Pacific Halibut Fisheries; Limited Access for Guided Sport Charter Vessels in Alaska

Federal RegisterJan 5, 2010

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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Parts 300 and 679

[Docket No. 080630798-91430-02]

RIN 0648-AW92

Pacific Halibut Fisheries; Limited Access for Guided Sport Charter Vessels in Alaska

AGENCY:

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Final rule.

SUMMARY:

NMFS issues regulations creating a limited access system for charter vessels in the guided sport fishery for Pacific halibut in waters of International Pacific Halibut Commission Regulatory Areas 2C (Southeast Alaska) and 3A (Central Gulf of Alaska). This limited access system limits the number of charter vessels that may participate in the guided sport fishery for halibut in these areas. NMFS will issue a charter halibut permit to a licensed charter fishing business owner based on his or her past participation in the charter halibut fishery and to a Community Quota Entity representing specific rural communities. All charter halibut permit holders are subject to limits on the number of permits they may hold and on the number of charter vessel anglers who may catch and retain halibut on permitted charter vessels. This action is necessary to achieve the approved halibut fishery management goals of the North Pacific Fishery Management Council. The intended effect is to curtail growth of fishing capacity in the guided sport fishery for halibut.

DATES:

February 4, 2010, except for § 300.66(b), (i), and (o), and § 300.66(r) through (v), and § 300.67(a), which will be effective on February 1, 2011.

ADDRESSES:

Electronic copies of the Environmental Assessment (EA), Regulatory Impact Review (RIR), and Final Regulatory Flexibility Analysis (FRFA) (collectively, Analysis) prepared for this action may be obtained from

http://www.Regulations.gov

or from the Alaska Region, NMFS on the Alaska Region Web site at

http://www.alaskafisheries.noaa.gov

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted by mail to NMFS, Alaska Region, P.O. Box 21668, Juneau, AK, 99802-1668, Attn: Ellen Sebastian, Records Officer; in person at NMFS, Alaska Region, 709 West 9th Street, Room 420A, Juneau, AK; and by e-mail to

David_Rostker@omb.eop.gov

or fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT:

Rachel Baker, 907-586-7228.

SUPPLEMENTARY INFORMATION:

The International Pacific Halibut Commission (IPHC) and National Marine Fisheries Service (NMFS) manage fishing for Pacific halibut (

Hippoglossus stenolepis

) through regulations established under authority of the Northern Pacific Halibut Act of 1982 (Halibut Act). The IPHC promulgates regulations governing the Pacific halibut fishery under the Convention between the United States and Canada for the Preservation of the Halibut Fishery of the North Pacific Ocean and Bering Sea (Convention), signed at Ottawa, Ontario, on March 2, 1953, as amended by a Protocol Amending the Convention (signed at Washington, DC, on March 29, 1979). Regulations developed by the IPHC are subject to approval by the Secretary of State with concurrence from the Secretary of Commerce (Secretary). After approval by the Secretary of State and the Secretary, the IPHC regulations are published in the

Federal Register

as annual management measures pursuant to 50 CFR 300.62. The most recent IPHC regulations were published March 19, 2009, at 74 FR 11681. IPHC regulations affecting sport fishing for halibut and charter vessels in Areas 2C (Southeast Alaska) and 3A (Central Gulf of Alaska) may be found in sections 3, 25, and 28 (74 FR 11681, March 19, 2009).

The Halibut Act, at sections 773c(a) and (b), provides the Secretary with general responsibility to carry out the Convention and the Halibut Act. In adopting regulations that may be necessary to carry out the purposes and objectives of the Convention and the Halibut Act, the Secretary is directed to consult with the Secretary of the department in which the U.S. Coast Guard (USCG) is operating.

The Halibut Act, at section 773c(c), also provides the North Pacific Fishery Management Council (Council) with authority to develop regulations, including limited access regulations, that are in addition to, and not in conflict with, approved IPHC regulations. Such Council-developed regulations may be implemented by NMFS only after approval by the Secretary. The Council has exercised this authority most notably in the development of its Individual Fishing Quota (IFQ) Program, codified at 50 CFR part 679, and subsistence halibut fishery management measures, codified at 50 CFR 300.65. The Council also has been developing a regulatory program to manage the guided sport charter vessel fishery for halibut. This action is a step in the development of that regulatory program and has been approved by the Secretary pursuant to section 773c(c).

Background and Need for Action

A comprehensive history of management of the guided sport fishery for halibut was presented in the proposed rule for this action published April 21, 2009 (74 FR 18178). This description focused on the history and rationale leading to the Council's development of limited access management for the charter vessel fishery and its recommendation of this limited access system in 2007. In brief, the principal concern was overcrowding of productive halibut grounds due to the growth of the charter vessel sector. The Council found that the charter vessel sector was the only halibut harvesting sector that was exhibiting growth in IPHC Areas 2C and 3A. Other harvesting sectors have specified catch limits that cause fishery closures when reached or are relatively stable over time. The Council recommended this limited access system to provide stability for the guided sport halibut fishery and decrease the need for regulatory adjustments affecting charter vessel anglers while the Council continues to develop a long-term policy of allocation between the commercial and charter vessel sectors.

The Council adopted its limited access policy on March 31, 2007, and submitted it for review to the Secretary pursuant to section 773c(c). By publishing this rule, NMFS announces Secretarial approval of this Council recommendation. A proposed rule for the recommended limited access system was published April 21, 2009 (74 FR 18178) soliciting public comments on the proposal until June 5, 2009. All comments received during this comment period are summarized and responded to below. Some changes from the proposed rule are made as a logical outgrowth from the proposed rule. These changes also are described below.

Following is a summary description of the charter halibut limited access system and how it is designed to operate. A more thorough description of the action is presented in the preamble to the proposed rule published April 21, 2009 (74 FR 18178). Additional detail is presented in responses to comments below.

Charter Halibut Limited Access System—Operational Aspects

General

This action limits the entry of charter vessels into the guided sport fishery for halibut in waters of IPHC Regulatory Areas 2C (Southeast Alaska) and 3A (Central Gulf of Alaska). After the effective date of this rule (

see

DATES

), any person operating a charter vessel engaged in halibut fishing in Areas 2C or 3A is required to have on board the vessel a charter halibut permit designated for that area. Qualifications for a charter halibut permit in each area are determined independently. A charter halibut permit can be either transferable or non-transferable depending on the qualifications of permit applicants. Each permit will have an angler endorsement that specifies the maximum number of anglers authorized to catch and retain halibut under the authority of the permit under which the vessel is operating. In addition, this action provides for two special permits—a community charter halibut permit and a military charter halibut permit.

Qualifications for Charter Halibut Permit

To receive an initial allocation of a charter halibut permit, an applicant must demonstrate participation in the charter halibut fishery during an historic qualifying period and during a recent participation period. The historic qualifying period is the sport fishing season established by the IPHC in 2004 and 2005. The sport fishing season in both of those years was February 1 through December 31. Minimum participation criteria need be met in only one of these years—2004 or 2005. The recent participation period is the sport fishing season established by the IPHC in 2008. This year was selected as the recent participation period because it is the most recent year for which NMFS has a complete record of saltwater charter vessel logbook data from the State of Alaska Department of Fish and Game (ADF&G).

The minimum participation qualifications include documentation of at least five logbook fishing trips during one of the qualifying years—2004 or 2005—and at least five logbook fishing trips during 2008. Meeting these minimum participation qualifications could qualify an applicant for a non-transferable charter halibut permit. The minimum participation qualifications for a transferable charter halibut permit include at least 15 logbook fishing trips during one of the qualifying years—2004 or 2005—and at least 15 logbook fishing trips during 2008.

The basic unit of participation for receiving a charter halibut permit will be a logbook fishing trip. A “logbook fishing trip” is a bottomfish logbook fishing trip during the qualifying years, 2004 and 2005, and as a halibut logbook fishing trip in 2008. A logbook fishing trip is an event that was reported to ADF&G in a logbook in accordance with the time limit required for reporting such a trip that was in effect at the time of the trip.

Number of Permits

If an applicant for a charter halibut permit meets the minimum participation requirements during a qualifying year and the recent participation year, NMFS will determine how many permits the applicant will receive and how many of those, if any, will be transferable permits. If an applicant qualifies for any permits, NMFS will issue to the applicant the number of permits equal to (a) the applicant's total number of bottomfish logbook fishing trips in a qualifying year, divided by 5, or (b) the number of vessels that made those trips, whichever number is lower. The applicant will select which year in the qualifying period—2004 or 2005—NMFS will use in making this calculation.

For example, an applicant in its selected qualifying year reported 23 logbook trips using three vessels. One vessel made 16 trips, another vessel made five trips, and another vessel made only two trips. Under the rule, NMFS will calculate 23 ÷ 5 = 4.6 which will be rounded down to four. But this number of permits will be limited by the number of vessels that made all the logbook trips in the applicant-selected year which was three. Hence, the applicant will be awarded three permits.

Transferable Permits

After determining the total number of permits, NMFS will determine which permits are transferable and which are nontransferable. An applicant will receive a transferable permit for each vessel that made at least 15 trips in the applicant-selected year (2004 or 2005) and at least 15 trips in the recent participation year (2008). The same vessel must have made all the trips within a year; however, the same vessel did not have to be used in the qualifying year and the recent participation year. The rest of the applicant's permits, if any, will be non-transferable permits. Applicants that do not have the minimum of 15 logbook fishing trips from the same vessel in each period but qualify for one or more permit(s) with a minimum of five logbook fishing trips, will receive only non-transferable permit(s). Hence, in the example above of an applicant with 23 logbook trips using three vessels, that applicant will receive three permits. Based on the 15-trip minimum criterion, however, this applicant will receive only one transferable permit and the other two permits will be non-transferable.

Angler Endorsements

Each charter halibut permit will have an angler endorsement number. The angler endorsement number on the permit is the maximum number of charter vessel anglers that may catch and retain halibut on board the vessel. The angler endorsement does not limit the number of passengers that an operator may carry, only the number that may catch and retain halibut. The angler endorsement will be equal to the highest number of anglers that the applicant reported on any logbook fishing trip in 2004 or 2005, subject to a minimum endorsement of four.

The term “charter vessel angler” is defined by this action to include all persons, paying or non-paying, who use the services of the charter vessel guide. The charter halibut permit, once issued with its angler endorsement, will limit the number of charter vessel anglers authorized to catch and retain halibut on the permitted vessel.

A vessel operator will be able to stack permits to increase the number of charter vessel anglers on board. For example, if a vessel operator has two charter permits on board, one with an angler endorsement of four and one with an endorsement of six, then the vessel operator can have a maximum of 10 charter vessel anglers on board who are catching and retaining halibut if the operator is otherwise authorized to carry 10 passengers. If other provisions of law, such as safety regulations or for-hire operation regulations, prevent 10 anglers from being on board the vessel, the charter halibut permits will not authorize the vessel operator to violate those provisions of law.

Initial Allocation Process

Several basic standards are required to initially receive a charter halibut permit. These standards include (1) timely application for a permit, (2) documentation of participation in the charter vessel fishery during the qualifying and recent participation periods by ADF&G logbooks, and (3) ownership of a business that was licensed by the State of Alaska to conduct the guided sport fishing reported in the logbooks.

Timely application.

To be an initial recipient of a charter halibut permit, an applicant must apply for the permit during the application period. An application period of no less than 60 days will be announced in the

Federal Register.

Applications submitted by mail, hand delivery, or facsimile will be accepted if postmarked, hand delivered, or received by fax no later than the last day of the application period. Electronic submissions other than facsimile will not be acceptable. A finite application period of reasonable length is necessary to resolve potential claims for permits by two or more persons for the same logbook fishing trip history. NMFS will not credit the same logbook fishing trip to more than one applicant and will not allow the participation history of one business owner to support issuance of a permit(s) to more than one applicant.

Application forms will be available through ADF&G and NMFS offices and on the NMFS, Alaska Region, Web site at

http://www.alaskafisheries.noaa.gov/

. Electronic submission of the application will not be acceptable, however, because a signature on the application will be required. The application form will include a statement that, by signature, the applicant attests that legal requirements were met and all statements on the application are correct under penalty of perjury.

Documentation of participation.

The principal documentation necessary to prove qualifying participation in the charter halibut fishery will be limited to saltwater charter vessel logbooks issued by the ADF&G. There are several reasons for relying only on the ADF&G charter vessel logbook database. First, ADF&G has regulated saltwater charter fishing in the State of Alaska through registrations, licenses, and logbooks since 1998. These requirements apply to all charter fishing, including vessels targeting halibut. Second, ADF&G supplied aggregated charter vessel logbook data to the Council to assist it in its analysis of past participation in the charter halibut fishery in Areas 2C and 3A. Third, the Council relied on these data in part to make its decision to recommend limiting entry into this fishery and NMFS, in turn, has relied on the Council's Analysis of alternatives and on subsequent ADF&G charter vessel logbook data to approve this action.

