charter fishery allocation under the CSP. 

The difference between the total amount 

of available RFQ and the amount 

needed for the charter fishery would be 

excess RFQ. NMFS would redistribute 

the amount of excess RFQ using the 

process recommended by the Council. 

Under this proposed rule, 50 percent 

of any RFQ in excess of the amount 

needed to achieve the unguided 

recreational management measures in 

either Area 2C or 3A would be 

redistributed as IFQ to all catcher vessel 

QS holders in the applicable area (Area 

2C or Area 3A) who held not more than 

32,333 QS units in Area 2C, and 47,469 

QS units in Area 3A (i.e., the amount of 

QS that yielded 2,000 pounds of IFQ in 

2015) in the year prior to the 

redistribution, and who also held that 

QS eligible for redistribution during the 

year that the redistribution occurs. This 

50 percent would be redistributed 

among qualified QS holders in 

proportion to their QS holdings. 

The Council’s recommendation stated 

that 50 percent of excess RFQ should be 

redistributed ‘‘equally’’ to all qualified 

QS holders. During Council 

deliberations, NMFS staff and the 

Council clarified how NMFS would 

implement the Council’s 

recommendation. NMFS proposes to 

implement this provision by dividing 

the amount of IFQ available for 

redistribution to qualified QS holders by 

the total amount of QS units held by all 

qualified QS holders. For example, if 

there were 50,000 pounds of excess RFQ 

to be redistributed as IFQ in Area 3A in 

calendar year 2025 among QS holders 

who held not more than 47,469 QS units 

in the year prior to the redistribution 

(2024), and in the year during which the 

redistribution occurs (2025), and the 

total sum of all QS held by those 

qualified QS holders was 500,000 units, 

then each of these qualified QS holders 

would receive an additional 1/10 of a 

pound of IFQ in 2025 for each QS unit 

held. NMFS does not issue IFQ in less 

than one pound increments, therefore 

NMFS would round the amount of 

redistributed IFQ to the nearest pound 

for each qualified QS holder. Section 

4.8.1.3 of the Analysis provides 

additional information on the method 

NMFS would use to redistribute excess 

RFQ. 

This proposed rule would require the 

QS holder to hold the QS in the year 

prior to the redistribution to meet the 

clear intent of the Council, as well as in 

the year that the redistribution occurs in 

order to ensure the proper 

administration of this provision. NMFS 

proposes this requirement to ensure that 

IFQ is issued to persons who hold the 

underlying QS eligible to receive the 

redistribution. If NMFS were to 

redistribute RFQ as IFQ only to QS 

holders that held QS in the year prior 

to the redistribution, it is possible that 

a person could hold QS in the year prior 

to the redistribution, subsequently 

transfer that QS before NMFS issues IFQ 

for the following year, and receive IFQ 

from the redistribution even though that 

person does not hold QS. Issuing IFQ to 

persons who do not currently hold QS 

would be contrary to the current 

functioning of the IFQ Program (i.e., IFQ 

is issued to persons who hold QS). 

Under this proposed rule, the 

remaining 50 percent of RFQ in excess 

of the amount needed to achieve the 

unguided sport management measures 

in either Area 2C or 3A would be 

redistributed equally among all CQEs 

that held halibut QS in the applicable 

area (Area 2C or Area 3A) in the year 

prior to the redistribution as well as in 

the year that the redistribution occurs. 

If no CQE held QS in the applicable area 

(Area 2C or Area 3A) in the preceding 

year and in the year that the 

redistribution occurs, this 50 percent of 

the excess RFQ would not be 

redistributed in that area. In other 

words, the excess RFQ would be 

unfished or ‘‘left in the water’’ for 

conservation. The rationale for requiring 

the CQE to hold QS in the year prior to 

the redistribution, and in the year the 

redistribution occurs is the same as the 

rationale for the redistribution to 

catcher vessel QS holders described 

above. NMFS solicits comments from 

the public on whether excess RFQ 

should be redistributed to eligible 

catcher vessel QS holders and CQEs 

based on this proposed methodology. 

The Council and NMFS considered 

options that would not have required a 

redistribution of RFQ as only IFQ, and 

alternative methods to redistribute RFQ 

as IFQ. The Council recommended and 

NMFS proposes the reallocation 

procedures in this rule to provide 

additional harvest opportunity among 

holders of small amounts of QS as well 

as to CQEs who hold QS on behalf of 

coastal community residents. Section 

4.8.1.4 of the Analysis describes the 

options considered by the Council and 

NMFS and notes that based on the 

current levels of halibut abundance and 

the cumulative use limits in Area 2C 

and 3A, it is unlikely that the RQE 

could hold an amount of QS that would 

result in the need for redistribution of 

excess RFQ. 

NMFS proposes to add regulations 

under § 679.40(c) to describe how 

excess RFQ would be redistributed. 

Cost Recovery Fees 

The Magnuson-Stevens Act at section 

304(d)(2)(A) requires that cost recovery 

fees be collected for the costs directly 


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related to the management, data 

collection, and enforcement of any 

limited access privilege programs. This 

includes programs such as the 

commercial halibut IFQ Program, under 

which a dedicated allocation is 

provided to IFQ permit holders. Fees 

owed are a percentage, not to exceed 3 

percent, of the ex-vessel value of fish 

landed and debited from IFQ permits. 

Each year, NMFS sends fee statements 

to IFQ holders whose annual IFQ was 

landed; those holders must remit fees by 

January 31 of the following year. Under 

this proposed rule, the RQE would be 

responsible for all cost recovery fees on 

their annual RFQ. 

NMFS calculates IFQ cost recovery 

fee assessments in November each year. 

To determine cost recovery fees for IFQ 

holders, NMFS uses data reported by 

Registered Buyers to compute annual 

standard ex-vessel IFQ prices by month 

and port (or, if confidential, by port 

group). NMFS publishes these standard 

prices in the Federal Register each year. 

For example, NMFS published the 2016 

standard ex-vessel IFQ prices in the 

Federal Register on December 13, 2016 

(81 FR 89990). NMFS uses the standard 

prices to compute the total annual 

fishery value of the IFQ fisheries. NMFS 

determines the fee percentage by 

dividing management, data collection, 

and enforcement costs for the IFQ 

Program by total IFQ fishery value. In 

recent years, IFQ costs have exceeded 3 

percent; therefore, the cost recovery fee 

percentage has been set at the maximum 

of 3 percent. Unlike commercial IFQ, 

which is only subject to cost recovery 

fees when landed, the RFQ held by the 

RQE would be considered ‘‘used’’ when 

issued, because management measures 

will be based on the combined amount 

of the RFQ and charter fishery catch 

limit in each regulatory area. 

In years when the RQE holds QS and 

the RFQ is issued to augment the charter 

fishery’s catch limit, the charter fishery 

would be effectively using all of this 

RFQ; therefore, the RQE would pay cost 

recovery fees on all of its RFQ. Since all 

annual RFQ issued to the RQE would be 

considered ‘‘used,’’ NMFS would levy 

the fee calculated for the RQE’s annual 

RFQ pounds that are issued, rather than 

estimating RFQ harvest at each point of 

charter landings. The fee would be 

calculated using the standard price 

calculated for Area 2C or 3A and the 

RFQ held by the RQE. This is similar to 

the method used to apply an ex-vessel 

value for GAF. The IFQ cost recovery 

fee could be levied on the RQE each 

year the RQE holds QS, and the 

resulting RFQ is issued to augment the 

catch limit in the charter fishery. All 

holdings acquired by the RQE on 

October 1 of the prior year would be 

subject to the IFQ cost recovery fee. 

