Source: https://www.federalregister.gov/documents/2011/10/06/2011-25750/fishing-capacity-reduction-program-for-the-southeast-alaska-purse-seine-salmon-fishery
Timestamp: 2017-08-16 23:09:52
Document Index: 590373480

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61985-61995 (11 pages)
Docket No. 100825389-1597-02
Appendix D to § 600.1107—Conditional Relinquishment of Southeast Salmon Purse Seine Entry Permit
https://www.federalregister.gov/d/2011-25750 https://www.federalregister.gov/d/2011-25750
Copies of the Environmental Assessment/Regulatory Impact Review/Final Regulatory Flexibility Analysis (EA/RIR/FRFA) prepared for this action may be obtained from Paul Marx, Chief, Financial Services Division, NMFS, Attn.: SE Alaska Purse Seine Salmon Rulemaking, 1315 East-West Highway, Silver Spring, MD 20910 or by calling Michael A. Sturtevant (see FOR FURTHER INFORMATION CONTACT).
Send comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this rule to Michael A. Sturtevant at the address specified above and also to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Washington, DC 20503 (Attention: NOAA Desk Officer) or e-mail to OIRA_Submission@omb.eop.gov, or fax to (202) 395-7825.
The Southeast Alaska purse seine salmon fishery is a commercial fishery in Alaska state waters and adjacent Federal waters. It encompasses the commercial taking of salmon with purse seine gear, and participation is limited to fishermen designated by the Alaska Commercial Fisheries Entry Commission (CFEC). In 2008, a pilot capacity reduction program, conducted by the Southeast Revitalization Association (SRA), using a reverse auction, purchased 35 limited entry permits in the Southeast Alaska Salmon fishery, reducing the number of Alaska permits in this fishery to 380. Approximately 200 permits are currently being fished.
This rule implements a voluntary buyback program loosely modeled on the aforementioned Alaska pilot program.
This rule establishes the administrative process for the Program, including the role of the SRA, application procedures, evaluation of the Reduction Plan by NMFS, process for conducting a referendum, and fee payment and collection provisions.
This Program is different from the other industry financed fishing capacity reduction programs undertaken by NMFS in several aspects: (1) It is the first permit-only buyback, i.e., fishing history is not being retired and there are no restrictions on how the vessel to which the relinquished permit applies can be used; (2) there are no Federal permits involved, whereas all other NMFS supported reduction programs have included the buying and relinquishing of Federal permits; and (3) it is anticipated to attract mainly latent permits.
The measures contained in this rule to establish the Program are based on the Consolidated Appropriations Act of 2005 (Section 209 of Title II of Division B of Pub. L. 108-447). Subsequently, that Federal law was amended by Section 121 of Public Law 109-479 (the Magnuson-Stevens Reauthorization Act of 2006), reducing the loan amount to no more than a $25 million 40-year loan (with repayment fees capped at three percent) and clarifying the respective roles of NMFS and the SRA relative to development and implementation of the Program. On December 26, 2007, Public Law 110-161 appropriated $235,000 for the cost of guaranteeing the loan amount (i.e., loan subsidy cost). Due to a 6.1 percent rescission to meet Congressional budgetary limits, the original appropriation of $250,000 was reduced to $234,765, thus lowering the maximum loan ceiling to $23,476,500. NMFS' authority to make this loan resides in sections 1111 and 1112 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1279(f) and 1279(g) (MMA) (title XI)).
Unlike buybacks conducted under Federal statutes where permits are permanently revoked, under the Alaska Constitution the state may reissue permits in the future if the fishery becomes too exclusive. An “optimum number” study by the CFEC would be required before any decision could be made on whether the fishery has become too exclusive. There is no direct management of this fishery by NMFS or any other Federal agency.
Participation in the Program is voluntary and is open to any holder of a valid entry permit issued by the CFEC to operate in the Southeast Alaska purse seine salmon fishery. The Program is essentially divided into six phases: (1) Enrollment; (2) bid selection; (3) plan submission and approval; (4) referendum; (5) implementation; and (6) the loan repayment fee collection. Each of these six phases will be discussed later in this preamble. Only Southeast Salmon Purse Seine Entry Permits voluntarily submitted for removal from Start Printed Page 61986the Reduction Fishery are subject to the reduction effort. Fishing history, the fishing vessel itself, and other assets associated with the permits are not required to be relinquished as part of this reduction effort. Fees for repayment of the loan will be calculated upon the annual ex-vessel value of all salmon harvested in the Southeast Alaska purse seine fishery and will be collected from those who continue fishing in the Reduction Fishery after implementation of the Program set forth in § 600.1107 of subpart M of part 600 of Title 50 of the Code of Federal Regulations.
