FR Fisheries of the Exclusive Economic Zone Off Alaska; Authorize Recreational Quota Entity To Participate in the Halibut IFQ Program

Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
www.archives.gov/federal-register/cfr/ibrlocations.html.

Zodiac Seats France Service Bulletin No.
537–25–003, Revision 1, dated August 29,
2016.
(h) Installation Prohibition
After the effective date of this AD, do not
install any affected Zodiac Seats France cabin
attendant seat on any aircraft.
(i) Alternative Methods of Compliance
(AMOCs)
(1) The Manager, Boston ACO Branch,
FAA, has the authority to approve AMOCs
for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with
14 CFR 39.19, send your request to your
principal inspector or local Flight Standards
District Office, as appropriate. If sending
information directly to the manager of the
Boston ACO Branch, send it to the attention
of the person identified in paragraph (j)(1) of
this AD.
(2) Before using any approved AMOC,
notify your appropriate principal inspector,
or lacking a principal inspector, the manager
of the local flight standards district office/
certificate holding district office.

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(j) Related Information
(1) For more information about this AD,
contact Dorie Resnik, Aerospace Engineer,
Boston ACO Branch, FAA, 1200 District
Avenue, Burlington, MA 01803; phone: 781–
238–7693; fax: 781–238–7199; email:
[email protected].
(2) Refer to European Aviation Safety
Agency (EASA) AD 2016–0163, dated August
10, 2016, for more information. You may
examine the EASA AD in the AD docket on
the internet at http://www.regulations.gov by
searching for and locating Docket No. FAA–
2017–0688.
(k) Material Incorporated by Reference
(1) The Director of the Federal Register
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(IBR) of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR
part 51.
(2) You must use this service information
as applicable to do the actions required by
this AD, unless the AD specifies otherwise.
(i) Zodiac Seats France Service Bulletin
No. 537–25–003, Revision 1, dated August
29, 2016.
(ii) Zodiac Seats France Service
Information Letter 537–01, dated July 31,
2015.
(3) For service information identified in
this AD, contact Zodiac Seats France, Rue
Robert Marechal Senior B.P. 69, 36100
Issoudun, France; phone: +33 (0) 9 70 83 08
30; fax: +33 (0) 2 54 03 39 00; email: zs.tac@
zodiacaerospace.com; internet: http://
www.services.zodiacaerospace.com.
(4) You may view this service information
at FAA, Engine & Propeller Standards
Branch, 1200 District Avenue, Burlington,
MA 01803. For information on the
availability of this material at the FAA, call
781–238–7759.
(5) You may view this service information
that is incorporated by reference at the
National Archives and Records
Administration (NARA). For information on
the availability of this material at NARA, call
202–741–6030, or go to: http://

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Issued in Burlington, Massachusetts, on
September 7, 2018.
Robert J. Ganley,
Manager, Engine and Propeller Standards
Branch, Aircraft Certification Service.
[FR Doc. 2018–20551 Filed 9–20–18; 8:45 am]
BILLING CODE 4910–13–P

DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
15 CFR Part 902
50 CFR Parts 300 and 679
[Docket No. 161222999–8773–02]
RIN 0648–BG57

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

NMFS issues regulations that
authorize formation of a recreational
quota entity (RQE) that could participate
in the Pacific Halibut and Sablefish
Individual Fishing Quota Program in
International Pacific Halibut
Commission Regulatory Areas 2C and
3A in the Gulf of Alaska. The RQE is
authorized to purchase and hold a
limited amount of commercial halibut
quota share that will yield additional
pounds of recreational fishing quota on
an annual basis to augment the amount
of halibut available for harvest in the
charter halibut fishery. The RQE will
provide a mechanism for a compensated
reallocation of a portion of commercial
halibut quota share to the charter
halibut fishery. This final rule is
necessary to promote social and
economic flexibility in the charter
halibut fishery, and is intended to
promote the goals and objectives of the
Northern Pacific Halibut Act of 1982,
and other applicable laws.
DATES: This rule is effective on October
22, 2018.
ADDRESSES: Electronic copies of the
Regulatory Impact/Initial Regulatory
Flexibility Analysis/Environmental
Assessment (collectively, Analysis)
prepared for this action are available
from http://www.regulations.gov or from
the NMFS Alaska Region website at
http://alaskafisheries.noaa.gov.
SUMMARY:

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Written comments regarding the
burden-hour estimates or other aspects
of the collection-of-information
requirements contained in this final rule
may be submitted to NMFS, Alaska
Region, P.O. Box 21668, Juneau, AK
99082–1668, Attn: Ellen Sebastian,
Records Officer, in person at NMFS,
Alaska Region, 709 West 9th Street,
Room 420A, Juneau, AK; by email to
[email protected]; or by
fax to 202–395–5806.
FOR FURTHER INFORMATION CONTACT: Kurt
Iverson, 907–586–7228.
SUPPLEMENTARY INFORMATION: This final
rule implements regulatory amendments
to authorize an RQE to participate in the
Pacific Halibut and Sablefish Individual
Fishing Quota Program (IFQ Program) in
International Pacific Halibut
Commission (IPHC) Regulatory Areas 2C
and 3A in the Gulf of Alaska. NMFS
published the proposed rule to
authorize an RQE on October 3, 2017
(82 FR 46016). The comment period on
the proposed rule ended on November
17, 2017. NMFS received 18 comment
letters on the proposed rule. One of the
comment letters was outside the scope
of this action. Of the remaining 17
comment letters, NMFS identified and
considered 19 unique, relevant
comments. A summary of the comments
and NMFS’ responses is provided in the
Comments and Responses section of this
preamble.
A detailed review of this rule and the
rationale for these regulations is
provided in the preamble to the
proposed rule (82 FR 46016, October 3,
2017). Electronic copies of the proposed
rule and the Analysis may be obtained
from www.regulations.gov or from the
NMFS Alaska Region website at http://
alaskafisheries.noaa.gov. All public
comment letters submitted during the
comment period may be obtained from
www.regulations.gov.
Background
Authority for Action
The IPHC and NMFS manage fishing
for Pacific halibut (Hippoglossus
stenolepis) through regulations
established under authority of the
Northern Pacific Halibut Act of 1982
(Halibut Act). The IPHC adopts
regulations governing the Pacific halibut
(halibut) fishery under the Convention
between the United States and Canada
for the Preservation of the Halibut
Fishery of the North Pacific Ocean and
Bering Sea (Convention), signed at
Ottawa, Ontario, on March 2, 1953, as
amended by a Protocol Amending the
Convention (signed at Washington, DC,
on March 29, 1979). For the United
States, regulations developed by the

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IPHC are subject to acceptance by the
Secretary of State with concurrence
from the Secretary of Commerce. After
acceptance by the Secretary of State and
the Secretary of Commerce, NMFS
publishes the IPHC regulations in the
Federal Register as annual management
measures pursuant to 50 CFR 300.62.
The interim final rule implementing
IPHC regulations for the 2018 fishing
season, including regulations affecting
sport fishing for halibut and vessels in
the charter fishery in IPHC Regulatory
Areas 2C (Southeast Alaska) and 3A
(Southcentral Alaska), was published
March 20, 2018 (83 FR 12133).
The Halibut Act, at sections 773c(a)
and (b), provides the Secretary of
Commerce with general responsibility to
carry out the Convention and the
Halibut Act. In adopting regulations that
may be necessary to carry out the
purposes and objectives of the
Convention and the Halibut Act, the
Secretary of Commerce is directed to
consult with the Secretary of the
department in which the U.S. Coast
Guard is operating, which is currently
the Department of Homeland Security.
The Halibut Act, at section 773c(c),
also provides the North Pacific Fishery
Management Council (Council) with
authority to develop regulations,
including limited access regulations,
that are in addition to, and not in
conflict with, approved IPHC
regulations. Regulations developed by
the Council may be implemented by
NMFS only after approval by the
Secretary of Commerce. The Council has
exercised this authority in the
development of halibut fishery
management measures, codified at 50
CFR 300.65, 300.66, and 300.67. The
Council also developed the IFQ Program
for the commercial halibut and sablefish
fisheries, codified at 50 CFR part 679.
Management of halibut in the IFQ
Program is authorized under the Halibut
Act.
Summary Background on Management
of the Charter Halibut Fishery
A comprehensive history of
management of the guided sport fishery
for halibut (also referred to herein as the
‘‘charter fishery’’) was presented in the
proposed rule for this action published
October 3, 2017 (82 FR 46016). The
proposed rule also provides essential
background of the commercial halibut
and sablefish IFQ Program and how the
IFQ Program intersects with
management of the charter fishery,
primarily through the Catch Sharing
Plan (CSP) that establishes allocations of
halibut harvests between the
commercial halibut IFQ and charter
sectors.

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The proposed rule describes the
history and development of annual
management measures for the charter
fishery. The proposed rule also provides
a summary of the development of the
Charter Halibut Limited Access Program
(CHLAP) that established Charter
Halibut Permits (CHPs), and provides
details on the Guided Angler Fish (GAF)
Program, which authorizes limited
annual transfers of commercial halibut
IFQ as GAF to qualified CHP holders.
The proposed rule describes the
Community Quota Entity Program (CQE)
as well, where eligible communities can
form non-profit corporations to
purchase catcher vessel quota shares
(QS). The IFQ resulting from the QS
may then be leased to community
residents annually.
As described in the proposed rule and
in Section 2.3 of the Analysis,
regulatory areas established by the IPHC
are referred to as ‘‘IPHC Regulatory
Areas.’’ This preamble uses the terms
‘‘Area 2C’’ and ‘‘Area 3A’’ to refer to
IPHC Regulatory Areas 2C and 3A,
respectively.
Summary of This Action
This final rule will change halibut
fishery management in Areas 2C
(Southeast Alaska) and 3A (Central Gulf
of Alaska). It will implement a
regulatory amendment to allow a nonprofit RQE to represent the charter
sector in Areas 2C and 3A. Sport fishing
for Pacific halibut in Areas 2C and 3A
is subject to distinct regulations,
depending upon whether anglers are
guided (charter) or unguided. To
provide stability in the charter fishery
and to help meet allocation objectives,
the Council adopted and NMFS
implemented the CHLAP in January
2010. The CHLAP limits the total
number of charter vessel operators that
may participate in the guided sport
fishery in Areas 2C and 3A. To fish for
halibut with charter anglers on board,
an operator must have an original, valid
CHP on board.
Since 2014, harvests of charter halibut
in Alaska have been subject to a CSP
that allocates harvests between the
commercial halibut IFQ fishery and the
charter fishery. To keep the harvests of
the charter fishery within its allocation,
regulations are developed annually in a
cooperative effort between the Council,
NMFS, and IPHC.
Regulations for charter anglers are
generally more restrictive than
regulations for unguided anglers, and
have become more stringent as halibut
abundance has dropped and charter
catch limits have been reduced. Charter
angling restrictions vary between Areas
2C and 3A. Typical restrictions include

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daily and annual limits on the number
of fish retained, fish size limits, and
closures on specific days of the week for
charter halibut fishing.
This final rule will allow the RQE to
purchase commercial halibut QS from
the commercial halibut sector. The
harvest pounds associated with the QS
will yield annual Recreational Fishing
Quota that will supplement the amount
of halibut allocated to the charter sector
under the existing CSP. If the RQE
obtains enough QS, some or all of the
halibut size and bag limits could be
relaxed for charter anglers, up to a point
where charter anglers could potentially
retain up to two fish of any size as a
daily bag limit, which is the current
daily limit for unguided halibut anglers.
Quota share obtained by the RQE will
be purchased on the open market, with
prices and terms negotiated between the
buyer (RQE) and sellers (commercial
halibut QS holders). The regulations
allow the RQE to hold QS indefinitely,
and to transfer QS back to the
commercial halibut sector. This
preamble uses the term ‘‘RQE Program’’
to refer to the regulations that authorize
the RQE and determine its activities and
responsibilities. Additional detail on the
specific provisions that apply to the
RQE is provided in the section of this
preamble titled ‘‘Provisions of Final
Rule.’’
Purpose and Need
The preamble to the proposed rule (82
FR 46016, October 3, 2017) provided a
detailed description of the purpose and
need for this final rule. A brief summary
is provided here. As stated above, the
charter fishery is limited to harvesting
its percentage of the Area 2C or 3A
combined catch limit allocated under
the CSP. Charter catch limits increase or
decrease as total halibut abundance
increases or decreases. When halibut
abundance is relatively low, as it has
been in recent years compared to
abundance in the 1990s and 2000s, the
charter allocations under the CSP are
lower, resulting in more restrictive
annual management measures.
The only way that charter operators
have been able to provide more
opportunity to charter clients than the
established management measures allow
for in their area is through participation
in the GAF Program by individual
charter operators. Because of the current
restrictions on charter harvests under
the CSP and the limited flexibility for
charter operators to provide additional
harvest opportunities to their clients,
charter operators have expressed their
desire to find a market-based
mechanism to increase their overall
allocation of the halibut resource.

