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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Parts 300 and 679
[Docket No. 161222999–7884–01]
RIN 0648–BG57

Fisheries of the Exclusive Economic
Zone Off Alaska; Authorize
Recreational Quota Entity To
Participate in the Halibut IFQ Program
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comments.
AGENCY:

NMFS issues a proposed rule
that would authorize formation of a
recreational quota entity (RQE) that
could participate in the Pacific Halibut
and Sablefish Individual Fishing Quota
Program in International Pacific Halibut
Commission Regulatory Areas 2C and
3A in the Gulf of Alaska. The RQE
would be authorized to purchase and
hold a limited amount of commercial
halibut quota share that would yield
additional pounds of recreational
fishing quota on an annual basis to
augment the amount of halibut available
for harvest in the charter halibut fishery.
The RQE would provide a mechanism
for a compensated reallocation of a
portion of commercial halibut quota
share to the charter halibut fishery. This
proposed rule is necessary to promote
social and economic flexibility in the
charter halibut fishery, and is intended
to promote the goals and objectives of
the Northern Pacific Halibut Act of
1982, and other applicable laws.
DATES: Submit comments on or before
November 17, 2017.
ADDRESSES: You may submit comments
on this document, identified by NOAA–
NMFS–2016–0158, by any of the
following methods:
• Electronic Submission: Submit all
electronic public comments via the
Federal e-Rulemaking Portal. Go to
www.regulations.gov/
#!docketDetail;D=NOAA-NMFS-20160158, click the ‘‘Comment Now!’’ icon,
complete the required fields, and enter
or attach your comments.
• Mail: Submit written comments to
Glenn Merrill, Assistant Regional
Administrator, Sustainable Fisheries
Division, Alaska Region NMFS, Attn:
Ellen Sebastian. Mail comments to P.O.
Box 21668, Juneau, AK 99802–1668.
Instructions: Comments sent by any
other method, to any other address or

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individual, or received after the end of
the comment period, may not be
considered by NMFS. All comments
received are a part of the public record
and will generally be posted for public
viewing on www.regulations.gov
without change. All personal identifying
information (e.g., name, address),
confidential business information, or
otherwise sensitive information
submitted voluntarily by the sender will
be publicly accessible. NMFS will
accept anonymous comments (enter
‘‘N/A’’ in the required fields if you wish
to remain anonymous).
Electronic copies of the
Environmental Assessment, Regulatory
Impact Review (RIR), and the Initial
Regulatory Flexibility Analysis (IRFA)
(collectively, Analysis) prepared for this
action are available from
www.regulations.gov or from the NMFS
Alaska Region Web site at
alaskafisheries.noaa.gov.
Written comments regarding the
burden-hour estimates or other aspects
of the collection-of-information
requirements contained in this rule may
be submitted by mail to NMFS at the
above address; by email to OIRA_
[email protected]; or by fax to
202–395–5806.
FOR FURTHER INFORMATION CONTACT: Kurt
Iverson, 907–586–7228, Kurt.Iverson@
noaa.gov.
SUPPLEMENTARY INFORMATION:
Authority for Action
The International Pacific Halibut
Commission (IPHC) and NMFS manage
fishing for Pacific halibut (Hippoglossus
stenolepis) through regulations
established under authority of the
Northern Pacific Halibut Act of 1982
(Halibut Act). The IPHC adopts
regulations governing the Pacific halibut
(halibut) fishery under the Convention
between the United States and Canada
for the Preservation of the Halibut
Fishery of the North Pacific Ocean and
Bering Sea (Convention), signed at
Ottawa, Ontario, on March 2, 1953, as
amended by a Protocol Amending the
Convention (signed at Washington, DC,
on March 29, 1979). For the United
States, regulations developed by the
IPHC are subject to acceptance by the
Secretary of State with concurrence
from the Secretary of Commerce. After
acceptance by the Secretary of State and
the Secretary of Commerce, NMFS
publishes the IPHC regulations in the
Federal Register as annual management
measures pursuant to 50 CFR 300.62.
The final rule implementing IPHC
regulations for the 2017 fishing season
was published March 7, 2017 (82 FR
12730). IPHC regulations affecting sport

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fishing for halibut and vessels in the
charter fishery in IPHC Regulatory Areas
2C (Southeast Alaska) and Areas 3A
(South Central Alaska) may be found in
sections 3, 25, and 28 of that final rule
(82 FR 12730, March 7, 2017).
The Halibut Act, at sections 773c(a)
and (b), provides the Secretary of
Commerce with general responsibility to
carry out the Convention and the
Halibut Act. In adopting regulations that
may be necessary to carry out the
purposes and objectives of the
Convention and the Halibut Act, the
Secretary of Commerce is directed to
consult with the Secretary of the
department in which the U.S. Coast
Guard is operating, which is currently
the Department of Homeland Security.
The Halibut Act, at section 773c(c),
also provides the North Pacific Fishery
Management Council (Council) with
authority to develop regulations,
including limited access regulations,
that are in addition to, and not in
conflict with, approved IPHC
regulations. Regulations developed by
the Council may be implemented by
NMFS only after approval by the
Secretary of Commerce. The Council has
exercised this authority in the
development of halibut fishery
management measures, codified at 50
CFR parts 300.65, 300.66, and 300.67.
The Council also developed the
Individual Fishing Quota (IFQ) Program
for the commercial halibut and sablefish
fisheries, codified at 50 CFR part 679.
Management of halibut in the IFQ
Program is authorized under section 773
of the Halibut Act.
Management of the Halibut Fishery
Description of the Action Area
This proposed action would change
halibut fishery management in IPHC
Regulatory Areas 2C and 3A. These
regulatory areas are referred to as ‘‘IFQ
Regulatory Areas’’ throughout the IFQ
Program regulations at 50 CFR part 679
and as ‘‘Commission Regulatory Areas’’
throughout the halibut management
regulations at 50 CFR parts 300.65,
300.66, and 300.67. These terms are
synonymous with ‘‘IPHC Regulatory
Areas’’ and may be used
interchangeably throughout this
document. This preamble uses the term
‘‘Area 2C’’ and ‘‘Area 3A’’ to refer to
IPHC Regulatory Areas 2C and 3A,
respectively. Additional information on
the action area is provided in Section
2.3 of the Analysis.
Background on the Halibut Fishery
The harvest of halibut in Alaska
occurs in three fisheries—the
commercial, sport, and subsistence

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fisheries. The commercial halibut
fishery is managed under the IFQ
Program. The sport fishery includes
unguided and guided anglers. Guided
anglers are commonly called ‘‘charter’’
anglers because they fish from chartered
vessels. Throughout this preamble, the
term ‘‘charter fishery’’ is used to refer to
the fishery prosecuted by guided
anglers. The subsistence fishery
provides an opportunity for rural
residents and members of an Alaska
Native tribe to retain halibut for
personal use or customary trade. The
following sections of the preamble
summarize charter fishery management
and aspects of the commercial IFQ
fishery that are relevant for the
proposed RQE Program.
Charter Halibut Fishery
Sport fishing activities for halibut in
Areas 2C and 3A are subject to different
regulations, depending on whether
those activities are guided or unguided.
Guided sport fishing (charter fishing) for
halibut is subject to charter restrictions
under Federal regulations that are
generally more restrictive than the
regulations for unguided anglers.
Charter fishery regulations apply if a
charter vessel guide is providing
assistance, for compensation, to a
person who is sport fishing, to take or
attempt to take fish during any part of
a charter vessel fishing trip. Unguided
anglers typically use their own vessels
and equipment, or they may rent a
vessel and fish with no assistance from
a guide.
Over the years, the Council and
NMFS have developed specific
management programs for the charter
fishery to achieve allocation and
conservation objectives. The Council
and NMFS have developed these
management programs with the intent of
maintaining stability and economic
viability in the charter fishery by
establishing: (1) Limits on the number of
charter vessel operators; (2) allocations
of halibut to the charter fishery that vary
with abundance; and (3) a process for
determining annual charter angler
harvest restrictions to limit charter
fishery harvest to the established
allocations.
The charter fisheries in Areas 2C and
3A are currently managed under the
Charter Halibut Limited Access Program
(CHLAP) and the Catch Sharing Plan
(CSP). The CHLAP limits the number of
operators in the charter fishery, while
the CSP establishes annual allocations
to the charter and commercial fisheries
and describes a process for determining
annual management measures to limit
charter harvest to the allocations in each
management area. The CHLAP and the

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CSP are summarized below and
described in more detail in Section 4.4
of the Analysis.
Historic and Current Management
Measures for the Charter Fishery
The CHLAP and CSP were developed
in response to increasing harvests in the
charter fisheries in Areas 2C and 3A
over the past 20 years. Until 2003,
charter and unguided anglers were
managed under the same two-halibut
daily bag limit in all IPHC Regulatory
Areas in Alaska. Since 2003, charter
management measures have become
more restrictive in Areas 2C and 3A,
where most charter fishing occurs, as
NMFS and the IPHC have sought to
limit charter harvests to specific harvest
limits. In 2003, NMFS implemented a
final rule to establish a guideline
harvest level (GHL) that identified target
harvest limits for the charter fishery in
Areas 2C and 3A (68 FR 47256, August
8, 2003). After the GHL was
implemented, NMFS and the IPHC
implemented a variety of additional
management measures in Areas 2C and
3A in an effort to constrain charter
fishery harvests to the harvest limits
established by the GHL. Section 4.4.2.2
of the Analysis describes historical
catch limits, regulations, and harvest in
the charter fisheries in Areas 2C and 3A.
In Area 2C, charter anglers have only
been allowed to harvest a bag limit of
one halibut per person, per day since
2009. Implementation of a one-halibut
daily bag limit was intended to keep
charter fishery harvests to
approximately the Area 2C GHL. In the
years following implementation of the
one-fish bag limit, additional
restrictions were required to maintain
harvest near the Area 2C GHL, including
a prohibition on halibut harvest by
charter captains and crew, limits on the
maximum number of lines that could be
deployed, maximum size limits, and
beginning in 2012, a reverse slot limit
that allows charter vessel anglers to
retain halibut that are either below or
above a specific size range. With the
implementation of the CSP in 2014,
charter fishery management became
more restrictive in Area 2C to maintain
charter fishery harvests within the Area
2C CSP allocations. In 2017, the charter
fishery in Area 2C has a catch limit of
915,000 pounds and is managed under
a one-fish daily bag limit with a reverse
slot limit that allows retention of a
halibut of 44 inches or less, or 80 inches
or more, and a prohibition on the
harvest of halibut by skippers or crew.
Charter management measures for Area
2C are summarized in Table 4–10 of the
Analysis.

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In Area 3A, a two-fish daily bag limit
with no size limits was maintained until
the CSP went into effect in 2014. Since
2014, the Area 3A charter fishery has
continued to be managed under a twofish daily bag limit, but management
measures have become increasingly
restrictive each year to maintain charter
fishery harvests within the CSP
allocation. In 2017, the charter fishery
in Area 3A has a catch limit of
1,890,000 pounds and is managed under
a two-fish daily bag limit with a 28-inch
maximum size limit on one fish; a 4-fish
annual limit for each charter fishery
angler; closures to charter fishing on
Wednesdays throughout the year;
closures to charter fishing during three
specific Tuesdays in the summer; a limit
of only one charter trip per day per
vessel (and per charter halibut permit);
and a prohibition on the harvest of
halibut by skippers or crew. Charter
management measures for Area 3A are
summarized in Table 4–11 of the
Analysis.
Charter Halibut Limited Access Program
(CHLAP)
NMFS implemented the CHLAP in
January 2010 (75 FR 554, January 5,
2010). The CHLAP established Federal
charter halibut permits (CHPs) that are
required for operators in the charter
halibut fishery in Areas 2C and 3A.
NMFS determined the eligibility of
applicants and issued CHPs in 2010.
CHPs were required for participation in
the charter halibut fishery beginning in
2011. NMFS implemented the CHLAP,
based on recommendations by the
Council, to meet allocation objectives in
the charter halibut fishery. Specifically,
this program provides stability in the
fishery by limiting the number of
charter vessels that may participate in
Areas 2C and 3A. The CHLAP also
issues a limited number of permits to
non-profit corporations representing
specified rural communities and to U.S.
military morale programs for service
members.
Since implementation of the CHLAP,
all vessel operators in Areas 2C and 3A
with charter anglers on board must have
an original, valid permit on board
during every charter vessel fishing trip
on which halibut are caught and
retained. CHPs are endorsed for the
appropriate IPHC Regulatory Area (Area
2C or Area 3A) and the maximum
number of anglers that may catch and
retain halibut on a charter vessel fishing
trip, ranging from 4 to 38 anglers.
Complete regulations for the CHLAP
are published at §§ 300.65, 300.66, and
300.67. Additional details on the
development and rationale for the
CHLAP can be found in the proposed

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rule for the CHLAP (74 FR 18178, April
21, 2009).
Catch Sharing Plan for IPHC Regulatory
Areas 2C and 3A
The CSP was implemented by NMFS
in January 2014 (78 FR 75844, December
12, 2013). The CSP replaced the GHL
that was in place from 2004 through
2013 for managing the charter fisheries
in Areas 2C and 3A. The CSP
establishes commercial IFQ and charter
fishery allocations that vary
proportionally with changing levels of
annual halibut abundance and that are
intended to balance the differing needs
of the commercial IFQ and charter
fisheries over a wide range of halibut
abundance in Areas 2C and 3A. Under
the CSP, the IPHC divides a combined
catch limit for Areas 2C and 3A into
separate annual catch limits for the
commercial IFQ and charter halibut
fisheries pursuant to the CSP’s
allocation formulas.
The CCLs for Areas 2C and 3A are
specified by the IPHC during an
iterative process that takes place each
year. In late November of each year, the
IPHC begins the process of assessing the
halibut resource, and provides a
preliminary estimate of exploitable
biomass of halibut. The exploitable
biomass is the amount of halibut that
could be available for harvest by
commercial, sport, and subsistence
fisheries. The IPHC determines the
exploitable biomass using a
combination of harvest data from the
commercial, sport, and subsistence
fisheries, and information collected
during scientific surveys and sampling
of halibut bycatch in other fisheries. The
IPHC calculates the Total Constant
Exploitation Yield (CEY), or the target
level for total removals (in net pounds)
for each IPHC regulatory area, by
multiplying the estimate of exploitable
biomass by the harvest rate specified for
that IPHC regulatory area. For Areas 2C
and 3A, the IPHC subtracts estimates of
other removals from the Total CEY.
Other removals include unguided sport
harvest, subsistence harvest, and
bycatch of halibut in non-target
commercial fisheries. In Areas 2C and
3A, the remaining CEY, after other
removals are subtracted, is the Fishery
CEY. For Areas 2C and 3A, the Fishery
CEY is equal to the annual combined
catch limit for the commercial IFQ
fishery and the charter fishery. This
process is depicted in Figure 4–1 of the
Analysis.
A fixed percentage of the annual CCLs
for Area 2C and 3A is allocated to the
commercial IFQ and charter fisheries
(for additional detail see Figures 4–3
and 4–4 in the Analysis). The fixed

