[Federal Register: December 17, 2001 (Volume 66, Number 242)]
[Proposed Rules]
[Page 65027-65069]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de01-14]

[[Page 65027]]

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Part II

Department of Commerce

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National Oceanic and Atmospheric Administration

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50 CFR Part 679

Fisheries of the Exclusive Economic Zone Off Alaska; Amendments 61/61/
13/8 to Implement Major Provisions of the American Fisheries Act;
Proposed Rule

[[Page 65028]]

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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 011128283-1283-01; I.D. 111401B]
RIN 0648-AN55


Fisheries of the Exclusive Economic Zone Off Alaska; Amendments
61/61/13/8 to Implement Major Provisions of the American Fisheries Act

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS proposes regulations to implement Amendment 61 to the
Fishery Management Plan for the Groundfish Fishery of the Bering Sea
and Aleutian Islands Area, Amendment 61 to the Fishery Management Plan
for Groundfish of the Gulf of Alaska, Amendment 13 to the Fishery
Management Plan for Bering Sea and Aleutian Islands King and Tanner
Crab, and Amendment 8 to the Fishery Management Plan for the Scallop
Fishery off Alaska (FMPs). These amendments incorporate the provisions
of the American Fisheries Act (AFA) into the FMPs and their
implementing regulations. Proposed management measures to implementing
the AFA include: Regulations limiting entry by vessels and processors
into all sectors of the Bering Sea and Aleutian Islands (BSAI) pollock
fishery, a new formula allocating the BSAI pollock total allowable
catch (TAC) among the inshore, catcher/processor, and mothership
processing sectors and the Community Development Quota (CDQ) Program,
regulations governing the formation and operation of fishery
cooperatives (cooperatives) in the BSAI pollock fishery, harvesting and
processing limits known as ``sideboards'' to protect vessels and
processors in other fisheries from spillover effects resulting from the
rationalization and privatization of the BSAI pollock fishery, observer
coverage requirements for vessels and processors in the BSAI pollock
fishery, catch weighing and scale requirements for BSAI pollock
processors, vessel monitoring system (VMS) requirements for AFA catcher
vessels and AFA catcher/processors fishing for groundfish in the BSAI
and GOA; and a 2-year extension of the inshore/offshore regime for
pollock and Pacific cod in the Gulf of Alaska (GOA). These amendments
are necessary to implement the AFA and are intended to do so in a
manner consistent with the environmental and socioeconomic objectives
of AFA, the Magnuson-Stevens Fishery Management and Conservation Act
(Magnuson-Stevens Act), the FMPs, and other applicable laws.

DATES: Comments on the proposed rule must be received on or before
January 31, 2002.

ADDRESSES: Comments must be sent to Sue Salveson, Assistant
Administrator, Sustainable Fisheries Division, NMFS, Alaska Region,
P.O. Box 21668, Juneau, AK 99802, Attn: Lori Gravel, or delivered to
Federal Building, Fourth Floor, 709 West 9th Street, Juneau, AK, and
marked Attn: Lori Gravel. Copies of the Environmental Impact Statement/
Regulatory Impact Review/ Initial Regulatory Flexibility Analysis (EIS/
RIR/IRFA) prepared for Amendments 61/61/13/8 may be obtained from NMFS
at the above address or online at http://www.fakr.noaa.gov. Send
comments on collection-of-information requirements to NMFS, Alaska
Region and to the Office of Information and Regulatory Affairs (OIRA),
Office of Management and Budget (OMB), Washington, DC 20503 (Attn: NOAA
Desk Officer).

FOR FURTHER INFORMATION CONTACT: Kent Lind, 907-586-7228 or
kent.lind@noaa.gov

SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fisheries in the
exclusive economic zone (EEZ) of the BSAI and Gulf of Alaska (GOA)
under the FMPs for groundfish in the respective areas. With Federal
oversight, the State of Alaska (State) manages the commercial king crab
and Tanner crab fisheries in the BSAI and the commercial scallop
fishery off Alaska under the FMPs for those fisheries. The North
Pacific Fishery Management Council (Council) prepared, and NMFS
approved, the FMPs under the authority of the Magnuson-Stevens Act (16
U.S.C. 1801 et seq.). Regulations implementing the FMPs appear at 50
CFR part 679. General regulations governing U.S. fisheries also appear
at 50 CFR part 600.

American Fisheries Act--Background Information

    On October 21, 1998, the President signed into law the AFA (Div. C,
Title II, Pub. L. No. 105-277, 112 Stat. 2681 (1998)). The AFA is
divided into two subtitles establishing certain requirements for
fishery endorsements for all U.S. fishing vessels, and providing for
the reorganization and rationalization of the BSAI pollock fishery,
respectively.
    Subtitle I--Fisheries Endorsements established a 25 percent foreign
ownership and control limit for all U.S. documented fishing vessels
over 100 ft (30.9 meters (m)) registered length. Subtitle I also limits
new U.S. documented fishing vessels to no more than 165 ft (59.3 m)
registered length, no more than 3,000 lbs (1.36 mt) shaft horsepower,
and no more than 750 gross registered tons (680 mt). The provisions of
this subtitle apply to all U.S. documented fishing vessels fishing
anywhere in the U.S. EEZ and are being implemented by the Maritime
Administration (MARAD) and the U.S. Coast Guard.
    Subtitle II--Bering Sea Pollock Fishery mandated sweeping changes
to the BSAI pollock fishery and to a lesser extent, affected the
management of the other groundfish, crab, and scallop fisheries off
Alaska. The purpose of Amendments 61/61/13/8 is to implement the
management program required by Subtitle II of the AFA.
    Congress identified two primary objectives in passing the AFA. The
first objective was to complete the process begun in 1976 to give U.S.
interests a priority in the harvest of U.S. fishery resources. This
objective was accomplished through the restrictions on foreign
ownership and control that are set out in Subtitle I of the AFA. The
second objective was to significantly decapitalize the Bering Sea
pollock fishery. This objective was addressed by Subtitle II of the
AFA. Under the council system established by the Magnuson-Stevens Act,
Congressional action is generally not needed to address fishery
conservation and management issues in specific fisheries. However,
Congress believed that the overcapacity in the BSAI pollock fishery
prior to the AFA was due, in part, to mistakes in, and
misinterpretations of, the 1987 Commercial Fishery Industry Vessel
Anti-Reflagging Act (Anti-Reflagging Act). In passing the AFA, Congress
noted that the Anti-Reflagging Act had allowed a flood of foreign-
rebuilt catcher/processors into the BSAI pollock fishery and did not
limit foreign control of such vessels in the manner in which Congress
had intended. Without Subtitle II, the Council and NMFS did not have
authority to provide funds under the Federal Credit Reform Act to buy
out and retire vessels from the BSAI pollock fishery, to strengthen
U.S. controlling interest standards for fishing vessels, or to
implement the inshore cooperative program contained in the AFA.

[[Page 65029]]

    Subtitle 2 of the AFA contains numerous provisions that affect the
management of the groundfish and crab fisheries off Alaska. Key
provisions include:
    1. The buyout of nine pollock catcher/processors and the subsequent
scrapping of eight of these vessels through a combination of $20
million in Federal appropriations and $75 million in direct loan
obligations;
    2. A new allocation scheme for BSAI pollock that allocates 10
percent of the BSAI pollock total allowable catch (TAC) to the CDQ
program, and after allowance for incidental catch of pollock in other
fisheries, allocates the remaining TAC as follows: 50 percent to
vessels harvesting pollock for processing by inshore processors, 40
percent to vessels harvesting pollock for processing by catcher/
processors, and 10 percent to vessels harvesting pollock for processing
by motherships;
    3. A fee of six-tenths (0.6) of one cent for each pound round
weight of pollock harvested by catcher vessels delivering to inshore
processors for the purpose of repaying the $75 million direct loan
obligation;
    4. A prohibition on entry of new vessels and processors into the
BSAI pollock fishery. The AFA lists by name vessels and processors and/
or provides qualifying criteria for those vessels and processors
eligible to participate in the non-CDQ portion of the BSAI pollock
fishery;
    5. New observer coverage and scale requirements for AFA catcher/
processors;
    6. New standards and limitations to guide the creation and
operation of fishery cooperatives in the BSAI pollock fishery;
    7. An individual fishing quota program for inshore catcher vessel
cooperatives under which NMFS grants individual allocations of the
inshore BSAI pollock TAC to inshore catcher vessel cooperatives that
are formed around a specific inshore processor and that agree to
deliver at least 90 percent of their pollock catch to that processor;
    8. The establishment of harvesting and processing limits known as
``sideboards'' on AFA pollock vessels and processors to protect the
interests of fishermen and processors in other fisheries from spillover
effects resulting from the rationalization of the BSAI pollock fishery;
and
    9. A 17.5 percent excessive share harvesting cap for BSAI pollock
and a requirement that the Council develop excessive share caps for
BSAI pollock processing and for the harvesting and processing of other
groundfish.
    Some of the above provisions of the AFA already have been
implemented by NMFS and other agencies. The buyout of the nine
ineligible factory trawlers and their subsequent scrapping was
completed by NMFS in 1999 under the schedule mandated by the AFA. This
action was accomplished by contract with the vessel owners rather than
regulation. The inshore pollock fee program required by the AFA was
implemented by NMFS through final regulations published February 3,
2000 (65 FR 5278). MARAD has implemented the new U.S. ownership
requirements and size restrictions for U.S. fishing vessels through
final regulations published July 19, 2000 (65 FR 44860). MARAD's
regulations also set out procedures for review of compliance with
excessive share harvesting limits contained in this proposed rule.

Development of Amendments 61/61/13/8 and AFA-Related Actions Taken
to Date

    Since the passage of the AFA in October 1998, NMFS and the Council
have undertaken an extensive public process to develop the management
program proposed under Amendments 61/61/13/8. Amendments 61/61/13/8
were prepared and revised during the course of 12 Council meetings over
the past 2 years and have been the subject of numerous additional
public meetings held by the Council and NMFS to address specific
aspects of the AFA. While the permanent management program proposed
under Amendments 61/61/13/8 was under analysis and development by the
Council and NMFS, the statutory deadlines in the AFA were met on an
interim basis through several emergency interim rules that were
extended through the end of 2001 by Pub. L. No. 106-554, which mandated
that all management measures in effect as of July 2000 be extended
through the end of 2001. The following time line provides a summary of
the 2-year public process through which NMFS and the Council prepared
Amendments 61/61/13/8.
    November 1998. After the passage of the AFA in October 1998, the
Council held a special meeting in November 1998, in Anchorage, AK, to
address among other things, the new requirements of the AFA and the
effect of the AFA on the fisheries under the jurisdiction of the
Council. The Council made various recommendations to NMFS regarding the
regulation of cooperatives in the catcher/processor sector and the
management of sideboards for AFA catcher/processors for the 1999
fishery and began the process of identifying issues and alternatives
for upcoming AFA-related actions.
    December 1998. At its December 1998 meeting in Anchorage, AK, the
Council approved two emergency rules to implement required provisions
of the AFA for the 1999 fishing year. The first emergency interim rule
required two observers on all AFA-listed catcher processors and
motherships, and established procedures for making inseason sideboard
closures (64 FR 3435, January 22, 1999; extended at 64 FR 33425, June
23, 1999). The second emergency interim rule made several technical
changes to the CDQ program regulations to accommodate the new
requirements of the AFA (64 FR 3887, January 26, 1999; extended at 64
FR 34743, June 29, 1999). After extensive public testimony and input
from the Council's Advisory Panel (AP) and Scientific and Statistical
Committee (SSC), the Council identified a suite of alternatives for the
management program that subsequently became known as Amendments 61/61/
13/8.
    February 1999. At its February 1999 meeting in Anchorage, AK, the
Council finalized sideboard and AFA management measure alternatives
with the intent that a draft analysis would be reviewed at the April
1999 meeting with a final decision scheduled for June 1999 to allow the
Council to meet the July 1999 deadline imposed by the AFA for
recommendation of sideboard measures. The Council also began
preparation of a separate discussion paper to examine the structure of
the inshore cooperative program. This separate analysis was in response
to a proposal by a group of independent inshore catcher vessel owners
who advocated a change in the program to allow the formation of an
independent vessel cooperative that would not be tied to a particular
processor. A draft analysis was scheduled for review in June 1999, with
further discussion in October 1999.
    April 1999. At its April 1999 meeting in Anchorage, AK, the Council
reviewed its draft analysis for Amendments 61/61/13/8, and received
extensive public testimony regarding alternatives and other issues that
should be considered under Amendments 61/61/13/8. The Council directed
staff to make various revisions and additions to the analysis with the
intent that the amendment package would be brought before the Council
for final action in June 1999. The Council also reviewed its discussion
paper on the structure of the inshore cooperative program and the
independent inshore catcher vessel cooperative proposal and requested
that a broader analysis be prepared for initial review at the October
1999 meeting. In