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
Based on these concerns, in 2015, the
Council initiated the analytic process to
develop a ‘‘market-based mechanism’’ to
allow a non-profit entity to purchase
and hold a limited amount of
commercial halibut QS on behalf of
charter anglers. The intent of the
Council was to provide additional
harvest opportunity and less restrictive
annual harvest measures for charter
anglers in times of low halibut
abundance, while complying with total
halibut removals under the catch limits
established by the IPHC under the CSP.
In initiating this effort, the Council
sought to balance the objectives of
participants in the charter fishery
without undermining the goals of the
IFQ Program or creating significant
adverse impacts to other halibut sectors.
A complete history of the development
of this action is described in the
proposed rule (82 FR 46016, October 3,
2017) and Section 2.2 of the Analysis.

on the estimated adjusted charter catch
limits. RFQ held by the RQE will be
available for harvest by all charter
anglers aboard registered charter vessels
of any size, regardless of the QS
category from which that RFQ
originated. Under this rule, RFQ may
not be transferred as GAF. Unless
specified, regulations that refer only to
IFQ permit holders do not apply to the
RQE. Likewise, unless specified in this
rule, regulations that refer only to IFQ
do not apply to RFQ.
This final rule does not change the
underlying allocations to the
commercial IFQ fishery and charter
fishery specified in the CSP, and does
not change the total QS pool. Therefore,
the QS holders in the commercial IFQ
fishery who do not transfer QS to the
RQE will receive the same amount of
IFQ pounds issued for their QS units,
regardless of the amount of QS
transferred to, and held by, the RQE.

Recreational Quota Entity for Area 2C
and Area 3A
This final rule allows an RQE to be
established as an eligible entity to
purchase halibut QS in Area 2C and
Area 3A, with limitations, for use by the
charter fishery as a whole. This final
rule designates the RQE as an eligible
participant in the IFQ Program that can
purchase Area 2C and 3A halibut QS for
use by all charter halibut anglers in the
respective area. Any halibut QS
purchased by the RQE will be held by
this entity for the common use of
charter halibut anglers.
Halibut QS held by the RQE will
generate annual pounds of recreational
fishing quota (RFQ), a type of annual
harvest privilege similar to IFQ that has
special requirements that pertain only to
the RQE. RFQ will be calculated in the
same manner as IFQ. Under this final
rule, the specific amount of RFQ (in net
pounds) is determined by the number of
QS units held by the RQE as of October
1 of the preceding calendar year, the
total number of halibut QS units issued
in Area 2C or 3A as of January 15 of the
year the IFQ or RFQ is issued, and the
total amount of halibut allocated to the
commercial IFQ fisheries in Areas 2C
and 3A for that year.
Although the amount of RFQ is
calculated in the same way as IFQ, it is
subject to different requirements. The
additional pounds of RFQ for each
regulatory area are combined with the
charter catch limit determined under
the CSP to calculate an adjusted charter
catch limit for the year for Area 2C or
3A. Annual charter management
measures for Areas 2C and 3A will be
analyzed, recommended to the IPHC,
and adopted for implementation based

Provisions of Final Rule

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RQE Organizational Structure
The Council recommended and
NMFS implements the requirement that
an RQE must be established as a
qualified non-profit entity registered
under the laws of the State of Alaska
and recognized as exempt from Federal
income tax by the Internal Revenue
Service (IRS) to purchase and hold
halibut QS for use by the charter fishery.
The QS held by an RQE could yield
RFQ annually. This final rule allows a
single non-profit entity to form to
represent and manage separate QS
holdings for Areas 2C and 3A. More
detailed information on the structure of
the RQE is provided in the preamble to
the proposed rule (82 FR 46016, October
3, 2017) and in Section 4.8.1.1 of the
Analysis.
This final rule adds new definitions
in § 679.2 for ‘‘recreational fishing quota
(RFQ)’’ and ‘‘recreational quota entity
(RQE).’’
Eligibility
This final rule establishes
requirements for the formation of a
single RQE that would be eligible to
purchase and hold commercial halibut
QS for use by the guided halibut sector.
The RQE must be a qualified non-profit
entity registered under the laws of the
State of Alaska and recognized as
exempt from Federal income tax by the
IRS. To qualify as exempt from Federal
income tax, an organization must seek
recognition of exemption from Federal
income tax under section 501(a) of the
Internal Revenue Code.
To be approved as the entity eligible
to purchase and hold halibut QS, the

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applicant wishing to become the RQE is
required to demonstrate it is a nonprofit entity registered under the laws of
the State of Alaska by submitting to
NMFS the articles of incorporation and
management organization information,
including bylaws and a list of key
personnel including, but not limited to,
the board of directors, officers,
representatives, and managers.
Articles of incorporation are public
documents that must be filed with the
state agency where the corporation
becomes incorporated (e.g., with
Alaska’s Division of Corporations,
Business, and Professional Licensing).
The RQE must be incorporated within
the State of Alaska consistent with
incorporation requirements applicable
to CQEs.
In addition to demonstrating it is a
non-profit corporation recognized by the
State of Alaska, the applicant wishing to
become the RQE is required to
demonstrate it has been granted an
exemption from Federal income tax by
the IRS by submitting to NMFS the IRS
acknowledgement of the entity’s Federal
tax exemption.
NMFS requires the approved RQE to
maintain its non-profit and tax-exempt
status, as described above. If the
approved RQE entity does not meet this
requirement, NMFS will not issue the
RFQ that would otherwise be issued to
the RQE based on its QS holdings. In
addition, NMFS will provide the
approved RQE entity with an
opportunity to reinstate its non-profit
and/or tax-exempt status. If the
approved RQE entity does not
demonstrate to NMFS that it is a
qualified non-profit entity registered
under the laws of the State of Alaska
and recognized as exempt from Federal
income tax by the IRS by the established
deadline, NMFS will issue an Initial
Administrative Determination (IAD) to
revoke the entity’s status as the
approved RQE and to require the entity
to divest its QS holdings. The entity has
the opportunity to appeal the IAD
through the National Appeals Office
under the provisions established at 15
CFR part 906. The applicant must
complete the ‘‘Application for a Nonprofit Corporation to be Designated as a
Recreational Quota Entity (RQE)’’ and
submit it to NMFS Alaska Region for
review and approval. The application
form will be available on the NMFS
Alaska Region website at https://
alaskafisheries.noaa.gov after the
effective date of this rule. NMFS will
approve the first complete RQE
application it receives. All other RQE
applications will be disapproved. NMFS
will notify the RQE when its application
has been approved. Once approved,

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NMFS will establish an account for QS
and RFQ holdings when the RQE
acquires QS. If NMFS disapproves an
application, that determination may be
appealed to the NMFS National Appeals
Office under the provisions established
at 15 CFR part 906. Detailed information
on RQE eligibility is provided in the
preamble to the proposed rule (82 FR
46016, October 3, 2017) and in Section
4.8 of the Analysis.
This rule adds a new paragraph to
§ 679.41(n) to describe the application
process and eligibility requirements for
a prospective RQE.
Restrictions on Transfers
This final rule authorizes two-way
transfers of QS. QS acquired by the RQE
may be transferred to an otherwise
eligible participant in the commercial
IFQ fishery. Because QS and the
resulting IFQ used in the commercial
IFQ fishery is subject to vessel
categories and block designations on
initially-issued QS—unlike the QS and
resulting RFQ used by the RQE, which
is exempt from such categories and
designations—NMFS will track QS
units, IFQ pounds, and vessel category
and block designations that apply to
ensure that original categories and
designations for the commercial IFQ
fishery are maintained during the
transfer process. Detailed information
on transfers of QS between the
commercial and charter fishery is
provided in the preamble to the
proposed rule (82 FR 46016, October 3,
2017) and in Section 4.8 of the Analysis.
NMFS modifies § 679.42 to describe
the QS transfer process for RQEs.

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Annual Limit on Transfers to an RQE
This final rule establishes areaspecific annual limits on the amount of
halibut QS that can transfer to an RQE.
Under this final rule, the RQE may
transfer up to the equivalent of 1
percent of the commercial QS units in
Area 2C based on the 2015 pool of all
QS categories (59,477,396 units). An
annual transfer limit was set equivalent
to 1.2 percent of the commercial QS
pool in Area 3A based on the 2015 pool
of all QS categories (184,893,008 units).
For a more detailed description of the
rationale for this provision, please see
the preamble of the proposed rule (82
FR 46016, October 3, 2017). Annual
transfer limits are discussed in further
detail in Section 4.8.1.2.2 of the
Analysis.
NMFS adds a new paragraph at
§ 679.42(f)(8) to implement the annual
transfer limits on QS for RQEs.

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Limit on Total QS Holdings by the RQE
This final rule places limits on the
total amount of halibut QS that may be
held by the RQE. For Area 2C, the RQE
can hold up to 10 percent of the 2015
commercial QS pool. This proportion is
calculated based on the entire QS pool,
including categories and blocks of QS
units that the RQE is prohibited from
purchasing (discussed in the next
sections of this preamble). Ten percent
of the 2015 commercial QS pool in Area
2C equates to 5,947,740 QS units.
This final rule limits QS holdings for
Area 3A to 12 percent of the 2015 entire
commercial QS pool, including
categories and blocks of QS units that
the RQE is prohibited from purchasing.
Twelve percent of the 2015 commercial
QS pool in Area 3A equates to
22,187,161 units.
As described in the proposed rule (82
FR 46016, October 3, 2017), this final
rule specifies the limits on total QS
holdings by the RQE in regulations so
that they are clearly defined for fishery
participants and will not fluctuate if
there are future changes in the Area 2C
or 3A QS pools. The limits on RQE
holdings of QS are discussed in further
detail in Section 4.8.1.2.3 of the
Analysis.
NMFS adds a new paragraph at
§ 679.42(f)(8) to describe the QS holding
limits for the RQE.
Limit on GAF Transfers as RQE
Holdings Increase
Part of this RQE Program limits the
total amount of GAF that may be used
annually by CHP holders. The GAF
transfer restrictions are adopted so that
in any year, the combined amount of
RFQ and GAF transferred to CHP
holders cannot exceed a poundage equal
to the maximum amount of pounds that
could be issued as RFQ in Area 2C or
3A. The limit on GAF transfers as RQE
QS holdings increase is discussed in
further detail in Section 4.8.1.2.4 of the
Analysis.
To implement these restrictions on
IFQ transfers to GAF, NMFS adds a new
paragraph at § 300.65(c)(5)(ii)(D)(1)(iv).
Vessel Category Restrictions
This rule also places limits on the
amounts of QS the RQE could hold by
vessel category. In Area 2C, the RQE is
limited to holding an amount equal to
10 percent of D-category QS and an
amount equal to 10 percent of Bcategory QS, based on the Area 2C 2015
QS pools. Translated to QS units, this
rule prohibits the RQE from holding
more than 889,548 units of D-category
QS, and more than 265,524 units of Bcategory QS, in Area 2C (see Table 4–

