50 CFR 600 Subpart M - Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR Part 600 Subpart M (Aug. 26, 2024)

This content is from the eCFR and is authoritative but unofficial.

Title 50 —Wildlife and Fisheries
Chapter VI —Fishery Conservation and Management, National Oceanic and Atmospheric
Administration, Department of Commerce
Part 600 —Magnuson-Stevens Act Provisions
Authority: 5 U.S.C. 561 and 16 U.S.C. 1801 et seq.
Source: 61 FR 32540, June 24, 1996, unless otherwise noted.

Subpart M Specific Fishery or Program Fishing Capacity Reduction Regulations
§ 600.1100 [Reserved]
§ 600.1101 Inshore fee system for repayment of the loan to harvesters of Pollock from the
directed fishing allowance allocated to the inshore component under section
206(b)(1) of the AFA.
§ 600.1102 Pacific Coast groundfish fee.
§ 600.1103 Bering Sea and Aleutian Islands (BSAI) Crab species program.
§ 600.1104 Bering Sea and Aleutian Islands (BSAI) crab species fee payment and collection
system.
§ 600.1105 Longline catcher processor subsector of the Bering Sea and Aleutian Islands (BSAI)
non-pollock groundfish fishery program.
§ 600.1106 Longline catcher processor subsector Bering Sea and Aleutian Islands (BSAI) nonpollock groundfish species fee payment and collection system.
§ 600.1107 Southeast Alaska Purse Seine Salmon Fishery capacity reduction program, including
fee payment and collection system.
§ 600.1108 Longline catcher processor subsector of the Bering Sea and Aleutian Islands (BSAI)
non-pollock groundfish fishery program.
Subpart M—Specific Fishery or Program Fishing Capacity Reduction Regulations
Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C. 1861a(b) through (e), 46 App. U.S.C. 53735, section
144(d) of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20, and section 205 of Pub. L. 107-117, Pub. L.
107-206, Pub. L. 108-7, Pub. L. 108-199, and Pub. L. 108-447.

Source: 69 FR 53361, Sept. 1, 2004, unless otherwise noted.

§ 600.1100 [Reserved]

50 CFR 600.1100 (enhanced display)

page 1 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1101

§ 600.1101 Inshore fee system for repayment of the loan to harvesters of Pollock from the
directed fishing allowance allocated to the inshore component under section 206(b)(1) of the
AFA.
(a) Definition. In addition to the definitions in the Magnuson-Stevens Act and in § 679.2 of this title, the terms
used in this subpart have the following meanings:
American Fisheries Act (AFA) means Title II of Pub.L. 105-277.
Borrower means (individually and collectively) all persons who, after January 1, 2000, harvest fee fish from
the IC directed fishing allowance.
Business week means a 7-day period, Saturday through Friday.
Delivery value means the gross ex-vessel value of all fee fish at fish delivery.
Deposit principal means all collected fee revenue that a fish buyer deposits in a segregated deposit
account maintained in a federally chartered national bank for the sole purpose of aggregating
collected fee revenue before sending the fee revenue to NMFS for repaying the loan.
Fee

means the six-tenths (0.6) of one cent that fish buyers deduct at fish delivery from the delivery value
of each pound of round weight fee fish.

Fee fish means all pollock harvested from the IC directed fishing allowance beginning on February 10, 2000
and ending at such time as the loan's principal and interest are fully repaid.
Fish buyer means the first ex-vessel fish buyer who purchases fee fish from a fish seller.
Fish delivery means the point at which a fish buyer first takes delivery or possession of fee fish from a fish
seller.
Fish seller means the harvester who catches and first sells fee fish to a fish buyer.
IC directed fishing allowance means the directed fishing allowance allocated to the inshore component
under section 206(b)(1) of the AFA.
Loan means the loan authorized by section 207(a) of the AFA.
Net delivery value means the delivery value minus the fee.
Subaccount means the Inshore Component Pollock Subaccount of the Fishing Capacity Reduction Fund in
the U.S. Treasury for the deposit of all funds involving the loan.
(b) Loan —
(1) Principal amount. The loan's principal amount is $75,000,000 (seventy five million dollars).
(2) Interest. Interest shall, from December 30, 1998, when NMFS disbursed the loan, until the date the
borrower fully repays the loan, accrue at a fixed rate of 7.09 percent. Interest shall be simple interest
and shall accrue on the basis of a 365-day year.
(3) Repayment. The fee shall be the exclusive source of loan repayment. The fee shall be paid on all fee
fish.
(4) Application of fee receipts. NMFS shall apply all fee receipts it receives, first, to payment of the loan's
accrued interest and, second, to reduction of the loan's principal balance.
50 CFR 600.1101(b)(4) (enhanced display)

page 2 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1101(b)(5)

(5) Obligation. The borrower shall repay the loan in accordance with the AFA and this subpart.
(c) Fee payment and collection —
(1) Payment and collection.
(i)

The fee is due and payable at the time of fish delivery. Each fish buyer shall collect the fee at the
time of fish delivery by deducting the fee from the delivery value before paying or promising
later to pay the net delivery value. Each fish seller shall pay the fee at the time of fish delivery by
receiving from the fish buyer the net delivery value or the fish buyer's promise later to pay the
net delivery value rather than the delivery value. Regardless of when the fish buyer pays the net
delivery value, the fish buyer shall collect the fee at the time of fish delivery;

(ii)
(A) Each fish seller shall be deemed, for the purpose of the fee collection, deposit,
disbursement, and accounting requirements of this subpart, to be both the fish seller and
the fish buyer—and all requirements and penalties under this subpart applicable to both a
fish seller and a fish buyer shall equally apply to the fish seller—each time that the fish
seller sells fee fish to:
(1) Any fish buyer whose place of business is not located in the United States, who does
not take delivery or possession of the fee fish in the United States, who is not
otherwise subject to this subpart, or to whom or against whom NMFS cannot
otherwise apply or enforce this subpart,
(2) Any fish buyer who is a general food-service wholesaler or supplier, a restaurant, a
retailer, a consumer, some other type of end-user, or some other fish buyer not
engaged in the business of buying fish from fish sellers for the purpose of reselling
the fish, or
(3) Any other fish buyer who the fish seller has good reason to believe is a fish buyer not
subject to this subpart or to whom or against whom NMFS cannot otherwise apply or
enforce this subpart,
(B) In each such case the fish seller shall, with respect to the fee fish involved in each such
case, discharge, in addition to the fee payment requirements of this subpart, all the fee
collection, deposit, disbursement, accounting, recordkeeping, and reporting requirements
that this subpart otherwise imposes on the fish buyer, and the fish seller shall be subject
to all the penalties this subpart provides for a fish buyer's failure to discharge such
requirements;
(2) Notification.
(i)

NMFS will send an appropriate fee payment and collection commencement notification to each
affected fish seller and fish buyer of whom NMFS has knowledge.

(ii) When NMFS determines that the loan is fully repaid, NMFS will publish a FEDERAL REGISTER
notification that the fee is no longer in effect and should no longer be either paid or collected.
NMFS will then also send an appropriate fee termination notification to each affected fish seller
and fish buyer of whom NMFS has knowledge;
(3) Failure to pay or collect.
50 CFR 600.1101(c)(3) (enhanced display)

page 3 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(i)

50 CFR 600.1101(c)(3)(i)

If a fish buyer refuses to collect the fee in the amount and manner that this subpart requires, the
fish seller shall then advise the fish buyer of the fish seller's fee payment obligation and of the
fish buyer's fee collection obligation. If the fish buyer still refuses to properly collect the fee, the
fish seller, within the next 7 calendar days, shall forward the fee to NMFS. The fish seller at the
same time shall also advise NMFS in writing of the full particulars, including:
(A) The fish buyer's and fish seller's name, address, and telephone number,
(B) The name of the fishing vessel from which the fish seller made fish delivery and the date
of doing so,
(C) The quantity and delivery value of fee fish that the fish seller delivered, and
(D) The fish buyer's reason (if known) for refusing to collect the fee in accordance with this
subpart;

(ii) If a fish seller refuses to pay the fee in the amount and manner that this subpart requires, the
fish buyer shall then advise the fish seller of the fish buyer's collection obligation and of the fish
seller's payment obligation. If the fish seller still refuses to pay the fee, the fish buyer shall then
either deduct the fee from the delivery value over the fish seller's protest or refuse to buy the fee
fish. The fish buyer shall also, within the next 7 calendar days, advise NMFS in writing of the full
particulars, including:
(A) The fish buyer's and fish seller's name, address, and telephone number,
(B) The name of the fishing vessel from which the fish seller made or attempted to make fish
delivery and the date of doing so,
(C) The quantity and delivery value of fee fish the fish seller delivered or attempted to deliver,
(D) Whether the fish buyer deducted the fee over the fish seller's protest or refused to buy the
fee fish, and
(E) The fish seller's reason (if known) for refusing to pay the fee in accordance with this
subpart.
(d) Fee collection deposits, disbursements, records, and reports —
(1) Deposit accounts. Each fish buyer that this subpart requires to collect a fee shall maintain a
segregated account at a federally insured financial institution for the sole purpose of depositing
collected fee revenue and disbursing the fee revenue directly to NMFS in accordance with paragraph
(c) of this section.
(2) Fee collection deposits. Each fish buyer, no less frequently than at the end of each business week,
shall deposit, in the deposit account established under paragraph (a) of this section, all fee revenue,
not previously deposited, that the fish buyer has collected through a date not more than 2 calendar
days before the date of deposit. Neither the deposit account nor the principal amount of deposits in
the account may be pledged, assigned, or used for any purpose other than aggregating collected fee
revenue for disbursement to the subaccount in accordance with paragraph (c) of this section. The
fish buyer is entitled, at any time, to withdraw deposit interest, if any, but never deposit principal, from
the deposit account for the fish buyer's own use and purposes.

50 CFR 600.1101(d)(2) (enhanced display)

page 4 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1101(d)(3)

(3) Deposit principal disbursement. On the last business day of each month, or more frequently if the
amount in the account exceeds the account limit for insurance purposes, the fish buyer shall
disburse to NMFS the full amount of deposit principal then in the deposit account. The fish buyer
shall do this by check made payable to “NOAA Inshore Component Pollock Loan Subaccount.” The
fish buyer shall mail each such check to the subaccount lockbox account that NMFS establishes for
the receipt of the disbursements of deposit principal. Each disbursement shall be accompanied by
the fish buyer's settlement sheet completed in the manner and form that NMFS specifies. NMFS will
specify the subaccount's lockbox and the manner and form of settlement sheet by means of the
notification in § 600.1101(c).
(4) Records maintenance. Each fish buyer shall maintain, in a secure and orderly manner for a period of
at least 3 years from the date of each transaction involved, at least the following information:
(i)

For all deliveries of fee fish that the fish buyer buys from each fish seller:
(A) The date of delivery,
(B) The fish seller's identity,
(C) The round weight of fee fish delivered,
(D) The identity of the fishing vessel that delivered the fee fish,
(E) The delivery value,
(F) The net delivery value,
(G) The identity of the party to whom the net delivery value is paid, if other than the fish seller,
(H) The date the net delivery value was paid, and
(I)

The total fee amount collected;

(ii) For all fee collection deposits to and disbursements from the deposit account:
(A) The dates and amounts of deposits,
(B) The dates and amounts of disbursements to the subaccount's lockbox account, and
(C) The dates and amounts of disbursements to the fish buyer or other parties of interest
earned on deposits.
(5) Annual report. By January 15, 2001, and by each January 15 thereafter until the loan is fully repaid,
each fish buyer shall submit to NMFS a report, on or in the form NMFS specifies, containing the
following information for the preceding year for all fee fish each fish buyer purchases from fish
sellers:
(i)

Total round weight bought;

(ii) Total delivery value paid;
(iii) Total fee amount collected;
(iv) Total fee collection amounts deposited by month;
(v) Dates and amounts of monthly disbursements to the subaccount lockbox;
(vi) Total amount of interest earned on deposits; and
50 CFR 600.1101(d)(5)(vi) (enhanced display)

page 5 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1101(d)(5)(vii)

(vii) Depository account balance at year-end.
(6) State records. If landing records that a state requires from fish sellers contain some or all of the data
that this section requires and state confidentiality laws or regulations do not prevent NMFS' access
to the records maintained for the state, then fish buyers can use such records to meet appropriate
portions of this section's recordkeeping requirements. If, however, state confidentiality laws or
regulations make such records unavailable to NMFS, then fish buyers shall maintain separate
records for NMFS that meet the requirements of this section.
(7) Audits. NMFS or its agents may audit, in whatever manner NMFS believes reasonably necessary for
the duly diligent administration of the loan, the financial records of the fish buyers and the fish
sellers in order to ensure proper fee payment, collection, deposit, disbursement, accounting,
recordkeeping, and reporting. Fish buyers and fish sellers shall make all records of all transactions
involving fee fish catches, fish deliveries, and fee payments, collections, deposits, disbursements,
accounting, recordkeeping, and reporting available to NMFS or its agents at reasonable times and
places and promptly provide all requested information reasonably related to these records that such
fish sellers and fish buyers may otherwise lawfully provide. Trip tickets (or similar accounting
records establishing the round weight pounds of fee fish that each fish buyer buys from each fish
seller each time that each fish buyer does so) are essential audit documentation.
(8) Confidentiality of records. NMFS and its auditing agents shall maintain the confidentiality of all data
to which NMFS has access under this section and shall neither release the data nor allow the data's
use for any purpose other than the purpose of this subpart, unless otherwise required by law;
provided, however, that NMFS may aggregate such data so as to preclude their identification with
any fish buyer or any fish seller and use them in the aggregate for other purposes.
(9) Refunds. When NMFS determines that the loan is fully repaid, NMFS will refund any excess fee
receipts, on a last-in/first-out basis, to the fish buyers. Fish buyers shall return the refunds, on a lastin/first-out basis, to the fish sellers who paid the amounts refunded.
(e) Late charges. The late charge to fish buyers for fee payment, collection, deposit, and/or disbursement
shall be one and one-half (1.5) percent per month, or the maximum rate permitted by state law, for the
total amount of the fee not paid, collected, deposited, and/or disbursed when due to be paid, collected,
deposited, and/or disbursed within 5 days of the date due. The full late charge shall apply to the fee for
each month or portion of a month that the fee remains unpaid, uncollected, undeposited, and/or
undisbursed.
(f) Enforcement. In accordance with applicable law or other authority, NMFS may take appropriate action
against each fish seller and/or fish buyer responsible for non-payment, non-collection, non-deposit, and/or
non-disbursement of the fee in accordance with this subpart to enforce the collection from such fish
seller and/or fish buyer of any fee (including penalties and all costs of collection) due and owing the
United States on account of the loan that such fish seller and/or fish buyer should have, but did not, pay,
collect, deposit, and/or disburse in accordance with this subpart. All such loan recoveries shall be applied
to reduce the unpaid balance of the loan.
(g) Prohibitions and penalties.
(1) The following activities are prohibited, and it is unlawful for anyone to:
(i)

Avoid, decrease, interfere with, hinder, or delay payment or collection of, or otherwise fail to fully
and properly pay or collect, any fee due and payable under this subpart or convert, or otherwise
use for any purpose other than the purpose this subpart intends, any paid or collected fee;

50 CFR 600.1101(g)(1)(i) (enhanced display)

page 6 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1101(g)(1)(ii)

(ii) Fail to fully and properly deposit on time the full amount of all fee revenue collected under this
subpart into a deposit account and disburse the full amount of all deposit principal to the
subaccount's lockbox account—all as this subpart requires;
(iii) Fail to maintain full, timely, and proper fee payment, collection, deposit, and/or disbursement
records or make full, timely, and proper reports of such information to NMFS-all as this subpart
requires;
(iv) Fail to advise NMFS of any fish seller's refusal to pay, or of any fish buyer's refusal to collect, any
fee due and payable under this subpart;
(v) Refuse to allow NMFS or agents that NMFS designates to review and audit at reasonable times
all books and records reasonably pertinent to fee payment, collection, deposit, disbursement,
and accounting under this subpart or otherwise interfere with, hinder, or delay NMFS or it
agents in the course of their activities under this subpart;
(vi) Make false statements to NMFS, any of the NMFS' employees, or any of NMFS' agents about
any of the matters in this subpart;
(vii) Obstruct, prevent, or unreasonably delay or attempt to obstruct, prevent, or unreasonably delay
any audit or investigation NMFS or its agents conduct, or attempt to conduct, in connection
with any of the matters in this subpart; and/or
(viii) Otherwise materially interfere with the efficient and effective repayment of the loan.
(2) Anyone who violates one or more of the prohibitions of paragraph (a) of this section is subject to the
full range of penalties the Magnuson-Stevens Act and 15 CFR part 904 provide (including, but not
limited to: civil penalties, sanctions, forfeitures, and punishment for criminal offenses) and to the full
penalties and punishments otherwise provided by any other applicable law of the United States.

§ 600.1102 Pacific Coast groundfish fee.
(a) Purpose. This section implements the fee for repaying the reduction loan financing the Pacific Coast
Groundfish Program authorized by section 212 of Division B, Title II, of Public Law 108-7 and implemented
by a final notification in the FEDERAL REGISTER (July 18, 2003; 68 FR 42613).
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 of subpart L
expressly apply to this section. The following terms have the following meanings for the purpose of this
section:
Borrower means, individually and collectively, each post-reduction fishing permit holder and/or fishing
vessel owner fishing in the reduction fishery, in any or all of the fee-share fisheries, or in both the
reduction fishery and any or all of the fee-share fisheries.
Deposit principal means all collected fee revenue that a fish buyer deposits in an account maintained at a
federally insured financial institution for the purpose of aggregating collected fee revenue before
sending the fee revenue to NMFS for repaying the reduction loan.
Fee fish means all fish harvested from the reduction fishery during the period in which any portion of the
reduction fishery's subamount is outstanding and all fish harvested from each of the fee-share
fisheries during the period in which any portion of each fee-share fishery's subamount is
outstanding.

50 CFR 600.1102(b) “Fee fish” (enhanced display)

page 7 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1102(b) “Fee-share fishery”

Fee-share fishery means each of the fisheries for coastal Dungeness crab and pink shrimp in each of the
States of California and Oregon and the fishery for coastal Dungeness crab and ocean pink shrimp in
the State of Washington.
Fee-share fishery subaccount means each of the six subaccounts established in the groundfish program's
fund subaccount in which each of the six fee-share fishery subamounts are deposited.
Reduction fishery means all species in, and that portion of, the limited entry trawl fishery under the Federal
Pacific Coast Groundfish Fishery Management Plan that is conducted under permits, excluding
those registered to whiting catcher-processors, which are endorsed for trawl gear operation.
Reduction fishery subaccount means the subaccount established in the groundfish program's fund
subaccount in which the reduction fishery subamount is deposited.
Subamount means each portion of the reduction loan's original principal amount which is allocated either
to the reduction fishery or to any one of the fee-share fisheries.
(c) Reduction loan amount. The reduction loan's original principal amount is $35,662,471.
(d) Subamounts. The subamounts of the reduction loan amount are:
(1) Reduction fishery, $28,428,719; and
(2) Fee-share fisheries:
(i)

California coastal Dungeness crab fee-share fishery, $2,334,334,

(ii) California pink shrimp fee-share fishery, $674,202,
(iii) Oregon coastal Dungeness crab fee-share fishery, $1,367,545,
(iv) Oregon pink shrimp fee-share fishery, $2,228,845,
(v) Washington coastal Dungeness crab fee-share fishery, $369,426, and
(vi) Washington ocean pink shrimp fee-share fishery, $259,400.
(e) Interest accrual inception. Interest began accruing on each portion of the reduction loan amount on and
from the date each such portion was disbursed.
(f) Interest rate. The reduction loan's interest rate is 6.97 percent. This is a fixed rate of interest for the full
term of the reduction loan's life.
(g) Repayment term. For the purpose of determining fee rates, the reduction loan's repayment term shall be 30
years from March 1, 2004, but each fee shall continue for as long as necessary to fully repay each
subamount.
(h) Reduction loan. The reduction loan shall be subject to the provisions of § 600.1012 of subpart L, except
that:
(1) The borrower's obligation to repay the reduction loan shall be discharged by fish sellers in the
reduction fishery and in each of the fee-share fisheries paying the fee applicable to each such
fishery's subamount in accordance with § 600.1013 of subpart L, and
(2) Fish buyers in the reduction fishery and in each of the fee-share fisheries shall be obligated to collect
the fee applicable to each such fishery's subamount in accordance with § 600.1013 of this subpart.

50 CFR 600.1102(h)(2) (enhanced display)

page 8 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(i)

50 CFR 600.1102(i)

Fee collection, deposits, disbursements, records, and reports. Fish buyers in the reduction fishery and in
each of the fee share fisheries shall deposit and disburse, as well as keep records for and submit reports
about, the fees applicable to each such fishery in accordance with § 600.1014 of this subpart, except that:
(1) Deposit accounts. Each fish buyer that this section requires to collect a fee shall maintain an account
at a federally insured financial institution for the purpose of depositing collected fee revenue and
disbursing the deposit principal directly to NMFS in accordance with paragraph (i)(3) of this section.
The fish buyer may use this account for other operational purposes as well, but the fish buyer shall
ensure that the account separately accounts for all deposit principal collected from the reduction
fishery and from each of the six fee-share fisheries. The fish buyer shall separately account for all fee
collections as follows:
(i)

All fee collections from the reduction fishery shall be accounted for in a reduction fishery
subaccount,

(ii) All fee collections from the California pink shrimp fee-share fishery shall be accounted for in a
California shrimp fee-share fishery subaccount,
(iii) All fee collections from the California coastal Dungeness crab fishery shall be accounted for in
a California crab fee-share fishery subaccount,
(iv) All fee collections from the Oregon pink shrimp fee-share fishery shall be accounted for in an
Oregon shrimp fee-share fishery subaccount,
(v) All fee collections from the Oregon coastal Dungeness crab fee-share fishery shall be
accounted for in an Oregon crab fee-share fishery subaccount,
(vi) All fee collections from the Washington ocean pink shrimp fee-share fishery shall be accounted
for in a Washington ocean shrimp fee-share fishery subaccount, and
(vii) All fee collections from the Washington coastal Dungeness crab fishery shall be accounted for
in a Washington crab fee-share fishery subaccount;
(2) Fee collection deposits. Each fish buyer, no less frequently than at the end of each month, shall
deposit, in the deposit account established under paragraph (i)(1) of this section, all collected fee
revenue not previously deposited that the fish buyer collects through a date not more than two
calendar days before the date of deposit. The deposit principal may not be pledged, assigned, or
used for any purpose other than aggregating collected fee revenue for disbursement to the fund in
accordance with paragraph (i)(3) of this section. The fish buyer is entitled, at any time, to withdraw
interest (if any) on the deposit principal, but never the deposit fee principal itself, for the fish buyer's
own use and purposes;
(3) Deposit principal disbursement. Not later than the 14th calendar day after the last calendar day of
each month, or more frequently if the amount in the account exceeds the account limit for insurance
purposes, the fish buyer shall disburse to NMFS the full deposit principal then in the deposit account,
provided that the deposit principal then totals $100 or more. If the deposit principal then totals less
than $100, the fish buyer need not disburse the deposit principal until either the next month during
which the deposit principal then totals $100 or more, or not later than the 14th calendar day after the
last calendar day of any year in which the deposit principal has not since the last required
disbursement totaled $100 or more, whichever comes first. The fish buyer shall disburse deposit
principal by check made payable to the groundfish program's fund subaccount. The fish buyer shall
mail each such check to the groundfish program's fund subaccount lockbox that NMFS establishes
50 CFR 600.1102(i)(3) (enhanced display)

page 9 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1102(i)(4)

for the receipt of groundfish program disbursements. Each disbursement shall be accompanied by
the fish buyer's fee collection report completed in the manner and form which NMFS specifies.
NMFS will, before fee payment and collection begins, specify the groundfish program's fund
subaccount lockbox and the manner and form of fee collection report. NMFS will do this by means
of the notification in § 600.1013(d) of subpart L. NMFS' fee collection report instructions will include
provisions for the fish buyer to specify the amount of each disbursement which was disbursed from
the reduction fishery subaccount and/or from each of the six fee-share fishery subaccounts;
(4) Records maintenance. Each fish buyer shall maintain, in a secure and orderly manner for a period of
at least 3 years from the date of each transaction involved, at least the following information:
(i)

For all deliveries of fee fish that the fish buyer buys from each fish seller:
(A) The date of delivery,
(B) The fish seller's identity,
(C) The weight, number, or volume of each species of fee fish delivered,
(D) Information sufficient to specifically identify the fishing vessel which delivered the fee fish,
(E) The delivery value of each species of fee fish,
(F) The net delivery value of each species of fee fish,
(G) The identity of the payor to whom the net delivery value is paid, if different than the fish
seller,
(H) The date the net delivery value was paid,
(I)

The total fee amount collected as a result of all fee fish, and

(J) The total fee amount collected as a result of all fee fish from the reduction fishery and/or
all fee fish from each of the six fee-share fisheries; and
(ii) For all collected fee deposits to, and disbursements of deposit principal from, the deposit
account include:
(A) The date of each deposit,
(B) The total amount deposited,
(C) The total amount deposited in the reduction fishery subaccount and/or in each of the six
fee-share fishery subaccounts,
(D) The date of each disbursement to the Fund's lockbox,
(E) The total amount disbursed,
(F) The total amount disbursed from the reduction fishery subaccount and/or from each of
the six fee-share fishery subaccounts, and
(G) The dates and amounts of disbursements to the fish buyer, or other parties, of interest
earned on deposits; and
(5) Annual report. No fish buyer needs to submit an annual report about fee fish collection activities
unless, during the course of an audit under § 600.1014(g), NMFS requires a fish buyer to submit
such a report or reports.
50 CFR 600.1102(i)(5) (enhanced display)

page 10 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(j)

50 CFR 600.1102(j)

Other provisions. The reduction loan is, in all other respects, subject to the provisions of § 600.1012
through applicable portions of § 600.1017, except § 600.1014(e).