[[Page 65030]]

addition, the Council formed an inshore cooperative implementation
committee to advise NMFS on many of the technical issues related to the
formation and management of inshore cooperatives.
    May 1999. The Council's inshore cooperative implementation
committee held a public meeting with NMFS on May 10-13 in Seattle, WA,
to examine alternative management approaches for inshore catcher vessel
cooperatives. The approach to implementing and managing inshore
cooperatives developed at this meeting forms the basis of the inshore
cooperative management program contained in this proposed rule.
    June 1999. At its June 1999 meeting in Kodiak, AK, the Council
reviewed Amendments 61/61/13/8 and after extensive public testimony,
approved a suite of AFA-related recommendations including restrictions
on the formation and operation of cooperatives, harvesting sideboards
for catcher/processors and catcher vessels, and catch weighing and
monitoring requirements. However, the Council was unable to reach a
decision on two AFA-related issues: groundfish processing sideboards
and excessive processing share caps. To address these issues, the
Council established an industry committee to further examine
alternatives and work with State and Federal managers to resolve
implementation issues with the intent that the Council would review the
committee's recommendations in October 1999.
    August 1999. The Council's processing sideboard industry committee
held a public meeting in Seattle, WA, to examine alternatives for
processing sideboards and excessive processing share caps. The
committee was unable to reach complete consensus on a recommended
approach for processing sideboard caps. However, the committee did
develop some general recommendations for the Council and provided the
Council with some requests for additional analysis and information.
    October 1999. At its October 1999 meeting in Seattle, WA, the
Council reviewed its analysis on the structure of the inshore
cooperative program, including the proposal to allow formation of
independent inshore catcher vessel cooperatives, and received extensive
public discussion on this issue. However, the Council voted to postpone
action until February 2000 and requested further analysis on this
issue. The Council also re-examined its June 1999 catcher vessel
sideboard exemption recommendations and requested that NMFS delay
implementation of these measures until the Council had the opportunity
to analyze and discuss possible revisions to its recommended catcher
vessel sideboard exemptions. The Council announced that it would be
revising its sideboard exemption recommendations at its December 1999
meeting. Finally, the Council reviewed what had become a separate
analysis of groundfish processing sideboards and excessive processing
share caps. After extensive discussion and public comment on this
issue, the Council chose to expand and revise its analysis with intent
to review the issue again in February 2000 with final action scheduled
for June 2000.
    December 1999. At its December 1999 meeting in Anchorage, AK, the
Council recommended two emergency interim rules to implement required
provisions of the AFA for the 2000 fishing year. These measures were
necessary to meet certain statutory deadlines in the AFA while the
comprehensive suite of permanent management measures under Amendments
61/61/13/8 continued to undergo development, revision, and analysis by
the Council and NMFS. The first emergency interim rule set out permit
requirements for AFA vessels, processors, and cooperatives (65 FR 380,
January 5, 2000; extended at 65 FR 39107, June 23, 2000). The second
emergency interim rule established sector allocations, cooperative
regulations, sideboards, and catch monitoring requirements for the AFA
fleets (65 FR 4520, January 28, 2000; extended at 65 FR 39107, June 23,
2000).
    February 2000. At its February 2000 meeting in Anchorage, AK, the
Council reviewed its revised analysis of groundfish processing
sideboards and excessive share processing caps and requested analysis
of several additional issues with the stated intent that the analysis
would be reviewed again in June 2000. The Council postponed action on
the proposed changes to the structure of the inshore cooperative
program and the independent inshore catcher vessel proposal until June
2000. Finally, at that meeting, the Council and NMFS decided it would
be appropriate to expand the environmental assessment (EA) prepared for
Amendments 61/61/13/8 into an EIS given the magnitude of the proposed
management program to implement the AFA.
    April 2000. At its April 2000 meeting in Anchorage, AK, the Council
received extensive testimony from industry on several elements of
Amendments 61/61/13/8. Catcher vessel owners requested that the Council
consider revising several of its recommendations related to catcher
vessel sideboards, retirement of vessels, and the formula for
calculating inshore cooperative allocations. The Council requested
preparation of a supplemental analysis of these issues for
consideration in June 2000. The Council also received testimony from
crab fishermen who opposed the crab processing caps implemented in 2000
through emergency interim rule. The Council announced its intent to
examine alternatives for crab processing caps at its June 2000 meeting
with final action on any changes scheduled for September 2000. In
addition, the April Council meeting was used as a scoping meeting to
solicit input from the public on issues and alternatives that should be
addressed in the EIS being prepared for Amendments 61/61/13/8.
    June 2000. At its June 2000 meeting in Portland, OR, the Council
reviewed its analysis of proposed structural changes to the inshore
cooperative program including the independent inshore catcher vessel
proposal. The Council did not adopt changes promoted by independent
inshore catcher vessel owners that would have allowed greater
flexibility in choosing which cooperative a vessel could join. Instead,
the Council recommended two changes related to retirement of vessels
and allocation formulas that would supersede the measures set out in
the AFA. These changes were incorporated as revisions to Amendments 61/
61/13/8. The Council also examined the issue of groundfish processing
sideboards and excessive processing share caps and voted to release its
analysis for public review with intent to take final action on these
measures at its October 2000 meeting. The Council's original intent was
to include groundfish processing sideboards and excessive processing
share caps in Amendments 61/61/13/8. However, due to the extensive
additional analysis required for these two issues, the Council decided
to address these issues on a separate timetable with a separate
analysis.
    September 2000. At its September 2000, meeting in Anchorage, AK,
the Council examined proposed changes to crab processing sideboard
limits and recommended that the 1995-1997 formula used to calculate
crab processing caps under the AFA be revised by adding 1998 processing
history and giving it double-weight. In other words, 1995 through 1998
would be used to determine crab processing history with the 1998 year
counting twice. The purpose of this change was to give greater emphasis
to recent processing history in consideration of

[[Page 65031]]

changes to the crab processing industry that have occurred since 1995.
    October 2000. At its October 2000 meeting in Sitka, AK, the Council
considered the issues of BSAI pollock excessive processing share limits
and groundfish processing sideboard limits. The Council adopted a 30
percent excessive processing share limit for BSAI pollock that would be
applied using the same 10 percent entity rules set out in the AFA to
define AFA entities for the purpose of the 17.5 percent excessive
harvesting share limit contained in the AFA. This action represents the
Council's final revision to Amendments 61/61/13/8 before official
submission of the amendments to the Secretary of Commerce for review
and approval. With respect to non-pollock groundfish processing
sideboards, the Council took no action. The Council believed that
placing non-pollock groundfish processing limits on AFA processors
could have negative effects on markets for both AFA and non-AFA catcher
vessels. In addition, the Council concluded that its suite of
harvesting sideboard restrictions on AFA catcher vessels and catcher/
processors also serve to protect non-AFA processors in the BSAI, which
are primarily non-AFA catcher/processors. Instead of imposing non-
pollock processing limits on AFA processors, the Council indicated its
intent to explore revisions to its Improved Retention/Improved
Utilization (IR/IU) program set out at 50 CFR 679.27. Testimony from
non-AFA processors indicated that such changes could be a more
effective means of providing a more level playing field for non-AFA
catcher/processors.

Submission of Amendments 61/61/13/8 for Secretarial Review and
Public Comment

    The Council has submitted Amendments 61/61/13/8 for Secretarial
review and a Notice of Availability of the FMP amendments was published
in the Federal Register on November 27, 2001, with comments on the FMP
amendments invited through January 28, 2002. Comments may address the
FMP amendments, the proposed rule, or both, but must be received by
January 28, 2002, to be considered in the approval/disapproval decision
on the FMP amendments. All comments received by January 28, 2002,
whether specifically directed to the FMP amendments or the proposed
rule, will be considered in the approval/disapproval decisions on the
FMP amendments.

Elements of the Proposed Rule

    The following is a summary of the major elements of the proposed
rule to implement Amendments 61/61/13/8.

Permit Requirements for Vessels and Processors

    Amendments 61/61/13/8 would establish permit requirements for AFA
catcher/processors, AFA catcher vessels, AFA motherships, AFA inshore
processors, and AFA inshore cooperatives. Once issued, AFA vessel and
processor permits would be valid until December 31, 2004, which is the
expiration date for section 208 of the AFA. Any vessel used to engage
in directed fishing for a non-CDQ allocation of pollock in the BSAI and
any processor that receives pollock in a non-CDQ directed pollock
fishery in the BSAI would be required to maintain a valid AFA permit
onboard the vessel or at the processor location at all times that non-
CDQ pollock is being harvested or processed. In addition, these new AFA
permits would not exempt a vessel operator, vessel owner, or pollock
processor from any other applicable permit or licensing requirements
required by State or Federal regulations. Finally, the AFA does not
limit who may participate in the CDQ pollock fishery. Therefore,
vessels or processors participating in the pollock CDQ fishery would
not be required to have AFA permits.
    NMFS has already issued interim AFA permits to owners of AFA
catcher vessels, AFA catcher/processors, AFA motherships, and AFA
inshore processors under the emergency interim rule published January
5, 2000 (65 FR 380). Under this proposed rule, these interim permits
would expire 60 days after the effective date of the final rule and the
owners of AFA catcher vessels, AFA catcher/processors, AFA motherships,
and AFA inshore processors would be required to re-apply for final AFA
permits. These final AFA permits would be valid for the duration of
section 208 of the AFA that extends through December 31, 2004. The
owners of all AFA vessels and processors would be required to re-apply
for their AFA permits because this proposed rule requires submission of
additional ownership information on AFA permit applications that was
not collected under the emergency interim rule.
    The deadline for application for all new AFA vessel and processor
permits would be 60 days after the effective date of the final rule.
This deadline would apply to the owners of any vessels and processors
for which NMFS has not already received a permit application under the
emergency interim rule but would not apply to replacement vessel permit
applications. NMFS would not accept applications for new AFA vessel and
processor permits after this date and any owners of vessels or
processors who have not already been issued AFA permits under the
emergency interim rule or for which an application has not been
received by this date would be permanently ineligible to receive AFA
permits for those respective vessels and/or processors. The purpose of
this application deadline is to finalize the list of vessels and
processors to which AFA fishing privileges and sideboard restrictions
apply. A final list of AFA-permitted vessels is necessary because
inshore cooperative allocations and catcher vessel sideboards are based
on the aggregate catch histories of the various AFA-permitted fleets.
    Under the proposed rule, AFA vessel and processor permits could not
be used on or transferred to another vessel or processor, except under
the replacement vessel provisions outlined below. However, AFA permits
may be amended to reflect any change in the ownership of the vessel or
processor. In contrast to vessel and processor permits, AFA inshore
cooperative permits, discussed below, are valid only for the fishing
year for which they are issued. However inshore cooperative fishing
permits would be renewable on an annual basis following approval of a
submitted permit application.

AFA Permit Application and Administrative Appeals Process

    Application forms for all AFA permits would be available upon
request from the NMFS Alaska Region (see ADDRESSES) and would be
available for downloading on the NMFS Alaska Region home page (http://
www.fakr.noaa.gov). AFA vessel and processor permits would be issued to
the current owner of a qualifying vessel or processor. The proposed
rule also sets out an administrative appeals process under which
applicants would be able to appeal NMFS determinations related to AFA
permits and AFA inshore cooperative allocations. The appeals process
for AFA permits would be similar to the process currently in place for
the individual fishing quota program and license limitation program
(LLP) appeals set out at 50 CFR 679.4(k).

AFA Catcher/Processor Permits

    Subsection 208(e) of the AFA, which took effect on January 1, 1999,
lists by name catcher/processors that are eligible to harvest the
catcher/processor sector BSAI pollock directed fishing

[[Page 65032]]

allowance. Under this proposed rule, two categories of AFA catcher/
processor permits would be issued. Vessels listed by name in paragraphs
208(e)(1) through (20) of the AFA would be issued ``listed AFA catcher/
processor permits.'' Vessels qualifying for AFA catcher/processor
permits under paragraph 208(e)(21) would be issued ``unlisted AFA
catcher/processor permits,'' which would restrict such vessels, in the
aggregate, to a harvest of no more than 0.5 percent of the catcher/
processor sector pollock TAC allocation. In addition, a catcher/
processor would not need an AFA catcher/processor permit to participate
in the CDQ sector of the BSAI pollock fishery because the AFA does not
limit participation in the CDQ pollock fishery.
    All owners of AFA catcher/processors would be required to reapply
for their AFA permits under this proposed rule because this proposed
rule requires the additional submission of vessel ownership information
that was not previously collected. All applicants for AFA catcher/
processor permits would be required to disclose the identities of all
persons who hold a 10 percent or greater direct or indirect interest in
the vessel in question. This information is necessary for NMFS to track
compliance with the 17.5 percent excessive harvesting share limit
established under the AFA and discussed below in the section on
excessive shares.

AFA Catcher Vessel Permits

    Under the AFA, a catcher vessel is qualified to engage in directed
fishing for BSAI pollock if it is listed by name in subsections 208(b),
208(c), or 211(e) of the AFA, or if its history of participation in the
BSAI pollock fishery meets certain criteria set out in subsections
208(a), 208(b), or 208(c) of the AFA. Under this proposed rule, AFA
catcher vessel permits would be endorsed to authorize directed fishing
for pollock for delivery to one or more of the three processing
sectors: Catcher/processors, inshore processors, and motherships. Under
the AFA, a catcher vessel may be authorized to engage in directed
fishing for pollock for delivery to both AFA inshore processors and AFA
motherships, depending on its qualifying catch history. However, a
vessel that is eligible to deliver to catcher/processors is ineligible
for an endorsement to deliver to inshore processors or motherships. In
addition, a catcher vessel would not need an AFA catcher vessel permit
to participate in the CDQ sector of the BSAI pollock fishery because
the AFA does not limit participation in the CDQ pollock fishery.
    All owners of AFA catcher vessels would be required to reapply for
their AFA permits under this proposed rule because this proposed rule
requires the additional submission of vessel ownership information that
was not previously collected. All applicants for AFA catcher vessel
permits would be required to disclose the identities of all persons who
hold a 10 percent or greater direct or indirect interest in the vessel
in question. This information is necessary for NMFS to track compliance
with the 17.5 percent excessive harvesting share limit established
under the AFA and discussed below in the section on excessive shares.
NMFS has created an official AFA record that includes the relevant
catch histories of all potentially qualifying catcher vessels and will
review for verification all claims of endorsement qualification against
the official AFA record.

