[Federal Register Volume 76, Number 99 (Monday, May 23, 2011)]
[Proposed Rules]
[Pages 29707-29717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-12650]
[[Page 29707]]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 100825389-1276-01]
RIN 0648-BA13
Fishing Capacity Reduction Program for the Southeast Alaska Purse
Seine Salmon Fishery
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Proposed rule; request for comments.
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SUMMARY: NMFS proposes regulations to implement a fishing capacity
reduction program and an industry fee system to repay a $23.5 million
loan for the Southeast Alaska Purse Seine Salmon Fishery (Reduction
Fishery). The fee system involves future landings of the Reduction
Fishery. This action's intent is to permanently reduce the most fishing
capacity at the least cost and establish the fee system.
DATES: Comments must be submitted in writing on or before June 22,
2011.
ADDRESSES: You may submit comments, identified by 0648-BA13 by either
of the following methods:
Electronic Submissions: Submit all electronic public
comments via the Federal eRulemaking Portal http://www.regulations.gov;
or
Mail: Paul Marx, Chief, Financial Services Division, NMFS,
Attn: SE Alaska Purse Seine Salmon Rulemaking, 1315 East-West Highway,
Silver Spring, MD 20910.
Instructions: All comments received are a part of the public record
and will generally be posted to http://www.regulations.gov without
change. All Personal Identifying Information (for example, name,
address, etc.) voluntarily submitted by the commenter may be publicly
accessible. Do not submit Confidential Business Information or
otherwise sensitive or protected information.
NMFS will accept anonymous comments (enter ``N/A'' in the required
fields, if you wish to remain anonymous). You may submit attachments to
electronic comments in Microsoft Word, Excel, WordPerfect, or Adobe PDF
file formats only.
Copies of the Environmental Assessment/Regulatory Impact Review/
Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) prepared for this
action may be obtained from the mailing address above or by calling
Michael A. Sturtevant (see FOR FURTHER INFORMATION CONTACT).
Send comments regarding the burden-hour estimates or other aspects
of the collection-of-information requirements contained in this
proposed rule to Michael A. Sturtevant at the address specified above
and also to the Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), Washington, DC 20503 (Attention: NOAA Desk
Officer) or e-mail to [email protected], or fax to (202)
395-7825.
FOR FURTHER INFORMATION CONTACT: Michael A. Sturtevant at (301) 713-
2390, fax (301) 713-1306, or [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Southeast Alaska purse seine salmon fishery is a commercial
fishery in Alaska state waters and adjacent Federal waters. It
encompasses the commercial taking of salmon with purse seine gear, and
participation is limited to fishermen designated by the Alaska
Commercial Fisheries Entry Commission (CFEC). A pilot capacity
reduction program, conducted by the Southeast Revitalization
Association (SRA) in 2008, using a reverse auction, purchased 35
limited entry permits reducing the number of Alaska permits in this
fishery to 380. Of this amount, approximately 200 are currently being
fished.
This rule proposes to implement a voluntary buyback program for the
Southeast Alaska purse seine salmon fishery (Program) that must be
approved by a majority of the Alaska permit holders in a referendum
conducted by NMFS.
To implement the Program, this proposed rule would establish the
administrative process for the Program, including the role of the SRA,
application procedures, and evaluation of the Reduction Plan by NMFS,
process for conducting the referendum, and fee payment and collection
provisions.
This Program is different from other industry financed fishing
capacity reduction programs undertaken by NMFS in several aspects: (1)
It is the first permit-only buyback, i.e., fishing history is not being
retired and there are no restrictions on how the vessel to which the
relinquished permit applies can be used; (2) there are no Federal
permits involved, whereas all other NMFS supported reduction programs
have included the buying and relinquishing of Federal permits; and (3)
it is anticipated to attract mainly latent permits.
II. Statutory and Regulatory Basis for the Program
The Southeast Alaska purse seine salmon fishery is managed under
Alaska law and regulatory requirements defined under Title 5 Alaska
Administrative Code Section 33.100. The Alaska Department of Fish &
Game (ADF&G) develops and implements conservation measures for this
fishery and a state limited entry permit issued by the CFEC is required
for participation in the fishery. The authority for the SRA to conduct
this Program is Alaska Statute 16.40.250.
The measures contained in this proposed rule to establish the
Program are based on the Consolidated Appropriations Act of 2005
(Section 209 of Title II of Division B of Public Law 108-447).
Subsequently, that Federal law was amended by Section 121 of Public Law
109-479 (the Magnuson-Stevens Reauthorization Act of 2006), reducing
the loan amount to no more than a $25 million 40-year loan (with
repayment fees capped at three percent) and clarifying the respective
roles of NMFS and the SRA relative to development and implementation of
the Program. On December 26, 2007, Public Law 110-161 appropriated
$235,000 for the cost of guaranteeing the loan amount (i.e., loan
subsidy cost). Due to a 6 percent rescission to meet Congressional
budgetary limits, the original appropriation of $250,000 was reduced to
$235,000, thus lowering the maximum loan ceiling to $23.5 million.
NMFS' authority to make this loan resides in sections 1111 and 1112 of
the Merchant Marine Act, 1936 (46 App. U.S.C. 1279(f) and
1279(g)(MMA)(title XI)).
The Federal statute authorizing this Program waives all of the
fishing capacity reduction program requirements of the Magnuson-Stevens
Act (Sections 312(b)-(e)) codified at 16 U.S.C. 1801 et seq. except for
Sections (b)(1)(C) and (d) which state: (1) it must be cost-effective;
and (2) it is subject to a referendum approved by a majority of permit
holders.
Program Overview
Unlike buybacks conducted under federal statutes where permits are
permanently revoked, under the Alaska Constitution, the state may
reissue permits in the future if the fishery becomes too exclusive. An
``optimum number'' study by the CFEC would be required before any
decision could be made on whether the fishery has become too exclusive.
There is no direct
[[Page 29708]]
management of this fishery by NMFS or any other Federal agency.
Participation in the Program is voluntary and would be open to any
holder of a valid entry permit issued by the CFEC to operate in the
Southeast Alaska purse seine salmon fishery. The Program is essentially
divided into six phases: (1) Enrollment; (2) bid selection; (3) plan
submission and approval; (4) referendum; (5) implementation; and (6)
fee collection. Each of these six phases will be discussed later in
this preamble. Only Southeast Salmon Purse Seine Entry Permits
voluntarily submitted for removal from the Reduction Fishery will be
subject to the reduction effort. Fishing history, the fishing vessel
itself, and other assets associated with the permits will not be
required to be relinquished as part of this reduction effort. Fees for
repayment of the loan will be calculated upon the annual ex-vessel
value of all salmon harvested in the Southeast Alaska purse seine
fishery and will be collected from those who continue fishing in the
Reduction Fishery after implementation of the Program set forth in
proposed Sec. 600.1107 of subpart M of part 600 of Title 50 of the
Code of Federal Regulations.
III. Enrollment Phase
Participants who wish to relinquish their permits will be required
to complete a Bid, Relinquishment Contract, Conditional Notice and
Conditional Relinquishment form. A copy of these documents will be
mailed by the SRA to each person who is the holder of record of a valid
entry permit issued by CFEC to operate in the Reduction Fishery. A copy
of those documents is appended to this proposed rule for public
comment.
The Bid identifies the eligible bidder and specifies requirements
with which the bidder must comply upon acceptance of bid.
The Relinquishment Contract is the agreement entered into by the
bidder and the SRA whereby the bidder agrees to relinquish a permit
upon acceptance of the bid, and before payment of the bid amount.
The Conditional Notice is the CFEC form restricting renewal and
transfer of each permit for which a bid was accepted.
The Conditional Relinquishment is the CFEC form signed by the
bidder to voluntarily give up a permit and abide by upon SRA acceptance
of the bid.