[70 FR 40229, July 13, 2005, as amended at 71 FR 28, Jan. 3, 2006]

§ 600.1103 Bering Sea and Aleutian Islands (BSAI) Crab species program.
(a) Purpose. This section's purpose is to implement the program that Section 144(d) of Division B of Pub. L.
106-554, as amended by section 2201 of Pub. L. 107-20 and section 205 of Pub. L. 107-117, enacted for
BSAI crab species.
(b) Terms. Unless otherwise defined in this section, the terms defined in § 600.1000 expressly apply to the
program for BSAI crab. Likewise, the terms defined in § 679.2 of this chapter also apply to terms not
otherwise defined in either § 600.1000 or this section. The following terms used in this section have the
following meanings for the purpose of this section:
Acceptance means NMFS' acceptance, on behalf of the United States, of a bid.
Bid means a bidder's irrevocable offer, in response to an invitation to bid under this section, to surrender,
to have revoked, to have restricted, to relinquish, to have withdrawn, or to have extinguished by other
means, in the manner this section requires, the bidder's reduction fishing interest.
Bid amount means the dollar amount of each bid.
Bidder means either a qualifying bidder bidding alone or a qualifying bidder and a co-bidder bidding
together who at the time of bidding holds the reduction fishing interests specified at § 600.1018(e).
Bid crab means the crab that NMFS determines each bidder's reduction/history vessel (see definition)
harvested, according to the State of Alaska's records of the documented harvest of crab, from each
reduction endorsement fishery and from the Norton Sound fishery during the most recent 5 calendar
years in which each reduction endorsement fishery was for any length of time open for directed crab
fishing during a 10-calendar-year period beginning on January 1, 1990, and ending on December 31,
1999.
Bid score means the criterion by which NMFS decides in what order to accept bids in the reverse auction
this section specifies.
Co-bidder means a person who is not a qualifying bidder, but who at the time of bidding owns the
reduction/privilege vessel this section requires to be included in a bid and is bidding together with a
qualifying bidder.
Crab means the crab species covered by the Fishery Management Plan for the Bering Sea/Aleutian
Islands King and Tanner Crabs pursuant to § 679.2 of this chapter.
Crab license means a License Limitation Program license for crab issued pursuant to § 679.4(k)(5) of this
chapter.
Crab reduction permit means a non-interim crab license endorsed for one or more reduction endorsement
fisheries, regardless of whether it is also endorsed for the Norton Sound fishery.
FSD means NMFS' Financial Services Division, located in NMFS' Silver Spring, MD, headquarters office.

50 CFR 600.1103 (enhanced display)

page 11 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

Non-crab reduction permit means a fishing license, including all of its predecessor history, for which a
bidder is the holder of record on December 12, 2003 and which was issued based on the fishing
history of the bidder's -reduction/history vessel.
Norton Sound fishery means the non-reduction fishery defined in § 679.2 of this chapter as the area/
species endorsement for Norton Sound red king and Norton Sound blue king crab.
NVDC means the U.S. Coast Guard's National Vessel Documentation Center located in Falling Waters, WV.
Qualifying bidder means a person who at the time of bidding is the license holder of record of a crab
reduction permit.
Qualifying voter means a person who at the time of voting in a referendum is the license holder of record
either of an interim or a non-interim crab license, except a crab license whose sole area/species
endorsement is for the Norton Sound fishery.
RAM Program means NMFS' Restricted Access Management Program located in NMFS' Juneau, AK,
regional office.
Reduction endorsement fishery means any of the seven fisheries that § 679.2 of this chapter defines as
area/species endorsements except the area/species endorsement for the Norton Sound fishery.
Reduction fishery means the fishery for all crab covered by the Bering Sea/Aleutian Islands King and
Tanner Crabs Fishery Management Plan under all area/species endorsements that section 679.2 of
the chapter defines, except the area/species endorsement for the Norton Sound fishery.
Reduction fishing history means, for each bid, the complete documented harvest of the bidder's reduction/
history vessel, upon any part of which such harvest NMFS based issuance of the crab license
included in the bid as a crab reduction permit, plus such fishing history, after the issuance of such
crab license, of any other vessel upon which the bidder used such crab license.
Reduction fishing interest means, for each bid, the bidder's:
(1) Reduction fishing privilege (see definition);
(2) Crab reduction permit;
(3) Non-crab reduction permit;
(4) Reduction fishing history (see definition); and
(5) Any other claim that could in any way qualify the owner, holder, or retainer of any of the
reduction components, or any person claiming under such owner, holder, or retainer, for any
present or future limited access system fishing license or permit in any United States fishery
(including, but not limited to, any harvesting privilege or quota allocation under any present or
future individual fishing quota system).
Reduction fishing privilege means the worldwide fishing privileges of a bid's reduction/privilege vessel (see
definition).
Reduction/history vessel means the vessel or vessels which generated the reduction fishing history.
Reduction loan sub-amount means the portion of the original principal amount of reduction loan this
section specifies each reduction endorsement fishery must repay with interest.
Reduction/privilege vessel means the vessel designated on a crab license on December 12, 2003.
50 CFR 600.1103 (enhanced display)

page 12 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

Referendum means a referendum under this section to determine whether voters approve the fee required
to repay this program's reduction loan.
Replacement vessel means a reduction/history vessel which replaced the lost or destroyed one whose
reduction fishing history qualified during the general qualification period and the endorsement
qualification period and, which under the exceptions in Amendment 10, qualified during the recent
participation period.
(c) Relationship to this subpart —
(1) Provisions that apply. The provisions of § 600.1000 through § 600.1017 of this subpart apply to this
program except as paragraph (c)(2) of this section provides; and
(2) Provisions that do not apply. The following sections, or portions of them, of this subpart do not apply
to this program:
(i)

All of:
(A) Section 600.1001,
(B) Section 600.1002,
(C) Section 600.1003,
(D) Section 600.1004,
(E) Section 600.1005,
(F) Section 600.1006, and
(G) Section 600.1007,

(ii) The portions of § 600.1008:
(A) Pertaining to an implementation plan,
(B) Pertaining to a 60-day comment period for a proposed implementation regulation,
(C) Pertaining to public hearings in each State that the this program affects,
(D) Pertaining to basing the implementation regulation on a business plan,
(E) Within paragraphs (d)(1)(ii) through (viii),
(F) Within paragraph (d)(2)(ii),
(G) Within paragraph (e), and
(H) Within paragraph (f) and pertaining to fishing capacity reduction specifications and a
subsidized program,
(iii) The portions of § 600.1009:
(A) Pertaining to fishing capacity reduction specifications,
(B) Within paragraph (a)(4),
(C) Pertaining to a reduction amendment,

50 CFR 600.1103 (enhanced display)

page 13 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(D) Within paragraph (a)(5)(ii), to the extent that the paragraph is inconsistent with the
requirements of this section,
(E) Within paragraph (b)(i), and
(F) Pertaining to an implementation plan,
(iv) The portions of § 600.1010:
(A) Within paragraph (b),
(B) Pertaining to fishing capacity reduction specifications,
(C) Within paragraph (d)(1), and
(D) Within paragraphs (d)(4))(iv) through (vii),
(v) The portions of § 600.1011:
(A) That comprise the last sentence of paragraph (a),
(B) Within paragraph (d), and
(C) Within paragraph (e)(2),
(vi) The portions of § 600.1012:
(A) Within paragraph (b)(3) following the word “subpart”, and
(B) Within paragraph (b)(3), and
(vii) The last sentence of § 600.1014(f).
(d) Reduction cost financing. NMFS will use the proceeds of a reduction loan, authorized for this purpose, to
finance 100 percent of the reduction cost. The original principal amount of the reduction loan will be the
total of all reduction payments that NMFS makes under reduction contracts. This amount shall not
exceed $100 million.
(e) Who constitutes a bidder. A bidder is a person or persons who is the:
(1) Holder of record and person otherwise fully and legally entitled to offer, in the manner this section
requires, the bid's crab reduction permit and the bid's non-crab reduction permit;
(2) Reduction/privilege vessel owner, title holder of record, and person otherwise fully and legally
entitled to offer, in the manner this section requires, the bid's reduction fishing privilege; and
(3) Retainer and person otherwise fully and legally entitled to offer, in the manner this section requires,
the bid's reduction fishing history.
(f) How crab licenses determine qualifying bidders and qualifying voters —
(1) Non-interim crab licenses. Each person who is the record holder of a non-interim crab license
endorsed for one or more reduction endorsement fisheries is both a qualifying bidder and a
qualifying voter and can both bid and vote;
(2) Interim crab licenses. Each person who is the record holder of an interim crab license endorsed for
one or more reduction endorsement fisheries is a qualifying voter but not a qualifying bidder and can
vote but not bid;
50 CFR 600.1103 (enhanced display)

page 14 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(3) Crab licenses endorsed solely for the Norton Sound Fishery. Each person who is the record holder of
any crab license endorsed solely for the Norton Sound fishery is neither a qualifying bidder nor a
qualifying voter and can neither bid nor vote; and
(4) Time at which qualifying bidders and voters must hold required crab licenses. A qualifying bidder
must be the record holder of the required crab license at the time the qualifying bidder submits its
bid. A qualifying voter must be the record holder of the required crab license at the time the
qualifying voter submits its referendum ballot.
(g) Qualifying bidders and co-bidders —
(1) Qualifying bidders bidding alone. There is no co-bidder when a qualifying bidder owns, holds, or
retains all the required components of the reduction fishing interest;
(2) Qualifying bidders bidding together with co-bidders. When a qualifying bidder does not own the
reduction/privilege vessel, the person who does may be the qualifying bidder's co-bidder; and
(3) Minimum reduction components that qualifying bidders must hold or retain when bidding with cobidders. At a minimum, a qualifying bidder must hold the crab reduction permit and the non-crab
reduction permit and retain the reduction fishing history. The reduction/privilege vessel may,
however, be owned by another person who is a co-bidder.
(h) Reduction fishing interest —(1) General requirements. Each bidder must:
(i)

In its bid, offer to surrender, to have revoked, to have restricted, to relinquish, to have withdrawn, or to have
extinguished by other means, in the manner that this section requires, the reduction fishing interest,
(ii) At the time of bidding, hold, own, or retain the reduction fishing interest and be fully and legally entitled
to offer, in the manner that this section requires, the reduction fishing interest, and
(iii) Continuously thereafter hold, own, or retain the reduction fishing interest and remain fully and legally
entitled to offer, in the manner that this section requires, the reduction fishing interest until:
(A) The bid expires without NMFS first having accepted the bid,
(B) NMFS notifies the bidder that NMFS rejects the bid,
(C) NMFS notifies the bidder that a reduction contract between the bidder and the United States no longer
exists, or
(D) NMFS tenders reduction payment to the bidder;
(2) Reduction/privilege vessel requirements. The reduction/privilege vessel in each bid must be:
(i)

The vessel designated, at the time this final rule is published in the FEDERAL REGISTER, on a crab
license which becomes a bid's crab reduction permit, and

(ii) Be neither lost nor destroyed at the time of bidding;
(3) Reduction fishing privilege requirements. The reduction fishing privilege in each bid must be the
reduction/privilege vessel's:
(i)

Fisheries trade endorsement under the Merchant Marine Act, 1936 (46 U.S.C.A. 12108),

(ii) Qualification for any present or future U.S. Government approval under section (9)(c)(2) of the
Shipping Act, 1916 (46 U.S.C. App. 808(c)(2)) for placement under foreign registry or operation
under the authority of a foreign country, and
50 CFR 600.1103 (enhanced display)

page 15 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(iii) Any other privilege to ever fish anywhere in the world;
(4) Crab reduction permit requirements.
(i)

Except as otherwise provided in paragraph (i) of this section, the crab reduction permit must in
each bid:
(A) Be the crab license that NMFS issued on the basis of the bidder's reduction fishing history,
(B) Be non-interim at the time each bidder submits its bid, and
(C) Include an area/species endorsement for any one or more reduction endorsement
fisheries,

(ii) Although the Norton Sound fishery is not a reduction endorsement fishery, an area/species
endorsement for the Norton Sound fishery occurring on a crab reduction permit must be
surrendered and revoked (and all fishing history involving it relinquished) in the same manner
as all other reduction endorsement fisheries occurring on the crab reduction permit;
(5) Non-crab reduction permit requirements. The non-crab reduction permit must in each bid be every
license, permit, or other harvesting privilege that:
(i)

NMFS issued on the basis of the fishing history of the bidder's reduction/history vessel, and

(ii) For which the bidder was the license holder of record on the effective date of this section; and
(6) Reduction fishing history requirements. Except as otherwise provided in paragraph (i) of this section,
the reduction fishing history in each bid must that of a single reduction/history vessel.
(i)

Exceptions to the reduction fishing interest requirements —(1) Lost or destroyed vessel salvaged.
When a bidder has salvaged a lost or destroyed vessel and has made from the salvaged vessel
the documented harvest of crab § 679.4(k)(5)(iii)(B)(3) of this chapter requires, the crab portion
of the reduction fishing history is the salvaged vessel's documented harvest of crab; and
(2) Lost or destroyed vessel not salvaged. When a bidder has not salvaged the lost or destroyed
vessel but has made from a replacement vessel the documented harvest of crab §
679.4(k)(5)(iii)(B)(3) of this chapter requires:

(i)

The crab portion of the reduction fishing history is the total of the lost or destroyed vessel's
documented harvest of crab through the date of such vessel's loss or destruction plus the
replacement vessel's documented harvest of crab after such date, and

(ii) For the purposes of this program, the lost or destroyed vessel's documented harvest of crab
merges with, and becomes a part of, the replacement vessel's documented harvest of crab; and
(3) Acquired crab fishing history. When a bidder, in the manner § 679.4(k)(5)(iv) of this chapter requires, has made a
documented harvest of crab from one vessel and has acquired a replacement vessel's documented harvest of crab:
(i)

The crab portion of the reduction fishing history is the total of the acquired documented harvest
of crab through December 31, 1994, plus the documented harvest of crab after December 31,
1994, of the vessel from which the bidder made the documented crab harvest § 679.4(k)(5)(iv)
of this chapter requires, and

(ii) [Reserved]
50 CFR 600.1103 (enhanced display)

page 16 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(iii) For the purposes of this program, the acquired documented harvest of crab merges with, and
becomes a part of, the non-acquired documented harvest of crab.
(j)

Determining value of reduction/history vessels' bid crab —
(1) In each fishery. NMFS will determine the dollar value of each reduction/history vessel's bid crab in
each reduction endorsement fishery and in the Norton Sound Fishery by multiplying each reduction/
history vessel's number of pounds of each species of bid crab by the average ex-vessel price per
pound that the State of Alaska annually publishes for each crab species in the bid crab; and
(2) In all fisheries. NMFS will determine the dollar value of each reduction/history vessel's bid crab in all
reduction endorsement fisheries and in the Norton Sound fishery by adding each of the products of
the multiplications in paragraph (j)(1) of this section; and
(3) Crab excluded from bid crab. A reduction/history vessel's bid crab may not include, to the extent that
NMFS has knowledge:
(i)

Triangle tanner crab, grooved tanner crab, and any other crab not involved in the various area/
species endorsements,

(ii) Discarded crab,
(iii) Crab caught for personal use,
(iv) Unspecified crab, and
(v) Any other crab for which the dollar value, crab fishery, landing date, or harvesting vessel NMFS
cannot, for whatever reason, determine.
(k) Determining bid score. NMFS will determine each bid score by dividing each bid amount by the sum in
paragraph (j)(2) of this section.
(l)

Determining reduction loan sub-amount —
(1) Value of all bid crab in each fishery. NMFS will add the dollar value of bid crab of all accepted bidders'
reduction/history vessels in each reduction endorsement fishery;
(2) Value of all bid crab in all fisheries. NMFS will add the dollar value of bid crab of all accepted bidders'
reduction/history vessels in all reduction endorsement fisheries plus the Norton Sound fishery;
(3) Each fishery as a percentage of all fisheries. NMFS will divide each of the sums in paragraph (l)(1) of
this section by the sum in paragraph (l)(2) of this section. The result of this calculation will be the
dollar value of all bid crab in each reduction endorsement fishery as a percentage of the dollar value
of all bid crab in all reduction endorsement fisheries plus the Norton Sound fishery;
(4) Applying percentages to loan amount. NMFS will multiply the reduction loan's full original principal
amount by each of the yields in paragraph (l)(3) of this section; and
(5) Loan sub-amount. Each of the amounts resulting from the calculation in paragraph (l)(4) of this
section will be the reduction loan subamount that a reduction endorsement fishery must repay.

(m) Prospectively qualifying bidder and voter notification —
(1) General. At the appropriate point before issuing an invitation to bid, NMFS will publish a notification
in the FEDERAL REGISTER listing all persons who at the time of publishing the notification prospectively
are qualifying bidders and qualifying voters;
50 CFR 600.1103 (enhanced display)

page 17 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(2) Qualifying bidder list. The prospectively qualifying bidder list will include the names and addresses of
record of each license holder of record for all non-interim crab licenses except only crab licenses
whose sole area/species endorsement is for the Norton Sound fishery;
(3) Qualifying voter list. The prospectively qualifying voter list will include the names and addresses of
record of each license holder of record for all non-interim and interim crab licenses except only crab
licenses whose sole area/species endorsement is for the Norton Sound fishery;
(4) Basis of lists. NMFS will base both the lists on the RAM Program's license holder records for crab
licenses meeting the requirements of § 679.4(k)(5) of this chapter as well as the requirements of
this section;
(5) Purpose. The purpose of the notification is to provide the public notice of:
(i)

The prospectively qualifying bidders, and

(ii) The prospectively qualifying voters; and
(6) Public comment. Any person who wants to comment about the notification has 30 days from the
notification's publication date to do so. Persons should send their comments to both FSD and the
RAM Program (at addresses that the notification will specify). Comments may address:
(i)

Persons who appear on one or more lists but should not,

(ii) Persons who do not appear on one or more lists but should, and
(iii) Persons who believe their names and/or business mailing addresses appearing on one or more
lists are incorrect.
(n) Invitation to bid —
(1) Notification. At the appropriate point after issuing the notification in paragraph (m) of this section,
NMFS will publish the invitation to bid in the FEDERAL REGISTER notification further specified in §
600.1009(c) of this subpart, along with a bidding form and terms of capacity reduction agreement.
No person may, however, bid at this stage;
(2) Notification contents. The invitation to bid notification will state all applicable bid submission
requirements and procedures (including, but not limited to, those included in this section). In
particular, the invitation to bid notification will:
(i)

State the date on which NMFS will invite bids by mailing an invitation to bid to each person on
the prospectively qualifying bidder list,

(ii) State a bid opening date, before which a bidder may not bid, and a bid closing date, after which
a bidder may not bid,
(iii) State a bid expiration date after which each bid expires unless, prior to that date, NMFS accepts
the bid by mailing a written acceptance notice to the bidder at the bidder's address of record,
(iv) State the manner of bid submission and the information each bidder must submit for NMFS to
deem a bid responsive,
(v) State any other information required for bid submission, and

50 CFR 600.1103 (enhanced display)

page 18 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(vi) Include a facsimile of the invitation to bid, along with a bidding form and terms of capacity
reduction agreement comprising the entire terms and conditions of the reduction contract
under which each bidder must bid and under which NMFS must accept a bid; and
(3) Mailing. On the date specified in this notification, NMFS will invite bids by mailing the invitation to bid
and a bidding package, including a bidding form terms of capacity reduction agreement, to each
person then on the prospectively qualifying bidder list. NMFS will not mail the invitation to bid to any
potential co-bidder because NMFS will not then know which bids may include a co-bidder. Each
qualifying bidder is solely responsible to have any required co-bidder properly complete the bid. No
person may bid before receiving the invitation to bid and the bidding package that NMFS mailed to
that person.
(o) Bids —
(1) Content. Each invitation to bid that NMFS mails to a qualifying bidder will have a bid form requiring
each bid to:
(i)

Identify, by name, regular mail address, telephone number, and (if available) electronic mail
address, the qualifying bidder and each co-bidder,

(ii) State the bid amount in U.S. dollars,
(iii) Identify, by crab license number, the qualifying bidder's crab reduction permit and include an
exact copy of this crab license (which the RAM Program issued),
(iv) Identify, by vessel name and official number, the bidder's reduction/privilege vessel, and include
an exact copy of this vessel's official document (which NVDC issued),
(v) Identify, by license or permit number, each of the bidder's non-crab reduction permits; and
include an exact copy of each of these licenses or permits (which the RAM Program issued for
licenses or permits involving species under the jurisdiction of NMFS' Alaska Region and which
other NMFS offices issued for licenses or permits involving species under those offices'
jurisdiction),
(vi) Identify, separately for crab and for each other species:
(A) The qualifying bidder's reduction fishing history, and
(B) The dates that each portion of the reduction fishing history encompasses; the name and
official number of the reduction/history vessel or vessels which gave rise to it; and the
dates during which the qualifying bidder owned such vessels or, if the qualifying bidder
acquired any reduction fishing history from another person, the name of the person from
which the qualifying bidder acquired such reduction fishing history and the manner in
which and the date on which the qualifying bidder did so,
(vii) State, declare, and affirm that the qualifying bidder holds the crab reduction permit and retains
the complete reduction fishing history, and is fully and legally entitled to offer both in the
manner this section requires,
(viii) State, declare, and affirm that either the qualifying bidder or the co-bidder owns the reduction/
privilege vessel and holds the non-crab reduction permit and is fully and legally entitled to offer
both in the manner that this section requires, and