For purposes of cost recovery, the 

RQE would pay fees on all resulting 

pounds of RFQ, even if the charter 

fishery’s harvest was under its catch 

limit in Area 2C or 3A for that year. In 

December of each year, NMFS would (1) 

determine the standard prices and the 

cost recovery fee percentage; (2) 

announce the standard prices and the 

cost recovery fee percentage in the 

Federal Register; and (3) issue the RQE 

a fee assessment. The RFQ fee 

assessment would be based on the 

number of RFQ pounds added to either 

the Area 2C or 3A charter catch limit 

based on QS holdings as of October 1 of 

the prior year multiplied by the 

standard price for Area 2C or Area 3A, 

and multiplied by the cost recovery fee 

percentage (around 3 percent in recent 

years). The cost recovery fee payment 

from the RQE to NMFS would be due 

by January 31 of each year. 

Based on NMFS policy, only 

‘‘incremental’’ costs, i.e., those incurred 

as a result of IFQ management, are 

assessable as cost recovery fees. The 

costs to develop the regulations, 

accounting, and reporting systems for 

the RQE Program would be considered 

incremental and extensions of the IFQ 

Program and would be recoverable 

under cost recovery. Agency costs 

related to development of the RQE 

Program will be included in the IFQ 

cost recovery fee assessment. Recently, 

the costs to administer the IFQ Program 

has been at or above the 3 percent cost 

recovery fee limit; therefore, additional 

costs due to the development of the RQE 

Program would likely not increase the 

cost recovery fee percentage for IFQ 

permit holders. Additional information 

about assessing cost recovery fees for an 

RQE is provided in Section 4.8.1.5.1 of 

the Analysis. 

NMFS proposes revising regulations 

throughout § 679.45 to incorporate the 

RQE into the IFQ Program cost recovery 

fee estimation and collection process. 

General Reporting 

Because all RFQ would be considered 

landed or used by the RQE in the year 

for which it is issued and the standard 

prices would be applied to pounds of 

RFQ, the RQE would not be required to 

complete the recordkeeping and 

reporting requirements described for the 

IFQ Program at § 679.5(1). The RQE 

would be exempt from submitting the 

IFQ Prior Notice of Landing, Product 

Transfer, IFQ Landing, IFQ 

Transshipment Authorization, and IFQ 

Departure reports. 

Annual Report 

The Council recommended and 

NMFS proposes that the RQE file an 

annual report with the Council by 

January 31 of each year that details the 

administrative activities and business 

operations of the RQE during the prior 

year for each year that it holds 

commercial QS. Although not 

specifically requested by the Council, 

NMFS proposes that the annual report 

also be submitted to NMFS for reasons 

described below. 

The RQE would be required to 

include the following general 

information in its annual report: (1) Any 

changes to the bylaws, board of 

directors, or other key management 

personnel of the RQE during the 

preceding year; (2) amounts and 

descriptions of annual administrative 

expenses; (3) amounts and descriptions 

of funds spent on conservation, 

research, and promotion of the halibut 

resource and a summary of the results; 

and (4) amounts and descriptions of all 

other expenses. Additionally, the RQE 

would be required to submit the 

following information by regulatory 

area: (1) The total amount of halibut QS 

by vessel category and block held by the 

RQE at the start of the calendar year, on 

October 1, and at the end of the calendar 

year; (2) a list of all transfers (purchases, 

sales, and any other transfers) of halibut 

QS, including transaction prices if 

applicable; and (3) the number of CHPs 

and associated angler endorsements 

purchased and held by the RQE. 

The Council did not specify what 

would happen if the RQE did not 

submit a timely and complete annual 

report. Section 679.41(c)(10)(ii) requires 

a CQE to submit a timely and complete 

annual report to NMFS before a transfer 

of QS will be approved or IFQ will be 

issued. NMFS proposes a similar 

requirement for the RQE at new 

paragraph § 679.41(c)(11)(i). If the RQE 

held QS in the previous year and has 

not submitted a timely and complete 

annual report by the January 31 

deadline, NMFS would not approve a 

transfer of QS or issue RFQ until the 

report is submitted. To confirm receipt 

of the report, NMFS is proposing that 

the RQE submit the annual report to 

both the Council and NMFS. NMFS 

seeks public comment on whether these 

requirements, similar to those for CQEs, 

should apply to the RQE. 

NMFS proposes adding § 679.5(v) to 

include the RQE annual report 

requirements. 

Other Regulatory Changes 

NMFS proposes revisions throughout 

the IFQ regulations at 50 CFR part 679 


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that refer to ‘‘an IFQ permit holder’’ to 

also include the term ‘‘RQE’’ where 

applicable. 

NMFS proposes revisions throughout 

50 CFR part 679 that refer to the IFQ 

permit that also pertain to the RQE to 

include the term ‘‘RFQ permit account.’’ 

NMFS proposes these revisions because 

the RQE would not be issued an IFQ 

fishing permit. Instead, NMFS proposes 

establishing an RFQ permit account for 

the RQE that would be used to 

administer RFQ as described in this 

proposed rule. 

NMFS also proposes revisions 

throughout 50 CFR part 679 that refer to 

IFQ to include the term ‘‘RFQ’’ when 

the regulations refer to IFQ and RFQ. 

These minor changes are shown in the 

proposed regulatory text. 

Appeals 

This proposed rule would change 

several references within §§ 679.41 and 

679.45 that describe the former 

procedure for appealing an IAD to the 

NOAA Fisheries’ Alaska Office of 

Administrative Appeals. Those 

procedures were described at to 

§ 679.43. NOAA Fisheries has 

centralized the appeals process in the 

National Appeals Office, which operates 

out of NOAA Fisheries’ headquarters in 

Silver Spring, MD. The National 

Appeals Office is now charged with 

processing appeals that were filed with 

the Office of Administrative Appeals, 

Alaska Region. The procedure for 

appealing an IAD through the National 

Appeals Office is at 15 CFR part 906 (79 

FR 7056, February 6, 2014). This 

proposed rule would update the 

regulations referring to appeals 

procedures for the IFQ Program to refer 

to 15 CFR part 906 instead of to 

§ 679.43. 

Council Intent Regarding the 

Functioning of the RQE 

During the development of the RQE 

Program, the Council and NMFS 

considered, but did not propose 

regulations that would address RQE 

funding, limits on the use of RQE funds, 

and the purchase of CHPs by the RQE. 

This section of the preamble provides 

the public with a description of the 

overall intent of the Council regarding 

RQE funding and limits on the use of 

RQE funds, and notes that NMFS would 

regulate the purchase of CHPs by the 

RQE consistent with existing 

regulations. 

RQE Funding 

The Council did not recommend and 

NMFS does not propose regulations that 

would define the specific type of 

incorporation (e.g., a 501(c)(3) nonprofit corporation) for the RQE. 

Likewise, the Council did not 

recommend and NMFS does not 

propose regulations regarding the 

acquisition of funds the RQE may use to 

purchase QS. Section 4.8.1.1 of the 

Analysis describes the different types of 

non-profit structures that an RQE could 

use, and how those non-profits may use 

and receive funds. 

