# Fisheries Off West Coast States; Pacific Coast Groundfish Fishery Management Plan; Amendments 20 and 21; Trawl Rationalization Program > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2010-30527 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** December 15, 2010 - **Citation:** 75 FR 78344 ## Text DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 15 CFR Part 902 50 CFR Part 660 [Docket No. 100212086-0532-05] RIN 0648-AY68 Fisheries Off West Coast States; Pacific Coast Groundfish Fishery Management Plan; Amendments 20 and 21; Trawl Rationalization Program AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS is implementing Amendments 20 and 21 to the Pacific Coast Groundfish Fishery Management Plan (FMP), which were partially approved by the Secretary on August 9, 2010. Amendment 20 establishes a trawl rationalization program for the Pacific Coast groundfish fishery. Amendment 20's trawl rationalization program consists of: An individual fishing quota (IFQ) program for the shorebased trawl fleet (including whiting and non-whiting sectors); and cooperative (coop) programs for the at-sea (whiting only) mothership and catcher/processor trawl fleets. Amendment 21 establishes fixed allocations for limited entry trawl participants. This final rule supplements the final rule published on October 1, 2010 (75 FR 60868), and provides additional program details, including: Program components applicable to IFQ gear switching, observer programs, retention requirements, equipment requirements, catch monitors, catch weighing requirements, coop permits, coop agreement requirements, first receiver site licenses, quota share (QS) accounts, vessel accounts, further tracking and monitoring components, and economic data collection requirements. DATES: This rule is effective January 1, 2011. ADDRESSES: Background information and documents, including the final environmental impacts statements for Amendment 20 and Amendment 21, are available at the Pacific Fishery Management Council's Web site at http://www.pcouncil.org/. NMFS prepared a Final Regulatory Flexibility Analysis (FRFA), which is summarized in the Classification section of this final rule. Copies of the FRFA and the Small Entity Compliance Guide are available from William W. Stelle, Jr., Regional Administrator, Northwest Region, NMFS, 7600 Sand Point Way, NE., Seattle, WA 98115-0070; or by phone at 206-526-6150. Copies of the Small Entity Compliance Guide are also available on the Northwest Regional Office Web site at http://www.nwr.noaa.gov/. Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted to William W. Stelle, Jr., Regional Administrator, Northwest Region, NMFS, 7600 Sand Point Way, NE., Seattle, WA 98115-0070, and to OMB by e-mail to OIRA_Submission@omb.eop.gov, or fax to 202-395-7285. FOR FURTHER INFORMATION CONTACT: Jamie Goen, 206-526-4656; (fax) 206-526-6736; Jamie.Goen@noaa.gov. SUPPLEMENTARY INFORMATION: Background The Amendment 20 trawl rationalization program is a limited access privilege program under the Magnuson-Stevens Fishery Conservation and Management Act (MSA), as reauthorized in 2007. It consists of: (1) An IFQ program for the shorebased trawl fleet; and (2) coop programs for the mothership and catcher-processor trawl fleets. The trawl rationalization program is intended to increase net economic benefits, create individual economic stability, provide full utilization of the trawl sector allocation, consider environmental impacts, and achieve individual accountability of catch and bycatch. Amendment 21 establishes fixed allocations for limited entry trawl participants. These allocations are intended to improve management under the rationalization program by streamlining its administration, providing stability to the fishery, and addressing halibut bycatch. The trawl rationalization program is scheduled to be implemented on January 1, 2011. Due to the complexity of the program and the tight timeline for implementation, NMFS has issued, or is in the process of issuing multiple rulemakings to implement this program. The following actions are related to the trawl rationalization program: • A final rule (75 FR 4684, January 29, 2010) which announced that potential participants in the program should review and, if necessary, correct their data that will be used for the issuance of QS, permits, and endorsements. It also established which data NMFS would use and requested ownership information from potential participants. • A notice of availability for Amendments 20 and 21 (75 FR 26702, May 12, 2010). • A proposed rule (75 FR 32994, June 10, 2010) followed by a final rule (75 FR 60868, October 1, 2010) that implemented Amendments 20 and 21, focused on provisions deemed necessary to issue permits and endorsements in time for use in the 2011 fishery and to have the 2011 harvest specifications reflect the new allocation scheme. In addition, the October 1st rule also restructured the entire Pacific Coast groundfish regulations at 50 CFR part 660 from one subpart (Subpart G) to five subparts (Subparts C-G). • A correction to the June 10th proposed rule (75 FR 37744, June 30, 2010) which corrected two dates referenced in the preamble to the proposed rule regarding the decision date for the FMP amendments and the end date for the public comment period. • The Secretary's review of and decision to partially approve Amendments 20 and 21 on August 9, 2010. • A proposed rule (75 FR 53380, August 31, 2010) which proposed for implementation on January 1, 2011, additional program details, including: Measures applicable to gear switching for the IFQ program, observer programs, retention requirements, equipment requirements, catch monitors, catch weighing requirements, coop permits, coop agreement requirements, first receiver site licenses, QS accounts, vessel accounts, further tracking and monitoring components, and economic data collection requirements. • A correction to the October 1st final rule (75 FR 67032, November 1, 2010) to make sure the correct trip limit tables for 2010 remain effective after November 1, 2010. This final rule follows the August 31st proposed rule (75 FR 53380) and implements additional program components for the trawl rationalization program. The preambles to both the June 10th and August 31st proposed rules provided more details on the program and are not fully repeated here. The preamble to the June 10th proposed rule (75 FR 32994), called the “initial issuance” proposed rule because it proposed the requirements for initial issuance of new permits and endorsements for the trawl rationalization program, provided detailed information on the trawl rationalization program and a general overview on the provisions in Amendments 20 and 21. In addition, the preamble to the August 31st proposed rule (75 FR 53380), called the “program components” proposed rule because it proposed further program details for the trawl rationalization program, provided more detail on the additional program components being proposed. The Pacific Fishery Management Council (Council) began scoping on trailing actions for the trawl rationalization program in the Fall of 2010 and intends to continue developing trailing actions at its 2011 Council meetings on topics including, but not limited to: Cost recovery, safe harbors/community fishing associations, the severability of MS/CV endorsements from limited entry trawl permits, and resubmission of Amendment 21 in response to NMFS' partial disapproval. Comments and Responses NMFS solicited public comment on the proposed rule (75 FR 53380, August 31, 2010). The comment period ended September 30, 2010. NMFS received 15 individual letters of comments on the proposed rule submitted by individuals or organizations. Some commenters have incorporated by reference previous comments submitted during the Council process or on a rulemaking (notice of availability 75 FR 26702, May 12, 2010; proposed rule 75 FR 32994, June 10, 2010; final rule 75 FR 60868, October 1, 2010) for the initial issuance of permits and endorsements and the review of Amendments 20 and 21. Comments presented to the Council are part of the record and were considered by the Council during its deliberation. Comments on the previous rulemaking were addressed in the final rule for that rulemaking. General Comments in Support and Opposed Comment 1. NMFS received multiple comments expressing general support for the proposed rule. Response. NMFS acknowledges these comments. Comment 2. NMFS received multiple comments expressing general disagreement with the proposed rule and amendments. Response. NMFS acknowledges these comments. Comments on Implementation of the Program Comment 3. One commenter stated that the program and implementing regulations should not be effective until January 1, 2012, in order to provide sufficient time for the groundfish industry to plan their operations under the new regulatory system. Response. This program has been developed by the Council and NMFS through a public process for over six years, and ample opportunities have been provided for input into the design of the program. The starting date for the trawl rationalization program was discussed and debated on multiple occasions at Council meetings, and based on the input from the public, the Council recommended, and NMFS agreed, to a target implementation date of January, 2011. NMFS notes the commenter's recommendation, but has determined that implementing the program at the earliest practicable date best serves the public interest. NMFS disagrees that any delay is necessary. Comment 4. One commenter described port outreach efforts and a workshop undertaken by the organization designed to complement the outreach being conducted by NMFS. These outreach meetings and workshop are an effort to speed the transition process to the new trawl rationalization program and provide fishermen tools for success under the catch shares program. Port outreach meetings were held in seven ports, with topics covering ways to reduce observer and operating costs, managing quota portfolios, establishing a business plan, and managing constraining stocks among others. In addition, the two-day informational workshop was attended by over 150 fishery participants; panels included topics on regulatory requirements; managing risks associated with constraining species and modifying fishing behavior; approaches for maximizing opportunity; gear modification; handling techniques and behavior changes; mapping and “hotspot” management; trading, tracking, and financing of quota portfolios; strategies for minimizing observer and other costs; and strategies for improving revenues. Response. NMFS appreciates the commenter's outreach efforts. In addition to the outreach efforts by outside organizations, NMFS has held a series of public workshops along the West Coast during the months of September and October, 2010, to assist program participants in transitioning to the new trawl rationalization program. Further information on NMFS's outreach efforts is described in the response to Comment 5. Comments on the Rulemaking and Trailing Amendments Comment 5. Some commenters stated that the complexity of the rulemakings for the trawl rationalization program have made it difficult to provide meaningful public input. Response. NMFS acknowledges that implementation of the trawl rationalization program, and associated rulemakings, has been complex. However, NMFS has been making every effort to make the implementation process as simple as possible and to explain the process in many public forums. While the Council developed the trawl rationalization program over several years, the Council and NMFS set an implementation date of January 1, 2011, giving NMFS and the Council approximately a year and a half to develop regulations and fine tune the program. This is a tight timeline for such a complex program which would dramatically change the operation and management of the trawl sector. Because of the tight timeline, NMFS had to split implementation into several rulemakings, focused on timing the rulemakings to allow potential participants the most time possible for the different phases of implementation given the resources available to implement the program. Early in the rulemaking process, NMFS brought forward this approach to the Council at their September 2009 meeting. In addition, NMFS published a brochure in December 2009 which was mailed out to the industry announcing the proposed January 1, 2011 implementation, the rulemaking schedule, and some additional details on the first rulemaking. The first rulemaking, which spanned late 2009 and early 2010, announced that potential participants should be reviewing and, if necessary, correcting their data before NMFS used the relevant data for initial issuance of permits and endorsements (proposed rule: 74 FR 47545, September 16, 2009; final rule: 75 FR 4684, January 29, 2010). NMFS initially announced that corrections should be done by late-May 2010 and before the initial issuance proposed rule published. NMFS later extended the deadline to July 1 in the initial issuance proposed rule (75 FR 32994, June 10, 2010) for both the Pacific Fisheries Information Network (PacFIN) dataset and for NMFS' Northwest Fisheries Science Center's Pacific whiting observer data from NORPAC (a database of North Pacific fisheries and Pacific whiting information) (this was later changed to August 1, 2010 for NORPAC data through a public notice dated June 22, 2010 (NMFS-SEA-10-08)). This first rulemaking also required completion of an ownership interest form. The results of these forms would be used, in part, to populate the ownership interest forms that would be part of the application process. This rulemaking laid the groundwork for the application process that would take place in the fall of 2010. Soon after the final rule published for this first rulemaking, the Council began meetings of its Regulatory Deeming Workgroup (RDW), an advisory body to the Council. The RDW held several public meetings between February and June 2010 to review the regulations that NMFS was developing for the program, to work through implementation details, and to bring issues forward to the Council, as needed. NMFS updated the RDW at all of their meetings on the implementation process and the status of the various rulemakings. The RDW meetings generally preceded Council meetings. The Council then discussed the rulemakings, including the implementation process and schedule, at all of their meetings to date in 2010. In the spring of 2010, the NOA for both Amendments 20 and 21 was published, announcing an open public comment period on the amendments (75 FR 26702, May 12, 2010). Shortly thereafter, the second rulemaking was initiated that announced the FMP amendments and the initial issuance process for certain new permits and endorsements which required a more intensive application process, and thus more time for implementation. In