Fisheries off West Coast States and in the Western Pacific; Pacific Coast Groundfish Fishery; Management Measures for Nontrawl Sablefish

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 980406085-8164-01; I.D. 031998C]

RIN 0648-AJ27

Fisheries off West Coast States and in the Western Pacific;

Pacific Coast Groundfish Fishery; Management Measures for Nontrawl

Sablefish

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

Atmospheric Administration (NOAA), Commerce.

ACTION: Final rule.

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SUMMARY: NMFS issues this final rule to implement management measures

recommended by the Pacific Fishery Management Council (Council) for the

limited entry, fixed gear sablefish fishery north of 36 deg. N. lat.

These measures provide a three-tiered management regime with three

different cumulative landings limits for permit holders participating

in the regular, limited entry, fixed gear sablefish fishery. The

cumulative landings limit available to a permit holder depends on the

tier to which the permit is assigned, with tier assignment based on

historical and more recent participation in the fixed gear sablefish

fishery. Both the limited entry and open access fixed gear sablefish

fisheries will be closed for 48 hours immediately before and for 30

hours immediately after the regular fishery, with different

restrictions applying during the two closed periods. Provisional 1997

regulatory language is updated by this final rule. These actions are

intended to recognize the historical and more recent participation and

investment in the fixed gear sablefish fishery while eliminating the

traditional ``derby'' style management system.

DATES: Effective July 10, 1998.

ADDRESSES: Copies of the Environmental Assessment/Regulatory Impact

Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) and the

Final Regulatory Flexibility Analysis (FRFA) for this action are

available from the Pacific Fishery Management Council, 2130 SW. Fifth

Avenue, Suite 224, Portland, OR 97201. Comments regarding the

collection-of-information requirements contained in this rule should be

sent to William Stelle, Administrator, Northwest Region, NMFS, 7600

Sand Point Way NE, BIN C15700, Seattle, WA 98115-0070 or to

[[Page 38102]]

William Hogarth, Administrator, Southwest Region, NMFS, 501 W. Ocean

Blvd., Suite 4200, Long Beach, CA 90802-4213, and to the Office of

Information and Regulatory Affairs, Office of Management and Budget,

(OMB) Washington, DC 20503 (ATTN: NOAA Desk Officer).

FOR FURTHER INFORMATION CONTACT: Yvonne deReynier at 206-526-6140, or

Wes Silverthorne at 562-980-4000.

SUPPLEMENTARY INFORMATION:

Background

NMFS issues this final rule to implement recommendations from the

Council, under the authority of the Pacific Coast Groundfish Fishery

Management Plan (FMP) and the Magnuson-Stevens Fishery Conservation and

Management Act (Magnuson-Stevens Act), to implement changes to the

management measures for the limited entry, fixed gear sablefish

fishery. The notice of proposed rulemaking for this action (63 FR

19878, April 22, 1998) fully described the background and rationale for

the Council's recommendations. NMFS requested public comments on this

action through May 22, 1998. NMFS received 26 letters during the

comment period, which are addressed later in the preamble to this final

rule.

In summary, limited entry permits with sablefish endorsements are

divided into three tiers, with placement based on the cumulative

sablefish catch associated with that permit from 1984 through 1994.

Each tier is allowed a different cumulative limit during the regular,

limited entry, fixed gear fishery. These measures apply only north of

36 deg. N. lat.

Three-Tier Program

NMFS has accepted the Council's recommendation for qualifying

criteria for the three different tiers. To qualify for the highest

tier, Tier 1, a permit must be associated with at least 898,000 lb

(407.33 mt) of cumulative sablefish landings made from 1984 through

1994. To qualify for the middle tier, Tier 2, a permit must be

associated with between 380,000 lb (172.36 mt) and 897,999 lb (407.33

mt) of cumulative sablefish landings made from 1984 through 1994.

Permits with sablefish endorsements that are associated with less than

380,000 lb (172.36 mt) of cumulative sablefish landings from 1984

through 1994 qualify for the lowest tier, Tier 3.

Analysts examined the distribution of sablefish cumulative catch

histories over the 1984 through 1994 period to determine whether there

were any large gaps between groupings of the cumulative catch histories

of limited entry permits with sablefish endorsements that might serve

as logical breakpoints between tiers. The Council wanted broad

divisions of permit catch history between permits assigned to different

tiers. Based on the analysis available at its meetings, the Council

determined that the above qualifying criteria for Tier 1 reflected the

largest break among a series of high catch history breakpoints, and

that the qualifying criteria for Tier 2 reflected the largest break

among a series of mid-range catch history breakpoints.

Permit catch history will be used to determine tier assignments for

limited entry permit holders with sablefish endorsements. Permit catch

history includes the catch history of the vessel(s) that initially

qualified for the permit, as well as subsequent catch history that was

accrued when the limited entry permit or permit rights were associated

with other vessels. Permit catch history also includes the catch

associated with any interim permit held during the appeal of an initial

NMFS decision to deny the initial issuance of a limited entry permit,

but only if (1) the appeal for which an interim permit was issued was

lost by the appellant, and (2) the owner's current permit was used by

the owner in the 1995 limited entry sablefish fishery. The catch

history of an interim permit where the full ``A'' permit was ultimately

granted will also be considered part of the catch history of the ``A''

permit. If the current permit is the result of the combination of

multiple permits, the combined catch histories of all of the permits

that were combined to create a new permit before March 12, 1998, will

be used in calculating the tier assignment for the resultant permit,

together with any catch history (during the qualifying period) of the

resultant permit. Only sablefish catch regulated by the FMP that was

legally taken with longline or fishpot gear will be considered for tier

placement. Harvest taken in tribal sablefish set-asides will not be

included in calculating permit catch histories.

Under the regulations that implemented Amendment 9 to the FMP,

which established the sablefish endorsement requirement, if two limited

entry, fixed gear permits are combined to generate a single permit with

a larger length endorsement, the resulting permit also will have a

sablefish endorsement only if all permits being combined have sablefish

endorsements. After tier assignments are issued by NMFS, if permits are

combined, the resulting permit will be assigned to the highest tier

held by either of the original permits before combination.

The three-tier program maintains a ratio between the cumulative

landings limits for the three tiers that approximates the 1991-1995

catch relationships between permits assigned to each tier on a group

average basis. Setting cumulative limits by ratios ensures that the

long-term relationships between the cumulative limits for each tier

will remain stable. With cumulative limits set by ratio, impacts from

changes in the numbers of permits distributed to each tier will be

shared by all vessels in the fleet. The cumulative landings limit ratio

for the tiers is 3.85 (Tier 1); 1.75 (Tier 2); and 1 (Tier 3). For

example, if Tier 3 had a cumulative limit of 10,000 lb (4,536 kg), Tier

2 would have a corresponding cumulative limit of 17,500 lb (7,938 kg),

and Tier 1 would have a corresponding cumulative limit of 38,500 lb

(17,463 kg).

Overhead guidelines will be used to set the cumulative limits for

each tier and for the overall expected catch for the fishery.

``Overhead'' is defined as the difference between the expected harvest

level and the total harvest that would occur if each permitted vessel

took its cumulative limit (maximum potential harvest). The concept of

overhead is based on the premise that not all participants in this

fishery will harvest the cumulative limit. NMFS considers a fishery

where all participants have the opportunity to catch a cumulative limit

and are all able to catch that limit to be an Individual Fishing Quota

(IFQ) program. The Magnuson-Stevens Act imposes a moratorium on

implementation of new IFQ programs until October 1, 2000.

Cumulative limits and season lengths for the limited entry, fixed

gear regular sablefish fishery will be set to achieve a projected

overhead, based on the most reasonable assumptions, of at least 25

percent and an overhead based on worst-case assumptions of at least 15

percent for the fleet as a whole. The overhead goal for any single tier

will be at least 15 percent, based on the most reasonable assumptions.

Tier assignments for limited entry permits with sablefish

endorsements will `be issued by NMFS, before the start of the regular

1998 limited entry, fixed gear sablefish season. NMFS has used landings

records from the Pacific States Marine Fisheries Commission's Pacific

Fisheries Information Network (PacFIN) database to preliminarily

determine which limited entry permits meet the Council-recommended

qualifications for each tier.

The Sustainable Fisheries Division (SFD), NMFS Northwest Region,

has

[[Page 38103]]

notified each limited entry permit owner with a sablefish endorsement

by letter whether PacFIN records indicate that his or her permit

qualifies for Tier 1, Tier 2, or Tier 3.

A permit owner who believes that his or her permit qualifies for a

different tier than the tier indicated by PacFIN records has 30 days to

send supporting documentation, such as fish tickets, to the SFD to

demonstrate how the qualifying criteria for a different tier have been

met. A new tier will be assigned if the permit owner demonstrates that

his or her permit meets the qualifying criteria. If the SFD, after

review of the information submitted by the permit owner, decides that

the permit does not qualify for the tier requested by the owner, the

owner will have 30 days to appeal the decision to the Regional

Administrator, NMFS Northwest Region. Unlike the initial limited entry

permitting process but similar to the sablefish endorsement issuance

process, there will be no industry appeals board to review appeals of

tier placement.

For the 1998 season only, permit owners with sablefish endorsements

will be issued certificates of tier assignment that will need to be

kept with, and considered part of, their limited entry permits. When

limited entry permit owners renew their permits for 1999, tier

assignments for those limited entry permit owners with sablefish

endorsements will be indicated directly on the limited entry permit.

Applications for sablefish endorsements, implemented in 1997 under

Amendment 9 to the FMP, will not be accepted after November 30, 1998,

which is the limited entry permit renewal deadline for the 1999 fishing

year.

Changes From the Proposed Rule

NMFS received Council recommendations on the two changes to the

proposed rule described in this section.

At the March 1998 Council meeting, the Council learned from its

analysts that the initial analysis presented before the 1997 Council

decision on the three-tier program had two mistakes directly related to

the Council's decision. The Council reconsidered the affected portions

of its recommendations. The first mistake was that the database used

for the initial analysis for the three-tier program had inadvertently

included some sablefish taken in waters off Alaska and later landed at

a Pacific Coast port. Tier qualification catch history includes only

sablefish landed from the Pacific Coast groundfish fishery. The catch

histories of some permits were inflated because of this inclusion of

Alaska-caught sablefish. Once the Alaska-caught sablefish was removed

from the permit catch history database, the tier qualification levels

had to be re-analyzed to determine whether the breaks between permit

catch histories (described above) were still large enough to draw clear

distinctions between permits above and below the breaks. The Council

particularly did not wish to set a qualification level that was within

a few thousand pounds of the next lowest permit catch history level.

