Groundfish of the Gulf of Alaska; Groundfish Fishery of the Bering Sea and Aleutian Islands Area; Extension of Allocations to Inshore and Offshore Components

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Parts 672 and 675

[Docket No. 950905226-5282-02; I.D. 083095A]

RIN 0648-AH00

Groundfish of the Gulf of Alaska; Groundfish Fishery of the

Bering Sea and Aleutian Islands Area; Extension of Allocations to

Inshore and Offshore Components

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA), Commerce.

ACTION: Final rule.

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SUMMARY: NMFS is implementing Amendment 38 to the Fishery Management

Plan (FMP) for the Groundfish Fishery of the Bering Sea and Aleutian

Islands Area (BSAI) and Amendment 40 to the Fishery Management Plan for

Groundfish of the Gulf of Alaska (GOA). Amendment 38 implements an

allocation of pollock for processing by the inshore and offshore

components in the BSAI management area from January 1, 1996, through

December 31, 1998. Amendment 40 implements an allocation of Pacific cod

for processing by the inshore and offshore components, and an

allocation of pollock for processing by the inshore component in the

GOA from January 1, 1996 through December 31, 1998. It also continues

the Western Alaska Community Development Quota (CDQ) Program for

pollock for the same period of time. This action is necessary to

continue the management measures that were contained in Amendments 18

and 23 to the BSAI and GOA FMPs, respectively. The intended effect of

this final rule is to promote management and conservation of

groundfish, enhance the stability in the fisheries, and further the

goals and objectives contained in the FMPs that govern these fisheries.

EFFECTIVE DATE: January 1, 1996.

ADDRESSES: Copies of Amendments 38 and 40, and the environmental

assessment/regulatory impact review/final regulatory flexibility

analysis (EA/RIR/FRFA) prepared for Amendments 38 and 40 are available

from the North Pacific Fishery Management Council, 605 West 4th Avenue,

room 306, Anchorage, AK 99501-2252; telephone: 907-271-2809.

FOR FURTHER INFORMATION CONTACT: David Ham, 907-586-7228.

SUPPLEMENTARY INFORMATION: The groundfish fisheries in the exclusive

economic zone (EEZ) off Alaska are managed under the BSAI and GOA FMPs.

Both FMPs were prepared by the North Pacific Fishery Management Council

(Council) under authority of the Magnuson Fishery Conservation and

Management Act (Magnuson Act). The BSAI FMP is implemented by

regulations appearing at 50 CFR 611.93, 50 CFR part 675, and 50 CFR

part 676; for the GOA FMP, regulations are found at 50 CFR 611.92, 50

CFR part 672, and 50 CFR part 676. General regulations that also

pertain to U.S. fisheries appear at 50 CFR part 620. The fisheries for

pollock (Theragra chalcogramma) and Pacific cod (Gadus macrocephalus)

and the affected human environment are described in the FMPs, in the

environmental impact statements prepared by the Council for each FMP,

and in the EA/RIR/FRFA prepared for this action.

Amendments 38 and 40 will extend the provisions of Amendment 18 to

the BSAI FMP and Amendment 23 to the GOA FMP, respectively.

Amendments 18 and 23 and their implementing regulations expire on

December 31, 1995. The Council has not yet completed development of its

comprehensive plan to address problems caused by the open access nature

of the Alaska groundfish fisheries. Therefore, the Council voted

unanimously at its June 1995 meeting to extend the provisions of the

expiring amendments through December 31, 1998, by Amendments 38 and 40.

A notice of availability of Amendments 38 and 40 was published at 60 FR

46572 (September 7, 1995).

Amendments 38 and 40 are essentially the same as amendments 18 and

23, with minor changes. A full discussion of these changes is listed in

the proposed rule for amendments 38 and 40 (60 FR 48087, September 18,

1995).

Amendments 38 and 40 were approved by NMFS on November 28, 1995,

under section 304(b) of the Magnuson Act. Upon reviewing the reasons

for Amendments 38 and 40 and the comments on the proposed rule to

implement it, NMFS has determined that this final rule extending the

allocation between inshore and offshore components is necessary for

fishery conservation and management.