50 CFR 600.1103 (enhanced display)

page 19 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(ix) Provide any other information or materials that NMFS believes is necessary and appropriate;
and
(2) Rejection. NMFS, regardless of bid scores, will reject any bid that NMFS believes is unresponsive to
the invitation to bid. All bid rejections will constitute final agency action as of the date of rejection.
Before rejection, NMFS may, however, contact any bidder to attempt to correct a bid deficiency if
NMFS, in its discretion, believes the attempt warranted.
(p) Acceptance —
(1) Reverse auction. NMFS will determine which responsive bids NMFS accepts by using a reverse
auction in which NMFS first accepts the responsive bid with the lowest bid score and successively
accepts each additional responsive bid with the next lowest bid score until either there are no more
responsive bids to accept or acceptance of the last responsive bid with the next lowest bid score
would cause the reduction cost to exceed $100 million. If two or more responsive bid scores are
exactly the same, NMFS will first accept the bid that NMFS first received;
(2) Notification. NMFS will, after the conclusion of a successful referendum, notify accepted bidders that
NMFS had, before the referendum, accepted their bids; and
(3) Post-acceptance reduction permit transfer. After NMFS has accepted bids, neither the RAM Program
(nor any other NMFS office) will transfer to other persons any reduction permits that accepted
bidders included in the bids unless and until FSD advises the RAM Program (or some other NMFS
office) that the resulting reduction contracts are no longer in effect because a referendum failed to
approve the fee that this section requires to repay this program's reduction loan.
(q) Reduction contracts subject to successful post-bidding referendum condition. Although this program
involves no fishing capacity reduction specifications under this subpart, each bid, each acceptance, and
each reduction contract is nevertheless subject to the successful post-bidding referendum condition that
§ 600.1009(a)(3) of this subpart specifies for bidding results that do not conform to the fishing capacity
reduction specifications.
(r) Post-bidding referendum —
(1) Purpose. NMFS will conduct a post-bidding referendum whose sole purpose is to determine whether,
based on the bidding results, qualifying voters who cast referendum ballots in the manner that this
section requires authorize the fee required to repay this program's reduction loan;
(2) Manner of conducting. NMFS will mail a referendum ballot to each person then on the prospectively
qualifying voter list for each crab license that the person holds and otherwise conduct the
referendum as specified in § 600.1010 of this subpart;
(3) One vote per crab license. Each qualifying voter may cast only one vote for each crab license that
each qualifying voter holds;
(4) Crab license numbers on ballots. Each referendum ballot that NMFS mails will contain the license
number of the prospectively qualifying voter's crab license to which the ballot relates;
(5) Potential reduction results stated. Each referendum ballot that NMFS mails will state the aggregate
potential reduction results of all the bids that NMFS accepted, including:
(i)

The amount of reduction that all accepted bids potentially effect, including:

50 CFR 600.1103 (enhanced display)

page 20 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(A) The number of crab reduction permits, together with each area/species endorsement for
which each of these licenses is endorsed,
(B) The number of reduction/privilege vessels and reduction/history vessels, and
(C) The aggregate and average dollar value of bid crab (together with the number of pounds of
bid crab upon which NMFS based the dollar value), in each reduction endorsement fishery
and in the reduction fishery, for all reduction/history vessels during the period for which
NMFS calculates the dollar value of bid crab,
(ii) The reduction loan sub-amount that each reduction endorsement fishery must repay if a
referendum approves the fee, and
(iii) Any other useful information NMFS may then have about the potential sub-fee rate initially
necessary in each reduction endorsement fishery to repay each reduction loan sub-amount; and
(6) Notice that condition fulfilled. If the referendum is successful, NMFS will notify accepted bidders, in
the manner that § 600.1010(d)(6)(iii) of this subpart specifies, that a successful referendum has
fulfilled the reduction contracts' successful post-bidding referendum condition specified in
paragraph (q) of this section.
(s) Reduction method. In return for each reduction payment, NMFS will permanently:
(1) Revoke each crab reduction permit;
(2) Revoke each non-crab reduction permit;
(3) Revoke each reduction fishing privilege (which revocation will run with the reduction/privilege
vessel's title in the manner § 600.1009(a)(5)(ii)(A) of this subpart requires and in accordance with 46
U.S.C. 12108(d));
(4) Effect relinquishment of each reduction fishing history for the purposes specified in this section by
noting in the RAM Program records (or such other records as may be appropriate for reduction
permits issued elsewhere) that the reduction fishing history has been relinquished under this section
and will never again be available to anyone for any fisheries purpose; and
(5) Otherwise restrict in accordance with this subpart each reduction/privilege vessel and fully effect the
surrender, revocation, restriction, relinquishment, withdrawal, or extinguishment by other means of all
components of each reduction fishing interest.
(t) Reduction payment tender and disbursement —
(1) Fishing continues until tender. Each accepted bidder may continue fishing as it otherwise would have
absent the program until NMFS, after a successful referendum, tenders reduction payment to the
accepted bidder;
(2) Notification to the public. After a successful referendum but before tendering reduction payment,
NMFS will publish a notification in the FEDERAL REGISTER listing all proposed reduction payments and
putting the public on notice:
(i)

Of the crab reduction permits, the reduction/privilege vessels, the reduction fishing histories,
and the non-crab reduction permits upon whose holding, owning, retaining, or other legal
authority representations accepted bidders based their bids and NMFS based its acceptances,
and

50 CFR 600.1103 (enhanced display)

page 21 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(ii) That NMFS intends, in accordance with the reduction contracts, to tender reduction payments in
return for the actions specified in paragraph (s) of this section;
(3) Public response. The public has 30 days after the date on which NMFS publishes the reduction
payment tender notification to advise NMFS in writing of any holding, owning, or retaining claims
that conflict with the representations upon which the accepted bidders based their bids and on
which NMFS based its acceptances;
(4) Tender and disbursement parties. NMFS will tender reduction payments only to accepted bidders,
unless otherwise provided contrary written instructions by accepted bidders. Creditors or other
parties with secured or other interests in reduction/privilege vessels or reduction permits are
responsible to make their own arrangements with accepted bidders;
(5) Time of tender. At the end of the reduction payment tender notification period, NMFS will tender
reduction payments to accepted bidders, unless NMFS then knows of a material dispute about an
accepted bidder's authority to enter into the reduction contract with respect to any one or more
components of the reduction fishing interest that warrants, in NMFS' discretion, an alternative course
of action;
(6) Method of tender and disbursement. NMFS will tender reduction payment by requesting from each
accepted bidder specific, written instructions for paying the reduction payments. Upon receipt of
these payment instructions, NMFS will immediately disburse reduction payments in accordance with
the payment instructions; and
(7) Effect of tender. Concurrently with NMFS' tender of reduction payment to each accepted bidder:
(i)

All fishing activity for any species anywhere in the world in any way associated with each
accepted bidder's reduction fishing interest must cease,

(ii) Each accepted bidder must retrieve all fixed fishing gear for whose deployment the accepted
bidder's reduction/privilege vessel was responsible, and
(iii) NMFS will fully exercise its reduction contract rights with respect to the reduction fishing
interest by taking the actions specified in paragraph (s) of this section.
(u) Fee payment and collection —
(1) Fish sellers who pay the fee. Any person who harvests any crab, but whom ADF&G's fisheries
reporting requirements do not require to record and submit an ADF&G fish ticket for that crab, is a
fish seller for the purpose of paying any fee on that crab and otherwise complying with the
requirements of § 600.1013 of this subpart;
(2) Fish buyers who collect the fee. Any person whom ADF&G's fisheries reporting requirements require
to record and submit an ADF&G fish ticket for any crab that another person harvested is a fish buyer
for the purpose of collecting the fee on that crab and otherwise complying with the requirements of
§ 600.1013 of this subpart; and
(3) Persons who are both fish sellers and fish buyers and both pay and collect the fee. Any person who
harvests any crab, and whom ADF&G's fisheries reporting requirements require to record and submit
an ADF&G fish ticket for that crab, is both a fish seller and a fish buyer for the purpose of paying and
collecting the fee on that crab and otherwise complying with the requirements of § 600.1013 of this
subpart.
(v) Fishing prohibition and penalties —
50 CFR 600.1103 (enhanced display)

page 22 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1103

(1) General. Fishing, for the purpose of this section, includes the full range of activities defined in the
term “fishing” in the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801),
(2) Prohibitions. Concurrently with NMFS' tender of each reduction payment, and with the sole exception
in paragraph (t)(7)(i) of this section, no person whatsoever may, and it is unlawful for any person to:
(i)

Fish with or attempt to fish with, or allow others to fish with or attempt to fish with, the
reduction/privilege vessel anywhere in the world for any species under any conditions and
regardless of the reduction/privilege vessel's ownership or registry for so long as the reduction/
privilege vessel exists. This prohibition includes, but is not limited to, fishing on the high seas or
in the jurisdiction of any foreign country (to the extent prohibited by law) while operating under
U.S. flag,

(ii) Place or attempt to place, or allow others to place or attempt to place, the reduction/privilege
vessel under foreign flag or registry,
(iii) Operate or attempt to operate, or allow others to operate or attempt to operate, the reduction/
privilege vessel under the authority of a foreign country to the extent prohibited by law,
(iv) Otherwise avoid or attempt to avoid, or allow others to avoid or attempt to avoid, the revocation
of the reduction fishing privilege with respect to any reduction/privilege vessel, and
(v) Make any claim or attempt to make any claim, or allow others to claim or attempt to make any
claim, for any present or future limited access fishing license or permit in any U.S. fishery
(including, but not limited to, any quota allocation under any present or future individual quota
allocation system) based in any way on any portion of a reduction fishing interest surrendered,
revoked, restricted, relinquished, withdrawn, or extinguished by other means under this section;
and
(3) Penalties. The activities that this paragraph prohibits are subject to the full penalties provided in §
600.1017 of this subpart, and immediate cause for NMFS to take action to, among other things:
(i)

At the reduction/privilege vessel owner's expense, seize and scrap the reduction/privilege
vessel, and

(ii) Pursue such other remedies and enforce such other penalties as may be applicable.
(w) Program administration —
(1) FSD responsibilities. FSD is responsible for implementing and administering this program. FSD will:
(i)

Issue all notifications and mailings that this section requires,

(ii) Prepare and issue the invitation to bid,
(iii) Receive bids,
(iv) Reject bids,
(v) Score bids,
(vi) Make acceptances,
(vii) Prepare and issue referendum ballots,
(viii) Receive referendum ballots,
50 CFR 600.1103 (enhanced display)

page 23 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1104

(ix) Tally referendum ballots,
(x) Determine referendum success or failure,
(xi) Tender and disburse reduction payments,
(xii) Administer reduction contracts,
(xiii) Administer fees and reduction loan repayment, and
(xiv) Discharge all other management and administration functions that this section requires;
(2) RAM Program responsibilities. Upon FSD's advice, the RAM Program (for fishing licenses under the
jurisdiction of NMFS's Alaska Region) and any other appropriate NMFS authority (for fishing licenses
under the jurisdiction of any other NMFS office) will revoke reduction permits and effect the
surrender of fishing histories in accordance with this section; and
(3) NVDC and MARAD responsibilities. FSD will advise NVDC, MARAD, such other agency or agencies as
may be involved, or all of them to revoke reduction/privilege vessels' fisheries trade endorsements
and otherwise restrict reduction/privilege vessels in accordance with this section.
(x) Reduction loan and reduction loan sub-amounts. [Reserved]
[68 FR 69337, Dec. 12, 2003. Redesignated at 69 FR 53362, Sept. 1, 2004]

§ 600.1104 Bering Sea and Aleutian Islands (BSAI) crab species fee payment and collection
system.
(a) Purpose. As authorized by Public Law 106-554, this section's purpose is to:
(1) In accordance with § 600.1012 of subpart L, establish:
(i)

The borrower's obligation to repay a reduction loan, and

(ii) The loan's principal amount, interest rate, and repayment term; and
(2) In accordance with § 600.1013 through § 600.1016 of subpart L, implement an industry fee system
for the reduction fishery.
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 of subpart L and §
600.1103 of this subpart expressly apply to this section. The following terms have the following meanings
for the purpose of this section:
Crab rationalization crab means the same as in § 680.2 of this chapter.
Crab rationalization fisheries means the same as in § 680.2 of this chapter.
Reduction endorsement fishery means any of the seven fisheries that § 679.2 of this chapter formerly
(before adoption of part 680 of this chapter) defined as crab area/species endorsements, except the
area/species endorsement for Norton Sound red king. More specifically, the reduction endorsement
fisheries, and the crab rationalization fisheries which (after adoption of part 680 of this chapter)
correspond to the reduction endorsement fisheries, are:
(1) Bristol Bay red king (the corresponding crab rationalization fishery is Bristol Bay red king crab),

50 CFR 600.1104(b) “Reduction endorsement fishery” (1) (enhanced display)

page 24 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
50 CFR 600.1104(b) “Reduction endorsement fishery” (2)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(2) Bering Sea and Aleutian Islands Area C. opilio and C. bairdi (the corresponding crab
rationalization fisheries are two separate fisheries, one for Bering Sea snow crab and another
for Bering Sea Tanner crab),
(3) Aleutian Islands brown king (the corresponding crab rationalization fisheries are the two
separate fisheries, one for Eastern Aleutian Islands golden king crab and another for Western
Aleutian Islands golden king crab),
(4) Aleutian Islands red king (the corresponding crab rationalization fishery is Western Aleutian
Islands red king crab),
(5) Pribilof red king and Pribilof blue king (the corresponding crab rationalization fishery is Pribilof
red king and blue king crab), and
(6) St. Matthew blue king (the corresponding crab rationalization fishery is also St. Matthew blue
king crab).
Reduction fishery means the fishery for all crab rationalization crab, excluding CDQ allocations, in all crab
rationalization fisheries.
Sub-amount means the portion of the reduction loan amount for whose repayment the borrower in each
reduction endorsement fishery is obligated.
(c) Reduction loan amount. The reduction loan's original principal amount is $97,399,357.11.
(d) Sub-amounts. The sub-amounts are:
(1) For Bristol Bay red king, $17,129,957.23;
(2) For Bering Sea and Aleutian Islands Area C. opilio and C. bairdi, $66,410,767.20;
(3) For Aleutian Islands brown king, $6,380,837.19;
(4) For Aleutian Islands red king, $237,588.04;
(5) For Pribilof red king and Pribilof blue king, $1,571,216.35; and
(6) For St. Matthew blue king, $5,668,991.10.
(e) Interest accrual from inception. Interest began accruing on each portion of the reduction loan amount on
and from the date on which NMFS disbursed each such portion.
(f) Interest rate. The reduction loan's interest rate shall be the applicable rate which the U.S. Treasury
determines at the end of fiscal year 2005 plus 2 percent.
(g) Repayment term. For the purpose of determining fee rates, the reduction loan's repayment term is 30 years
from January 19, 2005, but each fee shall continue indefinitely for as long as necessary to fully repay each
subamount.
(h) Reduction loan repayment.
(1) The borrower shall, in accordance with § 600.1012, repay the reduction loan;
(2) Fish sellers in each reduction endorsement fishery shall, in accordance with § 600.1013, pay the fee
at the rate applicable to each such fishery's subamount;
(3) Fish buyers in each reduction endorsement fishery shall, in accordance with § 600.1013, collect the
fee at the rate applicable to each such fishery;
50 CFR 600.1104(h)(3) (enhanced display)

page 25 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1104(h)(4)

(4) Fish buyers in each reduction endorsement fishery shall in accordance with § 600.1014, deposit and
disburse, as well as keep records for and submit reports about, the fees applicable to each such
fishery; except the requirements specified under paragraph (c) of this section concerning the deposit
principal disbursement shall be made to NMFS not later than the 7th calendar day of each month;
and the requirements specified under paragraph (e) of this section concerning annual reports which
shall be submitted to NMFS by July 1 of each calendar year; and,
(5) The reduction loan is, in all other respects, subject to the provisions of § 600.1012 through §
600.1017.
[70 FR 54656, Sept. 16, 2005, as amended at 71 FR 27210, May 10, 2006]

§ 600.1105 Longline catcher processor subsector of the Bering Sea and Aleutian Islands (BSAI)
non-pollock groundfish fishery program.
(a) Purpose. This section implements the capacity reduction program that Title II, Section 219(e) of Public
Law 108-447 enacted for the longline catcher processor subsector of the Bering Sea and Aleutian Islands
(BSAI) non-pollock groundfish fishery.
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 of subpart L of this
part expressly apply to this section. The following terms have the following meanings for the purpose of
this section:
Act

means Title II, Section 219 of Public Law 108-447.

AI

means the Aleutian Islands.

Application Form means the form published on the FLCC's website that sets forth whether the qualifying
LLP License is a Latent License and identifies the individual(s) authorized to execute and deliver
Offers and Offer Ranking Ballots on behalf of the Subsector Member.
Auditor means Jack V. Tagart, Ph.D., d.b.a. Tagart Consulting.
Authorized Party means the individuals authorized by Subsector Members on the application form to
execute and submit Offers, Rankings, protests and other documents and/or notices on behalf of
Subsector Member.
Ballot means the form found on the auditor's website used to cast a vote in favor of, or in opposition to, the
currently Selected Offers.
BS

means the Bering Sea.

BSAI means the Bering Sea and the Aleutian Islands.
BSAI Pacific Cod ITAC means the Total Allowable Catch for Pacific cod after the subtraction of the 7.5
percent Community Development Program reserve.
Capacity Reduction Agreement or Reduction Agreement means an agreement entered into by the Subsector
Members and the FLCC under which the FLCC is permitted to develop and submit a Capacity
Reduction Plan to the Secretary.
Certificate of Documentation (COD) means a document issued by the U.S. Coast Guard's National
Documentation Center that registers the vessel with the United States Government.

50 CFR 600.1105(b) “Certificate of Documentation (COD)” (enhanced display)

page 26 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(b) “Closing Vote”

Closing Vote means a vote held pursuant to paragraph (d)(7) of this section, after two-thirds (2⁄3) or more
of the Nonoffering Subsector Members submit Ranking Forms electing to accept the Selected
Offerors and close the Selection Process, and there are no unresolved Protests or Arbitrations.
Current Offer means an Offer submitted by a Subsector Member to the Auditor during any Submission
Period and, with regard to such Offer, Offeror has not become a Rejected Offeror. The term “Current
Offer” includes Selected Offers.
Current Offeror means an Offering Subsector Member that has submitted an Offer to the Auditor during any
Submission Period and, with regard to such Offer, Offeror has not become a Rejected Offeror. The
term “Current Offeror” includes Selected Offerors.
Database means the online LLP License database maintained by NMFS as downloaded by the Auditor
pursuant to paragraph (c)(1) of this section.
Effective Date means the date the Capacity Reduction Agreement becomes effective pursuant to section
4.e of the Capacity Reduction Agreement.
Fishing Capacity Reduction Contract or Reduction Contract means the contract that any Current Offeror
must sign and agree to abide by if NMFS accepts the offer by signing the Reduction Contract.
FLCC Counsel means Bauer Moynihan & Johnson LLP or other counsel representing the FLCC in any review
or arbitration under the Capacity Reduction Agreement.
Latent License means an LLP License on which a vessel was not designated at the time an Offer is
submitted.
LLP License means a Federal License Limitation Program groundfish license issued pursuant to § 679.4(k)
of this chapter or successor regulation that is noninterim and transferable, or that is interim and
subsequently becomes noninterim and transferable, and that is endorsed for BS or AI catcher
processor fishing activity, C/P, Pacific cod and hook and line gear.
Longline Subsector means the longline catcher processor subsector of the BSAI non-pollock groundfish
fishery as defined in the Act.
Longline Subsector ITAC means the longline catcher processor subsector remainder of the Total Allowable
Catch after the subtraction of the 7.5 percent Community Development Program reserve.
Nonoffering Subsector Member shall have the meaning ascribed thereto in paragraph (d)(5)(i) of this
section.
Offer Content means all information included in Offers submitted to the Auditor pursuant to paragraph
(d)(2)(ii) of this section.
Offer Form means the form found on the Auditor's website used to make an offer.
Offer(s) means a binding offer(s) from a Subsector Member to sell its LLP, right to participate in the
fisheries, the fishing history associated with such LLP, and any vessel set forth on the Offer Form
submitted by Offeror pursuant to the terms of this Capacity Reduction Agreement.
Opening Date means the first Monday following the Effective Date set forth in paragraph (c)(3) of this
section.

50 CFR 600.1105(b) “Opening Date” (enhanced display)

page 27 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(b) “Person”

Person includes any natural person(s) and any corporation, partnership, limited partnership, limited liability
company, association or any other entity whatsoever, organized under the laws of the United States
or of a state.
Prequalification Offer shall have the meaning ascribed thereto in paragraph (d)(2)(iii) of this section.
Ranking Form means the form posted by the Auditor pursuant to paragraph (d)(5)(iii) of this section.
Ranking Period shall have the meaning ascribed thereto in paragraph (d)(5)(ii) of this section.
Reduction Fishery means the BSAI non-pollock groundfish fishery.
Reduction Fishing Interests shall have the meaning ascribed thereto in the Fishing Capacity Reduction
Contract.
Reduction Plan means a business plan prepared by the Subsector Members in accordance with Section 1
of the Capacity Reduction Agreement and forwarded to the Secretary for approval.
Reduction Privilege Vessel means the vessel listed on the Offeror's License Limitation Program license.
Rejected Offer means an Offer that has been through one or more Rankings and is not a Selected Offer
following the latest Ranking Period, with respect to which the Offering Subsector Member's
obligations have terminated pursuant to paragraphs (d)(2)(i) and (d)(6)(v) of this section.
Rejected Offeror means a Subsector Member that has submitted an Offer which has been ranked and was
not posted as a Selected Offer pursuant to paragraph (d)(6)(ii) of this section.
Restricted Access Management (RAM) means the Restricted Access Management Program in the Alaska
Region, NMFS, located in Juneau, Alaska.
Secretary means the Secretary of Commerce or a designee.
Selected Offer shall have the meaning ascribed thereto in paragraph (d)(6)(iv) of this section.
Selected Offeror means a Subsector Member that has submitted an Offer which has been ranked and is
posted as a Selected Offer pursuant to paragraph (d)(6)(ii) of this section.
Selection Process means the process set forth in paragraph (d) of this section for selecting the fishing
capacity to be removed by the Reduction Plan.
Submission Period(s) or Submitting Period(s) shall have the meaning ascribed thereto in paragraph
(d)(3)(ii) of this section.
Subsector Member(s) means a member(s) of the Longline Subsector.
Web site means the internet Web site developed and maintained on behalf of the FLCC for implementation
of the Selection Process described herein with a URL address of http://www.freezerlonglinecoop.org.
(c) Qualification and enrollment of subsector members —
(1) Distribution. A copy of the Reduction Agreement, Application Form, and Reduction Contract shall be
mailed to each holder of record of an LLP License endorsed for BS or AI catcher processor activity,
C/P, Pacific cod and hook and line gear, as the Auditor determines from the Database downloaded by
the Auditor as of January 30, 2006, regardless of whether the LLP License is indicated in the
Database as noninterim and transferable or otherwise.

50 CFR 600.1105(c)(1) (enhanced display)

page 28 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(c)(2)

(2) Application. Any person, regardless of whether having received the mailing described in paragraph
(c)(1) of this section, may as a Subsector Member apply to enroll with the FLCC to participate in the
Reduction Program, by submitting all of the following documents:
(i)

Fully executed Reduction Agreement;

(ii) Photocopy of the LLP License(s) evidencing Subsector Member's qualification as a member of
the Longline Subsector;
(iii) Unless applying as the holder of a Latent License, a photocopy of Federal Fisheries Permit for
the vessel(s) designated on the LLP License(s) on the date the Reduction Agreement is signed
by the Subsector Member;
(iv) Unless applying as the holder of a Latent License, a photocopy of the Certificate of
Documentation (COD) for the vessel(s) designated on the LLP License(s) on the date the
Reduction Agreement is signed by the Subsector Member; and
(v) An executed Application Form which sets forth whether the qualifying LLP License is a Latent
License and identifies the individual(s) authorized to execute and deliver Offers and Offer
Ranking Ballots on behalf of the Subsector Member.
(3) Examination by Auditor —
(i)

In general. Each application must be submitted to the Auditor who will examine applications for
completeness and inconsistencies, whether on the face of the documents or with the
Database. Any application which is incomplete or which contains inconsistencies shall be
invalid. The Auditor shall notify by e-mail or mail an applicant of the basis for the Auditor's
finding an application invalid. An applicant may resubmit a revised application. If the
application meets all requirements, the Auditor may accept the application as valid and enroll
the applicant.