As stated above, the basic unit of participation for receiving a charter halibut permit will be a logbook fishing trip, which is a trip that was reported to ADF&G in a saltwater charter logbook in accordance with the time limit required for reporting such a trip that was in effect at the time of the trip. If a trip was not reported within those time limits, NMFS will not consider it a logbook fishing trip for purposes of a charter halibut permit application.

NMFS will use the same method of counting logbook fishing trips that was used by the Council in developing its recommendation for this action. Each trip in a multi-trip day will count as one logbook fishing trip, and each day on a multi-day trip will count as one logbook fishing trip. For example, if an operator documented two trips in one day, NMFS will consider that as two logbook fishing trips. Another operator that documented a trip that lasted two days also will be considered to have made two logbook fishing trips. This accounting of trips deviates from the ADF&G method of counting logbook trips when fishing continues over multiple days. The same issue does not exist for half-day trips. Consistent with ADF&G logbook data and the Council's Analysis, NMFS will consider a half day trip as one trip.

A halibut logbook fishing trip also can be a logbook fishing trip where the business owner, within ADF&G time limits, reported “boat hours that the vessel engaged in bottomfish fishing.” An applicant may use such a report as one way to document a halibut logbook fishing trip. The logbook data for “boat hours” that a business had to report in 2007 and 2008 was “No. of Boat Hours Fished this Trip” with bottomfish as a targeted species. ADF&G instructions for the 2007 and 2008 logbooks state that bottomfish include halibut. Documentation of boat hours fishing for bottomfish would capture trips where charter vessel anglers were targeting halibut but did not catch any. Hence, this action defines a halibut logbook fishing trip as a logbook fishing trip in which the applicant reported the number of halibut kept or released or the boat hours that the vessel engaged in bottomfish fishing.

Documentation of participation will be recorded in the official record of charter vessel participation in Areas 2C and 3A during the qualifying and recent participation years. The official record will be based on data from ADF&G and will link each logbook fishing trip to an ADF&G Business Owner License and to the person—individual, corporation, partnership, or other entity—that obtained the license. Thus, the official record will include information from ADF&G on the persons that obtained ADF&G Business Owner Licenses in the qualifying period and the recent participation period; the logbook fishing trips in those years that met the State of Alaska's legal requirements; the Business Owner License that authorized each logbook fishing trip; and the vessel that made each logbook fishing trip.

NMFS will compare all timely applications to the official record. If an applicant submits a claim that is not consistent with the official record, NMFS will allow the applicant to submit documentation or further evidence in support of the claim during a 30-day evidentiary period. If NMFS accepts the applicant's documentation as sufficient to change the official record, NMFS will change the official record and issue charter halibut permit(s) accordingly. If NMFS does not agree that the further evidence supports the applicant's claim, NMFS will issue an initial administrative determination (IAD). The IAD will describe why NMFS is initially denying some or all of an applicant's claim and will provide instructions on how to appeal the IAD.

An applicant may appeal the IAD to the Office of Administrative Appeals (OAA) pursuant to 50 CFR 679.43. NMFS will issue interim permits to applicants that filed timely applications and whose appeal is accepted by OAA. NMFS will limit interim permits on appeal to applicants who applied for charter halibut permits within the application period specified in the

Federal Register.

This means that an applicant that is denied a permit because its application was late would not receive an interim permit. All permits issued during an appeal will be interim, non-transferable permits. Until NMFS makes a final decision on the appeal, the permit holder will not be able to transfer any permits.

Licensed business owners.

Charter halibut permits will be issued to persons that were the ADF&G licensed business owners that met the minimum qualifications. The term “person” includes an individual, corporation, firm, or association (50 CFR 300.61). Hence, on successful application, NMFS will issue a charter halibut permit to the entity—individual, corporation, partnership, or other entity—that held the ADF&G Business Owner License that authorized the logbook fishing trips that met the participation requirements. NMFS has no obligation to determine the owners of a corporation or members of a partnership that successfully applied for a permit. NMFS will follow the form of ownership—individual or otherwise—that the business used to obtain legal authorization from the State of Alaska for its past participation in the charter halibut fishery.

Generally, the entity that applies for one or more charter halibut permits will be the same entity that held the ADF&G Business Owner License that authorized the trips that met the participation

requirements in the qualifying period and in the recent participation period. The only exception to this requirement is if the entity that held these licenses is an individual who has died, or a non-individual entity, such as a corporation or partnership, that has dissolved.

NMFS will not determine percentage of ownership of a dissolved partnership or corporation. If a dispute exists among former partners or shareholders as to how they should share ownership of a permit or permits, that dispute is properly resolved as a civil matter by a court.

NMFS will apply a guiding principle in evaluating applications for charter halibut permits; the logbook fishing trip activity of one person that is used for permit qualification cannot lead to more than one person receiving a charter halibut permit. The only possible exception is when NMFS might award a permit to successors-in-interest to a dissolved entity. Even then, NMFS will not issue a permit to each successor-in-interest, but will issue the number of permits for which the dissolved entity qualified in the names of all successors-in-interest. Subject to that exception, this guiding principle prohibits NMFS from crediting more than one applicant for the same logbook fishing trip, from crediting more than one applicant for logbook fishing trips made pursuant to the same ADF&G Business Owners License, and from issuing permits to more than one applicant for participation by one person in the charter halibut fishing business.

Unavoidable circumstances.

NMFS recognizes that certain unavoidable circumstances could have prevented an applicant from participating in either the qualifying period or recent participation period despite the applicant's intention. In developing a limited exception to allow for unavoidable circumstances, NMFS was guided in part by the unavoidable circumstance provisions in the License Limitation Program for groundfish and crab fisheries at 50 CFR 679.4(k). Basically, an applicant must demonstrate that—

• It participated during either the qualifying period or the recent participation period;

• It had a specific intent to participate in the period, either the qualifying period or the recent participation period, that the applicant missed;

• The circumstance that thwarted the intended participation was (a) unavoidable, (b) unique to the applicant, (c) unforeseen and unforeseeable;

• The applicant took all reasonable steps to overcome the problem; and

• The unavoidable circumstance actually occurred.

The unavoidable circumstance exception will be limited to persons that will be excluded from the fishery entirely unless their unavoidable circumstance is recognized. The unavoidable circumstance exception is not intended to upgrade the number or type of permits an applicant could receive. For example, NMFS will not accept an unavoidable circumstance claim to upgrade a non-transferable permit to a transferable permit based on an anticipated 15 logbook trips in 2005 that did not occur. NMFS intends a narrow interpretation of the unavoidable circumstance exception, and that, if an applicant can get any charter halibut permit based on the applicant's actual participation, then the applicant will be limited to that permit.

This rule also recognizes a particular type of unavoidable circumstance, military service. The military exemption is designed to benefit persons that will otherwise be completely excluded from receiving any charter halibut permits despite their intention to meet the participation requirement during the qualifying period. If a military exemption applicant can receive any permits based on the applicant's actual participation in the qualifying period, the applicant will be limited to that number and type of permits and cannot use the military exemption. An applicant may not claim a military exemption to excuse lack of participation in the qualifying period and an unavoidable circumstance to excuse a lack of participation in the recent participation period. The successful military exemption applicant will receive one non-transferable permit with an angler endorsement of six unless the applicant can demonstrate that it likely would have met participation requirements for a transferable permit or a higher angler endorsement.

Transfers

A person holding a transferable charter halibut permit may transfer the permit to another person (individual or non-individual entity) with certain limitations. Non-transferable charter halibut permits may not be transferred. Transferability of permits will allow limited new entry into the charter halibut fishery while preventing an uncontrolled expansion of the charter halibut fishery.

NMFS expects consolidation in the charter halibut fishery as holders of non-transferable permits leave the fishery and as charter halibut operators acquire multiple permits by transfer. Excessive consolidation will be prevented by imposing an excessive share limit of five charter halibut permits.

Two important exceptions to this excessive share limit, however, will allow a person to hold more than five permits. First, a person that is the initial recipient of more than five permits will be able to continue to hold all of the permits for which the person initially qualified. Such a person will be prevented from receiving transfers of additional permits. This exception will not apply if an individual permit holder dies or a corporate permit holder dissolves or changes its ownership by adding one or more new owner(s) or partner(s). In this event, NMFS will consider a successor-in-interest or a changed corporate structure to be a different entity from the one that was the initial recipient of the permits and the exception to the excessive share limit will not apply to the new entity. Upon notification of a change, NMFS would (1) invalidate transferable charter halibut permits held by the permit holder and provide notification that the permit holder must divest themselves of the permit; and (2) revoke non-transferable charter halibut permits held by the permit holder.

The second exception will allow a transfer that results in the person receiving the transfer holding more than five permits if the person meets the following three conditions:

• The existing permit holder that holds more than five permits under the first exception will be transferring all of the transferable permits that were initially issued;

• The existing permit holder will be transferring all assets—such as vessels owned by the business, lodges, and fishing equipment—of its charter vessel fishing business along with the permits; and

• The person that will receive the permits in excess of the excessive share limit does not hold any permits at the time of the proposed transfer.

Although no citizenship standards will apply to the initial allocation of charter halibut permits, a person receiving a charter halibut permit by transfer must be a United States (U.S.) citizen. Issuance of charter halibut permits to non-U.S. citizens is not authorized by section 773c(c) of the Halibut Act. The Secretary, however, has general responsibility and authority to adopt regulations as may be necessary under section 773c(a) and (b) of the Halibut Act. Therefore, the Secretary is exercising this authority in not applying citizenship standards for the initial allocation of charter halibut permits. A

transfer to an individual will be approved only if the individual is a U.S. citizen, and a transfer to a corporate entity will be approved only if it is a U.S. business with at least 75 percent U.S. citizen ownership of the business. This rule adopts the 75 percent U.S. ownership criterion for a U.S. business from the American Fisheries Act (111 Stat. 2681, Oct. 21, 1998), which is a key piece of Federal legislation designed to Americanize the fleet fishing off American waters.

A nontransferable permit cannot be transferred from the name of the individual once the individual dies. A nontransferable permit cannot be transferred from a non-individual permit holder (a corporation, partnership, or other entity) if the non-individual permit holder dissolves or changes. This rule incorporates the definition of “change” in a corporation or partnership from the IFQ program at 50 CFR 679.42(j)(4)(i). This paragraph in the IFQ regulations defines “a change” for corporations, partnerships, or other non-individual entity to mean “the addition of any new shareholder(s) or partner(s), except that a court appointed trustee to act on behalf of a shareholder or partner who becomes incapacitated is not a change in the corporation, partnership, association, or other non-individual entity.”

These limitations on the transfer of charter halibut permits will be made effective by a requirement for NMFS approval for all transfers. No transfer of a permit will be effective unless it is first approved by NMFS. A transfer application provided by NMFS is required to be completed by the person transferring and the person receiving the transferred permit. Completion of the transfer application and examination of it by NMFS will assure that the excessive share and citizenship requirements of this rule are maintained, and that non-transferable permits are dissolved on the death or change of the permit holder and will not be transferred to a new entity.

Special Permits

Two types of special permits are provided by this action for limited guided sport fishing for halibut outside of the requirements for charter halibut permits. First, community charter halibut permits are intended to allow development of a charter vessel fishery in certain rural communities that do not have a developed charter vessel industry. Second, a military charter halibut permit will exempt from this limited access system charter vessels operated by the U.S. Military's Morale, Welfare and Recreation (MWR) programs for recreational use by service members.

Community charter halibut permit.

One or more community charter halibut permits may be issued to Community Quota Entities (CQEs) representing specified communities that do not currently have a fully developed charter halibut fleet. The CQE concept was developed by the Council originally to help rural communities become more involved in the commercial fisheries for halibut and sablefish (84 FR 23681, April 30, 2004). CQEs are defined in existing regulations at 50 CFR 679.2.

A CQE representing a community or communities in Area 2C can receive a maximum of four community charter halibut permits for each eligible community the CQE represents. A CQE representing a community or communities in Area 3A can receive a maximum of seven community charter halibut permits for each eligible community it represents. The larger number of community permits allowed in Area 3A reflects the larger resource base in that area. A community charter halibut permit will have an angler endorsement of six and will be non-transferable.