To participate in the Capacity Reduction Program, a Permit Holder
submits a fully completed and executed Bid, Relinquishment Contract,
Conditional Notice, and Conditional Relinquishment. Each application
must be submitted to the SRA, c/o Elgee, Rehfeld, Mertz, LLC,
Professional Plaza Building B, 9309 Glacier Highway, Suite B-200,
Juneau, Alaska 99801. The Bid and other required documents must be
received by the SRA no later than the bid closing date identified in
the above mentioned mailing to Permit Holders. Once submitted, a bid is
irrevocable and cannot be withdrawn or amended. If a Permit Holder
holds more than one permit, the Permit Holder must submit a separate
Bid for each permit that he/she offers to relinquish.
By submitting a Bid, the Permit Holder warrants and represents that
he/she has read and understood the terms of the Bid, Relinquishment
Contract, Conditional Notice, and Conditional Relinquishment, and has
had the opportunity to seek independent legal counsel regarding such
documents and the consequences of submitting the Bid.
By submitting the Bid, the permit holder expressly acknowledges
that he/she makes an irrevocable offer to relinquish a permit for a
specific price to CFEC, and once having submitted the Bid, the bidder
is not entitled to withdraw or in any way amend the Bid. The permit
would be relinquished for the price set forth in the Bid contingent on
acceptance by the SRA at the closing of the Selection Process. Any
attempted withdrawal by a bidder will be invalid, and the Bid will
remain a binding, irrevocable offer, unaffected by the attempted
withdrawal.
IV. Bid Selection Phase
The SRA will begin the Selection Process upon its receipt of the
first application and will continue until: (a) The bid closing date
specified by SRA; or (b) the ranking of the next lowest bid would cause
the total program costs to exceed $23.5 million.
During the selection process, the SRA, in consultation with CFEC,
will examine each submitted Bid for consistency and the necessary
elements, including the validity of the permit and whether any
authorized party holds a security interest in the permit. The SRA will
notify the Permit Holder if the Bid is non-conforming and, in such
cases, the Permit Holder may submit a revised, conforming Bid if within
the prescribed period (i.e., until the bid closing date). A Bid that is
submitted by the Permit Holder but is not accepted by the SRA,
including a nonconforming bid that is not revised by the bid closing
date, will be deemed terminated and both the Permit Holder and the SRA
will have no further obligation. The SRA will rank all conforming bids
by using a reverse auction in which the SRA ranks the bid with the
lowest dollar amount and successively ranks each additional bid with
the next lowest dollar amount, until there are no more bids or the
ranking of the next lowest bid would cause the total program cost to
exceed $23.5 million. In the event of a tie with bids which results in
the tied bids exceeding $23.5 million, the SRA will select the tied bid
received first.
Upon termination of the selection process, the SRA shall determine
whether the number of ranked bids it is willing to accept is sufficient
to achieve a substantial reduction in harvest capacity and increases
economic efficiencies (i.e., increases harvesting productivity) for
those Permit Holders remaining in the fishery. If the SRA makes such a
determination and thereafter accepts bids, the SRA will send CFEC the
Conditional Notice form restricting renewal and transfer of each permit
for which a bid was accepted.
Once the SRA completes the selection process and after the bid
closing date, the SRA will sign all accepted Bids and the SRA will
notify each Permit Holder, via certified mail, of the effective date of
the Bid. While the Bid is an irrevocable offer, it remains subject to
the requirement for an industry referendum (VI. below). Bid selection
occurs prior to the referendum because the Reduction Plan resulting
from the Bid selection process is the course of action upon which the
referendum participants are voting.
V. Plan Submission and Approval Phase
Within 30 days after the conclusion of the selection process, the
SRA will submit the Reduction Plan to NMFS for final approval on behalf
of the Secretary of Commerce (Secretary). The aggregate of all Bids,
Relinquishment Contracts, Conditional Notices, and Conditional
Relinquishments signed by permit holders whose bids are accepted by the
SRA will together, with supporting rationale, constitute the Reduction
Plan. The supporting rationale must demonstrate that the Reduction Plan
would permanently reduce the most harvesting capacity in the Reduction
Fishery at the least cost, increase harvesting productivity for post-
reduction permit holders participating in the fishery, and improve
flexibility in the conservation and management of the fishery. The
Reduction Plan will include a listing of accepted bids arranged by bid
amount from lowest to highest bid attended by a statement from the SRA
that all other bids received, if any, were higher than the largest
dollar amount of the last bid accepted.
[[Page 29709]]
The primary requirements for the Assistant Administrator of NMFS,
on behalf of the Secretary, to approve a Reduction Plan are specified
at Sec. 600.1107(e)(2). Among other requirements, the Assistant
Administrator of NMFS must find that the Reduction Plan is consistent
with the amended Consolidated Appropriations Act of 2005 and the
applicable sections of the Magnuson-Stevens Act.
VI. The Referendum
The current Fishing Capacity Reduction Framework regulatory
provisions of Sec. 600.1010 stipulate procedural and other
requirements for NMFS to conduct referenda on fishing capacity
reduction programs, and Sec. 600.1017(a)(1)-(4) stipulate prohibitions
related to voting in a referendum. The proposed Sec. 600.1107(e)(3)
makes those framework referenda requirements applicable to this
Program.
If NMFS approves the Reduction Plan, NMFS will conduct a referendum
to determine the industry's willingness to repay a fishing capacity
reduction loan for purchase of the permits identified in the Reduction
Plan. NMFS will publish a notice in the Federal Register requesting
votes by Permit Holders on whether to accept or reject the Reduction
Plan for implementation. NMFS will issue ballots to eligible voters,
tally votes received, and notify voters on the outcome of the
referendum.
A successful referendum by a majority of the Permit Holders in the
Reduction Fishery would bind all parties and complete the reduction
process. NMFS will publish a notice in the Federal Register advising
the public that the referendum was successful and that NMFS will begin
tendering the reduction program's reduction payments to the selected
bidders.
An unsuccessful referendum would void accepted Bids and other
supporting documents without further obligation from the SRA or the
bidders.
VII. Implementation Phase
Within 60 days after a successful referendum, CFEC will provide
notice to NMFS of the permits retired from the Reduction Fishery. NMFS,
after receiving the notice of the retired permits, will then tender the
accepted bid amounts to the accepted bidders. If the SRA accepts a
total number of bids in an aggregate amount less than $23.5 million,
any remaining funds could be available for reduction payments as part
of a later, separate Reduction Plan.
The Reduction Loan will be amortized over a forty-year term. The
Reduction Loan's original principal amount may not exceed $23.5
million, but may be less if the ultimate reduction cost is less. The
final Reduction Loan periodic payment amount will be determined by NMFS
analysis of the ability of the post-reduction fishery to service the
debt. The Reduction Loan's interest rate will be the U.S. Treasury's
cost of borrowing equivalent maturity funds plus two percent. The
framework provisions of Sec. Sec. 600.1012-600.1017 will apply to any
reduction loan, fee payment and collection set forth in this proposed
rule to the extent they do not conflict with this proposed rule.
VIII. Fee Collection
Post-reduction Permit Holders operating in the fishery will be
obligated to pay the fee in accordance with Sec. 600.1107(f). The fee
will be expressed as a percentage of the ex-vessel price of all salmon
harvested and landed in the fishery. For example, if the fee is three
percent and the ex-vessel value is $0.50, then the fee per pound of
salmon will equal $0.015 per pound. The amount of such fee will be
calculated by NMFS on an annual basis as the principal and interest
payment amount necessary to amortize the loan over a 40-year term. The
maximum fee rate is three percent of total ex-vessel production
revenues. In the event that payments made under the Reduction Plan at
the maximum fee level are insufficient to repay the Reduction Loan
within the 40-year term, NMFS will extend the term of the repayment
until the Reduction Loan is paid in full.