On May 23, 2011, NMFS published proposed regulations in the Federal Register (76 FR 29707) to implement the program. This final rule implements the program with changes as described below and will be effective on November 7, 2011.
NMFS received five comments in response to the proposed rule. Three were from individuals, one from the Alaska Commercial Fisheries Entry Commission, and one from the SRA. The three individuals each expressed opposition to the Program for a variety of reasons.
Comment 1: Each of the three individuals expressed concerns that the Program would make it more difficult for new participants to enter the fishery by increasing the cost of permits.
Response: Although permit values have been increasing over the last few years, many factors are influencing the rising prices including higher catch levels of pink salmon and higher salmon prices. If permit holders believe the Program would further exacerbate the permit values, they will have the opportunity to vote against the Program in a referendum.
Comment 2: Two of the individuals expressed concern that the Program will be comprised of inactive fishing permits.
Response: NMFS acknowledges that inactive permits will likely be removed from the fishery. However, the permits could be fished in the future if no action is taken. The permit holders must decide if the cost of removing these latent permits is worth an additional 3% fee on future catch and will make that decision in the referendum.
Comment 3: Two of the individuals expressed concern about inactive permit holders who may hold permits for speculative purposes, dominating the referendum and buying back inactive permits.
Response: NMFS acknowledges that inactive permit holders constitute a significant portion of the fishery. The authorizing legislation requires approval from a majority of permit holders. NMFS believes that limiting the ability of certain permit holders to vote in the referendum could be perceived as arbitrary and is contrary to the statute.
Comment 4: Two commenters requested that the enrollment process be clarified to note that the initial determination that an application conforms to the prescribed requirements is made by an independent accounting firm and not the SRA.
Response: NMFS agrees the enrollment process needs to be clarified to note that the initial determination that an application conforms to the prescribed requirements is made by an independent accounting firm and not the SRA, and has accordingly revised § 600.1107(c)(2)(v)(A).
Comment 5: Two commenters noted an inconsistency in the enrollment process and requested that NMFS allow the SRA a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process.
Response: NMFS acknowledges the inconsistency and has changed both § 600.1107(c)(3) and § 600.1107(d)(1) to reflect that the SRA a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process.
Comment 6: Two commenters requested that NMFS clarify the bid selection process in the event that two identical bids are received on the same day and suggested that a random method be used such as drawing lots.
Response: NMFS agrees that the language in § 600.1107(d)(3) should be less ambiguous and has revised the language to state that in the event of a tie, the first bid received, if known, shall be selected. If the receipt time cannot be determined, neither bid will be accepted. A permit holder can ensure the receipt time is documented when using a reliable express delivery service. This solution is more equitable than some random method such as drawing lots, which could merely lead to further disputes as to the integrity of that process.
Comment 7: Two commenters stated that the referendum voting process does not provide sufficient time for NMFS to determine the accuracy of eligible voters, issue ballots, and for fishermen to return the ballots. They recommended providing a period of 21 days to conduct the referendum.
Response: NMFS agrees that the voting period should be expanded and has revised § 600.1107(e)(3) to allow a voting period of 21 to 30 days.
Comment 8: Two commenters requested that the list of eligible referendum voters to be published in the Federal Register contain a 7-day period to accept comments from the public.
Response: NMFS agrees that the public needs an opportunity to comment about any discrepancy before the referendum occurs but believes more time is necessary and therefore has revised § 600.1107(e)(3)(i) to allow the public 15 days to comment.
NMFS revises the following sections of the regulations of subpart M to 50 CFR part 600:
(1) Section 600.1107(c)(2)(v)(A). This section is revised to note that the initial determination that an application conforms to the prescribed requirements is made by an independent accounting firm and not the SRA.
(2) Section 600.1107(c)(3). This section is amended to allow the SRA a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process.