(ii) Interim LLP Licenses. If an LLP License is interim and/or nontransferable, the applicant's
enrollment shall be accepted as a Subsector Member and may fully participate in the Selection
Process. However, any posting of an Offer submitted with respect to such LLP License shall
note the status of such LLP License until that Subsector Member submits to the Auditor a letter
from the RAM confirming that it is within the Subsector Member's control to cause the
qualifying LLP License to be issued as noninterim and transferable upon withdrawal of all
applicable appeals.
(4) Enrollment period. Applications that meet all requirements will be accepted until the Selection
Process is completed.
(5) Effective date. The Effective Date of any Reduction Agreement shall be ten (10) calendar days after
written notice is sent by the Auditor to each holder of record of an LLP License endorsed for BS or AI
catcher processor activity, C/P, Pacific cod and hook and line gear (as determined by the Auditor
from the Auditor's examination of the Database) advising that the number of Subsector Members
that have delivered to the Auditor a complete Application, including a fully executed Reduction
Agreement, exceeds seventy percent (70 percent) of the members of the Longline Subsector (as
determined by the Auditor from the Auditor's examination of the Database).
(6) Notice. All notices related to the effective date of the Reduction Agreement shall be sent by the
Auditor via registered mail.

50 CFR 600.1105(c)(6) (enhanced display)

page 29 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(c)(7)

(7) Withdrawal. A Subsector Member, unless such Subsector Member is a Current Offeror or Selected
Offeror, may terminate the Reduction Agreement at any time with respect to that Subsector Member
by giving ten (10) calendar days written notice to the Auditor preferably via e-mail. Withdrawal of a
Subsector Member shall not affect the validity of the Reduction Agreement with respect to any other
Subsector Members. Once effective, the Reduction Agreement shall continue in full force and effect
regardless of whether subsequent withdrawals reduce the number of Subsector Members below that
level required to effectuate the Reduction Agreement. Attempted withdrawal by a Current Offeror or
Selected Offeror shall be invalid, and such Offer shall remain a binding, irrevocable Offer, unaffected
by the attempted withdrawal.
(d) Selection of fishing capacity to be removed by Reduction Plan. The fishing capacity removed by the
Reduction Plan will be the Reduction Fishing Interests voluntarily offered through the Reduction Plan by
offering Subsector Members and as selected by the Nonoffering Subsector Members, up to an aggregate
amount of thirty six million dollars ($36,000,000) as set forth in this paragraph (d).
(1) Overview. The Selection Process will begin upon the Effective Date of the Reduction Agreement. The
Selection Process will alternate on a weekly basis between:
(i)

Submitting Periods, during which individual Subsector Members may submit Offers of fishing
capacity they wish to include in the Reduction Plan; and

(ii) Ranking Periods, during which Nonoffering Subsector Members will rank the submitted Offers.
(2) Offers —
(i)

Binding agreement. An Offer from a Subsector Member shall be a binding, irrevocable offer
from a Subsector Member to relinquish to NMFS the Reduction Fishing Interests for the price
set forth on the Offer contingent on such Offer being a Selected Offer at the closing of the
Selection Process. Once submitted, an Offer may not be revoked or withdrawn while that Offer
is a Current Offer or Selected Offer. An Offer that is submitted by a Subsector Member, but is
not a Selected Offer during the subsequent Ranking Period, shall be deemed to be terminated
and the Subsector Member shall have no further obligation with respect to performance of that
Offer.

(ii) Offer content. All Offers submitted to the Auditor shall include the following information: LLP
License number; LLP License number(s) of any linked crab LLP Licenses; license MLOA
(MLOA—maximum length overall of a vessel is defined at § 679.2 of this chapter); the license
area, gear and species endorsements; a summary of the Pacific cod catch history for the
calendar years 1995-2004; and the offered price. The Offer shall also state whether a vessel is
currently designated on the LLP License and as such will be withdrawn from all fisheries if the
Offer is selected for reduction in the Reduction Plan. If so, the Offer shall identify such vessel by
name, official number, and current owner. In addition, the Offer shall provide a summary of the
Pacific cod catch history for the calendar years 1995-2004 of the vessel to be retired from the
fisheries. All summary catch histories included in Offers shall be calculated utilizing both the
weekly production report and best blend methodology and shall separately state for each
methodology the Pacific cod catch in metric tons and as a percentage of the overall catch for
the longline catcher processor subsector on an annual basis for each of the required years. If
the vessel stated to be withdrawn from the fisheries is not owned by the LLP License owner of
record, the Offer shall be countersigned by the owner of record of the vessel. An Offer offering a

50 CFR 600.1105(d)(2)(ii) (enhanced display)

page 30 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(d)(2)(iii)

Latent License shall state on the Offer Form that the offered LLP License is a Latent License.
The Offer Form shall also include a comment section for any additional information that
Offerors wish to provide to the Subsector Members concerning the Offer.
(iii) Prequalification of offers. A Subsector Member may submit a Prequalification Offer to the
Auditor at any time prior to the Opening Date. A Prequalification Offer shall contain all elements
of an Offer, except that a price need not be provided. The Auditor shall notify the Subsector
Member submitting a Prequalification Offer as to any deficiencies as soon as practicable. All
details of a Prequalification Offer shall be kept confidential by the Auditor.
(3) Submitting an offer —
(i)

Offer submission. Commencing on the first Tuesday following the Opening Date and during all
Submission Periods until the Selection Process is closed, any Subsector Member may submit
an Offer. All Offers are to be on the applicable form provided on the FLCC website, executed by
an Authorized Party and submitted to the Auditor by facsimile. Any Subsector Member may
submit an Offer during any Submission Period, even if that Subsector Member has not
submitted an Offer in any previous Submission Period. If a Subsector Member holds more than
one LLP License, such Subsector Member may, but is not required to, submit an Offer for each
LLP License held during a Submission Period.

(ii) Submission periods. The initial Submission Period shall commence at 9 a.m. (Pacific time) on
the Tuesday following the Opening Date and end at 5 p.m. (Pacific time) on the Friday of that
week. Subsequent Submission Periods shall commence at 9 a.m. (Pacific time) on the first
Tuesday following the preceding Ranking Period and end at 5 p.m. (Pacific time) on the Friday
of that week. All times set forth in the Reduction Agreement and used in the Offer process shall
be the time kept in the Pacific time zone as calculated by the National Institute of Standards
and Technology.
(iii) Validity of offer. The Auditor shall examine each Offer for consistency with the Database and
information contained in the enrollment documents. If there is an inconsistency in the
information contained in the Offer, any of the elements required of an Offer pursuant to
paragraph (d)(2)(ii) of this section are missing, or the Auditor does not receive the original Offer
Form before the Offers are to be posted pursuant to paragraph (d)(4) of this section, the Auditor
shall notify the offering Subsector Member by e-mail or mail that the Offer is nonconforming as
soon as practicable after discovering the basis of invalidity. The Subsector Member may submit
a revised, conforming Offer prior to the close of that Submission Period or, in any subsequent
Submission Period. Only one Offer may be submitted with respect to an LLP License during a
Submission Period. In the event a Subsector Member submits more than one Offer with respect
to an LLP License during a Submission Period, the first conforming Offer received by the
Auditor shall be binding and irrevocable and any subsequent Offers shall be deemed invalid.
(iv) Warranty. By submitting an Offer, the Offering Subsector Member, warrants and represents that
the Offering Subsector Member has read and understands the terms of the Reduction
Agreement, the Offer, and the Reduction Contract and has had the opportunity to seek
independent legal counsel regarding such documents and/or agreements and the
consequences of submitting an Offer.
(4) Posting offers —

50 CFR 600.1105(d)(4) (enhanced display)

page 31 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(i)

50 CFR 600.1105(d)(4)(i)

Current offers. For each Offer received during a Submission Period, the Auditor shall post on the
Website no later than 5 p.m. (Pacific time) on the following Tuesday all of the details of such
Offer as set forth on the Offer Form. In addition, the Auditor shall post, as available to Auditor, a
summary by year of up to ten (10) years catch history during the period 1995-2004 in total
round weight equivalents and percentage of Longline Subsector ITAC harvested for any vessel
that is included in the Offer. Subsector Member (or vessel owner, if other than the Subsector
Member) expressly authorizes Auditor to release the catch history summary information
previously prepared for that Subsector Member or vessel owner by the Auditor as part of the
analysis of FLCC's membership's catch history previously conducted by the Auditor on behalf of
the FLCC.

(ii) Posting order. Offers shall be posted on the Website by the Auditor in alphabetical order of the
Offering Subsector Member's name.
(iii) Questions as to offer. The Auditor shall respond to no questions from Subsector Member
regarding Offers except to confirm that the posting accurately reflects the details of the Offer. If
an Offering Subsector Member notices an error in an Offer posting on the Website, such
Subsector Member shall notify the Auditor as soon as practicable. The Auditor shall review
such notice, the posting and the original Offer. If an error was made in posting the Auditor shall
correct the posting as soon as practicable and notify the Subsector Members via e-mail or mail
of the correction. In the event such an error is not discovered prior to Ranking, an Offering
Subsector Member shall be bound to the terms of the submitted Offer, not the terms of the
posted Offer.
(iv) Archive. The Auditor shall maintain on the Website an archive of prior Offers posted, which shall
be available for review by all Subsector Members.
(5) Ranking —
(i)

Eligibility. Each Subsector Member that has not submitted an Offer during the preceding
Submission Period, or whose vessel is not included as a withdrawing vessel in an Offer during
the preceding Submission Period (i.e., a Nonoffering Subsector Member), may submit to the
Auditor a Ranking Form during a Ranking Period. With respect to Ranking, a Subsector Member
that holds more than one LLP License may participate in the Ranking process for each LLP
License not included in an Offer.

(ii) Ranking period. The initial Ranking Period shall commence immediately after the Offers from
the preceding Submission Period have been posted and end at 5 p.m. (Pacific time) on the
Friday of that week. Subsequent Ranking Periods shall commence immediately after the Offers
from the preceding Submission Period have been posted and end at 5 p.m. (Pacific time) on the
Friday of that week.
(iii) Ranking form. Prior to each Ranking Period, the Auditor will post a Ranking Form on the Website
in “pdf” file format. Each eligible Subsector Member wishing to rank the current Offers shall
rank the Offers on the Ranking Form numerically in the Subsector Member's preferred order of
purchase. The Offer that Subsector Member would most like to have accepted should be
ranked number one (1), and subsequent Offers ranked sequentially until the Offer that the
Subsector Member would least like to see accepted is ranked with the highest numerical score.
A Subsector Member wishing to call for a Closing Vote shall, in lieu of ranking the Current
Offers, mark the Ranking Form to accept the Selected Offers selected during the prior Ranking
Period and close the Selection Process. To be valid, the Ranking Form must rank each Current
50 CFR 600.1105(d)(5)(iii) (enhanced display)

page 32 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(d)(5)(iv)

Offer listed on the Ranking Form or, if applicable, be marked to call for a Closing Vote. Ranking
Forms shall be submitted by sending a completed Ranking Form, signed by an Authorized Party,
to the Auditor by facsimile or mail prior to the end of the Ranking Period. A Subsector Member
is not required to rank the Offers during a Ranking Period or call for a Closing Vote.
(iv) Validity of subsector member ranking. The Auditor shall examine each Ranking Form for
completeness, whether the form either ranks the Offers or calls for a Closing Vote (but not
both), and authorized signature. Any incomplete or otherwise noncompliant Ranking Form(s)
shall be invalid, and shall not be included in the Rankings of the Current Offers. The Auditor
shall notify the Subsector Member of the reason for declaring any Ranking Form invalid as soon
as practicable. A Subsector Member may cure the submission of an invalid Ranking Form by
submitting a complying Ranking Form if accomplished before the end of the applicable Ranking
Period.
(6) Ranking results —
(i)

Compiling the rankings. Unless two-thirds (2⁄3) of the Nonoffering Subsector Members have
called for a Closing Vote, the Auditor shall compile the results of the Ranking Forms by
assigning one point for each position on a Ranking Form. That is, the Offer ranked number one
(1) on a Ranking Form shall be awarded one (1) point, the Offer ranked two (2) shall receive two
(2) points, and continuing on in this manner until all Offers have been assigned points
correlating to its ranking on each valid Ranking Form. The Offer with the least number of total
points assigned shall be the highest ranked Offer, and the Offer with the greatest total points
assigned shall be the lowest ranked Offer.

(ii) Posting rankings. The Auditor shall post the results of the compilation of the Ranking Forms on
the Website in alphabetical order based on the Offering Subsector Member's name no later than
5 p.m. (Pacific time) on the Monday following the Ranking Period. The Auditor shall post the
highest consecutive ranking Offers that total thirty six million dollars ($36,000,000) or less.
Those Offering Subsector Members whose Offers are posted shall be deemed Selected
Offerors and their Offers shall be deemed Selected Offers. Those Offering Subsector Members
whose Offers are not posted shall be deemed Rejected Offerors.
(iii) Selected offer information or confidentiality. The Auditor shall post the name of the Offering
Subsector Member, the amount of the Offer, and a summary of the total number of Ranking
Forms received and the number of such forms on which the Members called for a Closing Vote.
Other than the foregoing, the Auditor shall not post any details of the compilation of the
Ranking Forms.
(iv) Selected offerors. Selected Offerors may not withdraw their Offers unless in subsequent
rankings their Offers no longer are within the highest ranking Offers and they become Rejected
Offerors. A Selected Offeror may, however, modify a Selected Offer solely to the extent such
modification consists of a reduction in the Offer price. A Selected Offeror may submit a
modified Offer to the Auditor during the next Offering Period as set forth in paragraph (d)(3) of
this section. Unless a Selected Offeror becomes a Rejected Offeror in a subsequent Ranking, a
Selected Offeror shall be bound by the terms of the lowest Selected Offer submitted as if such
modified Offer had been the original Selected Offer. In the event a Selected Offeror submits a
modified Offer and such Offer is not ranked because sufficient votes are received to call for a
Closing Vote, the previously Selected Offer shall remain the Selected Offer.

50 CFR 600.1105(d)(6)(iv) (enhanced display)

page 33 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(d)(6)(v)

(v) Rejected offerors. The Offer of a Rejected Offeror is terminated and the Rejected Offeror is no
longer bound by the terms of its Offer. A Rejected Offeror may, at its sole discretion, resubmit
the same Offer, submit a revised Offer, or elect not to submit an Offer during any subsequent
Submission Period until the Selection Process is closed.
(vi) Ties. In the event there is a tie with respect to Offers which results in the tied Offers exceeding
thirty-six million dollars ($36,000,000), the tied Offers and all Offers ranked lower than the tied
Offers shall be deemed to be rejected and the Rejected Offerors may, at their option, submit an
Offer in a subsequent Submission Period.
(vii) Archive. Auditor shall maintain on the Website an archive of prior Offer Rankings as posted over
the course of the Selection Process, which shall be available for Subsector Member review.
(7) Closing. The Selection Process will close when two-thirds (2⁄3) or more of the Nonoffering Subsector
Members of the Longline Subsector, as determined by the Auditor, affirmatively vote to accept the
Selected Offerors selected during the prior Ranking Period as part of the Reduction Plan to be
submitted to the Secretary.
(i)

Call for vote. A Closing Vote will be held when: at least two-thirds (2⁄3) of the Nonoffering
Subsector Members submit Ranking Forms electing to accept the Selected Offerors and close
the Selection Process in lieu of Ranking the current Offers; and there are no unresolved Protests
or Arbitrations. The Auditor shall notify all Subsector Members by e-mail or mail and posting a
notice on the Website as soon as practicable that a Closing Vote is to be held. Such notice shall
state the starting and ending dates and times of the voting period, which shall be not less than
three (3) nor more than seven (7) calendar days from the date of such notice. A voting period
shall commence at 9 a.m. (Pacific time) on Monday and end at 5 p.m. on the Friday of that
week.

(ii) Voting. No less than three (3) calendar days prior to the voting period, the Auditor will post a
Closing Ballot on the Website in “pdf” file format. Each eligible Nonoffering Subsector Member
wishing to vote shall print out the Closing Ballot, and, with respect to each of the currently
Selected Offers on the Closing Ballot, vote either in favor of or opposed to accepting that
Selected Offer and submit a completed and signed Closing Ballot to the Auditor preferably by
facsimile prior to the end of the Voting Period.
(iii) Ballot verification. The Auditor shall examine each submitted Closing Ballot for completeness
and authorized signature. Any incomplete Closing Ballot shall be void, and shall not be included
in the voting results. The Auditor shall not notify the Subsector Member of an invalid Closing
Ballot.
(iv) Voting results. The Auditor shall post the results of the Vote as soon as practicable after voting
closes. Each Offer on the Closing Ballot that receives votes approving acceptance of such Offer
from two-thirds (2⁄3) or more of the total number of Nonoffering Subsector Members shall be a
Selected Offeror and shall be the basis for the Reduction Plan submitted to NMFS. Any Offer on
the Closing Ballot that does not receive such two-thirds (2⁄3) approval shall be rejected and shall
not be included among the Offers included among the Reduction Plan submitted to NMFS.
(v) Notification to NMFS. Upon closing of the Selection Process, FLCC shall notify NMFS in writing
of the identities of the Selected Offerors and provide to NMFS a completed and fully executed
original Reduction Agreement from each of the Selected Offerors and a certified copy of the
fully executed Reduction Agreement and Reduction Contract.
50 CFR 600.1105(d)(7)(v) (enhanced display)

page 34 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(e)

(e) Submission of reduction plan, including repayment. Upon completion of the offering process, the FLCC on
behalf of the Subsector Members shall submit to NMFS the Reduction Plan which shall include the
provisions set forth in this paragraph (e).
(1) Capacity reduction. The Reduction Plan shall identify as the proposed capacity reduction, without
auction process, the LLP Licenses as well as the vessels and the catch histories related to the LLP
Licenses, linked crab LLP Licenses, and any other fishing rights or other interests associated with
the LLP Licenses and vessels included in the Selected Offers. The aggregate of all Reduction
Agreements and Reduction Contracts signed by Subsector Members whose offers to participate in
this buyback were accepted by votes of the Subsector Members, will together with the FLCC's
supporting documents and rationale for recognizing that these offers represent the expenditure of
the least money for the greatest capacity reduction, constitute the Reduction Plan to be submitted to
NMFS for approval on behalf of the Secretary of Commerce.
(2) Loan repayment —
(i)

Term. As authorized by Section 219(B)(2) of the Act, the capacity reduction loan (the “Reduction
Loan”) shall be amortized over a thirty (30) year term. The Reduction Loan's original principal
amount may not exceed thirty-six million dollars ($36,000,000), but may be less if the reduction
cost is less. Subsector Members acknowledge that in the event payments made under the
Reduction Plan are insufficient to repay the actual loan, the term of repayment shall be
extended by NMFS until the loan is paid in full.

(ii) Interest. The Reduction Loan's interest rate will be the U.S. Treasury's cost of borrowing
equivalent maturity funds plus 2 percent. NMFS will determine the Reduction Loan's initial
interest rate when NMFS borrows from the U.S. Treasury the funds with which to disburse
reduction payments. The initial interest rate will change to a final interest rate at the end of the
Federal fiscal year in which NMFS borrows the funds from the U.S. Treasury. The final interest
rate will be 2 percent plus a weighted average, throughout that fiscal year, of the U.S. Treasury's
cost of borrowing equivalent maturity funds. The final interest rate will be fixed, and will not
vary over the remainder of the reduction loan's 30-year term. The Reduction loan will be subject
to a level debt amortization. There is no prepayment penalty.
(iii) Fees. The Reduction Loan shall be repaid by fees collected from the Longline Subsector. The
fee amount will be based upon: The principal and interest due over the next twelve months
divided by the product of the Hook & Line, Catcher Processor (Longline Subsector; sometimes
referred to as the “H&LCP Subsector”) portion of the BSAI Pacific cod ITAC (in metric tons) set
by the North Pacific Fishery Management Council (NPFMC) in December of each year
multiplied by 2,205 (i.e., the number of pounds in a metric ton). In the event that the Longline
Subsector portion for the ensuing year is not available, the Longline Subsector portion forecast
from the preceding year will be used to calculate the fee.
(A) The fee will be expressed in cents per pound rounded up to the next one-tenth of a cent.
For example: If the principal and interest due equal $2,900,000 and the Longline Subsector
portion equals 100,000 metric tons, then the fee per round weight pound of Pacific cod will
equal 1.4 cents per pound. [2,900,000 /(100,000 × 2,205) = .01315]. The fee will be
accessed and collected on Pacific cod to the extent possible and if not, will be accessed
and collected as provided for in this paragraph (e).

50 CFR 600.1105(e)(2)(iii)(A) (enhanced display)

page 35 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(e)(2)(iii)(B)

(B) Fees must be accessed and collected on Pacific cod used for bait or discarded. Although
the fee could be up to 5 percent of the ex-vessel production value of all post-reduction
Longline Subsector landings, the fee will be less than 5 percent if NMFS projects that a
lesser rate can amortize the fishery's reduction loan over the reduction loan's 30-year term.
In the event that the total principal and interest due exceeds 5 percent of the ex-vessel
Pacific cod revenues, a penny per pound round weight fee will be calculated based on the
latest available revenue records and NMFS conversion factors for pollock, arrowtooth
flounder, Greenland turbot, skate, yellowfin sole and rock sole.
(C) The additional fee will be limited to the amount necessary to amortize the remaining
twelve months principal and interest in addition to the 5 percent fee accessed against
Pacific cod. The additional fee will be a minimum of one cent per pound. In the event that
collections exceed the total principal and interest needed to amortize the payment due,
the principal balance of the loan will be reduced. To verify that the fees collected do not
exceed 5 percent of the fishery revenues, the annual total of principal and interest due will
be compared to the latest available annual Longline Subsector revenues to ensure it is
equal to or less than 5 percent of the total ex-vessel production revenues. In the event that
any of the components necessary to calculate the next year's fee are not available, or for
any other reason NMFS believes the calculation must be postponed, the fee will remain at
the previous year's amount until such a time that new calculations are made and
communicated to the post reduction fishery participants.
(D) It is possible that the fishery may not open during some years and no Longline Subsector
portion of the ITAC is granted. Consequently, the fishery will not produce fee revenue with
which to service the reduction loan during those years. However, interest will continue to
accrue on the principal balance. When this happens, if the fee rate is not already at the
maximum 5 percent, NMFS will increase the fisheries' fee rate to the maximum 5 percent
of the revenues for Pacific cod and the species mentioned in paragraph (e)(2)(iii)(B), apply
all subsequent fee revenue first to the payment of accrued interest, and continue the
maximum fee rates until all principal and interest payments become current. Once all
principal and interest payments are current, NMFS will make a determination about
adjusting the fee rate.
(iv) Reduction loan. NMFS has promulgated framework regulations generally applicable to all
fishing capacity reduction programs (§ 600.1000 et seq.). The reduction loan shall be subject to
the provisions of § 600.1012, except that: the borrower's obligation to repay the reduction loan
shall be discharged by the owner of the Longline Subsector license regardless of which vessel
catches fish under this license and regardless of who processes the fish in the reduction fishery
in accordance with § 600.1013. Longline Subsector license owners in the reduction fishery
shall be obligated to collect the fee in accordance with § 600.1013.
(v) Collection. The LLP License holder of the vessel harvesting in the post-capacity reduction plan
Longline Subsector shall be responsible for self-collecting the repayment fees owed by that LLP
License holder. Fees shall be submitted to NMFS monthly and shall be due no later than fifteen
(15) calendar days following the end of each calendar month.
(vi) Record keeping and Reporting. The holder of the LLP License on which a vessel harvesting in
the post-capacity reduction plan Longline Subsector is designated shall be responsible for
compliance with the applicable record keeping and reporting requirements.