Changes in the Final Rule From the Proposed Rule

This final rule includes the following changes from the proposed

rule:

1. In Sec. 675.27(e)(1)(iii), the date that the annual budget

reconciliation report

[[Page 63655]]

is due to NMFS from each CDQ group is changed from May 15 to May 30 to

provide more time for the CDQ groups to comply with this requirement.

2. The definition of ``inshore component'' at Secs. 672.2 and 675.2

is revised as follows. The requirement for an owner of a processor

vessel to declare on the annual application for a Federal fishery

permit (NOAA Form 88-155) whether it will be part of the inshore

component has been deleted from paragraphs (2) and (3) of the

definition. This definition is revised for clarity and is not

fundamentally different from the current definition.

3. The definitions of ``inshore component'' and ``offshore

component'' at Secs. 672.2 and 675.2 are revised as follows. The phrase

``any processor vessel'' that appears in both definitions is changed to

``vessels''. This change was made to simplify and clarify the

definition. The definition already refers to vessels that ``process'',

therefore, further reference to a ``processor vessel'' is redundant.

4. For clarity, NMFS revises the definitions of Community

Development Quota Reserve and Community Development Quota at

Sec. 675.2.

5. For clarity, NMFS combines paragraphs (1) and (2) of

Sec. 675.27(e)(3)(i)(F) into one paragraph 675.27(e)(3)(i)(F). Also,

NMFS revises this paragraph (e)(3)(i)(F) of Sec. 675.27 to give the

Secretary of Commerce (Secretary) acting through NMFS, in addition to

the Governor of the State of Alaska, the authority to deem a change to

a Community Development Plan (CDP) to be a material change. This will

give NMFS the ability to make a determination that a proposed change to

a CDP is a material change.

6. Paragraph Sec. 675.22(g)(2) is removed. This permissive

statement is unnecessary.

7. The phrase ``processor vessels'' in paragraphs Sec. 675.22(g)

(3), (4), and (5) is changed to ``vessels'' to be consistent with the

definition of ``offshore component.''

Response to Comments

Fourteen letters of comment were received within the public comment

period. Two letters had no comment, eight were supportive of the

proposed action and are summarized in comment 1, and four were received

with comments that are summarized and responded to in comments two

through ten below:

Comment 1. Continuation of the inshore-offshore program through

Amendments 38 and 40 provides the industry with stability while the

Council proceeds with developing a comprehensive rationalization plan.

This program is needed by fishery-dependent coastal communities to

ensure continuing access to fisheries resources. These fishery

resources provide revenue to local communities through raw fish taxes,

municipal sales taxes from goods and services, fuel tax revenues from

sales to the fishing fleet, corporate income tax revenues, and real and

personal property tax revenues. Much of this tax revenue has gone into

community infrastructure that has been a great benefit to rural Alaskan

coastal communities. The inshore-offshore program slows the pace of

harvesting activity and allows NMFS to improve its monitoring of the

fisheries. The CDQ program has been a success and has accomplished the

positive results that were intended.

Response. NMFS notes this comment.

Comment 2. Amendments 38 and 40 will not maintain stability in the

fishery, safeguard capital investments, prevent preemption, or protect

coastal communities that are dependent on a local fleet. The derby-

style fishing that will continue to characterize these fisheries under

Amendments 38 and 40 is unstable. Fishing seasons will continue to

shorten, capital investments will continue to be at risk as a result of

increased inter-sector competition and capital investment. Local

fishing fleets will continue to be preempted by other nonlocal inshore

fleets.

Response. NMFS recognizes some limitations of these amendments, but

the inshore/offshore allocation is not intended to be a substitute for

comprehensive rationalization planning. This allocation extension is a

continuation of a temporary solution and as such will provide 3

additional years for completing the development and implementation of a

permanent solution.

Comment 3. The analysis for Amendments 38 and 40 should examine

environmental issues, such as the water quality problems that have

continued to plague shoreside processing operations in Dutch Harbor.

Response. Pages 214 and 215 of the EA/RIR/FRFA for Amendments 38

and 40 address water quality problems in Dutch Harbor. The analysis

concluded that it is unlikely that Amendments 38 and 40 will have a

negative impact on the water quality in this area.

Comment 4. The analysis did not evaluate the market structure in

key seafood markets to determine whether there might be anti-

competitive effects by giving shoreside processing plants an increased

share of the pollock resource. For example, is there a transfer pricing

risk? Or, did the inshore-offshore allocation result in the price

collapse of offshore surimi that occurred during the first inshore-

offshore allocation in 1993?