Removal of Alaska sablefish data did not significantly change the

breaks in cumulative catch histories identified by the Council at its

November 1997 meeting. The break for Tier 1, 898,000 lb (407.33 mt),

actually became larger, and so is a more effective fleet-division

indicator than it was when the Alaska data were included in the

cumulative catch histories. The qualifying amount that the Council had

originally recommended for Tier 2, 411,000 lb (186.43 mt), also occurs

at a large break in cumulative catch histories, but it is no longer the

lowest large breakpoint in its class. Analysis presented at the March

1998 meeting showed that 398,000 lb (180.53 mt) was the most

significant break in cumulative catch histories, and the lowest large

break among mid-range breakpoints. The Council commented on this issue,

stating that it preferred to use the lowest large breakpoint in the

mid-range area. In order to cushion any further possible data mistakes,

the Council recommended setting the Tier 2 qualifying poundage at

380,000 lb (172.37 mt). NMFS received no public comment on this issue,

and implements this change with this final rule.

The second mistake in the November 1997 analysis was made when the

Council considered whether permits that were the result of the

combination of two earlier permits would be assigned to a tier based on

the cumulative catch history of one of the earlier permits, or based on

the combined cumulative catch histories of both permits together. The

analysis presented to the Council in November indicated that no permit

holder would be denied qualification to a higher tier if the cumulative

catch history of the highest of two combined permits were used as the

qualifying catch history for that permit, rather than the summed

cumulative catch history of both permits that were used to create the

currently held permit. However, analysts later discovered a permit that

is a result of two previously combined permits with catch histories

that would each qualify for Tier 2, but that combined would qualify the

resultant permit for Tier 1. This mistake was presented to the Council

at its March 1998 meeting, after which the Council recommended changing

its initial decision so that permits that are the result of a

combination of multiple permits made before March 12, 1998, may combine

the cumulative catch histories of all of the permits that went into the

combination in order to determine the tier qualification status for the

resultant permit. The Council only allowed this change for pre-existing

combinations, but not for future combinations, so that permit holders

would not have an incentive to buy up latent effort in the fleet to

expand the capacity of their own operations. During the comment period,

NMFS received two letters expressing support for the new Council

recommendation. NMFS implements this change with this final rule.

Management Measures for 1998 and Beyond

To facilitate enforcement, there will be a 48-hour closure before

the start of the limited entry, fixed gear regular season, during which

time all fixed gear north of 36 deg. N. lat. must be out of the water,

and no sablefish may be landed by a fixed gear vessel. The 1998 pre-

season closure will begin at noon local time (l.t.) on Thursday, July

30, and end at noon l.t. on Saturday, August 1, at the start of the

fishery. There will be no opportunities for any fishers to set their

gear before the 1998 regular season start time.

The 1998 limited entry, fixed gear regular season will begin at

noon l.t. on Saturday, August 1, 1998. Only holders of limited entry

permits with sablefish endorsements and tier assignments may

participate in this fishery. The fishery will be 6 days long, ending at

noon l.t. on Friday, August 7, 1998. The cumulative landings limits for

participants in the limited entry, fixed gear sablefish fishery will be

52,000 lb (23,587 kg) for Tier 1; 23,500 lb (10,660 kg) for Tier 2, and

13,500 lb (6,124 kg) for Tier 3. During the regular and mop-up seasons,

there is a trip limit in effect for sablefish smaller than 22 inches

(56 cm) total length, which may comprise no more than 1,500 lb (680 kg)

or 3 percent of all legal sablefish 22 inches (56 cm) or larger,

whichever is greater.

To facilitate enforcement at the end of the regular season, there

will be a 30-hour post-season closure north of 36 deg. N. lat., during

which time no sablefish taken with fixed gear (limited entry or open

access) may be taken and retained

[[Page 38104]]

for the 30 hours immediately after the end of the regular season.

However, sablefish taken and retained during the regular season may be

possessed and landed during that 30-hour period. The post-season

closure has been changed from 48 hours in duration to 30 hours in

duration. This shorter post-season closure is a compromise between

vessel owners with pot gear who would prefer a short post-season

closure so that they may retrieve gear as soon after offloading as

possible, and vessels delivering sablefish to ports in Puget Sound that

are farther from the main fishing grounds than from direct ocean ports.

In 1998, this 30-hour post-season closure will begin at noon l.t. on

August 7 and end at 1800 hours l.t. on August 8. Gear may remain in the

water during the 30-hour post-season closure; however, gear used to

take and retain groundfish may not be set or retrieved during this

period.

Commencing at 1800 hours l.t., August 8, 1998, the daily trip

limits for fixed gear sablefish will resume at 300 lb (136 kg) per day

north of 36 deg. N. lat. (Daily trip limits apply to calendar days.

Therefore, on August 8, 1998, a daily trip limit may be landed between

1800 hours and 12 midnight l.t. Beginning at 0001 hours l.t. on August

9, 1998, daily trip limits will apply to the full 24 hours.) A vessel

participating in the regular fishery must begin landing its catch

before 1800 hours l.t., August 8, 1998, and complete the offloading

before returning to sea or continuing a trip at sea, or the daily trip

limit will apply to the fish remaining on board after 1800 hours l.t.

on August 8, 1998.

Estimates of the likely total harvest in the regular fishery have

been made conservatively in order to ensure that the fishery does not

exceed its total allocation. Because of this conservative management

and the need to provide harvest overhead in setting cumulative landings

limits for the three tiers, the regular fishery may not harvest all of

the limited entry, fixed gear allocation for north of 36 deg. N. lat.

in excess of that required for the daily trip limit fishery. Following

an estimation of the catch from the regular fishery, there will be a

mop-up fishery to harvest this excess. The recommendation on the size

of the mop-up cumulative limit will be made by the Council's Groundfish

Management Team, after calculation of the actual landed catch from the

regular fishery and the daily trip limit fishery. NMFS will announce

the start date, duration, and cumulative limit amount for the mop-up

portion of the fishery in the Federal Register before the start of the

mop-up season.

Comments and Responses

The comments in 26 letters received during the public comment

period ending on May 22, 1998, are summarized below. Comments 1 through

17 were received from 12 individuals in opposition to the three-tier

program. Comments 18 through 30 are comments were received from 13

individuals and from an attorney representing west Coast fixed gear

fishers. One letter in support of the rule included a suggestion that

permit owners be allowed to stack multiple permits to pursue multiple

cumulative limits during the regular fishery and a suggestion that the

regular fishery be managed with an option of two different start dates,

one in April and one in August. Neither of these suggestions was within

the scope of the proposed rule or the Council's considerations for the

three-tier program, so those comments have not been responded to below.

Comments Opposing the Rule

Comment 1: No justifiable need has been demonstrated for tiered

sablefish allocation. Tiered allocation does nothing to further the

stated purpose of the overall management program--to end derby fishing.

In fact, derby fishing would be perpetuated by this program. The three-

tier program does not address the safety-at-sea issue.

Response: For the past several years, the Council has expressed a

strong desire to end the status quo management regime of an open

competition derby while still maintaining historic trends in catch

distribution among participants. Each year, since 1987, the open

competition derby season has shortened in duration, yet the Council has

been unable to choose whether to support the management recommendations

of long-term fleet members who wanted to maintain their historic share

of sablefish landings, or the management recommendations of new

entrants to the fleet who wanted to increase their future shares of

sablefish landings. The history of the fixed gear sablefish management

regime is discussed in the preamble to the proposed rule. Finally, for

1998 and beyond, the Council recommended the three-tier program, a

compromise that recognizes historic and recent fishery participation

levels. The unrestricted competition derby will end with the

implementation of the three-tier program.

The amount of sablefish available to a three-tier regular fishery

provides a 6-day fishery in 1998. Without this rule, the regular

fishery would be an unrestricted derby of 2 to 3 days. With this rule,

approximately one-third of the expected participating vessels will be

able to slow their rate of fishing over the rate that they would have

fished under an unrestricted derby fishery, without reducing their

catch. The Council has several times deliberated on whether this

fishery would still be unsafe for vessels unable to catch the

cumulative limit within the time allotted for the fishery. Fishers who

knew that they would not be able to catch the cumulative limit within

the time available have testified before the Council that any increase

in the number of days in the fishery would allow them to slow the pace

of their fishing and improve their ability to operate in a safer

manner. The Council concluded that the three-tier program was an

appropriate compromise because it would substantially slow the fishery

without the adverse impacts of the alternatives that would have more

drastically redistributed the catch.

The regular fishery under the three-tier program will still be a

short, intense season. However, the only management option that has

been suggested to end such seasons entirely was to set equal, monthly

cumulative landings limits, an option with other offsetting drawbacks.

Equal monthly landings limits would drastically redistribute catch from

longer term participants to more recent and smaller capacity entrants.

Cumulative limits also give fishers incentive to aim for a limit, and

in aiming for that limit, they often exceed the limit and must discard

any fish exceeding the limit. Discard mortality is largely unmeasured,

and thus is a danger to the long-term health of the fish stocks. A

system of monthly limits risks the possibility that fishers will aim

for and exceed 12 small landings limits. The three-tier program has

just the large, regular fishery limit to aim for, plus an expected

second, smaller limit in the mop-up portion of the fishery.

Comment 2: The three-tier program is based solely on historic

catch. Historic catch is not mentioned in the Magnuson-Stevens Act. The

Magnuson-Stevens Act states that if the available resource must be

allocated to American fishers, historic participation shall be

required. All fishers with sablefish endorsements have shown historic

participation in the fishery.

Response: Under section 303 of the Magnuson-Stevens Act, a Council

may establish a limited access program if it takes into account, among

other things, ``historical fishing practices in, and dependence on, the

fishery.'' The three-tier program uses cumulative sablefish landings

from the 1984 through 1994

[[Page 38105]]

period to quantify the historical fishing practices and dependence of

participating fishers on the fixed gear sablefish fishery.

National standard 4 of the Magnuson-Stevens Act states that,

``Conservation and management measures shall not discriminate between

residents of different States. If 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 three-tier

program is fair and equitable to participants in the program because it

recognizes historic and recent participation and dependence on the

fishery, and because it divides fishing privileges in a manner designed

to minimize economic impact on those participants, within the

constraints of the Magnuson-Stevens Act prohibition on implementing new

IFQ programs.