In addition to community charter halibut permits, a CQE may acquire charter halibut permits by transfer. A unique excessive share limit will apply to each CQE in Area 2C of a maximum of four charter halibut permits for each eligible community the CQE represents in that area. The combined permit limit for a CQE in Area 2C is four community charter halibut permits plus four charter halibut permits for an overall limit of eight permits per eligible community. Similarly, the excessive share limit for a CQE in Area 3A is a combined permit limit of seven community charter halibut permits plus seven charter halibut permits for an overall limit of 14 permits per eligible community.

A charter vessel fishing trip for halibut that is authorized by a community charter halibut permit is required to either begin or end within the community designated on the community charter halibut permit. This requirement will apply only to community charter halibut permits and not to any additional charter halibut permits that a CQE may acquire by transfer.

The Council intended to limit the benefits of community charter halibut permits to rural communities that have an emerging but not a fully developed charter vessel fleet. Instead of listing in regulations the criteria used by the Council in selecting community eligibility, this rule simply specifies those communities in Areas 2C and 3A (

see

Table 21 to part 679) that meet the Council's criteria and will qualify for community charter halibut permits issued to CQE(s) representing them. To add or subtract a community from the proposed list will require separate Council action and a regulatory amendment.

Military charter halibut permit.

This action provides for special permits for charter vessels operated by any U.S. Military MWR program in Alaska. The only MWR program in Alaska that currently offers recreational charter halibut fishing to service members is the Seward Resort based at Fort Richardson in Anchorage, Alaska. To operate a charter vessel, the MWR program must obtain a military charter halibut permit by application to NMFS. Each military charter halibut permit will be non-transferable and valid only in the regulatory area designated on the permit. NMFS reserves the right to limit the number of these permits.

Consistency With Halibut Act

As described at the beginning of this preamble, this action is authorized by the Halibut Act at section 773c. Section 773c(c) specifically authorizes the Council to develop and the Secretary to approve limited access regulations applicable to nationals or vessels of the United States or both. Such regulations are required by this section of the Halibut Act to be consistent with four basic standards. The following discussion summarizes these statutory standards and the rationale used by the Secretary in approving the Council's recommendation and this rule implementing a limited access system for charter vessels in the guided sport fishery for halibut in IPHC regulatory Areas 2C and 3A.

Section 773c(c) of the Halibut Act requires limited access regulations to be—

• In addition to and not in conflict with regulations adopted by the IPHC;

• Non-discriminatory between residents of different States;

• Consistent with the limited entry criteria set forth in 16 U.S.C 1853(b); and

• Fair and equitable to all fishermen, based on the rights and obligations in Federal law, reasonably calculated to promote conservation, and carried out in such a manner that no particular individual, corporation, or other entity acquires an excessive share of halibut fishing privileges.

No Conflict With IPHC Regulations

Regulations governing halibut fisheries that are recommended by the IPHC are accepted or rejected on behalf

of the United States by the Secretary of State, with the concurrence of the Secretary, pursuant to section 773b of the Halibut Act. Accepted IPHC regulations are published as annual management measures pursuant to 50 CFR 300.62. The current annual management measures were published in the

Federal Register

on March 19, 2009 (74 FR 11681). IPHC regulations affecting sport fishing for halibut and charter vessels in Areas 2C and 3A may be found in sections 3, 25, and 28 of the IPHC regulations (74 FR 11681, March 19, 2009).

The IPHC regulations at section 3 of the annual management measures include definitions of terms, some of which are related to this action, such as “charter vessel” and “sport fishing.” This action removes a different definition of “charter vessel” from 50 CFR 300.61 that could have raised a conflict question. The definition of the term “charter vessel” at 50 CFR 300.61 resulted from a final rule published September 24, 2008 (73 FR 54932), for purposes of a prohibition against using a charter vessel for subsistence fishing for halibut. This action integrates the definition into the prohibition language to which it directly applies at 50 CFR 300.66(i) to clarify that the definition does not apply universally. The universal definition of “charter vessel” will continue to be that used by the IPHC and appearing in the annual management measures. Hence, no conflict is found between this action and the IPHC regulations concerning this definition.

The IPHC regulations at section 25 of the annual management measures specify the legal gear for sport fishing for halibut, specify which halibut count toward the daily bag limit, and prohibit possession of halibut on board a vessel while fishing in a closed area and when other fish or shellfish on board the vessel are intended for commercial use. Section 25 also prohibits halibut caught by sport fishing from being offered for sale, sold, traded, or bartered. Finally, section 25 makes an operator of a charter vessel liable for any violation of the IPHC regulations by a passenger on board the vessel. Regulations in this action are in addition to, and not in conflict with, the IPHC regulations at section 25.

The IPHC regulations at section 28 of the annual management measures establish sport fishing rules specific to Convention waters in and off of Alaska. Specifically, these regulations specify the sport fishing season, daily bag limit of halibut per person, the possession limit, and a prohibition against filleting halibut to support enforcement of the daily bag and possession limits. Exceptions to the filleting prohibition also are provided at section 28. Regulations in this action are in addition to, and not in conflict with, the IPHC regulations at section 28.

No Discrimination Between Residents of Different States

Regulations in this action do not discriminate between residents of different states. All charter business owners are treated the same regardless of their residency with respect to their eligibility to receive an initial allocation of a charter halibut permit or a transfer of a charter halibut permit. Likewise, neither the community charter halibut permit nor the military charter halibut permit is restricted in terms of the State of residency of the person who will use the permit. Charter vessel anglers who receive sport fishing guide services from businesses affected by this rule also are not discriminated against in terms of the State of their residence. Such anglers will have the same opportunity to contract with businesses that possess charter halibut permits regardless of the location of the angler's residence.

Consistency With Limited Entry Criteria

The limited entry criteria referred to in section 773c(c) of the Halibut Act appear at section 303(b)(6) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act, 16 U.S.C. 1801

et seq.

). These criteria appear under the heading of discretionary provisions for the Council and Secretary, and they read, and are discussed in turn, as follows:)

(b) Discretionary provisions. [The Council or 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 a 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;

(D) The cultural and social framework relevant to the fishery and any affected fishing communities;

(F) The fair and equitable distribution of access privileges in the fishery; and

(G) Any other relevant considerations.

Optimum yield.

This term is defined in the Magnuson-Stevens Act at section 3(33) in terms of providing the greatest overall benefit to the Nation, and prescribed on the basis of maximum sustainable yield as reduced by any relevant economic, social, or ecological factor. Also, at section 301(a)(1), the Magnuson-Stevens Act states that conservation and management measures must prevent overfishing while achieving optimum yield. This is one of ten national standards established by the Magnuson-Stevens Act with which any fishery management plan (FMP) or regulation implementing an FMP must be consistent.

The U.S. halibut fisheries are not managed under an FMP because the halibut fisheries are governed under the authority of the Halibut Act, not the Magnuson-Stevens Act. The Halibut Act does not require the U.S. halibut fisheries to be managed under an FMP. Therefore, specification of optimum yield for halibut is not required by statute and has not been determined. Nevertheless, the IPHC takes a conservative approach in setting the commercial fishery catch limits for the areas in and off Alaska while leaving economic and social balance questions to the Council. In essence, IPHC biologists determine a biologically acceptable level of harvest from all sources of halibut mortality, estimate the anticipated harvest from all non-commercial sources of fishing mortality, subtract the latter from the former, and set a commercial fishery catch limit based on the remainder. The overall harvest rate targeted by the IPHC is 20 percent of the exploitable biomass. The realized rate in recent years, however, has been substantially above the targeted harvest rate. Therefore, to the extent that the limited access system established by this rule can stabilize the halibut harvest by the charter halibut fishery, it will contribute to the achievement of the overall target harvest rate of halibut.

Present participation.

The Council took into account present participation in the charter halibut fisheries as it considered alternative participation criteria. The Council took its action to recommend this rule to the Secretary on March 31, 2007. At that time, the most recent information on participation in these fisheries was from 2004 and 2005 ADF&G saltwater charter vessel logbooks. Logbook data from participation in 2006 was not yet available for the Council's Analysis (

see

ADDRESSES

). In addition, the ADF&G logbook data were not specific to charter vessel fishing trips targeting halibut,

per se,

but indicated “bottomfish” fishing instead. However, the predominate bottomfish targeted in Alaska saltwater sport fisheries is halibut. Hence, bottomfish was assumed to be a reasonable proxy for halibut fishing. Further, the Council chose to accept any ADF&G saltwater logbook entry indicating a bottomfish statistical area, rods, or boat hours as evidence of participation during 2004 and 2005. The

Council was aware that this would result in a liberal estimate of participation in the charter halibut fisheries, but this decision was reasonably based on the best available information. With this understanding, the Council proceeded to consider alternative levels of participation, in terms of numbers of logbook fishing trips ranging from 1 to 20 trips or more, as an indication of participation during 2004 and 2005.

The Council has recommended, and the Secretary has approved, several other limited access systems before this action, and the Council knew that two or three years could pass before its recommendation for this limited access system was fully reviewed, approved, and implemented. In developing this limited access system, the Council addressed the potential of a rush of new entrants into the charter halibut fishery during the period of time the Council and the Secretary worked to develop and implement the system by specifying a minimum participation criterion in a recent participation period. The Council referred to this recent participation period as the “year prior to implementation.” In 2007, the year of Council action, the year prior to implementation was an unknown year in the future. In the proposed rule (April 21, 2009, 74 FR 18178), NMFS interpreted the “year prior to implementation” for practical purposes to mean the most recent year for which participation data are available. The most recent year for which ADF&G saltwater log book data are available now is 2008. Therefore, the Council's original Analysis of participation patterns was supplemented with 2008 logbook data indicating participation in the most recent year. This is currently the best information available on present participation in the charter halibut fisheries in IPHC Areas 2C and 3A.

The Council's policy recommendation to grant charter halibut permits based in part on participation in at least two years—one of the qualifying years, 2004 or 2005, and the recent participation year, 2008—served several purposes. One was to comply with the Magnuson-Stevens Act 303(b)(6) criteria of taking into account present and historical participation.

The second purpose was to stabilize growth in the charter halibut fisheries, a long-term objective of this limited access system. Due to the length of time needed to develop a limited access policy, conduct analyses of alternative policies, consider public comments, review and approve (or disapprove) a Council recommendation, and (if approved) implement the recommendation with Federal regulations, the entry of new charter halibut fishing effort during this time could significantly change the halibut harvesting capacity from when the Council's policy decision was made in March 2007. Specifying minimum participation criteria in a recent participation year in addition to a qualifying year served the purpose of discouraging new entry into the affected charter halibut fisheries during the intervening years.

The Council and the Secretary provided further public notice to discourage prospective new entry into the charter halibut fisheries when the Council acted to establish a control date of December 9, 2005. The Council determined that anyone entering the charter halibut fishery in and off Alaska after this date would not be assured of future access to that fishery if a limited access system of management was developed and implemented under authority of the Halibut Act. In addition to public announcement of this action at its meeting in December 2005, the Council also published this date in its December 2005 and February 2006 newsletters (

http://www.alaskafisheries.noaa.gov/npfmc/newsletters/newsletters.htm

). The Secretary also published a notice of this date in the

Federal Register

on February 8, 2006 (71 FR 6442).

The third purpose served by the Council's choice of present and historical participation years to qualify for an initial allocation of a charter halibut permit is to establish an objective and measurable indicator of dependence on the fishery. The Council reasoned in developing this and several other limited access systems that participation is a good indication of dependence on the fishery. Fishermen with a relatively greater participation in a fishery likely have a relatively greater dependence on the fishery for their livelihood than do other fishermen with relatively less participation. The difficult policy choice for the Council and Secretary is to determine where on the range, from little to large amount of participation, a decision should be made affecting future participation in the fishery. The Analysis of the potential effects of alternative decisions supports the ultimate policy choice (

see

ADDRESSES

For commercial fisheries, participation is often measured in pounds of the targeted fish species landed. Charter vessel businesses, however, primarily market a sport fishing experience rather than pounds of fish caught. Logbook fishing trips are a better measure of participation in the charter halibut fisheries than are pounds of halibut caught and retained. Hence, the Council used logbook fishing trips as a measure of participation in the charter halibut fisheries.

Further, the Council determined the level of minimum participation in both years—the historical, 2004 or 2005, and present participation, 2008—indicated a reasonable dependence on the charter halibut fishery. Using participation in a past and a recent year together demonstrates dependence on the fishery to a greater extent than using only one year of participation as a qualifying criterion. A charter halibut business with a record of at least minimal participation in both years likely participated also in the intervening years, and likely continues to participate now. Therefore, these are the businesses that the Council decided should receive an initial allocation of charter halibut permits. On the other hand, charter halibut businesses that participated only in the historical period but not in the recent participation period likely exited the charter halibut industry before the recent participation period and, therefore, are no longer dependent on the fishery. Conversely, charter halibut businesses that participated only in the recent period but not in the historical period likely entered the fishery after the control date. These businesses comprise a group of charter halibut participants that the Council and Secretary specifically discouraged from entry by announcing that their participation would not necessarily be recognized (71 FR 6442, February 8, 2006).