Response. The EA/RIR/FRFA for inshore-offshore examined several

issues related to this comment. Page 124 shows that the inshore price

for surimi collapsed at about the same rate as the offshore price for

surimi from 1992 through 1993. This overall price drop may or may not

have been influenced by the inshore-offshore allocation at that time.

The price drop was experienced by both sectors, though it was slightly

more severe for the offshore sector. The analysis indicates that this

may not have been a price collapse at all, but a return to normal

prices after 2 years (1991 and 1992) of inordinately high prices. Pages

119 to 123 of the analysis contain a detailed discussion of price

factors, though the analysis is not specific to the issue of the

collapse of 1993 surimi prices. In an issue related to the collapse of

the 1993 surimi prices, Appendix V of the analysis contains further

analysis of the structural breakdown of surimi prices relative to

exvessel prices paid. The analysis in Appendix V is unable to attribute

this phenomenon to the inshore-offshore allocation. Furthermore, the

price collapse issue raised in this comment is more relevant to the

original inshore-offshore decision than to Amendments 38 and 40,

because the inshore-offshore allocations have been in place for 3 years

and their continuance now represents the status quo.

Comment 5. Proponents of the inshore-offshore allocation program

claim that allocating more fish to large shoreside processors will

provide jobs and economic opportunity for local residents. However, the

analysis did not address this question. On the other hand, Akutan has

petitioned the Council to be included in the pollock CDQ program

because the Akutan Trident plant is not part of the community and local

residents rarely work at the plant. The logic on these two issues is

inconsistent.

Response. The Akutan plant is not necessarily reflective of other

shoreside plants, in terms of local employment. The social impact

analysis focused primarily on Dutch Harbor, Kodiak, St. Paul, and

Ballard/Seattle. The community impact study in the analysis looked at

total and distributional income indices, of which direct employment is

only a part. The relevant point is not just one of direct employment.

There are other non-quantifiable benefits derived from the inshore/

offshore allocation system. The availability of alternative economic

activity was also an important

[[Page 63656]]

consideration. Maintenance of cultural stability, social impacts, and

other impacts were also considered.

Comment 6. The proposed regulations at Sec. 675.23(e)(2)(ii)

preclude pollock catcher vessels from participating in the yellowfin

sole fishery prior to January 26 if they want to harvest pollock roe

for processing by the offshore component starting on January 26.

Vessels that participate in the yellowfin sole fishery before January

26 cannot enter the pollock fishery for processing by the offshore

component until February 5. Yellowfin sole is an abundant species and

its harvest should be encouraged, not discouraged. Therefore, there

should be no restriction on fishing for yellowfin sole prior to the

January 26 start of the pollock fishery for processing by the offshore

component.

Response. NMFS acknowledges that limitations on the participation

in the yellowfin sole fishery prior to the opening of the pollock

fishery for processing by the offshore component could reduce potential

revenues of vessels. NMFS approved this limitation after considering

the intent of the Council to minimize the preemptive impact on other

fisheries that could result from the delay of the pollock roe fishery

for processing by the offshore component until January 26.

Additionally, if vessels were allowed to harvest yellowfin sole before

January 26, those vessel operators could have an unfair advantage by

potentially prospecting for pollock stocks just prior to the opening of

the pollock fishery for processing by the offshore component.

Comment 7. The proposed CDQ regulations require that an annual

budget reconciliation report be submitted to NMFS by May 15 of the year

following the year for which the annual budget applies. However, due to

other CDQ reporting requirements during May, a burden on the CDQ groups

would be relieved if the May 15 due date were changed to May 30. This

would allow the CDQ groups more time to prepare the annual budget

reconciliation report for NMFS.

Response. NMFS concurs. The regulations at Sec. 675.27(e)(1)(iii)

are changed to require the annual budget reconciliation report to be

due to NMFS on May 30 instead of May 15.

Comment 8. The focus of the CDQ program needs to remain on long-

term development projects, not short-term projects such as job

creation. The CDQ regulations need to be more clear in describing the

types of CDQ projects that would be acceptable. The CDQ regulations

should direct a portion of CDQ resources to be used to construct and

maintain public infrastructure in CDQ communities.