AFA Catcher Vessel Crab Sideboard Endorsements

    Under subparagraph 211(c)(1)(A) of the AFA, the Council is required
to recommend measures to limit the participation of AFA catcher vessels
in BSAI crab fisheries. Subparagraph 211(c)(2)(C) of the AFA also
prohibits section 208(b) catcher vessels (i.e., AFA catcher vessels
eligible to deliver to catcher/processors) ``from participating in a
directed fishery for any species of crab in the Bering Sea and Aleutian
Islands Management Area unless the catcher vessel harvested crab in the
directed fishery for that species of crab in such Area during 1997.''
At its June 1999 and June 2000 meetings, the Council developed final
recommendations under Amendments 61/61/13/8 for limits on the
participation of AFA catcher vessels in BSAI crab fisheries in order to
comply with these two provisions of the AFA. These recommendations
would apply to all AFA catcher vessels and would supersede the crab
sideboards set out in subparagraph 211(c)(2)(C) of the AFA that apply
to section 208(b) vessels only.
    Under the proposed rule, NMFS would implement these catcher vessel
crab sideboard limits through crab sideboard endorsements on AFA
catcher vessel permits. The owner or operator of a catcher vessel who
wishes to participate in a BSAI king or Tanner crab fishery would be
required to have a sideboard endorsement for that crab species on the
vessel's AFA catcher vessel permit. An AFA catcher vessel permit would
be endorsed for the Bristol Bay Red King Crab (BBRKC), St. Matthew
Island blue king crab, Pribilof Island red or blue king crab, Aleutian
Islands brown king crab, Aleutian Islands red king crab, Opilio Tanner
crab, and Bairdi Tanner crab fisheries based on the vessel's history of
participation in such crab fisheries. The specific qualifying criteria
for each fishery are set out in Sec. 679.4(l)(3)(ii)(D) of this
proposed rule.
    The Council based some of its crab sideboard recommendations on
whether a particular vessel is ``LLP qualified'' for a particular crab
fishery. To implement this recommendation, the AFA catcher vessel
permit application includes questions related to vessel catch history
using the same qualifying years as the LLP program. This rule would
require an applicant for an AFA catcher vessel permit to indicate on
the permit application which AFA crab sideboard endorsements the vessel
qualifies for based on the qualifying criteria set out in this rule.
NMFS would verify all claims of qualification.
    Finally, the Council recommended exempting from all crab harvesting
sideboards, any AFA catcher vessel that made a legal landing of crab in
every BBRKC, Opilio Tanner crab, and Bairdi Tanner crab fishery opening
from 1991-1997. A vessel qualifying for this exemption would receive an
AFA catcher vessel permit with an endorsement indicating that the
vessel is exempt from all crab harvesting sideboards. The Council
recommended the exemption to mitigate the adverse effect of crab
sideboards on vessels that are almost exclusively crab vessels but, due
to a small amount of pollock landings, fell within the criteria for AFA
eligibility. The exemption would mitigate the adverse effect of the
crab sideboard restrictions on such vessels.
    An owner of a catcher vessel should be aware that qualification for
a crab sideboard endorsement would not, in and of itself, provide
sufficient authorization to participate in a BSAI crab fishery. To
participate in a BSAI crab fishery, the operator of an AFA catcher
vessel would be required to have a valid LLP license for that crab
fishery as well as an AFA catcher vessel permit naming that vessel and
containing an endorsement for that crab fishery.

Groundfish Sideboard Exemptions

    Under this proposed rule, groundfish catcher vessel harvest
sideboard limits detailed below would apply to all AFA catcher vessels
in the aggregate regardless of sector and regardless of participation
in a cooperative, except the Council recommended that catcher vessels
less than 125 ft (38.1 m) whose annual BSAI pollock landings averaged
less than 1700 mt from 1995-1997 (i.e., landed less than 5,100 mt of
pollock

[[Page 65033]]

over the 3-year period) would be exempt from BSAI Pacific cod
sideboards if they made 30 or more legal landings of BSAI Pacific cod
in the BSAI directed fishery for Pacific cod during that 3-year period.
In addition, AFA catcher vessels that meet the same vessel length and
BSAI pollock landing criteria and that made 40 or more legal landings
of GOA groundfish during the 1995-1997 time period would be exempt from
groundfish sideboards in the GOA.
    In recommending these exemptions, the Council noted that many of
the AFA catcher vessels with relatively low catch histories of BSAI
pollock have traditionally targeted BSAI Pacific cod and GOA groundfish
during much of the year and may be only minor participants in the BSAI
pollock fishery. The Council believed that imposing aggregate
sideboards on such vessels in the BSAI Pacific cod fishery and GOA
groundfish fisheries could severely harm the owners of such vessels
given their historic high levels of participation in non-pollock
fisheries, and the fact that their historic dedication to groundfish
fisheries other than the BSAI pollock fishery fisheries may account for
their lower catch histories of BSAI pollock during the AFA qualifying
years. The owners of vessels who believe their vessel may be eligible
for one or both of these exemptions would have to apply for the
sideboard exemption on their AFA catcher vessel permit application
form.

AFA Mothership Permits

    Under subsection 208(d) of the AFA, three named vessels are
eligible for AFA permits that authorize them to process pollock
harvested in the BSAI directed pollock fishery for delivery to
motherships. Under this proposed rule, NMFS would issue to the owner of
a mothership an AFA mothership permit if the mothership is listed by
name in paragraphs 208(d)(1) through (3) of the AFA and the owner
applies for such permit. However, the owner of a mothership wishing to
process pollock harvested by a fishery cooperative also would need to
apply for and receive a cooperative processing endorsement on its AFA
mothership permit. This requirement is necessary because NMFS must
identify and issue crab processing restrictions to any AFA entity that
owns or controls an AFA mothership or an AFA inshore processor that
receives pollock harvested by a cooperative.
    Subparagraph 211(c)(2)(A) of the AFA imposes crab processing
restrictions on the owners of AFA mothership and AFA inshore processors
that receive pollock from a fishery cooperative. Under the AFA, these
processing limits extend not only to the AFA processing facility
itself, but also to any entity that directly or indirectly owns or
controls a 10-percent or greater interest in the AFA mothership or in
the AFA inshore processor. To implement the crab processing
restrictions contained in subparagraph 211(c)(2)(A) of the AFA, NMFS
would require that applicants for AFA mothership and AFA inshore
processor permits disclose on their permit applications all entities
directly or indirectly owning or controlling a 10-percent or greater
interest in the AFA mothership or AFA inshore processor and the names
of BSAI crab processors in which such entities directly or indirectly
own or control a 10-percent or greater interest. An applicant for an
AFA mothership or an AFA inshore processor permit who did not disclose
this crab processor ownership information could still receive an AFA
mothership permit or an AFA inshore processor permit but would be
denied an endorsement authorizing the processor to receive and process
pollock harvested by a fishery cooperative.

AFA Inshore Processor Permits

    Under the AFA, shoreside processors and stationary floating
processors (collectively known as inshore processors) may be authorized
to receive and process BSAI pollock harvested in the directed fishery,
based on their levels of processing in both 1996 and 1997. An inshore
processor would be eligible for an unrestricted AFA inshore processing
permit if the facility annually processed more than 2,000 mt round
weight of pollock harvested in the BSAI inshore directed pollock
fishery in both 1996 and 1997. An inshore processor would be eligible
for a restricted AFA inshore processor permit if the facility processed
pollock harvested in the inshore directed pollock fishery during 1996
or 1997, but did not process annually more than 2,000 mt round weight
of pollock in both 1996 and 1997. A restricted AFA inshore processor
permit would prohibit the inshore processing facility from processing
more than 2,000 mt round weight of BSAI pollock harvested in the
directed fishery in any one calendar year.
    The owner of an AFA inshore processor wishing to process pollock
harvested by a fishery cooperative would need a cooperative processing
endorsement on the AFA inshore processing permit. The requirements for
an AFA inshore processor cooperative processing endorsement are the
same as those listed for AFA motherships above.
    Finally, AFA inshore processors would be restricted to processing
BSAI pollock in a single geographic location in State waters during a
fishing year. The purpose of this restriction is to implement
subparagraph 208(f)(1)(A) of the AFA, which includes in the category of
AFA inshore processors, vessels that operate in a single geographic
location in State waters. Under the proposed rule, shoreside (land-
based) processors would be restricted to operating in the physical
location in which the facility first processed pollock during a fishing
year. Stationary floating processors would be restricted to receiving
and processing BSAI pollock in a location within Alaska state waters
that is within 5 nautical miles (nm) of the position in which the
stationary floating processor first processed BSAI pollock during a
fishing year. NMFS believes that 5 nm is an appropriate distance for
this requirement because it allows the operator of a floating processor
some flexibility in choosing an appropriate anchorage, but it still
requires that the processor be located in the same body of water for
the duration of a fishing year while receiving and processing BSAI
pollock.

Approval of New AFA Inshore Processors

    Paragraph 208(f)(2) of the AFA provides that:
    Upon recommendation by the North Pacific Council, the Secretary
may approve measures to allow catcher vessels eligible under
subsection (a) to deliver pollock harvested from the directed
fishing allowance under section 206(b)(1) to shoreside processors
not eligible under paragraph (1) if the total allowable catch for
pollock in the Bering Sea and Aleutian Islands Management Area
increases by more than 10 percent above the total allowable catch in
such fishery in 1997, or in the event of the actual total loss or
constructive total loss of a shoreside processor eligible under
paragraph (1)(A).
    To implement this provision of the AFA, the proposed rule provides
a mechanism for the Council to recommend that NMFS issue AFA inshore
processor permits to inshore processors that would not otherwise be
eligible under the AFA. In the event that the BSAI pollock TAC exceeds
1,274,900 mt (10 percent above the 1997 combined BSAI TAC of 1,159,000
mt), or in the event of the actual total loss or constructive loss of
an AFA inshore processor, the Council may recommend that an additional
inshore processor (or processors) be issued AFA inshore processing
permits. The Council's recommendation to NMFS must identify (1) the
processor (or processors) that would be issued AFA inshore

[[Page 65034]]

processing permits, (2) the type of AFA inshore processing permit(s) to
be issued (restricted or unrestricted), and the duration of any such
permit(s). The Council may recommend any length of duration for permits
issued under this provision, from a single fishing season to the
duration of the AFA. Or the Council may recommend that any such permits
remain valid as long as the criteria that lead to their issuance remain
in effect (i.e., TAC remains above 1,274,900 mt).

Replacement Vessels

    The proposed rule provides that in the event of the actual total
loss or constructive total loss of an AFA catcher vessel, AFA
mothership, or AFA catcher/processor, the owner of such vessel may
designate a replacement vessel that would be eligible in the same
manner as the original vessel after submission of an application for an
AFA replacement vessel that is subsequently approved by NMFS. The AFA
contains specific restrictions on replacement vessels that are set out
in detail in the proposed rule regulatory text at Sec. 679.4(l)(7).
Paragraph 208(g)(5) of the AFA states that a vessel may be used as a
replacement vessel if:
    the eligible vessel is less than 165 feet in registered length,
of fewer than 750 gross registered tons, and has engines incapable
of producing less than 3,000 shaft horsepower, the replacement
vessel is less than each of such thresholds and does not exceed by
more than 10 percent the registered length, gross registered tons or
shaft horsepower of the eligible vessel;
    NMFS believes that Congress intended this clause to apply to
eligible vessels with engines incapable of producing more than 3,000
shaft horsepower rather than engines incapable of producing less than
3,000 shaft horsepower. No catcher vessel operating in Alaska has
engines incapable of producing less than 3,000 shaft horsepower, and
construing this clause literally would make this provision a nullity.
Any vessel engine regardless of size is capable of producing less than
3,000 shaft horsepower at less than full throttle or at idle.
Therefore, NMFS is using the phrase ``incapable of producing more than
3,000 shaft horsepower'' to implement paragraph 208(g)(5) of the AFA.
    In the event of the loss of an approved AFA replacement vessel, the
owners of the replacement vessel may designate a subsequent replacement
vessel provided that the original replacement vessel is lost under
conditions that meet the criteria set out in the AFA for lost vessels.
In the event of multiple vessel replacements, the length, horsepower,
and tonnage limits for any subsequent replacement vessels would be
based on the length, horsepower, and tonnage of the originally
qualifying AFA vessel.
    Under the proposed rule, any vessel that meets the replacement
vessel criteria may be designated as a replacement for a lost vessel
including an existing AFA vessel. In the event that an existing AFA
catcher vessel is designated as a replacement for a lost AFA catcher
vessel, the catch histories of the two vessels would be merged for the
purpose of making inshore cooperative allocations, crab sideboard
endorsements, and groundfish sideboard exemptions. However the catch
histories of two vessels would not be merged until NMFS receives and
approves an application for a replacement vessel from the owner(s) of
the affected vessels.