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percentage allocation to each fishery
varies with halibut abundance and
differs between Areas 2C and 3A.
Overall, the charter fishery’s relative
share of the CCL is higher when the CCL
is lower, but lower when the CCL is
higher. At current levels of abundance,
the charter fishery is allocated
approximately 18 percent of the CCLs
for both Areas 2C and 3A, and the
commercial IFQ fishery is allocated
approximately 82 percent. The IPHC
multiplies the CSP allocation
percentages for Area 2C and 3A by the
annual CCL in that area to calculate the
commercial and charter halibut
allocations in net pounds. Fisheryspecific catch limits are calculated by
deducting separate estimates of wastage
(i.e., the mortality of discarded fish)
from the commercial IFQ and charter
fishery allocations (see Figure 4–1 of the
Analysis). NMFS publishes the CCLs
and associated allocations in the
Federal Register as part of the IPHC
annual management measures pursuant
to 50 CFR 300.62. The process for
determining commercial IFQ and
charter catch limits under the CSP is
described in more detail in Section
4.4.1.2.1 of the Analysis.
Additional detail on the development
and rationale for the CSP can be found
in preamble for the CSP proposed rule
(78 FR 39122, June 28, 2013), and in the
final rule implementing the CSP (78 FR
75844, December 12, 2013).
Process for Setting Annual Management
Measures
The CSP also describes a public
process by which the Council develops
recommendations to the IPHC for
charter angler harvest restrictions
(annual management measures) that are
intended to limit harvest to the annual
charter fishery catch limit in Areas 2C
and 3A. The process for setting annual
management measures is described in
more detail in Section 4.4.1.2.2 of the
Analysis. Key elements of the process
are summarized below.
Each year in October, the Council’s
Charter Halibut Management Committee
(Charter Committee) reviews charter
harvest in Areas 2C and 3A during the
current year in relation to the charter
catch limit. Staff from the Alaska
Department of Fish and Game, Council,
and NMFS provide an analysis to
predict harvest for the upcoming year
under a range of alternative
management measures. Some of these
measures may directly restrict the
number or size of fish that may be
retained (e.g., daily bag limits, trip
limits, annual limits, and size limits).
Some of these measures may indirectly
restrict the number of halibut that may

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be retained (e.g., day of week closures,
or prohibition on harvest by skipper and
crew). After reviewing this analysis, the
Charter Committee makes
recommendations on possible
management measures for Areas 2C and
3A to be analyzed for the coming year.
In December of each year, the Council
considers the recommendations of the
Charter Committee, the analysis on
projected charter harvests under a range
of management measures, and any
additional information. After
considering public input, the Council
selects management measures to
recommend to the IPHC that are
intended to keep charter harvest within
the charter fishery allocation in Area 2C
and Area 3A under a range of different
CCLs that may be established by the
IPHC.
At its annual meeting in January of
each year, the IPHC allocates the CCL
for Area 2C and Area 3A between the
commercial IFQ fishery and the charter
fishery for that year based on the CSP
regulations at 50 CFR 300.65. The IPHC
takes into account Council
recommendations, any additional
information available to the IPHC, and
input from the public and IPHC staff.
After considering this information and
other information on the abundance of
the halibut resource in Areas 2C and 3A,
the IPHC adopts CCLs for Areas 2C and
3A and charter halibut management
measures designed to keep charter
harvest in Area 2C and Area 3A within
the catch limits specified under the CSP
for the adopted CCLs. Once accepted by
the Secretary of State with the
concurrence of the Secretary of
Commerce, NMFS publishes in the
Federal Register the charter halibut
management measures for each area as
part of the IPHC annual management
measures.
Guided Angler Fish Program
In 2014, as part of the CSP, NMFS
implemented the Guided Angler Fish
(GAF) Program to authorize limited
annual transfers of commercial halibut
IFQ as GAF to qualified CHP holders.
The GAF Program provides additional
harvest opportunities for charter
anglers. Using GAF, qualified CHP
holders may offer charter anglers the
opportunity to retain halibut up to the
limit for unguided anglers when charter
management measures limit charter
anglers to a more restrictive harvest
limit. For example, if charter
management regulations in Area 2C
restrict charter anglers to a one-halibut
daily bag limit, a charter angler could
retain one halibut and use one GAF to
retain a second halibut, bringing the
retained amount to two halibut—the

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same daily bag limit that applies to
unguided anglers. The GAF Program is
described in more detail in Section
4.4.1.2.4 of the Analysis and in the
proposed rule for the CSP (78 FR 39122,
June 28, 2013). Regulations
implementing the GAF Program are at
§§ 300.65, 679.5, 679.41, 679.42, and
679.45. A brief summary of the key
elements of the GAF Program is
provided below.
In order to receive GAF, an IFQ
holder and a CHP holder receiving GAF
must submit an application to NMFS for
review and approval. Guided Angler
Fish transfers may be between separate
IFQ and CHP holders, or a person
holding both IFQ and a CHP can transfer
their IFQ to himself or herself as GAF.
Upon approval of the transfer
application, NMFS issues a GAF permit
to the holder of the CHP. Once the
transfer is approved, the GAF permit
holder may offer additional GAF harvest
opportunities to anglers on board the
vessel on which the operator’s GAF
permit and the assigned CHP are used.
NMFS issues GAF in whole numbers
of halibut based on a conversion factor
from IFQ pounds. Conversion factors are
based on the average net weights of GAF
harvested in the applicable IPHC
Regulatory Area (Area 2C or 3A) during
the previous year. Average weights are
determined from data that charter vessel
guides report directly to NMFS. For
2017, 74 pounds of IFQ yields one GAF
in Area 2C, and 42 pounds of IFQ yields
one GAF in Area 3A. Based on selfreported data, CHP holders have paid
more than $5 per pound of IFQ
transferred as GAF in Area 2C and 3A,
making GAF quite expensive, especially
in Area 2C (see Section 4.4.2.3 in the
Analysis for additional detail). In part
due to the high costs of leasing GAF,
annual participation has been low,
averaging about 48,000 pounds per year
from 2014 through 2016.
Three restrictions on GAF transfers
were implemented with the GAF
Program. First, IFQ holders in Area 2C
are limited to transferring up to 1,500
pounds or 10 percent, whichever is
greater, of their initially-issued annual
halibut IFQ for use as GAF. In Area 3A,
IFQ holders may transfer up to 1,500
pounds or 15 percent, whichever is
greater, of their initially-issued annual
halibut IFQ for use as GAF. Second, no
more than 400 GAF will be assigned
during one year to a GAF permit
assigned to a holder of a CHP that is
endorsed for six or fewer anglers. Third,
no more than a total of 600 GAF will be
assigned during one year to a GAF
permit assigned to a holder of a CHP
endorsed for more than six anglers. The
restrictions on transfers of GAF are

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intended to prevent a particular
individual, corporation, or other entity
from acquiring an excessive share of
halibut fishing privileges as GAF.
NMFS’ costs associated with
management, data collection, and
enforcement of the GAF Program are
recoverable through IFQ Program Cost
Recovery fees. The IFQ permit holder is
responsible for paying IFQ Program Cost
Recovery fees on all pounds of IFQ
landed as GAF. The fee calculation is
based on the standard price calculated
by NMFS, aggregated to IPHC
Regulatory Area 2C or 3A.
Commercial Individual Fishing Quota
(IFQ) Fishery
The commercial halibut and sablefish
fisheries off Alaska are managed under
the IFQ Program (November 9, 1993; 58
FR 59375). The IFQ Program was
implemented in 1995. The commercial
halibut fishery is also referred to as the
‘‘directed halibut fishery.’’ The IFQ
Program limits access to the commercial
directed halibut fishery to those persons
holding halibut quota share (QS) in
specific management areas. A more
detailed description of QS allocation
and management is provided in Section
4.5.1 of the Analysis and summarized
here.
The IFQ Program assigned QS by
IPHC Regulatory Area based on certain
thresholds of historical participation in
the commercial halibut fishery. NMFS
initially issued QS to qualified
participants beginning in 1994. Once QS
was issued, NMFS allows QS to be
transferred from initial recipients to
individuals meeting specific eligibility
requirements. The GAF Program does
not authorize the transfer of QS from the
commercial IFQ fishery for use in the
charter fishery. QS provides individual
harvesting privileges that are allocated
on an annual basis through the issuance
of IFQ permits.
An annual IFQ permit authorizes the
holder to harvest a specified amount of
halibut in a designated IPHC Regulatory
Area. The specific amount of IFQ (in net
pounds) is determined by the number of
QS units held, the total number of QS
units issued in a specific IPHC
Regulatory Area, and the total amount of
the halibut catch limit allocated by the
IPHC in a particular year. If the
abundance of halibut decreases over
time, the catch limit will decrease and,
subsequently, the number of pounds on
a person’s annual IFQ permit also will
decrease. By providing an exclusive
privilege to harvest a certain amount of
the catch limit at the beginning of the
season, and by extending the season
over a longer period, the IFQ Program
allows QS holders to determine where

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and when to fish, how much gear to
deploy, and how much overall
investment to make in harvesting.
The Council and NMFS developed the
IFQ Program with several goals in mind.
Particularly applicable to this proposed
action, the IFQ Program was designed to
preserve an owner-operated fleet and to
limit consolidation of QS ownership. To
accomplish these goals, the IFQ Program
was designed to control transferability
of QS through: (1) Limits on the amount
of QS that can be owned or controlled
by individuals and companies (QS
transfer and use caps); (2) vessel size
categories that limit the size of vessels
that can use the annual allocations
resulting from the QS; (3) restrictions on
who can purchase catcher vessel QS;
and (4) limitations on leasing certain
categories of QS.
Halibut QS is designated as one of
four QS categories (also called ‘‘vessel
categories’’ or ‘‘size categories’’ of QS).
The term ‘‘vessel class’’ is also
sometimes used, but the term
‘‘category’’ will be used in this preamble
to be consistent with the term used in
regulation. These categories include Acategory for freezer catcher-processor
vessels; B-category for vessels greater
than 60 ft length overall (LOA); Ccategory for vessels 36 ft to 60 ft LOA;
and D-category for vessels 35 ft or less
LOA. The term ‘‘catcher vessel QS’’
refers to QS that can be used to catch,
but cannot be used to process, halibut
at sea (i.e., B-, C-, and D-category QS).
Halibut QS also has a designation of
‘‘blocked’’ or ‘‘unblocked.’’ Blocked QS
must be sold as a unit, and cannot be
separated. No person may hold more
than three blocks of halibut QS in any
IFQ regulatory area. The purpose of the
QS block provision was to ensure that
the smallest, most affordable QS would
remain available to a part-time fleet of
smaller operators in order to maintain
some of the fleet diversity that existed
prior to the IFQ Program’s
implementation, and to reduce potential
disruption to isolated Alaska fishing
communities. The preamble to the
proposed rule for the IFQ Program,
published on December 3, 1992 (57 FR
57130), describes the IFQ Program in
more detail.
Community Quota Entity Program
After implementation of the IFQ
Program, the total amount of QS held by
residents of small, coastal communities
and the number of IFQ holders
substantially declined. To alleviate the
social and economic impacts of this
consolidation on rural communities, the
Council revised the IFQ Program in
2004 to allow a distinct set of remote
coastal communities with few economic

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alternatives to purchase and hold
catcher vessel QS in Areas 2C, 3A, and
3B (69 FR 23681, April 30, 2004). This
action was implemented in order to
help ensure access to and sustain
participation in the commercial halibut
and sablefish fisheries. Eligible
communities can form non-profit
corporations called Community Quota
Entities (CQEs) to purchase catcher
vessel QS. The IFQ resulting from the
QS must be leased (i.e., made available
for fishing) to community residents
annually.
NMFS determined that CQE eligibility
applied to 46 Alaskan communities,
based on certain criteria for size,
accessibility, and historical
participation in the halibut or sablefish
fisheries. Eligible communities must
establish a non-profit corporation to
become a CQE. The non-profit
corporation must submit an application
to NMFS detailing its organization,
structure, and proposed procedures for
leasing IFQ to community residents
(among other requirements). If NMFS
approves the application, a CQE may
form to represent that community and
the CQE may obtain QS by transfer.
Currently, 28 communities have formed
non-profit corporations and have
applied for and been approved to obtain
QS by transfer. Of those 28 CQEs, 4 have
purchased QS. Community Quota
Entities may also apply to NMFS to be
able to participate in the CHLAP by
purchasing CHPs, and are authorized to
receive Community Charter Halibut
Permits which is similar to a CHP, but
available only to CQEs. To date, 20
CQEs have applied for and been issued
Community Charter Halibut Permits.
Although CQE’s may also receive CHPs
by purchasing (i.e., transferring) them
from non-CQE permit holders, no CQE
has received any CHPs by transfer to
date.
Although CQEs are subject to different
constraints than individual QS holders
in the IFQ Program, in some cases, the
CQE is subject to the same limitations
as individual permit holders in the IFQ
Program. For example, each CQE is held
to the same QS use caps (i.e., ownership
caps) as an individual holder. In other
cases, the CQE is subject to less
restrictive measures to provide for the
differing purpose and use of the QS
when held by communities. For
example, the vessel size categories do
not apply to QS when held by CQEs. In
yet other cases, the CQE is subject to
more restrictive measures than
individuals, in part to protect existing
holders and preserve entry-level
opportunities for fishermen residing in
fishery-dependent communities that are
not are not eligible to form a CQE. For

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example, CQEs cannot purchase
D-category halibut QS in Area 2C. In
addition, there are caps on the amount
of QS that all CQEs combined can
purchase, and CQEs cannot lease more
than 50,000 pounds of halibut IFQ to an
individual resident. A detailed list of
provisions specifically applicable to
CQEs is provided in Section 4.5.2 of the
Analysis.
Purpose and Need for Proposed Rule
Currently, the charter fishery is
limited to harvesting its percentage of
the Area 2C or 3A combined catch limit
it is allocated under the CSP. Charter
catch limits increase or decrease as total
halibut abundance increases or
decreases. When halibut abundance is
relatively low, as it has been in recent
years compared to abundance trends in
the 1990s and 2000s, the charter
allocations under the CSP are lower,
resulting in more restrictive annual
management measures.
The only way that charter operators
can currently provide more opportunity
to charter clients than the established
management measures allow for in their
area is through participation in the GAF
Program by individual charter operators.
Because of the current restrictions on
charter harvests under the existing
charter allocations under the CSP and
the limited flexibility for charter
operators to provide additional harvest
opportunities to their clients, the charter
fishery has expressed its desire to find
a market-based mechanism to increase
its overall allocation of the halibut
resource.
Based on these concerns, in 2015, the
Council initiated the analytic process to
develop a ‘‘market-based mechanism’’ to
allow a non-profit entity (similar to a
CQE) to purchase and hold a limited
amount of commercial halibut QS on
behalf of charter anglers. The intent of
the Council was to provide additional
harvest opportunity and less restrictive
annual harvest measures for charter
anglers in times of low halibut
abundance, while complying with total
halibut removals under the catch limits
established by the IPHC under the CSP.
In initiating this effort, the Council
sought to balance the objectives of
participants in the charter fishery
without undermining the goals of the
IFQ Program or creating significant
adverse impacts to other halibut sectors.
A complete history of the development
of this proposed action is described in
Section 2.2 of the Analysis.