Limit on Use of RQE Funds 

The Council did not recommend and 

NMFS does not propose regulations 

regarding the use of funds obtained by 

the RQE. However, the Council did 

indicate how funds obtained by the RQE 

could be used to meet the objectives of 

the RQE Program. The Council 

indicated that it intended for the RQE to 

use funds primarily for the acquisition 

of commercial halibut QS; halibut 

conservation and research; promotion of 

the halibut resource; and administrative 

costs. NMFS notes that this proposed 

rule would require the RQE to submit an 

annual report describing its annual 

expenditures (described in a previous 

section of this preamble) to NMFS and 

the Council. Based on information 

received in this annual report, the 

Council could choose to initiate a 

subsequent action that would limit the 

use of funds held by the RQE in the 

future if the RQE’s annual reports 

indicate that RQE funds are being used 

in a manner that is contrary to the 

Council’s intent described above. 

Purchase of Charter Halibut Permits by 

an RQE (§ 300.67) 

The Council did not specify limits on 

the acquisition of CHPs by the RQE; 

therefore, the RQE would be subject to 

regulations that apply to any other 

person, as defined at § 300.61, for 

purposes of purchasing and holding 

CHPs. Section 300.67(j) states that a 

person may not own, hold, or control 

more than five CHPs, with limited 

exceptions. The RQE would be 

authorized to purchase and hold up to 

five transferable CHPs in both regulatory 

areas combined. Any purchases or sales 

of CHPs by the RQE would be required 

to be reported in the RQE’s annual 

report to the Council and NMFS. 

Classification 

Regulations governing the U.S. 

fisheries for Pacific halibut are 

developed by the IPHC, the Pacific 

Fishery Management Council, the North 

Pacific Fishery Management Council, 

and the Secretary of Commerce. Section 

5 of the Halibut Act (16 U.S.C. 773c) 

allows the Regional Council having 

authority for a particular geographical 

area to develop regulations governing 

fishing for halibut in U.S. Convention 

waters as long as those regulations do 

not conflict with IPHC regulations. The 

Halibut Act, at sections 773c(a) and (b), 

provides the Secretary of Commerce 

with the general responsibility to carry 

out the Convention with the authority 

to, in consultation with the Secretary of 

the department in which the U.S. Coast 

Guard is operating, adopt such 

regulations as may be necessary to carry 

out the purposes and objectives of the 

Convention and the Halibut Act. This 

proposed rule is consistent with the 

Halibut Act and other applicable laws. 

This proposed rule has been 

determined to be not significant for the 

purposes of Executive Order 12866. 

Regulatory Impact Review (RIR) 

An RIR was prepared to assess all 

costs and benefits of available regulatory 

alternatives. The RIR considers all 

quantitative and qualitative measures. A 

copy of this analysis is available from 

NMFS (see ADDRESSES). The Council 

recommended and NMFS proposes this 

rule based on those measures that 

maximized net benefits to the Nation. 

Specific aspects of the economic 

analysis are discussed below in the 

Initial Regulatory Flexibility Analysis 

section. 

Initial Regulatory Flexibility Analysis 

An Initial Regulatory Flexibility 

Analysis (IRFA) was prepared for this 

action, as required by section 603 of the 

Regulatory Flexibility Act (RFA). The 

IRFA describes the economic impact 

this proposed rule, if adopted, would 

have on small entities. The IRFA 

describes the action; the reasons why 

this action is proposed; the objectives 

and legal basis for this proposed rule; 

the number and description of directly 

regulated small entities to which this 

proposed rule would apply; the 

recordkeeping, reporting, and other 

compliance requirements of this 

proposed rule; and the relevant Federal 

rules that may duplicate, overlap, or 

conflict with this proposed rule. The 

IRFA also describes significant 

alternatives to this proposed rule that 

would accomplish the stated objectives 

of the Magnuson-Stevens Act, and any 

other applicable statutes, and that 

would minimize any significant 

economic impact of this proposed rule 

on small entities. The description of the 

proposed action, its purpose, and the 

legal basis are explained in the 

preamble and are not repeated here. A 

summary of the IRFA follows. A copy of 

the IRFA is available from NMFS (see 

ADDRESSES). 

The Small Business Administration 

(SBA) criteria for determining whether 


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an entity is ‘‘small’’ for purposes of the 

RFA are discussed in more detail in 

Section 5.3 of the Analysis. The SBA 

has established a small business size 

standard for businesses, including their 

affiliates, whose primary industry is 

‘‘finfish fishing’’ (see 50 CFR 200.2). 

Commercial halibut QS holders are 

considered finfish fishers under the 

RFA. A business primarily involved in 

finfish fishing (North American Industry 

Classification Systems code 11411) is 

classified as a small business if it is 

independently owned and operated, is 

not dominant in its field of operation 

(including its affiliates), and has 

combined annual gross receipts not in 

excess of the applicable size standard 

for all its affiliated operations 

worldwide. On December 29, 2015, 

NMFS issued a final rule establishing 

the small business size standard of $11 

million in annual gross receipts for all 

businesses in the commercial fishing 

industry (80 FR 81194). This new size 

standard applies to all businesses 

included under the North American 

Industry Classification Systems code 

11411 for purposes of RFA compliance 

only. The new size standard became 

effective July 1, 2016, and was used to 

estimate the number of directly 

regulated small entities in this IRFA. 

For this proposed action, the pool of 

small, directly regulated entities would 

be limited to those entities that would 

be engaging in QS transfer (i.e., QS 

holders, including CQEs, and a future 

RQE). CQEs and the proposed RQE 

would be considered a small entity, or 

more specifically, a small organization 

as defined by the RFA. A small 

organization is ‘‘any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field.’’ In addition, no 

CQE has more than $11 million in 

annual gross receipts. The RQE that is 

proposed under this action would not 

be expected to have $11 million in 

annual gross receipts because it does not 

currently hold halibut QS that would 

yield $11 million in annual gross 

receipts. Commercial halibut QS holders 

would also be considered directly 

regulated. Most of the QS holders in the 

halibut IFQ Program are small entities. 

Number and Description of Small 

Entities Regulated by This Proposed 

Rule 

NMFS considers commercial halibut 

fishing vessels as proxies for small 

entities because IFQ from more than one 

QS holder is often fished from the same 

vessel. NMFS estimates that 812 vessels 

across all IPHC regulatory areas landed 

halibut in 2014, the most recent year of 

complete data on the value of halibut 

landings by vessel. Of those, 11 vessels 

would be considered large entities 

because they showed revenues that 

exceeded the $11 million threshold. The 

remaining 801 vessels would be 

considered directly regulated small 

entities for this proposed rule. See 

Section 5.6 of the Analysis for more 

information. 

Description of Significant Alternatives 

That Minimize Adverse Impacts on 

Small Entities 

This proposed action is expected to 

have distributional impacts to the 

identified directly regulated small 

entities. Transfers of QS would be 

voluntary among all the small, directly 

regulated entities identified in the IRFA. 

The preferred alternative is the only 

alternative considered that would give 

current halibut QS holders an additional 

opportunity to transfer their QS and the 

RQE an opportunity to form and obtain 

QS. As noted earlier in this preamble, 

the Council and NMFS considered the 

status quo and the preferred alternative. 