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40 of the Analysis). In Area 3A, the RQE
is prohibited from purchasing or
holding D-category QS. The RQE may
purchase any amount, up to the annual
transfer and cumulative use limits of
A-, B-, and C-category QS in Area 3A.
The vessel category restrictions are
discussed in more detail in Section
4.8.1.2.5 of the Analysis.
NMFS adds a new paragraph at
§ 679.42(f)(8) describing RQE use limits
for specific vessel categories of QS.
Block Restrictions
In addition to vessel category
restrictions for RQE purchases of QS,
this final rule places limits on the size
of QS blocks that the RQE may
purchase. The RQE is prohibited from
purchasing (i.e., receiving by transfer)
blocks of QS by category that equate to
1,500 pounds or less (based on 2015
pounds). For Area 2C, this means that
the RQE cannot purchase blocked QS of
24,250 units or less. For Area 3A, the
RQE is prohibited from purchasing
blocked QS of 35,620 units or less.
Block restrictions are discussed in more
detail in Section 4.8.1.3 of the Analysis.
NMFS adds a new paragraph at
§ 679.42(g)(1)(iii) to establish
restrictions on the type and amount of
blocked QS that the RQE can hold and
receive by transfer.
Revisions for the Calculation of the
Charter Catch Limit and Establishment
of Annual Management Measures
This final rule also modifies several
regulations to facilitate the proper
accounting of RFQ. This section
describes the process that will be used
annually to calculate the amount of RFQ
and establish annual management
measures.
On October 1 of each year, the RQE’s
QS holdings will be used as the basis for
estimating the number of RFQ pounds
to add to the charter allocation under
the CSP for the following calendar year.
This estimated combined allocation will
be used to recommend the charter
fishery management measures for the
following year. The process and
timeline for setting annual management
measures remains unchanged. Once the
IPHC annual management measures are
approved, typically in late February or
early March, NMFS will issue pounds of
RFQ to the RQE based on the number
of QS units held by the RQE on October
1 of the previous year. This RFQ will
augment the charter catch limit
established under the CSP. The
regulations establish October 1 as the
date for determining how many QS
units will yield RFQ so that the
Council’s Charter Committee and the
Council is able to estimate the pounds

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
of RFQ that the RQE receives in the
following year. The Charter Committee
will then be able to factor that amount
into its recommendations for the
following year’s charter management
measures.
The RFQ will not be issued to the
RQE in the upcoming fishing year for
any QS that the RQE received by
transfer after October 1. If the RQE
transfers QS that it holds on October 1
to a recipient in the commercial IFQ
fishery after that date, NMFS will not
issue IFQ to the commercial recipient
for that QS in the following calendar
year. This approach is similar to the
method used in the commercial fishery
to allow the transfer of QS but not the
IFQ once that IFQ has been used. In this
case, NMFS considers that RFQ is
effectively ‘‘used’’ if it is assigned to the
charter allocation for the following
calendar year. If the RQE receives QS by
transfer after October 1, that QS will not
result in the issuance of RFQ for the
following calendar year. However, if the
RQE subsequently transfers any QS
received by transfer after October 1 that
did not result in RFQ back to the
commercial IFQ fishery, NMFS will
issue IFQ to the commercial recipient
for that QS.
In late November of each year, NMFS
will estimate the pounds of RFQ that
will be available to the RQE in the
upcoming year, based on the QS units
held by the RQE on October 1, the
QS:IFQ ratio of the current year, and the
IPHC’s preliminary estimate of the
possible combined catch limits in Areas
2C and 3A.
In December of each year, the Council
will recommend a range of potential
charter management measures for Areas
2C and 3A that are expected to limit
charter harvests in an area to the
estimated charter catch limit, plus the
estimated supplemental pounds
provided by the RFQ.
In this final rule, NMFS is revising
§ 679.40(c)(2) to clarify that NMFS will
use the QS pool for the IFQ regulatory
area, including Areas 2C and 3A, on
record with the NMFS Alaska Region,
on January 15 of that year for the
purpose of calculating the amount of
IFQ and RFQ for that regulatory area for
that year. The revision to move the date
of record from January 31 to January 15
of each year ensures that IPHC will be
able to determine the amount of IFQ and
RFQ and that the total allocations are
assigned to the respective commercial
IFQ and charter fisheries when it adopts
annual management measures at its
annual meeting in late January.
NMFS is also revising § 300.65(c) to
authorize the use of RFQ in the charter
fishery, and to describe how and when

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QS holdings by the RQE are calculated
and added to the charter catch limit
under the CSP.
Redistribution of Excess RFQ
This final rule establishes a temporary
redistribution of RFQ from the RQE to
the commercial IFQ fishery if the RQE
holdings of QS provide a charter harvest
opportunity greater than the unguided
recreational management measures in
either Area 2C or 3A. Under this final
rule, NMFS will not issue annual RFQ
in excess of the adjusted charter catch
limit needed for charter anglers to
obtain the unguided recreational
management measures for that area. For
more information on the charter catch
limit, see the preamble of the proposed
rule (82 FR 46016, October 3, 2017).
The Council and the Analysis use the
term ‘‘reallocate’’ to describe the
temporary (1-year) redistribution of
excess RFQ to the commercial IFQ
fishery. NMFS notes that the term
reallocate is often used in other
regulations to describe a permanent
transfer of harvest privileges from one
group of participants to another. NMFS
uses the term ‘‘redistribute’’ in this rule
to clarify for fishery participants and the
public that the distribution of excess
RFQ to commercial IFQ fishery
participants is in effect for one year, and
is not a permanent reallocation.
This rule implements the following
process for the temporary redistribution
of RFQ (as IFQ) to the commercial IFQ
fishery, in the event that the RQE has
QS holdings in excess of the amount
needed to provide charter anglers with
harvest opportunities equal to those for
unguided recreational anglers. Each
January, the IPHC will recommend
charter fishery management measures
for Areas 2C and 3A that are expected
to limit charter harvest to the adjusted
charter catch limit for each area (the
sum of the annual guided sport catch
limit under the CSP and the estimated
amount of RFQ from the RQE’s QS
holdings on October 1 of the previous
year).
After the IPHC recommends charter
fishery management measures, NMFS
will determine if a redistribution of
excess RFQ is necessary. If the IPHC has
adopted charter fishery management
measures that are equivalent to the
unguided recreational management
measures in either Area 2C or 3A (e.g.,
a daily bag limit of two halibut of any
size), NMFS will determine the amount
of RFQ that are needed to account for
charter harvest in Area 2C and Area 3A
under the recommended management
measures and issue that amount as RFQ
to supplement the charter fishery
allocation under the CSP. The difference

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

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halibut QS in the applicable area (Area
2C or Area 3A) in the year prior to the
redistribution as well as in the year that
the redistribution occurs. If no CQE
holds QS in the applicable area (Area 2C
or Area 3A) in the preceding year and
in the year that the redistribution
occurs, this 50 percent of the excess
RFQ will not be redistributed in that
area. In other words, the excess RFQ
will be unfished or ‘‘left in the water’’
for conservation.
Section 4.8.1.3 of the Analysis
describes the options considered by the
Council and NMFS in developing this
portion of this final rule.
NMFS adds regulations under
§ 679.40(c) to describe how excess RFQ
will be redistributed.
Cost Recovery Fees
The Magnuson-Stevens Fishery
Conservation and Management Act
(Magnuson-Stevens Act) at section
304(d)(2)(A) requires that cost recovery
fees be collected for the costs directly
related to the management, data
collection, and enforcement of any
limited access privilege programs. This
includes programs such as the
commercial halibut IFQ Program, under
which a dedicated allocation is
provided to IFQ permit holders. Fees
owed are a percentage, not to exceed 3
percent, of the ex-vessel value of fish
landed and debited from IFQ permits.
Each year, NMFS sends fee statements
to IFQ holders whose annual IFQ was
landed; those holders must remit fees by
January 31 of the following year. Under
this rule, the RQE is responsible for all
cost recovery fees on their annual RFQ.
In years when the RQE holds QS and
the RFQ is issued to augment the charter
fishery’s catch limit, the charter fishery
will be effectively using all of this RFQ;
therefore, the RQE will be required to
pay cost recovery fees on all of its RFQ.
Since all annual RFQ issued to the RQE
will be considered ‘‘used,’’ NMFS will
levy the fee calculated for the RQE’s
annual RFQ pounds that are issued,
rather than estimating RFQ harvest at
each point of charter landings. The fee
will be calculated using the standard
price calculated for Area 2C or 3A and
the RFQ held by the RQE. This is
similar to the method used to apply an
ex-vessel value for GAF. The IFQ cost
recovery fee will be levied on the RQE
each year the RQE holds QS, and the
resulting RFQ is issued to augment the
catch limit in the charter fishery. All
holdings acquired by the RQE on
October 1 of the prior year are subject
to the IFQ cost recovery fee.
For purposes of cost recovery, the
RQE is required to pay fees on all
resulting pounds of RFQ, even if the

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charter fishery’s harvest is under its
catch limit in Area 2C or 3A for that
year. In December of each year, NMFS
will (1) determine the standard prices
and the cost recovery fee percentage, (2)
announce the standard prices and the
cost recovery fee percentage in the
Federal Register, and (3) issue the RQE
a fee assessment. The RFQ fee
assessment will be based on the number
of RFQ pounds added to either the Area
2C or 3A charter catch limit based on
QS holdings as of October 1 of the prior
year multiplied by the standard price for
Area 2C or Area 3A, and multiplied by
the cost recovery fee percentage
(approximately 3 percent in recent
years). The cost recovery fee payment
from the RQE to NMFS is due by
January 31 of each year.
Additional information about
assessing cost recovery fees for an RQE
is provided in Section 4.8.1.4.1 of the
Analysis.
NMFS is revising regulations
throughout § 679.45 to incorporate the
RQE into the IFQ Program cost recovery
fee estimation and collection process.
General Reporting
Because all RFQ is considered landed
or used by the RQE in the year for
which it is issued and the standard
prices are applied to pounds of RFQ, the
RQE is not required to complete the
recordkeeping and reporting
requirements described for the IFQ
Program at § 679.5(1). The RQE is
exempt from submitting the IFQ Prior
Notice of Landing, Product Transfer,
IFQ Landing, IFQ Transshipment
Authorization, and IFQ Departure
reports.
Annual Report
This final rule requires the RQE to file
an annual report with the Council by
January 31 of each year that details the
administrative activities and business
operations of the RQE during the prior
year for each year that it holds
commercial QS. Although not
specifically requested by the Council,
the annual report also must be
submitted to NMFS for reasons
described below.
The RQE is required to include the
following general information in its
annual report: (1) Any changes to the
bylaws, board of directors, or other key
management personnel of the RQE
during the preceding year; (2) amounts
and descriptions of annual
administrative expenses; (3) amounts
and descriptions of funds spent on
conservation, research, and promotion
of the halibut resource and a summary
of the results; and (4) amounts and
descriptions of all other expenses.