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Proposed Recreational Quota Entity for
Area 2C and Area 3A
Overview
In December 2016, the Council
recommended the implementation of an
RQE Program. This proposed RQE
Program would provide a mechanism
for the charter fishery to compensate the
commercial IFQ fishery for halibut QS
purchased from the commercial sector
to increase the charter annual catch
limits. The halibut RFQ that would
result from that QS would provide
potentially greater harvest opportunities
to the clients of charter operators within
Areas 2C and 3A.
The Council and NMFS considered a
no-action alternative to maintain the
status quo (no RQE Program) and an
alternative to authorize an RQE
Program. The Council and NMFS also
considered a broad range of elements
and options to determine: The number
of RQEs that could form; the amount
and type of QS that could be purchased
and held by the RQE; the process for
setting annual management measures;
how the RQE Program should interact
with the GAF and CQE Programs; how
the RQE could use funds, the
organizational structure of the RQE; and
the appropriate reporting requirements
for the RQE. The specific elements and
options recommended by the Council
and proposed by NMFS are described
below. The entire suite of elements and
options considered, and the predicted
effects of those elements and options
(including the no-action alternative) are
evaluated in detail in the Analysis.
The Council stated that the principal
objective of this proposed rule is to
promote social and economic flexibility
in the charter fishery by authorizing the
development of an entity that would be
eligible to purchase and hold
commercial halibut QS in Areas 2C and
3A, thereby providing additional
harvest opportunities to charter anglers.
This proposed rule is intended to
promote long-term efficiency in the use
of the halibut resource by allowing
transfers of QS between commercial QS
holders and the charter fishery, through
an RQE, under a ‘‘willing buyer and
willing seller’’ approach.
Description of Proposed Rule
This proposed rule would allow an
RQE to be established as an eligible
entity to purchase halibut QS in Area 2C
and Area 3A, with limitations, for use
by the charter fishery as a whole. Using
a structure similar to a CQE, the RQE
would be an eligible participant in the
IFQ Program and could purchase Area
2C and 3A halibut QS for use by all
charter halibut anglers in the respective

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area. Any halibut QS purchased by the
RQE would be held by this entity for the
common use of charter halibut anglers.
If approved, Federal regulations would
be amended to allow the RQE to acquire
QS.
Halibut QS held by the RQE would
generate annual pounds of recreational
fishing quota (RFQ), a type of annual
harvest privilege similar to IFQ that
would have special requirements that
pertain only to the RQE. RFQ would be
calculated in the same manner as IFQ.
Under this proposed rule, the specific
amount of RFQ (in net pounds) would
be determined by the number of QS
units held by the RQE as of October 1
of the preceding calendar year, the total
number of halibut QS units issued in
Area 2C or 3A as of January 15 of the
year the IFQ or RFQ is issued, and the
total amount of halibut allocated to the
commercial IFQ fisheries in Areas 2C
and 3A for that year.
Although the amount of RFQ would
be calculated in the same way as IFQ,
it would be subject to different
requirements. The additional pounds of
RFQ for each regulatory area would be
combined with the charter catch limit
determined under the CSP to calculate
an adjusted charter catch limit for the
year for Area 2C or 3A. Annual charter
management measures for Areas 2C and
3A would be analyzed, recommended to
the IPHC, and adopted for
implementation based on the estimated
adjusted charter catch limits.
Recreational Fishing Quota held by the
RQE would be available for harvest by
all charter anglers aboard registered
charter vessels of any size, regardless of
the QS category from which that RFQ
originated. Under this proposed rule,
RFQ could not be transferred as GAF.
Unless specified in this proposed rule,
regulations that refer only to IFQ permit
holders would not apply to the RQE.
Likewise, unless specified in this
proposed rule, regulations that refer
only to IFQ would not apply to RFQ.
This proposed rule would not change
the underlying allocations to the
commercial IFQ fishery and charter
fishery specified in the CSP, and would
not change the total QS pool. Therefore,
the QS holders in the commercial IFQ
fishery who do not transfer QS to the
RQE would receive the same amount of
IFQ pounds issued for their QS units
regardless of the amount of QS
transferred to, and held by, the RQE.
Provisions of Proposed Rule
RQE Organizational Structure
The Council recommends and NMFS
proposes to allow the establishment of
an RQE as a qualified non-profit entity

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registered under the laws of the State of
Alaska and recognized as exempt from
Federal income tax by the Internal
Revenue Service (IRS) to purchase and
hold halibut QS for use by the charter
fishery. The QS held by an RQE could
yield RFQ annually. This proposed rule
would allow a single non-profit entity to
form to represent and manage separate
QS holdings for Areas 2C and 3A.
The Council and NMFS considered an
option to allow formation of two RQEs,
one to represent Area 2C and another in
Area 3A, but ultimately decided that
one RQE would provide administrative
efficiencies for purchasing and
managing commercial QS. The Council
and NMFS initially considered allowing
multiple RQEs within Area 2C and 3A,
but recommended against that structure
to avoid potential competition against
each other to purchase QS, and to
reduce potential administrative costs.
The structure of the RQE is proposed
to be similar to non-profits established
to hold QS under the CQE Program. The
Council recommended and NMFS
proposes that the RQE be a non-profit
entity to help ensure it represents the
interests of the charter operators,
whereas a for-profit entity could result
in increased costs. The Council has
consistently recommended, and NMFS
has consistently approved the use of
non-profit entities for the purposes of
holding QS in other limited access
programs. The proposed RQE
organizational structure is consistent
with past practice. Also, a non-profit
entity that is independent of the Federal
or state governments could more
quickly and more flexibly take
advantage of favorable market
conditions for purchasing QS than a
program administered by the Federal or
state governments. More information on
the structure of the proposed RQE is
provided in section 4.8.1.1 of the
Analysis.
NMFS proposes new definitions in
§ 679.2 for ‘‘Recreational fishing quota
(RFQ)’’ and ‘‘Recreational quota entity
(RQE).’’
Eligibility
The Council recommended
establishment of a single RQE that is a
qualified non-profit entity registered
with the IRS to purchase and hold
commercial halibut QS for use by the
guided halibut sector.’’ To implement
this recommendation, NMFS proposes
requirements specifying that the RQE
must be a qualified non-profit entity
registered under the laws of the State of
Alaska and recognized as exempt from
Federal income tax by the IRS. Nonprofit status is a state law concept and
does not directly apply to Federal tax

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law. A non-profit organization may be
eligible for certain benefits, such as state
sales, property and income tax
exemptions. Although most Federal taxexempt organizations are non-profit
organizations, being recognized as a
non-profit organization at the state level
does not automatically grant the
organization exemption from Federal
income tax. To qualify as exempt from
Federal income tax, an organization
must seek recognition of exemption
from Federal income tax under section
501(a) of the Internal Revenue Code.
This proposed rule would establish
specific requirements for an entity to be
authorized as the RQE. To be approved
as the entity eligible to purchase and
hold halibut QS, the applicant wishing
to become the RQE would be required
to demonstrate it is a non-profit entity
registered under the laws of the State of
Alaska by submitting to NMFS the
articles of incorporation and
management organization information,
including bylaws and a list of key
personnel including, but not limited to,
the board of directors, officers,
representatives, and managers.
Articles of incorporation are public
documents that must be filed with the
state agency where the corporation
becomes incorporated (e.g., with
Alaska’s Division of Corporations,
Business, and Professional Licensing).
NMFS proposes that the RQE would
need to be incorporated within the State
of Alaska consistent with incorporation
requirements applicable to CQEs.
Bylaws are private documents
describing the organization’s operating
procedures that are not filed with any
government agency. The Council and
NMFS chose to not specify how the
board of directors of the RQE should be
structured. The Council and NMFS
considered options to require a certain
number of board members representing
different user groups, but ultimately
decided that these decisions were best
left to the RQE (see Section 4.8.1.6 of
the Analysis). The Council intends that
the RQE board should have the
flexibility to tailor its composition in a
way that best addresses the RQE’s
needs. The Council noted that a
representative of the Alaska Department
of Revenue may sit as an ex-officio (nonvoting) member of the RQE board, and
the Commissioner of the Alaska
Department of Fish and Game, or their
designee, may sit as a voting member of
the RQE board; however, the Council
did not intend be prescriptive with
respect to RQE board membership. The
Council intended for the RQE to
determine whether these officials would
be a member of the RQE board. For
example, if funding for the RQE is

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provided or administered by the State of
Alaska, then a board member from the
Alaska Department of Revenue might be
beneficial; however, the Council
intended for this determination to be at
the discretion of the RQE. Because the
Council intended for the RQE to have
flexibility to select members of the RQE
board, NMFS does not propose to
specify the composition of the RQE
board in regulation.
In addition to demonstrating it is a
non-profit corporation recognized by the
State of Alaska, the applicant wishing to
become the RQE would be required to
demonstrate it has been granted an
exemption from Federal income tax by
the IRS by submitting to NMFS the IRS
acknowledgement of the entity’s Federal
tax exemption.
NMFS proposes to require the
approved RQE to maintain its non-profit
and tax-exempt status, as described
above. If the approved RQE entity does
not meet this requirement, NMFS would
not issue the RFQ that would otherwise
be issued to the RQE based on its QS
holdings. In addition, NMFS would
provide the approved RQE entity with
an opportunity to reinstate its non-profit
and/or tax-exempt status. If the
approved RQE entity does not
demonstrate to NMFS that it is a
qualified non-profit entity registered
under the laws of the State of Alaska
and recognized as exempt from federal
income tax by the IRS by the established
deadline, NMFS would issue an Initial
Administrative Determination (IAD) to
revoke the entity’s status as the
approved RQE and to require the entity
to divest its QS holdings. The entity
would have the opportunity to appeal
the IAD through the National Appeals
Office under the provisions established
at 15 CFR part 906. The application and
procedures for approving the
application to become an RQE would be
modeled after the application and
process for CQEs. The applicant would
complete the ‘‘Application for a Nonprofit Corporation to be Designated as a
Recreational Quota Entity (RQE)’’ and
submit it to NMFS Alaska Region for
review and approval. The application
form would be available on the NMFS
Alaska Region Web site at https://
alaskafisheries.noaa.gov/ after the
effective date of the final rule, assuming
a final rule is published. NMFS would
approve the first complete RQE
application it receives. NMFS would
notify the RQE when its application has
been approved. Once approved, NMFS
would establish an account for QS and
RFQ holdings when the RQE acquires
QS. If NMFS disapproves the
application, that determination could be
appealed to the NOAA Fisheries

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National Appeals Office under the
provisions established at 15 CFR part
906.
NMFS proposes adding a new
paragraph § 679.41(n) to describe the
application process and eligibility
requirements for a prospective RQE.
Restrictions on Transfers
Under this proposed RQE Program,
two-way transfers of QS would be
allowed. Quota share acquired by the
RQE could be transferred to an
otherwise eligible participant in the
commercial IFQ fishery. Because QS
and the resulting IFQ used in the
commercial IFQ fishery is subject to
vessel categories and block designations
on initially-issued QS—unlike the QS
and resulting RFQ used by the RQE,
which is exempt from such categories
and designations—NMFS will track QS
units, IFQ pounds, and vessel category
and block designations that apply to
ensure that original categories and
designations for the commercial IFQ
fishery are maintained during the
transfer process.
The Council recommended and
NMFS proposes two-way transfers
because it is expected that there would
be variability from year to year in the
amount of QS the RQE would be
interested in using as RFQ. For example,
if halibut biomass increases, the RQE
may hold QS that is not needed to yield
RFQ to provide additional opportunities
for participants in the charter fishery,
and may decide to sell a portion of its
QS to an eligible buyers in the
commercial fishery sector.
NMFS proposes modifying § 679.42 to
describe the QS transfer process for
RQEs.
Annual Limit on Transfers to an RQE
This proposed rule would establish
area-specific annual limits on the
amount of halibut QS that can transfer
to an RQE. The intended effect of these
transfer limits is to limit the amount of
halibut QS that could be transferred
from the commercial IFQ fishery and
used as RFQ in the charter fishery each
year, and to minimize any abrupt
negative impacts that may occur to
participants in the commercial IFQ
fishery or to CQEs due to additional
competition in the QS market that could
occur with the entry of an RQE. Annual
transfer limits would allow users in the
commercial IFQ and charter fisheries
time to adapt business plans and
personal strategies to changes in the
composition of the fisheries.
The Council recommended and
NMFS proposes an annual transfer limit
equivalent to 1 percent of the
commercial QS units in Area 2C based