(3) Section 600.1107(d)(1). This section is also amended to allow the SRA a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process.
(4) Section 600.1107(d)(3). This section is revised to state that in the event of a tie, the first bid received, if known, shall be selected. If the receipt time cannot be determined, neither bid will be accepted.
(5) Section 600.1107(e)(3). This section is revised to allow a voting period of not less than 21 days and not more than 30 days.
(6) Section 600.1107(e)(3)(i). This section is revised to provide the public with a 15 day period to accept comments on the list of eligible referendum voters to be published in the Federal Register.
Participants who wish to relinquish their permits are required to complete a Bid, Relinquishment Contract, Conditional Notice and Conditional Relinquishment form. A copy of these documents will be mailed by the SRA to each person who is the holder of record of a valid entry permit issued by CFEC to operate in the Reduction Fishery. A copy of those documents is appended to this final rule.
The Bid identifies the eligible bidder and specifies requirements with which the bidder must comply upon acceptance of bid.Start Printed Page 61987
The Relinquishment Contract is the agreement entered into by the bidder and the SRA whereby the bidder agrees to relinquish a permit upon acceptance of the bid and before payment of the bid amount.
The Conditional Relinquishment is the CFEC form signed by the bidder to voluntarily give up a permit and to agree to abide by the terms in that form upon SRA acceptance of the bid.
The SRA will begin the Selection Process upon its receipt of the first application and will continue until: (1) The bid closing date specified by SRA; or (2) the ranking of the next lowest bid would cause the total program costs to exceed $23.5 million
During the selection process, the SRA, in consultation with CFEC, will examine each submitted Bid for consistency and the necessary elements, including the validity of the permit and whether any authorized party holds a security interest in the permit. The SRA will notify the Permit Holder if the Bid is non-conforming and, in such cases, the Permit Holder may submit a revised, conforming Bid if within the prescribed period (i.e., until the bid closing date). A Bid that is submitted by the Permit Holder but is not accepted by the SRA, including a nonconforming bid that is not revised by the bid closing date, will be deemed terminated and both the Permit Holder and the SRA will have no further obligation. The SRA will rank all conforming bids by using a reverse auction in which the SRA ranks the bid with the lowest dollar amount and successively ranks each additional bid with the next lowest dollar amount, until there are no more bids or the ranking of the next lowest bid would cause the total program cost to exceed $23,476,500. In the event of a tie with bids which results in the tied bids exceeding $23,476,500, the SRA will select the tied bid received first. If the receipt time cannot be determined, neither bid will be accepted.
Within 30 days after the conclusion of the selection process, the SRA will submit the Reduction Plan to NMFS for final approval on behalf of the Secretary of Commerce (Secretary). The aggregate of all Bids, Relinquishment Contracts, Conditional Notices, and Conditional Relinquishments signed by permit holders whose bids are accepted by the SRA will together, with supporting rationale, constitute the Reduction Plan. The supporting rationale must demonstrate that the Reduction Plan would permanently reduce the most harvesting capacity in the Reduction Fishery at the least cost, increase harvesting productivity for post-reduction permit holders participating in the fishery, and improve flexibility in the conservation and management of the fishery. The Reduction Plan will include a listing of accepted bids arranged by bid amount from lowest to highest bid attended by a statement from the SRA that all other bids received, if any, were higher than the largest dollar amount of the last bid accepted.
A successful referendum by a majority of the Permit Holders in the Reduction Fishery would bind all parties and complete the reduction process. An unsuccessful referendum would void accepted Bids and other supporting Start Printed Page 61988documents without further obligation from the SRA or the bidders.
Within 60 days after a successful referendum, CFEC will provide notice to NMFS of the permits retired from the Reduction Fishery. NMFS, after receiving the notice of the retired permits, will then tender the accepted bid amounts to the accepted bidders. If the SRA accepts a total number of bids in an aggregate amount less than $23,476,500, any remaining funds could be available for reduction payments as part of a later, separate Reduction Plan.