50 CFR 600.1105(e)(2)(vi) (enhanced display)

page 36 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(e)(3)

(3) Agreement with Secretary. Each Selected Offeror, and vessel owner if not the Subsector Member, that
has submitted a Selected Offer shall complete and deliver to the FLCC for inclusion in the Reduction
Plan submitted to NMFS, designee for the Secretary, a completed and fully executed Reduction
Contract. Any and all LLP License(s) and or vessels set forth on a Selected Offer shall be included as
Reduction Fishing Interests in such Reduction Contract.
(f) Decisions of the Auditor and the FLCC. Time is of the essence in developing and implementing a
Reduction Plan and, accordingly, the Offerors shall be limited to, and bound by, the decisions of the
Auditor and the FLCC.
(1) The Auditor's examination of submitted applications, Offers, Prequalification Offers and Rankings
shall be solely ministerial in nature. That is, the Auditor will verify whether the documents submitted
by Subsector Members are, on their face, consistent with each other and the Database, in
compliance with the requirements set forth in the Reduction Agreement, and, signed by an
Authorized Party. The Auditor may presume the validity of all signatures on documents submitted.
The Auditor shall not make substantive decisions as to compliance (e.g., whether an interim LLP
License satisfies the requirements of the Act, or whether a discrepancy in the name appearing on
LLP Licenses and other documents is material).
(2) [Reserved]
(g) Enforcement/specific performance. The parties to the Reduction Agreement have agreed that the
opportunity to develop and submit a capacity reduction program for the Longline Subsector under the
terms of the Act is both unique and finite and that failure of a Selected Offeror, and vessel owner, if not a
Subsector Member, to perform the obligations provided by the Reduction Agreement will result in
irreparable damage to the FLCC, the Subsector Members and other Selected Offerors. Accordingly, the
parties to the Reduction Agreement expressly acknowledge that money damages are an inadequate
means of redress and agree that upon the failure of the Selected Offeror, and vessel owner if not a
Subsector Member, to fulfill its obligations under the Reduction Agreement that specific performance of
those obligations may be obtained by suit in equity brought by the FLCC in any court of competent
jurisdiction without obligation to arbitrate such action.
(h) Miscellaneous —
(1) Time/Holidays. All times related to the Selection Process shall be the time kept in the Pacific time
zone as calculated by the National Institute of Standards and Technology. In the event that any date
occurring within the Selection Process is a Federal holiday, the date shall roll over to the next
occurring business day.
(2) Termination. The Reduction Agreement shall automatically terminate if no vote of acceptance is
completed by December 31, 2007. The Reduction Agreement may be terminated at any time prior to
approval of the Reduction Plan by NMFS, on behalf of the Secretary, by written notice from 50
percent of Subsector Members.
(3) Choice of law/venue. The Reduction Agreement shall be construed and enforced in accordance with
the laws of the State of Washington without regard to its choice of law provisions. The parties
submit to the exclusive personal jurisdiction of the United States District Court located in Seattle,
Washington, with respect to any litigation arising out of or relating to the Reduction Agreement or out
of the performance of services hereunder.

50 CFR 600.1105(h)(3) (enhanced display)

page 37 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(h)(4)

(4) Incorporation. All executed counterparts of the Reduction Agreement, Application Forms and Offers
constitute the agreement between the parties with respect to the subject matter of the Reduction
Agreement and are incorporated into the Reduction Agreement as if fully written.
(5) Counterparts. The Reduction Agreement may be executed in multiple counterparts and will be
effective as to signatories on the Effective Date. The Reduction Agreement may be executed in
duplicate originals, each of which shall be deemed to be an original instrument. All such
counterparts and duplicate originals together shall constitute the same agreement, whether or not all
parties execute each counterpart.
(i)

The facsimile signature of any party to the Reduction Agreement shall constitute the duly
authorized, irrevocable execution and delivery of the Reduction Agreement as fully as if the
Reduction Agreement contained the original ink signatures of the party or parties supplying a
facsimile signature.

(ii) [Reserved]
(i)

Amendment. Subsector Member acknowledges that the Reduction Agreement, the Reduction Contract,
and the Reduction Plan may be subject to amendment to conform to the requirements for approval of the
Reduction Plan by NMFS on behalf of the Secretary. The Auditor shall distribute to each Subsector
Member in electronic format the amended form of the Reduction Agreement, the Reduction Contract, and
the Reduction Plan, which amended documents in the form distributed by the Auditor and identified by the
Auditor by date and version, the version of each such document then in effect at the time of any dispute
arising or action taken shall be deemed binding upon the parties with respect to such dispute and/or
action.

(j)

Warranties. Subsector Member must expressly warrant and represent in the Reduction Agreement that:
(1) Subsector Member has had an opportunity to consult with Subsector Member's attorney or other
advisors of Subsector Member with respect to the Reduction Agreement, the Reduction Contract,
and the Act and the ramifications of the ratification of the Reduction Plan contemplated therein;
(2) Subsector Member has full understanding and appreciation of the ramifications of executing and
delivering the Reduction Agreement and, free from coercion of any kind by the FLCC or any of its
members, officers, agents and/or employees, executes and delivers the Reduction Agreement as the
free and voluntary act of Subsector Member;
(3) The execution and delivery of the Reduction Agreement, does not and will not conflict with any
provisions of the governing documents of Subsector Member;
(4) The person executing the Reduction Agreement has been duly authorized by Subsector Member to
execute and deliver the Reduction Agreement and to undertake and perform the actions
contemplated herein; and
(5) Subsector Member has taken all actions necessary for the Reduction Agreement to constitute the
valid and binding obligation of Subsector Member, enforceable in accordance with its terms.

(k) Approval of the reduction plan. Acceptance of the Offers are at the sole discretion of NMFS on behalf of
the Secretary of Commerce. To be approved by NMFS, on behalf of the Secretary, any Reduction Plan
developed and submitted in accordance with this section and subpart M to this part must be found by the
Assistant Administrator of NMFS, to:

50 CFR 600.1105(k) (enhanced display)

page 38 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(k)(1)

(1) Be consistent with the requirements of Section 219(e) of the FY 2005 Appropriations Act (Public Law
108-447);
(2) Be consistent with the requirements of Section 312(b) of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1861(a)) except for the requirement that a Council or
Governor of a State request such a program (as set out in section 312(b)(1)) and for the
requirements of section 312(b)(4);
(3) Contain provisions for a fee system that provides for full and timely repayment of the capacity
reduction loan by the Longline Subsector and that it provide for the assessment of such fees;
(4) Not require a bidding or auction process;
(5) Result in the maximum sustained reduction in fishing capacity at the least cost and in the minimum
amount of time; and
(6) Permit vessels in the Longline Subsector to be upgraded to achieve efficiencies in fishing operations
provided that such upgrades do not result in the vessel exceeding the applicable length, tonnage, or
horsepower limitations set out in Federal law or regulation.
(l)

Referenda. The provisions of § 600.1010 (including §§ 600.1004(a), 600.1008, 600.1009, 600.1013,
600.1014, and 600.1017(a)(5), (6) and (7)) shall apply to the Reduction Plan of this section to the extent
that they do not conflict with this section or with subpart M of this part.

Appendix to § 600.1105—Fishing Capacity Reduction Contract: Bering Sea
and Aleutian Islands Longline Catcher Processor Subsector
Fishing Capacity Reduction Contract: Bering Sea and Aleutian Islands
Longline Catcher Processor Subsector
This agreement, (the “Reduction Contract”) is entered into by and between the party or parties named in
section 46 of this contract entitled, “Fishing Capacity Reduction Offer Submission Form and Reduction Fishing
Interests Identification,” as the qualifying Offeror and as the co-Offeror (if there is a co-Offeror) (collectively the
“Offeror”) and the United States of America, acting by and through the Secretary of Commerce, National
Oceanic and Atmospheric Administration, National Marine Fisheries Service, Financial Services Division
(“NMFS”). The Reduction Contract is effective when NMFS signs the Reduction Contract and, thereby, accepts
the Offeror's offer, subject to the condition subsequent of NMFS' formal notification of a successful
referendum.

Witnesseth
Whereas, Section 219, Title II, Division B of the Consolidated Appropriations Act, 2005, as enacted on
December 8, 2004, (the “Act”) authorizes a fishing capacity reduction program implementing capacity reduction
plans submitted to NMFS by catcher processor subsectors of the Bering Sea and Aleutian Islands (“BSAI”) nonpollock groundfish fishery as set forth in the Act;
Whereas, the longline catcher processor subsector (the “Longline Subsector”) is among the catcher processor
subsectors eligible to submit to NMFS a capacity reduction plan under the terms of the Act;

50 CFR 600.1105(l) (enhanced display)

page 39 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

Whereas, the Freezer Longline Conservation Cooperative (the “FLCC”) has developed and is submitting to
NMFS concurrently with this Reduction Contract a capacity reduction plan for the Longline Subsector (the
“Reduction Plan”);
Whereas, the selection process will be pursuant to the fishing capacity Reduction Contract and the Reduction
Plan;
Whereas, the term “Reduction Fishery” is defined by the Reduction Plan as the longline catcher processor
subsector of the BSAI non-pollock groundfish fishery;
Whereas, the Reduction Plan's express objective is to permanently reduce harvesting capacity in the Reduction
Fishery; Whereas, NMFS implements the Reduction Plan pursuant to Section 219 of the Act as well as the
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a(b)-(e))(as excepted by the
Act, including inter alia, any requirement that the Reduction Plan include a bidding or auction process) and
other applicable law;
Whereas, NMFS has promulgated framework regulations generally applicable to all fishing capacity reduction
programs, portions of which are applicable to the Reduction Plan, (50 CFR 600.1000 et seq.);
Whereas, NMFS can implement the Reduction Plan only after giving notice to all members of the Longline
Subsector of the Reduction Plan pursuant to Section 219(3)(b) of the Act and approval of the Reduction Plan by
referendum of the Longline Subsector; and
Whereas, this Reduction Contract is submitted by Offeror and the FLCC as an integral element of the Reduction
Plan and is expressly subject to the terms and conditions set forth herein, the framework regulations, the final
rule (as used in this contract “final rule” means the final rule promulgated by NMFS which sets forth the
regulations implementing the Reduction Plan for the Longline Subsector) and applicable law.
Now therefore, for good and valuable consideration and the premises and covenants hereinafter set forth the
receipt and sufficiency of which the parties to the Reduction Contract hereby acknowledge, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing recitals are true and correct and are expressly incorporated herein by
this reference.
2. Further Incorporation. The Act, framework regulations, final rule and any other rule promulgated pursuant to
the Act are expressly incorporated herein by this reference. In the event of conflicting language, the framework
regulations, the final rule and any other rule promulgated pursuant to the Act, take precedence over the
Reduction Contract.
3. Contract Form. By completing and submitting the Reduction Contract to NMFS the Offeror hereby irrevocably
offers to relinquish its Reduction Fishing Interests. If NMFS discovers any deficiencies in the Offeror's
submission to NMFS, NMFS may, at its sole discretion, contact the Offeror in an attempt to correct such offer
deficiency. “Reduction Fishing Interests” means all of Offeror(s) rights, title and interest to the Groundfish
Reduction Permit, Reduction Permit(s), Reduction Fishing Privilege and Reduction Fishing History as defined in
this Reduction Contract.

50 CFR 600.1105(l) (enhanced display)

page 40 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

4. Groundfish Reduction Permit. Offeror expressly acknowledges that it hereby offers to permanently surrender,
relinquish, and have NMFS permanently revoke the valid non-interim Federal License Limitation Program
groundfish license issued pursuant to 50 CFR 679.4(k) (or successor regulation) endorsed for Bering Sea or
Aleutian Islands catcher processor fishing activity, C/P, Pacific cod, and hook and line gear identified in section
46 of this contract as well as any present or future claims of eligibility for any fishery privilege based upon such
permit, including any Latent License and any offered and accepted interim permit that Offeror causes to
become a non-interim permit, (the “Groundfish Reduction Permit”).
5. Reduction Permit(s). Offeror hereby acknowledges that it offers to permanently surrender, relinquish, and
have NMFS permanently revoke any and all Federal fishery licenses, fishery permits, and area and species
endorsements issued for any vessel named on the Groundfish Reduction Permit as well as any present or
future claims of eligibility for any fishery privilege based upon such permit, including any Latent License, (the
“Reduction Permits”).
6. Reduction Privilege Vessel. The Reduction Privilege Vessel is the vessel listed on the Offeror's License
Limitation Program license.
7. Reduction Fishing Privilege. If a vessel is specified in section 46 of this contract (the “Reduction Privilege
Vessel”), Offeror hereby acknowledges that Offeror offers to relinquish and surrender the Reduction Privilege
Vessel's fishing privilege and consents to the imposition of Federal vessel documentation restrictions that have
the effect of permanently revoking the Reduction Privilege Vessel's legal ability to fish anywhere in the world as
well as its legal ability to operate under foreign registry or control—including the Reduction Privilege Vessel's:
fisheries trade endorsement under the Commercial Fishing Industry Vessel Anti-Reflagging Act (46 U.S.C.
12108); eligibility for the approval required under section 9(c)(2) of the Shipping Act, 1916 (46 U.S.C. App.
808(c)(2)), for the placement of a vessel under foreign flag or registry, as well as its operation under the
authority of a foreign country; and the privilege otherwise to ever fish again anywhere in the world (the
“Reduction Fishing Privilege”). Offeror agrees to instruct the United States Coast Guard's Vessel
Documentation Center to remove the fishery endorsement from the Reduction Privilege Vessel. If the Reduction
Privilege Vessel is not a federally documented vessel, the Offeror offers to promptly scrap the vessel and allow
NMFS whatever access to the scrapping NMFS deems reasonably necessary to document and confirm the
scrapping.
8. Reduction Fishing History. Offeror surrenders, relinquishes, and consents to NMFS' permanent revocation of
the following Reduction Fishing History (the “Reduction Fishing History”):
a. The Reduction Privilege Vessel's full and complete documented harvest of groundfish;
b. For any documented harvest of the Reduction Privilege Vessel whatsoever, including that specified in section
8 of this contract, any right or privilege to make any claim in any way related to any fishery privilege derived in
whole or in part from any such other and documented harvest which could ever qualify any party for any future
limited access system fishing license, permit, and other harvest authorization of any kind; including without
limitation crab LLP licenses linked to License Limitation Program (“LLP”) licenses, state fishing rights
appurtenant to Reduction Fishing Vessels, and all fishing history associated therewith, but without prejudice to
any party who before submission of this offer may have for value independently acquired the fishing history
involving any such documented harvest;

50 CFR 600.1105(l) (enhanced display)

page 41 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

c. Any documented harvest on any other vessel (Reduction Fishing Vessel) that gave rise to the Groundfish
Reduction Permit; and
d. All fishing history associated with the latent LLP license identified on the Selected Offer and any fishing
history associated with the fishing vessel that gave rise to the latent LLP license that remains in the Offeror's
possession as of August 11, 2006 (i.e., date of publication of the proposed rule in the FEDERAL REGISTER).
9. Halibut, Sablefish and Crab IFQs Excluded. Notwithstanding any other provision of this Reduction Contract, no
right, title and/or interest to harvest, process or otherwise utilize individual fishing quota (“IFQ”) quota share in
the halibut, sablefish and crab fisheries pursuant to 50 CFR parts 679 and 680, nor crab LLP license history to
the extent necessary for the issuance of crab IFQ pursuant to 50 CFR part 680 as in effect as of the date of this
Contract, shall be included among Offeror's Reduction Fishing Interests.
10. Representations and Warranties. Offeror represents and warrants that, as of the date of submission of this
Reduction Contract, Offeror is:
a. The holder of record, according to NMFS' official fishing license records, at the time of offer, of the
Groundfish Reduction Permit and the Reduction Permit(s).
b. The Reduction Privilege Vessel's owner of record, according to the National Vessel Documentation Center's
official vessel documentation records, at the time of offer, and that the Reduction Privilege Vessel is neither
lost nor destroyed at the time of offer.
c. In retention of and fully and legally entitled to offer and dispose of hereunder, full and complete rights to the
Reduction Privilege Vessel's full and complete Reduction Fishing History necessary to fully and completely
comply with the requirements of section 8 of this contract.
11. Offer Amount. NMFS' payment to Offeror in the exact amount of the amount set forth by Offeror in section
46 of this contract is full and complete consideration for the Offeror's offer.
12. Additional Offer Elements. Offeror shall include with its offer an exact photocopy of the Reduction Privilege
Vessel's official vessel documentation or registration (i.e., the certificate of documentation the U.S. Coast
Guard's National Vessel Documentation Center issued for federally documented vessels or the registration a
State issues for State registered vessels) and an exact photocopy of the Groundfish Reduction Permit and all
Reduction Permit(s). The Offeror shall also include with the offer all other information required in this
Reduction Contract and otherwise comply with Reduction Contract requirements.
13. Use of Official Fishing License or Permit Databases. Offeror expressly acknowledges that NMFS shall use
the appropriate official governmental fishing license or permit database to:
Determine the Offeror's address of record; verify the Offeror's qualification to offer; determine the holder of
record of the Groundfish Reduction Permit and Reduction Permit(s); and verify the Offeror's inclusion in the
offer of all permits and licenses required to be offered in the Offer.

50 CFR 600.1105(l) (enhanced display)

page 42 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

14. Use of National Vessel Documentation Center Database. Offeror expressly acknowledges that NMFS shall
use the records of the National Vessel Documentation Center to determine the owner of record for a federally
documented Reduction Privilege Vessel and the appropriate State records to determine the owner of record of
a non-federally documented Reduction Privilege Vessel.
15. Offeror to Ensure Accurate Records. Offeror shall, to the best of its ability, ensure that the records of the
databases relevant to sections 13 and 14 of this contract are true, accurate, and complete.
16. Submissions are Irrevocable. The parties hereto expressly acknowledge as the essence hereof that the
Offeror voluntarily submits to NMFS this firm and irrevocable offer. The Offeror expressly acknowledges that it
hereby waives any privilege or right to withdraw, change, modify, alter, rescind, or cancel any portion of the
Reduction Contract and that the receipt date and time which NMFS marks on the Reduction Contract
constitutes the date and time of the offer's submission.
17. Offer Rejection. NMFS shall reject an offer that NMFS deems is in any way unresponsive or not in
conformance with the Reduction Contract, and the applicable law or regulations unless the Offeror corrects the
defect and NMFS, in its sole discretion, accepts the correction.
18. Notarized Offeror Signature(s) Required. NMFS shall deem as non-responsive and reject an offer whose
Offer Submission Form does not contain the notarized signatures of all persons required to sign the form on
behalf of the Offeror.
19. Offer Rejections Constitute Final Agency Action. NMFS's offer rejections are conclusive and constitute final
agency action as of the rejection date.
20. Effect of Offer Submission. Submitting an irrevocable offer conforming to the requirements stated herein
entitles the Offeror to have NMFS accept the offer if NMFS, in its sole discretion, deems that the offer is fully
responsive and complies with the Act, the final rule and any other rule promulgated pursuant to the Act.
21. Offeror Retains Use. After submitting an offer, the Offeror shall continue to hold, own, or retain unimpaired
every aspect of any and all LLP License(s) and or vessels set forth on an Offer included as Reduction Fishing
Interests, until such time as: NMFS notifies the Offeror that the Reduction Plan is not in compliance with the
Act or other applicable law and will not be approved by NMFS; notifies the Offeror that the referendum was
unsuccessful; NMFS tenders the reduction payment and the Offeror complies with its obligations under the
Reduction Contract; or NMFS otherwise excuses the Offeror's performance.
22. Acceptance by Referendum. NMFS shall formally notify the Offeror in writing whether the referendum is
successful, which written notice shall inform Offeror that the condition subsequent has been satisfied.
Therefore, Offeror expressly acknowledges that all parties must perform under the Reduction Contract and the
Reduction Contract is enforceable against, and binding on, the Reduction Contract parties in accordance with
the terms and conditions herein.
23. Reduction Contract Subject to Federal Law. The Reduction Contract is subject to Federal law.
24. Notice to Creditors. Upon NMFS' offer acceptance notice to the Offeror, Offeror agrees to notify all parties
with secured interests in the Reduction Fishing Interests that the Offeror has entered into the Reduction
Contract.
50 CFR 600.1105(l) (enhanced display)

page 43 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

25. Referendum. Offeror acknowledges that the outcome of the referendum of the Reduction Plan is an
occurrence over which NMFS has no control.
26. Unsuccessful Referendum Excuses Performance. An unsuccessful referendum excuses all parties hereto
from every obligation to perform under the Reduction Contract. In such event, NMFS need not tender reduction
payment and the Offeror need not surrender and relinquish or allow the revocation or restriction of any element
of the Reduction Fishing Interest specified in the Reduction Contract. An unsuccessful referendum shall cause
the Reduction Contract to have no further force or effect.
27. Offeror Responsibilities upon Successful Referendum. Upon NMFS' formal notification to the Offeror that the
referendum was successful and that NMFS had accepted the Reduction Contract, Offeror shall immediately
become ready to surrender and relinquish and allow the revocation or restriction of (as NMFS deems
appropriate) the Reduction Fishing Interests.
28. Written Payment Instructions. After a successful referendum, NMFS shall tender reduction payment by
requesting the Offeror to provide to NMFS, and the Offeror shall subsequently so provide, written payment
instructions for NMFS' disbursement of the reduction payment to the Offeror or to the Offeror's order.
29. Request for Written Payment Instructions Constitutes Tender. NMFS' request to the Offeror for written
payment instructions constitutes reduction payment tender, as specified in 50 CFR 600.1011.
30. Offeror Responsibilities upon Tender. Upon NMFS' reduction payment tender to the Offeror, the Offeror shall
immediately surrender and relinquish and allow the revocation or restriction of (as NMFS deems appropriate)
the Reduction Fishing Interests. The Offeror must then return the original of its Groundfish Reduction Permit
and Reduction Permit(s) to NMFS. Concurrently with NMFS' reduction payment tender, the Offeror shall forever
cease all fishing for any species with the Reduction Privilege Vessel and immediately retrieve all fishing gear,
irrespective of ownership, previously deployed from the Reduction Privilege Vessel. Offeror agrees to authorize
the United States Coast Guard to cancel the fishery endorsement in the Reduction Privilege Vessel.
31. Reduction Privilege Vessel Lacking Federal Documentation. Upon NMFS' reduction payment tender to the
Offeror, the Offeror shall immediately scrap any vessel which the Offeror specified as a Reduction Privilege
Vessel and which is documented solely under state law or otherwise lacks documentation under Federal law.
The Offeror shall scrap such vessel at the Offeror's expense. The Offeror shall allow NMFS, its agents, or its
appointees reasonable opportunity to observe and confirm such scrapping. The Offeror shall conclude such
scrapping within a reasonable time.
32. Future Harvest Privilege and Reduction Fishing History Extinguished. Upon NMFS' reduction payment tender
to the Offeror, the Offeror shall surrender and relinquish and consent to the revocation, restriction, withdrawal,
invalidation, or extinguishment by other means (as NMFS deems appropriate), of any claim in any way related
to any fishing privilege derived, in whole or in part, from the use or holdership of the Groundfish Reduction
Permits and the Reduction Permit(s), from the use or ownership of the Reduction Privilege Vessel (subject to
and in accordance with the provisions of section 8 of this contract), and from any documented harvest fishing
history arising under or associated with the same which could ever qualify the Offeror for any future limited
access fishing license, fishing permit, and other harvest authorization of any kind.