However, under the preferred 

alternative, the Council and NMFS 

considered a wide range of potential 

limitations on the amount and type of 

QS that could be held by the RQE. The 

wide variation in the options considered 

under the preferred alternative provided 

the Council and NMFS with a broad 

range of potential policy choices to 

minimize the adverse impacts. 

Under the preferred alternative, the 

RQE representing the charter fishery 

would not be expected to participate in 

the IFQ Program (and purchase halibut 

QS) if it did not benefit the charter 

fishery as a whole. QS holders, 

including CQEs, would not be expected 

to engage in a QS transaction with the 

RQE if it did not benefit from that 

transfer. However, there is a potential 

for the RQE to affect the QS market by 

increasing competition in the market. 

This increased competition could limit 

the ability for persons in the commercial 

IFQ fishery to expand their QS holdings 

by increasing the market price of QS or 

limiting the amount of QS available to 

commercial QS holders and CQEs. This 

potential negative impact is considered 

in the Regulatory Impact Review 

(Section 4.8.2 of the Analysis). To 

mitigate the expected effects on the QS 

market, the Council recommended and 

NMFS proposes provisions to limit the 

amount and types of QS that could be 

acquired by the RQE, annually and 

cumulatively. 

Specifically, the Council’s preferred 

alternative (and this proposed rule) 

would create an annual transfer 

limitation of 1 percent of the QS in Area 

2C and an annual transfer limitation of 

1.2 percent of the QS in Area 3A. 

Cumulative use limits for the charter 

fishery are proposed to limit the 

combined amount of commercial QS 

held by RQE and transferred under GAF 

(10 percent in Area 2C and 12 percent 

in Area 3A). Proposed transfer limits 

include prohibiting the RQE from 

purchasing D-category QS in Area 3A 

and limiting it to holding 10 percent of 

D-category QS in Area 2C, and 

restricting purchase of B-category QS to 

no more than 10 percent in Area 2C and 

10 percent of B-category QS in Area 2C. 

Block restrictions would prohibit the 

RQE from purchasing small blocks of 

QS. This proposed rule would seek to 

derive the greatest net benefit for small 

regulated entities by increasing market 

opportunities in the charter fishery 

while ameliorating adverse impacts that 

could occur for QS holders and CQEs in 

the commercial IFQ fishery if QS 

holdings by the RQE were not limited. 

Overall, the net benefits to directly 

regulated small entities are expected to 

be positive. 

Duplicate, Overlapping, or Conflicting 

Federal Rules 

NMFS has not identified any 

duplication, overlap, or conflict 

between this proposed action and 

existing Federal rules. 

Recordkeeping, Reporting, and Other 

Compliance Requirements 

The RFA requires a description of the 

projected reporting, recordkeeping, and 

other compliance requirements of the 

proposed rule, including an estimate of 

the classes of small entities that will be 

subject to the requirement and the type 

of professional skills necessary for 

preparation of the report or record. This 

proposed rule would require new 

information collections from an RQE. 

Under this proposed rule, a non-profit 

entity that wants to become an RQE 

would need to complete an application 

and submit it to NMFS for approval. 

This application would require 

submission of the entity’s articles of 

incorporation, the corporate by-laws, a 

list of key personnel, including the 

Board of Directors, officers, 

representatives, and managers. NMFS 

would approve the first complete RQE 

application it receives. 

If the RQE wants to receive or transfer 

halibut QS, it would need to use the 

‘‘Application for Transfer QS To or 

From an RQE’’ available on the NMFS 

Alaska Region Web site at https://

alaskafisheries.noaa.gov/. Additionally, 

the RQE would be required to submit an 

annual report detailing its activities to 

NMFS and the Council. The RQE would 

also be subject to cost recovery fees so 


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it would need to comply with the 

existing cost recovery fee payment 

requirements for IFQ permit holders. 

These recordkeeping and reporting 

requirements are expected to be 

administrative in nature. 

Collection-of-Information Requirements 

This proposed rule contains 

collection-of-information requirements 

subject to review and approval by the 

Office of Management and Budget 

(OMB) under the Paperwork Reduction 

Act (PRA). NMFS has submitted these 

requirements to OMB for approval 

under a temporary new information 

collection, to be merged after approval 

with OMB Control Number 0648–0272. 

Public reporting burden is estimated to 

average per response: 200 hours for 

Application for a Non-Profit 

Corporation to be Designated as a 

Recreational Quota Entity; 2 hours for 

Application for Transfer of QS To or 

From an RQE; 40 hours for RQE Annual 

Report; 1 minute for electronic 

submission of cost recovery fee; and 30 

minutes for non-electronic fee 

submission for IFQ Permit Holder Fee 

Submission Form. Public comment is 

sought regarding: Whether these 

proposed collections of information are 

necessary for the proper performance of 

the functions of the agency, including 

whether the information shall have 

practical utility; the accuracy of the 

burden statement; ways to enhance 

quality, utility, and clarity of the 

information to be collected; and ways to 

minimize the burden of the collection of 

information, including through the use 

of automated collection techniques or 

other forms of information technology. 

Send comments on these or any other 

aspects of the collection of information, 

to NMFS (see ADDRESSES), and by email 

to OIRA_Submission@omb.eop.gov or 

fax to 202– 395–5806. 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to penalty for failure to comply 

with, a collection of information subject 

to the requirement of the PRA, unless 

that collection of information displays a 

currently valid OMB control number. 

All currently approved NOAA 

collections of information may be 

viewed at http://www.cio.noaa.gov/ 

services_programs/prasubs.html. 

List of Subjects 

50 CFR Part 300 

Administrative practice and 

procedure, Antarctica, Canada, Exports, 

Fish, Fisheries, Fishing, Imports, 

Indians, Labeling, Marine resources, 

Reporting and recordkeeping 

requirements, Russian Federation, 

Transportation, Treaties, Wildlife. 

50 CFR Part 679 

Alaska, Fisheries, Reporting and 

recordkeeping requirements. 

Dated: September 25, 2017. 

Samuel D. Rauch, III, 

Deputy Assistant Administrator for 

Regulatory Programs, National Marine 

Fisheries Service. 

For the reasons set out in the 

preamble, 50 CFR parts 300 and 679 are 

proposed to be amended as follows: 

PART 300—INTERNATIONAL 

FISHERIES REGULATIONS 

Subpart E—Pacific Halibut Fisheries 

■ 1. The authority citation for part 300, 

subpart E, continues to read as follows: 

Authority: 16 U.S.C. 773–773k. 

■ 2. In § 300.65: 

■ a. Add paragraph (c)(1)(iii); 

■ b. Revise paragraph (c)(4)(i); and 

■ c. Add paragraphs (c)(4)(iii) and 

(c)(5)(ii)(D)(1)(iv) to read as follows: 

§ 300.65 Catch sharing plan and domestic 

management measures in waters in and off 

Alaska. 

* * * * * 

(c) * * * 

(1) * * * 

(iii) Authorizes the use of 

Commission regulatory areas 2C and 3A 

RFQ resulting from halibut QS held by 

the RQE as authorized in part 679 to this 

title to supplement the annual guided 

sport catch limit in the corresponding 

area, pursuant to paragraph (c)(4) of this 

section. 