Response. Job creation is part of some CDPs and is usually

associated with training and job creation in commercial fisheries.

Training and job creation in commercial fisheries will increase the

number of skilled fishermen. This will enable CDQ communities to become

more self-sufficient in regional fisheries related development, which

is a valid long-term goal of the CDQ program. The CDQ regulations allow

the CDQ group's board of directors, along with their constituents, to

choose their own CDQ projects because each CDQ group is more familiar

with the needs of its communities and would be the best judge of

whether a project would succeed or fail due to the local conditions.

Additionally, by choosing their own projects and succeeding or failing

on their own business skills, the CDQ groups can best learn the skills

for developing a viable business. This will assist the CDQ groups in

becoming self-sufficient in the future. Viable, ongoing businesses are

a long-term goal of the CDQ program.

Comment 9. The proposed annual budget and annual budget

reconciliation process is burdensome, and NMFS and State budget

reporting requirements should be integrated so that separate reports to

NMFS and the State are not necessary. CDQ groups should be allowed to

submit existing business records to NMFS instead of separately prepared

documents whose contents are based on NMFS' criteria.

Response. The Secretary, through NMFS, is obliged to ensure that

the funds derived from CDQ activity are used as directed in each CDP

for the benefit of the western Alaska communities. The annual budget

and annual budget reconciliation report requirements were developed in

conjunction with the State of Alaska because the existing reporting

requirements were not sufficient to track the financial transactions of

the CDQ groups. NMFS is requesting basic business information that

should have already been developed for the CDQ board of directors. NMFS

requires that each CDQ group submit reports based on NMFS' criteria

because NMFS must ensure that the report contains the necessary

information to evaluate any financial transactions.

Comment 10. Clarification is requested as to whether

Sec. 675.27(e)(3)(i)(F) (1) and (2) are intended to constitute

substantial amendments because their contents are already covered under

paragraphs Sec. 675.27(e)(3)(i) (A) through (E). Clarification is

requested as to the meaning of the term ``material change'' in

paragraph Sec. 675.27(e)(3)(i)(F). The CDQ regulations should contain

solid guidance so that a CDQ group can determine from the regulations

whether an amendment is a substantial amendment or a technical

amendment. The proposed requirement for written notification of

technical amendments to be sent to NMFS before the change occurs is

burdensome. This requirement could be met equally well with a quarterly

reporting requirement.

Response. Paragraphs (e)(3)(i)(F)(1) and (2) of Sec. 675.27 are

part of the definition for a substantial amendment to a CDP. NMFS

agrees that this is not clear and revises paragraphs (F)(1) and (2) to

create a new paragraph (F). Paragraph (F) is necessary because it would

be impossible to list every change to the present or future CDPs that

could be a substantial amendment. NMFS did not want to burden the CDQ

groups with a long list of CDP changes that would constitute

substantial amendments. On the other hand, NMFS did not want to omit

any change that could be a substantial amendment. NMFS decided to list

the most important general changes that would be substantial in

paragraphs (A) through (E), and then give the Governor of Alaska the

discretion to recommend to the Secretary other changes to be

substantial amendments, based on the Governor's decision as to what

constitutes a ``material change.'' NMFS must approve the Governor's

recommendations for substantial amendments. A technical amendment is

any change to a CDP that is not a substantial amendment. NMFS must be

notified of any such change before the change is effected because the

Governor and the Secretary must ensure that the change is not a

substantial amendment. The burden of notification is slight because it

can be accomplished by fax, and, in most cases, the response can be

rapid.

Classification

The Director, Alaska Region, NMFS, determined that these FMP

amendments are necessary for the conservation and management of the

BSAI and GOA fisheries and that they are consistent with the Magnuson

Act and other applicable laws.

This final rule has been determined to be not significant for

purposes of E.O. 12866.