The Reduction Loan will be amortized over a forty-year term. The Reduction Loan's original principal amount may not exceed $23,476,500, but may be less if the ultimate reduction cost is less. The final Reduction Loan periodic payment amount will be determined by NMFS analysis of the ability of the post-reduction fishery to service the debt. The Reduction Loan's interest rate will be the U.S. Treasury's cost of borrowing equivalent maturity funds plus two percent. The framework provisions of §§ 600.1012-600.1017 will apply to any reduction loan, fee payment and collection set forth in this rule to the extent they do not conflict with this rule.
Post-reduction Permit Holders operating in the fishery will be obligated to pay a fee for the repayment of the loan in accordance with § 600.1107(f). The fee will be expressed as a percentage of the ex-vessel price of all salmon harvested and landed in the fishery. For example, if the fee is three percent and the ex-vessel value is $0.50, then the fee per pound of salmon will equal $0.015 per pound. The amount of such fee will be calculated by NMFS on an annual basis as the principal and interest payment amount necessary to amortize the loan over a 40-year term. The maximum fee rate is three percent of total ex-vessel production revenues. In the event that payments made under the Reduction Plan at the maximum fee level are insufficient to repay the Reduction Loan within the 40-year term, NMFS will extend the term of the repayment until the Reduction Loan is paid in full.
The current Fishing Capacity Reduction Framework regulatory provisions of § 600.1013 (Fee payment and collection), § 600.1014 (Fee collection deposits, disbursements, records, and reports), § 600.1015 (Late charges), § 600.1016 (Enforcement), § 600.1017 (Prohibitions and penalties), and § 600.1017(a)(8)-(16) in particular, will apply to any fee collection in this fishery.
To provide more accessible services, streamline collections, and save taxpayer dollars, fish buyers may disburse collected fee deposits to NMFS by using a secure Federal system on the Internet known as Pay.gov. Pay.gov enables fish buyers to use their checking accounts to electronically disburse their collected fee deposits to NMFS. Fish buyers who have access to the Internet should consider using this quick and easy collected fee disbursement method. Fish buyers may access Pay.gov at: https://www.pay.gov/​paygov/​.
Fish buyers who do not have access to the Internet or who simply do not wish to use the Pay.gov electronic system must disburse collected fee deposits to NMFS by sending a check to our lockbox at: NOAA Fisheries Southeast Alaska Salmon Purse Seine Buyback, P.O. Box 979002, St. Louis, MO 63197-9000.
Fish buyers must complete a fee collection report for each disbursement. Fish buyers using Pay.gov will find an electronic fee collection report form to accompany electronic disbursements. Fish buyers who do not use Pay.gov must include a hard copy fee collection report with each of their disbursements and may access the NMFS Web site for a PDF version of the fee collection report at: http://www.nmfs.noaa.gov/​mb/​financial_​services/​buyback.htm.
Please see the framework rule's provisions at § 600.1000 for the Start Printed Page 61989definition of “delivery value” and of the other terms relevant to this rule. Each disbursement of the reduction loan's principal amount will begin accruing interest as of the date of each such disbursement. This loan's interest rate is the applicable rate, which the U.S. Treasury determines at the end of the fiscal year, plus two percent.
The provisions and requirements of § 600.1016 and § 600.1017 shall also apply to fish sellers and fish buyers subject to this fishery. Specifically, the final rule amends § 600.1017 by adding language that prohibits buyers from buying fish from reduction fishery participants who do not pay the required landing fee and prohibits reduction fishery participants from selling fish to buyers who do not collect the fees.
Pursuant to section 304 (b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with the provisions of the Magnuson-Stevens Act, and Title II, Section 209 of Public Law 108-447 as amended by Section 121 of Public Law 109-479.
In compliance with the National Environmental Policy Act, NMFS prepared an environmental assessment (EA) for this rule. The assessment discusses the impact of this final rule on the natural and human environment and integrates a Regulatory Impact Review (RIR) and a Final Regulatory Flexibility Analysis (FRFA). NMFS will send the assessment, the review and analysis to anyone who requests a copy (see ADDRESSES).
NMFS prepared a FRFA, as required by section 603 of the Regulatory Flexibility Act (RFA), to describe the economic impacts this rule would have on small entities. NMFS intends the analysis to aid the agency in considering regulatory alternatives that could minimize the economic impact on affected small entities. The rule does not duplicate or conflict with other Federal regulations.