* * * * * 

(4) * * * 

(i) The Commission regulatory areas 

2C and 3A annual guided sport catch 

limits are determined by subtracting 

wastage from, and adding any pounds of 

RFQ held by an RQE for that area to, the 

allocations in Tables 3 and 4 of this 

subpart E, adopted by the Commission 

as annual management measures, and 

published in the Federal Register as 

required in § 300.62. 

* * * * * 

(iii) The amount of QS held by the 

RQE for Commission regulatory area 2C 

and 3A as of October 1 each year will 

be the basis for determining the amount 

of RFQ pounds that will be added to the 

annual guided sport catch limit for the 

corresponding area in the upcoming 

year. 

(5) * * * 

(ii) * * * 

(D) * * * 

(1) * * * 

(iv) In the applicable Commission 

regulatory area, either Area 2C or Area 

3A, the sum of IFQ halibut equivalent 

pounds, as defined in § 679.2 of this 

title, from the transfer of IFQ to GAF 

and the pounds of RFQ issued to the 

RQE during a calendar year does not 

exceed an amount that is greater than 

the amount derived from: 

(A) 5,947,740 units of Area 2C QS; or 

(B) 22,187,161 units of Area 3A QS. 

* * * * * 

PART 679—FISHERIES OF THE 

EXCLUSIVE ECONOMIC ZONE OFF 

ALASKA 

■ 3. The authority citation for part 679 

continues to read as follows: 

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

seq.; 3631 et seq.; Pub. L. 108–447; Pub. L. 

111–281. 

■ 4. In § 679.2, add definitions for 

‘‘Recreational Fishing Quota (RFQ)’’ and 

‘‘Recreational Quota Entity (RQE)’’ in 

alphabetical order to read as follows: 

§ 679.2 Definitions. 

* * * * * 

Recreational Fishing Quota (RFQ) 

means the pounds of halibut issued 

annually to a Recreational Quota Entity 

to supplement the annual guided sport 

catch limit under the catch sharing plan 

for IFQ regulatory areas 2C and 3A 

pursuant to § 300.65(c) of this title. 

Recreational Quota Entity (RQE) 

means a non-profit entity incorporated 

under the laws of the State of Alaska, 

recognized as exempt from federal 

income tax by the Internal Revenue 

Service, and authorized by NMFS to 

participate in the Halibut IFQ Program 

to hold commercial halibut quota share 

to supplement the annual guided sport 

catch limit in IFQ regulatory areas 2C 

and 3A under the catch sharing plan 

pursuant to § 300.65(c) of this title. 

NMFS will authorize only one RQE at 

a time. 

* * * * * 

■ 5. In § 679.4, add paragraph (d)(1)(iv) 

to read as follows: 

§ 679.4 Permits. 

* * * * * 

(d) * * * 

(1) * * * 

(iv) RFQ permit account. An RFQ 

permit account identifies the amount of 

RFQ authorized for use by charter vessel 

anglers in Area 2C or Area 3A. The 

number of pounds of RFQ allocated to 

the RFQ permit account will be added 

to the annual guided sport catch limit 

under the catch sharing plan (described 

at 50 CFR 300.65(c)) for the appropriate 

IFQ regulatory area, Area 2C or Area 3A. 

* * * * * 


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■ 6. In § 679.5: 

■ a. Revise paragraphs (l)(7)(ii)(A) and 

(l)(7)(ii)(C) and (D); and 

■ b. Add paragraphs (l)(9) and (v) to 

read as follows: 

§ 679.5 Recordkeeping and reporting 

(R&R). 

* * * * * 

(l) * * * 

(7) * * * 

(ii) * * * 

(A) Applicability. An IFQ permit 

holder who holds an IFQ permit against 

which a landing was made or an RQE 

that holds RFQ must submit to NMFS a 

complete IFQ Permit Holder Fee 

Submission Form provided by NMFS. 

* * * * * 

(C) Completed application. NMFS 

will process an IFQ Permit Holder Fee 

Submission Form provided that a paper 

or electronic form is completed by the 

IFQ permit holder or an RQE that holds 

RFQ, with all applicable fields 

accurately filled in, and all required 

additional documentation is attached. 

(D) IFQ landing summary and 

estimated fee liability. NMFS will 

provide to an IFQ permit holder and an 

RQE that holds RFQ an IFQ Landing 

and Estimated Fee Liability page as 

required by § 679.45(a)(2). The IFQ 

permit holder must either accept the 

accuracy of the NMFS estimated fee 

liability associated with his or her IFQ 

landings for each IFQ permit, or 

calculate a revised IFQ fee liability in 

accordance with paragraph (l)(7)(ii)(E) 

of this section. The IFQ permit holder 

may calculate a revised fee liability for 

all or part of his or her IFQ landings. 

* * * * * 

(9) An annual report on RQE activities 

must be submitted to NMFS by the RQE 

as required at § 679.5(v). 

* * * * * 

(v) Recreational Quota Entity Program 

Annual Report—(1) Applicability. The 

RQE must submit a timely and complete 

annual report on the RQE’s 

administrative activities and business 

operation for each calendar year that it 

holds halibut recreational fishing quota 

(RFQ) and quota shares (QS). The RQE 

may combine annual reports on its 

holdings of halibut QS and RFQ for IFQ 

regulatory areas 2C and 3A into one 

report. The RQE must submit annual 

report data for the halibut QS and RFQ 

it held during the calendar year. The 

RQE is not required to submit an annual 

report for any calendar year in which it 

did not hold any halibut QS or RFQ. 

(2) Time limits and submittal. By 

January 31, the RQE must submit a 

complete annual report for the prior 

calendar year to the North Pacific 

Fishery Management Council, 605 West 

4th Ave., Suite 306, Anchorage, AK 

99501–2252, and to NMFS-Alaska 

Regional Administrator, P.O. Box 21668, 

Juneau, AK 99802–1668. 

(3) Complete annual report. A 

complete annual report contains all 

general report requirements described in 

paragraphs (v)(4)(i) through (v)(4)(iv) of 

this section, and all information specific 

to IFQ regulatory areas 2C and 3A 

described in paragraphs (v)(5)(i) through 

(v)(5)(iii) of this section. 

(4) General report requirements. The 

RQE must annually report the following 

information: 

(i) Any changes to the bylaws, board 

of directors, or other key management 

personnel of the RQE from the 

preceding year; 

(ii) Amount and description of annual 

administrative expenses; 

(iii) Amount and description of funds 

spent on conservation and research, 

including a summary of the results of 

those expenditures; and 

(iv) Amount and description of all 

other expenses incurred by the RQE. 

(5) Information by IFQ regulatory 

area. For each IFQ regulatory area 

represented by the RQE, the RQE must 

annually report the following 

information: 

(i) The total amount of halibut QS by 

category and blocks held by the RQE at 

the start of the calendar year, on October 

1, and at the end of the calendar year; 

(ii) A list of all transfers (purchases or 

sales) of halibut QS, including the 

transaction price; and 

(iii) A description of the number of 

charter halibut permits and number of 

angler endorsements purchased and 

held by the RQE. 

■ 7. In § 679.7, add paragraph (f)(3)(i)(C) 

to read as follows: 

§ 679.7 Prohibitions. 

* * * * * 

(f) * * * 

(3) * * * 

(i) * * * 

(C) Use fixed gear as defined in 

§ 679.2 to retain halibut RFQ. 