Official AFA Record and Appeals

    In order to issue AFA permits, NMFS is compiling available
information about vessels and processors that were used to participate
in the BSAI pollock fisheries during the qualifying periods.
Information in the official AFA record includes vessel ownership
information, documented harvests made from vessels during AFA
qualifying periods, vessel characteristics, and documented amounts of
pollock processed by pollock processors during AFA qualifying periods.
Under this proposed rule, the official AFA record would be presumed to
be correct for the purpose of determining eligibility for AFA permits.
An applicant for an AFA permit would have the burden of proving correct
any information submitted in an application that is inconsistent with
the AFA official record.
    This proposed rule also would establish an appeals process under
which the owners of vessels and processors may appeal NMFS
determinations about either AFA eligibility or inshore cooperative
allocations. The appeals process for AFA permits and inshore
cooperative allocations would be based on the existing appeals process
in place for the individual fishing quota and LLP programs.

Restrictions on Transfer of LLP Licenses

    This proposed rule also contains a revision to the LLP program for
groundfish and crab that would prevent LLP licenses earned on AFA
vessels from being used on non-AFA vessels. The purpose of this
restriction is to prevent the owners of retired AFA vessels from re-
deploying the LLP license in the groundfish and/or crab fisheries off
Alaska on a new vessel that would not be subject to the same sideboard
restrictions as the retired AFA vessel. Without this restriction,
owners of AFA vessels would be able to evade the harvesting sideboard
restrictions contained in this rule by using the LLP licenses from
their AFA vessels to deploy new vessels into the groundfish and crab
fisheries that are not subject to AFA sideboards.
    Under this proposed restriction, no person could use an LLP license
that was derived in whole or in part from the qualifying fishing
history of an AFA catcher vessel or a listed AFA catcher/processor to
fish for groundfish or crab on a non-AFA catcher vessel or non-AFA
catcher/processor. NMFS would identify all such licenses affected by
this restriction and inform the holders of such licenses of this
restriction through a letter to the permit holder and/or an endorsement
printed on the face of the license. Persons would be able to file an
administrative appeal of NMFS' determination under Sec. 679.4(l)(8).

Procedures and Formulas for Allocating the BSAI Pollock TAC

    Under this proposed rule, the procedures for allocating pollock TAC
among industry sectors and apportioning each sector's TAC between
seasons and/or areas would be revised to incorporate the changes
required by the AFA. Ten percent of the pollock TAC specified for the
Bering Sea (BS) subarea and the Aleutian Islands (AI) subarea would be
allocated to the CDQ program. The remaining TAC for each subarea, after
establishment of an incidental catch allowance for pollock harvested as
incidental catch in other groundfish fisheries, would be allocated 50
percent to AFA catcher vessels harvesting pollock for processing by AFA
inshore processors; 40 percent to AFA catcher/processors and AFA
catcher vessels harvesting pollock for processing by AFA catcher/
processors, with not less than 8.5 percent of this allocation made
available to AFA catcher vessels delivering to catcher/processors; and
10 percent to AFA catcher vessels harvesting pollock for processing by
AFA motherships. The inshore pollock TAC would be further divided into
two allocations; one allocation to vessels participating in inshore
fishery cooperatives, and one allocation to vessels not participating
in a fishery cooperative. The annual allocation to inshore cooperatives
would be equal to the aggregate annual allocations made to each inshore
cooperative. The annual allocation to

[[Page 65035]]

the inshore open access fishery, which is composed of the remaining AFA
inshore catcher vessels that are not in a cooperative, would be equal
to the remaining inshore allocation after subtraction of the allocation
to fishery cooperatives.

Management of the 8.5 Percent Allocation for AFA Catcher Vessels
Delivering to Catcher/Processors

    Under subsection 210(c) of the AFA ``not less than 8.5 percent of
the [catcher/processor sector] directed fishing allowance . . . shall
be available for harvest only by the catcher vessels eligible under
section 208(b).'' Subsection 210(c) further provides that ``The owners
of such catcher vessels may participate in a fishery cooperative with
the owners of the catcher/processors eligible under paragraphs (1)
through (20) of section 208(e).'' NMFS is proposing to implement these
two related provisions by establishing two different procedures based
on whether such catcher vessels are members of a cooperative with AFA
catcher/processors during a given fishing year.
    Allocation procedure with cooperatives. If prior to December 1 of
each year the owners of all such AFA catcher vessels enter into a
cooperative agreement, and the owners of such vessels also have entered
into a cooperative agreement or inter-cooperative agreement with the
owners of the listed AFA catcher/processors, and such agreement
provides for at least 8.5 percent of the cooperative harvest shares for
such catcher vessels, then NMFS would assume that the 8.5 percent
catcher vessel allocation has been provided for within the cooperative
or inter-cooperative agreement. In such event, NMFS would make a single
allocation of pollock to the catcher/processor sector that is not
subdivided between catcher vessels and catcher/processors. Owners of
catcher/processors would then be able to enter into cooperative
agreements that allow them to harvest some or all of the 8.5 percent of
the TAC reserved for catcher vessels, or catcher vessels could harvest
some or all of 91.5 percent catcher/processor limit.
    Allocation procedure without cooperatives. If the AFA catcher
vessels eligible to deliver to catcher/processors did not form a
cooperative and did not enter into a cooperative or inter-cooperative
agreement with the listed AFA catcher/processor fleet, and all such
agreements were not filed with NMFS prior to December 1 of each year,
then NMFS would limit AFA catcher/processors to harvesting no more than
91.5 percent of the catcher/processor sector allocation to guarantee
that not less than 8.5 percent of the catcher/processor sector
allocation is made available for harvest by AFA catcher vessels. In
other words, AFA catcher/processors would be limited to harvesting no
more than 91.5 percent of the catcher/processor allocation and only
eligible catcher vessels would be able to harvest the remaining 8.5
percent of the catcher/processor sector allocation for delivery to
catcher/processors. This 91.5 percent catcher/processor harvest limit
would be published in the annual harvest specifications and would be
applied to each fishing season.

Management of the 0.5 percent cap for unlisted AFA catcher/processors.

    Under paragraph 208(e)(21) of the AFA, unlisted catcher/processors
are ``prohibited from harvesting in the aggregate a total of more than
one-half (0.5) of a percent of the pollock apportioned to the [AFA
catcher/processor sector].'' Under the proposed rule, this 0.5 percent
limit would be apportioned seasonally using whatever seasonal
apportionment formula is in effect for the overall catcher/processor
sector. This is to prevent unlisted catcher/processors from taking
their entire 0.5 percent limit during the A/B season when pollock have
higher value. However, NMFS would allow for the rollover of any
uncaught amount of this 0.5 percent limit from the A/B to the C/D
season so that unlisted catcher/processors could take their entire
annual limit during the C/D season if they so choose. This 0.5 percent
limit is not a separate allocation to unlisted AFA catcher/processors
but rather a cap on their harvest activity within the overall catcher/
processor sector allocation. Consequently, if unlisted AFA catcher/
processors chose not to fish, this opportunity would be foregone in
favor of other AFA catcher/processors and AFA catcher vessels
delivering to catcher/processors.

Inshore Cooperative Allocations

    Subparagraph 210(b)(1)(B) of the AFA sets out a specific formula
for determining the allocation of pollock to each inshore cooperative.
Under this subparagraph:
    the Secretary shall allow only such catcher vessels . . . to
harvest the aggregate percentage of the directed fishing allowance
under section 206(b)(1) in the year in which the fishery cooperative
will be in effect that is equivalent to the aggregate total amount
of pollock harvested by such catcher vessels . . . in the directed
pollock fishery for processing by the inshore component during 1995,
1996, and 1997 relative to the aggregate total amount of pollock
harvested in the directed pollock fishery for processing by the
inshore component during such years and shall prevent such catcher
vessels . . . from harvesting in aggregate in excess of such
percentage of such directed fishing allowance.
    In other words, under the AFA, each inshore cooperative's pollock
allocation is a percentage of the inshore sector allocation that is
equal to the aggregate inshore landings by all member vessels in the
cooperative from 1995-1997 relative to the total inshore landings
during that same period.
    However, paragraph 213(c)(3) of the AFA provides the Council with
the authority to recommend an alternative allocation formula:
    The North Pacific Council may recommend and the Secretary may
approve conservation and management measures in accordance with the
Magnuson-Stevens Act . . . that supersede the criteria required in
paragraph (1) of section 210(b) to be used by the Secretary to set
the percentage allowed to be harvested by catcher vessels pursuant
to a fishery cooperative under such paragraph.
    Using the authority provided in paragraph 213(c)(3) of the AFA, the
Council has recommended three changes that would supersede the inshore
cooperative allocation formula set out in the AFA. These changes are
contained in the proposed rule and described below.
    Offshore compensation. The first change recommended by the Council
at its June 1999 meeting would allow inshore catcher vessels to receive
inshore catch history credit for landings made to catcher/processors if
the vessel made cumulative landings to catcher/processors of more than
499 mt of BSAI pollock during the 1995 through 1997 qualifying period.
The Council recommended this change to assist the cooperatives in
meeting the intent of paragraph 210(b)(4) of the AFA, which requires
that:
    Any contract implementing a fishery cooperative under paragraph
(1) which has been entered into by the owner of a qualified catcher
vessel eligible under section 208(a) that harvested pollock for
processing by catcher/processors or motherships in the directed
pollock fishery during 1995, 1996, and 1997 shall, to the extent
practicable, provide fair and equitable terms and conditions for the
owner of such qualified catcher vessel.
    The Council believed that catcher vessels with sustained
participation delivering to catcher/processors, but excluded from
delivering to catcher/processors under subsection 208(b) of the AFA,
should not be disadvantaged by the new management regime. The Council
chose 499 mt as the threshold based on information presented in the
EIS/RIR/IRFA, which indicated that 499 mt provided a good ``break
point''

[[Page 65036]]

between vessels with significant history of delivering to catcher/
processors and vessels that only had incidental deliveries to catcher/
processors during the 1995 through 1997 qualifying period. The Council
recommended that only deliveries to catcher/processors be considered
for such ``compensation'' and not deliveries made to the three
motherships listed in subsection 208(d) of the AFA, because any vessel
with more than 250 mt of pollock deliveries to one of the three AFA
motherships during the qualifying period would earn an endorsement to
deliver pollock to AFA motherships under the AFA and therefore, has not
``lost'' any fishing privileges as a result of the AFA.
    Using the best 2 of 3 years from 1995-1997. The second change
recommended by the Council at its June, 1999, meeting, would modify the
allocation formula so that the share of the BSAI pollock TAC that each
catcher vessel brings into a cooperative would be based on average
annual pollock landings in its best 2 out of 3 years from 1995 through
1997. This change, along with the offshore compensation formula, was
unanimously endorsed by industry representatives during public
testimony at the June 1999 Council meeting. These changes were viewed
as a more equitable method of allocating pollock catch because some
vessels may have missed all or part of the inshore fishery in a given
year due to unavoidable circumstances such as vessel breakdowns or lack
of markets.
    Revised open access formula. Finally, the Council recommended a
third change to the allocation formula at its June 2000 meeting. This
change would reduce the denominator in the formula from ``the aggregate
total amount of pollock harvested in the directed pollock fishery for
processing by the inshore component'' to ``the aggregate total amount
of pollock harvested by AFA catcher vessels with inshore sector
endorsements.'' The effect of this change is to eliminate from the
formula all 1995 through 1997 catch history made by vessels that are
not AFA catcher vessels with inshore sector endorsements. One
consequence of the formula set out in the AFA is that all inshore catch
history made by non-AFA vessels, and AFA catcher vessels without
inshore endorsements, defaults to the open access sector. The Council
believed that this resulted in an inshore open access allocation that
was unfairly inflated to the detriment of vessels in cooperatives. The
Council believed that inflating the open access quota in such a manner
would provide incentives for vessels to leave cooperatives that could
disrupt the objective of rationalizing the BSAI pollock fishery. Under
the Council's recommended change, the cooperative and the open access
sectors would be treated equally and allocations to both cooperatives
and the open access sector would be based only on the fishing histories
of the vessels in each group. All three of these changes have been
incorporated into Amendments 61/61/13/8 as recommendations that
supersede the AFA.
    Separate allocations for Bering Sea and Aleutian Islands Subareas.
Under the proposed rule, NMFS would use the allocation formula
recommended by the Council to make annual allocations of pollock to
each inshore cooperative for each subarea of the BSAI; the Bering Sea
subarea and the Aleutian Islands subarea. These two subareas would be
treated as separate pollock stocks under the FMP and receive separate
TACs during the annual specification process. The Aleutian Islands
subarea is currently closed to directed fishing for pollock as a
protection measure for Steller sea lions. Consequently, under this
proposed rule, as long as this closure remains in effect, NMFS would
not make separate cooperative allocations of pollock for the Aleutian
Islands subarea. Each cooperative would receive an annual allocation of
Bering Sea subarea pollock only.
    Each sector's annual Bering Sea Subarea allocation of pollock also
would be further apportioned among fishing seasons. In a separate
action, NMFS is implementing management measures to temporally and
spatially disperse the BSAI pollock fishery to implement reasonable and
prudent alternatives (RPAs) to protect endangered Steller sea lions.
These temporal and spatial dispersion measures would be applied to each
sector's BSAI pollock allocations in the manner set out in regulations
implementing the Steller sea lion RPAs.
    Treatment of the F/V HAZEL LORRAINE AND F/V PROVIDIAN pursuant to
Pub. L. 106-562. In December 2000, the President signed Pub. L. 106-562
into law. This law, among other things, includes a provision that
includes the F/V HAZEL LORRAINE and F/V PROVIDIAN as AFA inshore
catcher vessels. The relevant section reads as follows:
    SEC 501. TREATMENT OF VESSEL AS AN ELIGIBLE
VESSEL.Notwithstanding paragraphs (1) through (3) of sections 208(a)
of the American Fisheries Act . . . the catcher vessel HAZEL
LORRAINE . . . and catcher vessel PROVIDIAN . . . shall be
considered to be vessels that are eligible to harvest the directed
fishing allowance under section 206(b)(1) of that Act pursuant to a
Federal fishing permit in the same manner as, and subject to the
same requirements and limitations on that harvesting as apply to,
catcher vessels that are eligible to harvest that directed fishing
allowance under section 208(a) of that Act.
    After reviewing the legislative history of this statute including a
statement by Senator Snow in the Congressional Record (S. 11894,
December 15, 2000), NMFS has determined that Pub. L. 106-562 directs
NMFS to include both the F/V HAZEL LORRAINE and F/V PROVIDIAN as
eligible vessels and directs NMFS to use the 1992 through 1994 pollock
catch history of the F/V OCEAN SPRAY instead of 1995 through 1997 catch
history of the F/V PROVIDIAN for the purpose of determining inshore
cooperative quota allocations. Consequently, the proposed regulations
provide that the 1992 through 1994 catch history of the F/V OCEAN SPRAY
would be used to determine inshore cooperative allocations for any
cooperative for which the F/V PROVIDIAN is a member.