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on the 2015 pool of all QS categories
(59,477,396 units). Based on the 2015
QS pool, the RQE would be limited to
receiving by transfer a maximum of
594,774 units of Area 2C QS in a year.
Even if the QS pool changes in future
years, this proposed rule would fix the
annual transfer limit in Area 2C at
594,774 QS units. This will clearly
define the limit for fishery participants
and prevent a change in the limit if
there are future changes in the Area 2C
or 3A QS pools. For example, in 2017,
the QS:IFQ ratio is 14.1209 QS units per
pound of IFQ, and the annual transfer
limit would be 42,120 pounds of IFQ for
Area 2C.
The Council recommended and
NMFS proposes an annual transfer limit
equivalent to 1.2 percent of the
commercial QS pool in Area 3A based
on the 2015 pool of all QS categories
(184,893,008 units). For example, based
on the 2015 QS pool, the RQE would be
limited to receiving by transfer a
maximum of 2,218,716 units of Area 3A
QS in a year. Even if the QS pool
changes in future years, this proposed
rule would fix the annual transfer limit
in Area 3A at 2,218,716 QS units. For
example, in 2017, the QS:IFQ ratio is
23.8911QS units per pound of IFQ, and
the annual transfer limit would be
92,868 pounds of IFQ for Area 3A.
For both Area 2C and 3A, the Council
and NMFS considered annual transfer
limits between 0.5 and 5 percent and
determined that 1 percent for Area 2C
and 1.2 percent for Area 3A were the
appropriate annual transfer limits
because they would allow the RQE to
reach the cumulative use limits on QS
holding (discussed in the next section)
in 10 years if the RQE purchased the
maximum amount of QS in each area in
each year after the RQE Program is
implemented. The Council indicated
that limiting annual transfers at these
proposed limits and allowing the RQE
to reach its maximum QS holdings over
as few as 10 years would balance the
desire to provide adequate additional
harvest opportunity to charter anglers,
while at the same time mitigating the
potentially disruptive impacts on the
QS market with the entry of the RQE.
Therefore, the proposed annual limits
are equal to 1/10 of the cumulative
holdings limits. Annual transfer limits
are discussed in further detail in Section
4.8.1.2.2 of the Analysis.
NMFS proposes adding a new
paragraph at § 679.42(f)(8) to describe
the annual transfer limits on QS for
RQEs.
Limit on Total QS Holdings by the RQE
The Council recommended and
NMFS proposes a limit on the total

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amount of halibut QS that can be held
by the RQE. This rule proposes that for
Area 2C, the RQE could hold up to 10
percent of the 2015 commercial QS
pool. This proportion would be
calculated based on the entire QS pool,
including categories and blocks of QS
units that the RQE would be prohibited
from purchasing (discussed in the next
sections of this preamble). Ten percent
of the 2015 commercial QS pool equates
to 5,947,740 units.
This rule proposes a limit on QS
holdings for Area 3A of 12 percent of
the 2015 entire commercial QS pool,
including categories and blocks of QS
units that the RQE would be prohibited
from purchasing. Twelve percent of the
2015 commercial QS pool equates to
22,187,161 units.
As described in the previous section
for annual transfer limits for the RQE,
this proposed rule would fix the limits
on total QS holdings by the RQE in
regulations so that they are clearly
defined for fishery participants and will
not fluctuate if there are future changes
in the Area 2C or 3A QS pools.
The Council and NMFS considered
limits that ranged from 5 to 20 percent
of the 2015 QS pools in each area. The
Council recommended and NMFS
proposes 10 percent and 12 percent
limits in Areas 2C and 3A, respectively,
to provide a balance between providing
ample opportunity for additional
harvest opportunity for the charter
fishery, while seeking to alleviate
potential adverse impacts to commercial
halibut participants from increased
competition in the QS market and
higher QS prices that could occur if the
RQE were provided a higher limit on QS
holdings by the RQE. The limits on RQE
holdings of QS are discussed in further
detail in Section 4.8.1.2.3 of the
Analysis.
NMFS proposes adding a new
paragraph at § 679.42(f)(8) to describe
the QS holding limits for the RQE.
Limit on GAF Transfers as RQE
Holdings Increase
As part of the RQE Program, the
Council recommends and NMFS
proposes to limit the total amount of
GAF that could be used annually by
CHP holders by limiting the amount of
GAF that could be transferred to the
charter fishery as RQE QS holdings
increase.
Under existing regulations, a
significant amount of GAF could be
transferred to CHP holders each year.
For example, based on 2015 data, if all
QS holders transferred the maximum
allowable amounts of IFQ as GAF to
eligible CHP holders, 49.1 percent of the
Area 2C IFQ and 35.5 percent of the

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Area 3A could potentially be transferred
as GAF. However, actual participation
in the GAF Program has been relatively
low. From 2014 through 2016, less than
1.25 percent of Area 2C IFQ, and less
than 0.2 percent of Area 3A IFQ have
been transferred as GAF in any year.
Based on the cost to transfer IFQ as GAF
noted earlier in this preamble, NMFS
considers it very unlikely that
participation in the GAF Program will
increase substantially and approach the
maximum allowable transfer limits.
Notwithstanding that unlikelihood, the
Council determined and NMFS agrees
that limiting the amount of GAF that
could be transferred to the charter
fishery as RQE QS holdings increase
appropriately balances the objective of
establishing an RQE to further increase
harvest opportunity in the charter
fishery while minimizing the negative
impacts that may result in the
commercial IFQ fishery from transfers of
QS.
The Council recommended and
NMFS proposes restricting GAF
transfers so that in any year, the
combined amount of RFQ and GAF
transferred to CHP holders could not
exceed a poundage equal to the
maximum amount of pounds that could
be issued as RFQ in Area 2C or 3A.
The following two examples describe
how NMFS would administer this
provision in Area 2C. Under this
proposed rule, in Area 2C the RQE may
hold a maximum of 10 percent of the
2015 Area 2C QS pool (5,947,740 units).
These two examples use the 2017
QS:IFQ ratio for Area 2C (14.1209 QS
units per pound of IFQ), and the 2017
conversion factor for IFQ to GAF for
Area 2C (74 pounds of IFQ to yield one
GAF). The first example assumes the
RQE held the maximum amount of QS
units (5,947,740 units) in Area 2C.
Under this example, the RQE would be
issued 421,201 pounds of RFQ
(5,947,740 QS units/14.1209 QS:IFQ =
421,201 pounds), and NMFS would not
approve any transfers of GAF to CHP
holders in Area 2C during that calendar
year because the combined amount of
RFQ and GAF transferred by CHP
holders would exceed the cumulative
limit for RFQ and GAF in Area 2C
(421,201 pounds). The second example
assumes the RQE held 50 percent of the
RQE’s Area 2C cumulative QS limit (i.e.,
2,973,870 units). Under this example,
the RQE would be issued 210,601
pounds of RFQ (2,973,870 QS units/
14.1209 QS:IFQ = 210,601 pounds), and
NMFS could approve GAF transfers to
CHP holders equivalent to 210,601
pounds of IFQ, or 2,845 GAF (210,600
pounds/74 pounds of IFQ per GAF =
2,845 GAF) during that calendar year

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46023

before the combined amount of RFQ and
GAF transferred to CHP holders would
exceed as the cumulative limit for RFQ
and GAF in Area 2C (421,201 pounds).
Under this second example, NMFS
would approve GAF transfers for CHP
holders until 2,845 GAF had been
transferred to CHP holders in Area 2C.
Once 2,845 GAF had been transferred to
CHP holders in Area 2C, NMFS would
disapprove all subsequent transfers of
GAF in Area 2C for the remainder of the
calendar year.
The Council and NMFS considered
options that would not have restricted
transfers of GAF even if the RQE
reached its cumulative use limit of QS.
The Council recommended and NMFS
proposes limiting the total amount of
annual poundage that could be
reallocated to the charter fishery as RFQ
and GAF to the cumulative use limit on
RQE holdings. This limit was chosen, as
described in the previous section of the
preamble, to balance the concerns of
commercial fishery participants about
the increased potential for reallocation
to the charter fishery with the interests
of charter operators to increase harvest
opportunities. The limit on GAF
transfers as RQE QS holdings increase is
discussed in further detail in Section
4.8.1.2.4 of the Analysis.
NMFS proposes adding a new
paragraph at § 300.65(c)(5)(ii)(D)(1)(iv)
to limit the transfer of IFQ to GAF as the
RQE increases its holdings of QS.
Vessel Category Restrictions
The Council recommended and
NMFS proposes limits on the amounts
of QS the RQE could hold by vessel
category in Areas 2C and 3A. The RQE
would be limited to holding an amount
equal to 10 percent of D-category QS
and an amount equal to 10 percent of Bcategory QS, based on the 2015 QS
pools, in Area 2C. Translated to QS
units, this proposed rule would prohibit
the RQE from holding more than
889,548 units of D-category QS, and
more than 265,524 units of B-category
QS in Area 2C (see Table 4–40 of the
Analysis).
Under this proposed rule, the RQE
would be prohibited from purchasing or
holding D-category QS in Area 3A. The
RQE could purchase any amount, up to
the annual transfer and cumulative use
limits of A-, B-, and C-category QS in
Area 3A.
The Council and NMFS considered
the current composition of the QS pools
in Areas 2C and 3A, and the potential
impact on specific QS categories when
proposing these regulations. D-category
QS cannot be fished on vessels greater
than 35 ft LOA in Area 3A or 2C. Thus,
the proposed limits on the RQE

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acquiring D-category shares is intended
to maintain vessel size diversity in the
commercial fleet. Additionally, the
Council and NMFS noted that Dcategory QS tends to sell for a lower
price and could therefore make it a
desirable and accessible category of QS
for the RQE to purchase (see Section 4.5
of the Analysis). Therefore, the limits
are being proposed to reduce the
potential for the RQE to obtain so much
D-category QS as to impact the size
diversity of the commercial IFQ fishery
fleet by substantially reducing the
amount of QS available for small vessels
in the commercial fleet. The proposed
limits on D-category QS purchases are
also intended to protect the opportunity
for new entrants in the commercial
fishery because these participants often
use vessels that are 35 ft LOA or less.
In Area 2C, B- and C-category QS also
provide entry-level opportunities. A
total prohibition on acquisition of Dcategory QS in Area 2C could put
market pressure on other parts of the
Area 2C QS market that are important
for entry and diversity. While Ccategory QS makes up about 79 percent
of the total Area 2C QS pool, B-category
QS represents a relatively small
percentage (4.5 percent, as shown in
Table 4–19 of the Analysis). Therefore,
the Council recommended and NMFS
proposes limiting RQE QS purchases in
Area 2C to 10 percent of the B-category
QS pool (based on the 2015 QS pool).
Because restrictions on B-category QS
transfers would limit the QS market
opportunity for the RQE in Area 2C, the
Council recommended and NMFS
proposes some limited opportunity in
the D-category market to relieve some of
the potential market pressure on the
remaining C-category QS (10 percent of
the D-category QS pool in Area 2C).
These provisions would ensure that
most of the B- and D-category QS are
used in the commercial IFQ fishery and
are intended to balance entry-level
opportunities and fleet diversity in the
commercial IFQ fishery, with potential
benefits to the charter fishery from
transfers of QS to the RQE. The
proposed vessel category restrictions are
discussed in more detail in Section
4.8.1.2.5 of the Analysis.
NMFS proposes adding a new
paragraph at § 679.42(f)(8) describing
RQE use limits for specific vessel
categories of QS.
Block Restrictions
In addition to vessel category
restrictions for the RQE, the Council
recommended and NMFS proposes
limits on the size of QS blocks that the
RQE could purchase. The RQE would be
prohibited from purchasing blocks of

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QS by category that equate to 1,500
pounds or less (based on 2015 pounds).
For Area 2C, this means that the RQE
could not purchase blocked QS of
24,250 units or less. For Area 3A, the
RQE would be prohibited from
purchasing blocked QS of 35,620 units
or less. The Council recommended and
NMFS proposes these prohibitions to
ensure that small and more affordable
blocks of QS remain available for
purchase by new entrants and small
businesses in the commercial IFQ
fishery. The prohibition on the transfer
of small blocks of QS will have limited
impact on the total available market of
QS that the RQE could purchase. Block
restrictions are discussed in more detail
in Section 4.8.1.3 of the Analysis.
NMFS proposes to add a new
paragraph at § 679.42(g)(1)(iii) to
establish restrictions on the type and
amount of blocked QS that the RQE can
hold.
Revisions for the Calculation of the
Charter Catch Limit and Establishment
of Annual Management Measures
This proposed rule would also modify
several regulations to facilitate the
proper accounting of RFQ. This section
describes the process that would be
used annually to calculate the amount
of RFQ and establish annual
management measures.
On October 1 of each year, the RQE’s
QS holdings would be used as the basis
for estimating the number of RFQ
pounds to add to the charter allocation
under the CSP for the following
calendar year. This estimated combined
allocation would be used to recommend
the charter fishery management
measures for the following year. The
process and timeline for setting annual
management measures would remain
unchanged. Once the IPHC annual
management measures are approved,
typically in late February or early
March, NMFS would issue pounds of
RFQ to the RQE based on the number
of QS units held by the RQE on October
1 of the previous year to augment the
charter catch limit established under the
CSP. The Council recommended and
NMFS proposes establishing October 1
as the date for determining how many
QS units would yield RFQ so that the
Council’s Charter Committee and the
Council would be able to estimate the
pounds of RFQ that the RQE would
receive in the following year and be able
to factor that amount into its
recommendations for charter
management measures in the following
year.
The RFQ would not be issued to the
RQE in the upcoming fishing year for
any QS that the RQE received by