The Small Business Administration (SBA) has defined small entities as all fish harvesting businesses that are independently owned and operated, not dominant in its field of operation, and with annual receipts of $4 million or less. In addition, processors with 500 or fewer employees for related industries involved in canned or cured fish and seafood, or preparing fresh fish and seafood, are also considered small entities. Small entities within the scope of this rule include individual U.S. vessels, Permit Holders, and dealers. There are no disproportionate impacts between large and small entities.
Most firms operating in the Reduction Fishery have annual gross revenues of less than $4 million. The FRFA analysis estimates that most of the 212 active vessels that participated in 2008 are considered small entities. The ownership characteristics of vessels operating in the Reduction Fishery are not available and, therefore, it is not possible to determine with certainty if they are independently owned and operated or affiliated in one way or another with a larger parent company. However, because the action would not result in changes to allocation percentages and participation is voluntary, net effects would be expected to be minimal relative to the status quo.
The final rule's impact would be positive for both those whose bids NMFS accepts and for post-reduction harvesters whose landing fees repay the reduction loan because the Bidders and harvesters would have voluntarily assumed the impact:
2. Reduction loan repayment landing fees would be authorized, and NMFS could complete the Reduction Program, only if a majority of Permit Holders voted in favor of the Reduction Plan. Presumably, harvesters who are not selected would not vote in favor of the Reduction Plan unless they concluded that the Reduction Program's prospective capacity reduction was sufficient to enable them to increase their post-reduction revenues enough to justify the fee.
3. Those participants remaining in the fishery after the buyback will incur additional fees of up to 3 percent of the ex vessel production value of post reduction landings. However, the additional costs should be mitigated by reducing the possibility that latent permits will be activated thus reducing harvest levels and stabilizing year-to-year price fluctuations. NMFS believes that this final rule would affect neither authorized harvest levels nor harvesting practices.
Other than the preferred alternative, which is being implemented in this rule, NMFS considered the no action alternative in developing this action. NMFS rejected the no action alternative considered in the EA because if it failed to act, NMFS would not be in compliance with the mandate of Section 209 of the authorizing legislation to establish a buyback program. In addition, the Southeast Alaska purse seine salmon fishery would remain overcapitalized. Overcapitalization reduces the potential net value that could be derived from the salmon resource by dissipating rents, driving variable operating costs up, and imposing economic externalities on the fishermen. Overcapitalization has diminished the economic viability of members of the fleet and increased the economic and social burden on fishery dependent communities.
This final rule contains information collection requirements subject to the Paperwork Reduction Act (PRA). The Office of Management and Budget (OMB) previously approved this information collection under OMB Control Number 0648-0376.
NMFS amends the existing OMB control number as a result of the implementation of this capacity reduction program. The revision has been submitted to OMB for approval. NMFS estimates that the public reporting burden for this information collection totals 878 respondents with a total response time of 38,653 hours. NMFS estimates that each respondent will take an average of 4 hours for submitting a Bid (which includes executing the Bid Agreement and the Reduction Contract) and 4 hours for voting in a referendum. Persons affected by this rule would also be subject to other collection-of-information requirements referred to in the proposed rule and also approved under OMB Control Number 0648-0376. These requirements and their associated response times are: Completing and Start Printed Page 61990filing a fish ticket (10 minutes), submitting monthly fish buyer reports (2 hours), submitting annual fish buyer reports (4 hours), and fish buyer/fish seller reports when a person fails either to pay or to collect the loan repayment fee (2 hours).
These response estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collection. Public comment is sought regarding: Whether this collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Interested persons may send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to both NMFS and OMB (see ADDRESSES).
For the reasons set out in the preamble, 50 CFR part 600, subpart M, is amended as follows:
Conditional notice means the CFEC form that any Bidder must sign and agree to abide by upon submission of a Bid Agreement (Appendix B to § 600.1107).
Conditional relinquishment means the CFEC form that any Permit Holder, agreeing to relinquish a permit, must sign and agree to abide by upon SRA acceptance of the bid (Appendix C to § 600.1107).