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Additionally, the RQE is required to
submit the following information by
regulatory area: (1) The total amount of
halibut QS by vessel category and block
held by the RQE at the start of the
calendar year, on October 1, and at the
end of the calendar year; (2) a list of all
transfers (purchases, sales, and any
other transfers) of halibut QS, including
transaction prices if applicable; and (3)
the number of CHPs and associated
angler endorsements purchased and
held by the RQE.
Section 679.41(c)(10)(ii) requires a
CQE to submit a timely and complete
annual report to NMFS before a transfer
of QS will be approved or IFQ will be
issued. A similar requirement for the
RQE annual report is added at new
paragraph § 679.41(c)(11)(i). If the RQE
held QS in the previous year and has
not submitted a timely and complete
annual report by the January 31
deadline, NMFS will not approve a
transfer of QS or issue RFQ until the
report is submitted. To confirm receipt
of the report, this rule requires that the
RQE submit the annual report to both
the Council and NMFS.
NMFS is adding §§ 679.5(v) and
679.41(c)(11)(i) to include the RQE
annual report requirements.
Other Regulatory Changes
NMFS revises the IFQ regulations at
50 CFR part 679 that refer to ‘‘an IFQ
permit holder’’ to also include the term
‘‘RQE’’ where applicable.
NMFS revises regulations at 50 CFR
part 679 that refer to the IFQ permit that
also pertain to the RQE to include the
term ‘‘RFQ permit account.’’ NMFS
revised this language because the RQE
will not be issued an IFQ fishing permit.
Instead, NMFS will establish an RFQ
permit account for the RQE that will be
used to administer RFQ as described in
this rule.
NMFS revises regulations at 50 CFR
part 679 that refer to IFQ to include the
term ‘‘RFQ’’ when the regulations refer
to IFQ and RFQ.
The locations of these minor changes
are shown in the table in the regulatory
text at the end of this rule.
Appeals
This rule changes several references
within §§ 679.41 and 679.45 that
describe the former procedure for
appealing an IAD to the NMFS Alaska
Office of Administrative Appeals. Those
procedures are described at § 679.43.
NMFS has centralized the appeals
process in the National Appeals Office,
which operates out of NMFS’
headquarters in Silver Spring, MD. The
National Appeals Office is now charged
with processing appeals that were filed

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with the Office of Administrative
Appeals, Alaska Region. The procedure
for appealing an IAD through the
National Appeals Office is at 15 CFR
part 906 (79 FR 7056, February 6, 2014).
This rule updates the regulations
referring to appeals procedures for the
IFQ Program to refer to 15 CFR part 906
instead of to 50 CFR 679.43.
Changes From Proposed to Final Rule
NMFS made the following changes to
the final rule from the proposed rule:
• Section 679.7(f)(3)(i)(C) confirms
that fixed gear may not be used to retain
RFQ halibut. The regulatory language is
changed to conform with wording used
in similar regulations in this subsection. The phrase ‘‘as defined in
§ 679.2’’ is removed as a reference to
fixed gear, and to add clarity, ‘‘halibut
RFQ’’ is replaced with ‘‘RFQ halibut’’.
• The proposed regulatory text at
§ 679.41(g)(11)(ii), (iii), and (iv) is
changed to clarify that the regulatory
references for RQE eligibility in these
three paragraphs refer to all the
paragraphs and requirements that fall
under (n)(1) of that section.
• The proposed regulatory text at
§ 679.42(g)(1)(iii) is changed to more
clearly reflect the Council’s intent that
the RQE is prohibited from receiving
halibut QS blocks of 1,500 pounds or
less in Areas 2C and 3A, based on 2015
pounds. The phrase ‘‘is limited to
receiving’’ was replaced with ‘‘may not
receive;’’
• Section 679.45(f)(4) is changed to
clarify that the paragraph applies to IFQ
permit holders and to the RQE. The
phrase ‘‘the IFQ permit holder’’ is
replaced with ‘‘the IFQ permit holder or
RQE.’’

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Comments and Responses
NMFS received 18 comment letters on
the proposed rule. One of the comment
letters was outside the scope of this
action. Of the remaining 17 comment
letters, NMFS identified and considered
19 unique, relevant comments, which
are summarized and responded to
below. The commenters consisted of
individuals, representatives of the
charter sector, and representatives of the
commercial fishing sector.
Comment 1: Several commenters
expressed support for the RQE Program
and noted it would bring stability to the
charter fishery and create long-term
efficiency by allowing transfers of QS
between commercial QS holders and the
charter fishery and will help lessen
restrictive harvest measures for guided
anglers whose fishing opportunities are
closely linked to the economics of the
charter fishery.

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Response: NMFS acknowledges the
comment.
Comment 2: We support restricting
the maximum number of shares
transferred annually. We support fixing
October 1 QS holdings as the basis for
estimating the number of IFQ pounds
for the following fishing year. We
support NMFS assessing cost recovery
fees for RFQ holdings.
Response: NMFS acknowledges the
comment, and notes that the provisions
the commenter supports are contained
in this final rule.
Comment 3: Charter fishing is a main
source of income for some Alaskans.
Allowing charter catch limits to increase
would bring fishing back to the sport
fishing industry.
Response: The principal objective of
this final rule is to promote social and
economic flexibility in the charter
fishery by authorizing the development
of an entity that is eligible to purchase
and hold commercial halibut QS in
Areas 2C and 3A, thereby providing
additional harvest opportunities to
charter anglers. This final rule is
therefore intended to promote long-term
efficiency in the use of the halibut
resource by allowing transfers of QS
between commercial QS holders and the
charter fishery, through an RQE, under
a ‘‘willing buyer and willing seller’’
approach.
Comment 4: The RQE should remain
as a non-profit organization and as a
single entity. As a single entity, it
should not be limited on how much QS
it should be able to obtain. The charter
fishery should maintain the daily catch
limit of two fish per day with no size
restrictions. There should be a cap on
the number of charter boats.
Response: This final rule establishes
the RQE as a single, non-profit entity to
represent and manage the separate QS
holdings for Area 2C and Area 3A. The
Council recommended, and NMFS has
adopted, regulations that limit the
amount of QS that the RQE can
purchase and use. These regulations are
adopted primarily to mitigate the
potentially disruptive impacts on the
QS market with the entry of the RQE,
and to take into account the importance
of commercial halibut IFQ on fishing
communities.
The current CHLAP program caps the
number of charter operations in Areas
2C and 3A. Upon implementation of
this final rule, three primary factors will
determine whether charter anglers will
be able to retain two fish per day of any
size: (1) The abundance of halibut and
the resulting catch limits established by
IPHC and allocated under the CSP; (2)
the number of anglers and the size of
halibut that are projected to be retained

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from charter boats; and (3) the amount
of QS that the RQE purchases and holds
on October 1 of each year, and is made
available to augment the charter
allocation.
Comment 5: The 11 vessels that
NMFS considered large entities should
give the RQE 2 percent of their quota.
Response: The Council did not
recommend and this final rule does not
implement regulations to reallocate QS
from specific QS holders to the RQE.
The commenter’s recommendation is
outside of the scope of this action. The
commenter notes that some of the QS
holders are considered to be large
entities. We assume that the commenter
is referring to information provided in
the initial regulatory flexibility analysis
prepared in the proposed rule (82 FR
46016, October 3, 2017). In that
analysis, NMFS estimates that the
owners of 11 vessels that harvest halibut
IFQ would be considered large entities
because they showed revenues that
exceeded a specific threshold in the
most recent year for which we have
records (2014). Additional information
on the revenues of vessels active in the
halibut IFQ fishery is provided in
Section 5.6 of the Analysis.
Comment 6: National Standard
Guidelines that interpret specific
provisions of the Magnuson-Stevens Act
state that fishery management plans
should prevent overfishing and consider
the value of fishery resources to fishing
communities.
Response: NMFS notes that the
National Standard Guidelines cited by
the commenter do not apply to the
halibut fishery because it is managed
under the authority of the Halibut Act
as described in the section of this
preamble titled ‘‘Authority for Action,’’
and not the Magnuson-Stevens Act. As
described in the proposed rule (82 FR
46016, October 3, 2017), creation of an
RQE Program does not change
conservation or management of the
halibut resource in Areas 2C and 3A.
The Analysis at Section 4.8.2 describes
how the Council and NMFS considered
the value of fishery resources to fishing
communities. This action does not
change the current process for
establishing annual catch limits or the
management measures that have been
established to meet specific social and
economic goals for the halibut IFQ
fishery or the RQE Program.
Comment 7: Halibut harvested by the
commercial sector are weighed at the
point of sale. It would be impossible to
determine the pounds of halibut
harvested by the charter fleet.
Response: NMFS disagrees. The
pounds of halibut harvested by the
charter fleet are accounted for by the

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Alaska Department of Fish and Game
logbook program, which is a
requirement for all guided angler
operations in Alaska. All halibut caught
and retained by charter anglers are
required to be measured in a
standardized fashion. From these
measurements, IPHC length-weight
conversion tables are used to establish
the pounds of halibut harvested by the
charter fleet. The logbook program
provides the basis for determining the
charter sector’s harvests under the CSP
and is used to develop annual
management measures for guided
anglers in IPHC Areas 2C and 3A. This
method of catch accounting will not
change when the RQE acquires halibut
QS and the associated pounds of halibut
from that QS is added to the charter
sector allocation under the CSP.
Comment 8: The last twenty years
have led to overfishing and halibut are
small.
Response: According to the most
recent stock assessment by IPHC, Pacific
halibut are not considered to be subject
to overfishing (see https://iphc.int). The
stock assessment prepared by the IPHC
indicates that halibut stocks in Areas 2C
and 3A have declined over the last
decade, and that over that period the
average size-at-age of adult halibut has
become smaller. However, the extent of
the decline varies by geographic area,
and the reasons behind it cannot be
fully explained solely by commercial or
charter fishing removals. NMFS also
notes that this rule does not increase the
combined halibut commercial and
charter catch limits adopted by IPHC
and implemented by NMFS.
Comment 9: We oppose passage of the
RQE Program. The charter sector does
not share in the burden of conservation.
In times of low abundance, all sectors
should share in conserving resources.
Stocks are beginning to rebuild after a
long decline, and the RQE compromises
years of rebuilding.
Response: NMFS disagrees. As
described in the preamble to the
proposed rule (82 FR 46016, October 3,
2017), under the CSP both the
commercial and charter sectors share
the burden of conservation by having
reduced catch limits in times of low
abundance. The RQE Program allows,
but does not require, persons in the
commercial sector to choose to transfer
their QS to the RQE; however,
irrespective of those transfers, each
sector will continue to be constrained
by the combined catch limits
established by the IPHC. This final rule
also implements regulations that allow
the transfer of QS back to the
commercial sector from the RQE.

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Comment 10: Neither the Council nor
NMFS have defined the ‘‘need’’ for an
RQE. Demand for charter services has
remained relatively constant in Areas
2C and 3A despite changes to guided
angler bag limits.
Response: In December 2014, the
Council developed a purpose and need
statement that can be found in Section
2.1 of the Analysis. Restrictions have
increased for the guided angler sport
sector. Allowing an RQE to hold a
limited amount of commercial halibut
QS on behalf of guided recreational
halibut anglers under a ‘‘willing seller
and willing buyer’’ approach may result
in less restrictive annual harvest
measures for guided recreational anglers
in times of low halibut abundance,
while complying with total halibut
removals under the guided halibut catch
limits determined by the IPHC.
Comment 11: The RQE will further
erode the owner-operated nature of the
halibut fleet, undermining goals and
principles of the halibut quota share
program. The price of halibut quota is
already a significant barrier to entry for
young fishermen. The RQE creates an
unbalanced advantage for the charter
fleet to compete for halibut quota in an
already fully-utilized fishery.
Response: The Council considered its
goals of an owner-operated fleet in the
halibut IFQ Program when it developed
its recommendation to authorize the
RQE. This information, combined with
public testimony, factored into the
Council’s recommendation and NMFS’
regulations that place constraints on QS
purchases by the RQE. Specifically, the
Council recommended and this final
rule implements provisions that limit
RQEs from purchasing more than a
specific amount of QS on an annual
basis and in total. This final rule also
limits the RQE from purchasing specific
categories of QS that are typically
purchased by new entrants to the
halibut IFQ fishery. The preamble to the
proposed rule and Section 4.8.1.2 of the
Analysis provides additional
information on QS transfer provisions
and restrictions implemented by this
final rule and how these provisions
balance the interests of owner-operators,
new entrants, and the charter fishery.
Comment 12: Allowing additional
halibut quota to be reallocated to the
charter fleet exacerbates local depletion.
The charter fleet competes directly with
the non-charter resident sport anglers,
and this proposal allows the charter
sector to harvest most of the halibut
near towns. It would be very difficult for
a resident Alaskan angler fishing out of
a small boat to catch halibut.
Response: This final rule will not
result in an increase in the total amount