addition, this rulemaking reorganized the existing groundfish regulations to accommodate the new trawl rationalization program. Staggered after this second rulemaking was the third rulemaking, the subject of this final rule, which announces additional program details for January 1, 2011, including: IFQ gear switching, observer programs, retention requirements, equipment requirements, catch monitors, catch weighing requirements, coop permits, coop agreement requirements, first receiver site licenses, quota share (QS) accounts, vessel accounts, further tracking and monitoring components, and economic data collection requirements. All of these rulemakings have described NMFS' overall approach to the rulemakings and implementation. To provide support and guidance for the public during this process, NMFS has provided outreach along the West Coast in September and October 2010. These outreach efforts were used to announce the program details and implementation logistics, including the rulemakings and public comment periods. In addition, NMFS Office of Law Enforcement has provided several additional outreach sessions in October 2010 on compliance under the program. NMFS has also created a Web site on the trawl rationalization program to keep the interested public up to date and published and mailed several fact sheets, each focused on different aspects of the program. These fact sheets are also available on the Web site. Finally, NMFS has mailed and e-mailed several public notices to the industry and interested public regarding the trawl rationalization program. So while NMFS acknowledges that this has been a complex rulemaking, NMFS believes that the agency has made every effort to keep the industry and public informed of our approach and aware of the rulemaking process. Comment 6. One commenter requested that the Pacific whiting season start dates for the shorebased IFQ fishery, the mothership fishery, and the catcher-processor fishery be revisited under a trailing amendment. The commenter explained that separate season start dates between the sectors is no longer needed under a rationalized fishery; staggered start dates contradict the intent of the program, undermining the goals of the program to increase net economic benefits and create individual economic stability. Response. Start dates for the Pacific whiting season are not part of the program components rule. The Council discussed the Pacific whiting season start dates at its April and June 2010 meetings, and decided not to modify the season start dates at that time. The Council will continue to review management measures in the groundfish trawl fisheries after implementation of the rationalization program, and recommend changes where deemed appropriate. NMFS welcomes and encourages public participation in the Council decision-making process to address issues such as this. Comment 7. One commenter stated that implementing cost recovery through a trailing amendment does not allow the public or policy makers to know the full economic ramifications of the program. The commenter suggested delaying the program until a cost recovery program has been developed. Response. Although a recommendation was made by the Council, and NMFS agreed, that the cost recovery program would be implemented through the Council process as a trailing amendment to the program, that does not mean that the “costs” associated with cost recovery cannot be estimated. Under the MSA, as amended, cost recovery associated with program implementation is capped, or restricted to 3 percent of the value of the fishery. This anticipated cost recovery has been considered by NMFS in its record of decision. NMFS encourages public participation as the Council develops and recommends the cost recovery program to be implemented by NMFS, based on those recommendations. Comment 8. Some commenters stated that community fishing associations (CFAs) should be implemented at the start of the program rather than as a trailing amendment. One commenter suggests delaying the program until CFAs have been developed. Response. NMFS acknowledges that there are members of the public who feel that CFAs should be implemented at the start of the program. Although the Council considered incorporating provisions for CFAs into the alternatives early in the development process, no strong recommendation or advocacy was voiced by members of the public or representatives on the Trawl Individual Quota Committee, which was intended to represent a cross section of interests for the development of recommendations on structuring the trawl rationalization program. Proposals for including provisions for CFAs in the program emerged later on, when the Council was at the point of adopting a preferred alternative in November 2008, in part tied to the issue of how to deal with QS holding in excess of accumulation limits. Further refinement of the preferred alternative, which occurred at Council meetings in 2009, included additional consideration of CFA provisions. Specifically, at the April 2009 Council meeting, Agenda Item F.4 addressed CFAs, and it was at this time that the Council concluded that it would be more appropriate for CFA provisions to be implemented through a trailing action. However, the moratorium on the transfer of QS during the first two years of the program, combined with provisions to allow divestiture of QS over accumulation limits during years 3 and 4 of the program, were designed to facilitate the transfer of QS to CFAs. The moratorium is in part intended to slow the movement of QS holdings out of communities during a time when the trailing action for CFAs can be developed and implemented in a considered fashion. Recommendations for how to structure the CFA provisions in a trailing action are welcome and should be brought forward as that proposal is developed. The Council is likely to begin developing CFA provisions in 2011 so that they could be in place before the QS divestiture period begins. Comment 9. One commenter stated that the adaptive management program (AMP) should be promptly implemented as a trailing amendment to address unforeseen impacts, promote bycatch reduction, and promote sustainable fishing practices. Response. The AMP was established through the October 1st initial issuance final rule (75 FR 60868), and consists of two primary phases. For the first two years of the program, the 10 percent AMP share is allocated to nonwhiting QS owners to ease the transition to an IFQ system. The Council and NMFS will be evaluating the changes that will occur after implementation, and will then be able to react as necessary in the second phase to address specific objectives for the AMP, identified on page 402 of Appendix A of the FEIS “Rationalization of the Pacific Coast Groundfish Limited Entry Trawl Fishery.” This interim situation will also allow for some identification of unforeseen impacts associated with this program, which will better inform both the Council and NMFS in addressing the issues. Comments on Policies and Legal Standards Comment 10. One commenter incorporated by reference comments they had previously made on the initial issuance proposed rule and Amendments 20 and 21 on National Standards 1, 2, 4, 6, and 8. Response. NMFS's responses to comments 56-68 in the final rule to initiate implementation of Amendments 20 and 21 (75 FR 60868, 60884-60887) describe how Amendments 20 and 21, as well as that final rule, comply with National Standards 1, 2, 4, and 8. The explanations articulated there equally apply to the instant rule. With regard to National Standard 6, the commenter does not provide an explanation of why either of the rules or the underlying amendments would be inconsistent with National Standard 6. Nevertheless, this response will address consistency with National Standard 6. National Standard 6 states that conservation and management measures must: “take into account and allow for variations among, and contingencies in, fisheries, fishery resources, and catches.” 16 U.S.C. 1851(a)(6). The National Standard Guidelines further state that every effort should be made to develop FMPs that discuss and take into account vicissitudes and that, to the extent practicable, FMPs should provide a suitable buffer in favor of conservation. 50 CFR 600.335(c)(2). Amendments 20 and 21 are expected to give fishermen greater flexibility in determining when and how to fish, thus giving fishermen greater ability to respond individually to unanticipated occurrences. The AMP will provide additional management flexibility and will facilitate response to unanticipated circumstances. Thus, these amendments and the program components implemented through this rule are consistent with National Standard 6. Comment 11. One commenter stated that the program is inconsistent with National Standards 5 and 8 of the MSA. Response. As described in NMFS's response to comment 62 in the final rule to initiate implementation of Amendments 20 and 21 (75 FR 60868, 60885), Amendments 20 and 21 were designed to achieve multiple objectives and are consistent with National Standard 5. NMFS has determined that this rule to implement certain components of those amendments is consistent with National Standard 5 for the reasons stated in that previous preamble. NMFS's responses to comments 64-67 in the final rule to initiate implementation of Amendments 20 and 21 (75 FR 60868, 60886) explain how Amendments 20 and 21 are consistent with National Standard 8. NMFS has determined that this rule to implement certain components of those amendments is consistent with National Standard 8 for the reasons stated in that previous preamble. See also responses to comments in the FEIS for Amendment 20, particularly responses to comments 108 and 109. Comment 12. One commenter stated that the program should be revised to fully retain public control over our public fisheries resources and indicated that the statements in the regulations and Amendments that NMFS retains the right to modify, revoke, or suspend altogether the catch share system are not enough. Response. Congress, NMFS, and the Council have been clear and explicit that in a limited access privilege program, what is being granted is a privilege that is modifiable and revocable at any time without compensation to the privilege holder (see Section A-2.3.4 of the EIS). NMFS's responses to comments in the FEIS for Amendment 20, particularly responses to comments 86 and 87, provide further discussion on this issue and are not repeated here. In addition, the regulations at §§ 660.25 and 660.100 clearly state that any permits, endorsements, or amounts of harvest from the trawl rationalization program are a privilege that may be revoked, limited, or modified at any time. Comments on Program Costs, Community Impacts, and the Burden on Small Businesses Comment 13. Some commenters stated NMFS should minimize and mitigate impacts on small businesses and small communities; the program should not benefit large businesses at the expense of small businesses. One commenter stated that the burden of paperwork and costs of the program would be too much for small businesses and small communities and requested that the paperwork burden be streamlined. Response. NMFS responded to similar comments in the October 1st final rule (75 FR 60868) about the impacts on small businesses. In particular, concerns were raised about negative impacts on deckhands and smaller boats; that program costs to fishermen, including the costs of entering the fishery and the costs of observers and monitoring are too high; that observer rules need to change for trawl and small boats to reflect the vastly different bycatch which occurs when mistakes are made; about the impact of the allocation formulas on Fort Bragg fishermen; concern that average fishermen will not be able to afford to participate and that this could lead to increased consolidation and leave many ports no longer viable; about negative impacts on processors, that small processors will be driven out of business due to consolidation; and that it will eliminate the “mom and pop businesses.” NMFS has responded to these comments in detail in the October 1st initial issuance final rule (75 FR 60868). That response is applicable to the comments associated with this rule. In terms of impacts on small businesses, the trawl rationalization program is intended to increase net economic benefits, create economic stability, provide full utilization of the trawl sector allocation, consider environmental impacts, and promote conservation through individual accountability for catch and bycatch. The allocations of quota under the new program do not differ significantly from status quo allocations made biennially in terms of total allocations. However, instead of fleetwide quotas, there will now be individual allocations of quota shares and quota pounds to permit owners. Allocations of overfished species constrain all groundfish fishermen, for both large and small operations. In some cases, smaller operators may be constrained to a greater extent. This was recognized in development of the program, and operators are encouraged to work together cooperatively, through mechanisms like combining and sharing quota amounts. The program provides for leasing of additional quota as needed to facilitate operations. The program includes provisions that would have a beneficial impact on small entities. It would create a management program under which most recent participants in the Pacific Coast groundfish limited entry trawl fishery (many of which are small entities) would be eligible to continue participating in the fishery and under which the fishery itself would experience an increase in economic profitability. Small entities choosing to exit the fishery should receive financial compensation from selling their permit or share of the resource. To prevent a particular individual, corporation, or other entity from acquiring an excessive share of the total harvest privileges in the program, accumulation limits would restrict the amount of harvest privileges that can be held, acquired, or used by individuals and vessels. In addition, for the shoreside sector of the fishery, an AMP was created to mitigate any adverse impacts, including impacts on small entities and communities that might result from the program. It is expected that the shorebased IFQ fishery will lead to consolidation and this may affect small processors, particularly if they are in disadvantaged ports. Chapter 4 of the Amendment 20 FEIS analyzed the effects on processors from various perspectives: The distribution of landings across west coast ports may change as a result of fleet consolidation, industry agglomeration, and the comparative advantage of ports (a function of bycatch rates in the waters constituting the operational area for the port, differences in infrastructure, and other factors). In particular, the Council analysis indicated