Derbies, three-tier programs, and series of monthly cumulative

limits, were three of the major alternatives considered in this action.

Each provides a different means of controlling harvest in this fishery,

each with different social, economic, and conservation implications

that would change over time and with conditions in the fishery. The

implementation of any of these alternatives would promote resource

conservation. Deteriorating social and economic conditions resulting

from derby fishery management led to the consideration of alternative

conservation measures.

Finally, if the fishery could be managed in a way that would allow

each of the permits to harvest the entire cumulative limit associated

with the tiers, each of the permits in the top tier would be receiving

just 1.4 percent of the total catch available to that fishery. A small

number of fleet participants own more than one permit, so it is

extremely unlikely that any one individual, corporation, or any other

entity will acquire an excessive share of the privileges associated

with this fishery through the three-tier program.

Comment 3: The Magnuson-Stevens Act states that economic gain

shall not be used to allocate fish resources.

Response: National standard 5 of the Magnuson-Stevens Act states

that, ``Conservation and management measures shall, where practicable,

consider efficiency in the utilization of fishery resources; except

that no such measure shall have economic allocation as its sole

purpose.'' The purpose of the three-tier program is to move away from

the unrestricted derby fishery with a management program that allows

sablefish catch distribution to reflect historic and recent

participation levels in the fishery. A management measure that would

improve the efficiency of the use of a fishery resource would, among

other things, remove or discourage redundant capacity in the fleet

targeting that resource. Derby management encourages each fishery

participant to increase the capacity of his or her vessel, to maximize

the amount of fish that a vessel can catch during the time of the

fishery. If the catching capacity of each vessel in a fleet is

increased to improve its competitive advantage over other vessels, the

total catching capacity in the fleet becomes so great that the duration

of the derby must be shortened to prevent these vessels from exceeding

the harvest guideline for the target species. The Pacific Coast fixed

gear sablefish fishery has had a classic case history of a derby

fishery that rushed into the vicious spiral of ever-increasing

redundant capacity and ever-decreasing fishery duration. The three-tier

program is intended to decrease the intensity of this spiral by

matching permits to the tiers that most closely reflect their historic

landings shares of the fishery. Fishers within each tier will be

allowed to pursue cumulative limits that match more closely their

current vessel capacities, and will thus as a group have less incentive

to continue to increase those vessel capacities. There will still be

incentive for vessels that are unable to catch their cumulative limit

in the allotted time to increase their capacity (about two-thirds of

the fleet), but the degree of incentive will be reduced. The three-tier

program is a compromise program resulting from constraints created by

the Magnuson-Stevens Act moratorium on the creation of new IFQ programs

and the major reallocative effects of other alternative management

strategies (e.g., a year-round series of monthly cumulative limits).

Economic allocation is not the sole purpose of this regulation. As

discussed in response to comments 1 and 2, the rule also has social and

conservation purposes.

Comment 4: The tier system rewards overcapitalization by large

producers by giving them an unreasonably larger allocation of sablefish

in comparison to the rest, and majority, of the fleet.

Response: Fleet overcapitalization is primarily the result of two

factors: individual fishers improving and supplementing their gear and

vessel catching capabilities, and increasing numbers of new entrants to

the fleet. Both of these factors contributed to overcapitalization in

the fixed gear sablefish fishery. It is incorrect to say that, during

any given period, a vessel that added gear contributed more to the

overcapacity problem than a fisher bringing in a similar amount of

capacity as a new entrant, or to say that this program rewards

overcapitalization by recognizing historic and recent fishery

participation. The three-tier program is designed to reflect, in part,

dependence on the fishery.

The ratio that describes this distribution of cumulative catch

limits between tiers approximates the 1991 through 1995 catch

relationships between permits assigned to each tier on a group average

basis. Setting cumulative limits by ratios ensures that the long-term

relationships between the cumulative limits for each tier will remain

stable. With cumulative limits set by ratio, impacts from changes in

the numbers of permits distributed to each tier will be shared by all

vessels in the fleet. The cumulative limits ratio for the tiers will be

3.85 (Tier 1); 1.75 (Tier 2); and 1 (Tier 3). The ratio between the

average permit catch histories for permits in the three different tiers

over the 1984 through 1994 period is 10.9 (permits in Tier 1) to 3.9

(permits in Tier 2) to 1 (permits in Tier 3). Tier 1 fishers will not

have an unreasonably larger allocation of sablefish as compared with

the rest of the fleet, particularly given the difference between the

historic cumulative catch ratio and the cumulative limits ratio

implemented by the three-tier program.

Comment 5: The tier program criteria are arbitrary and

inappropriately inflexible. The criteria do not adequately allow for

the changing circumstances and contingencies common in the industry,

such as boat and gear loss, weather, price fluctuations, etc.

Response: NMFS disagrees. The three-tier program qualifying

criteria include the initial 1984 through 1988 window period used to

qualify vessels for limited entry permits, plus the 1989 through 1994

period that was added to the limited entry window period for sablefish

endorsement qualification. In considering this question, it is

important to remember that NMFS considers the relevant history to be

the history of the groundfish fishing firm as represented by the

groundfish permit. Within the 11-year window period, NMFS expects that

most fishers had some period of relatively low fishing activity due to

any number of possible problems they might have had with their boats,

gear and weather, with personal health and family needs or with basic

changes in market

[[Page 38106]]

conditions. The long (11 years) qualifying period reduces the impact of

any particular problem that might have affected a fisher's

participation in this fishery. For vessels that may have entered the

fishery in the latter part of the qualifying period, such as those

qualifying for a limited entry permit based on construction provisions,

notice was given as early as the November 1991 Council meeting

(announced at 57 FR 4394, February 5, 1992), that additional actions

might be taken to further restrict access to the fishery, and that the

Council was reserving the option to not consider subsequent investment

and dependence on the fishery in determining future allocation

questions with regard to this fishery. The qualifying requirement

represents a balance that considers both the duration of involvement in

the fishery and the size of the harvest operation. A fisher who entered

the fishery as a large producer in the later part of the qualification

window would have an opportunity to qualify for one of the higher

tiers, as would a fisher who participated at a lower, but consistent,

level over a longer period.

Comment 6: The catch requirements for tier placement would

unfairly favor large vessels and handicap smaller vessels. Recent derby

management has artificially widened the catch gap between larger and

smaller vessels, because small boats are more vulnerable to adverse

weather and must spend a greater percent of time in transit, loading,

and offloading. Thus, the catch rate of these smaller vessels has been

constrained during the extremely short seasons.

Response: NMFS agrees that there is some correlation between

vessel size and vessel catch history. However, there are also several

examples of small-sized vessels in the Tier 1 that have had high and

consistent sablefish landings over the entire 11-year qualifying

period. Conversely, there are very large vessels in Tier 3 with

relatively low cumulative catch histories. Many factors contribute to

whether a vessel has a relatively large or small sablefish catch

history. In addition to basic vessel length, cumulative catch history

might be related to sablefish abundance near the home port of the

vessel, the fishing skills of the captain and crew, the type and

condition of the gear used, the condition of the vessel, choices of the

vessel owner to participate in the West Coast sablefish fishery or in

other simultaneous fisheries, the number of years in this fishery, and

many other possible factors. During the 1984 through 1994 window

period, only the last three seasons could be classified as short in

duration, being 15 days in 1992, 21 days in 1993, and 20 days in 1994.

These short periods necessarily constrained the catch rates of all

participating vessels to ensure that the fishery did not exceed the

available harvest guideline. NMFS does not agree that smaller sized

vessels necessarily spend more time in transit, or in loading and

offloading than larger vessels.

Comment 7: High-producing pot fishers had an advantage of high

harvest levels during the window period because they, unlike

longliners, were allowed to set their gear before the start of the

season. This was supposedly justified by safety concerns that boats

carrying too many pots would be unstable.

Response: In 1993 and 1994, fixed gear vessels were prohibited

from taking and retaining, possessing, or landing sablefish for the 72

hours before the start of the regular sablefish fishery (58 FR 16629,

March 30, 1993). For those 2 years, all fixed gear fishers could deploy

their gear during the 72-hour pre-season closure, but no sablefish

could be taken from the water until the season start. In 1995,

longliners were prohibited from deploying their gear until the start of

the season, while pot fishers were allowed to deploy and bait their

gear in advance of the start of the regular season (60 FR 34473, July

3, 1995). Because tier qualification status is based on landings made

from 1984 through 1994, the pot pre-set allowance in 1995 and 1996 did

not affect harvest during the three-tier qualification period.

Comment 8: The three-tier program does not consider the impact on

the small fishing ports along the coast, as directed by the Magnuson-

Stevens Act.

Response: National standard 8 of the Magnuson-Stevens Act requires

that, ``Conservation and management measures shall, consistent with the

conservation requirements of this Act (including the prevention of

overfishing and rebuilding of overfished stocks), take into account the

importance of fishery resources to fishing communities in order to (A)

provide for the sustained participation of such communities, and (B) to

the extent practicable, minimize adverse economic impact on such

communities.'' NMFS notes that, according to the Council's decisional

analysis, the three-tier program is expected to cause little change in

the inter-port distribution of harvest over past years' harvest

distributions. Moreover, other alternatives to unrestricted derby

management, such as providing a single period equal cumulative limit

fishery for all vessels or a series of equal monthly cumulative limits,

would have imposed greater changes to inter-port harvest distribution

than the three-tier program implemented by this rule. The program

implemented by this rule meets the requirements of national standard 8.

Comment 9: The three-tier plan is only a disguised IFQ program,

which is not allowed under the Magnuson-Stevens Act. The ``overhead''

allowance does not remedy this being an IFQ program. Additionally, the

season has been artificially shortened in order to maintain this

``overhead'' fiction, increasing the fishery's hazardousness for all

participants.

Response: The October 11, 1996, Sustainable Fisheries Act

significantly revised and renamed the Magnuson-Stevens Act. The new

changes to the Magnuson-Stevens Act included a moratorium on the

implementation of new IFQ programs until October 1, 2000. An IFQ is

defined in the Magnuson-Stevens Act as, ``a Federal permit under a

limited access system to harvest a quantity of fish, expressed by a

unit or units representing a percentage of the total allowable catch of

a fishery that may be received or held for exclusive use by a person.''