Fees must be assessed and collected on all salmon harvested in the
fishery. Although the fee could be up to three percent of the ex-vessel
price of all post-reduction landings, the fee will be less than three
percent if NMFS projects that a lesser rate can amortize the Reduction
Loan over the 40-year term.
It is possible that the fishery may not open during some years.
Consequently, the fishery will not produce fee revenue with which to
service the Reduction Loan during these years. However, interest will
continue to accrue on the principal balance. When this happens, if the
fee is not already at the maximum three percent, NMFS will increase the
fee to the maximum three percent in the next season that the fishery is
open, apply all subsequent fee revenue first to the payment of accrued
interest, and continue the maximum fee rates until the principal and
interest payments become current. Once all principal and interest
payments are current, NMFS will make annual determinations on adjusting
the fee rate.
The dealer who first purchases the salmon landed in the fishery
(``fish buyer'') will be responsible for collecting and submitting the
repayment fees to NMFS on a monthly basis. Both Alaska Department of
Fish and Game daily fish tickets and the State of Alaska's Commercial
Operator Annual Report (COAR) produced annually each March following
the close of the previous season will be used to monitor fee
collection.
The current Fishing Capacity Reduction Framework regulatory
provisions of Sec. 600.1013 (Fee payment and collection), Sec.
600.1014 (Fee collection deposits, disbursements, records, and
reports), 600.1015 (Late charges), Sec. 600.1016 (Enforcement), Sec.
600.1017 (Prohibitions and penalties), and Sec. 600.1017(a)(8)-(16) in
particular, will apply to any fee collection in this fishery.
The framework rule's provisions at Sec. 600.1014 governs how fish
buyers must deposit, and later disburse to NMFS, the fees which they
have collected as well as how they must keep records of, and report
about, collected fees. Under the framework rule's provisions at Sec.
600.1014, fish buyers must, at the end of each business week, deposit
collected fees in federally insured accounts. Fees will be submitted to
NMFS monthly and are due no later than fifteen (15) calendar days
following the end of each calendar month. Fee collection reports must
accompany these disbursements. Fish buyers must maintain specified fee
collection records for at least three years and submit to NMFS annual
reports of fee collection and disbursement activities by February 1 of
each calendar year.
Under Sec. 600.1015, the late charge to fish buyers for fee
collection, deposit, and/or disbursement will be one and one-half (1.5)
percent per month of the fee due. The full late charge will apply to
the fee for each month or portion of a month that the fee remains
unpaid.
To provide more accessible services, streamline collections, and
save taxpayer dollars, fish buyers may disburse collected fee deposits
to NMFS by using a secure Federal system on the Internet known as
Pay.gov. Pay.gov enables fish buyers to use their checking accounts to
electronically disburse their collected fee deposits to NMFS. Fish
buyers who have access to the Internet should consider using this quick
and easy collected fee disbursement method. Fish buyers may access
Pay.gov at: https://www.pay.gov/paygov/.
[[Page 29710]]
Fish buyers who do not have access to the Internet or who simply do
not wish to use the Pay.gov electronic system must disburse collected
fee deposits to NMFS by sending a check to our lockbox at: NOAA
Fisheries Southeast Alaska Salmon Purse Seine Buyback, P.O. Box XXXX,
St. Louis, MO 63197-9000.
Fish buyers must complete a fee collection report for each
disbursement. Fish buyers using Pay.gov will find an electronic fee
collection report form to accompany electronic disbursements. Fish
buyers who do not use Pay.gov must include a hard copy fee collection
report with each of their disbursements and may access the NMFS website
for a PDF version of the fee collection report at: http://www.nmfs.noaa.gov/mb/financial_services/buyback.htm.
Before the fee's effective date, NMFS will separately mail a copy
of the final rule, along with detailed fee payment, collection,
deposit, disbursement, recording, and reporting information and
guidance, to each fish seller and buyer of whom NMFS has notice. The
fact that any fish seller or buyer might not, for whatever reason,
receive a copy of the notice or of the information and guidance does
not relieve the fish seller or buyer from his/her fee obligations under
the applicable regulations.
All parties interested in this action should carefully read the
following framework rule sections, whose detailed provisions apply to
the fee system for repaying the reduction program's loan:
1. Sec. 600.1012;
2. $ 600.1013;
3. Sec. 600.1014;
4. Sec. 600.1015;
5. Sec. 600.1016; and
6. Sec. 600.1017.
NMFS, in accordance with the framework rule's provisions at Sec.
600.1013(d), establishes the initial fee for the program's reduction
fishery as 3 percent of the annual ex-vessel value of all salmon
harvested in the fishery.
Please see the framework rule's provisions at Sec. 600.1000 for
the definition of ``delivery value'' and of the other terms relevant to
this proposed rule. Each disbursement of the reduction loan's principal
amount will begin accruing interest as of the date of each such
disbursement. This loan's interest rate is the applicable rate, plus
two percent, which the U.S. Treasury determines at the end of the
fiscal year.
IX. Specific Performance
The proposed regulatory provisions at Sec. 600.1107(g) mirror the
Bid's provisions for Specific Performance. Development of a capacity
reduction program provides a unique opportunity for permit holders to
manage capacity themselves. Failure of an accepted bidder to perform
the obligations under the Relinquishment Contract will result in
irreparable damage to the SRA and other Permit Holders. Therefore,
money damages are inadequate to redress the harm caused to the bidders
by a breach of contract. Specific performance is the only adequate
remedy.
X. Enforcement/Prohibitions and Penalties
The provisions and requirements of Sec. 600.1016 and Sec.
600.1017 shall also apply to fish sellers and fish buyers subject to
this fishery. Specifically, the proposed rule to amend Sec. 600.1017
by adding language that prohibits buyers from buying fish from
reduction fishery participants who do not pay the required landing fee
and prohibits reduction fishery participants from selling fish to
buyers who do not collect the fees.
Classification
Pursuant to section 304 (b)(1)(A) of the Magnuson-Stevens Act, the
NMFS Assistant Administrator has determined that this proposed rule is
consistent with the provisions of the Magnuson-Stevens Act, and Title
II, Section 209 of Public Law 108-447 as amended by Section 121 of
Public Law 109-479, subject to further consideration after public
comment.
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866.
In addition to public comment about the proposed rule's substance,
NMFS also seeks public comment on any ambiguity or unnecessary
complexity arising from the language used in this proposed rule.
In compliance with the National Environmental Policy Act, NMFS
prepared an environmental assessment (EA) for this proposed rule. The
assessment discusses the impact of this proposed rule on the natural
and human environment and integrates a Regulatory Impact Review (RIR)
and an Initial Regulatory Flexibility Analysis (IRFA). NMFS will send
the assessment, the review and analysis to anyone who requests a copy
(see ADDRESSES).
NMFS prepared an IRFA, as required by section 603 of the Regulatory
Flexibility Act (RFA), to describe the economic impacts this proposed
rule, if adopted, would have on small entities. NMFS intends the
analysis to aid us in considering regulatory alternatives that could
minimize the economic impact on affected small entities. The proposed
rule does not duplicate or conflict with other Federal regulations.
Summary of IRFA
The Small Business Administration (SBA) has defined small entities
as all fish harvesting businesses that are independently owned and
operated, not dominant in its field of operation, and with annual
receipts of $4 million or less. In addition, processors with 500 or
fewer employees for related industries involved in canned or cured fish
and seafood, or preparing fresh fish and seafood, are also considered
small entities. Small entities within the scope of this proposed rule
include individual U.S. vessels, Permit Holders, and dealers. There are
no disproportionate impacts between large and small entities.