Notwithstanding any other provision of law, no person is required

to respond to nor shall a person be subject to a penalty for failure to

comply with a collection of information subject to the requirements of

the Paperwork

[[Page 63657]]

Reduction Act unless that collection of information displays a

currently valid OMB control number. This rule contains a collection-of-

information requirement subject to the Paperwork Reduction Act. The

collection of information has been approved by The Office of Management

and Budget (OMB), OMB control number 0646-0269. The public reporting

burden for each year of this collection is estimated to average 40

hours per response for completing annual reports, 40 hours per response

for completing annual budget reconciliation reports, 30 hours per

response for completing substantial amendments, and 4 hours per

response for completing technical amendments. For the first year of the

CDQ program, completion of CDP applications is estimated to average 160

hours per response. For each of the last 2 years of the program,

completion of annual budget reports is expected to average 40 hours per

response. OMB approval has been obtained under OMB control number 0648-

0269 for the CDQ-managing organization representative requirement to

inform NMFS within 24 hours after the CDQ has been reached and fishing

ceased. This requirement has an estimated response time of 2 minutes

per response.

All reporting burden estimates include the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information.

The Assistant Administrator for Fisheries, NOAA (AA) finds, good

cause, pursuant to authority at 5 U.S.C. 553(d)(3), to waive the 30-day

delay in effective date of this final rule. The inshore-offshore and

CDQ programs have been in effect for the last 3 years, and the fishing

industry is relying upon their continuation. A lapse in the effective

regulations for these programs would confuse and destabilize the

industry. Further, to the extent that this final rule continues

regulations that currently are in effect, a delayed effectiveness

period is unnecessary because the fishing industry does not need

additional time to plan or prepare for compliance with these

regulations. Therefore, the AA is waiving the 30-day delayed

effectiveness period and making these regulations effective January 1,

1996, to coincide with the start of the fishing year.

List of Subjects in 50 CFR Parts 672 and 675

Fisheries, Reporting and recordkeeping requirements.

Dated: December 6, 1995.

Gary Matlock,

Program Management Officer, National Marine Fisheries Service.

For the reasons set out in the preamble, 50 CFR parts 672 and 675

are amended as follows:

PART 672--GROUNDFISH OF THE GULF OF ALASKA

1. The authority citation for 50 CFR part 672 continues to read as

follows:

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

2. In Sec. 672.2, the definitions of ``Inshore component'' and

``Offshore component'' are revised to read as follows:

Sec. 672.2 Definitions.

* * * * *

Inshore component (applicable through December 31, 1998) means the

following three categories of the U.S. groundfish fishery that process

pollock harvested in a directed fishery for pollock, or Pacific cod

harvested in a directed fishery for Pacific cod in the Gulf of Alaska,

or both:

(1) Shoreside processing operations;

(2) Vessels less than 125 ft (38.1 m) in length overall, that

process no more than 126 mt per week in round-weight equivalents of an

aggregate amount of those fish; and

(3) Vessels that process those fish at a single geographic location

in Alaska State waters (waters adjacent to the State of Alaska and

shoreward of the EEZ) during a fishing year. For the purposes of this

definition, NMFS will determine the single geographic location in a

fishing year for an individual processor from the geographic

coordinates the vessel operator reports on the check-in notice

(Secs. 672.5(c)(1) and 675.5(c)(1)) of this chapter when that vessel

first engages in processing those fish.

* * * * *

Offshore component (applicable through December 31, 1998) means all

vessels in the U.S. groundfish fisheries not included in the definition

of ``inshore component'' that process pollock caught in directed

fisheries for pollock, or Pacific cod caught in directed fisheries for

Pacific cod in the Gulf of Alaska, or both.

* * * * *

3. In Sec. 672.7, paragraph (h) heading, and paragraph (h)(2) are

revised to read as follows:

Sec. 672.7 Prohibitions.

* * * * *

(h) Applicable through December 31, 1998. * * *

(2) Operate any vessel under both the ``inshore component'' and

``offshore component'' definitions at Secs. 672.2 and 675.2 of this

chapter during the same fishing year.

* * * * *

Sec. 672.20 [Amended]

4. In Sec. 672.20, the headings of paragraphs (a)(2)(v),

(c)(1)(ii), and (c)(2)(ii) are revised to read: ``Applicable through

December 31, 1998.''.

5. In Sec. 672.20, the headings of paragraphs (c)(1)(i) and

(c)(2)(i) are revised to read: ``Applicable after December 31, 1998.''.

PART 675--GROUNDFISH OF THE BERING SEA AND ALEUTIAN ISLANDS AREA

6. The authority citation for 50 CFR part 675 continues to read as

follows:

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

7. In Sec. 675.2, a definition for ``Catcher vessel operational

area'' is added, in alphabetical order, and the definitions for

``Community Development Plan,'' ``Community Development Quota,''

``Community Development Quota Program,'' ``Community Development Quota

Reserve,'' ``Inshore component,'' and ``Offshore component'' are

revised to read as follows:

Sec. 675.2 Definitions.