* * * * * 

■ 8. In § 679.40: 

■ a. Revise paragraph (b); 

■ b. Revise paragraph (c) heading and 

paragraph (c)(2); 

■ c. Add paragraphs (c)(4) and (g)(2)(iii); 

■ d. Revise paragraph (h)(3) 

introductory text; and 

■ e. Add paragraph (h)(3)(iii) to read as 

follows: 

§ 679.40 Sablefish and halibut QS. 

* * * * * 

(b) Annual allocation of IFQ and RFQ. 

The Regional Administrator shall assign 

halibut or sablefish IFQs to each person, 

except the RQE, holding unrestricted QS 

halibut or sablefish, respectively, up to 

the limits prescribed in § 679.42(e) and 

(f). Each assigned IFQ will be specific to 

an IFQ regulatory area and vessel 

category, and will represent the 

maximum amount of halibut or 

sablefish that may be harvested from the 

specified IFQ regulatory area and by the 

person to whom it is assigned during 

the specified fishing year, unless the 

IFQ assignment is changed by the 

Regional Administrator within the 

fishing year because of an approved 

transfer or because all or part of the IFQ 

is sanctioned for violating rules of this 

part. The Regional Administrator shall 

assign RFQ to the RQE pursuant to 

paragraph (c)(4) of this section. 

(c) Calculation of annual IFQ and 

RFQ allocations. 

* * * * * 

(2) QS amounts. For purposes of 

calculating IFQs and RFQ for any 

fishing year, the amount of a person’s 

QS and the amount of the QS pool for 

any IFQ regulatory area will be the 

amounts on record with the Alaska 

Region, NMFS, on January 15 of that 

year. 

* * * * * 

(4) RFQ allocation to RQE—(i) RQE 

QS amounts. For purposes of 

calculating RFQ for any fishing year, the 

amount of halibut QS held by the RQE 

for either IFQ regulatory area 2C or 3A 

for the corresponding IFQ regulatory 

area will be the amounts on record with 

the Alaska Region, NMFS on October 1 

of the year prior. 

(ii) Calculation of RFQ. The annual 

allocation of RFQ halibut to an RQE 

(person r) in IFQ regulatory area 2C or 

3A (area a) will be equal to the product 

of the annual commercial catch limit as 

defined in § 300.61 of this title, and the 

QS held by the RQE (specified in 

paragraph (c)(4)(i) of this section) 

divided by the QS pool for that area 

(specified in paragraph (c)(2) of this 

section). No overage or underage 

adjustments will be applied to the 

RQE’s annual RFQ. Expressed 

algebraically, the annual RFQ halibut 

allocation formula is as follows: 

RFQra = [fixed gear TACa × (QSra/QS 

poola)] 

(iii) Excess RFQ. NMFS will not issue 

the RQE any excess RFQ. Excess RFQ is 

the difference between the amount of 

RFQ based on the QS held by the RQE 

and the amount of RFQ needed to 

provide charter fishery management 

measures that are equivalent to 

unguided recreational fishery 

management measures. If the annual 

management measures published 


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pursuant to § 300.62 of this title specify 

charter fishery management measures 

that are equivalent to the unguided 

recreational management measures, 

NMFS will: 

(A) Calculate the annual allocation of 

halibut RFQ to the RQE as specified in 

paragraph (c)(4)(ii) of this section; 

(B) Determine the amount of RFQ 

needed to supplement the annual 

guided sport catch limit from the CSP in 

Area 2C and Area 3A (described in 

§ 300.65(c)) to account for charter 

fishery harvests under the charter 

fishery management measures specified 

in the annual management measures 

and issue that amount of RFQ to the 

RFQ permit account. 

(C) Calculate the amount of excess 

RFQ by subtracting the amount of RFQ 

issued as determined in paragraph 

(c)(4)(iii)(B) of this section from the 

annual calculation of RFQ halibut to the 

RQE as calculated in paragraph 

(c)(4)(iii)(A) of this section. 

(iv) Redistribution of excess RFQ. 

Excess pounds of RFQ will be 

redistributed as IFQ as follows: 

(A) 50 percent to all catcher vessel QS 

holders in the applicable area who held 

not more than 32,333 QS units in Area 

2C, and 47,469 QS units in Area 3A in 

the current calendar year and in the 

calendar year prior to the redistribution, 

in proportion to their QS holdings; and 

(B) 50 percent divided equally among 

all CQEs that held halibut QS in the 

applicable IFQ regulatory area (Area 2C 

or Area 3A) in the current calendar year 

and in the calendar year prior to the 

redistribution. If no CQE held QS in the 

applicable IFQ regulatory area (Area 2C 

and Area 3A) in the current calendar 

year and in the calendar year prior to 

the redistribution, that RFQ will not be 

redistributed as IFQ and will not be 

available for use by any CQE, IFQ 

permit holder, or RQE in that calendar 

year. 

* * * * * 

(g) * * * 

(2) * * * 

(iii) The fish will not be calculated as 

part of the recreational harvest of 

halibut and will not be debited against 

the RFQ permit account or the annual 

guided sport catch limit as defined in 

§ 300.61 of this title. 

* * * * * 

(h) * * * 

(3) Source of debit. NMFS will use the 

following sources (see paragraphs 

(h)(3)(i), (ii) and (iii) of this section) of 

information to debit a CDQ halibut, IFQ 

halibut, IFQ sablefish, or RFQ permit 

account: 

* * * * * 

(iii) All annual RFQ halibut issued to 

an RQE will be considered landed in the 

year for which it is issued. 

■ 9. In § 679.41: 

■ a. Redesignate paragraph (c)(11) as 

(c)(12); 

■ b. Add new paragraph (c)(11); 

■ c. Revise paragraphs (d)(1) and (g)(1); 

and 

■ d. Add paragraphs (g)(9) through (11), 

and (n) to read as follows: 

§ 679.41 Transfer of quota shares and IFQ. 

* * * * * 

(c) * * * 

(11) If the person applying to receive 

or transfer QS is an RQE, the following 

determinations are required: 

(i) The RQE applying to receive or 

transfer QS, has submitted the timely 

and complete annual report required by 

§ 679.5(v); 

(ii) The RQE applying to receive QS 

is eligible to hold QS on behalf of the 

charter halibut sector in IFQ regulatory 

area 2C or 3A; and 

(iii) The RQE applying to receive QS 

has received notification of approval of 

eligibility to receive QS on behalf of the 

charter halibut sector in IFQ regulatory 

area 2C or 3A as described in paragraph 

(d)(1) of this section. 

* * * * * 

(d) * * * 

(1) Application for Eligibility. All 

persons applying to receive QS or IFQ 

must submit an Application for 

Eligibility to Receive QS/IFQ 

(Application for Eligibility) containing 

accurate information to the Regional 

Administrator. An Application for 

Eligibility to Receive QS/IFQ 

(Application for Eligibility) is not 

required for a CQE if a complete 

application to become a CQE, as 

described in paragraph (l)(3) of this 

section, has been approved by the 

Regional Administrator on behalf of an 

eligible community. An Application for 

Eligibility to Receive QS/IFQ 

(Application for Eligibility) is not 

required for the RQE if a complete 

application to become an RQE, as 

described in paragraph (n)(2) of this 

section, has been approved by the 

Regional Administrator. The Regional 

Administrator will not approve a 

transfer of IFQ or QS to a person until 

the Application for Eligibility for that 

person is approved by the Regional 

Administrator. The Regional 

Administrator will provide an 

Application for Eligibility form to any 

person on request. 