Relinquishment contract means the contract that any Permit Holder agreeing to relinquish a permit pursuant to Alaska Statute (A.S. 16.43.150(i)) must sign and agree to abide by upon acceptance of the Bid, and before payment of the bid amount (Appendix A to § 600.1107).Start Printed Page 61991
(c) Enrollment in the capacity reduction program—(1) Distribution. The SRA shall mail a copy of the following four documents via certified mail to each Permit Holder: Bid; Fleet Consolidation Relinquishment Contract (Relinquishment Contract); Conditional Notice to CFEC and Request by Permit Holder; and (Conditional Relinquishment of Southeast Salmon Purse Seine Entry Permit. Such mailing shall include a closing date after which the SRA will not accept new bids.
(3) Enrollment period. Applications that meet all requirements will be accepted until the bid selection process is completed but no later than the bid closing date specified by the SRA. The SRA will have a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process.
(d) Bid selection process. The fishing capacity removed by the Reduction Plan shall be represented by the total number of valid CFEC permits, whether active or latent, that are voluntarily offered by Permit Holders and selected by the SRA up to an aggregate amount of $23,476,500. Due to a rescission of funds, the underlying appropriations for this Reduction Program were reduced from $250,000 to $234,765, resulting in a loan ceiling of $23,476,500.
(1) Overview. The Selection Process shall begin upon the receipt by the SRA of the first application and shall continue until: The bid closing date specified by the SRA (paragraph (c)(1) of this section); or the ranking of the next lowest bid would cause the total program costs to exceed $23,476,500. The SRA will have a period of 21 days after the bid closing date to consult with CFEC and examine bid results to complete the selection process. When either one of these events is reached, the Selection Process shall be completed.
(3) Ranking. The SRA shall rank all conforming bids by using a reverse auction in which the SRA ranks the Bid with the lowest dollar amount and successively ranks each additional Bid with the next lowest dollar amount until there are no more Bids or the ranking of the next lowest bid would cause the total program cost to exceed $23,476,500. In the event of a tie with bids which results in the tied bids exceeding $23,476,500, the SRA will select the tied bid first received, if known. If the receipt time cannot be determined, neither bid will be accepted.
(4) Acceptance and post-acceptance restriction of renewals and transfers. Upon expiration of the bid closing date, the SRA shall determine whether the number of ranked bids it is willing to accept is sufficient to achieve a substantial reduction in harvest capacity and increased economic efficiencies for those Permit Holders remaining in the fishery. If the SRA makes such a determination and thereafter accepts bids, the SRA shall send CFEC the Conditional Notice form restricting renewal and transfer of each permit for which a bid was accepted. The Bid, Relinquishment Contract, Conditional Notice and Conditional Relinquishment are terminated for any rejected bid and the applicant is no longer bound by the terms of these documents.
(e) Plan submission and approval—(1) Submitting the reduction plan. Within 30 days of concluding the selection process, the SRA shall submit the Reduction Plan, consisting of the aggregate of all Bid Agreements, Relinquishment Contracts, Conditional Notices and Conditional Relinquishments, together with Start Printed Page 61992supporting documents and rationale, to NMFS for final approval on behalf of the Secretary. The Reduction Plan shall include a listing of accepted bids arranged by bid amount from lowest to highest bid, attended by a statement from the SRA that all other bids received were higher than the largest dollar amount of the last bid accepted.
(3) The referendum. If NMFS approves the Reduction Plan and subsequent to the publication of a final rule resulting from this rule, NMFS shall conduct a referendum to determine the industry's willingness to repay a fishing capacity reduction loan to purchase the permits identified in the Reduction Plan. NMFS shall publish a notice in the Federal Register requesting votes by Permit Holders on whether to accept or reject the Reduction Plan for implementation. The notice shall state the starting and ending dates and times of the voting period, which shall be not less than twenty one (21) nor more than thirty (30) calendar days from the date of such notice.
(i) Such notice shall state the name and address of record of each eligible voter, as well as the basis for having determined the eligibility of those voters. This shall constitute notice and opportunity to respond about adding eligible voters, deleting ineligible voters, and/or correcting any voter's name and address of record, and will provide a 15 day period to make these changes. If, in NMFS' discretion, the comments received in response to such notice warrants it, or for other good cause, NMFS may modify such list by publishing another notice in the Federal Register. NMFS shall issue ballots to eligible voters, tally votes, and notify voters whether the referendum was successful or unsuccessful in approving the Reduction Plan consistent with the provisions of § 600.1010.