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of halibut that may be harvested, and
NMFS does not have information to
suggest that the transfer of QS from
commercial operators to the RQE will
necessarily change harvesting locations
or patterns. The location of charter
fishing and commercial harvests varies
widely. In areas where there is a
significant overlap in both charter and
commercial fishing operations, the
localized effects from this action are
expected to be minimal as fishing
pressure shifts from the commercial
sector to the charter section in the same
area. Local resource abundance may be
a factor in harvest rates, but its
influence is intertwined with other
significant influences, such as stock
abundance, angler demand, and other
factors.
Comment 13: Scheduled Council
actions to establish an annual CHP
renewal process, to stop the transfer of
non-transferable CHPs, and address
latency capacity in the charter sector
will address the charter sector’s
perceived need for an RQE.
Response: The commenter refers to
several actions that are currently under
consideration by the Council. The
potential effects of these management
measures have not been fully analyzed,
and the Council has not recommended
these actions for implementation. At
this time, NMFS does not have the
information available to conclusively
determine whether these actions under
consideration would provide benefits to
the charter fishery consistent with this
final rule.
Comment 14: Annual limits on RQE
QS purchases are essential as are limits
on RQE purchases of category D and (in
Area 2C) B class quota, and the limit on
the size of QS blocks the RQE may
purchase. Unused QS should be
returned to the commercial sector each
season.
Response: This final rule implements
all the measures noted in the comment,
and described in the proposed rule, that
constrain the quantity and type of QS
purchases that can be made by the RQE.
Although these restrictions may impact
the efficacy of the RQE Program, they
are implemented primarily to mitigate
the effects of the RQE upon QS markets,
to prevent an accumulation of excessive
shares by the RQE, and to take into
consideration the importance of the
commercial halibut fishery on fishingdependent communities. The preamble
to the proposed rule described the
limitations on the use of QS that apply
to RQEs (82 FR 46016, October 3, 2017).
Comment 15: This RQE action does
not identify a mechanism for funding
the RQE, and an RQE CHP acquisition
limit is omitted. We recommend that

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
RQE CHP limits be at least 10 times
higher than individual CHP limits.
Response: This final rule does not
prescribe the means by which persons
or entities finance their purchases of
QS. The Council and NMFS did not
identify a management need for the RQE
to identify the methods that may be
used to purchase QS prior to NMFS
considering approving the transfer of QS
to the RQE. This final rule does
implement annual reporting
requirements by the RQE to the Council
and NMFS as described in the section
of this preamble titled ‘‘Provisions of
Final Rule.’’ Among other things, the
report requires that each year the RQE
detail all QS transactions, including the
amount paid for QS, and also for the
activities and expenses of the RQE.
The Council did not specify, and this
final rule does not provide, limits on the
acquisition of CHPs by the RQE;
therefore, the RQE will be subject to
regulations that apply to any other
person, as defined at § 300.61, for
purposes of purchasing and holding
CHPs. Section 300.67(j) states that a
person may not own, hold, or control
more than five transferable CHPs in both
regulatory areas combined, with limited
exceptions. This provision applies to
the RQE. Any purchases or sales of
CHPs by the RQE are required to be
reported in the RQE’s annual report to
the Council and NMFS.
Comment 16: There are insufficient
regulations in the proposed rule to limit
how the RQE may profit by buying and
selling QS. The RQE undermines the
owner-operator characteristics of the
fleet and forces individual commercial
fishermen to compete against a
subsidized entity in the quota share
market. The RQE must be prohibited
from trading QS on the market for profit.
Not limiting RQE acquisition will have
an impact to current IFQ Category C
shares. The proposed minimum QS
block that the RQE may purchase in
Area 2C is too low of a minimum. This
will create an incentive for IFQ holders
to sweep up and sell small blocks to the
RQE, limiting blocks available to new
IFQ entrants.
Response: This rule establishes that
the RQE will be a non-profit entity,
created for the purpose of adding social
and economic flexibility to the charter
fishery. To accomplish this, the RQE is
authorized to purchase a limited
amount of QS, which is to be used to
provide additional harvest opportunity
and less restrictive management
measures in times of low abundance.
This rule contains provisions for
monitoring the RQE activities by
requiring an annual report. Among other
things, the RQE must document in the

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report all the buying, selling, and other
transfers of QS during the relevant year,
including the QS prices paid for or
received by the RQE. The annual report
must also contain descriptions and
amounts of the RQE’s expenses during
the year. Although all QS transactions,
whether between or among sectors, will
occur under a ‘‘willing seller and
willing buyer’’ scenario, NMFS has
implemented several constraints on the
amount and type of halibut QS that may
be purchased by the RQE. This includes
restrictions that prohibit purchases of
QS blocks that equate to 1,500 pounds
or less. These constraints will likely
reduce the efficacy of the RQE Program
by limiting the pool of QS that may be
purchased by the RQE. However, the
Council and NMFS have determined
that these constraints are necessary to
balance with other considerations, such
as the RQE’s effects on the availability
of QS to commercial fishermen.
Comment 17: There has not been
sufficient analysis of the GAF’s impacts
to justify discontinuing this model of
compensated reallocation.
Response: NMFS is not discontinuing
the GAF Program. The GAF Program has
distinct advantages that are not
available through the RQE. GAF are
designed to work on an individual
operator level by authorizing limited
annual transfers of commercial halibut
IFQ as GAF to qualified CHP holders.
The GAF Program provides additional
harvest opportunities for charter anglers
by allowing them to retain halibut up to
the limit for unguided anglers when
charter management measures limit
charter anglers to a more restrictive
harvest limit. This program will remain
in place for individual CHP holders to
receive an IFQ transfer. In some cases,
CHP holders also hold QS, and have the
opportunity to use their QS either
commercially or as a means to augment
their charter fishing. The GAF Program
is described in more detail in proposed
rule for the CSP (78 FR 39122, June 28,
2013). Under this rule, RFQ could not
be transferred as GAF.
Comment 18: The incidental bycatch
limits for the trawl fleet should be
included in the RQE calculation. There
should be a mechanism in the RQE
action where the RQE could purchase
bycatch from the trawl fleet.
Response: The purpose of this final
rule is to provide for the transfer of QS
between commercial QS holders and the
RQE, and not to establish alternative
methods for establishing the amount of
catch available for commercial and
charter operators. The IPHC accounts for
incidental bycatch by all vessels when
determining total halibut removals and
catch limits. This includes the halibut

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47827

catch limits established for the
commercial and charter sectors in Areas
2C and 3A.
Comment 19: The Analysis failed to
adequately show the effect this program
would have on the stability of the
commercial fishermen, processors, and
consumers of the product. The action
kept touching on possible funding
sources that the RQE may use to
purchase QS, but ignored the
implications of not addressing funding
issues which is against National
Environmental Policy Act (NEPA)
requirements.
Response: The social and economic
impacts of this action were analyzed in
the regulatory impact review (RIR) (see
ADDRESSES). Because both commercial
and charter fisheries will still be
restricted by the total catch limits set for
each regulatory area based on halibut
abundance, the total removals of halibut
and relative timing of the commercial
and charter fisheries are expected to
remain the same. Possible funding
sources for the RQE’s purchase of QS
are also discussed in the RIR.
The environmental assessment (EA)
provides a comprehensive discussion of
this action to authorize an RQE to
purchase and hold commercial halibut
quota share for use by charter halibut
anglers (see ADDRESSES). The EA
analyzes the impacts of QS holdings and
use under a wide range alternative QS
use limits. After considering this
analysis, NMFS prepared a Finding of
No Significant Impact based on the EA
analysis. Regardless of the funding
mechanism used by the RQE, the EA
considered the environmental impact of
the transfer of QS from the commercial
to the charter fishery consistent with the
requirements under NEPA. NMFS
disagrees that this rule violates NEPA
requirements by not limiting or
otherwise determining which funding
sources might be appropriate for the
RQE.
OMB Revisions to PRA References in 15
CFR 902.1(b)
Section 3507(c)(B)(i) of the Paperwork
Reduction Act (PRA) requires that
agencies inventory and display a current
control number assigned by the Director
of the Office of Management and Budget
(OMB), for each agency’s information
collection. Section 902.1(b) identifies
the location of NOAA regulations for
which OMB approval numbers have
been issued. Because this final rule
revises and adds data elements within a
collection-of-information for
recordkeeping and reporting
requirements, 15 CFR 902.1(b) is revised
to reference correctly the sections
resulting from this final rule.

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Classification
Regulations governing the U.S.
fisheries for Pacific halibut are
developed by the IPHC, the Pacific
Fishery Management Council, the
Council, and the Secretary of
Commerce. Section 5 of the Halibut Act
(16 U.S.C. 773c) allows the regional
fishery management council having
authority for a particular geographical
area to develop regulations governing
fishing for halibut in U.S. Convention
waters as long as those regulations do
not conflict with IPHC regulations. The
Halibut Act, at sections 773c(a) and (b),
provides the Secretary of Commerce
with the general responsibility to carry
out the Convention with the authority
to, in consultation with the Secretary of
the department in which the U.S. Coast
Guard is operating, adopt such
regulations as may be necessary to carry
out the purposes and objectives of the
Convention and the Halibut Act. This
rule is consistent with the Halibut Act
and other applicable laws.
This rule has been determined to be
not significant for the purposes of
Executive Order 12866.
Small Entity Compliance Guide
Section 212 of the Small Business
Regulatory Enforcement Fairness Act of
1996 states that, for each rule or group
of related rules for which an agency is
required to prepare a final regulatory
flexibility analysis, the agency shall
publish one or more guides to assist
small entities in complying with the
rule, and shall designate such
publications as ‘‘small entity
compliance guides.’’ The preambles to
the proposed rule and this final rule
serve as the small entity compliance
guide. This action does not require any
additional compliance from small
entities that is not described in the
preambles. Copies of the proposed rule
and this final rule are available from the
NMFS website at http://
alaskafisheries.noaa.gov.

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Final Regulatory Flexibility Act (FRFA)
This FRFA incorporates the initial
regulatory flexibility analysis (IRFA), a
summary of the significant issues raised
by the public comments, NMFS’
responses to those comments, and a
summary of the analyses completed to
support this action. Section 604 of the
Regulatory Flexibility Act (RFA)
requires that, when an agency
promulgates a final rule under section
553 of Title 5 of the U.S. Code, after
being required by that section or any
other law to publish a general notice of
proposed rulemaking, the agency shall
prepare a FRFA. Section 604 describes

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the required contents of a FRFA: (1) A
statement of the need for, and objectives
of, the rule; (2) a statement of the
significant issues raised by the public
comments in response to the initial
regulatory flexibility analysis, a
statement of the assessment of the
agency of such issues, and a statement
of any changes made in the proposed
rule as a result of such comments; (3)
the response of the agency to any
comments filed by the Chief Counsel for
Advocacy of the Small Business
Administration (SBA) in response to the
proposed rule, and a detailed statement
of any change made to the proposed rule
in the final rule as a result of the
comments; (4) a description of and an
estimate of the number of small entities
to which the rule will apply or an
explanation of why no such estimate is
available; (5) a description of the
projected reporting, recordkeeping and
other compliance requirements of the
rule, including an estimate of the classes
of small entities which will be subject
to the requirement and the type of
professional skills necessary for
preparation of the report or record; and
(6) a description of the steps the agency
has taken to minimize the significant
economic impact on small entities
consistent with the stated objectives of
applicable statutes, including a
statement of the factual, policy, and
legal reasons for selecting the alternative
adopted in the final rule and why each
one of the other significant alternatives
to the rule considered by the agency
which affect the impact on small
entities was rejected.
Descriptions of this action, its
purpose, and the legal basis are
contained in the preamble to the
proposed rule (82 FR 46016, October 10,
2017) and are not repeated here.
Summary of Significant Issues Raised
During Public Comment
NMFS published the proposed rule on
October 10, 2017 (82 FR 46016). An
IRFA was prepared and summarized in
the ‘‘Classification’’ section of the
preamble to the proposed rule. The
comment period closed on November
17, 2017. NMFS received 18 letters of
public comment on the proposed rule.
None of the comments raised issues in
response to the IRFA. One comment
requested NMFS require the 11 large
entities in the IFQ Program to
redistribute 2 percent of their quota to
the RQE. No changes were made to this
final rule based on this comment. The
Chief Counsel for Advocacy of the SBA
did not file any comments on the
proposed rule.