Management measures for the limited entry, fixed gear sablefish

fishery have been carefully designed not to violate this IFQ

prohibition. As with the 1997 equal cumulative limit fishery, the

Council recommended using overhead guidelines in setting the cumulative

limits for each tier and for the overall expected catch for the total

fishery. ``Overhead'' is defined as the difference between the expected

harvest level and the total harvest that would occur if each permitted

vessel took its full cumulative limit (maximum potential harvest). The

concept of overhead is based on the premise that not all participants

in this fishery will be able to harvest the cumulative limit. Because

not all participants will be able to harvest the cumulative limits, and

the remaining fish will be made available to others in the fleet, the

cumulative limits are not held for ``exclusive use by a person.'' These

limits are merely caps on what the most productive members of each tier

may harvest during the regular season. NMFS considers a fishery where

all participants have the opportunity to catch a cumulative limit and

they are all able to catch that limit to be an IFQ program. The Council

recommended setting cumulative limits and season lengths in 1998 and

beyond to achieve a projected overhead, based on the most reasonable

assumptions, of at least 25 percent and an overhead, based on worst-

case assumptions, of at least 15 percent for the fleet as a whole. The

goal overhead for any single tier

[[Page 38107]]

would be at least 15 percent, based on the most reasonable assumptions.

Overhead provisions ensure that fishery participants do not have

exclusive use of the cumulative limits. Any fish that is not harvested

in the cumulative limit fishery will be redistributed in another catch

opportunity during the mop-up fishery. NMFS is satisfied that a

management program based on these conservative overhead guidelines will

not result in all participating fishers being able to catch their full

cumulative limits and that such a program will, therefore, not be an

IFQ program. NMFS agrees that a longer season would be more desirable

for its safety benefits. However, a longer season is not possible under

the current IFQ moratorium, and would not achieve the Council's goal of

ending the unrestricted derby with a management program that recognizes

historic and recent participation.

Comment 10: Adequate consideration has not been given to

alternative means of achieving the program's objectives. Alternatives

to the three-tier program include management by equal allocation of

sablefish for all limited entry permit holders, as in 1997.

Response: NMFS disagrees that adequate consideration has not been

given to alternative means of achieving the program's objectives. The

history of Council deliberation regarding this management system was

described in the preamble to the proposed rule. The Council

specifically considered, analyzed, and rejected options that provide

equal allocation of sablefish for all permit holders as having too

great a redistributive effect on the fishery. Because an option was not

adopted does not mean that it was not considered.

The 1997 management scheme for the limited entry, fixed gear

sablefish fishery set equal cumulative limits for all limited entry

permit holders with sablefish endorsements. This scheme was

specifically adopted for 1 year only because a long-term equal limits

policy would have had significant adverse social and economic effects.

This option, in addition to an option to set monthly equal cumulative

limits, was included in the Council's decisional analysis for the

management of this fishery in 1998 and beyond. In addition to these

options, the Council considered a status quo derby option, three

different three-tier options, and one four-tier option. The Council

thoroughly analyzed and considered all seven management options before

choosing the three-tier program implemented by this rule.

Comment 11: One commenter opposed to the rule supported the single

period equal cumulative limit with mop-up option. The commenter noted

that the Council's analysis for this issue showed that only 18 percent

of fishery participants would experience a greater than 5-percent

decrease in their incomes, making this less than NMFS's standard

``significant impact'' criteria of 20 percent.

Response: This comment appears to refer to NMFS criteria for

determining whether an action will have a significant economic impact

on a substantial number of small entities, a determination NMFS makes

pursuant to the Regulatory Flexibility Act (RFA). NMFS considers an

impact to be ``significant'' if it results in a reduction in annual

gross revenues by more than 5 percent, an increase in annual compliance

costs of greater than 5 percent, compliance costs at least 10 percent

higher than for large entities, compliance costs that require

significant capital expenditures, or the likelihood that 2 percent of

the small entities would be forced out of business. NMFS considers a

``substantial number'' of small entities to be more than 20 percent of

those small entities affected by the regulation that are engaged in the

fishery. This determination is discussed in the Classification section

of this rule, and analyzed in the EA/RIR/IRFA/FRFA for this action.

The Council set an equal cumulative limit regime in 1997 forall

sablefish endorsement holders with the understanding that such a

division of fishing opportunities within a fleet with vastly differing

historical fishery participation rates and dependence levels would be

an unfair allocation as a long-term policy. In the final rule

implementing the 1997 regime, NMFS stated that, while the equal

cumulative limit regime was preferable to a derby, the agency would

support a 1998 management system that better reflected historic and

more recent levels of fishery participation. NMFS does not agree that

an equal allocation for all sablefish endorsement holders is an

appropriate management option for this fishery. Although the single

period equal cumulative limit option would have resulted in fewer

businesses with economic loss, the degree of impact on those businesses

would have been much greater. Those businesses that would have lost

economically under this option would have lost revenue to a greater

degree than those businesses losing revenue under any of the tier

options. Comparisons of revenue losses and gains under the different

management options considered by the Council are analyzed in the EA/

RIR/IRFA and FRFA for this action. There is a higher likelihood that

applying the NMFS RFA criteria to a management measure to implement a

long-term policy of equal cumulative limits would have resulted in a

finding of significant economic impacts to fleet participants on the

basis of the standard that more than 2 of participating small

businesses could have been forced to cease operations. Thus, while the

three-tier program results in a greater number of businesses

experiencing losses, those losses are smaller, and the impacts of the

new management regime are spread more evenly through the fleet.

Comment 12: Equal opportunity to access the fisheries is the fair

and long-established approach to fishery management. There is no

justification for managing this one fishery differently from other West

Coast fisheries. Monthly trip limits have worked for trawlers, why

can't they be used for the longline and pot sablefish fishery?

Response: Management of the trawl and longline fishery for

sablefish diverged in 1987, when the Council established constraining

trip limits for the trawl fishery, but did not set trip limits for the

non-trawl fishery. Since then, the fisheries have developed in

different manners. A sudden shift to monthly trip limits for the non-

trawl fishery would have drastic reallocative impacts on the fishery,

which the Council specifically wanted to avoid. While equal trip limits

could be imposed on the fixed gear fleet, the effect would be, and was

in 1997, very different than for trawl vessels because of the different

management paths these two gear groups have taken. The trawl fishery

reached its current trip limit levels over a period of many years, with

some downward adjustments made each year. The sudden imposition of

today's limits on a trawl fleet previously constrained only by season

length would be extremely reallocative and disruptive. When the size of

harvests is changed dramatically and suddenly, rather than over time,

greater dislocations result, both in terms of labor and business, as

well as personal capital. The monthly trip limit for trawlers is not

without problems. An overcapitalized fleet fishing on relatively low

trip limits in a multi-species fishery may have high discard rates,

with reduced economic viability for many of the fishery participants.

Any management scheme has drawbacks, and the Council must balance all

competing factors in choosing a management regime for any fishery.

Comment 13: If a permit received an endorsement, the Council

should allow permit holders who did not qualify for limited entry

permits to use their vessel

[[Page 38108]]

catch history, rather than just the permit catch history, to qualify

that permit for tier placement.

Response: Permit catch history includes the catch history of the

vessel(s) that initially qualified for the permit and subsequent catch

histories accrued when the limited entry permit or permit rights were

associated with other vessels. This comment suggests that a permit

holder who purchased a permit after the limited entry program went into

effect should be able to add his or her personal vessel's pre-1994

catch history to the pre-1994 catch history of the vessel that

initially qualified for the purchased permit.

It has been the Council's policy to allow permit catch history to

include a vessel's catch only from a time when that vessel was

associated with the permit. Permit catch history includes the catch

history of the vessel that initially qualified for the permit (before

1994), plus any catch history accumulated by vessels using that permit

after issuance (1994 - present). It would be inconsistent with historic

Council and NMFS policy to change these parameters for vessel and

permit catch history for the three-tier program. To the degree

possible, it is important to maintain consistent policy so that people

can move in and out of the fishery and plan their fishery investments.

Changing a policy that has been consistently followed since 1989 would

create uncertainty about future policies for current participants and

new entrants, and would require substantial justification.

A different set of qualifying histories would require redesign of

the entire program, with the result being a different set of permit

owners benefitting and losing under the new qualifying histories. If

the proposal in this comment were adopted, either the qualifying

requirements for the tiers would have to be raised to maintain a

similar number of permits in each tier, or the cumulative limits for

all vessels would have to be reduced in order to accommodate a greater

number of permits in higher tiers. The net effect in the former case is

that some permits would be moved down so that others could move up, or

that everyone would experience a decrease in his or her harvest so that

more permits could move up.

Comment 14: In 1992, the Council established a window period for

future sablefish access limitation programs with a 1991 cutoff date. A

commenter noted that fishing business decisions were based on this

cutoff date and that, for this reason, his West Coast landings after

1991 are not as high as they would have been if he had known that there

would be a later cutoff date.

Response: On February 5, 1992, NMFS published a Notice of Control

Date (57 FR 4394), indicating that the Council was considering further

access restrictions to the limited entry groundfish fisheries. At that

time, the Council intended to consider individual quota (IQ) programs

for West Coast halibut and sablefish fisheries. In the Notice of

Control Date, NMFS stated, ``If IQ programs are adopted, the Council

has expressed its intent to exclude from consideration fishing activity

occurring after November 13, 1991, in establishing priorities for

issuance and shares of individual quotas for these fisheries.'' The

notice also explained that IQ programs were only a potential future

management program, and that setting a control date was intended to

``discourage speculative entry into these fisheries (sablefish and

halibut) while discussions on access control continues.'' Just as the

Council prepared to take final action on whether to implement an IQ

program, it received a letter from the West Coast congressional

delegation requesting that it defer action until national policy

guidance could be developed. The Council delayed action in response to

this letter and the industry controversy surrounding the issue.

Subsequently, Congress enacted a moratorium on new IFQ programs.

On August 1, 1995, NMFS published another Notice of Control Date

(60 FR 39144), this time stating that the Council was considering

establishing a sablefish endorsement program for limited entry, fixed

gear permit holders to control participation or effort in the regular

sablefish season. The notice read ``If a limited entry program is

established, the Council is considering June 29, 1995, as a possible

control date. Consideration of a control date is intended to discourage

new entry by nontrawl `A'permit holders into the sablefish fishery

based on economic speculation during the Council's deliberation on the

issues.'' This notice also explained that the Council might choose a

different control date or might choose a management regime thatdid not

make use of a control date. The purpose of a published notice of

control date was to prevent fishers from rushing into the fishery in

the hopes of accumulating catch history for possible future management

schemes.