* * * * * 

(g) * * * 

(1) Except as provided in paragraph 

(f), paragraph (g)(2), paragraph (l), or 

paragraph (n) of this section, only 

persons who are IFQ crew members, or 

who were initially issued QS assigned 

to vessel categories B, C, or D, and meet 

the eligibility requirements in this 

section, may receive by transfer QS 

assigned to vessel categories B, C, or D, 

or the IFQ resulting from it. 

* * * * * 

(9) For transfers of QS to an RQE, the 

RQE may only receive halibut QS that 

is assigned to IFQ regulatory area 2C or 

3A. 

(10) For transfers of QS from an RQE: 

(i) Quota category and block 

designations at time of purchase by an 

RQE are retained if QS is transferred to 

an eligible QS holder for use in the IFQ 

program. 

(ii) NMFS will not issue any IFQ from 

any QS transferred from an RQE to a QS 

holder for use in the IFQ program for a 

calendar year if that QS resulted in the 

issuance of RFQ to an RQE during that 

calendar year. 

(11) RQE eligibility. (i) To maintain 

eligibility as the RQE authorized by 

NMFS, the RQE must be a non-profit 

entity incorporated under the laws of 

the State of Alaska and recognized as 

exempt from federal income tax by the 

Internal Revenue Service as required by 

paragraph (n)(1)(i) of this section. 

(ii) If the Regional Administrator 

determines the RQE approved by NMFS 

does not meet the requirement specified 

in in paragraph (n)(1)(i) of this section, 

NMFS will notify the RQE of the 

Regional Administrator’s determination 

and specify that the RQE has 60 days to 

meet the requirement in paragraphs 

(n)(1)(i) of this section to maintain 

eligibility as the RQE authorized by 

NMFS. 

(iii) If the RQE demonstrates to NMFS 

within 60 days of notification that it 

meets the requirement in paragraphs 

(n)(1)(i) of this section, NMFS will 

notify the RQE that it remains the 

authorized RQE. 

(iv) If the RQE does not demonstrate 

to NMFS within 60 days of notification 

that it meets the requirement in 

paragraphs (n)(1)(i) of this section, 

NMFS will issue an initial 

administrative determination (IAD): 

(A) Revoking authorization of the 

RQE; 

(B) Disallowing the RQE from 

receiving any QS by transfer; 

(C) Requiring the CQE to divest of any 

QS that it holds; and 

(D) Withholding the issuance of RFQ 

based on any QS that the RQE holds. 

(v) The RQE would have the 

opportunity to appeal the IAD through 

the National Appeals Office under the 


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46032 Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Proposed Rules 

provisions established at 15 CFR part 

906. 

* * * * * 

(n) Transfer of halibut QS to an 

RQE—(1) RQE Organizational Structure. 

(i) The RQE will be a single entity 

representing IFQ regulatory Areas 2C 

and 3A. 

(ii) The RQE will be a non-profit 

entity incorporated under the laws of 

the State of Alaska and recognized as 

exempt from federal income tax by the 

Internal Revenue Service; and 

(iii) The RQE will submit an annual 

report to NMFS and the Council 

detailing RQE activities during the prior 

year according to § 679.5(v). 

(2) Application for Eligibility. Prior to 

initially receiving QS by transfer, a nonprofit entity that intends to participate 

in the Halibut IFQ Program and 

purchase and hold halibut QS in Area 

2C and Area 3A as the RQE must have 

approval from the Regional 

Administrator. To receive that approval, 

the non-profit entity seeking to become 

an RQE must submit a complete 

‘‘Application for a Non-Profit Entity to 

be Designated as a Recreational Quota 

Entity (RQE)’’ (available on the NMFS 

Alaska Region Web site at https://

alaskafisheries.noaa.gov/). NMFS will 

approve only one entity as the RQE. A 

complete application to become an RQE 

must include: 

(i) The articles of incorporation under 

the laws of the State of Alaska for that 

non-profit entity; 

(ii) Acknowledgement from the 

Internal Revenue Service that the nonprofit entity is exempt from federal 

income tax under section 501(a) of the 

Internal Revenue Code; 

(iii) Management organization 

information, including: 

(A) The bylaws of the non-profit 

entity; 

(B) A list of key personnel of the 

managing organization including, but 

not limited to, the RQE board of 

directors, officers, representatives, and 

any managers; 

(C) A description of how the nonprofit entity is qualified to manage QS 

on behalf of charter fishery participants 

and a demonstration that the non-profit 

entity has the management, technical 

expertise, and ability to manage QS and 

RFQ; 

(D) The name of the non-profit 

organization, taxpayer ID number, 

NMFS person number, permanent 

business mailing addresses, name of 

contact persons and additional contact 

information of the managing personnel 

for the non-profit entity, resumes of 

management personnel, name and 

notarized signature of applicant, and 

Notary Public signature and date when 

commission expires; 

(iv) A statement describing the 

procedures that will be used to 

determine the acquisition of funds to 

purchase QS. 

(3) Address for submittal of 

application: Regional Administrator, 

NMFS, P.O. Box 21668, Juneau, AK 

99802. 

(4) Approval. NMFS will approve the 

first complete application received. If an 

application is approved, NMFS will 

notify the RQE by mail, unless another 

mode of communication is requested on 

the application. 

(5) Disapproval. If an application is 

disapproved, that determination may be 

appealed under the provisions 

established at 15 CFR part 906. 

■ 10. In § 679.42: 

■ a. Add paragraph (a)(2)(v); 

■ b. Revise paragraph (f)(1) introductory 

text; and 

■ c. Add paragraphs (f)(8) and (g)(1)(iii) 

to read as follows: 

§ 679.42 Limitations on use of QS and IFQ. 

(a) * * * 

(2) * * * 

(v) In IFQ regulatory areas 2C and 3A, 

RFQ held by an RQE may be harvested 

aboard charter vessels as defined at 50 

CFR 300.61 of any size, regardless of the 

QS category from which that RFQ 

originated. 

* * * * * 

(f) * * * 

(1) Unless the amount in excess of the 

following limits was received in the 

initial allocation of halibut QS, no 

person other than a CQE representing 

the community of Adak, AK, 

individually or collectively, or an RQE, 

may use more than: 

* * * * * 

(8) RQE use limits—(i) Annual 

transfer limits. The RQE may not receive 

by transfer more than 594,774 units of 

Area 2C halibut QS and more than 

2,218,716 units of Area 3A halibut QS 

in a year. 

(ii) Cumulative use limits. The RQE 

may not hold more than 5,947,740 units 

of Area 2C halibut QS and more than 

22,187,161 units of Area 3A halibut QS. 

(iii) Vessel category restrictions. (A) 

The RQE may not hold more than 

889,548 units of halibut QS in IFQ 

regulatory area 2C that is assigned to 

vessel category D. 

(B) The RQE may not hold halibut QS 

in IFQ regulatory area 3A that is 

assigned to vessel category D. 

(C) The RQE may not hold more than 

265,524 units of halibut QS that is 

assigned to vessel category B in IFQ 

regulatory area 2C. 