50 CFR 600.1105(l) (enhanced display)

page 44 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

33. Post Tender Use of Federally Documented Reduction Privilege Vessel. After NMFS' reduction payment tender
to the Offeror, the Offeror may continue to use a federally documented Reduction Privilege Vessel for any lawful
purpose except “fishing” as defined under the Magnuson-Stevens Act and may transfer—subject to all
restrictions in the Reduction Contract, other applicable regulations, and the applicable law—the vessel to a new
owner. The Offeror or any subsequent owner shall only operate the Reduction Privilege Vessel under the United
States flag and shall not operate such vessel under the authority of a foreign country. In the event the Offeror
fails to abide by such restrictions, the Offeror expressly acknowledges and hereby agrees to allow NMFS to
pursue any and all remedies available to it, including, but not limited to, recovering the reduction payment and
seizing the Reduction Privilege Vessel and scrapping it at the Offeror's expense.
34. NMFS' Actions upon Tender. Contemporaneously with NMFS' reduction payment tender to the Offeror, and
without regard to the Offeror's refusal or failure to perform any of its Reduction Contract duties and obligations,
NMFS shall: Permanently revoke the Offeror's Groundfish Reduction Permit and Reduction Permit(s); notify the
National Vessel Documentation Center to permanently revoke the Reduction Privilege Vessel's fishery trade
endorsement; notify the U.S. Maritime Administration to make the Reduction Privilege Vessel permanently
ineligible for the approval of requests to place the vessel under foreign registry or operate the vessel under a
foreign country's authority; record in the appropriate NMFS records that the Reduction Fishing History
represented by any documented harvest fishing history accrued on, under, or as a result of the operation of the
Reduction Privilege Vessel and/or Reduction Fishing Vessel (subject to and in accordance with the provisions
of section 8 of this contract), the Groundfish Reduction Permit, and the Reduction Permit(s) which could ever
qualify the Offeror for any future limited access fishing license, fishing permit, or other harvesting privilege of
any kind shall never again be available to anyone for any fisheries purpose; and implement any other
restrictions the applicable law or regulations impose.
35. Material Disputes to be Identified. Members of the public shall, up until NMFS receives the Offeror's written
payment instructions, be able to advise NMFS in writing of any material dispute with regard to any aspect of
any accepted Reduction Contract. Such a material dispute shall neither relieve the Offeror of any Reduction
Contract duties or obligations nor affect NMFS' right to enforce performance of the Reduction Contract terms
and conditions.
36. Reduction Payment Disbursement. Once NMFS receives the Offeror's written payment instructions and
certification of compliance with the Reduction Contract, NMFS shall as soon as practicable disburse the
reduction payment to the Offeror. Reduction payment disbursement shall be in strict accordance with the
Offeror's written payment instructions. Unless the Offeror's written payment instructions direct NMFS to the
contrary, NMFS shall disburse the whole of the reduction payment to the Offeror. If the qualifying Offeror offers
with a co-Offeror, both the qualifying Offeror and the co-Offeror must approve and sign the written payment
instructions.
37. Reduction Payment Withheld for Scrapping or for Other Reasons. In the event that a Reduction Privilege
Vessel which is not under Federal documentation must be scrapped, NMFS shall withhold from reduction
payment disbursement an amount sufficient to scrap such vessel. NMFS shall withhold such sum until the
vessel is completely scrapped before disbursing any amount withheld. NMFS may confirm, if NMFS so
chooses, that the vessel has been scrapped before disbursing any amount withheld. If NMFS has reason to
believe the Offeror has failed to comply with any of the Reduction Contract terms and conditions, NMFS shall
also withhold reduction payment disbursement until such time as the Offeror performs in accordance with the
Reduction Contract terms and conditions.

50 CFR 600.1105(l) (enhanced display)

page 45 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

38. Offeror Assistance with Restriction. The Offeror shall, upon NMFS' request, furnish such additional
documents, undertakings, assurances, or take such other actions as may be reasonably required to enable
NMFS' revocation, restriction, invalidation, withdrawal, or extinguishment by other means (as NMFS deems
appropriate) of all components of the Reduction Contract's Reduction Fishing Interest in accordance with the
requirements of the Reduction Contract terms and conditions, applicable regulations and the applicable law.
39. Recordation of Restrictions. Upon the Reduction Fishing Privilege's revocation, the Offeror shall do
everything reasonably necessary to ensure that such revocation is recorded on the Reduction Privilege Vessel's
Federal documentation (which the National Vessel Documentation Center maintains in accordance with
Federal maritime law and regulations) in such manner as is acceptable to NMFS and as shall prevent the
Reduction Privilege Vessel, regardless of its subsequent ownership, from ever again being eligible for a fishery
trade endorsement or ever again fishing. The term “fishing” includes the full range of activities defined in the
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1802).
40. Reduction Element Omission. In the event NMFS accepts the offer and the Offeror has failed, for any reason,
to specify in the Reduction Contract any Groundfish Reduction Permit, non-Groundfish Reduction Permit(s),
Reduction Privilege Vessel, Reduction Fishing Vessel, Reduction Fishing History, or any other element of the
Reduction Fishing Interest which the Offeror should under Reduction Contract, applicable regulations and the
applicable law have specified in Reduction Contract, such omitted element shall nevertheless be deemed to be
included in the Reduction Contract and to be subject to the Reduction Contract's terms and conditions; and all
Reduction Contract terms and conditions which should have applied to such omitted element had it not be
omitted shall apply as if such element had not been omitted. Upon the Offeror discovering any such omission,
the Offeror shall immediately and fully advise NMFS of such omission. Upon either NMFS or the Offeror
discovering any such omission, the Offeror shall act in accordance with the Reduction Contract, applicable
regulations and the applicable law.
41. Remedy for Breach. Because money damages are not a sufficient remedy for the Offeror breaching any one
or more of the Reduction Contract terms and conditions, the Offeror explicitly agrees to and hereby authorizes
specific performance of the Reduction Contract, in addition to any money damages, as a remedy for such
breach. In the event of such breach, NMFS shall take any reasonable action, including requiring and enforcing
specific performance of the Reduction Contract, NMFS deems necessary to carry out the Reduction Contract,
applicable regulations and the applicable law.
42. Waiver of Data Confidentiality. The Offeror consents to the public release of any information provided in
connection with the Reduction Contract or pursuant to Reduction Plan requirements, including any information
provided in the Reduction Contract or by any other means associated with, or necessary for evaluation of, the
Offeror's Reduction Contract if NMFS finds that the release of such information is necessary to achieve the
Reduction Plan's authorized purpose. The Offeror hereby explicitly waives any claim of confidentiality otherwise
afforded to catch, or harvest data and fishing histories otherwise protected from release under the MagnusonStevens Fishery Conservation and Management Act (16 U.S.C. 1881 a(b)) or any other law. In the event of such
information release, the Offeror hereby forever fully and unconditionally releases and holds harmless the United
States and its officers, agents, employees, representatives, of and from any and all claims, demands, debts,
damages, duties, causes of action, actions and suits whatsoever, in law or equity, on account of any act, failure
to act or event arising from, out of, or in any way related to, the release of any information associated with the
Reduction Program.

50 CFR 600.1105(l) (enhanced display)

page 46 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

43. Oral Agreement Invalid. The Reduction Contract, any addendums to section 46 of this contract, and
enclosures of photocopies of licenses and permits required under section 46 of this contract, contain the final
terms and conditions of the agreement between the Offeror and NMFS and represent the entire and exclusive
agreement between them. NMFS and the Offeror forever waive all right to sue, or otherwise counterclaim
against each other, based on any claim of past, present, or future oral agreement between them.
44. Severable Provisions. The Reduction Contract provisions are severable; and, in the event that any portion of
the Reduction Contract is held to be void, invalid, non-binding, or otherwise unenforceable, the remaining
portion thereof shall remain fully valid, binding, and enforceable against the Offeror and NMFS.
45. Disputes. Any and all disputes involving the Reduction Contract, and any other Reduction Plan aspect
affecting them shall in all respects be governed by the Federal laws of the United States; and the Offeror and all
other parties claiming under the Offeror irrevocably submit themselves to the jurisdiction of the Federal courts
of the United States and/or to any other Federal administrative body which the applicable law authorizes to
adjudicate such disputes.
46. Fishing Capacity Reduction Offer Submission Form and Reduction Fishing Interests Identification.
a. Completion and Submission. The Offeror must fully, faithfully, and accurately complete this section 46 of this
contract and thereafter submit the full and complete Reduction Contract to NMFS in accordance with the
Reduction Contract. If completing this section requires inserting more information than the places provided for
the insertion of such information allows, the Offeror should attach an addendum to the Reduction Contract
that: Includes and identifies the additional information, states that the addendum is a part of the Reduction
Fishing Interests Identification portion of the Reduction Contract, states (as a means of identifying the
Reduction Contract to which the addendum relates) the NMFS license number designated on the Reduction
Contract's Groundfish Reduction Permit, and is signed by all persons who signed the Reduction Contract as the
Offeror.
b. Offeror Information.
(1) Offeror name(s). Insert in the table provided under this section 46.b(1) of this contract the name(s) of the
qualifying Offeror and of the co-Offeror (if there is a co-Offeror), and check the appropriate box for each name
listed.
Each name the Offeror inserts must be the full and exact legal name of record of each person, partnership,
corporation or other business entity identified on the offer. If any Reduction Fishing Interest element is coowned by more than one person, partnership, corporation or other business entity, the Offeror must insert each
co-owner's name.
In each case, the Offeror is the holder of record, at the time of Offeror's execution of this Reduction Contract, of
the Groundfish Reduction Permit and the Reduction Permit(s). A co-Offeror is not allowed for either the
Groundfish Reduction Permit or the Reduction Permit(s). If the Offeror is also the owner of record, at the time
of offering, of the Reduction Privilege Vessel, the qualifying Offeror is the sole Offeror. If, however, the owner of

50 CFR 600.1105(l) (enhanced display)

page 47 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

record, at the time of execution of this Reduction Contract, of the Reduction Privilege Vessel is not exactly the
same as the Offeror, then the owner of record is the co-Offeror; and the Offeror and the co-Offeror jointly offer
together as the Offeror.

OFFEROR NAME(S)
If Offeror or co-Offeror consists of more than one owner, use one row
of this column to name each co-Offeror. If not, use only one row for
Offeror and one row for any co-Offeror

Check appropriate box for
each name listed in the
adjacent column
Offeror

Co-Offeror
(if any)

(1)
(2)
(3)
(4)
(5)

(2) Offeror address(s) of record. Insert in the table provided under this section 46.b(2) of this contract the
Offeror's and the co-Offeror's (if there is a co-Offeror) full and exact address(s) of record, and check the
appropriate box for each address listed.

OFFEROR ADDRESS(S)
If Offeror or co-Offeror consists of more than one owner, use one row
of this column for address of each co-owner. If not, use only one row
for Offeror and one row for any co-Offeror.
Always use the same row order as is Offeror Name(s) table in section
46.b(1), i.e., address (1) is for name (1), address (2) is for name (2),
address (3) is for name (3), etc.

Check appropriate box for
each address listed in the
adjacent column

Offeror

Co-Offeror
(if any)

(1)
(2)
(3)
(4)

50 CFR 600.1105(l) (enhanced display)

page 48 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

OFFEROR ADDRESS(S)
If Offeror or co-Offeror consists of more than one owner, use one row
of this column for address of each co-owner. If not, use only one row
for Offeror and one row for any co-Offeror.
Always use the same row order as is Offeror Name(s) table in section
46.b(1), i.e., address (1) is for name (1), address (2) is for name (2),
address (3) is for name (3), etc.

50 CFR 600.1105(l)

Check appropriate box for
each address listed in the
adjacent column

Offeror

Co-Offeror
(if any)

(5)

(3) Offeror business telephone number(s). Insert in the table provided under this section 46.b(3) the Offeror's
and the co-Offeror's (if there is a co-Offeror) full and exact business telephone number(s), and check the
appropriate box for each number listed.

OFFEROR BUSINESS TELEPHONE NUMBER(S)
If Offeror or co-Offeror consists of more than one owner, use one row
of this column for the telephone number of each co-owner. If not, use
only one row for Offeror and one row for any co-Offeror.
Always use the same row order as is Offeror Name(s) table in section
46.b(1), i.e., telephone number (1) is for name (1), telephone number
(2) is for name (2), telephone number (3) is for name (3), etc.

Check appropriate box for
each telephone number
listed in the adjacent
column
Offeror

Co-Offeror
(if any)

(1)
(2)
(3)
(4)

50 CFR 600.1105(l) (enhanced display)

page 49 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

OFFEROR BUSINESS TELEPHONE NUMBER(S)
If Offeror or co-Offeror consists of more than one owner, use one row
of this column for the telephone number of each co-owner. If not, use
only one row for Offeror and one row for any co-Offeror.
Always use the same row order as is Offeror Name(s) table in section
46.b(1), i.e., telephone number (1) is for name (1), telephone number
(2) is for name (2), telephone number (3) is for name (3), etc.

50 CFR 600.1105(l)

Check appropriate box for
each telephone number
listed in the adjacent
column
Offeror

Co-Offeror
(if any)

(5)

(4) Offeror electronic mail address(s) (if available). Insert in the table printed under this section 46.b(4) the
Offeror's and the co-Offeror's (if there is a co-Offeror) full and exact electronic mail (e-mail) address(s), and
check the appropriate box for each address.

OFFEROR E-MAIL ADDRESS(S)
If Offeror or co-Offeror consists of more than one owner, use one row of this
column for the e-mail address of each co-owner. If not, use only one row for
Offeror and one row for any co-Offeror. Always use the same row order as is
Offeror Name in section 46.b(1) of this contract, i.e., e-mail (1) is for name (1),
e-mail (2) is for name (2), e-mail (3) is for name (3), etc

Check
appropriate box
for each e-mail
address listed in
the adjacent
column
Offeror

CoOfferor
(if any)

(1)
(2)
(3)
(4)

50 CFR 600.1105(l) (enhanced display)

page 50 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

OFFEROR E-MAIL ADDRESS(S)
If Offeror or co-Offeror consists of more than one owner, use one row of this
column for the e-mail address of each co-owner. If not, use only one row for
Offeror and one row for any co-Offeror. Always use the same row order as is
Offeror Name in section 46.b(1) of this contract, i.e., e-mail (1) is for name (1),
e-mail (2) is for name (2), e-mail (3) is for name (3), etc

Check
appropriate box
for each e-mail
address listed in
the adjacent
column
Offeror

CoOfferor
(if any)

(5)

c. LLP license number for Groundfish Reduction Permit. Insert in the place this section 46.c provides the full and
exact license number which NMFS designated on the LLP license which the Offeror specifies as the Groundfish
Reduction Permit. Attach with the Reduction Contract an exact photocopy of such license.

LLP LICENSE NUMBER(S) AND FISHERY(S) OF Of LLP LICENSE(S) SPECIFIED AS GROUNDFISH
REDUCTION PERMIT(S)
License
number(s)

Fishery(s)

(1)
(2)
(3)
(4)
(5)

d. License number(s) for Reduction Permit(s). Insert in the place this section 46.d provides the fishery(s)
involved in, and the full and exact license number(s) with NMFS designated on the license(s) which the Offeror
specifies in the Reduction Contract as the Reduction Permit(s). Enclose with the Reduction Contract an exact
photocopy of each such license.

LLP LICENSE NUMBER(S) AND FISHERY OF LICENSE(S) SPECIFIED AS REDUCTION PERMITS
License
number(s)

Fishery(s)

(1)
(2)

50 CFR 600.1105(l) (enhanced display)

page 51 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

LLP LICENSE NUMBER(S) AND FISHERY OF LICENSE(S) SPECIFIED AS REDUCTION PERMITS
License
number(s)

Fishery(s)

(3)
(4)
(5)

e. Reduction Fishing History. For all Reduction Fishing History insert in the place provided in the table under this
section 46.e the chronological and other information with each column heading therein requires. The
information required does not include any actual landing data. Any Offeror whose Groundfish Reduction Permit
whose issuance NMFS based on the fishing history of a lost or destroyed vessel plus a replacement vessel
must insert information for both vessels and meet the requirements of the framework regulations, final rule and
any other regulations promulgated pursuant to the Act. Any Offeror whose Groundfish Reduction Permit whose
issuance NMFS in any part based on acquisition of fishing history from another party must insert information
regarding such catch history.

NAMES(S) AND OFFICIAL
NUMBER OF REDUCTION
PRIVILEGE VESSEL AND
NAME(S) AND OFFICIAL
NUMBER(S) OF ANY VESSEL
FROM WHICH FISHING
HISTORY WAS ACQUIRED

FOR EACH FISHING HISTORY IN 2ND
FOR EACH
COLUMN
REDUCTION
License No. of
PRIVILEGE VESSEL IN
If Reduction Privilege
each Groundfish
1ST COLUMN
Vessel acquired
Reduction Permit
PROVIDE FROM TO
fishing history from
and Reduction
DATE OF EACH
another party, provide
Permit(s)
FISHING HISTORY
name of party, manner
associated with
OFFEROR
in which acquired, and
each vessel
POSSESSES
date acquired
involved

(1)
(2)
(3)
(4)
(5)

f. Reduction Privilege Vessel. Insert the full and exact name and official number which the National Vessel
Documentation Center designated for the Reduction Privilege Vessel which the Offeror or the co-Offeror (if
there is a co-Offeror) specifies in the Reduction Contract, and check the box appropriate for the vessel's
ownership of record.

50 CFR 600.1105(l) (enhanced display)

page 52 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

Enclose with the Reduction Contract an exact photocopy of such vessel's official certificate of documentation.

REDUCTION PRIVILEGE VESSEL
Official name

Official No.

Check appropriate ownership box below
Offeror

Co-Offeror (if any)

g. Offer Amount. Insert in the place this section 46.g provides the Offeror's full and exact offer amount, both in
words and in numbers.

OFFER AMOUNT [U.S. DOLLARS]
In words

In numbers

h. Reduction Contract Signature. In compliance with the Reduction Contract, applicable regulations and the
applicable law, the Offeror submits the Reduction Contract as the Offeror's irrevocable offer to NMFS for the
permanent surrender and relinquishment and revocation, restriction, withdrawal, invalidation, or extinguishment
by other means (as NMFS deems appropriate) of the Groundfish Reduction Permit, any Reduction Permit(s),
the Reduction Fishing Privilege, and the Reduction Fishing History—all as identified in the Reduction Contract or
as required under applicable regulations, or the applicable law.
The Offeror expressly acknowledges that NMFS' acceptance of the Offeror's offer hereunder and NMFS' tender,
following a successful referendum, of a reduction payment in the same amount specified in section 46.g of this
contract (less any sum withheld for scrapping any Reduction Privilege Vessel lacking Federal documentation or
for any other purpose) to the Offeror shall, among other things, render the Reduction Privilege Vessel
permanently ineligible or any fishing worldwide, including, but not limited to, fishing on the high seas or in the
jurisdiction of any foreign country while operating under United States flag, and shall impose or create other
legal and contractual restrictions, impediments, limitations, obligations, or other provisions which restrict,
revoke, withdraw, invalidate, or extinguish by other means (as NMFS deems appropriate) the complete
Reduction Fishing Interest and any other fishery privileges or claims associated with the Groundfish Reduction
Permit, any Reduction Permit(s), the Reduction Privilege Vessel, and the Reduction Fishing History—all as more
fully set forth in the Reduction Contract, applicable regulations, and the applicable law.
By completing and signing the Reduction Contract, the Offeror expressly acknowledges that the Offeror has
fully and completely read the entire Reduction Contract. The Offeror expressly states, declares, affirms, attests,
warrants, and represents to NMFS that the Offeror is fully able to enter into the Reduction Contract and that the
Offeror legally holds, owns, or retains, and is fully able under the Reduction Contract provisions to offer and
dispose of, the full Reduction Fishing Interest which the Reduction Contract specifies and the applicable
regulations, and the applicable law requires that any person or entity completing the Reduction Contract and/or
signing the Reduction Contract on behalf of another person or entity, expressly attests, warrants, and
represents to NMFS that such completing and/or signing person or entity has the express and written
permission or other grant of authority to bind such other person or entity to the Reduction Contract's terms and
50 CFR 600.1105(l) (enhanced display)

page 53 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

conditions. The Offeror expressly attests, warrants, and represents to NMFS that every co-owner of the Offeror
necessary to constitute the Offeror's full and complete execution of the Reduction Contract has signed the
Reduction Contract. The Offeror expressly attests, warrants, and represents to NMFS that the Offeror: Fully
understands the consequences of submitting the completed Reduction Contract of which it is a party to NMFS;
pledges to abide by the terms and conditions of the Reduction Contract; and is aware of, understands, and
consents to, any and all remedies available to NMFS for the Offeror's breach of the Reduction Contract or
submission of an offer which fails to conform with the Reduction Contract, final rule, applicable regulations and
the applicable law. The Offeror expressly attests, warrants, and represents to NMFS that all information which
the Offeror inserted in the Reduction Contract is true, accurate, complete, and fully in accordance with the
Reduction Contract, final rule, other applicable regulations and the applicable law.
In witness whereof, the Offeror has, in the place provided below, executed the Reduction Contract either as an
Offeror offering alone or as an Offeror and co-Offeror (if there is a co-Offeror) jointly offering together, in
accordance with the requirements specified above, and on the date written below. The Reduction Contract is
effective as of the date NMFS accepts the Offeror's offer by signing the Reduction Contract.
The Offeror and co-Offeror (if there is a co-Offeror) must each sign the Reduction Contract exactly as instructed
herein. Each co-owner (if there is a co-owner) of each Offeror and co-Offeror (if there is a co-Offeror) must also
sign the Reduction Contract exactly as instructed herein. A notary public must, for each person or entity signing
on behalf of the Offeror, complete and sign the acknowledgment and certification provision associated with
each such person or entity's signature.

50 CFR 600.1105(l) (enhanced display)

page 54 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1105(l)

I. Offeror and co-Offeror's (if there is a co-Offeror) signature(s) and notary's acknowledgment(s) and
certification(s).

OFFEROR'S SIGNATURE AND NOTARY'S ACKNOWLEDGMENT AND CERTIFICATION
If Offeror or co-Offeror consists of more than one owner, use one row of column 1 for each coowner's signature. If not, use only one row for Offeror and one row for co-Offeror (if any).
Always use same Offeror row order as in Offeror Name in the table under section 46.b(1) of this
contract (i.e., signature (1) is for name (1), signature (2) is for name (2) signature (3) is for name
(3), etc.)

OFFEROR SIGNATURE
(1) Sign. (2) Print: the
following: (a) signer's
name, (b) signer's title
(if signing for
corporation or other
business entity), and
(c) signing date

Check appropriate
column for each
signature in 1st
column

NOTARY SIGNATURE
(1) Sign. (2) Print: the following: (a) name, (b)
signing date, (3) date commission expires, and (4)
State and county. Each notary signature attests to
the following:
“I certify that I know or have satisfactory evidence
that the person who signed in the 1st column of this
same row is the person who appeared before me
and: (1) acknowledged his/her signature; (2) on
oath, stated that he/she was authorized to sign; and
(3) acknowledged that he/she did so freely and
voluntarily.”

CoQualifying
Offeror
Offeror
(if any)
(1)
(2)
(3)

II. United States of America's signature. United States of America, Acting by and through the Secretary of
Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Financial
Services Division.
Dated:
By:
Leo C. Erwin, Chief,
Financial Services Division, National Marine Fisheries Service.
[71 FR 57701, Sept. 29, 2006]

50 CFR 600.1105(l) (enhanced display)

page 55 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1106

§ 600.1106 Longline catcher processor subsector Bering Sea and Aleutian Islands (BSAI) nonpollock groundfish species fee payment and collection system.
(a) Purpose. As authorized by Public Law 108 447, this section's purpose is to:
(1) In accordance with § 600.1012, establish:
(i)

The borrower's obligation to repay a reduction loan, and

(ii) The loan's principal amount, interest rate, and repayment term; and
(2) In accordance with §§ 600.1013 through 600.1016, implement an industry fee system for the
reduction fishery.
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 and § 600.1105
expressly apply to this section. In addition, the following definition applies to this section:
Reduction fishery means the longline catcher processor subsector of the BSAI non-pollock groundfish
fishery that § 679.2 of this chapter defined as groundfish area/species endorsements.
(c) Reduction loan amount. The reduction loan's original principal amount is $35,000,000.
(d) Interest accrual from inception. Interest began accruing on the reduction loan from May 29, 2007, the date
on which NMFS disbursed such loan.
(e) Interest rate. The reduction loan's interest rate shall be the applicable rate which the U.S. Treasury
determines at the end of fiscal year 2007 plus 2 percent.
(f) Repayment term. For the purpose of determining fee rates, the reduction loan's repayment term is 30 years
from May 29, 2007, but fees shall continue indefinitely for as long as necessary to fully repay the loan.
(g) Reduction loan repayment.
(1) The borrower shall, in accordance with § 600.1012, repay the reduction loan;
(2) For the purpose of the fee collection, deposit, disbursement, and accounting requirements of this
subpart, subsector members are deemed to be both the fish buyer and fish seller. In this case, all
requirements and penalties of § 600.1013 that are applicable to both a fish seller and a fish buyer
shall equally apply to parties performing both functions;
(3) Subsector members in the reduction fishery shall pay and collect the fee amount in accordance with
§ 600.1105;
(4) Subsector members in the reduction fishery shall, in accordance with § 600.1014, deposit and
disburse, as well as keep records for and submit reports about, the fees applicable to such fishery;
except the requirements specified under paragraph (c) of this section concerning the deposit
principal disbursement shall be made to NMFS no later than fifteen (15) calendar days following the
end of each calendar month; and the requirements specified under paragraph (e) of this section
concerning annual reports which shall be submitted to NMFS by February 1 of each calendar year;
and
(5) The reduction loan is, in all other respects, subject to the provisions of §§ 600.1012 through
600.1017.
[72 FR 54222, Sept. 24, 2007]
50 CFR 600.1106(g)(5) (enhanced display)

page 56 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107

§ 600.1107 Southeast Alaska Purse Seine Salmon Fishery capacity reduction program, including
fee payment and collection system.
(a) Purpose. This section implements the fishing capacity reduction program for the Southeast Alaska purse
seine salmon fishery enacted by Section 209 of Public Law 108-447 and amended by Section 121 of
Public Law 109-479, with appropriations authorized by Section 121 of Public Law 109-479 and Public Law
110-161. The intent of the program is to permanently reduce, through an industry-financed permit
buyback, the most harvesting capacity in the Reduction Fishery at the least cost, increase harvesting
productivity for post-reduction Permit Holders and improve flexibility in the conservation and
management of the fishery. Fishery participants will finance this program through a federal loan that will
be repaid over 40 years through a fee collection system. The intent of the fee collection system is to
establish the post-reduction Permit Holders' obligation to repay the Reduction Loan's principal and
accrued interest over the repayment term, and to ensure repayment of the loan.
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 of subpart L of this
part expressly apply to this section. The following terms have the following meanings for the purpose of
this section:
Acceptance means SRA acceptance of a bid.
Act

means Section 209 of Title II of Division B of Public Law 108-447, Consolidated Appropriations Act of
2005, as amended by Section 121 of Public Law 109-447, Magnuson-Stevens Reauthorization Act of
2006.

