Daily Rules, Proposed Rules, and Notices of the Federal Government
Wreckfish is part of the snapper-grouper fishery and is managed under the FMP. The FMP was prepared by the Council and is implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act.
On January 12, 2012, NMFS published a notice of availability for Amendment 20A and requested comments (77 FR 1908). On March 30, 2012, NMFS published a proposed rule for Amendment 20A and requested public comments (77 FR 19165). The proposed rule and Amendment 20A outline the rationale for the actions contained in this final rule. Amendment 20A was approved by the Secretary of Commerce on April 6, 2012. A summary of the actions implemented by this final rule are provided below.
This final rule revises the wreckfish ITQ program, established in 1992, by defining and reverting inactive wreckfish quota shares, redistributing reverted quota shares to remaining shareholders, establishing a share cap, and establishing an appeals process for redistribution of reverted wreckfish quota shares. The intent of this rule is to achieve OY in the wreckfish commercial sector while maximizing harvest potential and not exceeding the annual catch limit (ACL).
When the Council took final action to approve Amendment 20A in December 2011, there were 20 wreckfish shareholders. Of those 20 shareholders, 13 were considered to be “inactive” and 7 “active” as defined in Amendment 20A. The 13 inactive shareholders held 28.18 percent of the shares, which would be redistributed among the 7 active wreckfish shareholders. After the Council took final action, several share transfers occurred which changed the distribution of shares in the wreckfish commercial sector of the snapper-grouper fishery. As of September 26, 2012, there are 6 active shareholders and 4 inactive shareholders. The active shareholders now hold 98.599 percent of the shares, and the inactive shareholders now hold 1.401 percent of the shares. The proposed rule and Amendment 20A state that 5 percent of the wreckfish quota shares will be set-aside, to resolve any appeals, for a period of 90 days starting on the effective date of the final rule. Due to the share transfers that occurred after the Council took final action to approve Amendment 20A in December 2011, only 1.401 percent of the shares remains “inactive” and thus are available to be reverted and redistributed. Therefore, only 1.401 percent is available as the set-aside to resolve any appeals, and NMFS will redistribute any shares remaining after the appeals process is complete. Any shares remaining after
NMFS received a total of 13 comments on Amendment 20A and the proposed rule, which include comments from individuals, including those in the recreational sector, restaurant and seafood businesses, and a consulting firm. Comments received regarding the value of the wreckfish ACL, the acceptable biological catch level, and the recreational wreckfish allocation, are related to actions contained in the South Atlantic Comprehensive Annual Catch Limit Amendment (Comprehensive ACL Amendment), and are not in Amendment 20A. The final rule to implement the Comprehensive ACL Amendment (77 FR 15916, March 16, 2012), which became effective April 16, 2012, addressed all comments received on that amendment and its proposed rules. Specific comments related to the actions contained in Amendment 20A and the proposed rule and NMFS' respective responses, are summarized below.
The Council chose to redistribute latent (inactive) shares to active commercial participants to optimize commercial wreckfish harvest and minimize latent effort. The Council's decision allows those participants, who are more dependent on wreckfish harvest, to retain their current shares and to be eligible to receive shares from redistribution. The Council chose to redistribute inactive shares to wreckfish shareholders who reported wreckfish landings during the fishing years 2006/2007 through 2010/2011.
The creation of market power in seafood markets through concentration of wreckfish quota shares is unlikely because wreckfish directly competes against other domestically harvested and imported groupers, snappers, and other fish. Further, most of the important inputs (
A share cap implemented in a commercial sector operating under a catch share program customarily applies at the individual rather than the shareholder level. This approach prevents individuals from exceeding the share cap by being or becoming partial or full owners of other entities that also own quota shares, or more specifically share certificates in the case of wreckfish.
With respect to the 49-percent share cap alternative, although this alternative does not allow the historically largest harvester to maintain his recent level of landings, it does allow this individual to come relatively close, particularly if the individual chooses to buy additional shares up to the 49-percent cap. As such, the Council expected this individual to have sufficient quota shares to continue operations after redistribution of the inactive shares. Further, the other individuals were expected to have sufficient shares to maintain or even exceed their recent landings after redistribution of the inactive shares. Thus, the 49-percent share cap alternative was the most likely to ensure the commercial ACL is harvested and OY is attained. The Council thought it was equitable to allow shareholders with greater economic dependence on wreckfish landings to possess relatively more of the quota shares. Given the benefits of the 49-percent share cap alternative
The Regional Administrator, Southeast Region, NMFS has determined that the actions contained in this final rule are necessary for the conservation and management of the snapper-grouper fishery in the South Atlantic and that they are consistent with Amendment 20A, the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here.
One of the comments addressed in the Supplementary Information section, regarding the distribution of the latent shares that would be revoked, included economic implications and is also addressed here. This comment stated that the latent shares should be retired and not redistributed to other commercial shareholders with the exception that a small unspecified portion should be given to the recreational sector. The final rule for the Comprehensive ACL Amendment, which became effective on April 16, 2012 (77 FR 15916, March 16, 2012), allocated 95 percent of the wreckfish ACL to the commercial sector and 5 percent to the recreational sector. Allocating some portion of latent shares to the recreational sector and retiring the rest would be inconsistent with the allocation established by the Council in the Comprehensive ACL Amendment, would not allow the commercial ACL to be harvested, and would result in reduced economic benefits to commercial small business entities. Therefore, no change has been made to this final rule as a result of this comment.
Because this final rule reduces the set-aside for appeals from 5 percent to 1.401 percent and, more importantly, inactive shareholders hold all of the quota shares being set-aside, active shareholders are not expected to experience any direct, adverse economic effects due to this action. Further, because the inactive shareholders have no gross revenue or profits from commercial fishing for wreckfish, the set-aside of their quota shares in the short-term to resolve appeals would not reduce their gross revenue or profit. Thus, the direct, adverse economic effects on shareholders as a result of this action and final rule will be less than what was estimated in the proposed rule. No other new information has been received that would affect the analysis of impacts on small entities. As a result, a final regulatory flexibility analysis was not required and none was prepared.
This final rule contains a collection-of-information requirement subject to the Paperwork Reduction Act (PRA), which has been approved by OMB under control number 0648-0551. Public reporting burden for the appeals process regarding the redistribution of inactive wreckfish shares is estimated to average 2 hours per response, including 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
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.
Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping requirements, Virgin Islands.
For the reasons set out in the preamble, 50 CFR part 622 is amended as follows:
16 U.S.C. 1801