The sablefish endorsement program and the Council's recommendation

for a three-tier management program have the same 11-year qualification

period of 1984 through 1994. This qualification period incorporates

catch over a long period and includes both historic and recent

participation. It also accounts for the fact that some fishers may

depend on different fisheries in different years or may have some years

of relatively low catch for reasons outside their control.

The use of control dates is a difficult issue. Control dates are

necessary for the protection of the resources and the fishers that are

dependent on the fishery. However, when a policy is not developed

fairly soon after the issuance of the control date, so many changes

occur in the fishery that adherence to old control dates lead to

perceived inequities. The need to maintain the control date is

difficult to balance with the need to account for changes in the

fishery. One way to resolve this balance is to recognize that one of

the purposes of the qualification criteria is to establish degree of

dependence on the fishery. If the Council had not set the 1991 control

date, the commenter may have made investments and fished at a level

that established a degree of dependence entitling his or her permit to

qualify for a higher tier. However, during the intervening years, such

investment was not made, and a greater degree of dependence on future

income from sablefish was not established. There is a greater

probability that the commenter's fishing enterprise will be able to

withstand a harvest reduction associated with assignment to a lower

tier, or the need to purchase a permit for a higher tier, than an

enterprise that has harvested at a higher rate. It is also possible,

depending on his or her catch history, that, even in the lowest tier,

the commenter will experience an increase relative to recent harvests.

Comment 15: A commenter suggested that the qualifying amount for

Tier 1 should be lower than it is, because some long-time participants

in the fishery may be placed in Tier 2.

Response: As discussed in this document and in the preamble to the

proposed rule for the three-tier program, the tier qualification

amounts are based on the largest breaks between a ranking of the

cumulative catch histories of all of the limited entry permits with

sablefish endorsements. A permit's tier placement reflects the catch

history associated with that permit, as compared with the catch

histories associated with all of the other permits with sablefish

endorsements. These 163 permits are associated with a wide range of

cumulative catch histories, from under 40,000 lb (18.14 mt) cumulative

catch history from 1984 through 1994 to over 3,000,000 lb (1,360.78 mt)

cumulative catch history during that same period. The breakpoints in

this three-tier program fall at levels where

[[Page 38109]]

there were large and obvious divisions between groupings of permit

catch histories.

Qualification requirements have to do not only with being a fisher

and a boat owner, but also with the level of participation in the fixed

gear sablefish fishery. A long-term owner in the fishery and steady

participant should end up in a tier somewhat reflective of his or her

general harvest levels. Because the program cannot provide individual

allocations due to the Magnuson-Stevens Act's moratorium on IQ

programs, there will inevitably be some reallocation from historic

catch shares; some fishers will receive more than their demonstrated

production levels and others will receive less. To those who sold a

vessel or permit with catch history or who recently invested in a

vessel with little catch history, many notices have been given since

the close of the 1988 limited entry window period that access rules for

the fishery might change overtime.

Comment 16: If there is to be a tiered system, the regulations

should have an appeal procedure under which hardship circumstances

adversely affecting an individual boat owner's tier placement can be

heard and placement upgraded if adequately justified.

Response: A permit holder eligible for participation in the three-

tier program has the opportunity to appeal his or her permit's tier

placement if that permit holder believes that the permit has been

placed in the wrong tier based on incorrect information about the catch

history associated with that permit. Like the sablefish endorsement

program, the three-tier program does not include a hardship provision

for tier placement. The three-tier program has a long qualifying period

(1984 through 1994) that encompasses the limited entry window period

plus more recent years.

Tier assignments are based on catch history of the permit, which

includes the catch history of the vessel that initially qualified for

the permit during the time before the permit was issued, plus any

subsequent catch made by vessels operating under the permit. The

qualifying window period for limited entry permits was July 11, 1984,

through August 1, 1988. Most vessels that qualified for an initial

limited entry permit based on personal hardship had to have been

fishing before the end of the limited entry qualifying period. Every

permit should have a long permit history, except for those that

qualified under vessel construction or conversion criteria.

The vessel construction/conversion criteria required that

construction on the vessel must have been started before 1988 and

completed by September 1990. Vessels qualifying under this provision

had at least 4 years of fishing opportunity during the three-tier

window period, except where unexpected circumstances may have prevented

construction completion before September 1990. A construction history

running from before August 1, 1988 through September 1990 or later

demonstrates some degree of ability to survive financially without

substantial fishing income.

Vessels entering the fishery for the first time in 1991, or later,

arrived in the fishery when there were only short derby fishing

opportunities and after the Council had provided notice of impending

changes to fishery access rules. A vessel that was a high producer

during the last four derbies in the three-tier qualification period

(1991 through 1994) may have established a high enough permit history

to qualify that permit for Tier 2. Conversely, low-producing vessels

that participated only in the 1991 through 1994 derbies have shown a

relatively low level of dependence on the fishery. Vessels that entered

the fishery at a later date had less of an opportunity to qualify for a

higher tier assignment than vessels with a long history of fishery

participation.

Comment 17: A commenter suggested that, if the tier system is

approved, upon death of a permit holder or sale of any permit, the

permit's associated cumulative limit should be forfeited into the total

amount available to all sablefish endorsement holders, to be divided

between active permits.

Response: NMFS is uncertain exactly how this proposal would work.

It appears that the proposal is to make sablefish harvesting a non-

transferable privilege, as opposed to the other fishing privileges

conferred by permit ownership. Similar provisions have been considered

in the past, but rejected because of complications having to do with

methods by which ``sales'' can be circumvented, and defining deaths

where partnerships or corporations are involved in the ownership. The

three-tier program is a program to allocate the fixed gear portion of

the limited entry sablefish allocation between participants in the

regular fishery; it is not a capacity reduction program. However, the

Council has expressed an interest in capacity reduction programs, and

this idea might be considered during future Council efforts to develop

capacity reduction programs.

Comments Supporting the Rule

Comment 18: The three-tier plan is equitable because it recognizes

historic dependence on and investment in the fishery as a rational

method of fishery management. The 11-year window period of 1984 through

1994 for the three-tier program is inclusive of both historical

participation and (at the time of program development) current

dependence upon the fishery. Using catch history to allocate fish is

the best method of distributing reductions in fishing opportunity

through an overcapitalized fleet. The time has come to implement a

management regime that will maintain a semblance of economic stability

and continued participation in a long-established fishery.

This three-tier program is also a compromise that gives low level

participants a higher harvest catch level than they have historically

enjoyed, while greatly reducing the poundage of the high level

producers. Vessels in Tier 1 will lose about 3.2 percent of their total

catch, while vessels in Tiers 2 and 3 are expected to gain 1.0 percent

and 0.7 percent respectively. Reallocation of proportional catch share

within and between permit holders in each tier is relatively modest.

The length of the qualifying period and the lack of an exception

for personal hardship represents a balance in the consideration of the

dependence of long-term producers and more recent entrants. For owners

of permits with a long catch history, the lack of a hardship provision

is another way of weighing the degree of dependence established in the

fishery. For the three-tier program, the question is not whether a

vessel will qualify for a tier assignment, but which tier assignment

the associated permit will receive. Owners of permits not qualifying

for a higher tier may move to a higher tier by purchasing a higher tier

permit, just as people who have not yet entered the fishery will have

to do to enter even the lowest tier.

Response: This comment refers in part to analysis in the EA/RIR/

IRFA for this issue that shows how the distribution of catch shares

between vessels in the fishery would change upon implementation of the

three-tier program. NMFS agrees that the three-tier program takes both

historic and recent participation into account in setting qualification

levels for the three tiers. NMFS also agrees that the three-tier

program has been carefully designed to spread the burden of more

rational management among fleet members. NMFS notes that many of the

comments in favor of the three-tier program were received from persons

who would have been negatively affected (as compared with status quo

derby management) by either the equal cumulative limits program or the

three-tier program, but

[[Page 38110]]

who prefer the three-tier program for its recognition of differing

fishery participation levels. However, NMFS also notes that, despite

this effort to reduce the reallocative effects of this program, the

degree of reallocation of proportional catch shares within the tiers is

still substantial, with some vessels experiencing increases and others

decreases.

Comment 19: The proposed rule would provide an effective mechanism

for the prevention of overfishing and the achievement of optimum yield

by providing close control over harvesting conducted by an over-

capitalized fleet. The proposed rule would enhance conservation of the

fishery by making the fishery easier to manage, increasing the

likelihood that harvests will remain within the harvest guideline, thus

improving the sustainability of the fishery. For these reasons, the

three-tier program complies with national standard 1.

Response: NMFS disagrees that the fishery is necessarily easier to

manage under the three-tier system than it would be under the derby.

The sum of the cumulative limits for all vessels in the fishery

substantially exceeds the total amount of available fish. Cumulative

limit management with overhead allows a longer fishery than

unrestricted derby management, at a similar degree of risk and

conservativeness. Additionally, there are enforcement and monitoring

problems with cumulative limits that must be recognized. Under derby

management, no incentive exists for vessels to under-report landings.

Under cumulative limit management, vessels able to take their

cumulative limits in the available time might under-report their

landing in order to land more sablefish than the limits allow. All of

these factors were taken into account when the Council and NMFS

balanced conservation, safety, allocation, and other management

objectives in selecting what they determined to be the best management

option.

Comment 20: The three-tier program complies with national standard

2, which states that ``Conservation and management measures shall be

based on the best scientific information available.'' Not only did the

Council use the most current data and analyses in shaping the three-

tier program, but also, when analysts discovered errors in the database

of permit catch histories, those mistakes were properly and timely

disclosed, and the Council reviewed and reconsidered its decisions

based on the new data.

Response: NMFS agrees. Changes from the proposed rule to the final

rule result from decisions made at the Council's March 1998 meeting,

and are described above.

Comment 21: According to one commenter, opponents of the three-

tier program argue that catch history should not be used to allocate

the sablefish resource and that equal allocation is the most fair

allocation. That same commenter noted that ``fairness of allocation

(national standard 4) is in the eye of the receiver.'' This commenter

pointed out that the 1997 equal limits management allowed permits that

had caught only 16,000 pounds in a single year to fish toward a limit

of 34,000 pounds, also allocating 34,000 pounds to permits with

historical annual catches of 300,000 pounds. Additionally, several

commenters noted that, in the three-tier program, fishers in Tiers 1

and 2 will lose catch opportunity, and fishers in Tier 3 will gain

catch opportunity, commenting that this program is a well compromised

allocation.