Authorized party means the individuals authorized by the Permit Holder on the application form to execute
and submit Bids, protests and other documents and/or notices on behalf of the Permit Holder.
Bid

means a bidder's irrevocable offer to relinquish a permit.

Bid amount means the dollar amount submitted by a bidder.
Bidder means a permit holder who submits a bid.
Commercial Fisheries Entry Commission (CFEC) means the Alaska state commission mandated to
conserve and maintain the economic health of Alaska's commercial fisheries by limiting the number
of participating fishers, by issuing permits and vessel licenses to qualified individuals in both limited
and unlimited fisheries, and by providing due process hearings and appeals.
CFEC documents means any documents issued by the CFEC in connection with the Southeast Alaska
purse seine salmon fishery.
Conditional notice means the CFEC form that any Bidder must sign and agree to abide by upon submission
of a Bid Agreement (Appendix B to § 600.1107).
Conditional relinquishment means the CFEC form that any Permit Holder, agreeing to relinquish a permit,
must sign and agree to abide by upon SRA acceptance of the bid (Appendix C to § 600.1107).
Fishery means the Southeast Alaska administrative area as defined under Title 5 Alaska Administrative
Code Section 33.100 for salmon with purse seine gear.
Magnuson-Stevens Act means the Magnuson-Stevens Fishery Conservation and Management Act codified
at 16 U.S.C. 1801 et seq.
Permit (Southeast Salmon Purse Seine Entry Permit) means a valid entry permit issued by CFEC to operate
in the Southeast Alaska purse seine salmon fishery.
50 CFR 600.1107(b) “Permit (Southeast Salmon Purse Seine Entry Permit)” (enhanced display)

page 57 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(b) “Permit holder”

Permit holder means an individual who at the time of bidding is the holder of record of a permit.
Reduction fishery means the Southeast Alaska Purse Seine Salmon Fishery.
Reduction loan means the loan used to purchase the relinquished permits pursuant to the approved
Reduction Plan.
Reduction loan amount means the Reduction Loan's original principal amount up to $23,476,500.
Reduction plan means the aggregate of all Bids, Relinquishment Contracts, Conditional Notices,
Conditional Relinquishments, and supporting documents and rationale, submitted to the Secretary
for approval.
Relinquishment contract means the contract that any Permit Holder agreeing to relinquish a permit
pursuant to Alaska Statute (A.S. 16.43.150(i)) must sign and agree to abide by upon acceptance of
the Bid, and before payment of the bid amount (Appendix A to § 600.1107).
Secretary means the Secretary of Commerce or his/her designee.
Southeast Revitalization Association (SRA) means the qualified fishery association authorized to develop
and implement this capacity reduction program under Alaska Statute 16.40.250 and Federal law.
(c) Enrollment in the capacity reduction program —
(1) Distribution. The SRA shall mail a copy of the following four documents via certified mail to each
Permit Holder: Bid; Fleet Consolidation Relinquishment Contract (Relinquishment Contract);
Conditional Notice to CFEC and Request by Permit Holder; and (Conditional Relinquishment of
Southeast Salmon Purse Seine Entry Permit. Such mailing shall include a closing date after which
the SRA will not accept new bids.
(2) Application. Any Permit Holder, regardless of whether having received the mailing described in
paragraph (c)(1) of this section, may participate in the Capacity Reduction Program by submitting all
of the following documents to the SRA no later than the bid closing date:
(i)

A fully executed Bid consistent with Appendix A to this section;

(ii) A photocopy of the permit evidencing the applicant's qualification as a participant in the fishery;
(iii) A fully executed Relinquishment Contract: Southeast Alaska Salmon Purse Seine Permit
Holders consistent with the appendix B to this section;
(iv) A fully executed Conditional Notice to CFEC and Request by Permit Holder consistent with the
appendix C to this section; and
(v) A fully executed Conditional Relinquishment of Southeast Salmon Purse Seine Entry Permit
consistent with the appendix D to this section.
(A) The submitted Bid shall include the following information: Name, address, telephone
number, social security number, and (if available) electronic mail address of the submitting
Permit Holder, permit number, and whether any authorized party holds a security interest
in the permit. Each application must be submitted to the SRA, c/o Elgee, Rehfeld, Mertz,
LLC, Professional Plaza Building B, 9309 Glacier Highway, Suite B-200, Juneau, Alaska
99801. The initial determination that an application conforms to the prescribed
requirements is made by this independent accounting firm and not the SRA.

50 CFR 600.1107(c)(2)(v)(A) (enhanced display)

page 58 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(c)(2)(v)(B)

(B) The SRA or the independent accounting firm will notify the Permit Holder if the Bid is nonconforming and, in such cases, the Permit Holder may submit a revised, conforming Bid
within the prescribed period (i.e., until the bid closing date).
(3) Enrollment period. Applications that meet all requirements will be accepted until the bid selection
process is completed but no later than the bid closing date specified by the SRA. The SRA will have a
period of 21 days after the bid closing date to consult with CFEC and examine bid results to
complete the selection process.
(4) Effective date. The effective date of any Bid shall be when the SRA has completed the selection
process and signed the Bid.
(5) Notice. The SRA will notify each Accepted Bidder, via certified mail, of the effective date of the Bid
Agreement.
(6) Conflicts. Where terms and conditions in the Bid, Relinquishment Contract, Conditional Notice, and
Conditional Relinquishment conflict with this regulation, the terms and conditions in the regulation
are controlling.
(d) Bid selection process. The fishing capacity removed by the Reduction Plan shall be represented by the
total number of valid CFEC permits, whether active or latent, that are voluntarily offered by Permit Holders
and selected by the SRA up to an aggregate amount of $23,476,500. Due to a rescission of funds, the
underlying appropriations for this Reduction Program were reduced from $250,000 to $234,765, resulting
in a loan ceiling of $23,476,500.
(1) Overview. The Selection Process shall begin upon the receipt by the SRA of the first application and
shall continue until: The bid closing date specified by the SRA (paragraph (c)(1) of this section); or
the ranking of the next lowest bid would cause the total program costs to exceed $23,476,500. The
SRA will have a period of 21 days after the bid closing date to consult with CFEC and examine bid
results to complete the selection process. When either one of these events is reached, the Selection
Process shall be completed.
(i)

During the selection process, the SRA in consultation with the CFEC shall examine each
submitted Bid for consistency and the necessary elements, including the validity of the permit
and whether any authorized party holds a security interest in the permit.

(ii) [Reserved]
(2) Bids. By submitting the Bid, the bidder expressly acknowledges that he makes an irrevocable offer to
relinquish to CFEC a permit for a specific price, and once having submitted the Bid, the bidder is not
entitled to withdraw or in any way amend the Bid. The permit will be relinquished for the price set
forth in the Bid contingent on such Bid being accepted by the SRA at the closing of the Selection
Process. Any attempted withdrawal by a bidder shall be invalid, and the Bid shall remain a binding,
irrevocable offer, unaffected by the attempted withdrawal. Any bid that is submitted by a Permit
Holder but is not accepted by the SRA shall be deemed terminated and both the Permit Holder and
the SRA will have no further obligation with respect to the Bid.
(i)

If a Permit Holder holds more than one permit, the Permit Holder must submit a separate Bid
for each permit that he/she offers to relinquish.

50 CFR 600.1107(d)(2)(i) (enhanced display)

page 59 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(d)(2)(ii)

(ii) By submitting a Bid, the Permit Holder warrants and represents that he/she has read and
understands the terms of the Program Regulations, Bid, Relinquishment Contract, Conditional
Notice and Conditional Relinquishment, and has had the opportunity to seek independent legal
counsel regarding such documents and the consequences of submitting the Bid Agreement.
(3) Ranking. The SRA shall rank all conforming bids by using a reverse auction in which the SRA ranks
the Bid with the lowest dollar amount and successively ranks each additional Bid with the next
lowest dollar amount until there are no more Bids or the ranking of the next lowest bid would cause
the total program cost to exceed $23,476,500. In the event of a tie with bids which results in the tied
bids exceeding $23,476,500, the SRA will select the tied bid first received, if known. If the receipt
time cannot be determined, neither bid will be accepted.
(4) Acceptance and post-acceptance restriction of renewals and transfers. Upon expiration of the bid
closing date, the SRA shall determine whether the number of ranked bids it is willing to accept is
sufficient to achieve a substantial reduction in harvest capacity and increased economic efficiencies
for those Permit Holders remaining in the fishery. If the SRA makes such a determination and
thereafter accepts bids, the SRA shall send CFEC the Conditional Notice form restricting renewal and
transfer of each permit for which a bid was accepted. The Bid, Relinquishment Contract, Conditional
Notice and Conditional Relinquishment are terminated for any rejected bid and the applicant is no
longer bound by the terms of these documents.
(e) Plan submission and approval —
(1) Submitting the reduction plan. Within 30 days of concluding the selection process, the SRA shall
submit the Reduction Plan, consisting of the aggregate of all Bid Agreements, Relinquishment
Contracts, Conditional Notices and Conditional Relinquishments, together with supporting
documents and rationale, to NMFS for final approval on behalf of the Secretary. The Reduction Plan
shall include a listing of accepted bids arranged by bid amount from lowest to highest bid, attended
by a statement from the SRA that all other bids received were higher than the largest dollar amount
of the last bid accepted.
(2) Required findings. In order to approve a Reduction Plan, the Assistant Administrator of NMFS, on
behalf of the Secretary, must find that: The Reduction Plan is consistent with the amended
Consolidated Appropriations Act of 2005 and applicable sections of the Magnuson-Stevens Act,
particularly that it is cost-effective; the Reduction Plan will result in the maximum sustained
reduction in fishing capacity at the least cost; and the Reduction Plan will increase harvesting
productivity for post-reduction Permit Holders participating in the fishery.
(3) The referendum. If NMFS approves the Reduction Plan and subsequent to the publication of a final
rule resulting from this rule, NMFS shall conduct a referendum to determine the industry's
willingness to repay a fishing capacity reduction loan to purchase the permits identified in the
Reduction Plan. NMFS shall publish a notice in the FEDERAL REGISTER requesting votes by Permit
Holders on whether to accept or reject the Reduction Plan for implementation. The notice shall state
the starting and ending dates and times of the voting period, which shall be not less than twenty one
(21) nor more than thirty (30) calendar days from the date of such notice.
(i)

Such notice shall state the name and address of record of each eligible voter, as well as the
basis for having determined the eligibility of those voters. This shall constitute notice and
opportunity to respond about adding eligible voters, deleting ineligible voters, and/or correcting
any voter's name and address of record, and will provide a 15 day period to make these
changes. If, in NMFS' discretion, the comments received in response to such notice warrants it,

50 CFR 600.1107(e)(3)(i) (enhanced display)

page 60 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(e)(3)(ii)

or for other good cause, NMFS may modify such list by publishing another notice in the FEDERAL
REGISTER. NMFS shall issue ballots to eligible voters, tally votes, and notify voters whether the
referendum was successful or unsuccessful in approving the Reduction Plan consistent with
the provisions of § 600.1010.
(ii) A successful referendum by a majority of the Permit Holders in the Reduction Fishery shall bind
all parties and complete the reduction process. NMFS shall publish a notice in the FEDERAL
REGISTER advising the public that the referendum was successful. Thereafter the Reduction
Program shall be implemented.
(iii) The provisions of § 600.1010 and § 600.1017(a)(1)-(4) shall apply to any referendum on the
Reduction Plan of this section to the extent that they do not conflict with this section or with
subpart M of this part.
(f) Implementation —
(1) Reduction payments. Within 60 days of a successful referendum, the CFEC will provide notice to
NMFS of the permits retired from the Reduction Fishery. Upon receiving such notification, NMFS will
then tender the accepted bid amounts to the Permit Holders. Reduction payments may not exceed
$23,476,500 and if the SRA accepts a total number of bids in an aggregate amount less than
$23,476,500, any remaining funds would be available for reduction payments as part of a later,
separate Reduction Plan conforming to these regulations. Upon NMFS tendering the reduction
program's payments to the selected Permit Holders, each such Permit Holder must permanently stop
all fishing with the relinquished permit(s).
(2) Repayment term. As authorized by the Act, the Reduction Loan shall be amortized over a forty (40)
year term. The Reduction Loan's original principal amount may not exceed $23,476,500, but may be
less if the ultimate reduction cost is less. The final Reduction Loan periodic payment amount will be
determined by NMFS' analysis of the ability of the post-reduction fishery to service debt. The
provisions of §§ 600.1012-600.1017 shall apply to any reduction loan, fee payment and collection
under this section to the extent they do not conflict with this section or with subpart M of this part.
(3) Loan repayment. Permit Holders operating in the fishery shall be obligated to pay the fee in
accordance with this section. In the event that payments made under the Reduction Plan are
insufficient to pay the Reduction Loan within the 40-year term, NMFS shall extend the term of the
repayment until the Reduction Loan is paid in full.
(i)

Interest. The Reduction Loan's interest rate will be the U.S. Treasury's cost of borrowing
equivalent maturity funds plus two percent. NMFS will determine the Reduction Loan's initial
interest rate when NMFS borrows from the U.S. Treasury the funds with which to disburse
reduction payments. Interest will begin accruing on the Reduction Loan from the date on which
NMFS disburses such loan. The initial interest rate will change to a final interest rate at the end
of the Federal fiscal year in which NMFS borrows the funds from the U.S. Treasury. The final
interest rate will be two percent plus a weighted average, throughout that fiscal year, of the U.S.
Treasury's cost of borrowing equivalent maturity funds. The final interest rate will be fixed and
will not vary over the remainder of the reduction loan's 40-year term. The Reduction Loan will be
subject to a level debt amortization. There is no prepayment penalty.

(ii) Fees. Post-reduction Permit Holders operating in the fishery shall be obligated to pay the fee in
accordance with paragraph (f) of this section. The amount of such fee will be calculated by
NMFS on an annual basis as the principal and interest payment amount necessary to amortize
the loan over a 40-year term. The fee shall be expressed as a percentage of the ex-vessel value
50 CFR 600.1107(f)(3)(ii) (enhanced display)

page 61 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(f)(3)(ii)(A)

of all salmon harvested and landed in the fishery. In the event that payments made under the
Reduction Plan are insufficient to repay the Reduction Loan within the 40-year term, NMFS shall
extend the term of the repayment until the Reduction Loan is paid in full.
(A) Fees must be assessed and collected on all salmon harvested in the fishery. Although the
fee could be up to three percent of the ex-vessel price of all post-reduction landings, the
fee will be less than three percent if NMFS projects that a lesser rate can amortize the
Reduction Loan over the 40-year term. To verify that the fees collected do not exceed three
percent of the fishery revenues, NMFS will compare the annual total of principal and
interest due with the latest available annual revenues in the fishery to ensure that it is
equal to or less than three percent of the total ex-vessel production revenues. In the event
that any of the components necessary to calculate the next year's fee are not available, or
postponed, the fee will remain at the previous year's amount until such time as new
calculations are made and communicated to the post-reduction fishery participants.
(B) If the fishery does not open during a year, interest will continue to accrue on the principal
balance even though no fee revenue will be generated. When this happens, if the fee is not
already at the maximum three percent, NMFS shall increase the fee to the maximum three
percent, apply all subsequent fee revenue first to the payment of accrued interest, and
continue the maximum fee rates until the principal and interest payments become current.
Once all principal and interest payments are current, NMFS will make a determination
about adjusting the fee rate.
(iii) Collection. The buyer who first purchases the salmon landed in the fishery shall be responsible
for collecting and submitting the repayment fees to NMFS monthly. The fees shall be submitted
to NMFS no later than fifteen (15) calendar days following the end of each calendar month.
(iv) Recordkeeping and reporting. The dealer who first purchases the salmon landed in the fishery
shall be responsible for compliance with the applicable recordkeeping and reporting
requirements.
(A) All requirements and penalties set forth in the provisions of §§ 600.1013 (Fee payment
and collection), 600.1014 (Fee collection deposits, disbursements, records, and reports),
600.1015 (Late charges), and 600.1017 (Prohibitions and penalties) shall apply to any
dealer who purchases salmon in the fishery, and to any fee collection under this section, to
the extent they do not conflict with this section or with subpart M of this part.
(B) [Reserved]
(g) Specific performance under the relinquishment contract. The parties to the Relinquishment Contract have
agreed that the opportunity to develop and submit a capacity reduction program for the fishery under the
terms of the Act is both unique and finite. The failure of a Permit Holder, whose bid was accepted, to
perform the obligations under the Relinquishment Contract will result in irreparable damage to the SRA
and all the other Permit Holders. Accordingly, the parties to the Relinquishment Contract expressly
acknowledge that money damages are an inadequate means of redress and agree, that upon failure of the
Permit Holder to fulfill his/her obligations under the Relinquishment Contract, that specific performance
of those obligations may be obtained by suit in equity brought by the SRA in any court of competent
jurisdiction without obligation to arbitrate such action.
(h) Enforcement for failure to pay fees. The provisions and requirements of § 600.1016 (Enforcement) shall
also apply to fish sellers and fish buyers subject to this fishery.
50 CFR 600.1107(h) (enhanced display)

page 62 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(i)

50 CFR 600.1107(i)

Prohibitions and penalties. Fish buyers are prohibited from purchasing fish from fish sellers who do not
pay the required landing fees. Fish sellers are prohibited from selling to fish buyers who do not pay the
required landing fees.

Appendix A to § 600.1107—Bid
This Bid (Bid) is entered between the individual named in section III, 11(a) of the Agreement and the Southeast
Revitalization Association (SRA).

I. Definitions
Unless otherwise defined, the following terms have the following meanings for the purpose of this Agreement.
Acceptance means SRA acceptance of a Bid.
Act means Section 209 of Title II of Division B of Public Law 108-447, Consolidated Appropriations Act of 2005;
as amended by Section 121 of Public Law 109-447, Magnuson-Stevens (MSA) Reauthorization Act of 2006.
Bid means a bidder's irrevocable offer to relinquish a permit.
Bid amount means the dollar amount submitted by a bidder.
Bidder means a permit holder who submits a bid.
Conditional notice means the Commercial Fisheries Entry Commission (CFEC) form that any Bidder must sign
and agree to abide by upon submission of a Bid Agreement.
Conditional relinquishment means the CFEC form that any Permit Holder, agreeing to relinquish a permit, must
sign and agree to abide by upon SRA acceptance of the bid.
Fishery means the Southeast Alaska administrative area as defined under Title 5 Alaska Administrative Code
Section 33.100 for salmon with purse seine gear.
Permit means a valid entry permit issued by CFEC to operate in the Southeast Alaska purse seine salmon
fishery.
Permit holder means an individual who at the time of bidding is the holder of record of a permit.
Reduction plan means the aggregate of all Bids, Relinquishment Contracts (Appendix B), Commercial Fisheries
Entry Commission (“CFEC”) Conditional Notice and Conditional Relinquishment (Appendices C & D), and
supporting documents and rationale; submitted to the Secretary for approval.
Referendum means the voting procedure to determine the Permit Holder's willingness to repay a fishing
capacity reduction loan to purchase the permits identified in the Plan.

50 CFR 600.1107(i) (enhanced display)

page 63 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

Relinquishment contract means the contract that any bidder agreeing to relinquish a permit pursuant to Alaska
Statute (A.S. 16.43.150(i) must sign and agree to abide by upon acceptance of the Bid, and before payment of
the bid amount.
Secretary means the Secretary of Commerce or his/her designee.
Southeast Revitalization Association (SRA) means the qualified fishery association authorized to develop and
implement this capacity reduction program under Alaska Statute 16.40.250 and Federal law.

II. Recitals
Whereas Alaska Statute 16.40.250 and the Act authorize a fishing capacity reduction program for the fishery;
Whereas, within 30 days of concluding the selection process, the SRA shall submit the Reduction Plan, together
with supporting documents and rationale, to NMFS for final approval on behalf of the Secretary;
Whereas, the reduction Plan's express objective is to reduce fishing capacity by permanently revoking permits
thereby promoting economic efficiency, improving flexibility in the conservation and management of the fishery
and obtain the maximum reduction in permits at the least cost;
Whereas, the SRA can implement the Reduction Plan only after giving notice to all Permit Holders and
subsequent approval of the reduction Plan by referendum.
Whereas, the Agreement submitted by the bidder and the SRA is an integral element of the Reduction Plan.
Now, therefore, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the SRA
and bidder agree as follows:

III. Terms and Conditions
1. Form. By completing and submitting this Bid to the SRA the bidder hereby offers to permanently relinquish,
and have the CFEC revoke, the permit. The SRA signing the Bid and subsequent NMFS payment to bidder in the
exact bid amount set forth in section III, 11(f) of the Bid is full and complete consideration.
2. Irrevocable. The bidder expressly acknowledges that by submitting the Bid he/she makes an irrevocable offer
to relinquish the permit and once having submitted the Bid is not entitled to withdraw or in any manner amend
the Bid. The receipt date that the SRA marks on the Bid constitutes the date of the bidder's submittal.
3. Warranty. The bidder warrants and represents that he/she is the holder of record of the permit, according to
the CFEC records, and that he/she has read and understands the terms of the Program Regulations, Bid,
Relinquishment Contract, Conditional Notice and the Conditional Relinquishment and has had the opportunity
to seek independent legal counsel regarding such documents and the consequences of submitting the Bid.
4. Validity. The SRA, in consultation with the CFEC, shall examine each Bid for completeness and consistency.
The SRA shall notify the bidder if the Bid is non-conforming. In such cases, the bidder may submit a revised,
conforming Bid within the prescribed period (i.e., until the bid closing date).

50 CFR 600.1107(i) (enhanced display)

page 64 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

5. Ranking. The SRA shall rank the bid amount entered in section III, 11(f) of this Bid by using a reverse auction
in which the SRA ranks the Bid with the lowest dollar amount and successively ranks each additional Bid with
the next lowest dollar amount until there are no more Bids or the ranking of the next lowest Bid would exceed
the total program cost. In the event of a tie with bids which results in the tied bids exceeding $23,476,500, the
SRA will select the tied bid first received.
6. Acceptance and Rejection. If the Bid is accepted, the SRA shall formally notify the bidder in writing. If the SRA
rejects the Bid, the SRA will formally notify the bidder in writing and the Bid shall terminate without further
obligation.
7. Restriction of Transfer of permit: Upon acceptance, the SRA will send the CFEC the Conditional Notice,
restricting transfer of the permit until such time as: The SRA notifies the bidder that the Plan is not in
compliance with the Act and will not be approved; or NMFS notifies the bidder the referendum was
unsuccessful.
8. Payment. Within 60 days from the close of the voting period of a successful referendum, the CFEC will
provide notice to NMFS of the permits retired from the Reduction Fishery. Upon receiving such notice, NMFS
will then tender the accepted bid amounts to the Permit Holders.
9. Specific Performance. The failure of a bidder whose Bid was accepted to comply with the terms of this Bid
will result in irreparable damage to the SRA and its members because the Bid was part of the basis for the Plan
submitted to the Secretary for approval. Accordingly, the SRA and bidder expressly acknowledge that money
damages are an inadequate means of redress and agree that specific performance of those obligations may be
obtained by suit in equity brought by the SRA in any court of competent jurisdiction without obligation to
arbitrate such action.
10. Submission. This Bid must be submitted within the prescribed period to the SRA, c/o Elgee, Rehfeld, Mertz,
LLC, Professional Plaza Building B, 9309 Glacier Highway, Suite B-200, Juneau, AK 99801.
11. Complete Bid Information: To fully and accurately complete this Bid, the bidder must fully complete the
following questions and provide an exact photocopy of the permit. The Bidder must further sign this form,
Appendices B, C, and D to § 600.1107, and acknowledge the signature before a notary public.
(a) BIDDER'S NAME. This must be the full and exact legal name of record of the person bidding. Insert the
name of the bidder.

