[Federal Register Volume 82, Number 190 (Tuesday, October 3, 2017)]
[Proposed Rules]
[Pages 46016-46033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20894]



[[Page 46016]]

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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.

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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:
    <bullet> 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.
    <bullet> 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 
<a href="/cdn-cgi/l/email-protection#df90968d9e808caabdb2b6acacb6b0b19fb0b2bdf1bab0aff1b8b0a9"><span class="__cf_email__" data-cfemail="014e4853405e5274636c687272686e6f416e6c632f646e712f666e77">[email protected]</span></a>; or by fax to 202-395-5806.

FOR FURTHER INFORMATION CONTACT: Kurt Iverson, 907-586-7228, 
<a href="/cdn-cgi/l/email-protection#08437d7a7c26417e6d7a7b67664866676969266f677e"><span class="__cf_email__" data-cfemail="7d36080f0953340b180f0e12133d13121c1c531a120b">[email protected]</span></a>.

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

[[Page 46017]]

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 two-fish 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 Sec. Sec.  
300.65, 300.66, and 300.67. Additional details on the development and 
rationale for the CHLAP can be found in the proposed

[[Page 46018]]

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. Fishery-specific 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 Sec. Sec.  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 self-reported 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 A-category for freezer catcher-processor 
vessels; B-category for vessels greater than 60 ft length overall 
(LOA); C-category 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

[[Page 46020]]

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

[[Page 46021]]

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[hyphen]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 Sec.  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. Non-profit 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 tax-exempt 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[hyphen]officio (non-voting) 
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

[[Page 46022]]

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[hyphen]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 Non-profit 
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 Sec.  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 Sec.  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 Sec.  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

[[Page 46023]]

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 Sec.  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 Sec.  
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 B-category 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

[[Page 46024]]

acquiring D-category shares is intended to maintain vessel size 
diversity in the commercial fleet. Additionally, the Council and NMFS 
noted that D-category 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 D-category 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 C-category 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 Sec.  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 Sec.  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 Sec.  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 Sec.  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

[[Page 46025]]

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 Sec.  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

[[Page 46026]]

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 Sec.  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 Sec.  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 Sec.  
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 Sec.  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

[[Page 46027]]

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 
Sec. Sec.  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 Sec.  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 Sec.  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) 
non-profit 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 (Sec.  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 Sec.  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

[[Page 46028]]

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

[[Page 46029]]

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 <a href="/cdn-cgi/l/email-protection#652a2c37243a361007080c16160c0a0b250a08074b000a154b020a13"><span class="__cf_email__" data-cfemail="e2adabb0a3bdb197808f8b91918b8d8ca28d8f80cc878d92cc858d94">[email protected]</span></a> 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

0
1. The authority citation for part 300, subpart E, continues to read as 
follows:

    Authority: 16 U.S.C. 773-773k.

0
2. In Sec.  300.65:
0
a. Add paragraph (c)(1)(iii);
0
b. Revise paragraph (c)(4)(i); and
0
c. Add paragraphs (c)(4)(iii) and (c)(5)(ii)(D)(1)(iv) to read as 
follows:


Sec.  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 Sec.  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 
Sec.  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

0
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.

0
4. In Sec.  679.2, add definitions for ``Recreational Fishing Quota 
(RFQ)'' and ``Recreational Quota Entity (RQE)'' in alphabetical order 
to read as follows:


Sec.  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 Sec.  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 Sec.  300.65(c) of this title. NMFS will authorize 
only one RQE at a time.
* * * * *
0
5. In Sec.  679.4, add paragraph (d)(1)(iv) to read as follows:


Sec.  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.
* * * * *

[[Page 46030]]

0
6. In Sec.  679.5:
0
a. Revise paragraphs (l)(7)(ii)(A) and (l)(7)(ii)(C) and (D); and
0
b. Add paragraphs (l)(9) and (v) to read as follows:


Sec.  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 Sec.  
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 Sec.  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.
0
7. In Sec.  679.7, add paragraph (f)(3)(i)(C) to read as follows:


Sec.  679.7  Prohibitions.