Response: As indicated in the response to Comment 11, NMFS agrees

that the three-tier program, which spreads the burden of catch

reductions more evenly through the fleet, is a fairer allocation than a

long-term equal cumulative limit allocation.

Comment 22: The three-tier program is an initial step toward

capacity reduction. Before capacity can be reduced, it must be

prevented from increasing. By assigning each permit an allocation,

fleet harvest capacity cannot increase because the incentive to catch

more fish disappears. In this way, the program complies with national

standard 5, which states that ``conservation and management measures

shall, where practicable, consider efficiency in the utilization of

fishery resources; except that no such measure shall have economic

allocation as its sole purpose.''

Response: NMFS partially agrees. As stated in the responses to

Comment 3, derby-style fishery management encourages each individual in

a given fleet to expand his or her vessel's catching capacity to better

compete with all of the other vessels in the fleet. Even if a limited

entry program restricts the number of vessels in the derby, individual

fishers have incentives to improve the competitive abilities of their

vessels. Derby management inevitably leads to the cumulative catching

ability of the fleet exceeding the actual capacity needed to harvest

the available resource. The three-tier program reduces but does not end

this derby-style management, and attempts to match permits to tiers

based on the cumulative catch associated with those permits. During the

fishery, a portion of vessels in each of the tiers will closely match

the catching ability associated with the available cumulative limit and

the time available, while some vessels will have more than enough

catching ability, and some vessels will have less catching ability than

needed for taking that cumulative limit within the available time.

Comment 23: One commenter stated that he appreciated the stability

this program will bring to a fishery that has a history of management

difficulties. The commenter noted that the stability of this program

will allow him to assure his crew members that otherwise lean years can

be filled out by catch in the sablefish season, and anticipated that

this stability would ensure loyalty from his experienced crew members

throughout the year.

The commenter further noted that the three-tier program will also

allow flexibility to participate in multiple fisheries. The three-tier

program, with a fixed fishery period and a mop-up following shortly

afterwards, allows fishers to get their gear on and off their boats and

to pursue the multiple fisheries necessary to make a year round living.

The commenter also was pleased that the three-tier program accounts for

the different fishing strategies of the many fleet participants, the

three-tier program follows national standard 6, which states that

``Conservation and management measures shall take into account and

allow for variations among, and contingencies in, fisheries, fishery

resources, and catches.''

Response: In developing the three-tier program, one of the

Council's goals was to begin to bring stability and rational management

to a frenetic and unstable fishery. The Council and NMFS recognize that

fixed gear fishers participate in a variety of fisheries throughout the

year, and season start dates for this fishery are set to accommodate as

many alternative fishery schedules as possible.

Comment 24: The fixed gear sablefish fleet is diverse and divided

into opposing categories: long term participants and new entrants,

large catch histories and small catch histories, large boat and small

boats. This program causes some losses and gains for some coastal

communities because we all deliver to and support coastal communities,

not because of a disregard for coastal communities. The three-tier

program complies with national standard 8, which states that the

interests of fishing communities be taken into account when

implementing conservation and management measures.

[[Page 38111]]

Response: NMFS agrees. As stated in the response to Comment 8, the

three-tier program is expected to cause little change in the inter-port

distribution of fixed gear sablefish landings, and less variation in

inter-port distribution than would have occurred under a long-term

system of equal cumulative limits. All of the vessels involved in this

fishery are considered small businesses, and all of the boats in the

fishery deliver their fish to coastal communities. National standard 8,

which addresses the dependence of fishing communities on fishery

resources, does not constitute a basis for allocating resources to

specific fishing communities.

Comment 25: One commenter stated that a longer fishery, even if it

is longer only by several days, allows him to keep and handle his

bycatch. Open derbies lead to people setting out more gear than they

can haul in a given time, resulting in a waste of gear and hooked fish.

At the other end of the scale, a monthly trip limit fishery would

unquestionably lead to high-grading and increased bycatch on a regular

basis. The commenter noted that this longer fishery will also allow him

to handle his gear more carefully, making him less likely to lose gear.

By minimizing bycatch, the three-tier program complies with national

standard 9.

Response: Bycatch can occur for many reasons. In a derby fishery,

where all vessels are participating at their highest possible rates of

fishing, fishers may not have the time to fish in a selective manner.

Fish would be hauled on board as quickly as possible without regard to

species or size, and then a portion would be discarded according to

market or regulatory constraints on what catch should and may be

retained. Conversely, in a fishery where all participants have ample

time to sort through their catch and fish until their vessels are

filled with the highest value fish, many lower value fish may be

discarded in the process. The three-tier program will allow some

fishers to slow their rates of fishing and to improve the selectivity

of their fishing methods. To some extent, however, selectivity in

fishing is a matter of personal ethics and fishing skill. NMFS does

agree that a slower paced fishery should have the much-desired result

of reducing gear abandonment and ghostfishing by lost gear.

Comment 26: The three-tier program provides increased safety with

respect to the status quo derby because fishers will know how much fish

they are allowed to catch and the season can be tailored to more

favorable weather patterns. The three-tier program allows 6 days

fishing while an unrestricted derby would probably allow 2. Several

commenters noted that any increase in the number of days in the

fishery, even if it is from 2 days to 6 days, is a safety improvement.

These commenters concluded that, for these reasons, the three-tier

program complies with national standard 10, which states that

``Conservation and management measures shall, to the extent

practicable, promote the safety of human life at sea.'' Finally, one

commenter noted with irony that if the Council had been able to

implement an IFQ program, the fishery could be several months long,

rather than several days long.

Response: NMFS agrees that a 6-day fishery provides greater safety

than a 2-day fishery. It is unfortunate that overcapitalization and the

reduced 1998 sablefish harvest guideline level have severely shortened

the fishery duration. NMFS expects that the primary safety benefit of a

6-day fishery over a 2-day fishery will occur for the approximately

one-third of the fleet easily able to take the allotted cumulative

limit during the time allowed. For the other two-thirds of the fleet

still operating in the derby mode, the effect of this action on safety

is uncertain. Income will increase as the length of the fishery

increases, and it is possible that risk-taking behavior will decline as

the amount of potential income increases. However, the Council decision

documents show that these are not conclusive findings.

NMFS also agrees that IFQ management for this fishery nwould allow

fishers adequate time to catch sablefish poundage associated with their

tiers. If this fishery were managed with an IFQ program (an option

currently prohibited under the Magnuson-Stevens Act), regardless of how

the available catch were allocated between permits, each permit owner

would likely be able to catch his or her entire allocation at any time

during the year, and likely without landings limits.

Comment 27: The three-tier program complies with section 303(b)(6)

of the Magnuson-Stevens Act, which states that, ``Any fishery

management plan which is prepared by any Council, or by the Secretary,

with respect to any fishery, may -- (6) establish a limited access

system for the fishery in order to achieve optimum yield if, in

developing such system, the Council and the Secretary take into

account--(A) present participation in the fishery, (B) historical

fishing practices in, and dependence on, the fishery, (C) the economics

of the fishery, (D) the capability of fishing vessels used in the

fishery to engage in other fisheries, (E) the cultural and social

framework relevant to the fishery and any affected fishing communities,

and (F) any other relevant considerations.'' In making its

recommendations for this program, the Council considered all of the

factors required under this section and, has therefore, met the

requirements of this section.

Response: NMFS agrees, see also response to Comment 2.

Comment 28: As stated in the proposed rule for the three-tier

program, the Council initially decided not to allow permit owners with

permits that were the result of a combination of multiple permits to

determine their tier placement based on the combined catch histories of

those original permits. This decision was based on a study that showed

that no individuals currently operating in the fishery would be

affected by that restriction. After further study, however, analysts

showed that this first assumption was incorrect and that this decision

would negatively affect a few individuals who had combined their

permits long before discussions of the three-tier program. We the

commenters who would have been harmed by this action, supported the

Council's March 1998 recommendation to allow permits that were a result

of a combination made before March 12, 1998, to combine their

cumulative catch histories for tier qualification status.

Response: NMFS agrees. The Council's initial recommendation on

this issue was based on an incorrect analysis. After receiving more

complete information, the Council revised that recommendation to allow

permits that were the result of a combination of multiple permits to

receive tier placement based on the combined cumulative catch histories

of the permits that went into the combination. Regulatory language

detailed in the proposed rule has been changed to reflect public and

Council comments on this issue.

Comment 29: One commenter supports the three-tier program, but

would like to be allowed to set his pots for 24 hours before the

opening of the regular fishery, since it takes at least 48 hours for

him to set all of his pots.

Response: As stated in the response to Comment 7, in 1995 and

1996, pot fishers were allowed to set their gear before the start of

the regular fishery. Longliners were opposed to this practice because

it gave pot fishers the chance to choose and then monopolize premium

fishing ground positions before the start of the derby. Because of

these concerns and because the 1997 10-day fishery period was expected

to provide all pot gear participants with sufficient time to set and

tend their gear, this pot pre-set

[[Page 38112]]

option was not allowed in the 1997 regular fishery. The Council

reconsidered a pot pre-set allowance for the three-tier system, but

concluded that the tiered cumulative limits would constrain pot fisher

catch levels enough so that they would not need to fish at a speed that

would require a pre-set allowance.

Comment 30: Several commenters who have participated in and/or

have studied the Alaska halibut and sablefish IFQ program support

future consideration of an IFQ program in the fixed gear sablefish

fishery once the Magnuson-Stevens Act moratorium is lifted.

Response: A Council may not submit and the Secretary may not

approve or implement an IFQ program before October 1, 2000. However, a

Council may begin development of an IFQ program before that date.

Comment 31: The proposed rule would not implement an IFQ system.

Under the Magnuson-Stevens Act and NMFS interpretation, for a program

to be an IFQ program, it must grant permits that give recipients a

privilege to harvest a specified percentage of the total annual catch

(TAC). Unless sold or otherwise disposed of, that permit holder has an

annual, guaranteed privilege to harvest that same percentage of the

TAC. With the three-tier program, no person is guaranteed a percent of

the harvest, fishers are merely separated into three different tiers

with three different cumulative limits that they can then try to

achieve in the given season. The ``overhead'' system embedded in the

rule ensures that this program is not an IFQ system. The proposed rule

would ensure that there is no guaranteed right to a specific amount of

fish--the antithesis of an IFQ system.