Description of the Number of Small Entities
Most firms operating in the Reduction Fishery have annual gross
revenues of less than $4 million. The IRFA analysis estimates that most
of the 212 active vessels that participated in 2008 are considered
small entities. The ownership characteristics of vessels operating in
the Reduction Fishery are not available and therefore it is not
possible to determine with certainty, if they are independently owned
and operated, or affiliated in one way or another with a larger parent
company. Furthermore, because analysts cannot quantify the exact number
of small entities that may be directly regulated by this action, a
definitive finding of non-significance for the proposed action under
the RFA is not possible. However, because the proposed action would not
result in changes to allocation percentages and participation is
voluntary, net effects would be expected to be minimal relative to the
status quo.
The proposed rule's impact would be positive for both those whose
bids NMFS accepts and for post-reduction harvesters whose landing fees
repay the reduction loan because the Bidders and harvesters would have
voluntarily assumed the impact:
1. Bidders would have volunteered to make bids at dollar amounts of
their own choice. Presumably, no Bidder would volunteer to make a bid
with an amount that is inconsistent with the Bidder's interest; and
2. Reduction loan repayment landing fees would be authorized, and
NMFS could complete the Reduction Program, only if a majority of Permit
Holders voted in favor of the Reduction Plan. Presumably, harvesters
who are not selected would not vote in favor of the Reduction Plan
unless they concluded that the Reduction Program's prospective capacity
reduction was
[[Page 29711]]
sufficient to enable them to increase their post-reduction revenues
enough to justify the fee.
3. Those participants remaining in the fishery after the buyback
will incur additional fees of up to 3 percent of the ex vessel
production value of post reduction landings. However, the additional
costs should be mitigated by increased harvest opportunities by post
reduction fishermen. NMFS believes that this proposed rule would affect
neither authorized harvest levels nor harvesting practices.
NMFS rejected the no action alternative considered in the EA
because if it failed to act, NMFS would not be in compliance with the
mandate of Section 209 of the authorizing legislation to establish a
buyback program. In addition, the Southeast Alaska purse seine salmon
fishery would remain overcapitalized. Overcapitalization reduces the
potential net value that could be derived from the salmon resource by
dissipating rents, driving variable operating costs up, and imposing
economic externalities on the fishermen. Overcapitalization has
diminished the economic viability of members of the fleet and increased
the economic and social burden on fishery dependent communities.
This proposed rule contains information collection requirements
subject to the Paperwork Reduction Act (PRA). The Office of Management
and Budget (OMB) previously approved this information collection under
OMB Control Number 0648-0376 with requirements for 878 respondents with
a total response time of 38,653 hours. NMFS estimates that the public
reporting burden for this information collection would average 4 hours
for submitting a Bid (which includes executing the Bid Agreement and
the Reduction Contract) and 4 hours for voting in a referendum. Persons
affected by this proposed rule would also be subject to other
collection-of-information requirements referred to in the proposed rule
and also approved under OMB Control Number 0648-0376. These
requirements and their associated response times are: Completing and
filing a fish ticket (10 minutes), submitting monthly fish buyer
reports (2 hours), submitting annual fish buyer reports (4 hours), and
fish buyer/fish seller reports when a person fails either to pay or to
collect the loan repayment fee (2 hours).
NMFS amends the existing OMB control number as a result of the
implementation of this capacity reduction program. The revision has
been submitted to OMB for approval. These response estimates include
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the information collection. Public comment is sought regarding: Whether
this proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; the accuracy of the burden
estimate; ways to enhance the quality, utility, and clarity of the
information to be collected; and ways to minimize the burden of the
collection of information, including through the use of automated
collection techniques or other forms of information technology.
Interested persons may send comments regarding this burden estimate, or
any other aspect of this data collection, including suggestions for
reducing the burden, to both NMFS and OMB (see ADDRESSES).
Notwithstanding any other provision of law, no person is required
to respond to, and no person is subject to a penalty for failure to
comply with, an information collection subject to the PRA requirements
unless that information collection displays a currently valid OMB
control number.
This action would not result in any adverse effects on endangered
species or marine mammals.
List of Subjects in 50 CFR Part 600
Fisheries, Fishing capacity reduction, Fishing permits, Fishing
vessels, Intergovernmental relations, Loan programs--business,
Reporting and recordkeeping requirements.
Dated: May 17, 2011.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 600, subpart
M, is proposed to be amended as follows:
PART 600--MAGNUSON-STEVENS ACT PROVISIONS
Subpart M--Specific Fishery or Program Fishing Capacity Reduction
Regulations
1. The authority citation for 50 CFR part 600, subpart M, is
revised to read as follows:
Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C.
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d)
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20,
and section 205 of Pub. L. 107-117, Pub. L. 107-206, Pub. L. 108-7,
Pub. L. 108-199, Pub. L. 108-447, Pub. L. 109-479, Pub. L. 110-161,
Section 209 of Title II of Division B of Pub. L. 108-447, Section
121 of Pub. L. 109-447, Section 121 of Pub. L. 109-479, Pub. L. 110-
161, and 46 U.S.C. 53701 et seq.
2. Section 600.1107 is added to subpart M to read as follows:
Sec. 600.1107 Southeast Alaska Purse Seine Salmon Fishery capacity
reduction program, including fee payment and collection system.
(a) Purpose. This section implements the fishing capacity reduction
program for the Southeast Alaska purse seine salmon fishery enacted by
Section 209 of Public Law 108-447 and amended by Section 121 of Public
Law 109-479, with appropriations authorized by Section 121 of Public
Law 109-479 and Public Law 110-161. The intent of the program is to
permanently reduce, through an industry-financed permit buyback, the
most harvesting capacity in the Reduction Fishery at the least cost,
increase harvesting productivity for post-reduction Permit Holders and
improve flexibility in the conservation and management of the fishery.
Fishery participants will finance this program through a federal loan
that will be repaid over 40 years through a fee collection system. The
intent of the fee collection system is to establish the post-reduction
Permit Holders' obligation to repay the Reduction Loan's principal and
accrued interest over the repayment term, and to ensure repayment of
the loan.
(b) Definitions. Unless otherwise defined in this section, the
terms defined in Sec. 600.1000 of subpart L of this part expressly
apply to this section. The following terms have the following meanings
for the purpose of this section:
Acceptance means SRA acceptance of a bid.
Act means Section 209 of Title II of Division B of Public Law 108-
447, Consolidated Appropriations Act of 2005, as amended by Section 121
of Public Law 109-447, Magnuson-Stevens Reauthorization Act of 2006.
Authorized party means the individuals authorized by the Permit
Holder on the application form to execute and submit Bids, protests and
other documents and/or notices on behalf of the Permit Holder.
Bid means a bidder's irrevocable offer to relinquish a permit.
Bid amount means the dollar amount submitted by a bidder.
Bidder means a permit holder who submits a bid.
Commercial Fisheries Entry Commission (CFEC) means the Alaska state
commission mandated to conserve and maintain the economic health of
Alaska's commercial fisheries by
[[Page 29712]]
limiting the number of participating fishers, by issuing permits and
vessel licenses to qualified individuals in both limited and unlimited
fisheries, and by providing due process hearings and appeals.
CFEC documents means any documents issued by the CFEC in connection
with the Southeast Alaska purse seine salmon fishery.
Conditional notice means the CFEC form that any Bidder must sign
and agree to abide by upon submission of a Bid Agreement (Attachment 2
in the Appendix to this Sec. 600.1107).
Conditional relinquishment means the CFEC form that any Permit
Holder, agreeing to relinquish a permit, must sign and agree to abide
by upon SRA acceptance of the bid (Attachment 3 in the Appendix to this
Sec. 600.1107).
Fishery means the Southeast Alaska administrative area as defined
under Title 5 Alaska Administrative Code Section 33.100 for salmon with
purse seine gear.
Magnuson-Stevens Act means the Magnuson-Stevens Fishery
Conservation and Management Act codified at 16 U.S.C. 1801 et seq.