that processors associated with disadvantaged communities may see trawl groundfish volumes decline. The analysis highlights that those processors receiving landings from Central California or Neah Bay may see a reduction in trawl caught groundfish if the market is able to redirect activity toward more efficient and advantaged ports. However, in addition to increased landings that are expected to result from the IFQ program, small processors and disadvantaged communities may benefit from the control limits, vessel limits, and adaptive management policies. Control limits will limit the ability of large processors to obtain shares of the fisheries while the AMP processes will allow the Council to consider the impacts on small processors and disadvantaged communities when allocating the AMP quota (10 percent of the total non-whiting trawl quotas). Although vessel accumulation limits tend to lower economic efficiency and restrict profitability for the average vessel, they could help retain vessels in communities because more vessels would remain. Another process by which small processors and disadvantaged communities may benefit will be the future development of CFAs. Some of the potential benefits of CFAs include: Ensuring access to the fishery resource in a particular area or community to benefit the local fishing economy; enabling the formation of risk pools and sharing monitoring and other costs; ensuring that fish delivered to a local area will benefit local processors and businesses; providing a local source of QSs for new entrants and others wanting to increase their participation in the fishery; increasing local accountability and responsibility for the resource; and benefiting other providers and users of local fishery infrastructure. In summary, the major impacts of this rule appear to be on shoreside processors which are a mix of large and small processors, and on shorebased trawlers which are also a mix of large and small companies. The non-whiting shorebased trawlers are currently operating at a loss or at best are “breaking even.” The new rationalization program would lead to profitability, but with a reduction of about 50 percent of the fleet. This program would lead to major changes in the fishery. To help mitigate against these changes, as discussed above, the agency has announced its intent, subject to available Federal funding, that participants would initially be responsible for 10 percent of the cost of hiring observers and catch monitors. The industry proportion of the costs of hiring observers and catch monitors would be increased every year so that by 2014, once the fishery has transitioned to the rationalization program, the industry would be responsible for 100 percent of the cost of hiring the observers and catch monitors. NMFS believes that an incrementally reduced subsidy to industry funding would enhance the observer and catch monitor program's stability, ensure 100 percent observer and catch monitor coverage, and facilitate the industries' successful transition to the new quota system. In addition, to help mitigate against negative impacts of this program, the Council has adopted an AMP where starting in year 3 of the program, 10 percent of non-whiting QS would be set aside every year to address community impacts and industry transition needs. After reviewing the initial effects of IFQ programs in other parts of the world, the Council had placed a short term QS trading prohibition so that fishermen can learn from their experiences and not make premature sales of their QS. The Council is also envisioning future regulatory processes that would allow community fisheries associations to be established to help aid communities and fishermen. NMFS has taken a hard look at the reporting burdens of the program and, given the program requirements, reduced the burden on small businesses to the extent possible. For instance, in the IFQ fishery, transactions for QS accounts and vessel accounts will be done online, reducing the paperwork burden. The QS permit renewal process will be the same as the current limited entry permit renewal process and during the same time period because initially most QS permit owners would already be familiar with the limited entry permit renewal process. Similarly, in the mothership sector, the MS/CV-endorsed permit renewal will be combined with their declaration of intent to obligate to a mothership processor so that both are done on the same form at the same time. To the extent possible, NMFS will send out permit renewal forms and other associated forms, such as the ownership interest form, pre-filled to reduce the burden on respondents. For the EDC, the survey design has sought to avoid duplication of data collection, and was developed from meetings with industry participants to discuss making survey questions easily understandable and consistent with the record keeping practices of survey respondents to reduce the burden on respondents. For the trawl monitoring requirements, NMFS has reduced the burden of the catch monitoring plans for first receivers by only requiring essential information needed to assure adequate catch accounting. To reduce the burden of requiring electronic fish tickets, fish ticket software will be provided at no cost, and will use a standard operating system and common software already owned by most businesses; fish ticket software will be compatible with the existing fish ticket requirements in each of the three states; and the software can be used to print a paper copy for submission to the state, when state law allows. To reduce costs, NMFS has determined that a person certified as both an observer and a catch monitor can serve in both capacities, within limitations on hours worked. After consideration of all these efforts and the requirements of the program, NMFS has determined that the remaining reporting requirements are necessary. Comment 14. One commenter expressed concerns that the inequitable distribution of overfished species QS, such as Canary Rockfish, disproportionately impacts California, while favoring Washington and Oregon; that the program should not result in an unfair allocation between the states; and that the program should be designed to result in an even consolidation between states and between the sectors (non-whiting shorebased IFQ, whiting shorebased IFQ, mothership sector, and catcher/processor sector). Response. With respect to the effects on the States including industry consolidation effects, NMFS acknowledges that this program may have different impacts on different states and on different communities. As mentioned above, one of the potential purposes of the AMP is to address differential impacts upon communities and thus the states. National Standard 4 requires that when it becomes necessary to allocate or assign fishing privileges among various United States fishermen, such allocation shall be (A) Fair and equitable to all such fishermen; (B) reasonably calculated to promote conservation; and (C) carried out in such a manner that no particular individual, corporation, or other entity acquires an excessive share of such privileges. The National Standard 4 guidelines at § 600.325(c)(3)(i)(B) state that: “An allocation of fishing privileges may impose a hardship on one group if it is outweighed by the total benefits received by another group or groups. An allocation need not preserve the status quo in the fishery to qualify as fair and equitable, if a restructuring of fishing privileges would maximize overall benefits. The Council should make an initial estimate of the relative benefits and hardships imposed by the allocation, and compare its consequences with those of alternative allocation schemes, including the status quo.” Thus, the Councils are given wide latitude to determine what is equitable within a particular fishery and to create the appropriate management measures to accomplish the goals of an FMP. The issue of allocation of overfished species was addressed extensively in the response to comments in the October 1st final rule. (75 FR 60868, comments 29 and 31.) Generally speaking, the Council evaluated the impacts of its allocation decisions and adequately determined that, after weighing the costs and benefits of its proposed scheme, the allocations selected were to the overall benefit of the fishery and its participants. Comment 15. One commenter stated that NMFS has not adopted criteria for participation in CFAs as required by law and improperly excluded CFAs from initial allocations. The commenter further stated that the 10 percent set aside for the AMP would not be enough to meet the needs of CFAs, smaller vessels idled by the program, processors, or new entrants. Another commenter stated that the 10 percent set aside for the AMP should be used to mitigate transition impacts and be used as an incentive pool for conservation results and to improve the program. Response. NMFS responded to a similar comment in the October 31st final rule (75 FR 60868, comment 41) which is incorporated here by reference. NMFS disagrees that communities have been excluded from initial allocations. Communities have not been precluded from acquiring groundfish limited entry trawl permits, which would make them eligible for the initial allocation of QS associated with a permit. Additionally, the Council's preferred alternative includes a very broad definition of who may own quota shares, so communities are not precluded from acquiring quota once the program is implemented. Just as non-trawl fishermen currently need to obtain a trawl-endorsed limited entry permit to participate in the trawl fishery, under the trawl catch shares program, a trawl permit and quota pounds is all that is needed to participate. NMFS also disagrees with the statement that the Council and NMFS did not follow the law with regard to CFAs. NMFS created the trawl rationalization program, including allocation to an AMP, consistent with the MSA and with communities in mind. The trawl catch shares program includes several ways to participate beyond the initial issuance of quota share. The AMP specifically reserves 10 percent of the non-whiting shoreside quota share to allocate in such a manner as to promote a wide range of important objectives, beginning with year 3 of the program. The objectives for this program are: Community stability, processor stability, conservation, unintended/unforeseen consequences of IFQ management, and facilitation of new entrants. NMFS agrees with the commenter's statement that the 10 percent set aside for the AMP should be used to mitigate transition impacts. During the first 2 years of the program, the AMP will help mitigate transition impacts by distributing the resulting to QP to trawlers with non-whiting QS to help them as they adjust to the new program, begin to work together and pool their resources, and adjust to new costs. In ongoing years, the AMP will help mitigate impacts of the program and promote conservation following the objectives for the AMP stated above. In addition to the AMP, the Council is also developing provisions for community involvement through CFAs as a trailing amendment. The trawl catch shares program includes a moratorium on the transfer of quota share during the first two years of the program (quota pounds will be able to be transferred during the moratorium), combined with provisions to require divestiture of quota share over accumulation limits during years 3 and 4 of the program. The moratorium is in part intended to slow the movement of quota share holdings out of communities during a time when the trailing action for community fishing associations can be developed and implemented in a considered fashion. Recommendations for how to structure the CFA provisions in a trailing action are welcome and should be brought forward as that proposal is developed by the Council. Moreover, the Council specifically acknowledged flexibility to adapt to changing circumstances, including provisions for a comprehensive review of the program that includes a community advisory committee, to evaluate effectiveness in relation to the original program goals and objectives, scheduled for year five of the program. The trawl rationalization program has addressed and continues to address directly these issues and ways to improve the program. Comment 16. One commenter stated that the rapid increase in value of QS and QP will make it hard for communities and CFAs to participate in the program. The commenter further stated that NMFS' new measure to allow limited entry trawl permit transfers during a window of time before the permit and endorsement application period will foster quick inflation of QS value. Response. NMFS appreciates the commenter's insight into the value of QS based on NMFS providing a window of opportunity for limited entry permit transfers before the permit and endorsement application period. NMFS' intent in providing this window in the October 31st initial issuance final rule (75 FR 60868) was solely to provide some additional flexibility for potential participants in the program in making their business decisions before being locked into their business arrangement for the next 2 years. As stated in the preamble to the final initial issuance rule, NMFS believes this change is consistent with the Council's intent to provide an opportunity for entry level participants to obtain a qualifying trawl limited entry permit prior to initial issuance with reasonable certainty of anticipated QS that would be issued on the basis of that permit. Further, for permit owners that have qualifying history that would exceed control limits, this change will provide an opportunity to divest permits prior to calculation of QS and any redistribution of QS. Comments on the Observer and Catch Monitor Programs Comment 17. Some commenters stated that alternatives should be explored to reduce the industry and taxpayer costs of the program, such as not requiring the industry to pay for observer ( i.e., the government should pay as part of its enforcement mandate), requiring less than 100 percent observer coverage, allowing the use of cameras, or measures to reduce observer costs below $350-500 per day. Another commenter agreed with NMFS that an observer can also be a catch monitor to reduce costs but also to gain data tracking efficiencies. A third commenter stated support for 100 percent observer coverage and rigorous observer and catch monitor training requirements. Response. Less than 100 percent observer coverage and the use of cameras to supplement or substitute for observer coverage were considered by the Council during the program's development, but were rejected. Full and independent accountability of all catch is key to the success of the catch shares program especially programs using individual fishing quotas. NMFS has recognized the increased costs to the industry and is therefore planning to subsidize the cost