Response: NMFS agrees that the three-tier program is not an IFQ

program. See response to Comment 9.

Classification

Under 5 U.S.C. 553(d)(3), the Assistant Administrator finds good

cause to waive the 30-day delay in effectiveness for this rule. August

1 was chosen as a season opening date to promote safety and to allow

fishers to participate in other fisheries aside from this directed

sablefish fishery. In order to avoid a 2 to 3 day derby fishery this

year and to allow the limited entry fixed gear sablefish fishery to

fully benefit from the increased vessel safety of holding the regular

and consequent mop-up seasons before the most difficult autumn weather,

this rule must be made effective to allow implementation of the three-

tier program before the August 1, 1998, start date of the regular

season. To this extent, to delay the effectiveness of this rule would

be contrary to the public interest.

This final rule has been determined to be not significant for the

purposes of E.O. 12866.

The Final Regulatory Flexibility Analysis (FRFA) consists of the

FRFA supplemental analysis prepared by NMFS, the IRFA (as submitted by

the Council and supplemented by the preamble to the proposed rule (63

FR 19878, April 22, 1998)), and the preamble to this final rule. NMFS

considers an impact to be ``significant'' if it results in a reduction

in annual gross revenues by more than 5 percent, an increase in annual

compliance costs of greater than 5 percent, compliance costs at least

10 percent higher for small entities than for large entities,

compliance costs that require significant capital expenditures, or the

likelihood that 2 percent of the small entities would be forced out of

business. NMFS considers a ``substantial number'' of small entities to

be more than 20 percent of those small entities affected by the

regulation that are engaged in the fishery.

There are 163 limited entry, fixed gear permit owners with

sablefish endorsements. All of the permit owners and vessels in the

Pacific Coast, limited entry, fixed gear fleet are considered small

entities. As indicated in the FRFA for this action, 42 permit holders

with sablefish endorsements (26 percent) would suffer a greater than 5

percent loss in total gross fishing revenue over what they would have

been expected to earn if the open competition derby management had been

continued for 1998.

The Council initially reviewed six different management options

aside from status quo, open competition derby management. Of those six

options, two options would have resulted in fewer than 26 percent of

endorsement holders suffering a greater than 5 percent loss in gross

annual revenue. The Council considered continuing the status quo derby

undesirable, expecting that a future policy of unrestricted derby

fishing would cause significant negative social and economic impacts to

fishery participants, with potentially grave safety consequences. An

option to continue the 1997 style fishery management of a single period

equal cumulative limit regime would have resulted in 18 percent of

endorsement holders suffering a greater than 5 percent loss in total

gross annual revenue. Although this option would have resulted in fewer

businesses with significant economic loss, those businesses that would

have lost economically under this option would have lost revenue to a

greater degree than those businesses losing revenue under any of the

tier options. This option would have also resulted in a greater

proportion of the harvest being reallocated amongst fleet members than

the proportion of harvest reallocation under the three-tier management

program implemented by this rule. There is a higher likelihood that a

management measure to implement a long-term policy of equal cumulative

limits would have been found to have significant economic impacts to

fleet participants on the basis of the standard that questions whether

more than 2 percent of participating small businesses would have been

forced to cease operations. Thus, while the option chosen by the

Council results in a greater number of businesses with significant

economic losses, the impacts of that option are spread more evenly

through the fleet. The Council also specifically decided when it

recommended a single period equal cumulative limit for 1997 that it

would not recommend continuing such an option for 1998 because of the

severe reallocative impacts.

The other option that would have resulted in fewer than 26 percent

of permit owners suffering a greater than 5 percent loss in gross

annual revenue was a four-tiered access system. This option was

projected as leading to greater than a 5 percent loss in gross annual

revenue for 22 percent of permit holders with sablefish endorsements.

One major impediment to Council recommendation of a four-tiered option

was that maintaining an overhead to prevent designation as an IFQ

system would have been more difficult under a four-tiered option. The

greater the number of tiers in a tiered access system, the more likely

it is that fishers will be able to achieve their tier limits, and the

greater the likelihood that the agency would find the program to

function as an IFQ. In an IFQ fishery, all fishers would be allowed to

use as much time as necessary to catch whatever cumulative limits are

available for the year. The Council chose the option that would have

the least impact on fishers' revenues while still maintaining enough

overhead to avoid the NMFS IFQ classification criteria and eliminating

derby management.

In addition to the single-period equal cumulative limit fishery,

the three-tier options, the four-tier option and the status quo derby,

the Council considered setting a year-round series of equal, monthly

cumulative limits as an

[[Page 38113]]

option that could offer greater safety benefits than the three-tier

program. However, a year-round fishery would have resulted in the

greatest reallocation of catch among participants, and would have had

significant, negative economic consequences for the greatest number of

fleet participants. The Council was also concerned that this option

would increase discard of sablefish. Finally, the Council expected that

the effects of year-round cumulative trip limits in this fishery would

be contrary to Magnuson-Stevens Act national standards on fairness and

equity, and on providing for sustained participation and minimizing

adverse effects on fishing communities.

This action is not expected to result in an increase in annual

compliance costs of greater than 5 percent, compliance costs at least

10 percent higher for small entities than for large entities,

compliance costs that require significant capital expenditures, or the

likelihood that 2 percent of the small entities will be forced out of

business.

In summary, all of the affected entities are small entities.

Therefore, there are no special provisions that can be inserted to

affect small entities differently than large entities. The losses from

one small entity turn to gains for another small entity. In order to

eliminate the traditional, unrestricted derby fishery, some small

entities will suffer negative economic impacts. The Council selected

the legally-available option that would eliminate the traditional

unrestricted derby, while minimizing the reallocation of catch.

This rule contains a collection-of-information requirement subject

to the Paperwork Reduction Act (PRA) that has been approved by the OMB

under OMB Control Number 0648-0203. Notwithstanding any other provision

of the law, no person is required to respond to, nor shall any person

be subject to a penalty for failure to comply with, a collection of

information subject to the requirements of the PRA, unless that

collection of information displays a currently valid OMB Control

Number. This rule's collection of information burden applies only to

those permit owners who disagree with the initial NMFS tier assignment,

and who wish to provide documentation to prove that they have in fact

met the tier qualifications for the tier that they wish to have

assigned to their permits. It is expected that the public reporting

burden will be 2 hours to make an initial application and possible

appeal. This is a one-time only collection-of-information, and this

rule imposes no annual reporting and recordkeeping burden. Send

comments regarding the collection-of-information burden or any other

aspect of the information collection to NMFS and OMB (see ADDRESSES).

List of Subjects in 50 CFR Part 660

Administrative practice and procedure, American Samoa, Fisheries,

Fishing, Guam, Hawaiian Natives, Indians, Northern Mariana Islands,

Reporting and recordkeeping requirements.

Dated: July 9, 1998.

David L. Evans,

Deputy Assistant Administrator for Fisheries, National Marine Fisheries

Service.

For the reasons set out in the preamble, 50 CFR part 660 is amended

as follows:

PART 660--FISHERIES OFF WEST COAST STATES AND IN THE WESTERN

PACIFIC

l. The authority citation for part 660 continues to read as

follows:

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

2. Section 660.323 is amended by revising paragraph (a)(2) to read

as follows:

Sec. 660.323 Catch restrictions.

(a) * * *

(2) Nontrawl sablefish. This paragraph (a)(2) applies to the

regular and mop-up seasons for the nontrawl limited entry sablefish

fishery north of 36 deg. N. lat., except for paragraphs (a)(2)(ii),

(iv), and (vii) of this section, which also apply to the open access

fishery north of 36 deg. N. lat. Limited entry and open access fixed

gear sablefish fishing south of 36 deg. N. lat. is governed by routine

management measures imposed under paragraph (b) of this section.

(i) Sablefish endorsement. A vessel may not participate in the

regular or mop-up season for the nontrawl limited entry fishery, unless

the vessel's owner holds (by ownership or otherwise) a limited entry

permit for that vessel, affixed with both a gear endorsement for

longline or trap (or pot) gear, and a sablefish endorsement.

(ii) Pre-season closure--open access and limited entry fisheries.

(A) Sablefish taken with fixed gear in the limited entry or open access

fishery in the EEZ may not be retained or landed during the 48 hours

immediately before the start of the regular season for the nontrawl

limited entry sablefish fishery.

(B) All fixed gear used to take and retain groundfish must be out

of EEZ waters during the 48 hours immediately before the opening of the

regular season for the nontrawl limited entry sablefish fishery.

(iii) Regular season--nontrawl limited entry sablefish fishery. (A)

The Regional Administrator will announce a season for waters north of

36 deg. N. lat. to start on any day from August 1 through September 30,

based on consultations with the Council, taking into account tidal

conditions, Council meeting dates, alternative fishing opportunities,

and industry comments.

(B) During the regular season, each vessel with a limited entry

permit with a sablefish endorsement that is registered for use with

that vessel may land up to the cumulative trip limit announced for the

tier to which the permit is assigned. Each permit will be assigned to

one of three tiers. A cumulative trip limit is the maximum amount of

sablefish that may be taken and retained, possessed, or landed per

vessel in a specified period of time, with no limit on the number of

landings or trips.

(C) The Regional Administrator will annually calculate the length

of the regular season and the size of the cumulative trip limit for

each tier in accordance with the process specified in chapter 1 of the

EA/RIR/IRFA for ``Fixed Gear Sablefish Tiered Cumulative Limits,''

dated February 1998, which is available from the Council. The season

length and the size of the cumulative trip limits will vary depending

on the amount of sablefish available for the regular and mop-up

fisheries and the projected harvest for the fishery. The season will be

set to be as long as possible, under the constraints described in

chapter 1 of the EA/RIR/IRFA, up to a maximum season length of 10 days.

(D) During the regular and mop-up season, limited entry nontrawl

sablefish fishers may also be subject to trip limits to protect

juvenile sablefish.

(E) There will be no limited entry, daily trip limit fishery during

the regular season.

(iv) Post-season closure--limited entry and open access. No

sablefish taken with fixed gear north of 36 deg. N. lat. during the 30

hours immediately after the end of the regular season for the nontrawl

limited entry sablefish fishery, may be retained. Sablefish taken and

retained during the regular season may be possessed and landed during

the 30-hour period. Gear may remain in water during the 30-hour post-

season closure. Fishers may not set or pull from the water fixed gear

used to take and retain groundfish during the 30-hour post-season

closure.