Permit (Southeast Salmon Purse Seine Entry Permit) means a valid
entry permit issued by CFEC to operate in the Southeast Alaska purse
seine salmon fishery.
Permit holder means an individual who at the time of bidding is the
holder of record of a permit.
Reduction fishery means the Southeast Alaska Purse Seine Salmon
Fishery.
Reduction loan means the loan used to purchase the relinquished
permits pursuant to the approved Reduction Plan.
Reduction loan amount means the Reduction Loan's original principal
amount up to $23,500,000.
Reduction plan means the aggregate of all Bids, Relinquishment
Contracts, Conditional Notices, Conditional Relinquishments, and
supporting documents and rationale, submitted to the Secretary for
approval.
Relinquishment contract means the contract that any Permit Holder
agreeing to relinquish a permit pursuant to Alaska Statute (A.S.
16.43.150(i)) must sign and agree to abide by upon acceptance of the
Bid, and before payment of the bid amount (Attachment 1 in the Appendix
to this Sec. 600.1107).
Secretary means the Secretary of Commerce or his/her designee.
Southeast Revitalization Association (SRA) means the qualified
fishery association authorized to develop and implement this capacity
reduction program under Alaska Statute 16.40.250 and Federal law.
(c) Enrollment in the capacity reduction program--(1) Distribution.
The SRA shall mail a copy of the following four documents via certified
mail to each Permit Holder: Bid; Fleet Consolidation Relinquishment
Contract (Relinquishment Contract); Conditional Notice to CFEC and
Request by Permit Holder; and Conditional Relinquishment of Southeast
Salmon Purse Seine Entry Permit. Such mailing shall include a closing
date after which the SRA will not accept new bids.
(2) Application. Any Permit Holder, regardless of whether having
received the mailing described in paragraph (c)(1) of this section, may
participate in the Capacity Reduction Program by submitting all of the
following documents to the SRA no later than the bid closing date:
(i) A fully executed Bid consistent with the Appendix to this
section;
(ii) A photocopy of the permit evidencing the applicant's
qualification as a participant in the fishery;
(iii) A fully executed Relinquishment Contract: Southeast Alaska
Salmon Purse Seine Permit Holders consistent with the appendix B to
this section;
(iv) A fully executed Conditional Notice to CFEC and Request by
Permit Holder consistent with the appendix C to this section; and
(v) A fully executed Conditional Relinquishment of Southeast Salmon
Purse Seine Entry Permit consistent with the appendix D to this
section.
(A) The submitted Bid shall include the following information:
name, address, telephone number, social security number, and (if
available) electronic mail address of the submitting Permit Holder,
permit number, and whether any authorized party holds a security
interest in the permit. Each application must be submitted to the SRA,
c/o Elgee, Rehfeld, Mertz, LLC, Professional Plaza Building B, 9309
Glacier Highway, Suite B-200, Juneau, Alaska 99801.
(B) The SRA will notify the Permit Holder if the Bid is non-
conforming and, in such cases, the Permit Holder may submit a revised,
conforming Bid within the prescribed period (i.e., until the bid
closing date).
(3) Enrollment period. Applications that meet all requirements will
be accepted until the bid selection process is completed but no later
than the bid closing date specified by SRA.
(4) Effective date. The effective date of any Bid shall be when the
SRA has completed the selection process and signed the Bid.
(5) Notice. The SRA will notify each Accepted Bidder, via certified
mail, of the effective date of the Bid Agreement.
(6) Conflicts. Where terms and conditions in the Bid,
Relinquishment Contract, Conditional Notice, and Conditional
Relinquishment conflict with this regulation, the terms and conditions
in the regulation are controlling.
(d) Bid selection process. The fishing capacity removed by the
Reduction Plan shall be represented by the total number of valid CFEC
permits, whether active or latent, that are voluntarily offered by
Permit Holders and selected by the SRA up to an aggregate amount of
$23.5 million. Due to a rescission of funds, the underlying
appropriations for this Reduction Program were reduced from $250,000 to
$235,000, resulting in a loan ceiling of $23.5 million.
(1) Overview. The Selection Process shall begin upon the receipt by
SRA of the first application and shall continue until: The bid closing
date specified by SRA (Sec. 600.1107(c)(1)); or the ranking of the
next lowest bid would cause the total program costs to exceed $23.5
million. When either one of these events is reached, the Selection
Process shall be completed.
(i) During the selection process, the SRA in consultation with the
CFEC shall examine each submitted Bid for consistency and the necessary
elements, including the validity of the permit and whether any
authorized party holds a security interest in the permit.
(ii) [Reserved]
(2) Bids. By submitting the Bid, the bidder expressly acknowledges
that he makes an irrevocable offer to relinquish to CFEC a permit for a
specific price, and once having submitted the Bid, the bidder is not
entitled to withdraw or in any way amend the Bid. The permit will be
relinquished for the price set forth in the Bid contingent on such Bid
being accepted by the SRA at the closing of the Selection Process. Any
attempted withdrawal by a bidder shall be invalid, and the Bid shall
remain a binding, irrevocable offer, unaffected by the attempted
withdrawal. Any bid that is submitted by a Permit Holder but is not
accepted by the SRA shall be deemed terminated and both the Permit
Holder and the SRA will have no further obligation with respect to the
Bid.
(i) If a Permit Holder holds more than one permit, the Permit
Holder must submit a separate Bid for each permit that he/she offers to
relinquish.
(ii) By submitting a Bid, the Permit Holder warrants and represents
that he/she has read and understands the terms of the Program
Regulations, Bid, Relinquishment Contract, Conditional
[[Page 29713]]
Notice and Conditional Relinquishment, and has had the opportunity to
seek independent legal counsel regarding such documents and the
consequences of submitting the Bid Agreement.
(3) Ranking. The SRA shall rank all conforming bids by using a
reverse auction in which the SRA ranks the Bid with the lowest dollar
amount and successively ranks each additional Bid with the next lowest
dollar amount until there are no more Bids or the ranking of the next
lowest bid would cause the total program cost to exceed $23.5 million.
In the event of a tie with bids which results in the tied bids
exceeding $23.5 million, the SRA will select the tied bid first
received.
(4) Acceptance and post-acceptance restriction of renewals and
transfers. Upon expiration of the bid closing date, the SRA shall
determine whether the number of ranked bids it is willing to accept is
sufficient to achieve a substantial reduction in harvest capacity and
increased economic efficiencies for those Permit Holders remaining in
the fishery. If the SRA makes such a determination and thereafter
accepts bids, SRA shall send CFEC the Conditional Notice form
restricting renewal and transfer of each permit for which a bid was
accepted. The Bid, Relinquishment Contract, Conditional Notice and
Conditional Relinquishment are terminated for any rejected bid and the
applicant is no longer bound by the terms of these documents.
(e) Plan submission and approval--(1) Submitting the reduction
plan. Within 30 days of concluding the selection process, the SRA shall
submit the Reduction Plan, consisting of the aggregate of all Bid
Agreements, Relinquishment Contracts, Conditional Notices and
Conditional Relinquishments, together with supporting documents and
rationale, to NMFS for final approval on behalf of the Secretary. The
Reduction Plan shall include a listing of accepted bids arranged by bid
amount from lowest to highest bid, attended by a statement from the SRA
that all other bids received were higher than the largest dollar amount
of the last bid accepted.
(2) Required findings. In order to approve a Reduction Plan, the
Assistant Administrator of NMFS, on behalf of the Secretary, must find
that: The Reduction Plan is consistent with the amended Consolidated
Appropriations Act of 2005 and applicable sections of the Magnuson-
Stevens Act, particularly that it is cost-effective; the Reduction Plan
will result in the maximum sustained reduction in fishing capacity at
the least cost; and the Reduction Plan will increase harvesting
productivity for post-reduction Permit Holders participating in the
fishery.