Excessive Shares Harvesting and Processing Limits

    Harvesting limits. Paragraph 210(e)(1) of the AFA establishes an
excessive harvesting share cap of 17.5 percent of the directed pollock
fishery as follows:
    HARVESTING. No particular individual, corporation, or other
entity may harvest, through a fishery cooperative or otherwise, a
total of more than 17.5 percent of the pollock available to be
harvested in the directed pollock fishery.
    To implement this provision of the AFA, NMFS would publish in the
annual harvest specifications, the tonnage amount that equates to 17.5
percent of the pollock available to be harvested in the directed
pollock fishery excluding CDQ. The proposed rule also contains a
definition of ``AFA entity'' to identify which entities are affected by
this 17.5 percent excessive harvesting share limit. The proposed
definition of AFA entity is discussed in detail in the definitions
section.
    Processing limits. Paragraph 210(e)(2) of the AFA states that:
    Under the authority of section 301(a)(4) of the Magnuson-Stevens
Act (16 U.S.C. 1851(a)(4)), the North Pacific Council is directed to
recommend for approval by the Secretary conservation and management
measures to prevent any particular individual or entity from
processing an excessive share of the pollock available to be
harvested in the directed pollock fishery. In the event the North
Pacific Council recommends and the Secretary approves an excessive
processing share that is lower than 17.5 percent, any individual or
entity that previously processed a percentage greater than such
share shall be allowed to continue to process such percentage,
except that their

[[Page 65037]]

percentage may not exceed 17.5 percent (excluding pollock processed
by catcher/processors that was harvested in the directed pollock
fishery by catcher vessels eligible under 208(b)) and shall be
reduced if their percentage decreases, until their percentage is
below such share. In recommending the excessive processing share,
the North Pacific Council shall consider the need of catcher vessels
in the directed pollock fishery to have competitive buyers for the
pollock harvested by such vessels.
    At its October 2000 meeting, the Council considered various options
for processing excessive share limits for the BSAI pollock fishery and
adopted a BSAI pollock excessive processing share limit of 30 percent
of the non-CDQ directed fishing allowance. The Council also recommended
that the same 10 percent entity rules established for excessive
harvesting shares be used for excessive processing shares as well.
Under this proposed rule, NMFS would publish in the annual harvest
specifications, the excessive processing share limit in tons that
equates to 30 percent of the pollock available to be harvested in the
non-CDQ directed pollock fishery. An AFA entity would be prohibited
from processing BSAI pollock from the BSAI directed pollock fishery
that was in excess of this excessive processing share limit.

Regulations Governing the Formation and Operation of Fishery
Cooperatives

    This proposed rule contains regulations that would govern the
formation and operation of fishery cooperatives. The first set of
regulations are filing deadlines and annual reporting requirements that
would apply to all cooperatives operating in the BSAI pollock fishery
regardless of sector. The second set of regulations are required
provisions of cooperative contracts that would be required to be
included in all catcher vessel cooperatives operating in the BSAI
pollock fishery that are intended to govern the harvest of sideboard
species by catcher vessel cooperatives. The third set of regulations
would be specific requirements and restrictions on inshore catcher
vessel cooperatives that are applying for an inshore cooperative
fishing permit to receive an annual allocation of the inshore sector
BSAI pollock TAC.

Regulations that Apply to all Cooperatives

    The following proposed regulations would apply to all fishery
cooperatives formed for the purpose of managing directed fishing for
pollock within any sector of the BSAI pollock fishery.
    Filing deadlines. Each fishery cooperative would be required to
file with NMFS and the Council, a signed copy of its cooperative
contract, and any material modifications to any such contract, together
with a copy of a letter from a party to the contract requesting a
business review letter on the fishery cooperative from the Department
of Justice and any response to such request. The Council and NMFS would
make this information available to the public upon request. The
proposed filing deadline for cooperatives operating in the catcher/
processor and mothership sectors is 30 days prior to the start of any
fishing activity conducted under the terms of the contract. The
proposed filing deadline for cooperatives operating in the AFA inshore
sector is December 1 of the year prior to the year in which fishing
under the contract would occur. The December 1 deadline for inshore
sector cooperatives is necessary because inshore sector cooperative
allocations must be included in the BSAI interim harvest specifications
that are published prior to January 31 of each year. Under this
proposed rule, NMFS would not make sub-allocations of pollock to
catcher/processor and mothership cooperatives. Such cooperatives
operate at the sector level. Consequently, catcher/processor and
mothership sector cooperative information does not need to be included
in the BSAI interim harvest specifications.
    Designated representative. Each cooperative would be required to
appoint a designated representative. The designated representative
would be the primary contact person for NMFS on issues related to the
operation of the cooperative and would be responsible for fulfilling
regulatory requirements on behalf of the cooperative including, but not
limited to, filing of cooperative contracts, filing of annual reports,
and in the case of inshore sector catcher vessel cooperatives, signing
cooperative fishing permit applications and completing and submitting
inshore catcher vessel pollock cooperative catch reports. The owners of
the member vessels would be jointly and severally responsible for
compliance and ensuring that the designated representative complies
with the requirements contained in this proposed rule.
    Agent for service of process. Each cooperative would be required to
appoint an agent who is authorized to receive and respond to any legal
process issued in the United States with respect to all owners and
operators of vessels that are members of the cooperative. The agent for
service of process may be the same individual as the cooperative's
designated representative, or may be a different individual. Service on
or notice to the cooperative's appointed agent would constitute service
on or notice to all members of the cooperative. NMFS may, at its
option, attempt to serve every member of the cooperative individually
in addition to service on the cooperative's appointed agent. However,
failure to achieve service on the individual member would not affect
the validity of notice if service is accomplished on the cooperative's
appointed agent for service of process. The agent for service of
process would have to be capable of accepting service on behalf of the
cooperative until December 31 of the year 5 years after the calendar
year for which the fishery cooperative has filed its intent to operate.
If the agent is unable to complete this obligation, the cooperative
would be required to appoint a replacement agent who could complete the
term of service.
    Required contract elements for all fishery cooperatives. Under the
proposed rule, all cooperative contracts formed for the purpose of
managing directed fishing for pollock in the BSAI must: (1) List
parties to the contract, (2) list all vessels and processors that will
harvest and process pollock harvested under the cooperative, (3)
specify the amount or percentage of pollock allocated to each party to
the contract, and (4) pursuant to subsection 210(f) of the AFA, include
a contract clause under which the parties to the contract agree to make
payments to the State for any pollock harvested in the directed pollock
fishery which is not landed in the State, in amounts which would
otherwise accrue had the pollock been landed in the State subject to
any landing taxes established under Alaska law. Failure to include such
a contract clause or for such amounts to be paid would result in a
revocation of the authority to form fishery cooperatives under section
1 of the Act of June 25, 1934 (15 U.S.C. 521 et seq.).
    Annual reporting requirements for all cooperatives. Under this
proposed rule all cooperatives would be required to submit preliminary
and final annual written reports on fishing activity to the Council.
The Council would make copies of each report available to the public
upon request. The preliminary report covering activities through
November 1 would have to be submitted by December 1 of each year. The
final report covering activities for an entire calendar year would have
to be submitted by February 1 the following year.
    The preliminary and final written reports would be required to
contain, at a minimum: (1) The cooperative's

[[Page 65038]]

allocated catch of pollock and sideboard species, and any sub-
allocations of pollock and sideboard species made by the cooperative to
individual vessels on a vessel-by-vessel basis; (2) the cooperative's
actual retained and discarded catch of pollock, sideboard species, and
PSC on an area-by-area and vessel-by-vessel basis; (3) a description of
the method used by the cooperative to monitor fisheries in which
cooperative vessels participated; and (4) a description of any actions
taken by the cooperative to penalize vessels that exceed their allowed
catch and bycatch in pollock and all sideboard fisheries.
    The purpose of this proposed annual report requirement is to assist
the Council and NMFS in meeting the requirements of paragraph 210(a)(1)
of the AFA, which requires that NMFS make such information available to
the public in a manner that NMFS and the Council decide is appropriate.
Section 210(a) requires the release of this information, despite the
confidentiality provisions of the Magnuson-Stevens Act or any other
law. It requires that the Secretary and Council take into account the
interest of parties to any cooperative contract in protecting the
confidentiality of propriety information. The Secretary and the Council
have no discretion in whether to release this information, despite the
possibility that it might be confidential commercial or financial
information.
    After analyzing various methods of providing this information to
the public, the Council determined that the most appropriate method for
disseminating information about each cooperative would be to require an
annual report from each cooperative that could be reviewed by the
Council and distributed to the public. The information that would be
released is based on observer data and, except for the exception in
section 210(a), such information may have been protected from public
disclosure under the Freedom of Information Act.
    During the development of this proposed reporting requirement,
pollock industry representatives did not present to NMFS or the Council
concerns about these reporting requirements, and have not indicated
that disclosure of such information could reasonably be expected to
cause substantial competitive harm. In addition, the annual report does
require the release of observer data on specific hauls (e.g., haul
location, fishing depth, and catch composition) that might disclose
confidential information on specific fishing operations. The
requirement that each cooperative report the actual retained and
discarded catch of pollock, sideboard species, and PSC on an area-by-
area and vessel-by-vessel basis would not disclose when and where
individual vessels fished and what they caught at those locations which
could have disclosed to competitors the identity of fishing grounds.
Therefore, NMFS believes the disclosure of catch and bycatch
information on an annual basis and by large management areas would not
identify any vessel's specific fishing grounds and what was harvested
at those specific locations.
    For these reasons, NMFS has concluded that the annual reporting
requirements as proposed by the Council are an appropriate way to
comply with the public disclosure requirements of paragraph 210(a)(1)
of the AFA.

Regulations for Cooperatives that Contain AFA Catcher Vessels

    In addition to the general regulations described above that would
apply to all fishery cooperatives operating in the BSAI directed
pollock fishery, this proposed rule would impose additional contract
requirements for all cooperatives that contain AFA catcher vessels.
These regulations would apply to catcher vessel cooperatives operating
in all sectors of the BSAI pollock fishery. The purpose of these
regulations is to hold catcher vessel cooperatives responsible for
managing the harvest of groundfish sideboard species and prevent an all
out race for sideboard species by AFA catcher vessels.
    Under the proposed rule, a cooperative contract that includes AFA
catcher vessels must include adequate provisions to prevent each non-
exempt member catcher vessel from exceeding an individual vessel
sideboard limit for each BSAI or GOA sideboard species or species group
that is issued to the vessel by the cooperative in accordance with the
following criteria: (1) The aggregate individual vessel sideboard
limits issued to all member vessels in a cooperative must not exceed
the aggregate contributions of each member vessel towards the overall
groundfish sideboard amount as announced by NMFS, or (2) in the case of
two or more cooperatives that have entered into an inter-cooperative
agreement, the aggregate individual vessel sideboard limits issued to
all member vessels subject to the inter-cooperative agreement must not
exceed the aggregate contributions of each member vessel towards the
overall groundfish sideboard amount as announced by NMFS.
    This requirement that catcher vessel cooperatives address the issue
of sideboard management in their cooperative contracts was recommended
by the Council at its December 1999 meeting as a means to prevent
increased competition for sideboard species. To comply with this
requirement, each cooperative contract must have penalty provisions on
individual vessels that would be payable to owners of vessels outside
the cooperative. The amount and type of such penalties are left to the
discretion of the cooperatives. However, NMFS may disapprove an inshore
cooperative fishing permit application if the Regional Administrator
determines that such penalties are inadequate.