(g) * * * 

(1) * * * 

(iii) The RQE is limited to receiving: 

(A) Transfers of halibut QS blocks of 

less than or equal to 24,250 quota share 

units in IFQ regulatory area 2C. 

(B) Transfers of halibut QS blocks of 

less than or equal to 35,620 quota share 

units in IFQ regulatory area 3A. 

* * * * * 

■ 11. In § 679.45: 

■ a. Revise paragraphs (a)(1), (a)(2)(i) 

introductory text, and (a)(2)(i)(A); 

■ b. Add paragraphs (a)(2)(i)(B)(3) and 

(a)(2)(i)(D); and 

■ c. Revise paragraphs (a)(3), (a)(4)(i), 

(b)(1), and (f)(2) to read as follows: 

§ 679.45 IFQ cost recovery program. 

(a) * * * 

(1) Responsibility. An IFQ permit 

holder is responsible for cost recovery 

fees for landings of his or her IFQ 

halibut and sablefish, including any 

halibut landed as guided angler fish 

(GAF), as defined in § 300.61 of this 

title, derived from his or her IFQ 

accounts. An RQE is responsible for cost 

recovery fees for all RFQ issued to the 

RQE. An IFQ permit holder or RQE 

must comply with the requirements of 

this section. 

(2) * * * 

(i) General. IFQ fee liability means a 

cost recovery liability based on either 

the value of all landed IFQ and GAF 

derived from the permit holder’s IFQ 

permit(s), or the value of all RFQ issued 

to an RQE. 

(A) Each year, the Regional 

Administrator will issue each IFQ 

permit holder a summary of his or her 

IFQ equivalent pounds landed as IFQ 

and GAF and will issue an RQE a 

summary of its RFQ pounds issued as 

part of the IFQ Landing and Estimated 

Fee Liability page described at 

§ 679.5(l)(7)(ii)(D). 

(B) * * * 

(3) All RFQ issued to an RQE in IFQ 

regulatory area 2C or 3A will be 

assessed at the IFQ regulatory area 2C or 

3A IFQ standard ex-vessel value. 

* * * * * 

(D) An RQE may not challenge the 

standard ex-vessel value used to 

determine the fee liability for all RFQ 

issued to the RQE. 

* * * * * 

(3) Fee Collection. (i) An IFQ permit 

holder with IFQ and/or GAF landings is 

responsible for collecting his or her own 

fee during the calendar year in which 

the IFQ fish and/or GAF are landed. 

(ii) An RQE is responsible for 

collecting its own fees during the 

calendar year in which the RFQ is 

issued to the RQE. 


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(4) * * * 

(i) Payment due date. An IFQ permit 

holder or RQE must submit its IFQ fee 

liability payment(s) to NMFS at the 

address provided at paragraph (a)(4)(iii) 

of this section not later than January 31 

of the year following the calendar year 

in which the IFQ or GAF landings were 

made or the RFQ was issued to the RQE. 

(b) * * * 

(1) General. (i) An IFQ permit holder 

must use either the IFQ actual ex-vessel 

value or the IFQ standard ex-vessel 

value when determining the IFQ fee 

liability based on ex-vessel value, 

except that landed GAF are assessed at 

the standard ex-vessel values derived by 

NMFS. An IFQ permit holder must base 

all fee liability calculations on the exvessel value that correlates to landed 

IFQ in IFQ equivalent pounds. 

(ii) An RQE must use the IFQ 

standard ex-vessel value derived by 

NMFS for all RFQ issued to the RQE. 

* * * * * 

(f) * * * 

(2) After the expiration of the 30-day 

period, the Regional Administrator will 

evaluate any additional documentation 

submitted by an IFQ permit holder or 

RQE in support of its payment. If the 

Regional Administrator determines that 

the additional documentation does not 

meet the burden of proving the payment 

is correct, the Regional Administrator 

will send the IFQ permit holder or RQE 

an IAD indicating that the IFQ permit 

holder or RQE did not meet the burden 

of proof to change the IFQ fee liability 

as calculated by the Regional 

Administrator based upon the IFQ 

standard ex-vessel value. The IAD will 

set out the facts and indicate the 

deficiencies in the documentation 

submitted by the IFQ permit holder or 

RQE. An IFQ permit holder or RQE who 

receives an IAD may appeal the IAD, as 

described in paragraph (h) of this 

section. 

* * * * * 

§§ 679.41 and 679.45 [Amended] 

■ 12. In the table below, for each section 

indicated in the ‘‘Location’’ column, 

remove the title indicated in the 

‘‘Remove’’ column from wherever it 

appears in the section, and add the title 

indicated in the ‘‘Add’’ column: 

Location Remove Add 

§ 679.41(l)(3) introductory text, and 

(l)(3)(v)(E)(3).

50 CFR 679.43 15 CFR part 906 

§ 679.41(m)(5)(ii) ................................................ § 679.43 15 CFR part 906 

§ 679.45(b)(2) ..................................................... landed as GAF. landed as GAF or issued as RFQ. 

§ 679.45(b)(3)(ii) ................................................. landed GAF landed GAF and RFQ issued to an RQE. 

§ 679.45(b)(3)(v) introductory text ...................... aggregated IFQ regulatory area 2C or 3A, to 

GAF landings. 

aggregated by IFQ regulatory area 2C or 3A, 

to GAF landings and RFQ issued to an 

RQE. 

§ 679.45(d)(2)(i)(A) and (B) ................................ IFQ and GAF IFQ, RFQ, and GAF 

§ 679.45(d)(2)(i)(C) ............................................. include GAF costs. include RQE and GAF costs. 

§ 679.45(d)(2)(ii) ................................................. as commercial catch or as GAF as commercial catch, RFQ, or GAF 

§ 679.45(d)(4) ..................................................... IFQ and GAF IFQ, RFQ, and GAF 

§ 679.45(d)(4), (e)(1) introductory text, (e)(1)(ii), 

and (f)(1)(i).

IFQ permit holder IFQ permit holder or RQE 

§ 679.45(e)(1)(i), and (e)(1)(ii) ............................ IFQ permit holder IFQ permit holder or RQE 

§ 679.45(e)(1)(i) .................................................. the IFQ permit holder’s estimated fee liability the estimated fee liability 

§ 679.45(e)(2) ..................................................... IFQ fishing permit held IFQ fishing permit or RFQ permit account 

held 

§ 679.45(e)(2), (f)(1)(ii), and (f)(5) ...................... IFQ permit holder IFQ permit holder or RQE 

§ 679.45(f)(1) introductory text ........................... IFQ permit holder has IFQ permit holder or RQE has 

§ 679.45(f)(3) ...................................................... § 679.43 15 CFR part 906 

§ 679.45(f)(4) ...................................................... the IFQ permit holder must pay the IFQ permit holder or RQE must pay 

§ 679.45(g) .......................................................... IFQ permit holder unless the permit holder requests IFQ permit holder or RQE unless the IFQ permit holder or RQE requests 

§ 679.45(g) .......................................................... IFQ permit holder’s IFQ permit holder’s or RQE’s 

§ 679.45(h) .......................................................... § 679.43 15 CFR part 906 

[FR Doc. 2017–20894 Filed 10–2–17; 8:45 am] 

BILLING CODE 3510–22–P 


asabaliauskas on DSKBBXCHB2PROD with PROPOSALS