(3) The referendum. If NMFS approves the Reduction Plan and
subsequent to the publication of a final rule resulting from this
proposed rule, NMFS shall conduct a referendum to determine the
industry's willingness to repay a fishing capacity reduction loan to
purchase the permits identified in the Reduction Plan. NMFS shall
publish a notice in the Federal Register requesting votes by Permit
Holders on whether to accept or reject the Reduction Plan for
implementation. The notice shall state the starting and ending dates
and times of the voting period, which shall be not less than three (3)
nor more than seven (7) calendar days from the date of such notice.
(i) Such notice shall state the name and address of record of each
eligible voter, as well as the basis for having determined the
eligibility of those voters. This shall constitute notice and
opportunity to respond about adding eligible voters, deleting
ineligible voters, and/or correcting any voter's name and address of
record. If, in NMFS' discretion, the comments received in response to
such notice warrants it, or for other good cause, NMFS may modify such
list by publishing another notice in the Federal Register. NMFS shall
issue ballots to eligible voters, tally votes, and notify voters
whether the referendum was successful or unsuccessful in approving the
Reduction Plan consistent with the provisions of Sec. 600.1010.
(ii) A successful referendum by a majority of the Permit Holders in
the Reduction Fishery shall bind all parties and complete the reduction
process. NMFS shall publish a notice in the Federal Register advising
the public that the referendum was successful and that NMFS will begin
tendering the reduction program's reduction payments to the selected
bidders. Thereafter the Reduction Program shall be implemented.
(iii) The provisions of Sec. 600.1010 and Sec. 600.1017(a)(1)-(4)
shall apply to any referendum on the Reduction Plan of this section to
the extent that they do not conflict with this section or with subpart
M of this part.
(f) Implementation--(1) Reduction payments. Within 60 days of a
successful referendum, the CFEC will provide notice to NMFS of the
permits retired from the Reduction Fishery. Upon receiving such
notification, NMFS will then tender the accepted bid amounts to the
Permit Holders. Reduction payments may not exceed $23.5 million and if
the SRA accepts a total number of bids in an aggregate amount less than
$23.5 million, any remaining funds would be available for reduction
payments as part of a later, separate Reduction Plan conforming to
these regulations. Upon NMFS tendering the reduction program's payments
to the selected Permit Holders, each such Permit Holder must
permanently stop all fishing with the relinquished permit(s).
(2) Repayment term. As authorized by the Act, the Reduction Loan
shall be amortized over a forty (40) year term. The Reduction Loan's
original principal amount may not exceed $23.5 million, but may be less
if the ultimate reduction cost is less. The final Reduction Loan
periodic payment amount will be determined by NMFS' analysis of the
ability of the post-reduction fishery to service debt. The provisions
of Sec. Sec. 600.1012-600.1017 shall apply to any reduction loan, fee
payment and collection under this section to the extent they do not
conflict with this section or with subpart M of this part.
(3) Loan repayment. Permit Holders operating in the fishery shall
be obligated to pay the fee in accordance with this section. In the
event that payments made under the Reduction Plan are insufficient to
pay the Reduction Loan within the 40-year term, NMFS shall extend the
term of the repayment until the Reduction Loan is paid in full.
(i) Interest. The Reduction Loan's interest rate will be the U.S.
Treasury's cost of borrowing equivalent maturity funds plus two
percent. NMFS will determine the Reduction Loan's initial interest rate
when NMFS borrows from the U.S. Treasury the funds with which to
disburse reduction payments. Interest will begin accruing on the
Reduction Loan from the date on which NMFS disburses such loan. The
initial interest rate will change to a final interest rate at the end
of the Federal fiscal year in which NMFS borrows the funds from the
U.S. Treasury. The final interest rate will be two percent plus a
weighted average, throughout that fiscal year, of the U.S. Treasury's
cost of borrowing equivalent maturity funds. The final interest rate
will be fixed and will not vary over the remainder of the reduction
loan's 40-year term. The Reduction Loan will be subject to a level debt
amortization. There is no prepayment penalty.
(ii) Fees. Post-reduction Permit Holders operating in the fishery
shall be obligated to pay the fee in accordance with Sec. 600.1107(f).
The amount of such fee will be calculated by NMFS on an annual basis as
the principal and interest payment amount necessary to amortize the
loan over a 40-year term. The fee shall be expressed as a
[[Page 29714]]
percentage of the ex-vessel value of all salmon harvested and landed in
the fishery. In the event that payments made under the Reduction Plan
are insufficient to repay the Reduction Loan within the 40-year term,
NMFS shall extend the term of the repayment until the Reduction Loan is
paid in full.
(A) Fees must be assessed and collected on all salmon harvested in
the fishery. Although the fee could be up to three percent of the ex-
vessel price of all post-reduction landings, the fee will be less than
three percent if NMFS projects that a lesser rate can amortize the
Reduction Loan over the 40-year term. To verify that the fees collected
do not exceed three percent of the fishery revenues, NMFS will compare
the annual total of principal and interest due with the latest
available annual revenues in the fishery to ensure that it is equal to
or less than three percent of the total ex-vessel production revenues.
In the event that any of the components necessary to calculate the next
year's fee are not available, or postponed, the fee will remain at the
previous year's amount until such time as new calculations are made and
communicated to the post-reduction fishery participants.
(B) If the fishery does not open during a year, interest will
continue to accrue on the principal balance even though no fee revenue
will be generated. When this happens, if the fee is not already at the
maximum three percent, NMFS shall increase the fee to the maximum three
percent, apply all subsequent fee revenue first to the payment of
accrued interest, and continue the maximum fee rates until the
principal and interest payments become current. Once all principal and
interest payments are current, NMFS will make a determination about
adjusting the fee rate.
(iii) Collection. The buyer who first purchases the salmon landed
in the fishery shall be responsible for collecting and submitting the
repayment fees to NMFS monthly. The fees shall be submitted to NMFS no
later than fifteen (15) calendar days following the end of each
calendar month.
(iv) Recordkeeping and reporting. The dealer who first purchases
the salmon landed in the fishery shall be responsible for compliance
with the applicable recordkeeping and reporting requirements.
(A) All requirements and penalties set forth in the provisions of
Sec. Sec. 600.1013 (Fee payment and collection), 600.1014 (Fee
collection deposits, disbursements, records, and reports), 600.1015
(Late charges), and 600.1017 (Prohibitions and penalties) shall apply
to any dealer who purchases salmon in the fishery, and to any fee
collection under this section, to the extent they do not conflict with
this section or with subpart M of this part.
(B) [Reserved]
(g) Specific performance under the relinquishment contract. The
parties to the Relinquishment Contract have agreed that the opportunity
to develop and submit a capacity reduction program for the fishery
under the terms of the Act is both unique and finite. The failure of a
Permit Holder, whose bid was accepted, to perform the obligations under
the Relinquishment Contract will result in irreparable damage to the
SRA and all the other Permit Holders. Accordingly, the parties to the
Relinquishment Contract expressly acknowledge that money damages are an
inadequate means of redress and agree, that upon failure of the Permit
Holder to fulfill his obligations under the Relinquishment Contract,
that specific performance of those obligations may be obtained by suit
in equity brought by the SRA in any court of competent jurisdiction
without obligation to arbitrate such action.
(h) Enforcement for Failure to Pay Fees. The provisions and
requirements of Sec. 600.1016 (Enforcement) shall also apply to fish
sellers and fish buyers subject to this fishery.
(i) Prohibitions and Penalties. Sec. 600.1017 is amended as
follows: Fish buyers are prohibited from purchasing fish from fish
sellers who do not pay the required landing fees. Fish sellers are
prohibited from selling to fish buyers who do not pay the required
landing fees.