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Number and Description of Small
Entities Regulated by Action
This final rule directly regulates three
classes of small entities: QS holders,
CQEs, and the newly implemented RQE.
For RFA purposes only, NMFS
established a small business size
standard for businesses, including their
affiliates, whose primary industry is
commercial fishing (see 50 CFR 200.2).
A business primarily engaged in
commercial fishing (NAICS code 11411)
is classified as a small business if it is
independently owned and operated, is
not dominant in its field of operation
(including its affiliates), and has
combined annual receipts not in excess
of $11 million for all its affiliated
operations worldwide.
For this action, the pool of small,
directly regulated entities is limited to
those entities that will be engaging in
QS transfer (i.e., QS holders, including
CQEs, and a future RQE). CQEs and the
future RQE are considered small
entities, or more specifically, a small
organization as defined by the RFA. A
small organization is ‘‘any not-for-profit
enterprise which is independently
owned and operated and is not
dominant in its field.’’ In addition, no
CQE has more than $11 million in
annual gross receipts. The RQE that is
authorized under this action is not be
expected to hold halibut QS that would
yield $11 million in annual gross
receipts. Commercial halibut QS holders
are also considered to be directly
regulated. Most of the QS holders in the
halibut IFQ Program are small entities.
NMFS considers commercial halibut
fishing vessels as proxies for small
entities because IFQ from more than one
QS holder is often fished from the same
vessel. NMFS estimates that 812 vessels
across all IPHC regulatory areas landed
halibut in 2014, which in the Analysis
is the most recent year of complete data
on the value of halibut landings by
vessel. Of those, 11 vessels are
considered large entities because they
showed revenues that exceeded the $11
million threshold. The remaining 801
vessels are considered directly regulated
small entities for this rule. See Section
5.6 of the Analysis for more
information.
Recordkeeping, Reporting, and Other
Compliance Requirements
The RFA requires a description of the
projected reporting, recordkeeping, and
other compliance requirements of this
rule, including an estimate of the classes
of small entities that will be subject to
the requirement and the type of
professional skills necessary for
preparation of the report or record. This

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
rule requires new information
collections from an RQE. Under this
rule, a non-profit entity that wants to
become an RQE will need to complete
an application and submit it to NMFS
for approval. This application requires
submission of the entity’s articles of
incorporation, the corporate by-laws,
and a list of key personnel, including
the Board of Directors, officers,
representatives, and managers. NMFS
will approve the first complete RQE
application it receives.
If the RQE intends to receive or
transfer halibut QS, it will use the
‘‘Application for Transfer QS To or
From an RQE’’ available on the NMFS
Alaska Region website at https://
alaskafisheries.noaa.gov/. Additionally,
the RQE is required to submit an annual
report detailing its activities to NMFS
and the Council. The RQE is also subject
to cost recovery fees; therefore, it needs
to comply with the existing cost
recovery fee payment requirements for
IFQ permit holders. These
recordkeeping and reporting
requirements are expected to be
administrative in nature and not require
additional professional expertise.

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Description of Significant Alternatives
That Minimize Adverse Impacts on
Small Entities
This rule minimizes the impact on
small entities and still meets the
objectives for this final rule. The
impacts on small entities for this action
are defined in the IRFA and are not
repeated here. As noted in the IRFA,
this final rule is expected to create a net
benefit for the directly regulated small
entities. The benefits of this action are
expected to outweigh the reporting,
recordkeeping, and other compliance
costs described in the previous section.
This action is not expected to have
negative economic impacts on the small
entities directly impacted by the action.
The Council considered a status quo
alternative (Alternative 1) in addition to
this final rule, which is Alternative 2,
the Council’s preferred alternative.
Alternative 1 would not have provided
more benefits to the directly regulated
small entities or reduced reporting,
recordkeeping, or compliance costs
more than the preferred alternative that
is implemented by this final rule.
Collection-of-Information Requirements
This final rule contains collection-ofinformation requirements subject to the
PRA, which have been approved by
OMB under Control Number 0648–0758
and will be merged with OMB Control
Numbers 0648–0272 and 0648–0711.
Public reporting burden is estimated
to average per response: 200 hours for

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Application for a Non-profit
Corporation to be Designated as a
Recreational Quota Entity; 2 hours for
Application for Transfer of QS To or
From a Recreational Quota Entity; 40
hours for RQE Annual Report; 1 minute
for electronic submission of IFQ Permit
Holder Fee Submission Form. These
estimates include the time for reviewing
instructions, searching existing data
sources, gathering and maintaining the
data needed, and completing and
reviewing the collection of information.
Send comments regarding these
burden estimates or any other aspect of
this data collection, including
suggestions for reducing the burden, to
NMFS (see ADDRESSES) and by email to
[email protected], or fax
to 202–395–5806. Notwithstanding any
other provision of the law, no person is
required to respond to, and no person
shall be subject to penalty for failure to
comply with, a collection of information
subject to the requirements of the PRA,
unless that collection of information
displays a currently valid OMB control
number. All currently approved NOAA
collections of information may be
viewed at http://www.cio.noaa.gov/
services_programs/prasubs.html.
List of Subjects
15 CFR Part 902
Reporting and recordkeeping
requirements.
50 CFR Part 300
Administrative practice and
procedure, Antarctica, Canada, Exports,
Fish, Fisheries, Fishing, Imports,
Indians, Labeling, Marine resources,
Reporting and recordkeeping
requirements, Russian Federation,
Transportation, Treaties, Wildlife.
50 CFR Part 679
Alaska, Fisheries, Reporting and
recordkeeping requirements.
Dated: September 14, 2018.
Samuel D. Rauch, III,
Deputy Assistant Administrator for
Regulatory Programs, National Marine
Fisheries Service.

For the reasons set out in the
preamble, NMFS amends 15 CFR part
902 and 50 CFR parts 300 and 679 as
follows:
Title 15—Commerce and Foreign Trade
PART 902—NOAA INFORMATION
COLLECTION REQUIREMENTS UNDER
THE PAPERWORK REDUCTION ACT:
OMB CONTROL NUMBERS
1. The authority citation for part 902
continues to read as follows:

■

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Authority: 44 U.S.C. 3501 et seq.

2. In § 902.1, in the table in paragraph
(b), under the entry ‘‘50 CFR’’:
■ a. Add an entry in alphanumeric order
for ‘‘679.5(v)’’; and
■ b. Revise the entry for ‘‘679.41(b),
(c)(1) through (9), (d) through (f), (g)(1)
through (4), (h) through (k), and (m)’’.
The addition and revision read as
follows:
■

§ 902.1 OMB control numbers assigned
pursuant to the Paperwork Reduction Act.

*

*
*
(b) * * *

*

*

CFR part or section
where the information
collection requirement
is located
*
50 CFR:

*

*

*
*
*
679.5(v) .......................

*

*
*
*
679.41(b), (c)(1)
through (9), (d)
through (f), (g)(1)
through (4), (h)
through (k), (m), and
(n) ............................

*

*

*

*

Current OMB
control No.
(all numbers begin
with 0648–)

*

*

*

*
–0272
*

–0272

*

*

*

*

*

*

Title 50—Wildlife and Fisheries
PART 300—INTERNATIONAL
FISHERIES REGULATIONS
Subpart E—Pacific Halibut Fisheries
3. The authority citation for part 300,
subpart E, continues to read as follows:

■

Authority: 16 U.S.C. 773–773k.

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

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

*

*
*
*
*
(c) * * *
(1) * * *
(iii) Authorizes the use of
Commission regulatory areas 2C and 3A
RFQ resulting from halibut QS held by
the RQE as authorized in part 679 to this
title to supplement the annual guided
sport catch limit in the corresponding

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area, pursuant to paragraph (c)(4) of this
section.
*
*
*
*
*
(4) * * *
(i) The Commission regulatory areas
2C and 3A annual guided sport catch
limits are determined by subtracting
wastage from, and adding any pounds of
RFQ held by an RQE for that area to, the
allocations in Tables 3 and 4 of this
subpart, adopted by the Commission as
annual management measures, and
published in the Federal Register as
required in § 300.62.
*
*
*
*
*
(iii) The amount of QS held by the
RQE for Commission regulatory area 2C
and 3A as of October 1 each year will
be the basis for determining the amount
of RFQ pounds that will be added to the
annual guided sport catch limit for the
corresponding area in the upcoming
year.
(5) * * *
(ii) * * *
(D) * * *
(1) * * *
(iv) In the applicable Commission
regulatory area, either Area 2C or Area
3A, the sum of IFQ halibut equivalent
pounds, as defined in § 679.2 of this
title, from the transfer of IFQ to GAF
and the pounds of RFQ issued to the
RQE during a calendar year does not
exceed an amount that is greater than
the amount derived from: 5,947,740
units of Area 2C QS, or 22,187,161 units
of Area 3A QS.
*
*
*
*
*
PART 679—FISHERIES OF THE
EXCLUSIVE ECONOMIC ZONE OFF
ALASKA
5. The authority citation for part 679
continues to read as follows:

■

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

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

■

§ 679.2

Definitions.

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*

*
*
*
*
Recreational Fishing Quota (RFQ)
means the pounds of halibut issued
annually to a Recreational Quota Entity
to supplement the annual guided sport
catch limit under the catch sharing plan
for IFQ regulatory areas 2C and 3A
pursuant to § 300.65(c) of this title.
Recreational Quota Entity (RQE)
means a non-profit entity incorporated
under the laws of the State of Alaska,
recognized as exempt from Federal
income tax by the Internal Revenue

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Service, and authorized by NMFS to
participate in the Halibut IFQ Program
to hold commercial halibut quota share
to supplement the annual guided sport
catch limit in IFQ regulatory areas 2C
and 3A under the catch sharing plan
pursuant to § 300.65(c) of this title.
NMFS will authorize only one RQE at
a time.
*
*
*
*
*
7. In § 679.4, add paragraph (d)(1)(iv)
to read as follows:

■

§ 679.4

Permits.

*

*
*
*
*
(d) * * *
(1) * * *
(iv) An RFQ permit account identifies
the amount of RFQ authorized for use
by charter vessel anglers in Area 2C or
Area 3A. The number of pounds of RFQ
allocated to the RFQ permit account
will be added to the annual guided sport
catch limit under the catch sharing plan
(described at 50 CFR 300.65(c)) for the
appropriate IFQ regulatory area, Area 2C
or Area 3A.
*
*
*
*
*
■ 8. In § 679.5:
■ a. Revise paragraphs (l)(7)(ii)(A), (C),
and (D); and
■ b. Add paragraphs (l)(9) and (v).
The revisions and additions read as
follows:
§ 679.5
(R&R).

Recordkeeping and reporting

*

*
*
*
*
(l) * * *
(7) * * *
(ii) * * *
(A) Applicability. An IFQ permit
holder who holds an IFQ permit against
which a landing was made or an RQE
that holds RFQ must submit to NMFS a
complete IFQ Permit Holder Fee
Submission Form provided by NMFS.
*
*
*
*
*
(C) Completed application. NMFS
will process an IFQ Permit Holder Fee
Submission Form provided that a paper
or electronic form is completed by the
IFQ permit holder or an RQE that holds
RFQ, with all applicable fields
accurately filled in, and all required
additional documentation is attached.
(D) IFQ landing summary and
estimated fee liability. NMFS will
provide to an IFQ permit holder and an
RQE that holds RFQ an IFQ Landing
and Estimated Fee Liability page as
required by § 679.45(a)(2). The IFQ
permit holder must either accept the
accuracy of the NMFS estimated fee
liability associated with his or her IFQ
landings for each IFQ permit, or
calculate a revised IFQ fee liability in
accordance with paragraph (l)(7)(ii)(E)

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of this section. The IFQ permit holder
may calculate a revised fee liability for
all or part of his or her IFQ landings.
*
*
*
*
*
(9) Recreational Quota Entity Program
annual report. An annual report on RQE
activities must be submitted to NMFS
by the RQE as required at § 679.5(v).
*
*
*
*
*
(v) Recreational Quota Entity Program
Annual Report—(1) Applicability. The
RQE must submit a timely and complete
annual report on the RQE’s
administrative activities and business
operation for each calendar year that it
holds halibut recreational fishing quota
(RFQ) and quota shares (QS). The RQE
may combine annual reports on its
holdings of halibut QS and RFQ for IFQ
regulatory areas 2C and 3A into one
report. The RQE must submit annual
report data for the halibut QS and RFQ
it held during the calendar year. The
RQE is not required to submit an annual
report for any calendar year in which it
did not hold any halibut QS or RFQ.
(2) Time limits and submittal. By
January 31, the RQE must submit a
complete annual report for the prior
calendar year to the North Pacific
Fishery Management Council, 605 West
4th Ave., Suite 306, Anchorage, AK
99501–2252, and to NMFS-Alaska
Regional Administrator, P.O. Box 21668,
Juneau, AK 99802–1668.
(3) Complete annual report. A
complete annual report contains all
general report requirements described in
paragraphs (v)(4)(i) through (iv) of this
section, and all information specific to
IFQ regulatory areas 2C and 3A
described in paragraphs (v)(5)(i) through
(iii) of this section.
(4) General report requirements. The
RQE must annually report the following
information:
(i) Any changes to the bylaws, board
of directors, or other key management
personnel of the RQE from the
preceding year;
(ii) Amount and description of annual
administrative expenses;
(iii) Amount and description of funds
spent on conservation and research,
including a summary of the results of
those expenditures; and
(iv) Amount and description of all
other expenses incurred by the RQE.
(5) Information by IFQ regulatory
area. For each IFQ regulatory area
represented by the RQE, the RQE must
annually report the following
information:
(i) The total amount of halibut QS by
category and blocks held by the RQE at
the start of the calendar year, on October
1, and at the end of the calendar year;

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(ii) A list of all transfers (purchases or
sales) of halibut QS, including the
transaction price; and
(iii) A description of the number of
charter halibut permits and number of
angler endorsements purchased and
held by the RQE.
9. In § 679.7, add paragraph (f)(3)(i)(C)
to read as follows:

■

§ 679.7

Prohibitions.