The Secretary has approved and adopted this rational basis for taking into account present participation.

Historical fishing practices.

The Analysis took into account historical fishing practices in and dependence on the charter halibut fisheries (

see

ADDRESSES

). The Council examined the potential effects of several alternative minimum qualifying logbook trips during this period before making its recommendation. As explained above, the choice of minimum qualifying logbook trips during this historical participation period in combination with those during the recent participation period (2008) was critical to a determination of dependence on the charter halibut fishery. Those charter halibut businesses that met the minimum logbook trip criteria were determined to be sufficiently dependent on the charter halibut industry to warrant them receiving an initial allocation of one or more charter halibut

permits. The Secretary has approved and adopted the Council's rational basis for taking into account historical fishing practices in and dependence on the charter halibut fisheries.

Economics.

The Council and the Secretary have taken into account the economics of the charter halibut fishery. The Analysis prepared by the Council and supplemented and approved by the Secretary includes a Regulatory Impact Review (RIR) and Final Regulatory Flexibility Analysis (FRFA) (

see

ADDRESSES

). These documents respectively include analysis of potential costs and benefits and analysis of potential impacts on small entities as defined by the Regulatory Flexibility Act. This Analysis contains information describing the principal sectors that fish for halibut and incorporates earlier descriptions by reference. Each of the components of the preferred alternative is analyzed separately in the RIR. The impacts of the preferred alternative, and two other significant alternatives, on user industry and consumer groups in the commercial and charter halibut fisheries are compared in the RIR. A FRFA provides an analysis of the impacts of the preferred alternative on small entities. The Council accepted testimony from the public, much of which addressed economic concerns. NMFS has supplemented the Analysis, prepared for the Council's decision-making and to accompany the publication of the proposed rule, with an updated analysis of the impacts of the preferred alternative in light of specification of the recent participation period (

see

ADDRESSES

). This information was not previously available. NMFS accepted and evaluated comments on the proposed rule, many of which raised economic issues. The summary of public comments and NMFS's responses to them may be found below.

Capability to engage in other fisheries.

The Council and the Secretary have taken into account the capability of vessels used in the guided sport fishery for halibut to engage in other fisheries. The Analysis prepared by the Council, supplemented and approved by the Secretary, includes a description of the affected fleet and industry. In brief, the charter halibut industry provides marine transportation and sport fishing guide services to anglers wishing to catch halibut. Charter vessel businesses provide these services also to anglers wishing to catch salmon, rockfish, lingcod, and other bottomfish. In addition, charter vessel businesses may provide marine transportation for bird watching, whale watching, and general sightseeing. Passengers using these services may be independent tourists, guests at lodges, or travelers on cruise ships. Charter vessel businesses may focus their business plan on sport anglers wishing to catch halibut, but other business plans are possible given the variety of reasons why an individual may want to engage the services of a charter vessel.

Cultural and social framework.

The Council and the Secretary have taken into account the cultural and social framework relevant to the charter halibut fishery and affected fishing communities. The Council received substantial public testimony during the early development of this rule which influenced the design of elements included for Secretarial consideration. The Secretary in turn has received public comments on cultural and socioeconomic aspects of this rule, has considered these comments and responded to them below. The Analysis of alternatives (

see

ADDRESSES

) reflects this consideration by finding numerous communities with little charter vessel activity while a few communities have a well-established charter vessel industry, as indicated by the numbers of vessels that terminated charter vessel trips in coastal communities during the qualifying years. Hence, this action supports limited development of a charter halibut fishery in specific rural communities through a special community charter halibut permit program.

Community charter halibut permits will be issued under this rule at no cost to CQEs representing communities that do not currently have a fully developed charter halibut fleet. The CQE provision was previously developed by the Council for the IFQ program to help certain rural communities become more involved in the commercial fisheries for halibut and sablefish. In this action, the CQE provision serves the same purpose for the development of the charter vessel industry based in any of 18 rural communities in Area 2C and 14 rural communities in Area 3A. The purpose and design of the CQE provision is more fully described in the proposed rule published April 21, 2009 (74 FR 18178).

The Council also recommended, and the Secretary approved, another special permit for military recreation purposes. This took into account the existence of morale, welfare, and recreation (MWR) programs operated by the U.S. military and their importance to the recreational opportunities afforded to military services.

The Council and Secretary also have taken into account unique social and cultural aspects of the charter halibut fishery by providing for certain hardships or unavoidable circumstances in qualifying for a charter halibut permit. The design and conditions for a charter halibut permit based on unavoidable circumstances are fully described in the proposed rule published April 21, 2009 (74 FR 18178).

Fair and equitable distribution of access privileges.

The Council and the Secretary have taken into account the fair and equitable distribution of access privileges to the halibut resource. Although this action may cause some restructuring within the charter vessel industry, no individual sport angler will be prevented from having access to the halibut resource for sport fishing. Sport fishermen wishing to fish for halibut on a charter vessel likely will be able to hire an operator or guide with a charter halibut permit as easily after the implementation of this rule as was done before that time.

Further, persons wishing to enter the charter vessel industry will be able to do so. This rule does not prevent any person from entering the charter vessel industry or becoming an operator of a charter vessel. An operator or business with a halibut fishing clientele, but that does not qualify for an initial allocation of one or more charter halibut permits, would have to obtain a transferable charter halibut permit by transfer. Alternatively, a charter vessel business that had such minimal participation that it does not qualify for a charter halibut permit under the Council's qualification criteria could change its business model to one that does not involve fishing for halibut. Although this rule does not prevent most persons from entering the charter halibut fishery, those persons that receive an initial allocation of charter halibut permits will have a competitive advantage over those that will have to pay for transfer of these permits. The rationale for making a distinction between these two groups is to end the opportunities for unlimited growth in charter vessel operations that may fish for halibut by establishing a finite number of charter vessels authorized for guided sport halibut fishing based on the historical and present participation criteria outlined above. This action is intended to support the Council's approved policy of allocating the halibut resource among all fishing sectors and providing continued participation by those operations most dependent on the halibut resource.

Other relevant considerations.

The Council and the Secretary have taken into account other factors to allow limited additional participation in the charter halibut fisheries than would otherwise be allowed without certain

exceptions to the qualifying criteria. First, an initial allocation of non-transferable charter halibut permits will be allocated to persons with a low level of participation. The minimum number of logbook fishing trips in one of the qualifying years—2004 or 2005—and in the recent participation year—2008—is five. Dependence on the halibut resource will be difficult to demonstrate for charter vessel businesses that made only 5 to 14 logbook fishing trips, relative to those businesses that made 15 or more trips. These low-participation charter businesses likely are small and operate part time, but together they supply a significant market for charter vessel anglers. Excluding the low-participation charter businesses from initial allocation of charter halibut permits could have constrained charter vessel angler opportunities. Allowing low-participation charter businesses to qualify for transferable charter halibut permits, however, would have created a large latent capacity to expand charter vessel angler opportunities. Hence, these low-participation charter businesses are allowed to qualify for non-transferable charter halibut permits to continue their current operations but not provide a source for significant expansion of charter halibut fishing in the future.

Second, consideration of unavoidable circumstances is specifically recognized by the Council and the Secretary. Such circumstances must have been unique to a particular person, unforeseen and unavoidable, and must have prevented a potential participant in the charter halibut fishery from participation as intended during either the qualifying or recent participation years. This hardship provision allows for an appeals process that may result in the potential allocation of non-transferable or transferable charter halibut permits that would otherwise be denied. A special military service hardship provision was included for a charter halibut permit applicant that meets the participation requirement during the recent participation period but not during the qualifying period due to U.S. military service.

Finally, the Council and Secretary allowed an exemption for charter vessels operated by any U.S. Military MWR program in Alaska. A special non-transferable military charter halibut permit will be issued to a MWR program without regard for previous participation in the charter halibut fisheries. NMFS reserves the right to limit the number of these permits.

Fair and Equitable, Promotes Conservation, and Avoids Excessive Share

The Halibut Act at 16 U.S.C. 773c(c) states the following:

If it becomes necessary to allocate or assign halibut fishing privileges among various United States fishermen, such allocation shall be fair and equitable to all such fishermen, based upon the rights and obligations in Federal law, reasonably calculated to promote conservation, and carried out in such a manner that no particular individual, corporation, or other entity acquires an excessive share of halibut fishing privileges.

The following discusses the consistency of this action with each of these three standards.

Fair and equitable.

The “fair and equitable” requirement in the Halibut Act quoted above is substantially the same as the “fair and equitable” requirement found at 16 U.S.C. 1851(a)(4),

i.e.,

National Standard 4 of the Magnuson-Stevens Act. The only difference is the addition of the word “halibut” before “fishing privileges” in the provision in 16 U.S.C. 773c(c). Because of this similarity, the National Standard 4 guidelines promulgated by NMFS help to illustrate why this action, even though it is taken under the Halibut Act and not the Magnuson-Stevens Act, meets the statutory requirement. An allocation of fishing privileges should be rationally connected to the achievement of optimum yield or the furtherance of a legitimate fishery management objective under the guidelines to National Standard 4 (50 CFR 600.325(c)(3)(i)(A)). The Council and NMFS have articulated a legitimate objective for this action, that is, to be a step toward establishing a comprehensive program of allocating the halibut resource among the various halibut fisheries (guided and unguided recreational, commercial, and subsistence). To accomplish this objective, the Council and NMFS found a need to stabilize growth in the charter halibut sector.

Further, the guidelines to National Standard 4 acknowledge that inherent in an allocation is the advantaging of one group to the detriment of another. The motive for taking a particular allocation should be justified in terms of fishery management objectives; otherwise, the disadvantaged user groups or individuals will suffer without cause (50 CFR 600.325(c)(3)(i)(A)). The fishery management objective of this action has been articulated by the Council and NMFS, starting with the 1995 problem statement by the Council and continuing through this final rule (cf., history of charter vessel fishery management concerns and limited access development published on February 8, 2006 [71 FR 6442], and April 29, 2009 [74 FR 18178]). These statements demonstrate that the Council was concerned about overcrowding of productive halibut grounds due to the growth of the charter vessel sector and that expansion of this sector may affect “the Council's ability to maintain the stability, economic viability, and diversity of the halibut industry, the quality of the recreational experience, the access of subsistence users, and the socioeconomic well-being of the coastal communities dependent on the halibut resource.”

Finally, the guidelines to National Standard 4 state that an allocation may impose a hardship on one group if it is outweighed by the total benefits received by another group or groups. “An allocation need not preserve the status quo in the fishery to qualify as `fair and equitable,' if a restructuring of fishing privileges would maximize overall benefits” (50 CFR 600.325(c)(3)(i)(B)). In this action, the Council and NMFS found that the total benefits to the charter halibut fishery will be increased relative to the status quo. The hardship of not qualifying for an initial allocation of a charter halibut permit will be borne by those who entered the charter halibut fishery after 2005 despite the Council's control date notice that such persons would not be assured of future access to this fishery if a limited access system is implemented (71 FR 6442, February 8, 2006). Overall benefits of this rule, however, will accrue to those businesses in the charter halibut fishery that were established and participating during the qualifying and recent participation years.

Promotes conservation.

Although biological conservation of the halibut resource is not the principal purpose of this rule, it will promote conservation by fostering a more easily managed charter halibut fishery. When any fishery resource is fully subscribed among the various fishery sectors using it, the uncontrolled growth in one sector will disadvantage the other sectors. The Analysis (

see

ADDRESSES

) indicates that the charter sector is the second largest (after the commercial fishery) of all the sectors using the halibut resource in the two IPHC regulatory areas to which this rule applies. Whereas growth of the commercial fishery sector is constrained by the IFQ program and catch limits stipulated by the IPHC, growth in the non-commercial sectors is not similarly constrained. This presents no fishery management problem provided that all

of the non-commercial sectors exhibit relatively static growth over time such that year-to-year assumptions about their harvest prove to be correct. The charter halibut fishery has grown in recent years, however, depending on the demand for halibut by charter vessel anglers. Although this rule is not designed primarily to limit the harvest by the charter halibut fisheries, it will make existing and future harvest restrictions more effective because conservation gains from individual harvest restrictions will not be eroded by unlimited growth in the fleet of charter vessels fishing for halibut. In this manner, this rule will contribute to the achievement of the overall target harvest rate of halibut established by the IPHC.

Avoids excessive share.