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transfer after October 1. If the RQE
transfers QS that it holds on October 1
to a recipient in the commercial IFQ
fishery after that date, NMFS would not
issue IFQ to the commercial recipient
for that QS in the following calendar
year. This approach is similar to the
method used in the commercial fishery
to allow the transfer of QS but not the
IFQ once that IFQ has been used. In this
case, NMFS would consider that RFQ is
effectively ‘‘used’’ if it is assigned to the
charter allocation for the following
calendar year. If the RQE receives QS by
transfer after October 1, that QS would
not result in the issuance of RFQ for the
following calendar year. However, if the
RQE subsequently transferred any QS
received by transfer after October 1 that
did not result in RFQ back to the
commercial IFQ fishery, NMFS would
issue IFQ to the commercial recipient
for that QS.
In late November of each year, NMFS
would estimate the pounds of RFQ that
the QS units held by the RQE on
October 1 would yield in the upcoming
year based on the current year’s QS:IFQ
ratio and the IPHC’s preliminary
estimate of the possible combined catch
limits in Areas 2C and 3A.
In December of each year, the Council
would recommend a range of potential
charter management measures for Areas
2C and 3A that would be expected to
limit charter harvests in an area to the
estimated charter catch limit plus the
estimated supplemental pounds
provided by the RFQ.
NMFS proposes revising
§ 679.40(c)(2) to clarify that NMFS
would use the QS pool for the IFQ
regulatory area, including Areas 2C and
3A, on record with the Alaska Region,
NMFS, on January 15 of that year for
purposes of calculating the amount of
IFQ and RFQ for that regulatory area for
that year. This proposed revision to
move the date of record from January 31
to January 15 of each year would ensure
that the IPHC would be able to
determine the amount of IFQ and RFQ
and the total allocations that would be
assigned to the commercial IFQ and
charter fisheries, respectively, when it
adopts annual management measures at
its annual meeting in late January.
NMFS also proposes revising
§ 300.65(c) to authorize the use of RFQ
in the charter fishery, and to describe
how and when QS holdings by the RQE
would be calculated and added to the
charter catch limit under the CSP.
Redistribution of Excess RFQ
The Council recommended and
NMFS proposes a temporary
redistribution of RFQ from the RQE to
the commercial IFQ fishery if the RQE

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Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Proposed Rules
holdings of QS provide a charter harvest
opportunity greater than the unguided
recreational management measures in
either Area 2C or 3A. The current
management measure for unguided
recreational anglers in both areas is a
daily bag limit of two halibut of any
size. Under this proposed rule, NMFS
would not issue annual RFQ in excess
of the adjusted charter catch limit (the
sum of the annual guided sport catch
limit under the CSP and RFQ from the
RQE’s QS holdings on October 1 of the
previous year) needed for charter
anglers to obtain the unguided
recreational management measures for
that area.
The Council and the Analysis use the
term ‘‘reallocate’’ to describe the
temporary (1-year) redistribution of
excess RFQ to the commercial IFQ
fishery. NMFS notes that the term
reallocate is often used in other
regulations to describe a permanent
transfer of harvest privileges from one
group of participants to another. NMFS
uses the term redistribute in this
proposed rule to clarify for fishery
participants and the public that the
distribution of excess RFQ to
commercial IFQ fishery participants is
in effect for one year, and is not a
permanent reallocation.
The Council recommended and
NMFS proposes the following process
for the temporary redistribution of RFQ
(as IFQ) to the commercial IFQ fishery,
in the event that the RQE has QS
holdings in excess of the amount
needed to provide charter anglers with
harvest opportunities equal to those for
unguided recreational anglers. Each
January, the IPHC will recommend
charter fishery management measures
for Areas 2C and 3A that are expected
to limit charter harvest to the adjusted
charter catch limit for each area (the
sum of the annual guided sport catch
limit under the CSP and the estimated
amount of RFQ from the RQE’s QS
holdings on October 1 of the previous
year).
After the IPHC recommends charter
fishery management measures, NMFS
will determine if a redistribution of
excess RFQ is necessary. If the IPHC has
adopted charter fishery management
measures that are equivalent to the
unguided recreational management
measures in either Area 2C or 3A (e.g.,
a daily bag limit of two halibut of any
size), NMFS would determine the
amount of RFQ that would be needed to
account for charter harvest in Area 2C
and Area 3A under the recommended
management measures and issue that
amount as RFQ to supplement the
charter fishery allocation under the CSP.
The difference between the total amount

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of available RFQ and the amount
needed for the charter fishery would be
excess RFQ. NMFS would redistribute
the amount of excess RFQ using the
process recommended by the Council.
Under this proposed rule, 50 percent
of any RFQ in excess of the amount
needed to achieve the unguided
recreational management measures in
either Area 2C or 3A would be
redistributed as IFQ to all catcher vessel
QS holders in the applicable area (Area
2C or Area 3A) who held not more than
32,333 QS units in Area 2C, and 47,469
QS units in Area 3A (i.e., the amount of
QS that yielded 2,000 pounds of IFQ in
2015) in the year prior to the
redistribution, and who also held that
QS eligible for redistribution during the
year that the redistribution occurs. This
50 percent would be redistributed
among qualified QS holders in
proportion to their QS holdings.
The Council’s recommendation stated
that 50 percent of excess RFQ should be
redistributed ‘‘equally’’ to all qualified
QS holders. During Council
deliberations, NMFS staff and the
Council clarified how NMFS would
implement the Council’s
recommendation. NMFS proposes to
implement this provision by dividing
the amount of IFQ available for
redistribution to qualified QS holders by
the total amount of QS units held by all
qualified QS holders. For example, if
there were 50,000 pounds of excess RFQ
to be redistributed as IFQ in Area 3A in
calendar year 2025 among QS holders
who held not more than 47,469 QS units
in the year prior to the redistribution
(2024), and in the year during which the
redistribution occurs (2025), and the
total sum of all QS held by those
qualified QS holders was 500,000 units,
then each of these qualified QS holders
would receive an additional 1/10 of a
pound of IFQ in 2025 for each QS unit
held. NMFS does not issue IFQ in less
than one pound increments, therefore
NMFS would round the amount of
redistributed IFQ to the nearest pound
for each qualified QS holder. Section
4.8.1.3 of the Analysis provides
additional information on the method
NMFS would use to redistribute excess
RFQ.
This proposed rule would require the
QS holder to hold the QS in the year
prior to the redistribution to meet the
clear intent of the Council, as well as in
the year that the redistribution occurs in
order to ensure the proper
administration of this provision. NMFS
proposes this requirement to ensure that
IFQ is issued to persons who hold the
underlying QS eligible to receive the
redistribution. If NMFS were to
redistribute RFQ as IFQ only to QS

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holders that held QS in the year prior
to the redistribution, it is possible that
a person could hold QS in the year prior
to the redistribution, subsequently
transfer that QS before NMFS issues IFQ
for the following year, and receive IFQ
from the redistribution even though that
person does not hold QS. Issuing IFQ to
persons who do not currently hold QS
would be contrary to the current
functioning of the IFQ Program (i.e., IFQ
is issued to persons who hold QS).
Under this proposed rule, the
remaining 50 percent of RFQ in excess
of the amount needed to achieve the
unguided sport management measures
in either Area 2C or 3A would be
redistributed equally among all CQEs
that held halibut QS in the applicable
area (Area 2C or Area 3A) in the year
prior to the redistribution as well as in
the year that the redistribution occurs.
If no CQE held QS in the applicable area
(Area 2C or Area 3A) in the preceding
year and in the year that the
redistribution occurs, this 50 percent of
the excess RFQ would not be
redistributed in that area. In other
words, the excess RFQ would be
unfished or ‘‘left in the water’’ for
conservation. The rationale for requiring
the CQE to hold QS in the year prior to
the redistribution, and in the year the
redistribution occurs is the same as the
rationale for the redistribution to
catcher vessel QS holders described
above. NMFS solicits comments from
the public on whether excess RFQ
should be redistributed to eligible
catcher vessel QS holders and CQEs
based on this proposed methodology.
The Council and NMFS considered
options that would not have required a
redistribution of RFQ as only IFQ, and
alternative methods to redistribute RFQ
as IFQ. The Council recommended and
NMFS proposes the reallocation
procedures in this rule to provide
additional harvest opportunity among
holders of small amounts of QS as well
as to CQEs who hold QS on behalf of
coastal community residents. Section
4.8.1.4 of the Analysis describes the
options considered by the Council and
NMFS and notes that based on the
current levels of halibut abundance and
the cumulative use limits in Area 2C
and 3A, it is unlikely that the RQE
could hold an amount of QS that would
result in the need for redistribution of
excess RFQ.
NMFS proposes to add regulations
under § 679.40(c) to describe how
excess RFQ would be redistributed.
Cost Recovery Fees
The Magnuson-Stevens Act at section
304(d)(2)(A) requires that cost recovery
fees be collected for the costs directly

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related to the management, data
collection, and enforcement of any
limited access privilege programs. This
includes programs such as the
commercial halibut IFQ Program, under
which a dedicated allocation is
provided to IFQ permit holders. Fees
owed are a percentage, not to exceed 3
percent, of the ex-vessel value of fish
landed and debited from IFQ permits.
Each year, NMFS sends fee statements
to IFQ holders whose annual IFQ was
landed; those holders must remit fees by
January 31 of the following year. Under
this proposed rule, the RQE would be
responsible for all cost recovery fees on
their annual RFQ.
NMFS calculates IFQ cost recovery
fee assessments in November each year.
To determine cost recovery fees for IFQ
holders, NMFS uses data reported by
Registered Buyers to compute annual
standard ex-vessel IFQ prices by month
and port (or, if confidential, by port
group). NMFS publishes these standard
prices in the Federal Register each year.
For example, NMFS published the 2016
standard ex-vessel IFQ prices in the
Federal Register on December 13, 2016
(81 FR 89990). NMFS uses the standard
prices to compute the total annual
fishery value of the IFQ fisheries. NMFS
determines the fee percentage by
dividing management, data collection,
and enforcement costs for the IFQ
Program by total IFQ fishery value. In
recent years, IFQ costs have exceeded 3
percent; therefore, the cost recovery fee
percentage has been set at the maximum
of 3 percent. Unlike commercial IFQ,
which is only subject to cost recovery
fees when landed, the RFQ held by the
RQE would be considered ‘‘used’’ when
issued, because management measures
will be based on the combined amount
of the RFQ and charter fishery catch
limit in each regulatory area.
In years when the RQE holds QS and
the RFQ is issued to augment the charter
fishery’s catch limit, the charter fishery
would be effectively using all of this
RFQ; therefore, the RQE would pay cost
recovery fees on all of its RFQ. Since all
annual RFQ issued to the RQE would be
considered ‘‘used,’’ NMFS would levy
the fee calculated for the RQE’s annual
RFQ pounds that are issued, rather than
estimating RFQ harvest at each point of
charter landings. The fee would be
calculated using the standard price
calculated for Area 2C or 3A and the
RFQ held by the RQE. This is similar to
the method used to apply an ex-vessel
value for GAF. The IFQ cost recovery
fee could be levied on the RQE each
year the RQE holds QS, and the
resulting RFQ is issued to augment the
catch limit in the charter fishery. All
holdings acquired by the RQE on

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October 1 of the prior year would be
subject to the IFQ cost recovery fee.
For purposes of cost recovery, the
RQE would pay fees on all resulting
pounds of RFQ, even if the charter
fishery’s harvest was under its catch
limit in Area 2C or 3A for that year. In
December of each year, NMFS would (1)
determine the standard prices and the
cost recovery fee percentage; (2)
announce the standard prices and the
cost recovery fee percentage in the
Federal Register; and (3) issue the RQE
a fee assessment. The RFQ fee
assessment would be based on the
number of RFQ pounds added to either
the Area 2C or 3A charter catch limit
based on QS holdings as of October 1 of
the prior year multiplied by the
standard price for Area 2C or Area 3A,
and multiplied by the cost recovery fee
percentage (around 3 percent in recent
years). The cost recovery fee payment
from the RQE to NMFS would be due
by January 31 of each year.
Based on NMFS policy, only
‘‘incremental’’ costs, i.e., those incurred
as a result of IFQ management, are
assessable as cost recovery fees. The
costs to develop the regulations,
accounting, and reporting systems for
the RQE Program would be considered
incremental and extensions of the IFQ
Program and would be recoverable
under cost recovery. Agency costs
related to development of the RQE
Program will be included in the IFQ
cost recovery fee assessment. Recently,
the costs to administer the IFQ Program
has been at or above the 3 percent cost
recovery fee limit; therefore, additional
costs due to the development of the RQE
Program would likely not increase the
cost recovery fee percentage for IFQ
permit holders. Additional information
about assessing cost recovery fees for an
RQE is provided in Section 4.8.1.5.1 of
the Analysis.
NMFS proposes revising regulations
throughout § 679.45 to incorporate the
RQE into the IFQ Program cost recovery
fee estimation and collection process.
General Reporting
Because all RFQ would be considered
landed or used by the RQE in the year
for which it is issued and the standard
prices would be applied to pounds of
RFQ, the RQE would not be required to
complete the recordkeeping and
reporting requirements described for the
IFQ Program at § 679.5(1). The RQE
would be exempt from submitting the
IFQ Prior Notice of Landing, Product
Transfer, IFQ Landing, IFQ
Transshipment Authorization, and IFQ
Departure reports.

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Annual Report
The Council recommended and
NMFS proposes that the RQE file an
annual report with the Council by
January 31 of each year that details the
administrative activities and business
operations of the RQE during the prior
year for each year that it holds
commercial QS. Although not
specifically requested by the Council,
NMFS proposes that the annual report
also be submitted to NMFS for reasons
described below.
The RQE would be required to
include the following general
information in its annual report: (1) Any
changes to the bylaws, board of
directors, or other key management
personnel of the RQE during the
preceding year; (2) amounts and
descriptions of annual administrative
expenses; (3) amounts and descriptions
of funds spent on conservation,
research, and promotion of the halibut
resource and a summary of the results;
and (4) amounts and descriptions of all
other expenses. Additionally, the RQE
would be required to submit the
following information by regulatory
area: (1) The total amount of halibut QS
by vessel category and block held by the
RQE at the start of the calendar year, on
October 1, and at the end of the calendar
year; (2) a list of all transfers (purchases,
sales, and any other transfers) of halibut
QS, including transaction prices if
applicable; and (3) the number of CHPs
and associated angler endorsements
purchased and held by the RQE.
The Council did not specify what
would happen if the RQE did not
submit a timely and complete annual
report. Section 679.41(c)(10)(ii) requires
a CQE to submit a timely and complete
annual report to NMFS before a transfer
of QS will be approved or IFQ will be
issued. NMFS proposes a similar
requirement for the RQE at new
paragraph § 679.41(c)(11)(i). If the RQE
held QS in the previous year and has
not submitted a timely and complete
annual report by the January 31
deadline, NMFS would not approve a
transfer of QS or issue RFQ until the
report is submitted. To confirm receipt
of the report, NMFS is proposing that
the RQE submit the annual report to
both the Council and NMFS. NMFS
seeks public comment on whether these
requirements, similar to those for CQEs,
should apply to the RQE.
NMFS proposes adding § 679.5(v) to
include the RQE annual report
requirements.
Other Regulatory Changes
NMFS proposes revisions throughout
the IFQ regulations at 50 CFR part 679

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that refer to ‘‘an IFQ permit holder’’ to
also include the term ‘‘RQE’’ where
applicable.
NMFS proposes revisions throughout
50 CFR part 679 that refer to the IFQ
permit that also pertain to the RQE to
include the term ‘‘RFQ permit account.’’
NMFS proposes these revisions because
the RQE would not be issued an IFQ
fishing permit. Instead, NMFS proposes
establishing an RFQ permit account for
the RQE that would be used to
administer RFQ as described in this
proposed rule.
NMFS also proposes revisions
throughout 50 CFR part 679 that refer to
IFQ to include the term ‘‘RFQ’’ when
the regulations refer to IFQ and RFQ.
These minor changes are shown in the
proposed regulatory text.