*

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

Sablefish and halibut QS.

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*

*
*
*
*
(b) Annual allocation of IFQ and RFQ.
The Regional Administrator shall assign
halibut or sablefish IFQs to each person,
except the RQE, holding unrestricted QS
halibut or sablefish, respectively, up to
the limits prescribed in § 679.42(e) and
(f). Each assigned IFQ will be specific to
an IFQ regulatory area and vessel
category, and will represent the
maximum amount of halibut or
sablefish that may be harvested from the
specified IFQ regulatory area and by the
person to whom it is assigned during
the specified fishing year, unless the
IFQ assignment is changed by the
Regional Administrator within the
fishing year because of an approved
transfer or because all or part of the IFQ
is sanctioned for violating rules of this
part. The Regional Administrator shall
assign RFQ to the RQE pursuant to
paragraph (c)(4) of this section.
(c) Calculation of annual IFQ and
RFQ allocations.* * *
(2) QS amounts. For purposes of
calculating IFQs and RFQ for any
fishing year, the amount of a person’s
QS and the amount of the QS pool for
any IFQ regulatory area will be the
amounts on record with the Alaska
Region, NMFS, on January 15 of that
year.
*
*
*
*
*
(4) RFQ allocation to RQE—(i) RQE
QS amounts. For purposes of
calculating RFQ for any fishing year, the
amount of halibut QS held by the RQE
for either IFQ regulatory area 2C or 3A

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16:15 Sep 20, 2018

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for the corresponding IFQ regulatory
area will be the amounts on record with
the Alaska Region, NMFS on October 1
of the year prior.
(ii) Calculation of RFQ. The annual
allocation of RFQ halibut to an RQE
(person r) in IFQ regulatory area 2C or
3A (area a) will be equal to the product
of the annual commercial catch limit as
defined in § 300.61 of this title, and the
QS held by the RQE (specified in
paragraph (c)(4)(i) of this section)
divided by the QS pool for that area
(specified in paragraph (c)(2) of this
section). No overage or underage
adjustments will be applied to the
RQE’s annual RFQ. Expressed
algebraically, the annual RFQ halibut
allocation formula is as follows:
RFQra = [fixed gear TACa × (QSra/QS
poola)]
(iii) Excess RFQ. NMFS will not issue
the RQE any excess RFQ. Excess RFQ is
the difference between the amount of
RFQ based on the QS held by the RQE
and the amount of RFQ needed to
provide charter fishery management
measures that are equivalent to
unguided recreational fishery
management measures. If the annual
management measures published
pursuant to § 300.62 of this title specify
charter fishery management measures
that are equivalent to the unguided
recreational management measures,
NMFS will:
(A) Calculate the annual allocation of
halibut RFQ to the RQE as specified in
paragraph (c)(4)(ii) of this section; and
(B) Determine the amount of RFQ
needed to supplement the annual
guided sport catch limit from the CSP in
Area 2C and Area 3A (described in
§ 300.65(c) of this title) to account for
charter fishery harvests under the
charter fishery management measures
specified in the annual management
measures and issue that amount of RFQ
to the RFQ permit account.
(C) Calculate the amount of excess
RFQ by subtracting the amount of RFQ
issued as determined in paragraph
(c)(4)(iii)(B) of this section from the
annual calculation of RFQ halibut to the
RQE as calculated in paragraph
(c)(4)(iii)(A) of this section.
(iv) Redistribution of excess RFQ.
Excess pounds of RFQ will be
redistributed as IFQ as follows:
(A) 50 percent to all catcher vessel QS
holders in the applicable area who held
not more than 32,333 QS units in Area
2C, and 47,469 QS units in Area 3A in
the current calendar year and in the
calendar year prior to the redistribution,
in proportion to their QS holdings; and
(B) 50 percent divided equally among
all CQEs that held halibut QS in the

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Fmt 4700

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47831

applicable IFQ regulatory area (Area 2C
or Area 3A) in the current calendar year
and in the calendar year prior to the
redistribution. If no CQE held QS in the
applicable IFQ regulatory area (Area 2C
and Area 3A) in the current calendar
year and in the calendar year prior to
the redistribution, that RFQ will not be
redistributed as IFQ and will not be
available for use by any CQE, IFQ
permit holder, or RQE in that calendar
year.
*
*
*
*
*
(g) * * *
(2) * * *
(iii) The fish will not be calculated as
part of the recreational harvest of
halibut and will not be debited against
the RFQ permit account or the annual
guided sport catch limit as defined in
§ 300.61 of this title.
(h) * * *
(3) Source of debit. NMFS will use the
following sources (see paragraphs
(h)(3)(i), (ii) and (iii) of this section) of
information to debit a CDQ halibut, IFQ
halibut, IFQ sablefish, or RFQ permit
account:
*
*
*
*
*
(iii) Landed RFQ. All annual RFQ
halibut issued to an RQE will be
considered landed in the year for which
it is issued.
11. In § 679.41:
a. Redesignate paragraph (c)(11) as
paragraph (c)(12);
■ b. Add new paragraph (c)(11);
■ c. Revise paragraphs (d)(1) and (g)(1);
and
■ d. Add paragraphs (g)(9) through (11)
and (n).
The additions and revisions read as
follows:
■
■

§ 679.41

Transfer of quota shares and IFQ.

*

*
*
*
*
(c) * * *
(11) If the person applying to receive
or transfer QS is an RQE, the following
determinations are required:
(i) The RQE applying to receive or
transfer QS, has submitted the timely
and complete annual report required by
§ 679.5(v);
(ii) The RQE applying to receive QS
is eligible to hold QS on behalf of the
charter halibut sector in IFQ regulatory
area 2C or 3A; and
(iii) The RQE applying to receive QS
has received notification of approval of
eligibility to receive QS on behalf of the
charter halibut sector in IFQ regulatory
area 2C or 3A as described in paragraph
(d)(1) of this section.
*
*
*
*
*
(d) * * *
(1) Application for Eligibility. All
persons applying to receive QS or IFQ

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations

must submit an Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) containing
accurate information to the Regional
Administrator. An Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) is not
required for a CQE if a complete
application to become a CQE, as
described in paragraph (l)(3) of this
section, has been approved by the
Regional Administrator on behalf of an
eligible community. An Application for
Eligibility to Receive QS/IFQ
(Application for Eligibility) is not
required for the RQE if a complete
application to become an RQE, as
described in paragraph (n)(2) of this
section, has been approved by the
Regional Administrator. The Regional
Administrator will not approve a
transfer of IFQ or QS to a person until
the Application for Eligibility for that
person is approved by the Regional
Administrator. The Regional
Administrator will provide an
Application for Eligibility form to any
person on request.
*
*
*
*
*
(g) * * *
(1) Except as provided in paragraph
(f), (g)(2), (l), or (n) of this section, only
persons who are IFQ crew members, or
who were initially issued QS assigned
to vessel categories B, C, or D, and meet
the eligibility requirements in this
section, may receive by transfer QS
assigned to vessel categories B, C, or D,
or the IFQ resulting from it.
*
*
*
*
*
(9) For transfers of QS to an RQE, the
RQE may only receive halibut QS that
is assigned to IFQ regulatory area 2C or
3A.
(10) For transfers of QS from an RQE:
(i) Quota category and block
designations at time of purchase by an
RQE are retained if QS is transferred to
an eligible QS holder for use in the IFQ
program.
(ii) NMFS will not issue any IFQ from
any QS transferred from an RQE to a QS
holder for use in the IFQ program for a
calendar year if that QS resulted in the
issuance of RFQ to an RQE during that
calendar year.
(11)(i) To maintain eligibility as the
RQE authorized by NMFS, the RQE
must be a non-profit entity incorporated
under the laws of the State of Alaska
and recognized as exempt from Federal
income tax by the Internal Revenue
Service as required by paragraph
(n)(1)(ii) of this section.
(ii) If the Regional Administrator
determines the RQE approved by NMFS
does not meet the requirements
specified in paragraph (n)(1) of this

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section, NMFS will notify the RQE of
the Regional Administrator’s
determination and specify that the RQE
has 60 days to meet the requirements in
paragraph (n)(1) of this section to
maintain eligibility as the RQE
authorized by NMFS.
(iii) If the RQE demonstrates to NMFS
within 60 days of notification that it
meets the requirements in paragraph
(n)(1) of this section, NMFS will notify
the RQE that it remains the authorized
RQE.
(iv) If the RQE does not demonstrate
to NMFS within 60 days of notification
that it meets the requirements in
paragraph (n)(1) of this section, NMFS
will issue an initial administrative
determination (IAD):
(A) Revoking authorization of the
RQE;
(B) Disallowing the RQE from
receiving any QS by transfer;
(C) Requiring the CQE to divest of any
QS that it holds; and
(D) Withholding the issuance of RFQ
based on any QS that the RQE holds.
(v) The RQE will have the opportunity
to appeal the IAD through the National
Appeals Office under the provisions
established at 15 CFR part 906.
*
*
*
*
*
(n) Transfer of halibut QS to an
RQE—(1) RQE organizational structure.
(i) The RQE must be a single entity
representing IFQ regulatory Areas 2C
and 3A.
(ii) The RQE must be a non-profit
entity incorporated under the laws of
the State of Alaska and recognized as
exempt from Federal income tax by the
Internal Revenue Service; and
(iii) The RQE must submit an annual
report to NMFS and the Council
detailing RQE activities during the prior
year according to § 679.5(v).
(2) Application for Eligibility. Prior to
initially receiving QS by transfer, a nonprofit entity that intends to participate
in the Halibut IFQ Program and
purchase and hold halibut QS in Area
2C and Area 3A as the RQE must have
approval from the Regional
Administrator. To receive that approval,
the non-profit entity seeking to become
an RQE must submit a complete
‘‘Application for a Non-profit Entity to
be Designated as a Recreational Quota
Entity (RQE)’’ (available on the NMFS
Alaska Region website at https://
alaskafisheries.noaa.gov/). NMFS will
approve only one entity as the RQE. A
complete application to become an RQE
must include:
(i) The articles of incorporation under
the laws of the State of Alaska for that
non-profit entity;
(ii) Acknowledgement from the
Internal Revenue Service that the non-

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profit entity is exempt from Federal
income tax under section 501(a) of the
Internal Revenue Code; and
(iii) Management organization
information, including:
(A) The bylaws of the non-profit
entity;
(B) A list of key personnel of the
managing organization including, but
not limited to, the RQE board of
directors, officers, representatives, and
any managers;
(C) A description of how the nonprofit entity is qualified to manage QS
on behalf of charter fishery participants
and a demonstration that the non-profit
entity has the management, technical
expertise, and ability to manage QS and
RFQ;
(D) The name of the non-profit
organization, taxpayer ID number,
NMFS person number, permanent
business mailing addresses, name of
contact persons and additional contact
information of the managing personnel
for the non-profit entity, resumes of
management personnel, name and
notarized signature of applicant, and
Notary Public signature and date when
commission expires; and
(iv) A statement describing the
procedures that will be used to
determine the acquisition of funds to
purchase QS.
(3) Address for submittal of
application. Regional Administrator,
NMFS, P.O. Box 21668, Juneau, AK
99802.
(4) Approval. NMFS will approve the
first complete application received. If an
application is approved, NMFS will
notify the RQE by mail, unless another
mode of communication is requested on
the application.
(5) Disapproval. If an application is
disapproved, that determination may be
appealed under the provisions
established at 15 CFR part 906.
■ 12. In § 679.42:
■ a. Add paragraph (a)(2)(v);
■ b. Revise paragraph (f)(1) introductory
text; and
■ c. Add paragraphs (f)(8) and (g)(1)(iii).
The additions and revision read as
follows:
§ 679.42

Limitations on use of QS and IFQ.