An excessive share of halibut fishing privilege is not defined in either the Halibut Act or in the National Standard 4 guidelines. The latter states simply that an allocation must deter any entity from acquiring an excessive share of fishing privileges, and avoid creating conditions that foster inordinate control by buyers and sellers (50 CFR 600.325(c)(3)(iii)).

This rule sets an excessive share standard of five charter halibut permits. Existing businesses that initially qualify for more than five permits will be able to continue business at levels above this excessive share standard; however, they will be prevented from acquiring more permits than their initial allocation. Transfers of a permit or permits that will result in the person, business, or other entity receiving the permit(s) holding more than five permits will not be approved by NMFS with limited exception.

Some consolidation of charter halibut permits may occur under this rule, but will be limited by the five-permit excessive share standard. Further, the number of businesses that are allowed an initial allocation of permits in excess of this standard will not increase. A 10 percent ownership criterion will apply to prevent a corporation from exceeding the excessive share standard by owning or controlling subsidiary businesses each holding the maximum number of permits. The 10 percent ownership criterion is the same as that used for implementing the American Fisheries Act and defined at 50 CFR 679.2. Under this definition, two entities are considered the same entity if one owns or controls 10 percent or more of the other. Hence, an excessive share of privileges to operate charter vessels fishing for halibut is prevented and the dominance of any businesses in the charter halibut fishery will not be allowed to increase any more than it is at the time of initial allocation of permits.

Comments and Responses

This action was published as a proposed rule on April 21, 2009 (74 FR 18178), and public comments on it were solicited until June 5, 2009. NMFS received 166 comment submissions containing 157 unique comments. These comments were reviewed, organized into seven topical categories, and responded to as follows:

Fairness and Legal Authority

Comment 1:

The proposed rule does not meet the National Standards for Fishery Conservation and Management as defined in the Magnuson-Stevens Act (16 U.S.C. 1851(a)(4)).

Response:

This action is authorized by the Halibut Act at section 773c, not the Magnuson-Stevens Act. Section 773c(c) of the Halibut Act provides the requirements that must be met by the Council and the Secretary when developing and implementing regulations for halibut. The Secretary has found this rule to be consistent with this requirement of the Halibut Act as explained above under the heading “Consistency with Halibut Act.”

Comment 2:

The Halibut Act of 1982, (at section 773c(c)) states that rules shall be fair and equitable and they shall not discriminate among participants.

Response:

The Halibut Act at the section cited actually prohibits discrimination between residents of different States. This rule does not discriminate between residents of different States as the criteria for an initial allocation of charter halibut permits applies to all applicants regardless of the State in which they reside. This action complies with the requirements of the Halibut Act, as discussed in the “Consistency with Halibut Act” section above.

Comment 3:

Several comments stated that the proposed rule is not fair and equitable because it requires applicants to demonstrate participation in the halibut charter fisheries in 2004 or 2005 (historical participation period). The comments note that the historical participation requirement illegally discriminates against businesses that are currently in operation because:

• The proposed rule would impose

ex post facto

regulations, contrary to the Constitution of the United States;

• The Magnuson-Stevens Act at 16 U.S.C. 1853(b)(6) states that when implementing a limited entry program, present participation and historical practices must be considered. It does not say anything about historical participation on which NMFS is basing this rule;

• While obtaining all relevant licenses and permits to operate a charter business, there was no notification by the licensing agencies that rules were being made that would retroactively disallow charter operators from continuing to operate their businesses;

• Many small business owners will not have the right to appeal under the unavoidable circumstances provision as the proposed rule states that an applicant must demonstrate that it had a specific intent to participate in the qualifying period; and

• The proposed rule clearly shows the Council's intention to act favorably towards the charter vessels that operated during 2004 and 2005 by excluding charter businesses that started operating between 2006 and 2009.

Response:

This rule is not illegal or contrary to the U.S. Constitution. An

ex post facto

law is a law passed after the occurrence of an event or action which retrospectively changes the legal consequences of the event or action. That is not the case with this rule. This rule does not make charter halibut fishing that was legally performed after 2005 and before the effective date of this rule illegal, but instead establishes specific eligibility criteria for receiving a harvest privilege. Hence, this rule does not change the legal consequences of past participation in the charter halibut fishery. Persons who entered the fishery after 2005, however, had constructive notice, published February 8, 2006 (71 FR 6442), that they were not assured of future access to the charter halibut fishery if a management regime, such as the one implemented by this rule, were implemented.

The Council and the Secretary considered historical practices in the charter halibut fisheries in Areas 2C and 3A by looking at the number of charter vessel businesses and vessels participating in these fisheries, the range in the number of logbook fishing trips made, and the number and distribution of communities in which these fishing trips terminated in 2004 and 2005. These factors are reasonable measures of dependence on the charter halibut fisheries.

see also

Section 2.8 of the Analysis at

ADDRESSES

Comment 17:

The moratorium is legally vulnerable.

Response:

As indicated above, NMFS finds this rule to be consistent with applicable law (

see

discussion above under the heading “Consistency with Halibut Act”). This rule was developed through a public process used by the Council and NMFS to formulate and implement fishery management policy. In doing so, the Council and NMFS heard from members of the public, including representatives of the charter vessel sector. Some members of the public were in favor of this action, others were not. NMFS respectfully understands that some charter business owners are opposed to this rule.

Comment 18:

The Analysis states on page 153, paragraph 2 that “[t]he moratorium is not expected to limit the number of halibut charter trips in the near future.” Wasn't the “growing number of charter fleets” the main reason this moratorium was being pushed by the Council and NOAA?

Response:

As stated in the Analysis (

see

ADDRESSES

), NMFS does not expect the limited access system established by this rule, by itself, to limit the growth in charter halibut trips, charter halibut harvest, or charter vessel anglers over the short term. Instead, this rule is expected to stabilize the charter halibut sector by curtailing the growth in numbers of charter vessels in Areas 2C and 3A and thereby improve the effectiveness of other management measures, now and in the future, to control the rate of halibut harvest.

Comment 19:

The Environmental Assessment/Regulatory Impact Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) states on page 58,

“It is possible that commercial IFQ halibut fishermen could also benefit, if the constraint slows the growth in charter catches in the future. However, given the excess capacity that is likely to exist in the fleet after implementation of the moratorium, this outcome is unlikely, all else equal.”

If the Council is attempting to limit the fleets then how could this scenario be unlikely? If the Council is attempting to limit the fleets then why do they anticipate excess capacity in charter fleets after the implementation of the proposed rule? If this proposed rule is not expected to constrain harvests, why is it being proposed?

Response:

It is not possible to determine the optimal amount of capacity in the charter vessel sector with available data. The intended effect of this action is to curtail growth in capacity. Although limited entry on the number of vessels is a commonly used fishery management tool to limit capacity growth, it is an imprecise tool because individual operators can increase capacity to increase effort over historical levels. For example, charter vessels operating under this rule may increase the number of fishing trips they make, increase the average number of anglers they carry, or improve their ability to find halibut. All of these outcomes and others are possible under this limited access system, in which case the actual harvest of halibut by the charter vessel sector may actually increase over current levels.

Limited entry provides a basis for the development of a long-term comprehensive effort limitation program for the charter halibut fishery, if it is determined that such a program is needed in the future. The RIR (at page 46) prepared for this action determined that limited entry could serve to better stabilize fishing effort than the status quo, because only permitted vessels would be capable of increased effort. Further, a reduction in fishing capacity will occur as non-transferable permits are eliminated as their holders leave the fishery.

Comment 20:

The Federal Government has a duty to not discriminate. The summary of costs and benefits table in the EA/RIR/IRFA presents the reasons why the Council chose Alternative 2. However, this table is extremely biased. For example, in columns 3 and 4, the table states, “Limiting the number of vessels that may operate would help limit competition. * * *” Why limit competition, especially if that may lead to business failure for some operations?

Response:

NMFS has a duty to not discriminate based on constitutional and statutory rights. The response to Comment 2 describes why this action is not discrimination against charter operators that do not receive a charter halibut permit on initial allocation.

The quote from Table 42 on page 156 of the EA/RIR/IRFA (

see

ADDRESSES

) presented in the comment is incomplete. The complete sentence reads, “Limiting the number of vessels that may operate would help limit competition from new entrants in the fishery, but competition from existing permit holders is expected to keep businesses from earning above normal profits.” The statement makes clear that although the charter halibut permit program will reduce competition from new entrants, the program is not expected to prevent competition within the charter halibut sector. As discussed in the response to Comments 21 and 43, NMFS anticipates that permit holders will have sufficient opportunities to ensure that capacity meets demand for halibut charters in Areas 2C and 3A.

Comment 21:

The rule unfairly restricts guided access to the resource while not considering unguided access. The Halibut Act requires that “if it becomes necessary to allocate or assign halibut fishing privileges among various U.S. fishermen, such allocation shall be fair and equitable to all such fishermen.” Many anglers require guided services for financial, health, safety, or other practical reasons. This restriction violates the “fair and equitable” provisions of the Halibut Act because guided recreational anglers are being restricted while there is no such limitation proposed for unguided recreational anglers.

Response:

This rule is consistent with the fair and equitable requirement of the Halibut Act (

see

discussion above under the heading “Consistency with Halibut Act”). The fair and equitable requirement of the Halibut Act does not require that different sectors of the halibut fisheries be managed using the same tools or restrictions. In Areas 2C and 3A, the charter halibut fishery is the second largest, in terms of volume of halibut, after the commercial setline fishery. The non-guided sport fishery has the third largest harvest in both areas. Of these three harvesting sectors, the charter halibut fishery has demonstrated growth in participation over time while the commercial and non-guided recreational sectors have declined or remained relatively steady. This information was in the Analysis (

see

ADDRESSES

) considered by the Council and the Secretary when taking this action.

This rule will not unreasonably restrict guided angler access to the halibut resource. NMFS estimates that 502 charter halibut permits will be issued to charter businesses operating in Area 2C, of which 347 (or 69.1 percent) will be transferable, and 418 charter halibut permits will be issued to charter businesses operating in Area 3A, of which 319 (or 76.3 percent) will be transferable. In Area 2C, the estimated total (for transferable and non-transferable permits combined) angler endorsements on all charter halibut permits is 3,028 of which 2,152 will be associated with transferable permits. In Area 3A, the estimated total angler

endorsement on all charter halibut permits is 3,577 of which 2,834 will be associated with transferable permits.

Available data indicate that charter vessels in the guided sport fishery for halibut in 2008 averaged 36 trips per season in Area 2C and 38 trips per season in Area 3A. Using all endorsements prior to the expiration of non-transferable permits, charter vessels under this rule would have to average 52 trips in Area 2C and 56 trips in Area 3A to supply the aggregate number of fishing trips supplied in 2008. This estimate does not include the potential supply from the community charter halibut permits and endorsements associated with the CQE program. In Area 2C, a potential total of 72 permits and 432 angler endorsements may be added, and in Area 3A, a potential total of 98 permits and 588 angler endorsements may be added under the CQE program. These figures indicate that the charter halibut industry will be able to meet recent charter vessel angler demand levels with the number of permits expected to be issued under this rule. Hence, no restriction in guided angler access to the halibut resource is expected under this rule.

Comment 22:

Two of my charter vessel captains will come up a year short of the 2004-2005 qualification period. I truly feel my history in this business is long enough to warrant receiving a moratorium permit.

Response:

The limited access system established by this rule allocates charter halibut permits to the person that meets the eligibility requirements during the qualifying and recent participation years. If a sport fishing business meets the eligibility requirements, then it likely would receive one or more charter halibut permits and could continue to hire charter vessel captains as it has in the past. Hence, charter vessel captains who do not meet these requirements would not be eligible for an initial allocation of a charter halibut permit although the businesses that they worked for may be eligible for a permit(s). Nevertheless, persons not eligible for an initial allocation of a charter halibut permit(s), may be eligible to receive a transfer of a charter halibut permit from a person with a transferable permit.

Conservation

Comment 23:

The Alaska charter fleet has become overcapitalized in the last decade and is rapidly expanding. The fleet should not be allowed to grow and negatively impact current users and endanger the sustainability of the fishery by exceeding the GHL. Charter operators must become a part of the conservation effort and regulations limiting access are long overdue. NMFS should limit the number of participants in the commercial sport halibut industry and reduce the number of fish they catch. Too many charter businesses are competing for too few customers, which results in overcrowding, a lower quality Alaskan experience for travelers, and increased pressure on local halibut populations.

Response:

This rule limits the number of charter vessels that may participate in the charter halibut fishery and the number of charter vessel anglers that may catch and retain halibut on charter vessels. This rule is not intended, by itself, to reduce the charter harvest of halibut or the number of fish each angler may catch and retain.