of observer coverage for at least the first year, subject to appropriations (see response to Comment 22). The defraying of cost via this subsidy will give the fleet time to develop cost cutting measures with other industry members in their port and with the observer provider companies. NMFS recognizes the importance of reigning in costs to the industry and the public and will continue to investigate and implement efficiencies when practical. One such efficiency is that a person can be trained and certified as both an observer and as a catch monitor. That person could act in both capacities even for the same vessel's offload, subject to maximum work hour requirements and other limitations, which may provide some cost savings. Comment 18. The Pacific Fishery Management Council commented in agreement with the conflict of interest regulations as proposed by NMFS under Alternative 2 for the observer and catch monitor regulations. Another commenter supported rigorous conflict of interest provisions. Response. In the August 31st proposed rule (75 FR 53380), NMFS provided two alternative sections addressing conflict of interest provisions applicable to observers and catch monitors; Alternative 1 provided provisions as deemed by the Council, Alternative 2 presented the NMFS-proposed language. NMFS provided its rationale for the NMFS-proposed alternative in the proposed rule, and explained that the NMFS-proposed conflict of interest provisions are consistent with existing language in NMFS policy statement 04-109-01 and current standards in the West Coast Groundfish Observer Program. NMFS specifically requested comment on which provisions to include in the final rule and NMFS received no comments in disagreement with the NMFS-proposed alternative included in the final rule. Comment 19. One commenter stated that Morro Bay, California, will not have enough trawlers to support a catch monitor. Response. NMFS responded to a similar comment regarding costs of monitoring in the October 31st final rule (75 FR 60873, comment 22). As stated in the response to the prior comment: “Analyses indicate that the program benefits will outweigh the program costs. The EIS anticipates that the value of the fishery will increase through a variety of mechanisms, including increased efficiency of existing vessels, the transfer of effort to the most efficient vessels, and increased retention of target species. The program includes opportunities for adaptive management if actual impacts differ from projected impacts. [* * *] To aid the fishing industry during the transition to a rationalized fishery, the agency has announced its intent, subject to available Federal funding, to cover a portion of the initial cost of hiring observers and catch monitors. As stated by the agency, participants would initially be responsible for 10 percent of the cost of hiring observers and catch monitors, with that amount increased every year so that by 2014, the industry would be responsible for 100 percent of the cost of hiring the observers and catch monitors.” Landings monitoring is an essential component to the rationalization program developed by the Council. Thus, industry members and catch monitor providers need to work together to resolve local implementation issues such as the development of cost-effective deployment of catch monitors in Morro Bay. One potential solution provided for in this final rule would be to contract with providers for the services of observers that are also certified as catch monitors. Such “dual certified” observers, which would already be on board the vessel participating in the Shorebased IFQ Program, could assume the catch monitor role for the IFQ first receiver. Coordination between the fishing vessel, the IFQ first receiver, and the observer/catch monitor provider will help alleviate concerns of program costs under circumstances such as those presented at Morro Bay. NMFS anticipates that further opportunities to reduce costs will develop with experience under the program. See also the response to Comment 20. Comment 20. California Department of Fish and Game (CDFG) commented that it supports an ongoing dialogue with NMFS and the states about the use of state employees as observers or catch monitors within the trawl rationalization program, provided that such dialogue includes a mechanism to reimburse the states for the use of state employees. Response. NMFS acknowledges the comment and plans to continue its dialogue with the states regarding the use of state employees as observers and/or catch monitors. Initial discussions conducted thus far indicate that the states are interested in providing some catch monitor services. If state employees serve as catch monitors, NMFS anticipates that reimbursement for costs associated with such services would be a component of legal contracts entered into between the states and the IFQ first receivers or vessels to which the states provide services. NMFS looks forward to continued discussions with the states to support coordination of the trawl rationalization program with state employees. Comment 21. Some commenters asked for clarification of the terms, “authorized officer,” “authorized person,” and “NMFS staff” with regard to the catch monitor and observer regulations. One commenter stated that persons authorized access to first receiver facilities should include state-authorized employees, both law enforcement and non-law enforcement, and Pacific States Marine Fisheries Commission staff. Both of these types of personnel are involved in the monitoring and enforcement of the groundfish fishery. The commenter also noted inconsistent use of the terms “authorized officer” and “authorized person” in the regulations and recommended a consistent and encompassing use of the term “authorized person.” Another commenter asked that the term “NMFS staff” be defined and should be more narrow than any employee of NMFS. The commenter suggested a definition. Response. NMFS appreciates the comments and how they highlight the variety of management and enforcement persons that are involved in the program. However, NMFS disagrees that further definitions are necessary at this time. NMFS believes that the current use of the terms is appropriate and serves to distinguish the different persons that must have access to, or accomplish other duties in connection to program management and enforcement. “Authorized officer” is a term already defined under the MSA in regulations found at 50 CFR part 600. The term is focused exclusively on enforcement officers, both state and Federal, and includes NOAA agents and officers, state officers acting under a JEA with NOAA and USCG boarding officers. This term is important for use involving inspection and enforcement activities. “Authorized person” is not defined but was included to identify persons other than enforcement officers and NMFS staff who are authorized to conduct duties related to the program. The term includes catch monitors as they are not NMFS staff, but are employees of contractors. These persons have authority to conduct duties pursuant to the program regulations. NMFS staff are those persons who have authority to conduct duties under the program regulations, as well. As for state employees, these persons have independent authority under state laws to enter the facility and do their jobs. Comment 22. One commenter asked if NMFS' offer to cover up to 90 percent of the costs of the observer program during the first year of the program was for all sectors of the fishery, or only the Shorebased IFQ Program. Response. There is no assurance or guarantee that NMFS will provide funding, as the funding depends on Congressional appropriation. However, assuming that an appropriation is made and those funds are made available to the program and not otherwise restricted, NMFS NWR would apply these funds to help defray both the observer and catch monitor program costs. Further, NMFS would make the funds available to all three sectors (MS, C/P, and Shorebased) not just the Shorebased IFQ program. Comment 23. One commenter suggested that language on the catch monitor program stating that “monitors have access to telephone lines during the times that Pacific whiting was being processed” may be an artifact of previous regulations for catch monitors. The commenter suggested that NMFS re-examine whether this language should apply to more species than Pacific whiting. Response. NMFS agrees with the comment and, upon further review, has determined that this requirement is no longer necessary. The commenter was correct that catch monitors may need access to more species that just Pacific whiting for the Shorebased IFQ Program. In addition, any phone may be used, a cell phone or a telephone. However, the IFQ first receiver will not have to provide catch monitors with access to a phone while IFQ species are being processed. That is the responsibility of the catch monitor provider as stated at § 660.17(e)(8)(i)(A). NMFS is removing this language from the IFQ first receiver responsibilities at § 660.140(i)(4). See the section on “Changes from the Proposed Rule.” Comments on the Economic Data Collection (EDC) Program Comment 24. Some commenters stated that the economic data collection questionnaire was too detailed and burdensome for small businesses. One of those commenters suggested that if it is an annual questionnaire, it should be simplified to collect only crucial information. If the detailed questionnaire is continued, it should be collected periodically, not annually. Another commenter stated that the EDC program is too narrow and will not capture the effects of the trawl rationalization program on jobs, businesses, and communities. Response. In developing the trawl catch share program, NMFS is striking a balance. NMFS believes the importance and benefits of this program outweighs the burden on small businesses. The statute authorizing LAP programs such as this, Section 303A of the MSA, requires periodic reviews. In order to do that, NMFS must collect both baseline and annual information to judge the effectiveness of the program for the 5 year review. NMFS will continue to work through the Council process to make any necessary changes to the program to assure that that program does collect information needed by the Council meets the requirements of the MSA and the Council including providing assessments on the impacts of the program on jobs, businesses, and communities. NMFS' authority to collect economic information is limited to those vessels and processors harvesting and processing fish that are regulated under the MSA. Although NMFS could ask for economic information from persons or entities that are not directly regulated under a fishery program, it would be unable to require submission of the information. This is a critical difference and NMFS cannot establish a voluntary economic information program that would certainly be rejected by non-fishery industry persons and entities. NMFS could not ensure confidentiality of voluntarily submitted information and this problem would mean NMFS would never receive information or receive information that was incomplete or unreliable. An incomplete or unreliable database would be unusable. Regarding a commenter's concern over the EDC program not capturing the effects of the trawl rationalization program on lost jobs, closed businesses, and devastated communities, the Northwest Fisheries Science Center will conduct voluntary interviews through the Trawl Rationalization Program Human Dimensions Study to try and capture some of these other effects of the program. Comment 25. One commenter agreed with NMFS' definition of “processor” for the EDC Program. Response. NMFS acknowledges this commenter's concurrence with the proposed definition for “processor” for the EDC program. Comment 26. One commenter expressed concerns about the EDC audit process, in particular the potential use of a third-party auditor to examine EDC submissions. The comment focused on the handling of “extremely sensitive commercial information”. The comment acknowledges that NMFS states that submitted information is confidential, but the comment suggests that there are no standards or rules in place to ensure confidentiality. Further, the comment questions whether NMFS can ask for tax information and require its submission to a third-party auditor and whether this practice may violate IRS rules. Response. While NMFS understands the concern about information confidentiality, this issue was highlighted in the proposed rule and NMFS explained that the EDC program will ensure information confidentiality. Information submitted to NMFS pursuant to the trawl program is considered confidential not only under the MSA, which specifically states that submitted information is confidential and not disclosable, but also there are at least two other Federal acts that NMFS uses to hold commercial and financial information confidential, namely the FOIA and Trade Secrets Act. NMFS has promulgated regulations that describe information confidentiality and processes to ensure its confidentiality at 50 CFR 600.405. Further, NMFS follows a detailed policy-based process, titled NAO 216-100, directing specifically how NMFS employees and contractors ensure information confidentiality. NMFS personnel as well as any third-party contractor, such as an auditor, are required to retain information confidentiality. Should information be mishandled and inappropriately disclosed, both civil and criminal sanctions could be applied depending on the circumstances. To further ensure the confidentiality of information submitted to third-parties such as auditors, NMFS wrote regulatory language at section 660.114(e) describing the EDC audit procedures that indicates that any information required for verification of economic data, including that provided to a third-party auditor, is considered a required submission to NMFS. In other economic information collection programs, such as those found in the North Pacific crab and Bering sea trawl groundfish programs, NMFS has adopted the use of professional auditors to evaluate economic and financial information. Due to resource limitations, NMFS has no choice but to contract for these special services and cannot provide them “in-house.” Finally, NMFS—like private institutions—can require submission of financial documents, including tax reporting forms, if necessary to ensure that its program receives reliable, verifiable information. If this was not the case, NMFS could not carry-out Congress' intent that commercial and financial information be collected and evaluated for this limited access program's future evaluation and potential effectiveness. Comment 27. One commenter suggested revised wording for the economic data collection program regulations at § 660.114 to require only one owner of a processor to submit the required data, if the processor is owned by more than