* * * * *
    (f) * * *
    (3) * * *
    (i) * * *
    (C) Use fixed gear as defined in Sec.  679.2 to retain halibut RFQ.
* * * * *
0
8. In Sec.  679.40:
0
a. Revise paragraph (b);
0
b. Revise paragraph (c) heading and paragraph (c)(2);
0
c. Add paragraphs (c)(4) and (g)(2)(iii);
0
d. Revise paragraph (h)(3) introductory text; and
0
e. Add paragraph (h)(3)(iii) to read as follows:


Sec.  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 Sec.  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 Sec.  
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:

RFQ<INF>ra</INF> = [fixed gear TAC<INF>a</INF> x (QS<INF>ra</INF>/QS 
pool<INF>a</INF>)]

    (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

[[Page 46031]]

pursuant to Sec.  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 Sec.  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 Sec.  
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.
0
9. In Sec.  679.41:
0
a. Redesignate paragraph (c)(11) as (c)(12);
0
b. Add new paragraph (c)(11);
0
c. Revise paragraphs (d)(1) and (g)(1); and
0
d. Add paragraphs (g)(9) through (11), and (n) to read as follows:


Sec.  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 Sec.  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

[[Page 46032]]

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 Sec.  
679.5(v).
    (2) Application for Eligibility. Prior to initially receiving QS by 
transfer, a non-profit 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 
non-profit 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 non-profit 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.
0
10. In Sec.  679.42:
0
a. Add paragraph (a)(2)(v);
0
b. Revise paragraph (f)(1) introductory text; and
0
c. Add paragraphs (f)(8) and (g)(1)(iii) to read as follows:


Sec.  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.
* * * * *
0
11. In Sec.  679.45:
0
a. Revise paragraphs (a)(1), (a)(2)(i) introductory text, and 
(a)(2)(i)(A);
0
b. Add paragraphs (a)(2)(i)(B)(3) and (a)(2)(i)(D); and
0
c. Revise paragraphs (a)(3), (a)(4)(i), (b)(1), and (f)(2) to read as 
follows:


Sec.  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 
Sec.  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 
Sec.  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.

[[Page 46033]]

    (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 ex-vessel 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.
* * * * *


Sec. Sec.  679.41 and 679.45   [Amended]

0
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
----------------------------------------------------------------------------------------------------------------
Sec.   679.41(l)(3) introductory       50 CFR 679.43                               15 CFR part 906
 text, and (l)(3)(v)(E)(3).
Sec.   679.41(m)(5)(ii)..............  Sec.   679.43                               15 CFR part 906
Sec.   679.45(b)(2)..................  landed as GAF.                              landed as GAF or issued as
                                                                                    RFQ.
Sec.   679.45(b)(3)(ii)..............  landed GAF                                  landed GAF and RFQ issued to
                                                                                    an RQE.
Sec.   679.45(b)(3)(v) introductory    aggregated IFQ regulatory area 2C or 3A,    aggregated by IFQ regulatory
 text.                                  to GAF landings.                            area 2C or 3A, to GAF
                                                                                    landings and RFQ issued to
                                                                                    an RQE.
Sec.   679.45(d)(2)(i)(A) and (B)....  IFQ and GAF                                 IFQ, RFQ, and GAF
Sec.   679.45(d)(2)(i)(C)............  include GAF costs.                          include RQE and GAF costs.
Sec.   679.45(d)(2)(ii)..............  as commercial catch or as GAF               as commercial catch, RFQ, or
                                                                                    GAF
Sec.   679.45(d)(4)..................  IFQ and GAF                                 IFQ, RFQ, and GAF
Sec.   679.45(d)(4), (e)(1)            IFQ permit holder                           IFQ permit holder or RQE
 introductory text, (e)(1)(ii), and
 (f)(1)(i).
Sec.   679.45(e)(1)(i), and            IFQ permit holder                           IFQ permit holder or RQE
 (e)(1)(ii).
Sec.   679.45(e)(1)(i)...............  the IFQ permit holder's estimated fee       the estimated fee liability
                                        liability
Sec.   679.45(e)(2)..................  IFQ fishing permit held                     IFQ fishing permit or RFQ
                                                                                    permit account held
Sec.   679.45(e)(2), (f)(1)(ii), and   IFQ permit holder                           IFQ permit holder or RQE
 (f)(5).
Sec.   679.45(f)(1) introductory text  IFQ permit holder has                       IFQ permit holder or RQE has
Sec.   679.45(f)(3)..................  Sec.   679.43                               15 CFR part 906
Sec.   679.45(f)(4)..................  the IFQ permit holder must pay              the IFQ permit holder or RQE
                                                                                    must pay
Sec.   679.45(g).....................  IFQ permit holder unless the permit holder  IFQ permit holder or RQE
                                        requests                                    unless the IFQ permit holder
                                                                                    or RQE requests
Sec.   679.45(g).....................  IFQ permit holder's                         IFQ permit holder's or RQE's
Sec.   679.45(h).....................  Sec.   679.43                               15 CFR part 906
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2017-20894 Filed 10-2-17; 8:45 am]
BILLING CODE 3510-22-P


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