Regulations for Inshore Catcher Vessel Cooperatives

    Under the AFA, a fundamental difference exists between the fishery
cooperatives authorized to operate in the AFA catcher/processor and AFA
mothership sectors, and the fishery cooperatives authorized to operate
in the inshore sector. AFA catcher/processor and AFA mothership
cooperatives operate at the sector level and NMFS does not make sub-
allocations of each sector's BSAI pollock TAC to individual
cooperatives. Inseason management of the AFA catcher/processor and AFA
mothership sectors would continue to occur at the sector level
regardless of the presence or absence of fishery cooperatives.
    However, the inshore catcher vessel cooperatives authorized by the
AFA require an entirely different management structure. Subsection
210(b) of the AFA requires that NMFS make separate TAC allocations to
inshore catcher vessel cooperatives that form around an AFA inshore
processor and that meet certain restrictions. For this reason, inshore
cooperatives require substantially greater regulatory and management
infrastructure than AFA catcher/processor and AFA mothership sector
cooperatives. This proposed rule implements the following inshore
cooperative management measures as required by subsection 210(b) of the
AFA.
    Application for inshore cooperative fishing permits. Under this
proposed rule, inshore catcher vessel cooperatives wishing to receive
an allocation of the BSAI inshore pollock TAC would be required to
submit an application for an inshore cooperative fishing permit on an
annual basis by December 1 of the year prior to the year in which the
cooperative fishing permit would be in effect. Applications for an
inshore cooperative fishing permit would need to be accompanied by a
copy of the cooperative contract itself and by a copy of a letter from
a party to the contract

[[Page 65039]]

requesting a business review letter on the fishery cooperative from the
U.S. Department of Justice and any response to such request. Inshore
cooperative fishing permit applications that are not received by NMFS
by December 1 would be disapproved.
    As part of the application for an inshore cooperative fishing
permit, the cooperative's designated representative, who is signing the
permit application on behalf of the various members, would be required
to certify that: (1) Each catcher vessel in the cooperative is a
``qualified catcher vessel'' according to the definition of qualified
catcher vessel described below, (2) the cooperative contract was signed
by the owners of at least 80 percent of the qualified catcher vessels
that delivered pollock harvested in the BSAI directed pollock fishery
to the cooperative's designated AFA inshore processor during the year
prior to the year in which the cooperative fishing permit would be in
effect, (3) the cooperative contract requires that the cooperative
deliver at least 90 percent of its BSAI pollock catch to its designated
AFA processor, and (4) each member vessel has no permit sanctions or
other type of sanctions against it that would prevent it from fishing
for groundfish in the BSAI. A catcher vessel that cannot legally
harvest BSAI pollock due to enforcement action, permit sanctions, lack
of a valid AFA catcher vessel permit, or lack of other required permit,
would be barred from membership in an inshore cooperative that receives
an inshore cooperative fishing permit.
    To add or subtract a qualified catcher vessel, the cooperative
would be required to submit a new application prior to the December 1
deadline, and the new application must be subsequently approved by the
Regional Administrator.
    Definition of qualified catcher vessel. At its June, 2000, meeting,
the Council voted to recommend a definition of ``qualified catcher
vessel'' that would supersede the definition contained in the AFA.
Paragraph 210(b)(3) of the AFA defines ``qualified catcher vessel'' as
follows:
    QUALIFIED CATCHER VESSEL. For the purposes of this subsection, a
catcher vessel shall be considered a ``qualified catcher vessel''
if, during the year prior to the year in which the fishery
cooperative will be in effect, it delivered more pollock to the
shoreside processor to which it will deliver pollock under the
fishery cooperative in paragraph (1) than to any other shoreside
processor.
    The effect of this definition was to prevent the retirement of
catcher vessels that are no longer needed to harvest a cooperative's
annual allocation of pollock because each vessel was required to make a
qualifying landing every year to remain in the cooperative in each
subsequent year. At its June 2000, meeting, the Council recommended
that this definition be replaced with a new definition under which an
inactive vessel would remain qualified to join the cooperative that is
associated with the processor where it delivered more pollock to than
any other inshore processor in the last year in which the vessel
participated in the inshore sector of the BSAI directed pollock
fishery. The Council's recommended change would not affect vessels that
were active in the BSAI pollock fishery during the year prior to the
year in which the cooperative fishing permit would be in effect.
    The Council derives its authority to recommend an alternative
definition of ``qualified catcher vessel'' from paragraph 213(c)(1) of
the AFA, which provides the Council with the authority to recommend
measures to supersede certain provisions of the AFA. Paragraph
213(c)(1) provides that:
    CHANGES TO FISHERY COOPERATIVE LIMITATIONS AND POLLOCK CDQ
ALLOCATION. The North Pacific Council may recommend and the
Secretary may approve conservation and management measures in
accordance with the Magnuson-Stevens Act
    (1) that supersede the provisions of this title, except for
sections 206 and 208, for conservation purposes or to mitigate
adverse effects in fisheries or on owners of fewer than three
vessels in the directed pollock fishery caused by this title or
fishery cooperatives in the directed pollock fishery, provided such
measures take into account all factors affecting the fisheries and
are imposed fairly and equitably to the extent practicable among and
within the sectors in the directed pollock fishery;
    In making the recommendation under Amendments 61/61/13/8 to
supersede the AFA definition of ``qualified catcher vessel'' the
Council determined that this change would mitigate adverse effects on
some owners of fewer than three catcher vessels. Some independently
owned AFA catcher vessels are relatively small vessels that may be less
safe to operate at great distances from shore under the new Steller sea
lion RPA protection measures which have closed many nearshore areas to
pollock fishing. A requirement that all such vessels fish each year to
remain qualified to join a cooperative each following year would impose
unnecessary risks that could be mitigated with a revision to the
definition of qualified catcher vessel. In addition, some catcher
vessels that are eligible to fish for pollock under the AFA have since
been lost or may no longer be safe to operate without major rebuilding.
Under this change, the owners of such vessels could remain in
cooperatives without the need to rebuild or deploy new vessels into the
BSAI pollock fishery. In making this recommendation, the Council also
noted that a primary objective of the AFA is to reduce excess capacity
in the BSAI pollock fishery and that changing the definition of
``qualified catcher vessel'' would further that objective.
    This proposed rule also makes an additional clarification to the
definition of ``qualified catcher vessel.'' Under the proposed rule,
only pollock harvested in the BSAI directed pollock fishery would be
used to determine vessel qualification. Pollock that is landed as
incidental bycatch in other fisheries would not be used to determine
which cooperative a catcher vessel is qualified to join and a catcher
vessel cannot qualify to join a cooperative based on incidental catch
of pollock in other fisheries. This clarification is necessary to
prevent a vessel's incidental bycatch of pollock in other fisheries
from inadvertently affecting its cooperative qualification. Counting
pollock bycatch could create the unintended effect of restricting the
ability of catcher vessels to deliver non-pollock groundfish to other
markets. Because pollock is a common bycatch species in the Pacific cod
fishery and other groundfish fisheries, AFA catcher vessels fishing for
Pacific cod may land significant amounts of pollock as incidental
bycatch that would be counted against the pollock incidental catch
allowance and not the vessel's cooperative quota. The AFA makes no
restrictions on either the delivery or processing of non-pollock
groundfish species in the BSAI. Consequently, AFA catcher vessels
fishing for Pacific cod are free to deliver their Pacific cod and
associated incidental catch of pollock to any processor, not just to
one of the eight AFA processors that are authorized to receive pollock
harvested in the BSAI directed pollock fishery.
    If an AFA vessel's cooperative qualification were based on all
catch of pollock and not just pollock harvested in the directed
fishery, then an AFA catcher vessel fishing for Pacific cod and
delivering to a processor other than its AFA pollock processor could
inadvertently disqualify itself from its cooperative of choice due to
incidental pollock harvests in other fisheries. In fact, because
Pacific cod processors other than the eight AFA inshore pollock
processors also operate in the BSAI, an active AFA catcher vessel
delivering Pacific cod to a non-AFA processor could inadvertently find
itself ineligible to join any inshore cooperative because the processor
to

[[Page 65040]]

which it delivered more pollock than any other processor may be a non-
AFA processor.
    Additional contract requirements. Inshore cooperatives wishing to
receive an allocation of pollock would have several additional contract
requirements. An inshore cooperative contract eligible for a pollock
allocation must be signed by the owners of at least 80 percent of the
qualified catcher vessels. In addition, inshore cooperative contracts
must specify that the cooperative will deliver at least 90 percent of
the pollock harvested in the directed pollock fishery to its designated
inshore processor during the year in which the fishery cooperative
would be in effect and that its designated inshore processor has agreed
to process such pollock. Finally, a catcher vessel would be barred from
membership in an inshore cooperative if the vessel does not have all
necessary permits to engage in directed fishing for pollock in the
BSAI, or if the vessel is subject to any permit sanction that would
prevent it from engaging in directed fishing for pollock in the BSAI.
The purpose of this restriction is to prevent the granting of a limited
access fishing quota to any catcher vessel that cannot legally fish for
pollock in the BSAI. If an inshore cooperative fishing permit
application does not meet all of these requirements, the permit
application would be denied by NMFS and the cooperative would be
provided the opportunity to submit a revised contract and permit
application.
    Inshore Cooperative Fishing Restrictions. This proposed rule would
impose a variety of requirements and management standards on inshore
fishery cooperatives. First, only catcher vessels listed on the
cooperative's AFA inshore cooperative fishing permit would be permitted
to harvest the cooperative's annual cooperative allocation. Second, all
BSAI inshore pollock harvested by a member vessel while engaging in
directed fishing for inshore pollock would accrue against the
cooperative's annual pollock allocation regardless of whether the
pollock was retained or discarded and regardless of where the pollock
was delivered. Third, each inshore pollock cooperative would be
responsible for reporting to NMFS its BSAI pollock harvest on a weekly
basis according to recordkeeping and reporting requirements published
as part of the annual revisions to recordkeeping and reporting
requirements for the groundfish fisheries of the BSAI and GOA. Fourth,
each inshore pollock cooperative would be prohibited from exceeding its
annual allocation of BSAI pollock, and the owners and operators of all
vessels listed on the cooperative fishing permit would be held jointly
and severally liable for overages of the cooperative's annual
allocation.
    Inseason Management of Inshore Cooperatives. Under this proposed
rule, NMFS would manage the inshore cooperative sector and inshore open
access sector as two separate inshore pollock fisheries. The various
inshore cooperatives would be managed as a single aggregate allocation
for the purpose of making season and area TAC apportionments and for
the purpose of issuing directed fishing closures. When NMFS determines
that the cooperative sector has reached a season or area apportionment
of BSAI pollock, NMFS would close inshore cooperative fishing for that
season or area. Under this system, each inshore cooperative would be
given the opportunity to harvest its entire annual allocation of BSAI
pollock, but would receive no harvest guarantee for each season and
area. NMFS is encouraging the various inshore cooperatives to form an
inter-cooperative agreement to govern cooperative fishing activities
within each season and area. Such an inter-cooperative agreement was
formed in January 2000 to manage cooperative fishing under the
emergency interim rules and has operated successfully to date. The
proposed management approach is that NMFS would manage the cooperative
pollock quota and various sideboard quotas in the aggregate and
encourage the various cooperatives to work together to develop a
cooperative management program to govern activities by individual
cooperatives and individual vessels. Such cooperation between
cooperatives will be necessary to prevent the activities of one
cooperative from affecting the plans of another cooperative.

Harvesting and Processing Sideboard Restrictions

    The AFA requires that harvesting and processing limits be placed on
AFA vessels and processors in other groundfish, crab, and scallop
fisheries to protect the participants in other fisheries from spillover
effects resulting from the rationalization of the BSAI pollock fishery
and the formation of fishery cooperatives in the BSAI pollock fishery.
Potential spillover effects could take many forms. Most obviously,
excess harvesting and processing capacity from the rationalization of
the BSAI pollock fishery could flood into other fisheries as a result
of the AFA to the detriment of current participants in other fisheries.
In addition, fishery cooperatives provide vessels with greater
flexibility to schedule their fishing activity because they are no
longer racing for pollock at the start of every season. As a result,
vessels in cooperatives would have the ability to enter other fisheries
that might previously have been conducted concurrent with the BSAI
pollock fishery. Finally, companies involved in the AFA pollock fishery
are expected to benefit financially from the formation of fishery
cooperatives and non-AFA companies fear that such profits may be used
to expand into other groundfish and crab fisheries.
    To address these potential negative effects of the AFA on the
participants in other groundfish, crab, and scallop fisheries, the AFA
sets out a complex set of harvest and processing restrictions, which
have become known as ``sideboards''. These sideboard measures have been
further refined by the Council's recommendations for catcher/processor
and catcher vessel sideboards under Amendments 61/61/13/8. The
Council's recommendations have been incorporated into this proposed
rule and are summarized below.