one person. The commenter stated that not all owners may have access to the level of detail required on the forms and the additional burden of requiring all owners to submit the data is unnecessary. Response. NMFS agrees, but does not conclude that a change in the proposed rule text is necessary. NMFS is aware that some processors are owned by more than one person. However, a processor can be considered a single person or entity and thus would report its information on one form. Thus, NMFS requires only one EDC form from a processor provided that the form provides all relevant and complete information from the processor. All owners of a processor, however, are subject to the risk that with the filing of one form for the processor, that the form may not be timely filed or properly completed by whoever is identified as the responsible party for submitting it on behalf of the processor and thus, all the owners. Comment 28. One commenter suggested that the language in § 660.114, for the trawl fishery economic data collection program, should be revised to read “holder” of a first receiver site license rather than “owner” because the license is a privilege and conveys no ownership rights. Response. NMFS agrees with the commenter that first receiver site licenses are a privilege and not a right, but declines to change the term from “owner” to “holder” as the commenter suggests. The regulations at § 660.100 clearly state that any privileges (including IFQ first receiver site licenses) in the trawl rationalization program may be revoked, limited, or modified at any time. In order to take delivery of groundfish caught in the Shorebased IFQ Program, an IFQ first receiver would need to have a first receiver site license. “IFQ first receivers” are defined in the October 31st final rule (75 FR 60868) at § 660.111 as “persons who first receive, purchase, or take custody, control, or possession of catch onshore directly from a vessel that harvested the catch while fishing under the Shorebased IFQ Program described at § 660.140, subpart D.” For the first receiver site license owner, the term “license owner” is defined at § 660.11 as “a person who is the owner of record with NMFS, SFD, Permits Office of a License issued under § 660.140, subpart D” and is cross-referenced from the “permit owner” definition. Comments on Ownership and Transfer Comment 29. One commenter asked if an estate completes probate court during the first two years of the program, can ownership of the limited entry trawl permit and QS permit be transferred from the estate administrator to a beneficiary. Response. The proposed rule states that “[d]uring the first 2 years after implementation of the program, QS or IBQ cannot be transferred to another QS permit owner, except under U.S. court order and as approved by NMFS.” 50 CFR 660.140(d)(3)(ii)(B)( 1 ). During the first two years of the program, QS and IBQ are non-transferable. However, NMFS recognizes that there may be some circumstances where a court may order or authorize the distribution of assets, including QS or IBQ. Such a circumstance may arise as a result of death or dissolution of a QS owner, such as in probate or in a bankruptcy action. NMFS drafted this regulatory provision to accommodate such circumstances. Such a transfer would still be subject to review by NMFS, however, to determine whether the transferee is eligible to own QS and whether the ownership interest of the transferee would be within the control limits; NMFS will not approve a transfer if the transferee is ineligible to own QS or if the ownership interest of the transferee would exceed control limits as a result of the transfer. NMFS recognizes that not all distributions of assets in probate or bankruptcy may be set forth in a court order. Accordingly, NMFS has clarified its intent by modifying the regulatory provision to state that “[d]uring the first 2 years after implementation of the program, QS or IBQ cannot be transferred * * * except under U.S. court order or authorization and as approved by NMFS.” Comment 30. One commenter asked if two limited entry trawl permits are owned by the same entity, for example an estate administrator, can the resulting QS from the two limited entry trawl permits be separated into two QS permits if the court orders the permits to be divided between beneficiaries. Response. In the situation described by this commenter, where a court orders division of the permits, NMFS would transfer the QS and IBQ to the separate beneficiaries, subject to NMFS' approval of the transfer. For NMFS to approve such a transfer, NMFS would first determine whether each beneficiary is eligible to own QS; if a beneficiary is eligible and does not already own a QS permit, NMFS would issue a QS permit to the beneficiary. NMFS would also review the transfer to determine whether either beneficiary's ownership interest in QS or IBQ would exceed control limits as a result of the transfer. If a beneficiary is not eligible to own QS, or if the transfer of QS would cause the beneficiary's ownership of QS or IBQ to exceed control limits, NMFS would not approve the transfer. NMFS would respond in the same manner if the transfer is otherwise authorized by a court. See response to Comment 29. Comment 31. Several commenters commented on application of ownership limits on trusts. a. One commenter agreed with NMFS that the trustee should be considered the owner of a trust. Response. NMFS acknowledges this comment. b. Another commenter agreed that NMFS correctly identified the nature of trust ownership, but expressed concern that a trustor or beneficiaries could exert control over the trust. The commenter suggested that to prevent this, all parties to the trust (trustor, trustee, and beneficiaries) should be charged with 100 percent of the trust ownership for purposes of application of control limits. Another commenter similarly expressed concern that accumulation limits may be exceeded through ownership by a trust, and also suggested 100 percent ownership be applied to the trustor, trustee, and beneficiary for control test purposes. Response. NMFS acknowledges the comment that accumulation limits may be exceeded by other parties besides a trustee where QS or IBQ is owned by a trust, but distinguishes between the different accumulation limits that apply. “Accumulation limits,” as defined in the proposed rule, means “the maximum extent of permissible ownership, control or use of a privilege within the trawl rationalization program[.]” 75 FR 53413 (emphasis added). As stated in the preamble to the proposed rule, NMFS interprets an ownership interest by a trust to vest ownership in the trustee; this interpretation applies specifically to permissible ownership. Ownership limits would apply to ownership of MS/CV-endorsed permits and catch history assignment, MS permits, and to QS and IBQ as a subset of applicable control limits. With regard to QS and IBQ and control limits Amendment 20 to the FMP states that “[t]he term `own or control' was shortened to `control' for simplicity[;] `Control' includes ownership[.]” (Appendix E, footnote y, at E-21, August 2010.) In the proposed rule, control limits applicable to the Shorebased IFQ Program are defined as “the maximum amount that a person may own or control[.]” 75 FR 53413 (emphasis added). NMFS' interpretation that ownership of QS or IBQ by a trust would vest ownership in the trustee (or trustees, if more than one) only applies to the maximum permissible ownership aspect of compliance with control limits. Ownership of QS or IBQ by a trust and control by any party other than the trustee—whether such party is the trustor, a beneficiary, or any other party—are two different things. While ownership is one way in which a party may exercise control, control is broader than ownership and a determination of control depends on further investigation beyond identification of the legal ownership of the QS or IBQ involved. A person may exceed control limits for QS or IBQ despite having no ownership of the QS or IBQ. Investigations regarding alleged violations of control limits will depend on the facts unique to each situation; NMFS will make a determination based on all relevant facts and circumstances revealed in an investigation. Ownership will be one fact considered, but not the only one. As stated in the preamble to the proposed rule, NMFS acknowledges that additional information, such as the trust document, may be needed to determine compliance with control limits. As the commenter points out, other facts may be needed as well. Accordingly, the proposed rule and this final rule includes provisions that NMFS may ask for additional information it believes to be necessary for a determination of compliance with control limits. NMFS disagrees with the commenters' suggestion that NMFS should attribute trust ownership to parties other than the trustee for control limit purposes. One of the commenters described scenarios where parties other than the trustee may possibly exert control, either directly or indirectly, over the trust, the trustee, or the QS or IBQ; however, the commenter has not provided sufficient facts to enable NMFS to determine whether control limits are exceeded under these scenarios. The commenters' suggested approach would presume control exists regardless of the facts and would attribute control to trustors and beneficiaries even where they have no actual control. NMFS acknowledges that one of the commenters expressed concern that an investigation of control would require “valuable time of NMFS staff[,]” but this applies for any enforcement investigation of control by parties other than legal owners, regardless of whether the ownership interest is a trust or any other form of ownership interest. Accordingly, NMFS declines to revise its interpretation of the attribution of ownership interest of a trust to the trustee. Comment 32. One commenter stated that the proposed Shorebased IFQ Program does not comply with MSA limitations on who can hold, acquire, or use limited access privileges, and that unrestricted ownership of quota shares will increase the cost of entry into the fishery and thwart the conservation benefits of the program. Response. Section 303A(c)(5)(E) of the MSA states that in developing a limited access privilege program to harvest fish a Council shall “authorize limited access privileges to harvest fish to be held, acquired, used by, or issued under the system to persons who substantially participate in the fishery, including in a specific sector of such fishery, as specified by the Council.” NOAA interprets that provision to mean that those who substantially participate in the fishery must be among those eligible to acquire QS, but are not the only entities or person who can receive QS. In other words, as long as those who substantially participate in the fishery are included as those eligible to receive QS, this provision of the statute is satisfied. The Council's eligibility criteria at § 660.140(d)(2) would allow all entities that currently substantially participate in the shorebased IFQ fishery to hold, acquire, use or be issued QS. Comment 33. One commenter stated that the proposed Shorebased IFQ Program does not comply with the MSA because it allows QS to be acquired to perfect a security interest. Response. Section 303A(c)(1)(D) of the MSA, which addresses requirements for eligibility for limited access programs, does not prohibit the acquisition of QS to perfect a security interest. This section states that the same statutory eligibility criteria apply to all persons who acquire a privilege to harvest fish, including those who acquire a limited access privilege solely for the purpose of perfecting or realizing on a security interest in such privilege. The MSA would allow United States citizens, corporations, partnerships, other entities established under the laws of the United States or any State, or permanent resident aliens to acquire privileges to harvest fish, including acquiring a privilege for the purpose of perfecting or realizing on a security interest in such privilege, if they meet the eligibility and participation requirements established in the program. The MSA requires that a limited access privilege program prohibit other persons from acquiring a harvesting privilege. The eligibility and participation requirements for the Shorebased IFQ Program in § 660.140(d) are consistent with the MSA. Comment 34. One commenter asked for clarification in the final rule on whether NMFS addressed the Council's motion that does not require the size (or length) endorsement on a vessel to be reduced for limited entry trawl permits transferred to smaller vessels. Response. NMFS addressed this issue, consistent with the Council motion, in the October 1st final rule (75 FR 60868) at § 660.25(b)(3)(iii)(B)( 1 ) which states, “A limited entry permit may be registered for use with a vessel up to 5 ft (1.52 m) longer than, the same length as, or any length shorter than, the size endorsed on the existing permit without requiring a combination of permits or a change in the size endorsement.” Previously, limited entry fixed gear and limited entry trawl permits had different size endorsements limitations. Trawl rationalization changed these requirements making the trawl size endorsement limitations mirror the limited entry fixed gear (i.e., the size endorsement of neither type of permit has to be reduced if registered to a smaller vessel). Comments on Initial Allocation of Catch Shares Comment 35. One commenter stated that the allocation formula for overfished species rewarded fishermen that caught overfished species while penalizing those that successfully avoided them. Response. NMFS responded to a similar comment in the October 31st final rule (75 FR 60868, comment 31) which stated, “The Council considered and rejected the option of allocating overfished species for nonwhiting trips using the same method as for other nonwhiting IFQ species as not appropriate under the circumstances. In particular, the relative weighting approach, by which landings for a year are measured as a percent of all landings for the year and species, would have given a particularly high amount of credit for pounds caught during the rebuilding period. Additionally, QS would have been allocated to those who targeted some of the overfished species in the mid-1990s (before they were declared overfished) rather than to those who need such QS to access current target species. Accordingly, the Council rejected the approach of using the same allocation formula for overfished species as for nonwhiting target species based on the desire to not reward bycatch during the rebuilding period and in order to provide QS to those who would need it to cover incidental catch taken with their target species QS allocation. Regarding the comment that overfished species years selected were arbitrary, the Council's methodology for