* * * * *

Catcher vessel operational area (CVOA) (applicable through December

31, 1998) means that part of the Bering Sea subarea south of 56 deg.00'

N. lat. and between 163 deg.00' and 167 deg.30' W. long.

Community Development Plan (CDP) (applicable through December 31,

1998) means a plan for a specific Western Alaska community or group of

communities approved by the Governor of the State of Alaska and

recommended to NMFS under Sec. 675.27.

Community Development Quota (CDQ) (applicable through December 31,

1998) means a percentage of the CDQ reserve for a BSAI subarea or

district as defined at Sec. 675.20(a)(3)(ii) that is allocated to a

CDP.

Community Development Quota Program (CDQ Program) (applicable

through December 31, 1998) means the Western Alaska Community

Development Program implemented under Sec. 675.27.

Community Development Quota Reserve (CDQ Reserve) (applicable

through December 31, 1998) means one half of the pollock TAC that is

placed into the reserve for each subarea and district of the BSAI as

specified at

[[Page 63658]]

Sec. 675.20(a)(3) and that is set aside for the CDQ program.

* * * * *

Inshore component (applicable through December 31, 1998) means the

following three categories of the U.S. groundfish fishery that process

pollock harvested in a directed fishery for pollock, or Pacific cod

harvested in a directed fishery for Pacific cod in the Gulf of Alaska,

or both:

(1) Shoreside processing operations;

(2) Vessels less than 125 ft (38.1 m) in length overall, that

process no more than 126 mt per week in round-weight equivalents of an

aggregate amount of those fish; and

(3) Vessels that process those fish at a single geographic location

in Alaska State waters (waters adjacent to the State of Alaska and

shoreward of the EEZ) during a fishing year. For the purposes of this

definition, NMFS will determine the single geographic location in a

fishing year for an individual processor from the geographic

coordinates the vessel operator reports on the check-in notice

(Secs. 672.5(c)(1) of this chapter and 675.5(c)(1)) when that vessel

first engages in processing those fish.

* * * * *

Offshore component (applicable through December 31, 1998) means all

vessels not included in the definition of ``inshore component'' that

process pollock caught in directed fisheries for pollock, or Pacific

cod caught in directed fisheries for Pacific cod in the Gulf of Alaska,

or both.

* * * * *

8. In Sec. 675.7, paragraph (i) heading, paragraph (i)(2), and

paragraph (j) heading are revised to read as follows:

Sec. 675.7 Prohibitions.

* * * * *

(i) Applicable through December 31, 1998. * * *

(2) Operate any vessel under both the ``inshore component'' and

``offshore component'' definitions at Sec. 672.2 of this chapter and

Sec. 675.2 during the same fishing year.

(j) Applicable through December 31, 1998.

* * * * *

9. In Sec. 675.20, the headings of paragraphs (a)(2)(iii),

(a)(3)(i), (a)(3)(ii), and (a)(3)(iii) are revised to read as follows:

Sec. 675.20 General limitations.

(a) * * *

(2) * * *

(iii) Applicable through December 31, 1998.

* * * * *

(3) * * *

(i) Applicable through December 31, 1998. * * *

(ii) Applicable through December 31, 1998. * * *

(iii) Applicable through December 31, 1998; application for

approval of a CDP and CDQ allocation. * * *

* * * * *

10. In Sec. 675.22, paragraphs (g) and (h)(2) are revised to read

as follows:

Sec. 675.22 Time and area closures.

* * * * *

(g) Catcher vessel operational area (applicable through December

31, 1998). (1) The Catcher Vessel Operational Area is established

annually from the beginning of the second season of directed fishing

for pollock (defined at Sec. 675.23(e)) until either the date that NMFS

determines that the pollock quota for processing by the inshore

component has been harvested or December 31, whichever is earlier.

(2) Vessels in the offshore component are prohibited from

conducting directed fishing for pollock in the CVOA unless they are

operating under a CDP approved by NMFS.

(3) Vessels in the offshore component that do not catch groundfish

but do process pollock caught in a directed fishery for pollock may

operate within the CVOA to process pollock.