Appendix A to Sec. 600.1107--BID
This Bid (Bid) is entered between the individual named in
section III, 11(a) of the Agreement and the Southeast Revitalization
Association (SRA).
I. Definitions
Unless otherwise defined, the following terms have the following
meanings for the purpose of this Agreement.
Acceptance means SRA acceptance of a Bid.
Act means Section 209 of Title II of Division B of Public Law
108-447, Consolidated Appropriations Act of 2005; as amended by
Section 121 of Public Law 109-447, Magnuson-Stevens (MSA)
Reauthorization Act of 2006.
Bid means a bidder's irrevocable offer to relinquish a permit.
Bid amount means the dollar amount submitted by a bidder.
Bidder means a permit holder who submits a bid.
Conditional notice means the Commercial Fisheries Entry
Commission (CFEC) form that any Bidder must sign and agree to abide
by upon submission of a Bid Agreement.
Conditional relinquishment means the CFEC form that any Permit
Holder, agreeing to relinquish a permit, must sign and agree to
abide by upon SRA acceptance of the bid.
Fishery means the Southeast Alaska administrative area as
defined under Title 5 Alaska Administrative Code Section 33.100 for
salmon with purse seine gear.
Permit means a valid entry permit issued by CFEC to operate in
the Southeast Alaska purse seine salmon fishery.
Permit holder means an individual who at the time of bidding is
the holder of record of a permit.
Reduction plan means the aggregate of all Bids, Relinquishment
Contracts (Appendix B), Commercial Fisheries Entry Commission
(``CFEC'') Conditional Notice and Conditional Relinquishment
(Appendices C & D), and supporting documents and rationale;
submitted to the Secretary for approval.
Referendum means the voting procedure to determine the Permit
Holder's willingness to repay a fishing capacity reduction loan to
purchase the permits identified in the Plan.
Relinquishment contract means the contract that any bidder
agreeing to relinquish a permit pursuant to Alaska Statute (A.S.
16.43.150(i)) must sign and agree to abide by upon acceptance of the
Bid, and before payment of the bid amount.
Secretary means the Secretary of Commerce or his/her designee.
Southeast Revitalization Association (SRA) means the qualified
fishery association authorized to develop and implement this
capacity reduction program under Alaska Statute 16.40.250 and
Federal law.
II. Recitals
Whereas Alaska Statute 16.40.250 and the Act authorize a fishing
capacity reduction program for the fishery;
Whereas, within 30 days of concluding the selection process, the
SRA shall submit the Reduction Plan, together with supporting
documents and rationale, to NMFS for final approval on behalf of the
Secretary;
Whereas, the reduction Plan's express objective is to reduce
fishing capacity by permanently revoking permits thereby promoting
economic efficiency, improving flexibility in the conservation and
management of the fishery and obtain the maximum reduction in
permits at the least cost;
Whereas, the SRA can implement the Reduction Plan only after
giving notice to all Permit Holders and subsequent approval of the
reduction Plan by referendum;
Whereas, the Agreement submitted by the bidder and the SRA is an
integral element of the Reduction Plan;
Now, therefore, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, the SRA and bidder
agree as follows:
III. Terms and Conditions
1. Form. By completing and submitting this Bid to the SRA the
bidder hereby offers to permanently relinquish, and have the CFEC
revoke, the permit. The SRA signing the Bid and subsequent NMFS
payment to bidder in the exact bid amount set forth in section III,
11(f) of the Bid is full and complete consideration.
[[Page 29715]]
2. Irrevocable. The bidder expressly acknowledges that by
submitting the Bid he/she makes an irrevocable offer to relinquish
the permit and once having submitted the Bid is not entitled to
withdraw or in any manner amend the Bid. The receipt date that the
SRA marks on the Bid constitutes the date of the bidder's submittal.
3. Warranty. The bidder warrants and represents that he/she is
the holder of record of the permit, according to the CFEC records,
and that he/she has read and understands the terms of the Program
Regulations, Bid, Relinquishment Contract, Conditional Notice and
the Conditional Relinquishment and has had the opportunity to seek
independent legal counsel regarding such documents and the
consequences of submitting the Bid.
4. Validity. The SRA, in consultation with the CFEC, shall
examine each Bid for completeness and consistency. The SRA shall
notify the bidder if the Bid is non-conforming. In such cases, the
bidder may submit a revised, conforming Bid within the prescribed
period (i.e., until the bid closing date).
5. Ranking. The SRA shall rank the bid amount entered in section
III, 11(f) of this Bid by using a reverse auction in which the SRA
ranks the Bid with the lowest dollar amount and successively ranks
each additional Bid with the next lowest dollar amount until there
are no more Bids or the ranking of the next lowest Bid would exceed
the total program cost. In the event of a tie with bids which
results in the tied bids exceeding $23.5 million, the SRA will
select the tied bid first received.
6. Acceptance and Rejection. If the Bid is accepted, the SRA
shall formally notify the bidder in writing. If the SRA rejects the
Bid, the SRA will formally notify the bidder in writing and the Bid
shall terminate without further obligation.
7. Restriction of Transfer of permit: Upon acceptance, the SRA
will send the CFEC the Conditional Notice, restricting transfer of
the permit until such time as: the SRA notifies the bidder that the
Plan is not in compliance with the Act and will not be approved; or
NMFS notifies the bidder the referendum was unsuccessful.
8. Payment. Within 60 days from the close of the voting period
of a successful referendum, the CFEC will provide notice to NMFS of
the permits retired from the Reduction Fishery. Upon receiving such
notice, NMFS will then tender the accepted bid amounts to the Permit
Holders.
9. Specific Performance. The failure of a bidder whose Bid was
accepted to comply with the terms of this Bid will result in
irreparable damage to the SRA and its members because the Bid was
part of the basis for the Plan submitted to the Secretary for
approval. Accordingly, the SRA and bidder expressly acknowledge that
money damages are an inadequate means of redress and agree that
specific performance of those obligations may be obtained by suit in
equity brought by the SRA in any court of competent jurisdiction
without obligation to arbitrate such action.
10. Submission. This Bid must be submitted within the prescribed
period to the SRA, c/o Elgee, Rehfeld, Mertz, LLC, Professional
Plaza Building B, 9309 Glacier Highway, Suite B-200, Juneau, AK
99801.
11. Complete Bid Information: To fully and accurately complete
this Bid, the bidder must fully complete the following questions and
provide an exact photocopy of the permit. The Bidder must further
sign this form, Appendices B, C, and D and acknowledge the signature
before a notary public.
(a) BIDDER'S NAME. This must be the full and exact legal name of
record of the person bidding. Insert the name of the bidder.
------------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------------------------------------------------
(b) BIDDER'S ADDRESS OF RECORD. Insert the full and exact
address of record for the bidder.
------------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------------------------------------------------
(c) BIDDER'S TELEPHONE NUMBER. Insert the full and exact
telephone number of the bidder.
------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
(d) BIDDER'S ELECTRONIC MAIL ADDRESS (if available). Insert the
full and exact e-mail address of the bidder.
------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
(e) PERMIT. Insert the full and exact permit number(s) of the
bidder. Enclose with this Bid an exact photocopy of the permit.
------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
(f) BID AMOUNT. Insert, in U.S. dollars, the bid's full and
exact amount, both in words and numbers.
------------------------------------------------------------------------
In words In numbers
------------------------------------------------------------------------
$
$
$
------------------------------------------------------------------------
(g) SECURITY INTERESTS. Insert the name of any authorized third
party that may hold a security interest in the permit.
------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
(h) SOCIAL SECURITY NUMBER. Insert the full and exact Social
Security Number of the bidder.