allocating overfished species is significantly different than the methodology for allocating target catch. The 1994-2003 period is still used to determine the target species allocation, and the harvest patterns from the 2003-2006 logbooks are used to determine the amount of overfished species an entity would need to take its target species. In this fashion, more recent information for the fishery is used without rewarding post control date increases in effort. The 1994-2003 harvest patterns were not used to determine a target species QS recipients need for overfished species QS. This is because of the substantial changes in fishing patterns which were induced by the determination that some species were overfished and the implementation of the RCAs and because the RCAs will remain in place after the trawl rationalization system is put into place. Therefore, the Council considered that an estimate of likely patterns of activity should be based on a period of time when the RCAs were in place. The RCAs were not in place for most of the 1994-2003 period but were in place for 2003-2006, further supporting the conclusion to use this period for the allocation of overfished species.” Comment 36. Several commenters stated that the program should not result in an unfair allocation between the states, and should be designed to result in an even consolidation between states and between the sectors (non-whiting shorebased IFQ, whiting shorebased IFQ, mothership sector, and catcher/processor sector). One commenter stated that California fishermen have received an unfair allocation of overfished species compared to fishermen in Washington and Oregon, which was not discussed by the Council, analyzed under NEPA, or justified under the Magnuson-Stevens Act. Response. NMFS responded to a similar comment in the October 31st final rule (75 FR 60868, 60885, comment 61). As stated in the response to the prior comment: “The trawl rationalization program was developed through the Council process, which facilitates substantial participation by state representatives. Generally, state proposals are brought forward when alternatives are crafted and integrated to the degree practicable. Decisions about catch allocation between different sectors or gear groups are also part of this participatory process, and emphasis is placed on equitable division while ensuring conservation goals. The Council determined that none of the alternatives considered, including the final plan, would discriminate against residents of different states. The rationalization program was structured to provide fair and equitable allocations of both target species and overfished species to participants.” These concerns were expressly identified and addressed in the FEIS for Amendment 20, as well. See the FEIS “Rationalization of the Pacific Coast Groundfish Limited Entry Trawl Fishery” in Chapter 6, Section 6.2 on pages 611. See also the response to Comment 14, supra. Comment 37. One commenter disagreed with NMFS' decision to move forward with formal allocations to the trawl fishermen, favoring the most impactful gear. The commenter is hopeful that the program can still be utilized to create conservation benefits and lessen bycatch and habitat impacts from destructive gears. Response. NMFS responded to a similar comment in the October 31st final rule (75 FR 60868, comment 81) which stated, in part, “The action [from the October 31st final rule] largely limits the trawl allocation of many of the Amendment 21 species to percentages less than the historical trawl catch shares to the benefit of the non-trawl sectors. For instance, the proposed action limits the maximum trawl allocation of any Amendment 21species to 95 percent of the directed harvest when historical trawl catch shares for many of these species have been higher than 95 percent. Amendment 21 species' allocations that tend to favor non-trawl sectors (i.e., non-trawl sector allocations greater than observed in the 1995 to 2005 historical catch) include Pacific cod, Pacific ocean perch, chilipepper rockfish south of 40°10′ N. lat., splitnose rockfish south of 40°10′ N. lat., shortspine thornyhead north of 34°27′ N. lat., longspine thornyhead north of 34°27′ N. lat., darkblotched rockfish, Dover sole, English sole, petrale sole, arrowtooth flounder, starry flounder, and species in the Other Flatfish complex. All other Amendment 21 species' allocations under the proposed action are generally favorable to non-trawl sectors in that the highest non-trawl sector catch percentages analyzed were proposed to be allocated to the non-trawl sectors. The only exception to this general trend is lingcod, where a more favorable trawl allocation was adopted as the final action. The rationale for a higher trawl allocation of lingcod is that, unlike the non-trawl sectors that predominantly use hook-and-line gear to target groundfish, the trawl sectors are not as constrained by management measures designed to foster yelloweye rockfish rebuilding. This is because the mandatory use of trawls with small-diameter footropes (i.e., at least 8 inches) shoreward of the RCA effectively keeps bottom trawls out of the high relief habitats where yelloweye occur. A higher trawl allocation of lingcod would minimize stranding of harvestable yields of lingcod that would otherwise be allocated to non-trawl sectors and unavailable for harvest due to yelloweye rebuilding constraints. Thus, the inter-sector allocation does not provide more bottom trawl opportunity than status quo management measures and allocations. In addition, the trawl rationalization allows limited entry trawl permit holders to switch from trawl to fixed gears to fish their quotas, which, in turn, would reduce trawl impacts. It also allows nontrawl vessels to harvest the allocation to the trawl sector if they acquire a trawl permit and IFQ. These facts lead to the conclusion that potential adverse impacts from trawl gear could be expected to be lower under the proposed action than under status quo management or under any of the other alternatives analyzed. Moreover, the allocations are consistent with the current distribution of fishing opportunity among groundfish sectors. Even if the fixed gear sector had the capacity and desire to catch significantly greater amounts of groundfish, which is questionable, those factors are not, in and of themselves, criteria for determining allocations. Allocations are necessary precisely because more than one group has some level of “capacity and desire,” which engenders potential conflicts over resource access that must be resolved through allocation.” Comments on the Shorebased IFQ Program Comment 38. One commenter disagrees with the regulatory provision that allows the Shorebased IFQ Program to be closed as a result of a projected overage in another trawl sector (MS Coop Program, C/P Coop Program). The commenter believes NMFS misinterpreted the Council's intent. Response. NMFS acknowledges the comment, and appreciates the commenter's concern. This concern was raised by representatives of the trawl sectors through the Council during the regulatory deeming process. As explained at that time, this language reflects NMFS' authority to take action in any and/or all sectors of the fishery based on a conservation concern. Overfishing or projected overages on OYs are expected to be less likely under the trawl rationalization program, however, consistent with the MSA, NMFS retains the authority to take action to protect the status of the stocks, if needed. Comment 39. One commenter stated that fishermen who receive minimal QS or zero QS for overfished bycatch species would face the choice of being tied up at the dock or paying other fishermen for the privilege of using their IFQ for overfished bycatch species. Response. NMFS disagrees with the comment that these are the only choices available to fishermen that receive low initial allocations of QS for overfished bycatch species. QS is associated with QS permit owners, and is tracked in the QS permit owner's QS account. Each year, NMFS will deposit QP in the QS account based on the amount of QS for the IFQ species and the shoreside trawl allocation for that species. In order for a fisherman to use QP, the fisherman must obtain QP to transfer into the fisherman's unique vessel account associated with the vessel the fisherman will use to catch the fish. QP is required in the vessel account to cover catch of IFQ species. Unless a fisherman has a negative balance of QP for any IFQ species in their vessel account, they can go fishing in the Shorebased IFQ Program. This is true even if they have zero QP for some IFQ species, including overfished bycatch species. To the extent that the fisherman is adept at avoiding bycatch of IFQ species which the fisherman has no QP for, no QP need ever be transferred to that fisherman's vessel account for those species. If the fisherman does catch IFQ species for which they do not have QP, the fisherman would have 30 days to obtain and transfer QP for that species into their vessel account. Alternatively, if the amount of QP that they need to cover the overage is within the carryover provisions, they can opt out of the fishery for the remainder of the year and use the next year's QP to cover that overage (see comment 41). Fisherman also have the option of working together to share their QP for overfished bycatch species by avoiding overfished bycatch species as much as possible, forming risk pools to use collectively, and using that amount to address inadvertent catch of unwanted bycatch by members of the pooling arrangement. Comment 40. One commenter supported the proposed requirement that the owner of a vessel account must cover a deficit for any IFQ species within 30 days of when the deficit occurs, or, if the vessel chooses to invoke the carryover provision to avoid penalties, opt out of the fishery for the remainder of the year. The commenter also suggested that in order to encourage clean fishing practices, NMFS should limit the number of times a vessel can use this provision to two years total. Response. In the August 31st proposed rule (75 FR 53380), NMFS specifically requested comment on the carryover provision. NMFS acknowledges the comment in support of the proposed regulation and the requirement to opt out of the IFQ fishery for the remainder of the year if a fisherman invokes the carryover provision to cover a deficit. Nothing in the Council motion, however, authorizes NMFS to limit the carryover provision to only two years of the program. Amendment 20 does not restrict the carryover provision to the first two years of the program, but does provide a method for future revision of the carryover limit, which may be changed during the biennial specifications process. Appendix E, A-2.2.2b; at E-13. Moreover, the carryover provision, as well as other relevant issues, will be reviewed during the 5-year review. To the extent that the commenter suggests a more restrictive carryover provision than that described in the proposed rule, the appropriate avenue for consideration of this suggestion under the FMP would be through the biennial specifications process or as part of the 5-year review. Comment 41. Another commenter stated that the proposed rule would require fishermen to cover a deficit within 30 days or opt out of the fishery for the year, and that under the commenter's reading of the proposed rule, fishermen that receive zero QS/QP would start from a position of noncompliance, and would be required to first obtain QP to fish for target species. Response. The commenter correctly states that a deficit must be covered within 30 days, but does not accurately state what would be required for compliance with this provision. In order to harvest fish without incurring a deficit, a vessel must have sufficient QP in its vessel account. Each vessel participating in the Shorebased IFQ Program would have a vessel account, and all vessel accounts start with a zero balance. In order to be in compliance, the owner of the vessel would have to acquire QP only for the fish that it catches; having a zero balance for QP for any one IFQ species does not automatically result in noncompliance. Under the rationalized fishery, fishermen have several options to plan their fishing strategies. A QS owner may choose to transfer the resulting QP to the owner's own vessel account, or may elect to lease the QP and transfer them to another vessel account entirely. A vessel owner that chooses to go fishing can obtain QP before the vessel goes fishing, whether from the vessel owner's own QS account or by transfer from another owner of QP, for IFQ species that the vessel intends to harvest or anticipates harvesting, and may go fishing with a zero balance for IFQ species which it intends to avoid. Moreover, if a vessel fishing with a zero balance for an IFQ species were to catch that species, the vessel would have 30 days after that occurrence within which to obtain sufficient QP to cover the deficit, and if the deficit is within the carryover limit, the vessel owner has the option to opt out of the IFQ fishery for the remainder of the year and cover the deficit with QP issued in the following year. A vessel that opts out of the IFQ fishery to use the carryover provision may still fish in other fisheries during the remainder of the year, and may transfer unused QP from the vessel account to another vessel account. Under none of these scenarios would the fisherman be in a “position of noncompliance,” despite having started with a zero balance of QP. Comment 42. Multiple commenters addressed NMFS' proposed weight conversions. Some commenters agreed with NMFS on the need for a standard, coastwide set of conversion factors for fish not landed whole. The commenters agreed with the values NMFS published in the August 31st proposed rule (75 FR 53380) for most species. For sablefish, lingcod, Pacific whiting, and skates, the commenters recommended NMFS use values from the Oregon Department of Fish and Wildlife (ODFW). Another commenter only supported a non-sector specific sablefish conversion factor of 1.6, but did not support any other proposed additional weight conversion factors at this time for several reasons. Response. In the August 31st proposed rule (75 FR 53380), NMFS specifically requested comment on the actual values and implications of the proposed conversion factors. NMFS' intent is to have consistent coastwide conversion factors that are as consistent as possible with existing state practices. It is NMFS' understanding that processors will report on electronic fish tickets in a similar manner as the states have been doing for the state paper fish ticket system, which is to report the groundfish species to sorting groups with their current condition noted (e.g., headed and gutted (eviscerated)). If the states have more restrictive landings requirements on the species or condition that fish may