(4) Vessels that catch or process groundfish in directed fisheries

for species other than pollock may operate within the CVOA.

(h) * * *

(2) If the Regional Director determines that 42,000 nonchinook

salmon have been caught by vessels using trawl gear during August 15

through October 14 in the CVOA, NMFS will prohibit fishing with trawl

gear for the remainder of the period September 1 through October 14 in

the Chum Salmon Savings Area defined under paragraph (h)(1) of this

section.

11. In Sec. 675.23, paragraph (e)(2) heading is revised to read as

follows:

Sec. 675.23 Seasons.

* * * * *

(e) * * *

(2) Applicable through December 31, 1998. * * *

* * * * *

12. In Sec. 675.27, the section heading is revised, introductory

text is added, and paragraphs (b)(1)(i), (b)(1)(vii), (b)(2)(vii),

(b)(3)(ii)(B), (e), and the heading of paragraph (f) are revised to

read as follows:

Sec. 675.27 Western Alaska Community Development Quota Program

(applicable through December 31, 1998).

The goals and purpose of the CDQ program are to allocate pollock

from the CDQ reserve to eligible Western Alaska communities to provide

the means for starting or supporting commercial seafood activities that

will result in ongoing, regionally based, commercial seafood or related

businesses.

* * * * *

(b) * * *

(1) * * *

(i) A description of the CDP projects that are proposed to be

funded by the CDQ and how the CDP projects satisfy the goals and

purpose of the CDQ program;

* * * * *

(vii) Description of how the CDP would generate new capital or

equity for the applicant's fishing and/or processing operations;

* * * * *

(2) * * *

(vii) A general budget for implementing the CDP. A general budget

is a general account of estimated income and expenditures for each CDP

project that is described at paragraph (b)(1)(i) of this section for

the total number of calendar years that the CDP is in effect. An annual

budget is required to be submitted with a CDP as described at paragraph

(e)(1)(ii) of this section;

* * * * *

(3) * * *

(ii) * * *

(B) Documentation of a legal relationship between the CDP applicant

and the managing organization (if the managing organization is

different from the CDP applicant), which clearly describes the

responsibilities and obligations of each party as demonstrated through

a contract or other legally binding agreement; and

* * * * *

(e) Monitoring of CDPs--(1) CDP reports. The following reports must

be submitted to NMFS:

(i) Annual progress reports. CDP applicants are required to submit

annual progress reports to the Governor by June 30 of the year

following allocation. Annual progress reports will include information

describing how the CDP has met its milestones, goals, and objectives.

On the basis of those reports, the Governor will submit an annual

progress report to NMFS and recommend whether CDPs should be continued.

NMFS must notify the Governor in writing within 45 days of receipt of

the Governor's annual progress report, accepting or rejecting

[[Page 63659]]

the annual progress report and the Governor's recommendations on

multiyear CDQ projects. If NMFS rejects the Governor's annual progress

report, NMFS will return it for revision and resubmission. The report

will be deemed approved if NMFS does not notify the Governor in writing

within 45 days of the report's receipt.

(ii) Annual budget report. An annual budget report is a detailed

estimation of income and expenditures for each CDP project as described

in paragraph (b)(1)(i) of this section for a calendar year. The first

annual budget report shall be included in the CDP. Each subsequent

annual budget report must be submitted to NMFS by December 15 preceding

the year for which the annual budget applies. Annual budget reports are

approved upon receipt by NMFS unless disapproved in writing by December

31. If disapproved, the annual budget report may be revised and

resubmitted to NMFS. NMFS will approve or disapprove a resubmitted

annual budget report in writing.

(iii) Annual budget reconciliation report. A CDQ group must

reconcile each annual budget by May 30 of the year following the year

for which the annual budget applied. Reconciliation is an accounting of

the annual budget's estimated income and expenditures with the actual

income and expenditures, including the variance in dollars and variance

in percentage for each CDP project that is described in paragraph

(b)(1)(i) of this section. If a general budget as described at

paragraph (b)(2)(vii) of this section is no longer correct due to the

reconciliation of an annual budget, then the general budget must also

be revised to reflect the annual budget reconciliation, and the revised

general budget must be included in the annual budget reconciliation

report.