(a) * * *
(2) * * *
(v) In IFQ regulatory areas 2C and 3A,
RFQ held by an RQE may be harvested
aboard charter vessels as defined at 50
CFR 300.61 of any size, regardless of the
QS category from which that RFQ
originated.
*
*
*
*
*
(f) * * *
(1) Unless the amount in excess of the
following limits was received in the

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initial allocation of halibut QS, no
person other than a CQE representing
the community of Adak, AK,
individually or collectively, or an RQE,
may use more than:
*
*
*
*
*
(8)(i) Annual transfer limits. The RQE
may not receive by transfer more than
594,774 units of Area 2C halibut QS and
more than 2,218,716 units of Area 3A
halibut QS in a year.
(ii) Cumulative use limits. The RQE
may not hold more than 5,947,740 units
of Area 2C halibut QS and more than
22,187,161 units of Area 3A halibut QS.
(iii) Vessel category restrictions. (A)
The RQE may not hold more than
889,548 units of halibut QS in IFQ
regulatory area 2C that is assigned to
vessel category D.
(B) The RQE may not hold halibut QS
in IFQ regulatory area 3A that is
assigned to vessel category D.
(C) The RQE may not hold more than
265,524 units of halibut QS that is
assigned to vessel category B in IFQ
regulatory area 2C.
(g) * * *
(1) * * *
(iii) The RQE may not receive:
(A) Transfers of halibut QS blocks of
less than or equal to 24,250 quota share
units in IFQ regulatory area 2C.
(B) Transfers of halibut QS blocks of
less than or equal to 35,620 quota share
units in IFQ regulatory area 3A.
*
*
*
*
*
■ 13. In § 679.45:
■ a. Revise paragraphs (a)(1), (a)(2)(i)
introductory text, and (a)(2)(i)(A);
■ b. Add paragraphs (a)(2)(i)(B)(3) and
(a)(2)(i)(D); and
■ c. Revise paragraphs (a)(3), (a)(4)(i),
(b)(1), and (f)(2).
The revisions and addition read as
follows:
§ 679.45

IFQ cost recovery program.

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(a) * * *
(1) Responsibility. An IFQ permit
holder is responsible for cost recovery
fees for landings of his or her IFQ
halibut and sablefish, including any

halibut landed as guided angler fish
(GAF), as defined in § 300.61 of this
title, derived from his or her IFQ
accounts. An RQE is responsible for cost
recovery fees for all RFQ issued to the
RQE. An IFQ permit holder or RQE
must comply with the requirements of
this section.
(2) * * *
(i) General. IFQ fee liability means a
cost recovery liability based on either
the value of all landed IFQ and GAF
derived from the permit holder’s IFQ
permit(s), or the value of all RFQ issued
to an RQE.
(A) Each year, the Regional
Administrator will issue each IFQ
permit holder a summary of his or her
IFQ equivalent pounds landed as IFQ
and GAF and will issue an RQE a
summary of its RFQ pounds issued as
part of the IFQ Landing and Estimated
Fee Liability page described at
§ 679.5(l)(7)(ii)(D).
(B) * * *
(3) All RFQ issued to an RQE in IFQ
regulatory area 2C or 3A will be
assessed at the IFQ regulatory area 2C or
3A IFQ standard ex-vessel value.
*
*
*
*
*
(D) An RQE may not challenge the
standard ex-vessel value used to
determine the fee liability for all RFQ
issued to the RQE.
*
*
*
*
*
(3) Fee collection. (i) An IFQ permit
holder with IFQ and/or GAF landings is
responsible for collecting his or her own
fee during the calendar year in which
the IFQ fish and/or GAF are landed.
(ii) An RQE is responsible for
collecting its own fees during the
calendar year in which the RFQ is
issued to the RQE.
(4) * * *
(i) Payment due date. An IFQ permit
holder or RQE must submit its IFQ fee
liability payment(s) to NMFS as
instructed at paragraph (a)(4)(iii) of this
section not later than January 31 of the
year following the calendar year in

47833

which the IFQ or GAF landings were
made or the RFQ was issued to the RQE.
*
*
*
*
*
(b) * * *
(1) General. (i) An IFQ permit holder
must use either the IFQ actual ex-vessel
value or the IFQ standard ex-vessel
value when determining the IFQ fee
liability based on ex-vessel value,
except that landed GAF are assessed at
the standard ex-vessel values derived by
NMFS. An IFQ permit holder must base
all fee liability calculations on the exvessel value that correlates to landed
IFQ in IFQ equivalent pounds.
(ii) An RQE must use the IFQ
standard ex-vessel value derived by
NMFS for all RFQ issued to the RQE.
*
*
*
*
*
(f) * * *
(2) After the expiration of the 30-day
period, the Regional Administrator will
evaluate any additional documentation
submitted by an IFQ permit holder or
RQE in support of its payment. If the
Regional Administrator determines that
the additional documentation does not
meet the burden of proving the payment
is correct, the Regional Administrator
will send the IFQ permit holder or RQE
an IAD indicating that the IFQ permit
holder or RQE did not meet the burden
of proof to change the IFQ fee liability
as calculated by the Regional
Administrator based upon the IFQ
standard ex-vessel value. The IAD will
set out the facts and indicate the
deficiencies in the documentation
submitted by the IFQ permit holder or
RQE. An IFQ permit holder or RQE who
receives an IAD may appeal the IAD, as
described in paragraph (h) of this
section.
*
*
*
*
*
§ § 679.41 and 679.45

[Amended]

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

■

Location

Remove

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

50 CFR 679.43 ................................................

15 CFR part 906.

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

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

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

VerDate Sep<11>2014

16:15 Sep 20, 2018

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

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Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Rules and Regulations
Location

Remove

Add

§ 679.45(e)(1)(i) and (ii) ......................................
§ 679.45(e)(1)(i) ..................................................
§ 679.45(e)(2) .....................................................

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

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

IFQ permit holder .............................................
IFQ permit holder has ......................................
by the IFQ permit holder ..................................
§ 679.43 ............................................................
the IFQ permit holder .......................................
IFQ permit holder unless the permit holder requests.
IFQ permit holder’s ..........................................
§ 679.43 ............................................................

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

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

[FR Doc. 2018–20410 Filed 9–20–18; 8:45 am]
BILLING CODE 3510–22–P

SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 227 and 230
[Release No. 33–10556]

Regulation Crowdfunding and
Regulation A Relief and Assistance for
Victims of Hurricane Florence
Securities and Exchange
Commission.
ACTION: Interim final temporary rule.
AGENCY:

We are adopting interim final
temporary rules for issuers subject to
reporting obligations pursuant to
Regulation Crowdfunding and
Regulation A in order to address the
needs of companies directly or
indirectly affected by Hurricane
Florence. The temporary rules extend
the filing deadlines for specified reports
and forms due pursuant to Regulation
Crowdfunding and Regulation A for
certain issuers.
DATES: These rules are effective from
September 21, 2018, through October
29, 2018.
FOR FURTHER INFORMATION CONTACT:
Jennifer Zepralka, Office Chief, or Amy
Reischauer, Special Counsel, Office of
Small Business Policy, Division of
Corporation Finance, at (202) 551–3460,
U.S. Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–3628.
SUPPLEMENTARY INFORMATION: We are
adopting amendments to 17 CFR
227.202 (‘‘Rule 202’’) of Regulation
Crowdfunding 1 under the Securities
Act of 1933 (the ‘‘Securities Act’’) 2 and
17 CFR 230.257 (‘‘Rule 257’’) of
Regulation A 3 under the Securities Act
as interim final temporary rules.

daltland on DSKBBV9HB2PROD with RULES

SUMMARY:

1 17

CFR 227 et seq.
U.S.C. 77a et seq.
3 17 CFR 230.251 through 230.263.

17:31 Sep 20, 2018

II. Temporary Relief From Filing
Requirements for Issuers Subject to the
Reporting Obligations of Regulation
Crowdfunding or Regulation A
The lack of communications,
transportation, electricity, facilities, and
available staff and professional advisors
as a result of Hurricane Florence could
hamper the efforts of companies with
reporting obligations to meet their filing
deadlines pursuant to Regulation
Crowdfunding or Regulation A. At the
same time, investors have an interest in
the timely availability of required
information about these companies.
While the Commission believes that the
temporary relief from filing
requirements provided by the
amendments to Rule 202 of Regulation
Crowdfunding 5 and Rule 257 of
U.S.C. 77z–3.
Rule 202(c) of Regulation Crowdfunding. 17
CFR 227.202(c).

Regulation A 6 is both necessary in the
public interest and consistent with the
protection of investors, we remind
companies that are the subject of the
relief provided in these interim final
temporary rules to continue to evaluate
their obligations to make materially
accurate and complete disclosures in
accordance with the anti-fraud
provisions of the federal securities laws.
Accordingly, pursuant to Section 28
of the Securities Act, we are adopting
interim final temporary rules providing
that an issuer subject to the reporting
requirements of either Regulation
Crowdfunding or Regulation A is
exempt from any requirement to file
specified reports or forms with the
Commission where the conditions
below are satisfied:
(a) The issuer is not able to meet a
filing deadline due to Hurricane
Florence or its aftermath;
(b) The issuer files with the
Commission, on or before October 29,
2018, the report or form required to be
filed pursuant to either Regulation
Crowdfunding or Regulation A during
the period from and including
September 14, 2018 to and including
October 26, 2018; and
(c) In any such report or form, the
issuer discloses that it is relying on the
interim final temporary rules and states
the reasons why, in good faith, it could
not file such report or form on a timely
basis.
For Regulation Crowdfunding, the
relief includes annual reports on Form
C–AR, progress updates on Form C–U,
and termination of reporting on Form
C–TR. For Regulation A, the relief
includes post-qualification amendments
required at least every 12 months after
the qualification date to include
updated financial statements, annual
reports on Form 1–K, semi-annual
reports on Form 1–SA, special financial
reports on Forms 1–K or 1–SA, current

4 15

2 15

VerDate Sep<11>2014

I. Introduction
On September 14, 2018, Hurricane
Florence made landfall near the North
Carolina and South Carolina border. The
storm and subsequent flooding have
displaced individuals and businesses
and disrupted communications and
transportation across the affected region.
We are adopting these interim final
temporary rules to address the needs of
companies directly or indirectly affected
by Hurricane Florence or its aftermath
that are subject to reporting obligations
pursuant to Regulation Crowdfunding or
Regulation A.
Section 28 of the Securities Act
provides that the Commission may, by
rule or regulation, ‘‘conditionally or
unconditionally exempt any person,
security, or transaction, or any class or
classes of persons, securities, or
transactions, from any provision or
provisions of this title or of any rule or
regulation issued under this title, to the
extent that such exemption is necessary
or appropriate in the public interest,
and is consistent with the protection of
investors.’’ 4

5 See

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6 See Rule 257(f) of Regulation A. 17 CFR
230.257(f).

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