The IPHC takes into account halibut removals by all user groups in establishing the constant exploitation yield (CEY). Past increases in charter halibut harvests have created conservation and allocation concerns that the Council and NMFS have taken steps to address, but the halibut resource in Area 2C and 3A is being managed in a sustainable manner. NMFS does not have information to verify or refute the claims that charter businesses are competing for too few customers, that halibut fishing grounds are overcrowded, or that charter vessel anglers are experiencing low quality charter fishing trips. Finally, NMFS does not have scientific information to discern local depletion or attribute it to any particular user group.

Comment 24:

Near-shore depletion of halibut and gear conflicts have increased since the implementation of the IFQ program for commercial setline fishermen. Before the IFQ program, large commercial vessels fished farther from shore than they do today. Now, under the IFQ program, commercial fishermen do not have to go as far offshore to fish for halibut and there is always some form of gear in our near shore areas off Sitka. Protection of halibut would be improved with short specified open seasons for commercial halibut fishing. Charter fishing is not the problem.

Response:

Further restrictions on the commercial fishery would not achieve the objective of this action and are outside the scope of this rule. NMFS does not have sufficient scientific information to discern localized depletion of halibut or, if it exists, to attribute it to a particular user group in Area 2C or 3A.

Comment 25:

This rule has nothing to do with conservation or management of the resource and concerns allocation only. Page 18191 of the proposed rule states that, “the NMFS Assistant Administrator has determined that this proposed rule is necessary for the conservation and management of the halibut fishery.” The rule places no direct restrictions on guided anglers or their overall harvest, only limits on the number of boats available to transport guided anglers to the fishing grounds. The Environmental Assessment states, “[t]he proposed action addresses access to the Pacific Halibut resource. There are no expected impacts on the halibut subsistence, personal use, or unguided sport fisheries because these takes are not limited and are not affected by any allocation decisions in other sectors * * * [t]here are no significant impacts on the halibut stock expected from the proposed action.” National Standard 5 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.” How does this action meet National Standard 5?

Response:

The National Standards in the Magnuson-Stevens Act (section 301) do not apply directly to this rule because it is authorized under the Halibut Act. Two connections exist between the Halibut Act and the Magnuson-Stevens Act, however. First, the Halibut Act references section 303(b)(6) of the Magnuson-Stevens Act, and second, the Halibut Act uses virtually the same language as National Standard 4 (section 301(a)(4)) of the Magnuson-Stevens Act. The language at National Standard 4 is particularly relevant to this comment in that it requires conservation and management measures that allocate or assign fishing privileges (as this action does) to be “reasonably calculated to promote conservation” among other things. The discussion above under the heading “Consistency with Halibut Act” describes how this rule meets this conservation standard. In brief, this action is intended to stabilize the charter vessel industry, which will enhance the effectiveness of existing and potential future harvest restrictions. This will assist the IPHC to meet its overall harvest rate targets.

The EA finds that the action will not have significant environmental impacts. The purpose of the EA is to determine whether the action will have a significant impact on the human environment, and whether an environmental impact statement is necessary. The Analysis for this action evaluated the environmental impacts of the action and found that it would not have a significant environmental

impact. This conclusion is not inconsistent with the statement that this action is generally necessary for conservation and management purposes.

Comment 26:

NMFS inaccurately implies that this is a conservation measure in the proposed rule. It simply is not. American sportsmen and women have one of the best records when it comes to conservation. Reducing recreational angler access will not increase conservation or reduce the total allowable catch. Those available fish will only be reallocated and harvested by other sectors, primarily the commercial sector.

Response:

As discussed above under the heading “Consistency with Halibut Act,” this action is reasonably calculated to promote conservation, as required by the Halibut Act. Although biological conservation is not its principal purpose, the effectiveness of other biological conservation measures will be enhanced over time by this action. Conservation and allocation management measures often are inextricably linked. Hence, although the intent of this action is not to directly reduce the halibut harvest by charter vessel anglers in Areas 2C and 3A in the short term, it will enhance conservation of the halibut resource in the long term.

Also see

the response to Comments 21 and 43.

Comment 27:

The proposal for the charter limited entry program has been written to specifically list numbers relating to the charter GHL yet leaves out that the longliners receive a larger amount of the halibut quota than charter and private anglers. These numbers would show the imbalance between the charter fleet and the commercial fleet and highlight that limiting the charter fleet is not about conservation.

Response:

The IPHC is generally responsible for the conservation of the halibut resource. In Area 2C, the IPHC preliminary estimate of the halibut harvest in 2008 was that the commercial setline fishery harvested 59 percent of the total removals by all sectors (IPHC 2009 Annual Meeting “bluebook” Table 1). The second largest harvest in Area 2C in 2008 was made by the sport fishery (guided charter and non-guided combined) at 30 percent of the total halibut removals. Of that 30 percent, over half is harvested by charter vessel anglers. Hence, in Area 2C, about 89 percent of the total halibut removals can be attributed to the combined commercial and sport sectors. By comparison, in Area 3A, the commercial setline fishery for halibut in 2008 was estimated to harvest 70 percent and the combined sport fishery was estimated to harvest 16 percent of the total halibut removals. These fisheries account for about 86 percent of the total halibut removals in Area 3A. Hence, the regulatory burden justifiably falls mostly on the commercial and sport (charter vessel) harvesting sectors. The commercial setline sector has been managed under a limited access system since 1995. Although it is less than the commercial setline fishery, the combined sport harvest (comprised predominately by the charter vessel sector) is not trivial in Areas 2C and 3A.

Comment 28:

There is no mention of the amount of wastage and incidental bycatch of halibut caused by the commercial fleet. The issue of bycatch in the commercial setline fishery is important also because the numbers of yelloweye rockfish and lingcod that are pulled off a single commercial set significantly exceed the numbers taken by charter or private anglers, who are only allowed two per person.

Response:

The comment raises several different bycatch issues. One is the bycatch of rockfish and lingcod in the commercial setline fishery directed at halibut. The commercial setline fishery is managed under the IFQ program. Regulations implementing this program generally prohibit the discard of rockfish and Pacific cod when IFQ halibut or IFQ sablefish are on board the vessel (§ 679.7(f)(8)). These regulations create an incentive for commercial setline fishermen to avoid areas of high rockfish bycatch. Although bycatch of lingcod is not addressed by the IFQ regulations, a similar incentive exists unless an IFQ fisherman has a market for lingcod. Ideally the bycatch of these species should be adequately controlled by economic incentives. However, this issue is beyond the scope of this rule.

The second issue raised is waste of halibut in the commercial setline fishery for halibut. The preliminary estimate of wastage in 2008 in Areas 2C and 3A amounts to about two percent and three percent, respectively, of the total halibut removals in each area. Wasted halibut have no value to the commercial halibut fishery, which already has a strong economic incentive to minimize this source of halibut mortality.

The third issue concerns the incidental removals of halibut in commercial fisheries targeting other species. The bycatch of halibut in Area 2C fisheries for other species is estimated to account for only three percent of the total removals from that area, and in Area 3A, bycatch was estimated to account for about nine percent of the total removals from that area.

Comment 29:

Four comments support the charter halibut moratorium, but suggest that further restrictions are needed to limit charter angler harvest in Southeast Alaska to address localized depletion.

Response:

NMFS notes the support for the charter halibut permit program. NMFS does not have sufficient scientific information to discern localized depletion of halibut or, if it exists, to attribute it to a particular user group in Area 2C or 3A. This rule is not designed primarily to limit the harvest by the charter halibut fisheries, but it will make existing and future harvest restrictions more effective because harvest restrictions in other regulations will not be eroded by unlimited growth in the fleet of charter vessels fishing for halibut. In this manner, this rule will contribute to the achievement of the overall target harvest rate of halibut established by the IPHC.

Comment 30:

I support limited access as it will help limit over-fishing in the charter sector. The proposed limited entry program provides part of the sustainable management equation. As the proposed rule indicates, the charter sector has exceeded its guideline harvest level in Area 2C for the past 5 years and in Area 3A for the past 3 years. Charter overharvest is contributing to resource declines at both the local and the area-wide level, yet charter operators object that their businesses will be unsustainable if conservation measures are implemented. This downward spiral can only result in resource depletion unless both capacity and effort are curtailed.

Response:

This action is not intended to limit charter angler harvest to the GHL in Areas 2C and 3A. By stabilizing growth in the charter industry, however, this rule will enable other harvest control regulations to be more effective.

Comment 31:

Charter sport fishing is a very effective form of commercial fishing. The charter sector continues to overfish its quota every year, which is hurting the stocks and is unfair to all halibut fishermen. It is irresponsible resource management to allow this fishery to continue to grow while the commercial setline fishery is limited. Southeast Alaska commercial setline halibut fishermen have seen quotas cut in half the past four years. The annual excessive harvest by the charter sector reduces future harvests of both the commercial setline fishery and of local residents doing sport or subsistence fishing for halibut to feed their families. The charter fishermen should acknowledge their responsibility for conservation. If both the commercial

and charter fleets do not work together, the future of halibut fishing in Southeast Alaska is in jeopardy.

Response:

NMFS agrees that cooperation among all fishermen and management agencies is essential to assure sustainable fisheries. The charter industry does not have a catch limit quota as does the commercial setline industry. Instead, the GHL serves as a benchmark for monitoring the charter vessel fishery's harvests of Pacific halibut in Areas 2C and 3A. By itself, the GHL does not limit harvests by charter vessel anglers.

This rule is designed to limit the number of charter vessels that may participate in the charter halibut fishery. Although this rule is not designed primarily to limit the harvest of the charter halibut fisheries, it will make existing and future harvest restrictions more effective because conservation gains from individual harvest restrictions will not be eroded by unlimited growth in the fleet of charter vessels fishing for halibut.

Comment 32:

The charter halibut fishermen are fishing during the summer for the most part, a time when the large female halibut (males seldom reach a size over 30 pounds) are in shallow water. Instead of harvesting a cross-section of the biomass as the commercial fleet does, the charter halibut fleet targets the large females that are the future of this resource. This causes great concern for the health of halibut stocks. The biologists have noted the truncated age class structure and lack of large females in the Southeast Alaska halibut stocks.

Response:

This comment presumes that large halibut generally are females that contribute disproportionately to the reproductive potential of the stock, and that harvest of these females will substantially decrease future juvenile halibut abundance. To test this presumption in 1999, the IPHC reviewed options for a maximum size limit of 60 inches (150 cm) in the commercial setline fishery and concluded, based on the research at the time, that preservation of large halibut in the setline fishery did not add substantial production to the stock. Applying the limit to the sport fishery would have an even smaller benefit (if any) because the sport fishery harvest is smaller than commercial harvest. Suggestions for a maximum size limit in both fisheries, commercial and sport, could be considered again by the IPHC but are beyond the scope of this rule.

Comment 33:

Virtually every fishery in Alaska is sustainably managed under a State “limited entry” program. All are viable and allow for new entrants as others choose to leave the fishery. Long term stability in these fisheries has been achieved since the inception of this management plan by Alaska in the 1970s, and world-class fisheries have resulted from the ability of fishery managers to exercise conservation measures through the State's limited entry program. It is inconceivable that any fishery can be efficiently or sustainably managed without all user groups exercising restraint to avoid over-utilization of its resource. There are numerous examples worldwide of fisheries, which can be shown to exemplify the depletion of fish stocks because of over-harvesting practices.

Response:

NMFS acknowledges the comment and notes that limited entry has been used as a fishery management tool in Alaska since 1973. Pacific halibut fisheries, however, are not managed by the State of Alaska. The Halibut Act authorizes the Council, with respect to halibut fisheries in and off Alaska, to develop limited access regulations and for the Secretary to approve and implement them, as is done by this action.

Comment 34:

We oppose the proposed limited access system to cap the number of halibut charter boats and anglers. Instead, we support an increase in the GHL for the charter fleet in IPHC Areas 2C and 3A.

Response:

Changes to the GHL in Areas 2C and 3A are not within the scope of this action and would not achieve the objective of this rule. Changes to the GHL should be suggested to the Council for potential recommendation to the Secretary.

Comment 35:

The proposed rule indicates that the Council's policy is that the charter vessel fisheries should not exceed the GHLs; however, no constraints were initially recommended by the Council or imposed on the charter vessel fisheries for exceeding a GHL. Examination of the GHL final rule reveals that the GHL is advisory in nature, requiring no action by the Council, NMFS, or the Secretary other than its annual publication in the

Federal Register

. Since the GHL is not an allocation, there has never been analysis by NMFS or subsequent determination by the Secretary of the fairness and equity of the GHL as an allocation. Until an allocation has been set in compliance with the requirements of the Halibut Act, the limited access program described in the proposed rule is premature and contrary to the law.