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Appeals
This proposed rule would change
several references within §§ 679.41 and
679.45 that describe the former
procedure for appealing an IAD to the
NOAA Fisheries’ Alaska Office of
Administrative Appeals. Those
procedures were described at to
§ 679.43. NOAA Fisheries has
centralized the appeals process in the
National Appeals Office, which operates
out of NOAA Fisheries’ headquarters in
Silver Spring, MD. The National
Appeals Office is now charged with
processing appeals that were filed with
the Office of Administrative Appeals,
Alaska Region. The procedure for
appealing an IAD through the National
Appeals Office is at 15 CFR part 906 (79
FR 7056, February 6, 2014). This
proposed rule would update the
regulations referring to appeals
procedures for the IFQ Program to refer
to 15 CFR part 906 instead of to
§ 679.43.
Council Intent Regarding the
Functioning of the RQE
During the development of the RQE
Program, the Council and NMFS
considered, but did not propose
regulations that would address RQE
funding, limits on the use of RQE funds,
and the purchase of CHPs by the RQE.
This section of the preamble provides
the public with a description of the
overall intent of the Council regarding
RQE funding and limits on the use of
RQE funds, and notes that NMFS would
regulate the purchase of CHPs by the
RQE consistent with existing
regulations.
RQE Funding
The Council did not recommend and
NMFS does not propose regulations that
would define the specific type of
incorporation (e.g., a 501(c)(3) non-

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profit corporation) for the RQE.
Likewise, the Council did not
recommend and NMFS does not
propose regulations regarding the
acquisition of funds the RQE may use to
purchase QS. Section 4.8.1.1 of the
Analysis describes the different types of
non-profit structures that an RQE could
use, and how those non-profits may use
and receive funds.
Limit on Use of RQE Funds
The Council did not recommend and
NMFS does not propose regulations
regarding the use of funds obtained by
the RQE. However, the Council did
indicate how funds obtained by the RQE
could be used to meet the objectives of
the RQE Program. The Council
indicated that it intended for the RQE to
use funds primarily for the acquisition
of commercial halibut QS; halibut
conservation and research; promotion of
the halibut resource; and administrative
costs. NMFS notes that this proposed
rule would require the RQE to submit an
annual report describing its annual
expenditures (described in a previous
section of this preamble) to NMFS and
the Council. Based on information
received in this annual report, the
Council could choose to initiate a
subsequent action that would limit the
use of funds held by the RQE in the
future if the RQE’s annual reports
indicate that RQE funds are being used
in a manner that is contrary to the
Council’s intent described above.
Purchase of Charter Halibut Permits by
an RQE (§ 300.67)
The Council did not specify limits on
the acquisition of CHPs by the RQE;
therefore, the RQE would be subject to
regulations that apply to any other
person, as defined at § 300.61, for
purposes of purchasing and holding
CHPs. Section 300.67(j) states that a
person may not own, hold, or control
more than five CHPs, with limited
exceptions. The RQE would be
authorized to purchase and hold up to
five transferable CHPs in both regulatory
areas combined. Any purchases or sales
of CHPs by the RQE would be required
to be reported in the RQE’s annual
report to the Council and NMFS.
Classification
Regulations governing the U.S.
fisheries for Pacific halibut are
developed by the IPHC, the Pacific
Fishery Management Council, the North
Pacific Fishery Management Council,
and the Secretary of Commerce. Section
5 of the Halibut Act (16 U.S.C. 773c)
allows the Regional Council having
authority for a particular geographical
area to develop regulations governing

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46027

fishing for halibut in U.S. Convention
waters as long as those regulations do
not conflict with IPHC regulations. The
Halibut Act, at sections 773c(a) and (b),
provides the Secretary of Commerce
with the general responsibility to carry
out the Convention with the authority
to, in consultation with the Secretary of
the department in which the U.S. Coast
Guard is operating, adopt such
regulations as may be necessary to carry
out the purposes and objectives of the
Convention and the Halibut Act. This
proposed rule is consistent with the
Halibut Act and other applicable laws.
This proposed rule has been
determined to be not significant for the
purposes of Executive Order 12866.
Regulatory Impact Review (RIR)
An RIR was prepared to assess all
costs and benefits of available regulatory
alternatives. The RIR considers all
quantitative and qualitative measures. A
copy of this analysis is available from
NMFS (see ADDRESSES). The Council
recommended and NMFS proposes this
rule based on those measures that
maximized net benefits to the Nation.
Specific aspects of the economic
analysis are discussed below in the
Initial Regulatory Flexibility Analysis
section.
Initial Regulatory Flexibility Analysis
An Initial Regulatory Flexibility
Analysis (IRFA) was prepared for this
action, as required by section 603 of the
Regulatory Flexibility Act (RFA). The
IRFA describes the economic impact
this proposed rule, if adopted, would
have on small entities. The IRFA
describes the action; the reasons why
this action is proposed; the objectives
and legal basis for this proposed rule;
the number and description of directly
regulated small entities to which this
proposed rule would apply; the
recordkeeping, reporting, and other
compliance requirements of this
proposed rule; and the relevant Federal
rules that may duplicate, overlap, or
conflict with this proposed rule. The
IRFA also describes significant
alternatives to this proposed rule that
would accomplish the stated objectives
of the Magnuson-Stevens Act, and any
other applicable statutes, and that
would minimize any significant
economic impact of this proposed rule
on small entities. The description of the
proposed action, its purpose, and the
legal basis are explained in the
preamble and are not repeated here. A
summary of the IRFA follows. A copy of
the IRFA is available from NMFS (see
ADDRESSES).
The Small Business Administration
(SBA) criteria for determining whether

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asabaliauskas on DSKBBXCHB2PROD with PROPOSALS

an entity is ‘‘small’’ for purposes of the
RFA are discussed in more detail in
Section 5.3 of the Analysis. The SBA
has established a small business size
standard for businesses, including their
affiliates, whose primary industry is
‘‘finfish fishing’’ (see 50 CFR 200.2).
Commercial halibut QS holders are
considered finfish fishers under the
RFA. A business primarily involved in
finfish fishing (North American Industry
Classification Systems code 11411) is
classified as a small business if it is
independently owned and operated, is
not dominant in its field of operation
(including its affiliates), and has
combined annual gross receipts not in
excess of the applicable size standard
for all its affiliated operations
worldwide. On December 29, 2015,
NMFS issued a final rule establishing
the small business size standard of $11
million in annual gross receipts for all
businesses in the commercial fishing
industry (80 FR 81194). This new size
standard applies to all businesses
included under the North American
Industry Classification Systems code
11411 for purposes of RFA compliance
only. The new size standard became
effective July 1, 2016, and was used to
estimate the number of directly
regulated small entities in this IRFA.
For this proposed action, the pool of
small, directly regulated entities would
be limited to those entities that would
be engaging in QS transfer (i.e., QS
holders, including CQEs, and a future
RQE). CQEs and the proposed RQE
would be considered a small entity, or
more specifically, a small organization
as defined by the RFA. A small
organization is ‘‘any not-for-profit
enterprise which is independently
owned and operated and is not
dominant in its field.’’ In addition, no
CQE has more than $11 million in
annual gross receipts. The RQE that is
proposed under this action would not
be expected to have $11 million in
annual gross receipts because it does not
currently hold halibut QS that would
yield $11 million in annual gross
receipts. Commercial halibut QS holders
would also be considered directly
regulated. Most of the QS holders in the
halibut IFQ Program are small entities.
Number and Description of Small
Entities Regulated by This Proposed
Rule
NMFS considers commercial halibut
fishing vessels as proxies for small
entities because IFQ from more than one
QS holder is often fished from the same
vessel. NMFS estimates that 812 vessels
across all IPHC regulatory areas landed
halibut in 2014, the most recent year of
complete data on the value of halibut

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landings by vessel. Of those, 11 vessels
would be considered large entities
because they showed revenues that
exceeded the $11 million threshold. The
remaining 801 vessels would be
considered directly regulated small
entities for this proposed rule. See
Section 5.6 of the Analysis for more
information.
Description of Significant Alternatives
That Minimize Adverse Impacts on
Small Entities
This proposed action is expected to
have distributional impacts to the
identified directly regulated small
entities. Transfers of QS would be
voluntary among all the small, directly
regulated entities identified in the IRFA.
The preferred alternative is the only
alternative considered that would give
current halibut QS holders an additional
opportunity to transfer their QS and the
RQE an opportunity to form and obtain
QS. As noted earlier in this preamble,
the Council and NMFS considered the
status quo and the preferred alternative.
However, under the preferred
alternative, the Council and NMFS
considered a wide range of potential
limitations on the amount and type of
QS that could be held by the RQE. The
wide variation in the options considered
under the preferred alternative provided
the Council and NMFS with a broad
range of potential policy choices to
minimize the adverse impacts.
Under the preferred alternative, the
RQE representing the charter fishery
would not be expected to participate in
the IFQ Program (and purchase halibut
QS) if it did not benefit the charter
fishery as a whole. QS holders,
including CQEs, would not be expected
to engage in a QS transaction with the
RQE if it did not benefit from that
transfer. However, there is a potential
for the RQE to affect the QS market by
increasing competition in the market.
This increased competition could limit
the ability for persons in the commercial
IFQ fishery to expand their QS holdings
by increasing the market price of QS or
limiting the amount of QS available to
commercial QS holders and CQEs. This
potential negative impact is considered
in the Regulatory Impact Review
(Section 4.8.2 of the Analysis). To
mitigate the expected effects on the QS
market, the Council recommended and
NMFS proposes provisions to limit the
amount and types of QS that could be
acquired by the RQE, annually and
cumulatively.
Specifically, the Council’s preferred
alternative (and this proposed rule)
would create an annual transfer
limitation of 1 percent of the QS in Area
2C and an annual transfer limitation of

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1.2 percent of the QS in Area 3A.
Cumulative use limits for the charter
fishery are proposed to limit the
combined amount of commercial QS
held by RQE and transferred under GAF
(10 percent in Area 2C and 12 percent
in Area 3A). Proposed transfer limits
include prohibiting the RQE from
purchasing D-category QS in Area 3A
and limiting it to holding 10 percent of
D-category QS in Area 2C, and
restricting purchase of B-category QS to
no more than 10 percent in Area 2C and
10 percent of B-category QS in Area 2C.
Block restrictions would prohibit the
RQE from purchasing small blocks of
QS. This proposed rule would seek to
derive the greatest net benefit for small
regulated entities by increasing market
opportunities in the charter fishery
while ameliorating adverse impacts that
could occur for QS holders and CQEs in
the commercial IFQ fishery if QS
holdings by the RQE were not limited.
Overall, the net benefits to directly
regulated small entities are expected to
be positive.
Duplicate, Overlapping, or Conflicting
Federal Rules
NMFS has not identified any
duplication, overlap, or conflict
between this proposed action and
existing Federal rules.
Recordkeeping, Reporting, and Other
Compliance Requirements
The RFA requires a description of the
projected reporting, recordkeeping, and
other compliance requirements of the
proposed rule, including an estimate of
the classes of small entities that will be
subject to the requirement and the type
of professional skills necessary for
preparation of the report or record. This
proposed rule would require new
information collections from an RQE.
Under this proposed rule, a non-profit
entity that wants to become an RQE
would need to complete an application
and submit it to NMFS for approval.
This application would require
submission of the entity’s articles of
incorporation, the corporate by-laws, a
list of key personnel, including the
Board of Directors, officers,
representatives, and managers. NMFS
would approve the first complete RQE
application it receives.
If the RQE wants to receive or transfer
halibut QS, it would need to use the
‘‘Application for Transfer QS To or
From an RQE’’ available on the NMFS
Alaska Region Web site at https://
alaskafisheries.noaa.gov/. Additionally,
the RQE would be required to submit an
annual report detailing its activities to
NMFS and the Council. The RQE would
also be subject to cost recovery fees so

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Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Proposed Rules
it would need to comply with the
existing cost recovery fee payment
requirements for IFQ permit holders.
These recordkeeping and reporting
requirements are expected to be
administrative in nature.

requirements, Russian Federation,
Transportation, Treaties, Wildlife.

Collection-of-Information Requirements

Dated: September 25, 2017.
Samuel D. Rauch, III,
Deputy Assistant Administrator for
Regulatory Programs, National Marine
Fisheries Service.