(f) Implementation—(1) Reduction payments. Within 60 days of a successful referendum, the CFEC will provide notice to NMFS of the permits retired from the Reduction Fishery. Upon receiving such notification, NMFS will then tender the accepted bid amounts to the Permit Holders. Reduction payments may not exceed $23,476,500 and if the SRA accepts a total number of bids in an aggregate amount less than $23,476,500, any remaining funds would be available for reduction payments as part of a later, separate Reduction Plan conforming to these regulations. Upon NMFS tendering the reduction program's payments to the selected Permit Holders, each such Permit Holder must permanently stop all fishing with the relinquished permit(s).
(2) Repayment term. As authorized by the Act, the Reduction Loan shall be amortized over a forty (40) year term. The Reduction Loan's original principal amount may not exceed $23,476,500, but may be less if the ultimate reduction cost is less. The final Reduction Loan periodic payment amount will be determined by NMFS' analysis of the ability of the post-reduction fishery to service debt. The provisions of §§ 600.1012-600.1017 shall apply to any reduction loan, fee payment and collection under this section to the extent they do not conflict with this section or with subpart M of this part.
(ii) Fees. Post-reduction Permit Holders operating in the fishery shall be obligated to pay the fee in accordance with paragraph (f) of this section. The amount of such fee will be calculated by NMFS on an annual basis as the principal and interest payment amount necessary to amortize the loan over a 40-year term. The fee shall be expressed as a percentage of the ex-vessel value of all salmon harvested and landed in the fishery. In the event that payments made under the Reduction Plan are insufficient to repay the Reduction Loan within the 40-year term, NMFS shall extend the term of the repayment until the Reduction Loan is paid in full.
(B) If the fishery does not open during a year, interest will continue to accrue on the principal balance even though no fee revenue will be generated. When this happens, if the fee is not already at the maximum three percent, NMFS shall increase the fee to the maximum three percent, apply all subsequent fee revenue first to the payment of accrued interest, and continue the maximum fee rates until the principal and interest payments become current. Once all principal and interest payments are current, NMFS will make a determination about adjusting the fee rate.Start Printed Page 61993
(g) Specific performance under the relinquishment contract. The parties to the Relinquishment Contract have agreed that the opportunity to develop and submit a capacity reduction program for the fishery under the terms of the Act is both unique and finite. The failure of a Permit Holder, whose bid was accepted, to perform the obligations under the Relinquishment Contract will result in irreparable damage to the SRA and all the other Permit Holders. Accordingly, the parties to the Relinquishment Contract expressly acknowledge that money damages are an inadequate means of redress and agree, that upon failure of the Permit Holder to fulfill his/her obligations under the Relinquishment Contract, that specific performance of those obligations may be obtained by suit in equity brought by the SRA in any court of competent jurisdiction without obligation to arbitrate such action.
(i) Prohibitions and penalties. Fish buyers are prohibited from purchasing fish from fish sellers who do not pay the required landing fees. Fish sellers are prohibited from selling to fish buyers who do not pay the required landing fees.
7. Restriction of Transfer of permit: Upon acceptance, the SRA will send the CFEC the Conditional Notice, restricting transfer of the permit until such time as: The SRA notifies the bidder that the Plan is not in compliance with the Act and will not be approved; or NMFS notifies the bidder the referendum was unsuccessful.Start Printed Page 61994
11. Complete Bid Information: To fully and accurately complete this Bid, the bidder must fully complete the following questions and provide an exact photocopy of the permit. The Bidder must further sign this form, Appendices B, C, and D to § 600.1107, and acknowledge the signature before a notary public.
Whereas, this contract is subject to the terms and conditions set forth herein, including the CFEC forms marked as Appendices C and D to § 600.1107;
4. Upon notification by the SRA to the Bidder that the SRA accepted the bid; the SRA will submit to the CFEC the Permit Holder's executed notice form (Appendix C to § 600.1107) and executed relinquishment form (Appendix D to § 600.1107).
8. The bidder consents to the public release of any information provided in connection with the contract or program requirements after completion of the plan.Start Printed Page 61995
(1) Sign (1) Sign
[FR Doc. 2011-25750 Filed 10-5-11; 8:45 am]