be landed in, the Federal regulations will not supersede those more restrictive state requirements. The conversion factor would be applied to the state, PacFIN, or Federal data systems later in the process. While ideally the Federal weight conversion factors would be consistent with values used by the states, they are independent and may be different. As stated in the preamble to the proposed rule, Federal regulations at § 660.60(h)(5)(ii) state that Federal conversion factors will be used for participants in the Shorebased IFQ Program. However, for the limited entry fixed gear and open access fisheries, the regulations say that state conversion factors will be used. Based on Council discussion at the September 2010 meeting and on public comment received, NMFWS has revised the regulations in this final rule to make sablefish, lingcod, and Pacific whiting consistent with the values from the Oregon Department of Fish and Wildlife (ODFW), with some exceptions, and to clarify that Federal regulations do not supersede more restrictive state regulations on landings requirements for the species or condition that fish may be landed. NMFS is not adopting ODFW conversion factors for filleted Pacific whiting, for winged skates, or for glazed sablefish because processing of groundfish is prohibited at-sea by vessels in the Shorebased IFQ Program at § 660.112(b)(1)(xii), with narrow exceptions, inapplicable here. In addition, skates are not an IFQ species. The value from ODFW for lingcod of 1.1 uses the term “gilled and gutted” which is equivalent to “gutted with the head on” in Federal regulations. The values for other groundfish species will remain as previously specified in the August 31st proposed rule, including a value for Pacific whiting that has been headed and gutted with tail removed. This conversion factor is necessary because there is an exception from the prohibition on processing at-sea for Pacific whiting for vessels that are equal to or shorter than 75-ft (23-m) that head, gut, remove tails and freeze whiting. See the section on “Changes from the Proposed Rule.” The conversion factors implemented through this final rule are based on the best available information and are subject to change on the basis of improved scientific information. Comment 43. One commenter disagreed with the proposed regulations at § 660.113(a)(4)(i) to record the weight of fish on electronic fish tickets in round weight only. The commenter suggested that the weight of fish recorded on electronic fish tickets should be the weight of the fish based on the condition it was landed in, whether dressed or round, and the conversion factors for dressed fish should be applied after the fish ticket reporting. The commenter provided several reasons why this would be preferable, including: ease for the catch monitors to verify weights without dealing with conversion factors; more assurance by NMFS and states that the correct conversion factors are applied, reducing the likelihood of confusion for buyers between state and electronic fish tickets; and consistent weights between state and electronic fish tickets. Response. NMFS appreciates the comment and has reviewed the required information for electronic fish tickets. NMFS is developing an electronic fish ticket system where weight limit conversion factor will be automated and applied once the data is entered into the data system. Accordingly, the required information that IFQ first receivers must provide on electronic fish tickets is being revised in this final rule to require the actual weight and condition of species landed, rather than the round weight. NMFS is also requiring the vessel account number to be reported on the electronic fish ticket to accurately track landed catch to a specific vessel account. To be clear, the Federal electronic landing report (electronic fish ticket) does not replace any state reporting requirements for landings but is in addition to those requirements. Comment 44. One commenter stated that NMFS failed to consider impacts of gear switching on fixed gear fisheries, on ports and processors dependent on species harvested by trawl gear, and on the inequities created between sectors (fixed gear and trawl) for gear conversion. Response. As discussed in response to the commenter's similar comments on Amendments 20 and 21 to the FMP, the potential effects of the trawl rationalization program on other fisheries and on ports and processors dependent on species harvested by trawl gear are specifically addressed in the FEIS “Rationalization of the Pacific Coast Groundfish Limited Entry Trawl Fishery” in Chapter 4, Sections 4.8.2 and 4.8.3 on pages 402-409, and Section 4.9.2 on pages 413-423, respectively. Potential effects specifically due to gear switching that were analyzed in the FEIS include spillover of vessel participation, grounds competition, market competition and regional shifts in landings. These potential effects were identified and analyzed, to the extent possible, without the knowledge of observed or actual impacts. These potential impacts were highlighted for the purpose of monitoring behavioral changes in the fishery, understanding their impacts, and reacting through the Council process to minimize impacts. These matters will also be evaluated through the 5 year comprehensive review of the trawl rationalization program. Regarding the comment about alleged inequities between sectors, under the license limitation program, trawl vessels are already allowed to use fixed gear to take the trawl allocation, albeit they must do so under the open access regulations, which have much lower limits. In contrast, fixed gear endorsements give a vessel access to the fixed gear allocation. Allowing trawl vessels to switch gear (or other vessels to acquire a trawl permit and IFQ) does not give trawl-permitted vessels access to the fixed gear quota; it merely allows the vessel to use nontrawl gear to take the trawl IFQ. Moreover, with regard to intersector allocations and allowing fixed gear to harvest trawl quota, it should be noted that trawlers who have entered the fishery since 1994 have had to buy trawl permits to access trawl quota, thus in this respect other vessels would be on an even footing with trawl vessels. This issue of requiring a trawl permit and quota to harvest trawl quota with fixed gear was addressed in the response to comments on the Amendment 20 FEIS at page 661. On average there are about 120 trawl vessels that participate in the fishery each year; however, there are about 168 permits. This indicates some opportunity for nontrawl vessels to acquire trawl permits and use trawl IFQ. Further, it is expected that there will be consolidation in the trawl fleet, increasing the number of trawl permits potentially available for use by nontrawl vessels. Thus, despite the limited scope, the IFQ system will allow for some use of trawl IFQ by nontrawl vessels. Comment 45. One commenter expressed support for gear switching and recommended that NMFS create incentives for permanent conversion to lower impact gears. Response. NMFS acknowledges the comment in support of gear switching provisions in the proposed rule; however, nothing in Amendment 20 allows NMFS to provide incentives for permanent gear conversion. The Council considered and rejected permanent gear conversion in its development of alternatives for Amendment 20. The Council's rationale for rejecting permanent gear conversion is included in the FEIS at Appendix A, Section A.7, on pages A-419 to A-423. Since permanent gear conversion is not within the scope of the trawl rationalization program, NMFS declines to provide any incentives for permanent gear conversion. Comment 46. One commenter was concerned with the timing of applying for an interim first receiver site license and the start of the fishery. The commenter suggested that, if the fishery starts January 1, 2011, no first receiver site license (interim or permanent) should be required until February 1, 2011. Response. NMFS understands the commenter's concerns, but believes the interim first receiver site license will accommodate the needs of the fishery. Due to the quick implementation of this program, the interim first receiver site license was developed to allow industry participants time to obtain permanent site licenses. An interim first receiver site license is required before an IFQ first receiver begins accepting landings of IFQ species, which could be as early as January 1, 2011. Site licenses are required for tracking and documentation purposes to account for the landings from the quota-based program. NMFS will work with industry from the start of the program through June 30, 2011, to complete an acceptable application and monitoring plan for an annual first receiver site license, including site inspections. First receivers that have accepted Pacific whiting in the past three years are already familiar with many of the site license requirements, including preparation of a monitoring plan, and should only require some modifications to their plans such as expanding them to cover more groundfish species. Comment 47. Some commenters stated that the maximized retention in the Shorebased IFQ Program should be consistent with the existing maximized retention fishery, where some discards are allowed for operational and safety reasons, but those discards are estimated by an observer. Response. In the August 31st proposed rule (75 FR 53380), NMFS specifically requested comment on any implications that the prohibition on discarding may have on the prosecution of a maximized retention fishery, and further requested comment on what should constitute discarding under this provision of the Shorebased IFQ Program. NMFS agrees with the commenters that the maximized retention in the Shorebased IFQ Program should be consistent with the existing maximized retention fishery. Under current practices in the maximized retention Pacific whiting fisheries, some minor amounts of operational discard are allowed. Under trawl rationalization, any minor operational amounts of discard would be estimated by the observer and deducted from allocations. NMFS has modified the final rule language in the Shorebased IFQ Program to be consistent with the MS Coop Program language on maximized retention which allows minor operational amounts of discard which are estimated by the observer. See the section on “Changes from the Proposed Rule.” Comment 48. One commenter disagreed with the requirement that a vessel fish in a single management area during a single trip. The commenter stated that with 100 percent observer coverage, observer access to vessel location, all catch recorded, and—in the future—electronic logbooks, there is no need to restrict a vessel's operation by restricting them to a single management area per trip. Response. Several IFQ species are either a single species with different QS by area; or are a single species in one area and a component of an assemblage, such as minor shelf rockfish or minor slope rockfish, in another. For instance, QS for sablefish is issued with area distinctions either north or south of 36° N. lat. Likewise, QS for shortspine thornyhead is issued with area distinctions either north or south of 34°27′ N. lat. One example of an IFQ species would be yellowtail rockfish, which is an individual IFQ species north of 40°10′, but a component of the minor shelf rockfish species complex south of 40°10′. Similar distinctions exist for bocaccio rockfish, chilipepper rockfish, cowcod, Pacific ocean perch, and splitnose rockfish. Discards will be accounted for at the tow level, with 100 percent observer coverage and haul locations. However, not all retained catch will be estimated by observers. Landed catch, therefore, would not be attributable to the appropriate management area if a vessel were to fish in multiple management areas in one trip. For example, if a vessel were to catch sablefish both North and South of 36° in the same trip, it would not be possible for an IFQ first receiver to sort or for the catch monitor to verify how much sablefish was caught in either area in order to enter on the electronic fish ticket the appropriate amount for sablefish north of 36° N. lat. versus sablefish south of 36° N. lat. Nor would it be possible for NMFS to determine how much QP should be subtracted from the vessel account for their QP of each IFQ species. NMFS raised this concern with the Council in its March 2010 meeting. Because landings are a mix of all hauls taken during a single trip, NMFS indicated its intent to implement this provision in order to simplify sorting requirements, at-sea observation, and enforcement of IFQ limits. NMFS considers this approach to be the most straightforward and efficient method to track and verify total catch of a vessel's IFQ limits for individual species and rockfish complexes. Therefore, the Council deemed, and NMFS has implemented, the requirement in the Shorebased IFQ Program for a vessel to fish in a single management area during a trip. Comment 49. One commenter requested clarification on the provision that allows a vessel to deliver a load of fish to more than one first receiver and how that relates to the requirement that all fish be offloaded once an offload has begun. Response. A vessel may make more than one delivery as part of the same landing. Current regulations at § 660.11 define land or landing as “to begin transfer of fish, offloading fish, or to offload fish from any vessel[;] Once transfer of fish begins, all fish aboard the vessel are counted as part of the landing.” This definition does not prohibit a landing from being offloaded through more than one delivery; however, all fish aboard a vessel at the start of the first transfer are considered part of the same landing. Current regulations at § 660.12(e)(5) prohibit vessels from landing fish without observer coverage when a vessel is required to carry an observer. The proposed regulations at §§ 660.112(b)(1)(xiii) and 660.140(h)(1) clarify that observer coverage requirements under the Shorebased IFQ Program include having an observer onboard during a trip until such time that all fish from that trip have been offloaded. Observers must also be onboard the vessel during transit from one delivery site to another. Section 660.60(h)(2) reiterates the definition of a landing at § 660.12, and clarifies that not only are all fish aboard the vessel at the time offloading begins counted as part of the same landing, but also that they would be required to be reported as such. Section 660.60(h)(2) of the proposed rule would also prohibit catcher vessels in the mothership sector from setting the gear for a subsequent haul; however, the regulations did not specify that all fish from an IFQ landing would need to be completed before a new fishing trip begins. NMFS appreciates the comment pointing to this discrepancy in the regulations, and accordingly is including