(v) Mop-up season--limited entry fishery. A mop-up season to take

the remainder of the limited entry nontrawl allocation will begin in

waters north of

[[Page 38114]]

36 deg. N. lat. about 3 weeks, or as soon as practicable, after the end

of the regular season. During the mop-up fishery, a cumulative trip

limit will be imposed. A cumulative trip limit is the maximum amount of

sablefish that may be taken and retained, possessed, or landed per

vessel in a specified period of time, with no limit on the number of

landings or trips. The length of the mop-up season and the amount of

the cumulative trip limit, will be determined by the Regional

Administrator in consultation with the Council or its designees, and

will be based primarily on the amount of fish remaining in the limited

entry nontrawl allocation, the amount of sablefish needed for the

remainder of the daily trip limit fishery, and the number of mop-up

participants anticipated. The Regional Administrator may determine that

too little of the nontrawl allocation remains to conduct an orderly or

manageable fishery, in which case there will not be a mop-up season.

There will be no limited entry daily trip limit fishery during the mop-

up season.

(vi) Other announcements. The dates and times that the regular

season starts and ends (and trip limits on sablefish of all sizes are

resumed), the size of the cumulative trip limits for the three tiers in

the regular fishery, the dates and times for the 30-hour post-season

closure, the dates and times that the mop-up season begins and ends,

and the size of the cumulative trip limit for the mop-up fishery will

be announced in the Federal Register, and may be modified. Unless

otherwise announced, these seasons will begin and end at 12 noon on the

specified date.

(vii) Trip limits. Trip and/or frequency limits may be imposed in

the limited entry fishery before and after the regular season, and

after the mop-up season, under paragraph (b) of this section. Trip and/

or size limits to protect juvenile sablefish in the limited entry or

open-access fisheries also may be imposed at any time under paragraph

(b) of this section. Trip limits may be imposed in the open-access

fishery at any time under paragraph (b) of this section.

* * * * *

3. In Sec. 660.333, the first sentence of paragraph (c)(1),

paragraphs (d) introductory text, (f)(2), and (h)(2)(iii) are revised

to read as follows:

Sec. 660.333 Limited entry fishery--general.

* * * * *

(c) Transfer and registration of limited entry permits and gear

endorsements. (1) When the SFD transfers a limited entry permit, the

SFD will reissue the permit in the name of the new permit holder with

such gear and, if applicable, species endorsements and tier assignments

as are eligible for transfer with the permit. * * *

* * * * *

(d) Evidence and burden of proof. A vessel owner (or person holding

limited entry rights under the express terms of a written contract)

applying for issuance, renewal, transfer, or registration of a limited

entry permit has the burden to provide evidence that qualification

requirements are met. The owner of a permit endorsed for longline or

trap (or pot) gear applying for a sablefish endorsement or a tier

assignment under Sec. 660.336(c) or (d) has the burden to submit

evidence to prove that qualification requirements are met. The

following evidentiary standards apply:

* * * * *

(f) * * *

(2) Gear endorsements, sablefish endorsements, and sablefish tier

assignments may not be transferred separately from the limited entry

permit.

* * * * *

(h) * * *

(2) * * *

(iii) Two or more limited entry permits with ``A'' gear

endorsements for the same type of limited entry gear may be combined

and reissued as a single permit with a larger size endorsement. With

respect to permits endorsed for nontrawl limited entry gear, a

sablefish endorsement will be issued for the new permit only if all of

the permits being combined have sablefish endorsements. If two or more

permits with sablefish endorsements are combined, the new permit will

receive the same tier assignment as the tier with the largest

cumulative landing limit of the permits being combined. The vessel

harvest capacity rating for each of the permits being combined is that

indicated in Table 2 of this part for the LOA (in feet) endorsed on the

respective limited entry permit. Harvest capacity ratings for fractions

of a foot in vessel length will be determined by multiplying the

fraction of a foot in vessel length by the difference in the two

ratings assigned to the nearest integers of vessel length. The length

rating for the combined permit is that indicated for the sum of the

vessel harvest capacity ratings for each permit being combined. If that

sum falls between the sums for two adjacent lengths on Table 2 of this

part, the length rating shall be the higher length.

* * * * *

4. In Sec. 660.336, the section heading paragraphs (a)(1), (a)(2),

(b) introductory text, (b)(1), (c) heading, and paragraph (c)(1), are

revised; and paragraphs (b)(3), (d), and (e) are added to read as

follows:

Sec. 660.336 Limited entry permits--sablefish endorsement and tier

assignment.

(a) * * *

(1) A sablefish endorsement with a tier assignment will be affixed

to the permit and will remain valid when the permit is transferred.

(2) A sablefish endorsement and its associated tier assignment are

not separable from the limited entry permit, and therefore may not be

transferred separately from the limited entry permit.

(b) Endorsement and tier assignment qualifying criteria. A

sablefish endorsement will be affixed to any limited entry permit that

meets the sablefish endorsement qualifying criteria and for which the

owner submits a timely application. Limited entry permits with

sablefish endorsements will be assigned to one of three different

cumulative trip limit tiers, based on the qualifying catch history of

the permit.

(1) Permit catch history will be used to determine whether a permit

meets the qualifying criteria for a fixed gear sablefish endorsement

and to determine the appropriate tier assignment for endorsed permits.

Permit catch history includes the catch history of the vessel(s) that

initially qualified for the permit, and subsequent catch histories

accrued when the limited entry permit or permit rights were associated

with other vessels. The catch history of a permit also includes the

catch of any interim permit held by the current owner of the permit

during the appeal of an initial NMFS decision to deny the initial

issuance of a limited entry permit, but only if the appeal for which an

interim permit was issued was lost by the appellant, and the owner's

current permit was used by the owner in the 1995 limited entry

sablefish fishery. The catch history of an interim permit where the

full ``A'' permit was ultimately granted will also be considered part

of the catch history of the ``A'' permit. If the current permit is the

result of the combination of multiple permits, then for the combined

permit to qualify for an endorsement, at least one of the permits that

were combined must have had sufficient sablefish history to qualify for

an endorsement; or the permit must qualify based on catch occurring

after it was combined, but taken within the qualifying period. If the

current permit is the result of the combination of multiple permits,

the combined catch histories of all of the permits that were combined

to create a new permit before March 12, 1998, will

[[Page 38115]]

be used in calculating the tier assignment for the resultant permit,

together with any catch history (during the qualifying period) of the

resultant permit. Only sablefish catch regulated by this part that was

taken with longline or fish trap (or pot) gear will be considered for

this endorsement. Sablefish harvested illegally or landed illegally

will not be considered for this endorsement.

* * * * *

(3) Only limited entry, fixed gear permits with sablefish

endorsements will receive cumulative trip limit tier assignments. The

qualifying criteria for Tier 1 are: At least 898,000 lb (406,794 kg)

cumulative round weight of sablefish caught with longline or trap (or

pot) gear over the years 1984 through 1994. The qualifying criteria for

Tier 2 are: At least 380,000 lb (172,365 kg), but no more than 897,999

lb (406,793 kg) cumulative round weight of sablefish caught with

longline or trap (or pot) gear over the years 1984 through 1994. Fixed

gear permits with less than 380,000 lb (172,365 kg) cumulative round

weight of sablefish caught with longline or trap (or pot) gear over the

years 1984 through 1994 qualify for Tier 3. All catch must be sablefish

managed under this part. Sablefish taken in tribal set aside fisheries

does not qualify.

(c) Issuance process for sablefish endorsements. (1) The SFD has

notified each limited entry, fixed gear permit holder, by letter of

qualification status, whether Pacific States Marine Fisheries

Commission's Pacific Fisheries Information Network (PacFIN) records

indicate that his or her permit qualifies for a sablefish endorsement.

A person who has been notified by the SFD, by letter of qualification

status, that his or her permit qualifies for a sablefish endorsement

will be issued a revised limited entry permit with a sablefish

endorsement if, by November 30, 1998, that person returns to the SFD

the endorsement application and pays the one-time processing fee. No

new applications for sablefish endorsements will be accepted after

November 30, 1998.

* * * * *

(d) Issuance process for tier assignments. (1) The SFD will notify

each owner of a limited entry permit with a sablefish endorsement, by

letter of qualification status, of the tier assignment for which his or

her permit qualifies, as indicated by PacFIN records. The SFD will also

send to the permit owner a tier assignment certificate.

(2) If a permit owner believes there is sufficient evidence to show

that his or her permit qualifies for a different tier than that listed

in the letter of qualification status, that permit owner must, within

30 days of the issuance of the SFD's letter of qualification status,

submit information to the SFD to demonstrate that the permit qualifies

for a different tier. Section 660.333(d) sets out the relevant

evidentiary standards and burden of proof.

(3) After review of the evidence submitted under paragraph (d)(2)

of this section, and any additional information the SFD finds to be

relevant, the SFD will issue a letter of determination notifying a

permit owner of whether the evidence submitted is sufficient to alter

the initial tier assignment. If the SFD determines the permit qualifies

for a different tier, the permit owner will be issued a revised tier

assignment certificate once the initial certificate is returned to the

SFD for processing.

(4) If a permit owner chooses to file an appeal of the

determination under paragraph (d)(3) of this section, the appeal must

be filed with the Regional Administrator within 30 days of the issuance

of the letter of determination (at paragraph (d)(3) of this section).

The appeal must be in writing and must allege facts or circumstances,

and include credible evidence demonstrating why the permit qualifies

for a different tier assignment. The appeal of a denial of an

application for a different tier assignment will not be referred to the

Council for a recommendation under Sec. 660.340(e).

(5) Absent good cause for further delay, the Regional Administrator

will issue a written decision on the appeal within 30 days of receipt

of the appeal. The Regional Administrator's decision is the final

administrative decision of the Department of Commerce as of the date of

the decision.

(e) Tier assignment certificates. For the 1998 season only, permit

holders with sablefish endorsements will be issued certificates of tier

assignment that are to be kept with and are considered part of their

limited entry permits. When limited entry permit holders renew their

permits for 1999, tier assignments for those limited entry permit

holders with sablefish endorsements will be indicated directly on the

limited entry permit.

[FR Doc. 98-18751 Filed 7-10-98; 9:51 am]

BILLING CODE 3510-22-F