50 CFR Part 679
Alaska, Fisheries, Reporting and
recordkeeping requirements.

This proposed rule contains
collection-of-information requirements
subject to review and approval by the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act (PRA). NMFS has submitted these
requirements to OMB for approval
under a temporary new information
collection, to be merged after approval
with OMB Control Number 0648–0272.
Public reporting burden is estimated to
average per response: 200 hours for
Application for a Non-Profit
Corporation to be Designated as a
Recreational Quota Entity; 2 hours for
Application for Transfer of QS To or
From an RQE; 40 hours for RQE Annual
Report; 1 minute for electronic
submission of cost recovery fee; and 30
minutes for non-electronic fee
submission for IFQ Permit Holder Fee
Submission Form. Public comment is
sought regarding: Whether these
proposed collections of information are
necessary for the proper performance of
the functions of the agency, including
whether the information shall have
practical utility; the accuracy of the
burden statement; ways to enhance
quality, utility, and clarity of the
information to be collected; and ways to
minimize the burden of the collection of
information, including through the use
of automated collection techniques or
other forms of information technology.
Send comments on these or any other
aspects of the collection of information,
to NMFS (see ADDRESSES), and by email
to [email protected] or
fax to 202– 395–5806.
Notwithstanding any other provision
of the law, no person is required to
respond to, nor shall any person be
subject to penalty for failure to comply
with, a collection of information subject
to the requirement of the PRA, unless
that collection of information displays a
currently valid OMB control number.
All currently approved NOAA
collections of information may be
viewed at http://www.cio.noaa.gov/
services_programs/prasubs.html.
List of Subjects
50 CFR Part 300
Administrative practice and
procedure, Antarctica, Canada, Exports,
Fish, Fisheries, Fishing, Imports,
Indians, Labeling, Marine resources,
Reporting and recordkeeping

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For the reasons set out in the
preamble, 50 CFR parts 300 and 679 are
proposed to be amended as follows:
PART 300—INTERNATIONAL
FISHERIES REGULATIONS

1. The authority citation for part 300,
subpart E, continues to read as follows:
Authority: 16 U.S.C. 773–773k.

2. In § 300.65:
a. Add paragraph (c)(1)(iii);
b. Revise paragraph (c)(4)(i); and
c. Add paragraphs (c)(4)(iii) and
(c)(5)(ii)(D)(1)(iv) to read as follows:

■
■
■
■

§ 300.65 Catch sharing plan and domestic
management measures in waters in and off
Alaska.

*
*
*
*
(c) * * *
(1) * * *
(iii) Authorizes the use of
Commission regulatory areas 2C and 3A
RFQ resulting from halibut QS held by
the RQE as authorized in part 679 to this
title to supplement the annual guided
sport catch limit in the corresponding
area, pursuant to paragraph (c)(4) of this
section.
*
*
*
*
*
(4) * * *
(i) The Commission regulatory areas
2C and 3A annual guided sport catch
limits are determined by subtracting
wastage from, and adding any pounds of
RFQ held by an RQE for that area to, the
allocations in Tables 3 and 4 of this
subpart E, adopted by the Commission
as annual management measures, and
published in the Federal Register as
required in § 300.62.
*
*
*
*
*
(iii) The amount of QS held by the
RQE for Commission regulatory area 2C
and 3A as of October 1 each year will
be the basis for determining the amount
of RFQ pounds that will be added to the
annual guided sport catch limit for the
corresponding area in the upcoming
year.
(5) * * *
(ii) * * *
(D) * * *
(1) * * *

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PART 679—FISHERIES OF THE
EXCLUSIVE ECONOMIC ZONE OFF
ALASKA
3. The authority citation for part 679
continues to read as follows:

■

PO 00000

(iv) In the applicable Commission
regulatory area, either Area 2C or Area
3A, the sum of IFQ halibut equivalent
pounds, as defined in § 679.2 of this
title, from the transfer of IFQ to GAF
and the pounds of RFQ issued to the
RQE during a calendar year does not
exceed an amount that is greater than
the amount derived from:
(A) 5,947,740 units of Area 2C QS; or
(B) 22,187,161 units of Area 3A QS.
*
*
*
*
*

■

Subpart E—Pacific Halibut Fisheries

*

46029

Authority: 16 U.S.C. 773 et seq.; 1801 et
seq.; 3631 et seq.; Pub. L. 108–447; Pub. L.
111–281.

4. In § 679.2, add definitions for
‘‘Recreational Fishing Quota (RFQ)’’ and
‘‘Recreational Quota Entity (RQE)’’ in
alphabetical order to read as follows:

■

§ 679.2

Definitions.

*

*
*
*
*
Recreational Fishing Quota (RFQ)
means the pounds of halibut issued
annually to a Recreational Quota Entity
to supplement the annual guided sport
catch limit under the catch sharing plan
for IFQ regulatory areas 2C and 3A
pursuant to § 300.65(c) of this title.
Recreational Quota Entity (RQE)
means a non-profit entity incorporated
under the laws of the State of Alaska,
recognized as exempt from federal
income tax by the Internal Revenue
Service, and authorized by NMFS to
participate in the Halibut IFQ Program
to hold commercial halibut quota share
to supplement the annual guided sport
catch limit in IFQ regulatory areas 2C
and 3A under the catch sharing plan
pursuant to § 300.65(c) of this title.
NMFS will authorize only one RQE at
a time.
*
*
*
*
*
■ 5. In § 679.4, add paragraph (d)(1)(iv)
to read as follows:
§ 679.4

Permits.

*

*
*
*
*
(d) * * *
(1) * * *
(iv) RFQ permit account. An RFQ
permit account identifies the amount of
RFQ authorized for use by charter vessel
anglers in Area 2C or Area 3A. The
number of pounds of RFQ allocated to
the RFQ permit account will be added
to the annual guided sport catch limit
under the catch sharing plan (described
at 50 CFR 300.65(c)) for the appropriate
IFQ regulatory area, Area 2C or Area 3A.
*
*
*
*
*

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6. In § 679.5:
a. Revise paragraphs (l)(7)(ii)(A) and
(l)(7)(ii)(C) and (D); and
■ b. Add paragraphs (l)(9) and (v) to
read as follows:
■
■

§ 679.5
(R&R).

Recordkeeping and reporting

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*

*
*
*
*
(l) * * *
(7) * * *
(ii) * * *
(A) Applicability. An IFQ permit
holder who holds an IFQ permit against
which a landing was made or an RQE
that holds RFQ must submit to NMFS a
complete IFQ Permit Holder Fee
Submission Form provided by NMFS.
*
*
*
*
*
(C) Completed application. NMFS
will process an IFQ Permit Holder Fee
Submission Form provided that a paper
or electronic form is completed by the
IFQ permit holder or an RQE that holds
RFQ, with all applicable fields
accurately filled in, and all required
additional documentation is attached.
(D) IFQ landing summary and
estimated fee liability. NMFS will
provide to an IFQ permit holder and an
RQE that holds RFQ an IFQ Landing
and Estimated Fee Liability page as
required by § 679.45(a)(2). The IFQ
permit holder must either accept the
accuracy of the NMFS estimated fee
liability associated with his or her IFQ
landings for each IFQ permit, or
calculate a revised IFQ fee liability in
accordance with paragraph (l)(7)(ii)(E)
of this section. The IFQ permit holder
may calculate a revised fee liability for
all or part of his or her IFQ landings.
*
*
*
*
*
(9) An annual report on RQE activities
must be submitted to NMFS by the RQE
as required at § 679.5(v).
*
*
*
*
*
(v) Recreational Quota Entity Program
Annual Report—(1) Applicability. The
RQE must submit a timely and complete
annual report on the RQE’s
administrative activities and business
operation for each calendar year that it
holds halibut recreational fishing quota
(RFQ) and quota shares (QS). The RQE
may combine annual reports on its
holdings of halibut QS and RFQ for IFQ
regulatory areas 2C and 3A into one
report. The RQE must submit annual
report data for the halibut QS and RFQ
it held during the calendar year. The
RQE is not required to submit an annual
report for any calendar year in which it
did not hold any halibut QS or RFQ.
(2) Time limits and submittal. By
January 31, the RQE must submit a
complete annual report for the prior
calendar year to the North Pacific

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Fishery Management Council, 605 West
4th Ave., Suite 306, Anchorage, AK
99501–2252, and to NMFS-Alaska
Regional Administrator, P.O. Box 21668,
Juneau, AK 99802–1668.
(3) Complete annual report. A
complete annual report contains all
general report requirements described in
paragraphs (v)(4)(i) through (v)(4)(iv) of
this section, and all information specific
to IFQ regulatory areas 2C and 3A
described in paragraphs (v)(5)(i) through
(v)(5)(iii) of this section.
(4) General report requirements. The
RQE must annually report the following
information:
(i) Any changes to the bylaws, board
of directors, or other key management
personnel of the RQE from the
preceding year;
(ii) Amount and description of annual
administrative expenses;
(iii) Amount and description of funds
spent on conservation and research,
including a summary of the results of
those expenditures; and
(iv) Amount and description of all
other expenses incurred by the RQE.
(5) Information by IFQ regulatory
area. For each IFQ regulatory area
represented by the RQE, the RQE must
annually report the following
information:
(i) The total amount of halibut QS by
category and blocks held by the RQE at
the start of the calendar year, on October
1, and at the end of the calendar year;
(ii) A list of all transfers (purchases or
sales) of halibut QS, including the
transaction price; and
(iii) A description of the number of
charter halibut permits and number of
angler endorsements purchased and
held by the RQE.
■ 7. In § 679.7, add paragraph (f)(3)(i)(C)
to read as follows:
§ 679.7

Prohibitions.

*

*
*
*
*
(f) * * *
(3) * * *
(i) * * *
(C) Use fixed gear as defined in
§ 679.2 to retain halibut RFQ.
*
*
*
*
*
■ 8. In § 679.40:
■ a. Revise paragraph (b);
■ b. Revise paragraph (c) heading and
paragraph (c)(2);
■ c. Add paragraphs (c)(4) and (g)(2)(iii);
■ d. Revise paragraph (h)(3)
introductory text; and
■ e. Add paragraph (h)(3)(iii) to read as
follows:
§ 679.40

Sablefish and halibut QS.

*

*
*
*
*
(b) Annual allocation of IFQ and RFQ.
The Regional Administrator shall assign

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halibut or sablefish IFQs to each person,
except the RQE, holding unrestricted QS
halibut or sablefish, respectively, up to
the limits prescribed in § 679.42(e) and
(f). Each assigned IFQ will be specific to
an IFQ regulatory area and vessel
category, and will represent the
maximum amount of halibut or
sablefish that may be harvested from the
specified IFQ regulatory area and by the
person to whom it is assigned during
the specified fishing year, unless the
IFQ assignment is changed by the
Regional Administrator within the
fishing year because of an approved
transfer or because all or part of the IFQ
is sanctioned for violating rules of this
part. The Regional Administrator shall
assign RFQ to the RQE pursuant to
paragraph (c)(4) of this section.
(c) Calculation of annual IFQ and
RFQ allocations.
*
*
*
*
*
(2) QS amounts. For purposes of
calculating IFQs and RFQ for any
fishing year, the amount of a person’s
QS and the amount of the QS pool for
any IFQ regulatory area will be the
amounts on record with the Alaska
Region, NMFS, on January 15 of that
year.
*
*
*
*
*
(4) RFQ allocation to RQE—(i) RQE
QS amounts. For purposes of
calculating RFQ for any fishing year, the
amount of halibut QS held by the RQE
for either IFQ regulatory area 2C or 3A
for the corresponding IFQ regulatory
area will be the amounts on record with
the Alaska Region, NMFS on October 1
of the year prior.
(ii) Calculation of RFQ. The annual
allocation of RFQ halibut to an RQE
(person r) in IFQ regulatory area 2C or
3A (area a) will be equal to the product
of the annual commercial catch limit as
defined in § 300.61 of this title, and the
QS held by the RQE (specified in
paragraph (c)(4)(i) of this section)
divided by the QS pool for that area
(specified in paragraph (c)(2) of this
section). No overage or underage
adjustments will be applied to the
RQE’s annual RFQ. Expressed
algebraically, the annual RFQ halibut
allocation formula is as follows:
RFQra = [fixed gear TACa × (QSra/QS
poola)]
(iii) Excess RFQ. NMFS will not issue
the RQE any excess RFQ. Excess RFQ is
the difference between the amount of
RFQ based on the QS held by the RQE
and the amount of RFQ needed to
provide charter fishery management
measures that are equivalent to
unguided recreational fishery
management measures. If the annual
management measures published

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pursuant to § 300.62 of this title specify
charter fishery management measures
that are equivalent to the unguided
recreational management measures,
NMFS will:
(A) Calculate the annual allocation of
halibut RFQ to the RQE as specified in
paragraph (c)(4)(ii) of this section;
(B) Determine the amount of RFQ
needed to supplement the annual
guided sport catch limit from the CSP in
Area 2C and Area 3A (described in
§ 300.65(c)) to account for charter
fishery harvests under the charter
fishery management measures specified
in the annual management measures
and issue that amount of RFQ to the
RFQ permit account.
(C) Calculate the amount of excess
RFQ by subtracting the amount of RFQ
issued as determined in paragraph
(c)(4)(iii)(B) of this section from the
annual calculation of RFQ halibut to the
RQE as calculated in paragraph
(c)(4)(iii)(A) of this section.
(iv) Redistribution of excess RFQ.
Excess pounds of RFQ will be
redistributed as IFQ as follows:
(A) 50 percent to all catcher vessel QS
holders in the applicable area who held
not more than 32,333 QS units in Area
2C, and 47,469 QS units in Area 3A in
the current calendar year and in the
calendar year prior to the redistribution,
in proportion to their QS holdings; and
(B) 50 percent divided equally among
all CQEs that held halibut QS in the
applicable IFQ regulatory area (Area 2C
or Area 3A) in the current calendar year
and in the calendar year prior to the
redistribution. If no CQE held QS in the
applicable IFQ regulatory area (Area 2C
and Area 3A) in the current calendar
year and in the calendar year prior to
the redistribution, that RFQ will not be
redistributed as IFQ and will not be
available for use by any CQE, IFQ
permit holder, or RQE in that calendar
year.
*
*
*
*
*
(g) * * *
(2) * * *
(iii) The fish will not be calculated as
part of the recreational harvest of
halibut and will not be debited against
the RFQ permit account or the annual
guided sport catch limit as defined in
§ 300.61 of this title.
*
*
*
*
*
(h) * * *
(3) Source of debit. NMFS will use the
following sources (see paragraphs
(h)(3)(i), (ii) and (iii) of this section) of
information to debit a CDQ halibut, IFQ
halibut, IFQ sablefish, or RFQ permit
account:
*
*
*
*
*

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(iii) All annual RFQ halibut issued to
an RQE will be considered landed in the
year for which it is issued.
■ 9. In § 679.41:
■ a. Redesignate paragraph (c)(11) as
(c)(12);
■ b. Add new paragraph (c)(11);
■ c. Revise paragraphs (d)(1) and (g)(1);
and
■ d. Add paragraphs (g)(9) through (11),
and (n) to read as follows:
§ 679.41

Transfer of quota shares and IFQ.