Response:

The GHLs developed by the Council and approved by the Secretary represent an allocation policy. A final rule implementing that policy was published August 8, 2003 (68 FR 47256). The rule implementing the GHLs was determined to be consistent with the Halibut Act including its “fair and equitable” provision. The potential effects of this allocation policy were addressed in an analysis that supported that action.

As explained in the preamble to the proposed rule (74 FR 18178, April 21, 2009) on page 18179, the Council's policy is that the charter halibut fisheries should not exceed the GHLs established for Areas 2C and 3A. However, the GHLs themselves do not limit the harvest of the charter halibut fishery. A separate regulatory action is necessary to impose such a harvest restriction. NMFS promulgated a harvest restriction on the charter halibut fishery in Area 2C most recently on May 6, 2009 (74 FR 21194). That action was determined to be consistent with the “fair and equitable” standard of the Halibut Act. Although not directly related to that harvest restriction, this rule also is determined to be consistent with the Halibut Act (

see

discussion above under heading “Consistency with Halibut Act”).

Comment 36:

The claim in the proposed rule that the fishery CEY is the maximum catch for an area's directed commercial fixed gear fishery is false. The fishery CEY is not the maximum catch for an area's directed fishery. The fishery CEY is the basis for IPHC staff recommendations that result from application of a buffering algorithm known as “Slow-Up Fast Down” (SUFD) to the fishery CEY in a predictable fashion for each IPHC regulatory area. At the IPHC annual meeting, IPHC commissioners review staff recommendations as well as Conference Board and Processor Advisory Group recommendations. The commissioners then decide on catch limits, which rarely if ever equal the fishery CEY. SUFD also buffers any change in the fishery CEY, be it from a decrease in biomass or an increase in non-commercial removals, in both Slow-Up and Fast-Down years. The statement should be corrected in the final rule.

Response:

NMFS agrees with this explanation. The preamble to the proposed rule did not elaborate on the SUFD policy because it is an additional complexity to the IPHC process that is irrelevant to this limited access action. Moreover, the preamble to the proposed rule never stated that the fishery CEY was equal to the commercial catch limit. The principal message in that part of the proposed rule preamble was that the IPHC takes into account all non-commercial sources of halibut mortality in setting the catch limit for the commercial setline fishery. NMFS

acknowledges that the SUFD policy technically is part of this fundamental process.

Economic Impacts

Comment 37:

This action seeks to limit the guided angler catch when it should be limiting the commercial catch. This rule limits guided angler catch, leaving commercial longliners with minimal limits.

Response:

This rule is not designed to limit the harvest of halibut by charter vessel anglers, but rather to curtail the growth of fishing capacity by the charter halibut fishery. Commercial harvests are heavily regulated by the IPHC and NMFS through the IFQ program. Commercial fishermen have made contributions to resource conservation and, for example, have had their catch limit cut by just over half in Area 2C between 2005 and 2009.

Comment 38:

Several comments expressed concerns about the impacts of the growth of the charter halibut fishery on Pelican, Petersburg, and Gustavus in Southeast Alaska (IPHC Area 2C). These comments indicated that growth of the guided sport fishery destabilized the local economy in various ways and in some cases expressed support for this limited entry program. Destabilizing impacts cited include localized depletion, use of community resources by lodges located outside city limits and thus beyond city taxation, displacement of local residents from dock facilities in the summer by heavy charter vessel activity, sliming of docks, and environmental concerns as guided operations began to operate in Glacier Bay National Park in May through September. These concerns included habituating the bears and sea lions and endangering the food source of the killer whale resident population.

Response:

Charter industry harvest levels have remained well above the GHL in Area 2C. NMFS acknowledges that the growth of the charter halibut fishery since the late 1990s has led to changes, competition with other resource user groups, and social tension in Southeast Alaska communities. This action does not address all of these concerns. The purpose of this action is to stabilize the charter halibut fishery by limiting the future growth in numbers of charter vessels that may participate in the fishery. NMFS notes, however, that the charter halibut fishery is a legitimate resource user that provides economic benefits to Alaskan coastal communities and to the Nation. Further, this program will not by itself limit the number of charter vessel anglers that may use sport fishing guide services or their harvest of halibut. Instead, this program will define and limit the number of charter operators. Potential future regulations to address the issues raised by this comment will be easier to implement because of this program.

Comment 39:

My community has a community quota entity program and is entitled to use it under the final rule but does not have the financial resources to use it effectively.

Response:

Specified Area 2C communities may receive up to four community charter halibut permits per community and specified Area 3A communities may receive up to seven permits per community issued to CQEs at no cost. Some costs are likely, however, in establishing and administering CQEs. Growth of a charter halibut fishery beyond the CQE permits provided by this rule, however, would require the purchase of transferable charter halibut permits. When NMFS originally authorized CQEs to acquire commercial halibut or sablefish quota share under the IFQ program, the State of Alaska responded by modifying its fisheries loan programs to provide financing for the purchase of halibut and sablefish quota share by CQEs. The State may adapt this program for loans to allow CQEs to acquire charter halibut permits. Also, CQEs eligible to receive community charter halibut permits may consider joint venture arrangements with private sector partners to share the costs of forming and operating a CQE.

Comment 40:

For many years there has been significant discussion and motions regarding charter IFQs, moratoriums, limited entry programs,

etc.

These discussions and motions, in some cases passed and rescinded, have caused confusion in the charter halibut industry. This confusion has likely caused charter operators to hold on to businesses that they would have retired from or would have sold long ago. This affected the natural management of charter operations and is a factor that you have not considered.

Response:

The Council and NMFS considered speculative participation in the charter vessel industry when developing this rule. Uncertainty about the intent of the Council and uncertainty about the potential criteria may have led some individuals to participate in the fishery at levels that they hoped would qualify them for a future permit, when they might otherwise not have operated. This type of speculative activity could have led to increased effort levels in the guided sport fishery. The publication of a control date of December 9, 2005 (71 FR 6442, February 8, 2006), was intended to discourage such speculative behavior. The use of minimum participation thresholds to qualify for permits and for transferable permits should further reduce the control of permits by speculative operators.

The Council subsequently developed and recommended this limited access system using 2005 as the last year in which at least minimal participation in the charter halibut fishery will qualify a person for a charter halibut permit. The Council took over a year to develop this program and listened to substantial public testimony. Anyone entering the charter halibut fishery during this time should have been well aware of the speculative risk of doing so.

Comment 41:

There has been a steady decline in the number of halibut charter vessels in Valdez. For example, in 1995 there were approximately 35 halibut charter boats operating out of Valdez. Last summer there were fewer than 20. This is not due to the lack of customers, but to the long distances we are being forced to travel to find quality halibut fishing grounds for our clients, and the cost to operate a vessel under these circumstances. The proposed moratorium will cripple the economy for seasonal businesses that rely on tourists and locals alike to come to Valdez and go fishing. If anything you should make provisions to allow a small expansion of charter vessels in Valdez. Similarly, another comment stated that aside from the CQE provision, some growth, particularly in places like Kodiak, Yakutat, and Whittier, should be allowed.

Response:

Valdez, Kodiak, Yakutat, and Whittier, Alaska, are in IPHC Area 3A. A charter halibut permit endorsed for Area 3A may be used anywhere within that area. This rule allows for market-based responses to changing fishing conditions in different parts of Area 3A. As halibut fishing conditions or business conditions fluctuate, holders of Area 3A charter halibut permits could enter or leave the charter halibut fishery based in any Area 3A community. Hence, no special allowance for expansion of the charter halibut business is necessary as this rule will not inhibit such expansion. NMFS expects also that holders of charter halibut permits will shift their operations to the communities where the demand for guided angling is greatest and can be served most profitably.

Comment 42:

The proposed action will suppress private enterprise and competition, creating monopoly power that will trigger anti-trust laws. The Council, dominated by commercial fisheries interests, is privatizing a public resource by prohibiting free enterprise and allowing selected individuals or

companies to own a part of the public resource to which they are not entitled.

Response:

A monopoly is exclusive control of a commodity or service in a particular market that makes possible the manipulation of prices. This action does not create a monopoly in the charter vessel industry. NMFS estimates that about 231 businesses will qualify for charter halibut permits in Area 2C and 296 businesses will qualify for charter halibut permits in Area 3A. These qualifying businesses likely will receive a total of about 502 transferable and non-transferable permits in Area 2C and 418 transferable and non-transferable permits in Area 3A. With this number of businesses competing to provide sport fishing guide services for halibut fishing in each area, none is likely to be able to control the market for these services or manipulate prices. Further, this rule has an excessive share provision that prevents any one business or individual from acquiring more than five permits by transfer (

see

discussion above under the heading “Consistency with Halibut Act”). Although more than five permits may be initially allocated to a business, consolidation within the charter halibut fishery will be no more than it was during the qualifying and recent participation years. Thus NMFS expects that the charter industries in Areas 2C and 3A will be competitive, and no anti-trust issues are expected.

This rule does not privatize the halibut resource. A charter halibut permit creates no right, title, or interest in any halibut before the halibut is harvested by a charter vessel angler on the vessel for which the operator holds a permit. A charter halibut permit confers no right of compensation to the holder of the permit if it is revoked, limited, or modified. A charter halibut permit is considered a grant of permission to the holder of the permit to engage in the charter halibut fishery by allowing charter vessel anglers on the vessel operated by the permit holder to catch and retain halibut. Anglers may continue accessing the halibut resource through non-guided sport fishing which is not affected by this rule.

This action does not interfere with free enterprise. It provides use privileges that, with respect to transferable charter halibut permits, create a climate for the effective functioning of a free enterprise market for sport fishing guide services. Markets function well when they are founded on clearly defined rules that explain the nature of the privileges each market participant has to the scarce resources needed to operate their businesses. This rule creates permits that will provide fishing privileges and provide the charter halibut fishery stability necessary for effective conservation and management of the halibut resource.

Comment 43:

This action will limit the number of guided charter operations and the ability of this industry to meet the demand for guided charter fishing. The limit on supply of guided angling opportunities will mean that fewer persons will be able to take advantage of guided services and that the cost of these services will increase. This will reduce the benefits to anglers and prompt some anglers, who would otherwise have used guide services, to substitute less attractive guided or non-guided fishing activity. Reduced guided angler activity will have adverse economic impacts on the guided industry and on regions of Alaska where guides are based. There will be fewer jobs and less income, and this will hurt local businesses that depend on revenue generated by charter operations.

Response:

Although the number of vessels with charter halibut permits operating under this rule is limited, their passenger carrying capacity exceeds current 2008 levels of participation. The numbers of charter halibut permits and associated endorsements issued under this rule create significant opportunities for charter halibut operations to expand their capacity to meet existing and higher levels of angler demand for guided halibut fishing.

Opportunities likely exist for operators to increase the number of anglers they carry under this rule. NMFS expects that, if charter vessel angler demand warrants, operators will increase investments in their fishing vessels to increase their fishing efficiency, the average number of clients they carry (subject to the endorsement and other licensing restrictions), and the number of days each season that their vessels operate.

The Analysis (

see

ADDRESSES

) indicates that the number of permits issued under this rule will allow permitted vessels to meet 2008 levels of charter trips by increasing the average number of trips they make in Area 2C from 36 to 52, and in Area 3A from 38 to 56. These levels of increased activity are within the capacity of the charter halibut fleet that will have permits under this rule. Further increases in numbers of trips also are possible. Members of the charter vessel industry indicated in public testimony to the Council that the charter fishing season lasts for about 100 days. Many of these trips would be half day trips so that multiple trips might be made per day. Even after assuming for days off due to bad weather and mechanical breakdown, it is likely that the number of days fished could double. Hence, it is not apparent that this rule will result in constraining operations of charter vessels with charter halibut permits or in constraining guided angling opportunities (

see

also response to Comment 21).

As discussed in the Analysis, NMFS expects, over a wide range of demand conditions, that increasing the number of passengers in a trip, or increasing the number of trips in a season, can be done at relatively constant incremental cost. This suggests that charter halibut permits under this rule can meet demand without price increases.

Comment 44:

Halibut are a common property resource and everyone is entitled to make a living off a resource that belongs to no one person or group. Management is necessary but it should not stifle capitalism. This limited entry program is solely about taking more away from the general public who have a right to this resource. Guided angler caught halibut are worth five times as much to the State and fisherman as a commercial fish. Management should seek to maximize the value of the fish.