additional regulatory language to clarify that an IFQ landing would need to be offloaded prior to starting a new fishing trip. See the section on “Changes from the Proposed Rule” for specific regulatory citations. Comment 50. One commenter requested clarification on the printed record requirement for scales at first receivers as stated at § 660.140(j)(2)(i) and (ii). The commenter stated that one paragraph exempted scales used for bulk weighing from the printed record requirement while the other paragraph limits the exemption based on the purchasing record of the first receiver and other factors having nothing to do with bulk weighing. Response. The commenter appears to have misread the exemption. Scales NOT designed for bulk weighing may be exempted from all or part of the printed record requirements (i.e. platform scales). The second paragraph referenced outlines the conditions that are required to obtain the exemption. Based on comments received from industry during public workshops, including comments about the costs for small business that do not accept large volumes of fish, NMFS considered a specific standard for this exemption as appropriate. The requirement for a printed record is to assist the catch monitor in independently monitoring the sorting and weighing processes and ensuring catch accountability. Monitoring may be conducted effectively at facilities that accept small volumes of catch, without the need for a printed record from non-bulk weighing scales, pending the first receiver ensuring that all catch is weighed and that independent verification of the weights are possible. Comment 51. One commenter suggested that the responsibilities of the first receiver site license should go to the “holder” of the license rather than the owner of the first receiver company because the holder could be an individual other than an owner and restrictions on the license is a primary enforcement tool. Response. NMFS agrees with the comment. NMFS is revising the final rule at § 660.140(j)(2)(i) and (j)(3) to change the regulations from “the owner of an IFQ first receiver must* * * ” to “the IFQ first receiver must* * *. ” “IFQ first receivers” are defined in the October 31st final rule (75 FR 60868) at § 660.111 as “persons who first receive, purchase, or take custody, control, or possession of catch onshore directly from a vessel that harvested the catch while fishing under the Shorebased IFQ Program described at § 660.140, subpart D.” For the first receiver site license owner, the term “license owner” is defined at § 660.11 as “a person who is the owner of record with NMFS, SFD, Permits Office of a License issued under § 660.140, subpart D” and is cross-referenced from the “permit owner” definition. See the section on “Changes from the Proposed Rule” for specific regulatory citations. Comments on At-Sea Whiting Programs (Mothership or Catcher/Processor) Comment 52. One commenter stated that transfers of MS/CV endorsed permits should be effective immediately rather than at the start of the next cumulative limit period because 2-month cumulative trip limits do not apply to the at-sea fishery. Another commenter agreed with NMFS' statement in the proposed rule that transfers of MS permits and C/P-endorsed limited entry permits would be effective immediately upon reissuance to the new vessel because neither of these permits would be affected by trip limits. Response. In the August 31st proposed rule (75 FR 53380), NMFS specifically requested comment on the effective date for an MS/CV-endorsed limited entry permit's second transfer within the same year. At the September 2010 Council meeting and in the Council's letter of public comment on the August 31st proposed rule, the Council stated that the second transfer of an MS/CV-endorsed limited entry permit should be effective immediately because trip limits will not apply to the at-sea sectors (MS or C/P) in 2011 and 2012. NMFS agrees with the Council's recommendation and revised the regulations in this final rule to reflect that. See the section on “Changes from the Proposed Rule” for specific regulatory citations. NMFS also agrees with the second commenter who reaffirmed NMFS regulations in the proposed rule that transfers of MS permits and C/P-endorsed limited entry permits would be effective immediately because they are not subject to trip limits. Comment 53. Some commenters stated that there is no need for the regulations on the at-sea sector donation program (which allows amounts over retention limits to be donated instead of discarded) because there are no 2-month cumulative trip limits in the at-sea fishery. Response. In the August 31st proposed rule (75 FR 53380), NMFS specifically requested comment on the implications of removing or retaining the at-sea sector donation program and requested suggested language revisions. The at-sea sector donation program, called the “bycatch reduction and full utilization program for at-sea processors” in regulation, was previously established to allow vessels harvesting unsorted catch to retain and donate amounts of groundfish that were in excess of trip limits. At the September 2010 Council meeting, the Council clarified that the at-sea sector regulations should not require vessels to be subject to trip limits for bycatch of non-whiting groundfish species. In addition to public comment from the Council, another commenter supported this conclusion and both recommended that the donation program is no longer necessary. NMFS agrees with this conclusion and has removed the at-sea donation program from the regulations in this final rule. See the section on “Changes from the Proposed Rule” for specific regulatory citations. In reviewing regulations that may no longer be necessary because of changes in the trip limit requirements for the at-sea fishery, NMFS also notes that there may be regulations that are no longer necessary or need revisions because of changes in the trip limit requirements for the Shorebased IFQ Program. For the 2011-2012 groundfish harvest specifications and management measures, the Council has recommended trip limits only for non- IFQ species. The trawl fishery crossover provision regulations, specified in the October 1st final rule at § 660.120, list requirements for handling trip limits when a vessel crosses over a management area within a 2-month cumulative trip limit period. However, all of the species listed in this section of the regulations are now IFQ species that are no longer subject to 2-month cumulative trip limits. NMFS intends to revisit these regulations through a future action to determine if they should be removed altogether or revised with new species or based on changing management concerns. Comment 54. One commenter asked for clarification on whether discarding of non-whiting species would be required in the absence of 2-month cumulative trip limits in the at-sea fishery. Response. The regulations for at-sea coop programs would not require discarding of non-whiting groundfish species in the absence of 2-month cumulative trip limits. Allocations of non-whiting species to the at-sea sectors are specified at § 660.150(c) for the MS Coop Program and at § 660.160(c) for the C/P Coop Program, including allocations for some overfished non-whiting groundfish species at risk of being caught with Pacific whiting, set-asides for other non-whiting groundfish species less likely to be caught in whiting fisheries, and no allocation or set-aside for species not expected to be caught in whiting fisheries. Over time, the Council may revisit these allocations, set-asides (or lack thereof), and trip limits if catch of non-whiting groundfish species increases in the at-sea sectors. Comment 55. One commenter agreed with NMFS' interpretation of the processor obligation for the MS Coop Program where the MS/CV-endorsed permit's catch history assignment is obligated to an MS permit for the year. The commenter also agreed with the timing of the declaration in regulations which is reported to NMFS through the annual MS/CV-endorsed limited entry trawl permit renewal and again through the MS Coop permit application. Response. NMFS acknowledges this comment. Comment 56. One commenter asked for clarification about items applicable to the MS Coop Program that NMFS disapproved in Amendment 20, as stated in the preamble to the August 31st proposed rule (75 FR 53380, 53396), and whether they should apply to the C/P Coop Program. In particular, the commenter questioned the requirement for coop agreements to be submitted to the Council and available for public review before the coop is authorized to go fishing, and the requirement to submit a letter to the Department of Justice and provide a copy to NMFS. Response. On August 9, 2010, NMFS made its decision to partially approve Amendments 20 and 21 to the FMP. The preamble to the October 1st final rule (75 FR 60868) discussed the partial approval of Amendments 20 and 21. The August 31st proposed rule (75 FR 53380) for the additional program components, developed by NMFS and deemed by the Council prior to NMFS' partial approval of the amendments, contained several provisions that NMFS subsequently disapproved. The commenter correctly noted that the preamble to the August 31st proposed rule (75 FR 53380, 53396) described disapproval of items applicable to the MS Coop Program, but did not specify whether similar provisions should apply to the C/P Coop Program. The similar provisions applicable to the C/P Coop Program were not specifically contained in Amendment 20 to the FMP and thus were not specifically disapproved by NMFS' decision on the Amendments; however, they had been deemed by the Council as necessary and appropriate in the regulations for the implementation of the program. NMFS has considered the issue in light of the disapproval of provisions of Amendment 20 applicable to the MS Coop Program, and believes the reasons for disapproval apply equally to the C/P Coop Program. Accordingly, with this final rule, NMFS is removing the requirement that the C/P coop file a coop contract with the Council and make it available for public review and the requirement that the C/P coop file a letter from the Department of Justice and provide a copy to NMFS. See the section on “Changes from the Proposed Rule” for specific regulatory citations. Items NMFS Requested Comment on in the Proposed Rule In addition to the comments received above, NMFS specifically requested comment on several items in the proposed rule. NMFS received comments on some but not all of those items. Where NMFS has made changes to the proposed rule where comments were specifically requested, these specific requests are identified in the section on “Changes from the Proposed Rule.” Changes From the Proposed Rule A. All Trawl Programs I. Changes To Reflect Recent NMFS Actions Some changes are made in this final rule to update the regulations to reflect actions that have been implemented at 50 CFR part 660 since the proposed rule (75 FR 53380, August 31, 2010) was published. The regulations in this final rule were reviewed and revised to reflect changes implemented in the final rule published on October 1, 2010 (75 FR 60868), called the “initial issuance” final rule. For example, § 660.25(b)(4)(iv)(A) was revised to include the language from the final rule regarding the restriction on changes in permit ownership during application period. II. Changes Due to Partial Disapproval of Amendment 20 On August 9, 2010, NMFS made its decision to partially approve Amendments 20 and 21 to the FMP. The preamble to the final rule (75 FR 60868, October 1, 2010) discussed the partial approval of Amendments 20 and 21. The proposed rule (75 FR 53380, August 31, 2010), which was developed by NMFS and deemed necessary by the Council prior to NMFS' partial approval of the amendments, contained several provisions in the MS Coop Program and C/P Coop Program that NMFS subsequently disapproved. Public comment on the proposed rule requested clarification whether the items that were disapproved only affected the MS Coop Program, or whether similar provisions applicable to the C/P Coop Program would also be revised. The similar provisions applicable to the C/P Coop Program were not specifically contained in Amendment 20 to the FMP, however, they had been deemed by the Council as necessary and appropriate for the implementation of the program. NMFS has considered the issue in light of the disapproval of provisions of Amendment 20 applicable to the MS Coop Program, and believes the reasons for disapproval apply equally to the C/P Coop Program. Accordingly, with this final rule, NMFS is removing or revising regulatory language for three provisions based on the partial disapproval of Amendment 20: (1) The requirement that MS coops or the C/P coop file a coop contract with the Council and to make it available for public review [it must still be filed with NMFS]; (2) the requirement that MS coops or the C/P coop file a letter from the Department of Justice; and (3) the requirement that MS coop agreements include a clause that at least a majority of the members are required to dissolve the coop. The first provision stated: “Signed copies of the coop agreement must be submitted to NMFS and the Council and available for public review before the coop is authorized to engage in fishing activities.” NMFS disapproved of the requirement to submit agreements to the Council and for public review because not only would it be impracticable given the timing for public review, but also could violate restrictions on the disclosure of confidential information under the MSA. Accordingly, NMFS is revising this provision in the final rule for both the MS Coop Program (§ 660.150 (d)(1)(iii)(A)) and the C/P Coop Program (§ 660.160 (d)(1)(iii)(A)) to state: “Signed copies of the coop agreement must be submitted to NMFS before the coop is authorized to engage in fishing activities.” The second provision would have required coops to submit a letter to the Department of Justice requesting a business review letter on the fishery coop, and to submit copies of all such correspondence with a coop permit application. NMFS disapproved this provision because compliance with antitrust laws is a separate and distinct obligation of each and every participant and does not need to be a requirement specified in the FMP. Accordingly, NMFS is removing this provision entirely in the final rule for both the MS Coop Program (from § 660.150 (d)(1)(iii)(A)( 2 )) and the C/P Coop Program (from § 660.160 (d)(1)(iii)(A)( 2 )). The third provision would have required coop agreements in the MS Coop Program to include “A requirement that agreement by at least a majority of the members is required to dissolve the coop.” NMFS disapproved this provision because it would interfere with private parties' ability to [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2010-30527. Public record. Not legal advice.