Catcher/Processor Harvesting Sideboards

    The AFA establishes harvest restrictions or ``sideboards,'' that
restrict the participation of listed AFA catcher/processors in other
BSAI groundfish fisheries and completely prohibit listed AFA catcher/
processors from fishing in the GOA. These sideboards apply only to AFA
catcher/processors listed in paragraphs 208(e)(1) through (20) of the
AFA and are not extended to unlisted AFA catcher/processors that
qualify to fish for pollock under paragraph 208(e)(21) of the AFA. The
language establishing catcher/processor harvest caps is set out in
paragraphs 211(b)(1) and (2) of the AFA as follows:
    (b) CATCHER/PROCESSOR RESTRICTIONS.--
    (1) GENERAL. The restrictions in this sub-section shall take
effect on January 1, 1999 and shall remain in effect thereafter
except that they may be superceded (with the exception of paragraph
(4)) by conservation and management measures recommended after the
date of the enactment of this Act by the North Pacific Council and
approved by the Secretary in accordance with the Magnuson-Stevens
Act.
    (2) BERING SEA FISHING. The catcher/processors eligible under
paragraphs (1) through (20) of section 208(e) are hereby prohibited
from, in the aggregate
    (A) exceeding the percentage of the harvest available in the
offshore component of any Bering Sea and Aleutian Islands groundfish
fishery (other than the pollock fishery) that is equivalent to the
total harvest by such catcher/processors and the catcher/

[[Page 65041]]

processors listed in section 209 in the fishery in 1995, 1996, and
1997 relative to the total amount available to be harvested by the
offshore component in the fishery in 1995, 1996, and 1997;
    (B) exceeding the percentage of the prohibited species available
in the offshore component of any Bering Sea and Aleutian Islands
groundfish fishery (other than the pollock fishery) that is
equivalent to the total of the prohibited species harvested by such
catcher/processors and the catcher/processors listed in section 209
in the fishery in 1995, 1996, and 1997 relative to the total amount
of prohibited species available to be harvested by the offshore
component in the fishery in 1995, 1996, and 1997; and
    (C) fishing for Atka mackerel in the eastern area of the Bering
Sea and Aleutian Islands and from exceeding the following
percentages of the directed harvest available in the Bering Sea and
Aleutian Islands Atka mackerel fishery
    (i) 11.5 percent in the central area; and
    (ii) 20 percent in the western area.
    For the 1999 fishing year, NMFS implemented these provisions by
publishing the harvest limits in the 1999 BSAI harvest specifications
and prohibiting listed AFA catcher/processors from engaging in directed
fishing for a groundfish species or species group when NMFS determined
that the sideboard limit was likely to be met or exceeded. For the 2000
and 2001 fishing years these limits were set out by emergency interim
rule (65 FR 4520, January 28, 2000; extended at 65 FR 39107, June 23,
2000; and 66 FR 7276, January 22, 2001).
    At its June 1999 meeting, the Council recommended that catcher/
processor harvest limits for BSAI groundfish other than Atka mackerel
be based on the 1995 through 1997 retained catch of such groundfish
species by the 20 listed AFA catcher/processors listed in paragraphs
208(e)(1) through (20) of the AFA and the nine ineligible catcher/
processors listed in section 209 of the AFA, except for Pacific cod
which would be based on 1997 retained catch only. The Council made a
distinction between retained and total catch for the purpose of
calculating sideboards and felt that AFA vessels should not receive
sideboard credit for groundfish that was discarded and not utilized.
Given NMFS' and the Council's longstanding emphasis on reduction of
discards and waste in the groundfish fisheries off Alaska, the Council
believed it was reasonable not to allow the members of a sector of the
groundfish fleet to claim fishing privileges based on catch that they
discarded and did not utilize, especially given that such discards may
have resulted in foregone catch and loss of fishing opportunities for
other sectors of the industry.
    In addition, the Council recommended several other relatively minor
changes to the catcher/processor sideboard formula set out in the AFA.
The Council recommended that only 1997 catch history be used to
determine Pacific cod harvest limits, because 1997 was the first year
in which the BSAI Pacific cod trawl gear allocation was split between
catcher/processors and catcher vessels. Prior to 1997 the BSAI Pacific
cod TAC was not allocated between catcher/processors and catcher
vessels, meaning that pre-1997 Pacific cod TACs and harvest percentages
by AFA catcher/processors are not directly comparable to present day
Pacific cod allocations. The Council also recommended that only the
years 1996 and 1997 be used to calculate Pacific ocean perch (POP)
sideboard amounts because 1996 was the first year in which the POP TAC
was divided between the Bering Sea and Aleutian Islands subareas.
    The Atka mackerel catcher/processor sideboard percentages set out
in subparagraph 211(b)(1)(C) of the AFA would be implemented unchanged.
The AFA catcher/processor sideboard limit for Atka mackerel would be
zero percent of the Bering Sea subarea and Eastern Aleutians annual
TAC, 11.5 percent of the Central Aleutians annual TAC, and 20 percent
of the Western Aleutians annual TAC. These Atka mackerel sideboard
amounts would be divided by area and season and would be limited inside
critical habitat in the same manner as the overall Atka mackerel TAC
for each area.
    The Council did not recommend any changes to the formula for
establishing prohibited species catch (PSC) bycatch limits set out in
subparagraph 211(b)(2)(B) of the AFA. However, the Council recommended
that NMFS not implement catcher/processor sideboards for salmon and
herring because extensive management measures are already in place to
limit bycatch of those PSC species in the BSAI pollock fishery and
incidental bycatch of salmon or herring is primarily a concern in the
pollock fishery and not in the directed fisheries for other groundfish
species.

Management of Catcher/Processor Harvest Sideboards

    Under this proposed rule, catcher/processor sideboards would be
managed through directed fishing closures. NMFS would evaluate each
groundfish harvest limit specified according to the formula outlined
previously and would authorize directed fishing by listed AFA catcher/
processors only for those BSAI groundfish species for which the harvest
limit is large enough to support a directed fishery by listed AFA
catcher/processors. Groundfish species for which the catcher/processor
harvest limit is too small to support a directed fishery would be
closed to directed fishing by listed AFA catcher/processors at the
beginning of the fishing year. The sideboard amounts for these species
would then be specified as the incidental catch amounts harvested in
other directed groundfish fisheries.
    In some instances where catcher/processors have a history of
harvesting a particular species as bycatch in the pollock fishery and
have not traditionally retained that species, the retained catch
formula for setting sideboard amounts would result in a sideboard
amount for that species that likely would be far below its intrinsic
bycatch rate in the BSAI pollock fishery. Squid and POP fall into this
category. An expected consequence of basing sideboard amounts on
retained catch rather than total catch is that actual harvests of some
species as bycatch in the directed pollock fishery would exceed the
published sideboard amount. As a result, NMFS proposes a management
approach in the proposed rule that would allow for continued incidental
catch of species under sideboard provisions that acknowledge historical
bycatch needs, while ensuring that listed AFA catcher/processors would
not participate in directed fisheries for other BSAI groundfish species
at levels that would exceed their level of participation in such
fisheries from 1995 through 1997. NMFS believes that this approach is
consistent with the language and intent of the AFA.

Catcher Vessel Sideboards

    This proposed rule would establish catcher vessel harvest limits
for BSAI crab, BSAI and GOA groundfish, and the Alaska scallop fishery.
These measure are required under subparagraph 211(c)(1)(A) of the AFA
which states:
    By not later than July 1, 1999, the North Pacific Council shall
recommend for approval by the Secretary conservation and management
measures to . . . prevent the catcher vessels eligible under
subsections (a), (b), and (c) of section 208 from exceeding in the
aggregate the traditional harvest levels of such vessels in other
fisheries under the authority of the North Pacific Council as a
result of fishery cooperatives in the directed pollock fishery.
    The Council met this requirement by adopting a comprehensive suite
of catcher vessel sideboard measures at its June 1999 meeting as part
of Amendments 61/61/13/8.
    Because the BSAI king and Tanner crab fisheries and the Alaska
scallop

[[Page 65042]]

fishery are managed by the State under Federal oversight, the Council
recommended that crab and scallop catcher vessel sideboards be
implemented jointly through State and Federal actions. Amendment 4 to
the scallop FMP was approved by NMFS on June 8, 2000 and authorized a
license limitation program (LLP) for the Alaska scallop fishery under
which only one AFA catcher vessel is eligible to receive a scallop
license. NMFS and the Council have determined that the scallop LLP
program effectively prevents additional effort in the scallop fishery
by other AFA catcher vessels and that additional restrictions on entry
by AFA catcher vessels are unnecessary. As a further measure under
Amendments 61/61/13/8, the Council also has recommended that the State
implement an AFA catcher vessel scallop sideboard limit equal to the
percentage of the scallop guideline harvest level that was harvested by
the AFA catcher vessel in 1997. This sideboard harvest restriction
would be implemented under State regulations. Therefore, scallop
sideboard measures are not included in this proposed rule.
    Under Amendments 61/61/13/8, the Council has recommended that NMFS
limit participation in BSAI crab fisheries through crab sideboard
endorsements on AFA catcher vessel permits. The Council has recommended
that only AFA catcher vessels with a demonstrated history in a
particular crab fishery may continue participating in that fishery. A
catcher vessel that lacks the appropriate crab sideboard endorsements
on its AFA permit would be prohibited from retaining BSAI king and
Tanner crab even if that vessel was authorized to do so under an LLP
for that crab fishery. These sideboard endorsements are described above
in the discussion of AFA catcher vessel permits.
    In addition to permit restrictions, the Council also recommended
that the State implement AFA catcher vessel harvest limits for the
Bristol Bay red king crab and Bairdi Tanner crab fisheries to keep the
AFA vessels from harvesting more such crab than they had traditionally
harvested. With respect to the Bristol Bay red king crab fishery, the
Council recommended an AFA catcher vessel sideboard limit equal to the
percentage of Bristol Bay red king crab harvested by AFA catcher
vessels from 1991 through 1997, excluding 1994 and 1995 when the
fishery was closed. For the Bairdi Tanner crab fishery, the Council
recommended that AFA catcher vessels be excluded from the fishery until
the Council's Bairdi rebuilding goal is reached, and then be limited to
their historic catch percentage from 1995-1996. The Alaska Board of
Fisheries has developed a management program to implement these
restrictions which has been in effect since the 2000 Bristol Bay red
king crab fishery.
    For the BSAI and GOA groundfish fisheries, the Council recommended
that AFA catcher vessel sideboards be established based on landed catch
and be managed through directed fishing closures in the same manner as
AFA catcher/processor sideboards. However, a significant difference
between catcher/processor and catcher vessel groundfish sideboards is
that the Council recommended that certain AFA catcher vessels be exempt
from some BSAI and GOA groundfish sideboards while no exemptions were
recommended for listed AFA catcher/processors. These sideboard
exemptions were described previously under the section on AFA catcher
vessel permits. This proposed rule contains the Council's recommended
BSAI and GOA groundfish and PSC sideboards for AFA catcher vessels,
which are summarized below.

Catcher Vessel Groundfish Sideboards in the BSAI

    Catcher vessel groundfish sideboards would be established for all
BSAI groundfish species using a formula based on the retained catch of
all non-exempt AFA catcher vessels of each sideboard species from 1995
through 1997 (1997 only for BSAI Pacific cod) divided by the available
TAC for that species over the same period. AFA catcher vessel
sideboards would apply to all non-exempt AFA catcher vessels regardless
of sector and regardless of participation in a cooperative. The
criteria for catcher vessel sideboard exemptions were outlined in the
AFA catcher vessel permit section.
    In addition, AFA catcher vessels with mothership endorsements would
be exempt from Pacific cod sideboard closures after March 1 of each
year. The March 1 exemption for AFA catcher vessels with mothership
endorsements was recommended for several reasons. In most years, the
BSAI Pacific cod fishery is largely concluded by March 1 and fishing is
often less productive in terms of catch per unit effort after that
date. Given that as few as two non-AFA catcher vessels have fished for
BSAI Pacific cod in recent years, the Council believed that some
additional vessels might be needed after this date to completely
harvest the TAC so that processors are not faced with a slow trickle of
Pacific cod deliveries that are uneconomical to process. The Council
recommended that AFA catcher vessels with mothership endorsements be
allowed to re-enter the BSAI Pacific cod fishery after March 1 because
the mothership sector received a relatively smaller pollock quota under
the AFA and mothership catcher vessels are more likely to be finished
with their pollock operations by that date.
    Catcher vessel PSC sideboards for BSAI groundfish fisheries would
be managed in the same manner as catcher/processor PSC sideboards,
however the sideboard amounts would be calculated differently. Because
individual vessel PSC catch histories are not available for AFA catcher
vessels, PSC sideboard amounts would be pro-rated based on percentage
of groundfish catch in each BSAI groundfish fishery.