Response:

NMFS agrees that the Pacific halibut resource in Areas 2C and 3A is a common property resource. As such, all resource users should be benefitted by fishery management policies implemented by NMFS. This action does not change the allocation of halibut between sport or commercial users. The U.S. Government is authorized to regulate access to this resource consistent with the Halibut Act and other applicable law. This action creates a limited set of access rights or privileges for a resource that cannot support unlimited access. Any citizen of the United States will be free to enter the guided angling business in Alaska and to guide charter vessel anglers in harvesting halibut by purchasing the relevant permits. NMFS estimates that about 231 charter vessel businesses will qualify for charter halibut permits in Area 2C and about 296 charter vessel businesses will qualify for charter halibut permits in Area 3A. Many of these businesses will qualify for transferable charter halibut permits, and a robust market for these permits is expected to develop. Therefore, this rule is not likely to stifle capitalism.

The public's access to the halibut resource is not diminished by this rule. The general public may access this resource as it does now through purchases of halibut in commercial markets (

e.g.

, grocery stores, restaurants), and through non-guided and guided sport fishing. The intent of

this rule is to stabilize the growth of charter vessel operations in the guided sport fishery for halibut. Relative to the present, this rule will not diminish charter vessel angler opportunity in the foreseeable future. Instead, it is designed to restrict the entry of additional charter halibut operations.

Comment 45:

The analysis in the EA/RIR/IRFA is inadequate. There is no information about the adverse impacts this action will impose on a large percentage of the operations in the fleet. It does not include information about operations that entered the business in the years from 2006 to 2009. The IRFA does not provide adequate information on the impact to operations that will not receive permits under this rule. It should include information on lost revenue or expenses to all entities involved. Not allowing small businesses starting after 2005 to compete in the fishery is inconsistent with the Regulatory Flexibility Act.

Response:

The Analysis (

see

ADDRESSES

) estimates numbers of operations affected by this action, and examines the costs and benefits of the action accruing to different sectors. Much of the Analysis is qualitative, reflecting the limited information that exists on the charter vessel business generally and on the angler demand.

The Council's recommendation to the Secretary looked primarily at charter vessel businesses that were active during the qualifying years of 2004 and 2005. These were the participants that the Council sought to confirm in their business patterns when it made its decision to recommend this action in 2007. An “Active” charter business was determined to be one that made at least five logbook trips in at least one of the two qualifying years and at least five logbook trips in the recent participation year (2008). This two-tier qualification requirement was designed to assure that limited access permits were allocated to historically active charter businesses that were still active when the program was implemented. The five-logbook-trip minimum was chosen in part because it is a relatively low standard of activity. A charter vessel business with less than five logbook trips in a year is not likely in most instances to generate a significant annual income. The Council's Analysis that was made available to the public for review with the proposed rule (74 FR 18178, April 21, 2009) did not consider the effect of the participation requirement in 2008 because that year had not yet occurred at the time of Council action. However, the Council was aware that the numbers of businesses receiving permits under this rule would be no more than those that were active in 2004 or 2005, and likely would be somewhat less as some firms active in 2004 and 2005 left the charter business during 2006 and 2007.

The Council and Secretary reasonably assumed that the number of businesses that would enter the fishery during 2006 through 2009 would be small. Such businesses contemplating entry into the charter halibut fishery during those years should have been aware of the control date of December 9, 2005, set by the Council and published by the Secretary on February 8, 2006 (71 FR 6442). Being put on notice of potentially not qualifying for initial allocation of charter halibut permit(s), businesses entering the fishery after the control date should have structured their operations on the assumption that they may be in the charter halibut business temporarily. Alternatively, these businesses could have planned on purchasing one or more transferable charter halibut permits after they were issued. Other than assuming this outcome, no basis existed for estimating the number of businesses that would make a post-control date entry decision.

More recently, NMFS has prepared a supplementary analysis, with estimates of the number of businesses that are expected to qualify for charter halibut permits based on the 2004 and 2005 qualifying years and the recent participation year of 2008. The RIR and RFA analyses have been updated to reflect this new information (

see

ADDRESSES

). In summary, the updated analyses indicate that about 231 businesses are expected to qualify for charter halibut permits in Area 2C and about 296 are expected to qualify in Area 3A. An estimated 115 businesses were active (

i.e.

, at least five logbook trips) in Area 2C in 2008 but not during either of the qualifying years indicating that these businesses may have entered the charter halibut fishery during the period 2006 through 2008. The comparable estimate of new entry businesses in Area 3A is 111.

Comment 46:

Will the government offer a compensation package of vocational retraining, financial aid, or other compensation to guided charter operators who will not be able to continue in this business? This compensation may be appropriate since these persons will no longer be able to honor private agreements with clients, and will lose the value of vessels purchased for the fishery.

Response:

No compensation is planned or provided in this rule for persons that do not qualify for a charter halibut permit. No legitimate investment-backed expectations exist for businesses that profit from free access to a public fishery resource.

Comment 47:

By designating certain permits as non-transferable, the proposed rule seeks to create a second class of charter operators who can operate but cannot transfer their permit. No analysis has been made of the losses involved in selling surplus charter halibut fishing assets without a permit. A regulation designed solely to benefit the commercial sector to the disadvantage of a small number of charter operators is unconscionable. This classification of charter permit holders does not meet the requirements of the Halibut Act and should be removed from the rule.

Response:

As discussed under the heading “Consistency with Halibut Act,” this rule was determined to meet the requirements of the Halibut Act. The purpose and rational basis of this rule are described above and in the preamble of the proposed rule published April 21, 2009 (75 FR 18178).

The non-transferable permits provision of this rule provides a temporal buffer to reduce the overall impact of this rule on persons that demonstrated relatively low levels of activity. Qualifying businesses will be issued transferable permits for vessels that made 15 or more logbook trips in one of the qualifying period years and in 2008. Participation in the charter halibut fishery during these years at between five and 15 logbook trips indicates a relatively low level of participation in the guided charter business. However, these businesses will qualify for non-transferable charter halibut permit(s). Businesses that receive an initial allocation of non-transferable permits will be able to continue their charter halibut operations as they previously had done, or may increase their participation in the charter halibut fishery by acquiring additional permits by transfer.

Holding non-transferable permits does not destroy the total value of business assets. A person or business with non-transferable permits may transfer ownership of vessels, fishing equipment, and real estate associated with the business to other persons that wish to enter the business and acquire charter halibut permits by transfer. Alternatively, the assets of a charter business could have value to persons that do not need charter halibut permits because their business plan does not involve the harvest of halibut. A business issued non-transferable permits may also purchase transferable permits.

Comment 48:

If this proposal is approved it will set a precedent and

could potentially affect thousands in the charter industry. I have been told by NMFS that there are no other charter limited entry programs currently in effect in the United States.

Response:

This rule does not establish the first limited entry management of charter vessels. A moratorium for charter vessels and headboats operating in Federal waters of the Gulf of Mexico was effective beginning on June 16, 2003 (67 FR 43558, June 28, 2002).

Comment 49:

I believe that this limited entry program is going to be a “free” government retirement package for many who have just held on for this permit and will immediately sell it. Their business will become more valuable overnight while other businesses will not. To illustrate this point, the State of Alaska issued a Legislative Resolve No. 5 in 1983 that stated “a share system could result in the concentration of ownership of the fishery resource in the hands of a few fishermen,” that it “could encourage speculation and the making of exorbitant profits at the expense of Alaska fishermen,” and that it “could tend to eliminate competition among halibut fishermen.” The State Constitution does not support a limitation on charter vessels.

Response:

Some persons may have participated in the charter halibut fishery before 2005, solely in a speculative effort to acquire permits should a limited entry program with transferable permits be adopted. Speculative entry is a common concern when limited entry programs are under consideration. The Council addressed this concern in two ways. First, to discourage speculative entry during program development, the Council adopted a control date of December 9, 2005, at the start of its deliberations. Announcement of this control date by the Council and Secretary (71 FR 6442, February 8, 2006) notified the public that anyone entering the charter sport fishery for halibut after the control date would not be assured of future access to the fishery if a management regime that limits the number of participants is developed and implemented. The Council continued to publicize this control date through the development of this rule.

Secondly, the Council adopted a minimum participation standard for initial allocation of charter halibut permits. A qualifying business may receive a transferable permit only if the business has a record of making at least 15 logbook trips in one year of the 2004-2005 qualifying period, and in 2008. The reasons that each person has for participating in the guided sport fishery are highly subjective, and NMFS does not have information available to discriminate among resource users on the basis of their reasons for participation.

This rule is being implemented under the authority of the Halibut Act, not the Alaska Constitution. Legislative resolutions by the Alaska legislature are not legally binding on this action. However, allowing excessive shares of halibut fishing privileges to be acquired is prohibited by the Halibut Act. The excessive share provision in this rule that limits persons to five permits (with some exceptions) assures that excessive consolidation will not occur and competition among operators will remain.

Comment 50:

The proposed rule states the intended effect of this program is to curtail growth of fishing capacity in the guided sport fishery for halibut. This rule will not only curtail growth, it will eliminate it without compensation. Based on the qualifying criteria, the immediate effect will reduce the fleet size by an estimated 10 percent now, and over time as non-transferable permits are retired, an additional 15 percent of the current fleet will cease to exist. This does not include the “private agreement” and “same vessel” clauses that will eliminate even more vessels. Although there may be enough capacity in the fleet to meet current demand, with such a large reduction during peak periods anglers in the future may not be able to find an available charter.

Response:

NMFS has supplemented the Council's earlier analyses using new information on charter halibut participation levels in 2008, the recent participation year (

see

Section 2.8 of the Analysis at

ADDRESSES

). The supplementary analysis takes into account the anticipated effect of the recent participation year reducing the number of charter halibut permits issued below a number based solely on participation in the qualifying years of 2004 and 2005.

Based on the earlier analysis and its supplement, the charter halibut industry will have sufficient capacity to meet existing angler demand and to meet some increases in that demand (

see

responses to Comments 21 and 43).

Comment 51:

The proposed control date for qualifying for the limited entry halibut charter vessels is December 9, 2005. I respectfully request the control date be moved up until at least 2008 so companies that started after 2005 can qualify for a permit. If our company is unable to obtain a limited entry halibut permit for our charter vessel, our lodge would be forced to go out of business. Presently we have employees, vendors, and tourists from around the world and that would all be adversely affected if we were forced to close. Local, State, and Federal governments would also be adversely affected due to the loss of revenue from utilities fees, fuel taxes, payroll taxes, bed taxes, various license fees, and of course payroll taxes. With the present economic conditions, a number of charter fishing boat and lodge operators will be forced out of business this year regardless of the limited entry proposal. The 2004-2005 qualifying period is not only damaging to the economy, but is also extremely damaging to the charter businesses that have started operating since 2006. All charter operations already vested in the industry should remain in business.

Response:

The control date, December 9, 2005, was recommended by the Council and published by NMFS in the

Federal Register

on February 8, 2006 (71 FR 6442). The purpose of the control date announcement was to announce that anyone entering the charter sport fishery for halibut in and off Alaska after the control date will not be assured of future access to that fishery if a management regime that limits the number of participants is developed and implemented. The Council and NMFS intent in making the control date announcement was to discourage speculative entry into the charter halibut fishery while potential entry or access control rules were being developed by the Council and, if approved, implemented by the Secretary.

The notification of a control date does not compel the Council or the Secretary to use that date. In this case, the Council used the date in part by recommending a two-year qualifying period that ran through the end of 2005. The Secretary has approved the Council's recommended charter halibut moratorium recommendation which includes this qualifying period. The comment actually is seeking a new, more recent qualifying period. This cannot be done under the approved policy of 2004 and 2005 as the qualifying period without revising the entire Council recommendation. A more recent qualifying period would be a significant change to the recommended charter halibut moratorium policy and this rule. NMFS has determined that such a significant change is not warranted and the approved policy and this rule are consistent with the Halibut Act and other applicable law.

Moratorium Elements

Comment 52:

If limited entry is adopted, the permits should not be allowed to be sold when they are no

longer used. A lottery should be held and the winner would then have the same opportunity as the first person.

Response:

This rule does not include a lottery to distribute charter halibut permits when they are no longer used or on a periodic basis. Such a lottery would be a substantial change from the policy recommended by the Council and approved by the Secretary. However, this suggestion could be made to the Council for its consideration as an amendment to this rule in the future. This rule implements the Council's original recommendation to establish a market-based system for permit transfers. The Council and Secretary determined that this would be more reasonable and efficient than to have a continual permit-application and permit-award process by the government.

Comment 53:

I recommend that a permit be used for five years before it can be sold. This would keep people from hanging on so they can get a permit to sell. This would thin out the crowd and a new business would be forced to use the permit before it gains any value. Any charter business that is over five years old would be exempt.

Response:

The proposal to require some use of a charter halibut permit before transferring would inhibit the exit and entry of charter halibut businesses and could increase costs of

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