(b) BIDDER'S ADDRESS OF RECORD. Insert the full and exact address of record for the bidder.

50 CFR 600.1107(i) (enhanced display)

page 65 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

(c) BIDDER'S TELEPHONE NUMBER. Insert the full and exact telephone number of the bidder.

(d) BIDDER'S ELECTRONIC MAIL ADDRESS (if available). Insert the full and exact e-mail address of the bidder.

(e) PERMIT. Insert the full and exact permit number(s) of the bidder. Enclose with this Bid an exact photocopy
of the permit.

(f) BID AMOUNT. Insert, in U.S. dollars, the bid's full and exact amount, both in words and numbers.

In words

In numbers
$

(g) SECURITY INTERESTS. Insert the name of any authorized third party that may hold a security interest in the
permit.

(h) SOCIAL SECURITY NUMBER. Insert the full and exact social security number of the bidder.

50 CFR 600.1107(i) (enhanced display)

page 66 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

(i) BID SIGNATURE. In compliance with applicable law and this Bid, the bidder submits the above bid amount as
an offer to the SRA for the permanent relinquishment of his/her permit. By completing the sections above and
signing below, the bidder acknowledges that the bidder has completely reviewed this Bid and attachments. The
bidder warrants that the bidder is fully able to enter into the Relinquishment Contract. The bidder expressly
warrants and attests that all information included herein is accurate.

Signature
Printed Name
Date of Signature

State of: ________________ County/Borough of: ________________
I certify that ________________________ is the person who appeared before me and said person acknowledged
that he/she signed this Bid and on oath stated that he/she was authorized to execute such document and
acknowledged it to be the free and voluntary act of him/her for the uses and purposes mentioned in such
document.
Notary Public's Signature: ________________________Dated: ____________
My Commission Expires: ________________________
12. SRA SIGNATURE. By signing below, the SRA acknowledges acceptance of this Bid, including the bidder's bid
amount.

Signature
Printed Name

50 CFR 600.1107(i) (enhanced display)

page 67 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

Date of Signature

Appendix B to § 600.1107—Relinquishment Contract: Southeast Alaska
Salmon Purse Seine Permit Holders
This Relinquishment Contract (“Contract”) and agreement is entered into between the Southeast Revitalization
Association (“SRA”) and the bidder named in Section 11(a) of the Bid. The contract is effective when the bidder
signs the Bid and this contract and, thereby, agrees to relinquish his/her permit, issued by the Alaska
Commercial Fisheries Entry Commission (“CFEC”) for the Southeast Alaska salmon purse seine fishery
(“fishery”).
Whereas Alaska Statute 16.40.250 and Federal law authorize a fishing capacity reduction program for the
fishery;
Whereas, upon accepting and signing the Bid, the SRA shall submit a Reduction Plan to NMFS;
Whereas, the Reduction Plan's express objective is to reduce fishing capacity by permanently revoking permits
thereby promoting economic efficiency, improving flexibility in the conservation and management of the fishery
and obtain the maximum reduction in permits at the least cost;
Whereas, this contract is subject to the terms and conditions set forth herein, including the CFEC forms marked
as Appendices C and D to § 600.1107;
Now, therefore, for valuable consideration and the covenants hereinafter set forth, the parties hereto agree as
follows:
1. The foregoing, including the Bid and specifically the definitions under section 1, are expressly incorporated
herein by this reference.
2. Under AS 16.43.150(i), the Bidder agrees to permanently relinquish and have the CFEC revoke the permit.
3. The Bidder represents that, as of the date of submitting the contract, he or she is the holder of record of the
permit according to the CFEC official permit records.
4. Upon notification by the SRA to the Bidder that the SRA accepted the bid; the SRA will submit to the CFEC the
Permit Holder's executed notice form (Appendix C to § 600.1107) and executed relinquishment form (Appendix
D to § 600.1107).
5. In the event an authorized third party holds a security interest in the permit, NMFS will not make payment
until receiving notice of written consent by the third party to the SRA and the CFEC on a form provided by the
CFEC.

50 CFR 600.1107(i) (enhanced display)

page 68 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1107(i)

6. NMFS' payment to the accepted bidder in the exact amount of the accepted bid amount is full and complete
consideration for the CFEC revoking the permit.
7. The bidder shall, upon the SRA or the CFEC request, furnish such additional documents, information, or take
such other actions as may be reasonably required to enable the CFEC to implement relinquishment of the
permit.
8. The bidder consents to the public release of any information provided in connection with the contract or
program requirements after completion of the plan.
9. The contract contains the final terms and conditions of this agreement between the parties and represents
the entire and exclusive agreement between them.
10. The contract terms are severable, and, in the event that any portion of the contract is held to be
unenforceable, the remaining portion shall remain fully enforceable against the parties.
11. Any and all disputes involving the contract shall be governed by laws of the State of Alaska. The bidder
expressly acknowledges that by submitting the Bid, he/she makes an irrevocable offer to relinquish the permit,
and once having submitted the Bid, is not entitled to withdraw or in any way amend the Bid.
12. The failure of a bidder to perform his/her obligations under the Bid will result in irreparable damage to the
SRA and its members upon submittal of the Plan to the Secretary for approval. Accordingly, the SRA and the
bidder expressly acknowledge that money damages are an inadequate means of redress and agree that upon
failure of the bidder to fulfill his/her obligations under the Bid that specific performance of those obligations
may be obtained by suit in equity brought by the SRA in any court of competent jurisdiction without obligation
to arbitrate such action.

BIDDER'S SIGNATURE AND NOTARY'S ACKNOWLEDGEMENT AND CERTIFICATION
Bidder
signature
(1) Sign

Notary signature
(1) Sign

(2) Print
(2) Print the following:
the
following:
(a) signer's
name

(a) name

(b) signing
date

(b) signing date

(c) state
and city/
borough

(3) date commission expires, and State and city/borough. Each notary signature attests
to the following: “I certify that I know or have satisfactory evidence that the person who
is signed in the 1st column of this same row is the person who appeared before me
and: (1) Acknowledged his/her signature; (2) on oath, stated that he/she was authorized

50 CFR 600.1107(i) (enhanced display)

page 69 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

Bidder
signature

50 CFR 600.1107(i)

Notary signature
to sign; and (3) acknowledged that he/she did so freely and voluntarily.”

(1)

(1)

(2)(a)

(2)(a)

(2)(b)

(2)(b)

(2)(c)

(3)

II. Southeast Revitalization Association signature Southeast
Revitalization Association
Dated:
By:

Appendix C to § 600.1107—Conditional Notice to CFEC and Request by
Permit Holder
In support of my Bid to the Southeast Revitalization Association (SRA), I have executed this Conditional Notice
and request and authorize the Southeast Revitalization Association (SRA) to submit this executed document to
the Alaska Commercial Fisheries Entry Commission (CFEC) in the event that the SRA accepts my bid to
permanently relinquish my Southeast Salmon Purse Seine Entry Permit under AS 16.43.150(i).
I hereby notify the CFEC that the SRA has accepted my Bid to permanently relinquish my Southeast Salmon
Purse Seine Entry Permit #______________.
I request the CFEC: (1) not to renew my above-identified entry permit; and (2) not to authorize any transfer of
my entry permit.
DATED this ______ day of __________ , 2011.

(Permit Holder/Bidder)
SUBSCRIBED AND SWORN TO before me this ______ day of __________ , 2011.

Notary Public, State of __________________
My commission expires: ______________

50 CFR 600.1107(i) (enhanced display)

page 70 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1108

Appendix D to § 600.1107—Conditional Relinquishment of Southeast
Salmon Purse Seine Entry Permit
[AS 16.43.150(i)]
Upon satisfaction of the conditions that the Southeast Revitalization Association (SRA) accepts my bid and
that NMFS agrees to pay my full bid amount to me, the SRA may submit this executed Conditional
Relinquishment of Southeast Salmon Purse Seine Entry Permit to the Commercial Fisheries Entry Commission.
I fully understand this relinquishment of my permanent entry permit #______________ under AS 16.43.150(i) is
permanent, and I will not be able to reinstate the permit.
DATED this ______ day of __________ , 2011.

(Permit Holder/Bidder)
SUBSCRIBED AND SWORN TO before me this ______ day of __________ , 2011.

Notary Public, State of __________________
My commission expires: ______________
[76 FR 61990, Oct. 6, 2011]

§ 600.1108 Longline catcher processor subsector of the Bering Sea and Aleutian Islands (BSAI)
non-pollock groundfish fishery program.
(a) Purpose. This section implements the capacity reduction program that Title II, section 219(e) of Public
Law 108-447 established for the longline catcher processor subsector of the Bering Sea and Aleutian
Islands (BSAI) non-pollock groundfish fishery.
(b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 of subpart L and §
600.1105 of subpart M of this part expressly apply to this section. The following terms have the following
meanings for the purpose of this section:
Reduction fishery means the Hook & Line, Catcher Processor (Longline Subsector); sometimes referred to
as the “H&LCP Subsector) portion of the BSAI Pacific cod ITAC (in metric tons) set by the North
Pacific Fishery Management Council (NPFMC) in December of each year multiplied by 2,205 (i.e., the
rounded number of pounds in a metric ton)or the Longline Subsector of the BSAI non-pollock
groundfish fishery that § 679.2 of this chapter defined as groundfish area/species endorsement.
(c) Capacity Reduction Program. As a result of the completion of the Selection Process, written notification
from the FLCC to NMFS identifying the selected offeror, and submission of the reduction plan, the
capacity reduction program is implemented as follows:
(1) Loan repayment —
50 CFR 600.1108(c)(1) (enhanced display)

page 71 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

(i)

50 CFR 600.1108(c)(1)(i)

Term. As authorized by section 219(B)(2) of the Appropriations Act, the capacity reduction loan
(the Reduction Loan) shall be amortized over a thirty (30) year term. The Reduction Loan's
original principal amount may not exceed the amount approved by the subsector. The
subsector has currently approved a loan of two million seven hundred thousand dollars
($2,700,000). Subsector Members acknowledge that in the event payments made under the
Reduction Plan are insufficient to repay the actual loan, the term of repayment shall be
extended by NMFS until the loan is paid in full. Repayment calculations and records will be kept
separately for each program.

(ii) Interest. The Reduction Loan's interest rate will be the U.S. Treasury's cost of borrowing
equivalent maturity funds plus 2 percent. NMFS will determine the Reduction Loan's initial
interest rate when NMFS borrows from the U.S. Treasury the funds with which to disburse
reduction payments. The initial interest rate will change to a final interest rate at the end of the
Federal fiscal year in which NMFS borrows the funds from the U.S. Treasury. The final interest
rate will be 2 percent plus a weighted average, throughout that fiscal year, of the U.S. Treasury's
cost of borrowing equivalent maturity funds. The final interest rate will be fixed, and will not
vary over the remainder of the reduction loan's 30-year term. The Reduction loan will be subject
to a level debt amortization. There is no prepayment penalty.
(iii) Fees. The Reduction Loan shall be repaid by fees collected from the Longline Subsector. The
fee amount will be based upon: The principal and interest due over the next twelve months
divided by the product of the Longline Subsector. In the event that the Longline Subsector
portion for the ensuing year is not available, the Longline Subsector portion forecast from the
preceding year will be used to calculate the fee.
(A) The fee will be expressed in cents per pound rounded up to the next one-tenth of a cent.
For example: If the principal and interest due equal $2,900,000 and the Longline Subsector
portion equals 100,000 metric tons, then the fee per round weight pound of Pacific cod will
equal 1.4 cents per pound. [2,900,000/(100,000 × 2,205) = .01315]. The fee will be
assessed and collected on Pacific cod to the extent possible and if not, will be assessed
and collected as provided for in paragraph (c)(1)(iii)(B) of this section.
(B) Fees must be assessed and collected on Pacific cod used for bait or discarded. Although
the fee could be up to 5 percent of the ex-vessel production value of all post-reduction
Longline Subsector landings, the fee will be less than 5 percent if NMFS projects that a
lesser rate can amortize the fishery's reduction loan over the reduction loan's 30-year term.
In the event that the total principal and interest due exceeds 5 percent of the ex-vessel
Pacific cod revenues, a standardized additional fee will be assessed. The additional fee
shall be one cent per pound round weight, which is calculated based on the latest
available revenue records and NMFS conversion factors for pollock, arrowtooth flounder,
Greenland turbot, skate, yellowfin sole and rock sole.
(C) To verify that the fees collected do not exceed 5 percent of the fishery revenues, the
annual total of principal and interest due will be compared to the latest available annual
Longline Subsector revenues. In the event that any of the components necessary to
calculate the next year's fee are not available, or for any other reason NMFS believes the
calculation must be postponed, the fee will remain at the previous year's amount until
such a time that new calculations are made and communicated to the post-reduction
fishery participants.

50 CFR 600.1108(c)(1)(iii)(C) (enhanced display)

page 72 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1108(c)(1)(iii)(D)

(D) It is possible that the fishery may not open during some years and no Longline Subsector
portion of the ITAC is granted. Consequently, the fishery will not produce fee revenue with
which to service the reduction loan during those years. However, interest will continue to
accrue on the principal balance. When this happens, if the fee rate is not already at the
maximum 5 percent, NMFS will increase the fishery's fee rate to the maximum 5 percent
of revenue for Pacific cod, apply all subsequent fee revenue first to the payment of
accrued interest, and continue the maximum fee rates until all principal and interest
payments become current. Once all principal and interest payments are current, NMFS will
make a determination about adjusting the fee rate.
(iv) Reduction loan. NMFS has promulgated framework regulations generally applicable to all
fishing capacity reduction programs in subpart L of this part. The reduction loan shall be
subject to the provisions of § 600.1012, except that: the subsector members' obligation to
repay the reduction loan shall be discharged by the owner of the Longline Subsector license
regardless of which vessel catches fish under this license and regardless of who processes the
fish in the reduction fishery in accordance with § 600.1013. Longline Subsector license owners
in the reduction fishery shall be obligated to collect the fee in accordance with § 600.1013.
(v) Collection. The LLP License holders of vessels harvesting in the post-capacity reduction plan
Longline Subsector shall be responsible for self-collecting the repayment fees owed by the LLP
License holder. Fees shall be submitted to NMFS monthly and shall be due no later than fifteen
(15) calendar days following the end of each calendar month.
(vi) Recordkeeping and reporting. The holder of the LLP Licenses on which vessels harvesting in the
post-capacity reduction plan Longline Subsector is designated shall be responsible for
compliance with the applicable recordkeeping and reporting requirements.
(2) Agreement with Secretary. The Selected Offeror shall complete and deliver to the FLCC for inclusion
in the Reduction Plan submitted to NMFS, designee for the Secretary, a completed and fully executed
Reduction Contract. The LLP License set forth on the Selected Offer shall be included as Reduction
Fishing Interests in such Reduction Contract.
(d) Decisions of the Auditor and the FLCC. Time was of the essence in developing and implementing a
Reduction Plan and, accordingly, the Offeror is limited to, and bound by, the decisions of the Auditor and
the FLCC.
(1) The Auditor's examination of submitted applications, Offers, Prequalification Offers and Rankings
was solely ministerial in nature. That is, the Auditor verified whether the documents submitted by
Subsector Members were, on their face, consistent with each other and the Database, in compliance
with the requirements set forth in the Reduction Agreement, and signed by an Authorized Party. The
Auditor presumed the validity of all signatures on documents submitted. The Auditor made no
substantive decisions as to compliance (e.g., whether an interim LLP License satisfies the
requirements of the Act, or whether a discrepancy in the name appearing on LLP Licenses and other
documents was material).
(2) [Reserved]
(e) Specific performance. The parties to the Reduction Agreement have agreed that the opportunity to
develop and submit a capacity reduction program for the Longline Subsector under the terms of the
Appropriations Act is both unique and finite and that failure of the Selected Offeror to perform the
obligations provided by the Reduction Agreement will result in irreparable damage to the FLCC and the
Subsector Members. Accordingly, the parties to the Reduction Agreement expressly acknowledge that
50 CFR 600.1108(e) (enhanced display)

page 73 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1108(f)

money damages are an inadequate means of redress and agree that upon the failure of the Selected
Offeror to fulfill their obligations under the Reduction Agreement that specific performance of those
obligations may be obtained by suit in equity brought by the FLCC in any court of competent jurisdiction
without obligation to arbitrate such action.
(f) Miscellaneous —
(1) Termination. The Reduction Agreement may be terminated at any time prior to approval of the
Reduction Plan by NMFS, on behalf of the Secretary, by written notice from 50 percent of Subsector
Members.
(2) Choice of law/venue. The Reduction Agreement shall be construed and enforced in accordance with
the laws of the State of Washington without regard to its choice of law provisions. The parties
submit to the exclusive personal jurisdiction of the United States District Court located in Seattle,
Washington, with respect to any litigation arising out of or relating to the Reduction Agreement or out
of the performance of services hereunder.
(3) Incorporation. All executed counterparts of the Reduction Agreement, Application Forms and Offers
constitute the agreement between the parties with respect to the subject matter of the Reduction
Agreement and are incorporated into the Reduction Agreement as if fully written.
(4) Counterparts. The Reduction Agreement may be executed in multiple counterparts and will be
effective as to signatories on the Effective Date. The Reduction Agreement may be executed in
duplicate originals, each of which shall be deemed to be an original instrument. All such
counterparts and duplicate originals together shall constitute the same agreement, whether or not all
parties execute each counterpart.
(i)

The facsimile signature of any party to the Reduction Agreement shall constitute the duly
authorized, irrevocable execution and delivery of the Reduction Agreement as fully as if the
Reduction Agreement contained the original ink signatures of the party or parties supplying a
facsimile signature.

(ii) [Reserved]
(g) Amendment. All Subsector Members acknowledge that the Reduction Agreement, the Reduction Contract,
and the Reduction Plan may be subject to amendment to conform to the requirements for approval of the
Reduction Plan by NMFS on behalf of the Secretary. The Auditor shall distribute to each Subsector
Member in electronic format the amended form of the Reduction Agreement, the Reduction Contract, and
the Reduction Plan, which amended documents in the form distributed by the Auditor and identified by the
Auditor by date and version, the version of each such document then in effect at the time of any dispute
arising or action taken shall be deemed binding upon the parties with respect to such dispute and/or
action.
(h) Warranties. The Offeror must expressly warrant and represent in the Reduction Agreement that:
(1) The Offeror has had an opportunity to consult with an attorney or other advisors with respect to the
Reduction Agreement, the Reduction Contract, and the Act and the ramifications of the ratification of
the Reduction Plan contemplated therein;
(2) The Offeror has full understanding and appreciation of the ramifications of executing and delivering
the Reduction Agreement and, free from coercion of any kind by the FLCC or any of its members,
officers, agents and/or employees, executes and delivers the Reduction Agreement as the free and
voluntary act of the Offeror;
50 CFR 600.1108(h)(2) (enhanced display)

page 74 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1108(h)(3)

(3) The execution and delivery of the Reduction Agreement, does not and will not conflict with any
provisions of the governing documents of the Offeror;
(4) The person executing the Reduction Agreement has been duly authorized by the Offeror to execute
and deliver the Reduction Agreement and to undertake and perform the actions contemplated
herein; and
(5) The Offeror has taken all actions necessary for the Reduction Agreement to constitute a valid and
binding obligation, enforceable in accordance with its terms.
(i)

Approval of the Reduction Plan. Acceptance of the Offer is at the sole discretion of NMFS on behalf of the
Secretary of Commerce. To be approved by NMFS, on behalf of the Secretary, any Reduction Plan
developed and submitted in accordance with this section and subpart M of this part must be found by the
Assistant Administrator of NMFS, to:
(1) Be consistent with the requirements of section 219(e) of the FY 2005 Appropriations Act (Pub. L.
108-447);
(2) Be consistent with the requirements of section 312(b) of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1861(a)) except for the requirement that a Council or
Governor of a State request such a program (as set out in section 312(b)(1)) and for the
requirements of section 312(b)(4);
(3) Contain provisions for a fee system that provides for full and timely repayment of the capacity
reduction loan by the Longline Subsector and that it provide for the assessment of such fees;
(4) Not require a bidding or auction process;
(5) Result in the maximum sustained reduction in fishing capacity at the least cost and in the minimum
amount of time; and
(6) Permit vessels in the Longline Subsector to be upgraded to achieve efficiencies in fishing operations
provided that such upgrades do not result in the vessel exceeding the applicable length, tonnage, or
horsepower limitations set out in Federal law or regulation.

(j)

Referendum. The following provisions apply to the Reduction Plan of this section to the extent that they do
not conflict with subpart L of this part including §§ 600.1009, 600.1010, 600.1013, and 600.1014 or 16
U.S.C. 1861a; except where the referendum is successful if a majority of all permit holders within the
fishery vote in favor of the Reduction Program is accordance with 18 U.S.C. 1861a(d)(1)(B).

(k)
(1) Fee payment and collection system. Upon successful completion of the Referendum discussed
above as authorized by Public Law 108-447 and in accordance with 16 U.S.C. 1861a and § 600.1012
this fee collection system establishes:
(i)

The subsector members' obligation to repay the reduction loan, and

(ii) The loan's principal amount, interest rate, and repayment term; and
(iii) In accordance with §§ 600.1013 through 600.1016, implements an industry fee system for the
reduction fishery.
(2) Reduction loan amount. The reduction loan's original principal amount is $2,700,000.

50 CFR 600.1108(k)(2) (enhanced display)

page 75 of 76

50 CFR Part 600 Subpart M (up to date as of 8/26/2024)
Specific Fishery or Program Fishing Capacity Reduction Regulations

50 CFR 600.1108(k)(3)

(3) Interest accrual from inception. Interest begins accruing on the reduction loan from the date which
NMFS disburses such loan.
(4) Interest rate. The reduction loan's interest rate shall be the applicable rate which the U.S. Treasury
determines at the end of fiscal year in which loan is disbursed plus 2 percent.
(5) Repayment terms. For the purpose of determining fee rates, the reduction loan's repayment term is
30 years from the date NMFS disburses the loan. However, fee collections shall continue indefinitely
until the loan is fully repaid.
(6) Reduction loan repayment. The subsector members shall repay the reduction loan in accordance
with § 600.1012. Both fish buyers and fish sellers are considered subsector members for purposes
of fee collection, deposit, disbursement, and accounting in accordance with § 600.1013.
(i)

Subsector members in the reduction fishery shall collect and pay the fee amount in accordance
with § 600.1105;

(ii) Subsector members in the reduction fishery shall deposit and disburse, as well as keep records
for and submit reports about, the applicable fees in accordance with § 600.1014, except the
requirements under paragraphs (c) and (e) of this section. All collected fee revenue a fish buyer
collects to repay the loan identified in paragraph (c) of this section shall be made to NMFS no
later than fifteen (15) calendar days following the end of each calendar month. The annual
reports identified in paragraph (e) of this section shall be submitted to NMFS by February 1 of
each calendar year.
(iii) The reduction loan is, in all other respects, subject to the provisions of §§ 600.1012 through
600.1017.
(l)

Enforcement for failure to pay fees. The provisions and requirements of § 600.1016 (Enforcement) shall
also apply to fish sellers and fish buyers subject to this fishery.

[77 FR 58779, Sept. 24, 2012]

50 CFR 600.1108(l) (enhanced display)

page 76 of 76