*

*
*
*
*
(c) * * *
(11) If the person applying to receive
or transfer QS is an RQE, the following
determinations are required:
(i) The RQE applying to receive or
transfer QS, has submitted the timely
and complete annual report required by
§ 679.5(v);
(ii) The RQE applying to receive QS
is eligible to hold QS on behalf of the
charter halibut sector in IFQ regulatory
area 2C or 3A; and
(iii) The RQE applying to receive QS
has received notification of approval of
eligibility to receive QS on behalf of the
charter halibut sector in IFQ regulatory
area 2C or 3A as described in paragraph
(d)(1) of this section.
*
*
*
*
*
(d) * * *
(1) Application for Eligibility. All
persons applying to receive QS or IFQ
must submit an Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) containing
accurate information to the Regional
Administrator. An Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) is not
required for a CQE if a complete
application to become a CQE, as
described in paragraph (l)(3) of this
section, has been approved by the
Regional Administrator on behalf of an
eligible community. An Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) is not
required for the RQE if a complete
application to become an RQE, as
described in paragraph (n)(2) of this
section, has been approved by the
Regional Administrator. The Regional
Administrator will not approve a
transfer of IFQ or QS to a person until
the Application for Eligibility for that
person is approved by the Regional
Administrator. The Regional
Administrator will provide an
Application for Eligibility form to any
person on request.
*
*
*
*
*
(g) * * *
(1) Except as provided in paragraph
(f), paragraph (g)(2), paragraph (l), or

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paragraph (n) of this section, only
persons who are IFQ crew members, or
who were initially issued QS assigned
to vessel categories B, C, or D, and meet
the eligibility requirements in this
section, may receive by transfer QS
assigned to vessel categories B, C, or D,
or the IFQ resulting from it.
*
*
*
*
*
(9) For transfers of QS to an RQE, the
RQE may only receive halibut QS that
is assigned to IFQ regulatory area 2C or
3A.
(10) For transfers of QS from an RQE:
(i) Quota category and block
designations at time of purchase by an
RQE are retained if QS is transferred to
an eligible QS holder for use in the IFQ
program.
(ii) NMFS will not issue any IFQ from
any QS transferred from an RQE to a QS
holder for use in the IFQ program for a
calendar year if that QS resulted in the
issuance of RFQ to an RQE during that
calendar year.
(11) RQE eligibility. (i) To maintain
eligibility as the RQE authorized by
NMFS, the RQE must be a non-profit
entity incorporated under the laws of
the State of Alaska and recognized as
exempt from federal income tax by the
Internal Revenue Service as required by
paragraph (n)(1)(i) of this section.
(ii) If the Regional Administrator
determines the RQE approved by NMFS
does not meet the requirement specified
in in paragraph (n)(1)(i) of this section,
NMFS will notify the RQE of the
Regional Administrator’s determination
and specify that the RQE has 60 days to
meet the requirement in paragraphs
(n)(1)(i) of this section to maintain
eligibility as the RQE authorized by
NMFS.
(iii) If the RQE demonstrates to NMFS
within 60 days of notification that it
meets the requirement in paragraphs
(n)(1)(i) of this section, NMFS will
notify the RQE that it remains the
authorized RQE.
(iv) If the RQE does not demonstrate
to NMFS within 60 days of notification
that it meets the requirement in
paragraphs (n)(1)(i) of this section,
NMFS will issue an initial
administrative determination (IAD):
(A) Revoking authorization of the
RQE;
(B) Disallowing the RQE from
receiving any QS by transfer;
(C) Requiring the CQE to divest of any
QS that it holds; and
(D) Withholding the issuance of RFQ
based on any QS that the RQE holds.
(v) The RQE would have the
opportunity to appeal the IAD through
the National Appeals Office under the

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provisions established at 15 CFR part
906.
*
*
*
*
*
(n) Transfer of halibut QS to an
RQE—(1) RQE Organizational Structure.
(i) The RQE will be a single entity
representing IFQ regulatory Areas 2C
and 3A.
(ii) The RQE will be a non-profit
entity incorporated under the laws of
the State of Alaska and recognized as
exempt from federal income tax by the
Internal Revenue Service; and
(iii) The RQE will submit an annual
report to NMFS and the Council
detailing RQE activities during the prior
year according to § 679.5(v).
(2) Application for Eligibility. Prior to
initially receiving QS by transfer, a nonprofit entity that intends to participate
in the Halibut IFQ Program and
purchase and hold halibut QS in Area
2C and Area 3A as the RQE must have
approval from the Regional
Administrator. To receive that approval,
the non-profit entity seeking to become
an RQE must submit a complete
‘‘Application for a Non-Profit Entity to
be Designated as a Recreational Quota
Entity (RQE)’’ (available on the NMFS
Alaska Region Web site at https://
alaskafisheries.noaa.gov/). NMFS will
approve only one entity as the RQE. A
complete application to become an RQE
must include:
(i) The articles of incorporation under
the laws of the State of Alaska for that
non-profit entity;
(ii) Acknowledgement from the
Internal Revenue Service that the nonprofit entity is exempt from federal
income tax under section 501(a) of the
Internal Revenue Code;
(iii) Management organization
information, including:
(A) The bylaws of the non-profit
entity;
(B) A list of key personnel of the
managing organization including, but
not limited to, the RQE board of
directors, officers, representatives, and
any managers;
(C) A description of how the nonprofit entity is qualified to manage QS
on behalf of charter fishery participants
and a demonstration that the non-profit
entity has the management, technical
expertise, and ability to manage QS and
RFQ;
(D) The name of the non-profit
organization, taxpayer ID number,
NMFS person number, permanent
business mailing addresses, name of
contact persons and additional contact
information of the managing personnel
for the non-profit entity, resumes of
management personnel, name and
notarized signature of applicant, and

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Notary Public signature and date when
commission expires;
(iv) A statement describing the
procedures that will be used to
determine the acquisition of funds to
purchase QS.
(3) Address for submittal of
application: Regional Administrator,
NMFS, P.O. Box 21668, Juneau, AK
99802.
(4) Approval. NMFS will approve the
first complete application received. If an
application is approved, NMFS will
notify the RQE by mail, unless another
mode of communication is requested on
the application.
(5) Disapproval. If an application is
disapproved, that determination may be
appealed under the provisions
established at 15 CFR part 906.
■ 10. In § 679.42:
■ a. Add paragraph (a)(2)(v);
■ b. Revise paragraph (f)(1) introductory
text; and
■ c. Add paragraphs (f)(8) and (g)(1)(iii)
to read as follows:
§ 679.42

Limitations on use of QS and IFQ.

(a) * * *
(2) * * *
(v) In IFQ regulatory areas 2C and 3A,
RFQ held by an RQE may be harvested
aboard charter vessels as defined at 50
CFR 300.61 of any size, regardless of the
QS category from which that RFQ
originated.
*
*
*
*
*
(f) * * *
(1) Unless the amount in excess of the
following limits was received in the
initial allocation of halibut QS, no
person other than a CQE representing
the community of Adak, AK,
individually or collectively, or an RQE,
may use more than:
*
*
*
*
*
(8) RQE use limits—(i) Annual
transfer limits. The RQE may not receive
by transfer more than 594,774 units of
Area 2C halibut QS and more than
2,218,716 units of Area 3A halibut QS
in a year.
(ii) Cumulative use limits. The RQE
may not hold more than 5,947,740 units
of Area 2C halibut QS and more than
22,187,161 units of Area 3A halibut QS.
(iii) Vessel category restrictions. (A)
The RQE may not hold more than
889,548 units of halibut QS in IFQ
regulatory area 2C that is assigned to
vessel category D.
(B) The RQE may not hold halibut QS
in IFQ regulatory area 3A that is
assigned to vessel category D.
(C) The RQE may not hold more than
265,524 units of halibut QS that is
assigned to vessel category B in IFQ
regulatory area 2C.

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(g) * * *
(1) * * *
(iii) The RQE is limited to receiving:
(A) Transfers of halibut QS blocks of
less than or equal to 24,250 quota share
units in IFQ regulatory area 2C.
(B) Transfers of halibut QS blocks of
less than or equal to 35,620 quota share
units in IFQ regulatory area 3A.
*
*
*
*
*
■ 11. In § 679.45:
■ a. Revise paragraphs (a)(1), (a)(2)(i)
introductory text, and (a)(2)(i)(A);
■ b. Add paragraphs (a)(2)(i)(B)(3) and
(a)(2)(i)(D); and
■ c. Revise paragraphs (a)(3), (a)(4)(i),
(b)(1), and (f)(2) to read as follows:
§ 679.45

IFQ cost recovery program.

(a) * * *
(1) Responsibility. An IFQ permit
holder is responsible for cost recovery
fees for landings of his or her IFQ
halibut and sablefish, including any
halibut landed as guided angler fish
(GAF), as defined in § 300.61 of this
title, derived from his or her IFQ
accounts. An RQE is responsible for cost
recovery fees for all RFQ issued to the
RQE. An IFQ permit holder or RQE
must comply with the requirements of
this section.
(2) * * *
(i) General. IFQ fee liability means a
cost recovery liability based on either
the value of all landed IFQ and GAF
derived from the permit holder’s IFQ
permit(s), or the value of all RFQ issued
to an RQE.
(A) Each year, the Regional
Administrator will issue each IFQ
permit holder a summary of his or her
IFQ equivalent pounds landed as IFQ
and GAF and will issue an RQE a
summary of its RFQ pounds issued as
part of the IFQ Landing and Estimated
Fee Liability page described at
§ 679.5(l)(7)(ii)(D).
(B) * * *
(3) All RFQ issued to an RQE in IFQ
regulatory area 2C or 3A will be
assessed at the IFQ regulatory area 2C or
3A IFQ standard ex-vessel value.
*
*
*
*
*
(D) An RQE may not challenge the
standard ex-vessel value used to
determine the fee liability for all RFQ
issued to the RQE.
*
*
*
*
*
(3) Fee Collection. (i) An IFQ permit
holder with IFQ and/or GAF landings is
responsible for collecting his or her own
fee during the calendar year in which
the IFQ fish and/or GAF are landed.
(ii) An RQE is responsible for
collecting its own fees during the
calendar year in which the RFQ is
issued to the RQE.

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(4) * * *
(i) Payment due date. An IFQ permit
holder or RQE must submit its IFQ fee
liability payment(s) to NMFS at the
address provided at paragraph (a)(4)(iii)
of this section not later than January 31
of the year following the calendar year
in which the IFQ or GAF landings were
made or the RFQ was issued to the RQE.
(b) * * *
(1) General. (i) An IFQ permit holder
must use either the IFQ actual ex-vessel
value or the IFQ standard ex-vessel
value when determining the IFQ fee
liability based on ex-vessel value,
except that landed GAF are assessed at
the standard ex-vessel values derived by
NMFS. An IFQ permit holder must base
all fee liability calculations on the ex-

vessel value that correlates to landed
IFQ in IFQ equivalent pounds.
(ii) An RQE must use the IFQ
standard ex-vessel value derived by
NMFS for all RFQ issued to the RQE.
*
*
*
*
*
(f) * * *
(2) After the expiration of the 30-day
period, the Regional Administrator will
evaluate any additional documentation
submitted by an IFQ permit holder or
RQE in support of its payment. If the
Regional Administrator determines that
the additional documentation does not
meet the burden of proving the payment
is correct, the Regional Administrator
will send the IFQ permit holder or RQE
an IAD indicating that the IFQ permit
holder or RQE did not meet the burden
of proof to change the IFQ fee liability

Location

as calculated by the Regional
Administrator based upon the IFQ
standard ex-vessel value. The IAD will
set out the facts and indicate the
deficiencies in the documentation
submitted by the IFQ permit holder or
RQE. An IFQ permit holder or RQE who
receives an IAD may appeal the IAD, as
described in paragraph (h) of this
section.
*
*
*
*
*
§§ 679.41 and 679.45

12. In the table below, for each section
indicated in the ‘‘Location’’ column,
remove the title indicated in the
‘‘Remove’’ column from wherever it
appears in the section, and add the title
indicated in the ‘‘Add’’ column:
Add

50 CFR 679.43

15 CFR part 906

§ 679.43
landed as GAF.
landed GAF
aggregated IFQ regulatory area 2C or 3A, to
GAF landings.

15 CFR part 906
landed as GAF or issued as RFQ.
landed GAF and RFQ issued to an RQE.
aggregated by IFQ regulatory area 2C or 3A,
to GAF landings and RFQ issued to an
RQE.
IFQ, RFQ, and GAF
include RQE and GAF costs.
as commercial catch, RFQ, or GAF
IFQ, RFQ, and GAF
IFQ permit holder or RQE

§ 679.45(d)(2)(i)(A) and (B) ................................
§ 679.45(d)(2)(i)(C) .............................................
§ 679.45(d)(2)(ii) .................................................
§ 679.45(d)(4) .....................................................
§ 679.45(d)(4), (e)(1) introductory text, (e)(1)(ii),
and (f)(1)(i).
§ 679.45(e)(1)(i), and (e)(1)(ii) ............................
§ 679.45(e)(1)(i) ..................................................
§ 679.45(e)(2) .....................................................

IFQ and GAF
include GAF costs.
as commercial catch or as GAF
IFQ and GAF
IFQ permit holder

§ 679.45(e)(2), (f)(1)(ii), and (f)(5) ......................
§ 679.45(f)(1) introductory text ...........................
§ 679.45(f)(3) ......................................................
§ 679.45(f)(4) ......................................................
§ 679.45(g) ..........................................................

IFQ permit holder
IFQ permit holder has
§ 679.43
the IFQ permit holder must pay
IFQ permit holder unless the permit holder requests
IFQ permit holder’s
§ 679.43

§ 679.45(g) ..........................................................
§ 679.45(h) ..........................................................

IFQ permit holder
the IFQ permit holder’s estimated fee liability
IFQ fishing permit held

IFQ permit holder or RQE
the estimated fee liability
IFQ fishing permit or RFQ permit account
held
IFQ permit holder or RQE
IFQ permit holder or RQE has
15 CFR part 906
the IFQ permit holder or RQE must pay
IFQ permit holder or RQE unless the IFQ permit holder or RQE requests
IFQ permit holder’s or RQE’s
15 CFR part 906

[FR Doc. 2017–20894 Filed 10–2–17; 8:45 am]

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[Amended]

■

Remove

§ 679.41(l)(3)
introductory
text,
and
(l)(3)(v)(E)(3).
§ 679.41(m)(5)(ii) ................................................
§ 679.45(b)(2) .....................................................
§ 679.45(b)(3)(ii) .................................................
§ 679.45(b)(3)(v) introductory text ......................

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