(2) CDQ increase. If an applicant requests an increase in a CDQ

under a multiyear CDP, the applicant must submit a new CDP application

for review by the Governor and approval by NMFS as described in

paragraphs (b) and (c) of this section.

(3) Substantial amendments. A CDP is a working business plan and

must be kept up to date. Substantial amendments to a CDP will require

written notification to the Governor and subsequent approval by the

Governor and NMFS before any change in a CDP can occur. The Governor

may recommend to NMFS that the request for an amendment be approved.

NMFS may notify the Governor in writing of approval or disapproval of

the amendment within 30 days of receipt of the Governor's

recommendation. The Governor's recommendation for approval of an

amendment will be deemed approved if NMFS does not notify the Governor

in writing within 30 calendar days of receipt of the Governor's

recommendation. If NMFS determines that the CDP, if changed, would no

longer meet the criteria under paragraph (d) of this section, or if any

of the requirements under this section would not be met, NMFS shall

notify the Governor in writing of the reasons why the amendment cannot

be approved.

(i) For the purposes of this section, substantial amendments are

defined as changes in a CDP, including, but not limited to, the

following:

(A) Any change in the applicant communities or replacement of the

managing organization;

(B) A change in the CDP applicant's harvesting or processing

partner;

(C) Funding a CDP project in excess of $100,000 that is not part of

an approved general budget;

(D) More than a 20 percent increase in the annual budget of an

approved CDP project;

(E) More than a 20 percent increase in actual expenditures over the

approved annual budget for administrative operations; or

(F) A change in the contractual agreement(s) between the CDP

applicant and its harvesting or processing partner, or a change in a

CDP project, if such change is deemed by the Governor or the Secretary

to be a material change.

(ii) Notification of an amendment to a CDP shall include the

following information:

(A) The background and justification for the amendment that

explains why the proposed amendment is necessary and appropriate;

(B) An explanation of why the proposed change to the CDP is an

amendment according to paragraph (e)(3)(i) of this section;

(C) A description of the proposed amendment, explaining all changes

to the CDP that result from the proposed amendment;

(D) A comparison of the original CDP text with the text of the

proposed changes to the CDP, and the changed pages of the CDP for

replacement in the CDP binder;

(E) Identification of any NMFS' findings that would need to be

modified if the amendment is approved along with the proposed modified

text; and

(F) A description of how the proposed amendment meets the

requirements of this Sec. 675.27. Only those CDQ regulations that are

affected by the proposed amendment need to be discussed.

(4) Technical amendments. Any change to a CDP that is not a

substantial amendment as defined at paragraph (e)(3)(i) of this

section, is a technical amendment. It is the responsibility of the CDQ

group to coordinate with the Governor to ensure that a proposed

technical amendment does not meet the definition for a substantial

amendment. Technical amendments require written notification to the

Governor and NMFS before the change in a CDP occurs. A technical

amendment will be approved when the CDQ group receives a written notice

from NMFS announcing the receipt of the technical amendment. The

Governor may recommend to NMFS in writing that a technical amendment be

disapproved at any time. NMFS may disapprove a technical amendment in

writing at any time with the reasons therefor. Notification should

include:

(i) The pages of the CDP with the text highlighted to show

deletions and additions; and

(ii) The changed pages of the CDP for replacement in the CDP

binder.

(5) It is the responsibility of the CDQ-managing organization to

cease fishing operations once its respective CDQ pollock allocation has

been reached. Total pollock harvests for each CDP will be determined by

observer estimates of total catch and catch composition as reported on

the daily observer catch message. The CDQ-managing organization must

arrange for processors to transmit a copy of the observer daily catch

message to it in a manner that allows the CDQ-managing organization to

inform processors to cease fishing operations before the CDQ allocation

has been exceeded. CDQ-managing organization representatives must also

inform NMFS within 24 hours after the CDQ has been reached and fishing

has ceased. If NMFS determines that the observer, the processor, or the

CDQ-managing organization failed to follow the procedures described in

paragraph (h) of this section for estimating the total harvest of

pollock, or violated any other regulation in this part, NMFS reserves

the right to estimate the total pollock harvest based on the best

available data.

(f) Suspension or termination of a CDP.

* * * * *

[FR Doc. 95-30139 Filed 12-11-95; 8:45 am]

BILLING CODE 3510-22-W