Catcher Vessel Groundfish Sideboards in the GOA

    Catcher vessel sideboards for GOA groundfish fisheries would be
established and managed in the same manner as the catcher vessel
sideboards in the BSAI groundfish fisheries except that catcher vessels
less than 125 ft (38.1 m) LOA whose annual BSAI pollock landings
averaged less than 1700 mt from 1995 through 1997 (i.e., landed less
than 5,100 mt of pollock over the 3-year period) and that made 40 or
more GOA groundfish landings over the same period would be exempt from
sideboard closures for GOA groundfish fisheries. The catch histories of
the exempt vessels would not be counted towards the sideboard amounts
for non-exempt vessels. As with the BSAI Pacific cod fishery, the
Council noted that many AFA catcher vessels with relatively low catch
histories in BSAI pollock have traditionally participated in GOA
groundfish fisheries. Indeed, many of these vessels are based in Kodiak
and other GOA ports and have historically concentrated their fishing
effort in GOA fisheries. The Council believed that it would be
inequitable to limit such vessels from participating in GOA fisheries
when they have historically fished in the GOA and may have relatively
low pollock catch histories in the BSAI during the AFA qualifying years
due to their history of fishing primarily in the GOA.
    The Council specifically limited both the BSAI Pacific cod and GOA
groundfish sideboard exemptions to vessels with a significant history
of participation in those fisheries and indicated that it believed such
exemptions were consistent with the catcher vessel sideboard provisions
at paragraph 211(c)(1) of the AFA, which require that:
    By not later than July 1, 1999, the North Pacific Council shall
recommend for

[[Page 65043]]

approval by the Secretary conservation and management measures to
    (A) prevent the catcher vessels eligible under subsections (a),
(b), and (c) of section 208 from exceeding in the aggregate the
traditional harvest levels of such vessels in other fisheries under
the authority of the North Pacific Council as a result of fishery
cooperatives in the directed pollock fishery . . . .
    NMFS estimates that 12 catcher vessels would be exempt from BSAI
Pacific cod sideboards in the BSAI and 12 catcher vessels would be
exempt from groundfish sideboards in the GOA. The Council noted that
because these exempt vessels traditionally have participated at high
levels in the BSAI Pacific cod and GOA groundfish fisheries, such
exemptions were not likely to cause the aggregate harvest levels of all
AFA catcher vessels to exceed traditional levels in these fisheries.
However, the Council noted that, even if fishing in the BSAI Pacific
cod and GOA groundfish fisheries by exempt vessels does cause the
aggregate harvest of all AFA catcher vessels to exceed historic levels
in other groundfish fisheries, the exemptions are warranted and within
the authority of the Council to recommend under paragraph 213(c)(1) of
the AFA, which states:
    The North Pacific Council may recommend and the Secretary may
approve conservation and management measures in accordance with the
Magnuson-Stevens Act
    (1) that supersede the provisions of this title, except for
sections 206 and 208, for conservation purposes or to mitigate
adverse effects in fisheries or on owners of fewer than three
vessels in the directed pollock fishery caused by this title or
fishery cooperatives in the directed pollock fishery, provided such
measures take into account all factors affecting the fisheries and
are imposed fairly and equitably to the extent practicable among and
within the sectors in the directed pollock fishery.
    The Council believed that these two exemptions are warranted to
mitigate adverse economic effects as described above on owners of fewer
than three vessels in the directed pollock fishery given that the
exempt vessels are primarily owned by independent fishermen who own
fewer than three vessels in the directed pollock fishery.

Crab Processing Sideboards

    Subparagraph 211(c)(2)(A) of the AFA establishes limits on crab
processing by AFA inshore processors and AFA motherships that receive
pollock harvested by a fishery cooperative:
    Effective January 1, 2000, the owners of the motherships
eligible under section 208(d) and the shoreside processors eligible
under section 208(f) that receive pollock from the directed pollock
fishery under a fishery cooperative are hereby prohibited from
processing, in the aggregate for each calendar year, more than the
percentage of the total catch of each species of crab in directed
fisheries under the jurisdiction of the North Pacific Council than
facilities operated by such owners processed of each such species in
the aggregate, on average, in 1995, 1996, 1997. For the purposes of
this subparagraph, the term ``facilities'' means any processing
plant, catcher/ processor, mothership, floating processor, or any
other operation that processes fish. Any entity in which 10 percent
or more of the interest is owned or controlled by another individual
or entity shall be considered to be the same entity as the other
individual or entity for the purposes of this subparagraph.
    These crab processing limits were implemented by NMFS in the
emergency interim rule published January 28, 2000 (65 FR 4520, extended
at 65 FR 39107). However, at its September 2000 meeting, the Council
recommended that the basis years used to calculate crab processing
sideboard amounts be revised by adding 1998 and giving it double-
weight. Some crab fishermen and AFA processors expressed concern that
too many non-AFA processors have left the crab fisheries since 1997 and
that the 1995-1997 years do not accurately reflect the composition of
the crab processing industry at the time of passage of the AFA. Some
crab fishermen were concerned that AFA crab processing caps were
restricting markets for crab fishermen and having a negative effect on
exvessel prices. By adding 1998 and giving it double-weight relative to
1995-1997, the Council believed that the crab processing caps would
more accurately reflect the status of the crab processing industry at
the time of passage of the AFA and that such a change to supersede this
provision of the AFA was warranted to mitigate adverse effects on
markets for crab fishermen.
    Entity-based processing caps. NMFS has developed a definition of
``AFA entity'' for the purpose of implementing these crab processing
limits and for the purpose of implementing the 17.5 percent excessive
harvesting share limit discussed above. This definition is explained
below in the section on definitions. To implement these crab processing
limits, NMFS would require that the owners of an AFA mothership or AFA
inshore processor intending to process pollock harvested by a
cooperative identify on their permit applications all individuals,
corporations, or other entities that directly or indirectly own or
control a 10-percent or greater interest in the AFA mothership and/or
inshore processor (collectively the AFA inshore or mothership entity),
and any other crab processors in which such entities have a 10-percent
or greater interest (the associated AFA crab facilities). For each BSAI
king and Tanner crab fishery, NMFS would calculate the average
percentage of the total crab harvest processed by the associated AFA
crab facilities and issue entity-wide crab processing caps for each
crab fishery to each AFA inshore or mothership entity on its AFA
mothership or AFA inshore processor permit. Each individual,
corporation, or other concern comprising an AFA inshore or mothership
entity would be responsible for ensuring that the AFA crab processing
facilities associated with the AFA inshore or mothership entity do not
exceed the entity's caps. The individuals, corporations and other
concerns comprising the AFA inshore or mothership entity would be held
jointly and severally liable for any overage.
    Determining crab processing percentages. Upon receipt of an
application for a cooperative processing endorsement from the owners of
an AFA mothership or AFA inshore processor, the Regional Administrator
would calculate a crab processing cap percentage for the associated AFA
inshore or mothership entity. The crab processing cap percentage for
each BSAI king or Tanner crab species would be equal to the percentage
of the total catch of each BSAI king or Tanner crab species that the
AFA crab facilities associated with the AFA inshore or mothership
entity processed in the aggregate, on average, in 1995, 1996, 1997, and
1998 with 1998 given double-weight (counted twice).
    Each AFA inshore or mothership entity's crab processing cap
percentage for each BSAI king or Tanner crab species would be listed on
the AFA mothership or AFA inshore processor permit that contains a
cooperative pollock processing endorsement.
    Conversion of crab processing sideboard percentages to poundage
caps. Prior to the start of each BSAI king or Tanner crab fishery, NMFS
would convert each AFA inshore or mothership entity's crab processing
sideboard percentage to a poundage cap by multiplying the crab
processing sideboard percentage by the pre-season guideline harvest
level established for that crab fishery by ADF&G. Each entity and the
public would be notified of the crab processing poundage caps through
notification in the Federal Register and/or through information
bulletins published on the NMFS-Alaska Region world wide web home page
(http:\\www.fakr.noaa.gov).
    CDQ crab harvest. Under the proposed rule, processing of CDQ crab
would not accrue against an entity's

[[Page 65044]]

crab processing cap. Only crab harvested in the non-CDQ directed crab
fisheries would accrue against an entity's crab processing cap. Custom
processing. These crab processing caps would apply to all crab
processed by the associated AFA crab processing facilities including
any ``custom processing'' activity. Custom processing refers to a
contractual relationship in which one processing facility processes
crab on behalf of another processor. Custom processing of crab would
not be prohibited, but any custom processing of crab done under
contract with an AFA crab processor would be counted against the
associated AFA inshore or mothership entity's crab processing cap.

Observer Coverage Requirements for AFA Vessels and Processors

    Under Amendments 61/61/13/8, NMFS proposes new observer coverage
requirements for AFA catcher/processors, AFA motherships, and AFA
inshore processors. However, no changes to observer coverage
requirements are proposed for AFA catcher vessels. These proposed new
observer coverage requirements are described below.

Listed AFA Catcher/Processors and AFA Motherships

    Two observer requirement. Subparagraph 211(b)(6)(A) of the AFA
requires that unrestricted AFA catcher/processors have two observers on
board at any time the vessel is fishing for groundfish in the BSAI.
This proposed rule would set out this requirement in regulation and
extend the requirement to AFA motherships. NMFS believes it is
appropriate to extend this requirement to AFA motherships because AFA
motherships operate in a similar manner to AFA catcher/processors in
that they receive unsorted codends from catcher vessels. In a
mothership operation, all weighing and sorting of catch occurs on the
mothership rather than the catcher vessel. The only practical
difference between catcher/processor and mothership operations is that
motherships do not actually engage in trawling. Under this proposed
rule, a listed AFA catcher/processor or AFA mothership would be
required to have aboard two NMFS certified observers for each day that
the vessel is used to harvest, process, or take deliveries of
groundfish. In addition, at least one observer on board each AFA
catcher/processor and AFA mothership would have to be a lead level 2
observer at all times that the vessel is fishing for groundfish or
processing groundfish harvested in the BSAI or GOA.
    Observer workload requirement. This proposed rule also would extend
the CDQ program observer workload limits to AFA catcher/processor and
AFA motherships. These workload limits are necessary to insure that all
groundfish harvested and processed by AFA catcher/processors and
motherships can be sampled by a NMFS observer. Consequently, more than
two observers might be required to allow each haul brought on board the
vessel to be sampled by an observer. This situation may occur for some
AFA motherships, depending on how many deliveries they receive from
catcher vessels in a day.
    Lead level 2 observer requirement. Under this proposed rule, at
least one observer on board each AFA catcher/processor and AFA
mothership would have to be a lead level 2 observer (formerly known as
a lead CDQ observer) and would allow the second observer position to be
filled by any NMFS certified observer. Observers are an increasingly
important element of NMFS' monitoring program for AFA catcher/processor
and AFA mothership sector pollock harvests. Prior to the AFA, NMFS
monitored offshore pollock harvests using a blend of observer data and
processor weekly production reports. However, under the AFA with its
statutory requirement that AFA catcher/processors carry two observers
at all times and weigh their catch using NMFS-approved scales, NMFS is
now relying only on observers and scale weights to provide inseason
harvest data for the AFA catcher/processor sector and is no longer
using vessel production data for quota management purposes. In
addition, NMFS relies on observers to monitor catcher/processor
groundfish sideboards as well as catcher vessel sideboards for catcher
vessels delivering to catcher/processors and AFA motherships. Given
this increased reliance on observers and scales, NMFS believes that the
lead level 2 observer requirement is necessary to ensure that at least
one of the observers aboard each AFA catcher/processor and AFA
mothership has prior experience sampling on a trawl catcher/processor
or mothership, is trained and experienced in the use of on-board
scales, and is available to monitor the use and calibration of such
scales. In addition, NMFS believes that the requirement for at least
one lead level 2 observer is necessary to ensure that the compliance
monitoring role of the observers aboard AFA catcher/processors can be
successfully accomplished.
    In order to monitor and enforce the newly imposed harvest
limitations for unrestricted AFA catcher/processors and AFA
motherships, observers with more experience and training must be
aboard. NMFS-certified lead level 2 observers have that experience and
training. Level 2 observers receive special training in sampling for
species composition in situations where bycatch may be limiting, in
working with vessel personnel to resolve access to catch and other
sampling problems, and in using flow scales for catch weight
measurements. Monitoring by level 2 observers is essential for accurate
catch accounting, given the fact that a fishery cooperative has been
established and that the potential exists for fishing to be curtailed
when either groundfish or prohibited species harvest limitations
specified for unrestricted AFA catcher/processors have been reached.
    Consolidation of CDQ and AFA observer requirements. Under the
emergency interim rules governing the AFA pollock fishery in 1999 and
2000, AFA catcher/processors and motherships were required to have one
lead level 2 observer at all times but the second observer requirement
could be filled by any NMFS-certified observer. However, the CDQ
program imposed a higher requirement of one lead level 2 observer and a
second level 2 observer for catcher/processor and motherships
participating in the CDQ pollock fishery. Under this proposed rule, the
observer requirements for catcher/processors and motherships in the AFA
and CDQ pollock fisheries would be consolidated into a single standard
that would require at least one lead level 2 observer on board at all
times but would allow the second observer position to be filled by any
NMFS certified observer.
    Data quality needs for the AFA fishery take into account the
vessel-specific nature of the fishery and the operational environment
under which observers collect the data. This vessel-specific nature of
the AFA has increased the responsibility of the observer to generate
data of a quality equivalent to a ``final post-debrief'' level prior to
the structured NMFS debriefing process. This raises the standard for
experience and advanced training requirements. Since implementation of
the AFA, the quality of data collected by observers at-sea has been
assessed by the rigorous post-cruise debriefing process and has overall
been found to meet expectations of high quality data at the point of
collection.
    The catcher/processors and motherships involved in this fishery
provide the most straightforward sampling situations for observers in
the groundfish fleet due to typically minimal bycatch, as well as
excellent working conditions for the observer.

[[Page 65045]]

 Multiple opportunities for oversight of the work performed by the
second, potentially less experienced, observer has been shown to
successfully ensure all data collec