------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
(i) BID SIGNATURE. In compliance with applicable law and this
Bid, the bidder submits the above bid amount as an offer to the SRA
for the permanent relinquishment of his/her permit. By completing
the sections above and signing below, the bidder acknowledges that
the bidder has completely reviewed this Bid and attachments. The
bidder warrants that the bidder is fully able to enter into the
Relinquishment Contract. The bidder expressly warrants and attests
that all information included herein is accurate.
------------------------------------------------------------------------
------------------------------------------------------------------------
Signature
Printed Name
Date of Signature
------------------------------------------------------------------------
State of:--------------------------------------------------------------
County/Borough of:-----------------------------------------------------
I certify that ----------------------------------------is the
person who appeared before me and said person acknowledged that he/
she signed this Bid and on oath stated that he/she was authorized to
execute such document and acknowledged it to be the free and
voluntary act of him/her for the uses and purposes mentioned in such
document.
Notary Public's Signature:---------------------------------------------
Dated:-----------------------------------------------------------------
My Commission Expires:-------------------------------------------------
12. SRA SIGNATURE. By signing below, the SRA acknowledges
acceptance of this Bid, including the bidder's bid amount.
[[Page 29716]]
----------------------------------------------------------------------------------------------------------------
--------------------------------------------------------
Signature............
Printed Name.........
Date of Signature....
----------------------------------------------------------------------------------------------------------------
Appendix B to Sec. 600.1107--Relinquishment Contract: Southeast Alaska
Salmon Purse Seine Permit Holders
This Relinquishment Contract (``Contract'') and agreement is
entered into between the Southeast Revitalization Association
(``SRA'') and the bidder named in Section 11(a) of the Bid. The
contract is effective when the bidder signs the Bid and this
contract and, thereby, agrees to relinquish his/her permit, issued
by the Alaska Commercial Fisheries Entry Commission (``CFEC'') for
the Southeast Alaska salmon purse seine fishery (``fishery'').
Whereas Alaska Statute 16.40.250 and Federal law authorize a
fishing capacity reduction program for the fishery;
Whereas, upon accepting and signing the Bid, the SRA shall
submit a Reduction Plan to NMFS;
Whereas, the Reduction Plan's express objective is to reduce
fishing capacity by permanently revoking permits thereby promoting
economic efficiency, improving flexibility in the conservation and
management of the fishery and obtain the maximum reduction in
permits at the least cost;
Whereas, this contract is subject to the terms and conditions
set forth herein, including the CFEC forms marked as Appendices C &
D;
Now, therefore, for valuable consideration and the covenants
hereinafter set forth, the parties hereto agree as follows:
1. The foregoing, including the Bid and specifically the
definitions under section 1, are expressly incorporated herein by
this reference.
2. Under AS 16.43.150(i), the Bidder agrees to permanently
relinquish and have the CFEC revoke the permit.
3. The Bidder represents that, as of the date of submitting the
contract, he or she is the holder of record of the permit according
to the CFEC official permit records.
4. Upon notification by the SRA to the Bidder that the SRA
accepted the bid; the SRA will submit to the CFEC the Permit
Holder's executed notice form (Appendix C) and executed
relinquishment form (Appendix D).
5. In the event an authorized third party holds a security
interest in the permit, NMFS will not make payment until receiving
notice of written consent by the third party to the SRA and the CFEC
on a form provided by the CFEC.
6. NMFS payment to the accepted bidder in the exact amount of
the accepted bid amount is full and complete consideration for the
CFEC revoking the permit.
7. The bidder shall, upon the SRA or the CFEC request, furnish
such additional documents, information, or take such other actions
as may be reasonably required to enable the CFEC to implement
relinquishment of the permit.
8. The bidder consents to the public release of any information
provided in connection with the contract or program requirements
after completion of the plan.
9. The contract contains the final terms and conditions of this
agreement between the parties and represents the entire and
exclusive agreement between them.
10. The contract terms are severable, and, in the event that any
portion of the contract is held to be unenforceable, the remaining
portion shall remain fully enforceable against the parties.
11. Any and all disputes involving the contract shall be
governed by laws of the State of Alaska. The bidder expressly
acknowledges that by submitting the Bid, he/she makes an irrevocable
offer to relinquish the permit, and once having submitted the Bid,
is not entitled to withdraw or in any way amend the Bid.
12. The failure of a bidder to perform his/her obligations under
the Bid will result in irreparable damage to the SRA and its members
upon submittal of the Plan to the Secretary for approval.
Accordingly, the SRA and the bidder expressly acknowledge that money
damages are an inadequate means of redress and agree that upon
failure of the bidder to fulfill his/her obligations under the Bid
that specific performance of those obligations may be obtained by
suit in equity brought by the SRA in any court of competent
jurisdiction without obligation to arbitrate such action.
Bidder's Signature and Notary's Acknowledgement and Certification
------------------------------------------------------------------------
Bidder signature Notary signature
------------------------------------------------------------------------
(1) Sign. (1) Sign.
(2) Print the following: (2) Print the following:
(a) signer's name (a) name
(b) signing date (b) signing date
(c) state and city/borough (3) date commission
expires, and State and city/
borough. Each notary
signature attests to the
following: ``I certify that
I know or have satisfactory
evidence that the person who
is signed in the 1st column
of this same row is the
person who appeared before
me and: (1) acknowledged his/
her signature; (2) on oath,
stated that he/she was
authorized to sign; and (3)
acknowledged that he/she did
so freely and voluntarily.''
------------------------------------------------------------------------
(1) (1)
------------------------------------------------------------------------
(2)(a) (2)(a)
------------------------------------------------------------------------
(2)(b) (2)(b)
------------------------------------------------------------------------
(2)(c) (3)
------------------------------------------------------------------------
II. Southeast Revitalization Association Signature Southeast
Revitalization Association
Dated:-----------------------------------------------------------------
By:--------------------------------------------------------------------
Appendix C to Sec. 600.1107--Conditional Notice to CFEC and Request by
Permit Holder
In support of my Bid to the Southeast Revitalization Association
(SRA), I have executed this Conditional Notice and request and
authorize the Southeast Revitalization Association (SRA) to submit
this executed document to the Alaska Commercial Fisheries Entry
Commission (CFEC) in the event that the SRA accepts my bid to
permanently relinquish my Southeast Salmon Purse Seine Entry Permit
under AS 16.43.150(i).
[[Page 29717]]
I hereby notify the CFEC that the SRA has accepted my Bid to
permanently relinquish my Southeast Salmon Purse Seine Entry Permit
----------------.
I request the CFEC: (1) not to renew my above-identified entry
permit; and (2) not to authorize any transfer of my entry permit.
DATED this ---- day of ------------, 2011.
-----------------------------------------------------------------------
(Permit Holder/Bidder)
SUBSCRIBED AND SWORN TO before me this ---- day of ------------,
2011.
-----------------------------------------------------------------------
Notary Public, State of------------------------------------------------
My commission expires:-------------------------------------------------
Appendix D to Sec. 600.1107--Conditional Relinquishment of Southeast
Salmon Purse Seine Entry Permit [as 16.43.150(i)]
Upon satisfaction of the conditions that the Southeast
Revitalization Association (SRA) accepts my bid and that NMFS agrees
to pay my full bid amount to me, the SRA may submit this executed
Conditional Relinquishment of Southeast Salmon Purse Seine Entry
Permit to the Commercial Fisheries Entry Commission.
I fully understand this relinquishment of my permanent entry
permit ---------------- under AS 16.43.150(i) is
permanent, and I will not be able to reinstate the permit.
DATED this ---- day of------------, 2011.
-----------------------------------------------------------------------
(Permit Holder/Bidder)
SUBSCRIBED AND SWORN TO before me this ---- day of ------------,
2011.
-----------------------------------------------------------------------
Notary Public, State of------------------------------------------------
My commission expires:-------------------------------------------------
[FR Doc. 2011-12650 Filed 5-20-11; 8:45 am]
BILLING CODE 3510-22-P