[Code of Federal Regulations] [Title 50, Volume 4] [Revised as of October 1, 2002] From the U.S. Government Printing Office via GPO Access [CITE: 50CFR679.30] [Page 693-699] TITLE 50--WILDLIFE AND FISHERIES DEPARTMENT OF COMMERCE PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA--Table of Contents Subpart C--Western Alaska Community Development Quota Program Sec. 679.30 General CDQ regulations. (a) Application procedure. The CDQ program is a voluntary program. Allocations of CDQ and PSQ are made to CDQ groups and not to vessels or processors fishing under contract with any CDQ group. Any vessel or processor harvesting or processing CDQ or PSQ under a CDP must comply with all other requirements of this part. In addition, the CDQ group is responsible to ensure that vessels and processors listed as eligible on the CDQ group's approved CDP comply with all requirements of this part while harvesting or processing CDQ species. Allocations of CDQ and PSQ are harvest privileges that expire upon the expiration of the CDP. When a CDP expires, further CDQ allocations are not implied or guaranteed, and a qualified applicant must re-apply for further allocations on a competitive basis with other qualified applicants. The CDQ allocations provide the means for CDQ groups to complete their CDQ projects. A qualified applicant may apply for CDQ and PSQ allocations by submitting a proposed CDP to the State during the CDQ application period that is announced by the State. A proposed CDP must include the following information: (1) Community development information. Community development information includes: (i) Project description. A detailed description of all proposed CDQ projects, including the short-and long-term benefits to the qualified applicant from the proposed CDQ projects. CDQ projects should not be designed with the expectation of CDQ allocations beyond those requested in the proposed CDP. (ii) Project schedule. A schedule for the completion of each CDQ project with measurable milestones for determining the progress of each CDQ project. (iii) Employment. The number of individuals to be employed through the CDP projects, and a description of the nature of the work and the career advancement potential for each type of work. (iv) Community eligibility. A list of the participating communities. Each participating community must be listed in Table 7 to this part or meet the criteria for an eligible community under Sec. 679.2. (v) Community support. A demonstration of each participating community's support for the qualified applicant and the managing organization through an official letter approved by the governing body of each such community. (2) Managing organization information. A proposed CDP must include the following information about the managing organization: (i) Structure and personnel. A description of the management structure and key personnel of the managing organization, such as resumes and references, including the name, address, fax number, and telephone number of the qualified applicant's CDQ representative. (ii) Management qualifications. A description of how the managing organization is qualified to carry out the CDP projects in the proposed CDP, and a [[Page 694]] demonstration that the managing organization has the management, technical expertise, and ability to manage CDQ allocations and prevent exceeding a CDQ or PSQ. (iii) Legal relationship. Documentation of the legal relationship between the qualified applicant and the managing organization (if the managing organization is different from the qualified applicant) clearly describing the responsibilities and obligations of each party as demonstrated through a contract or other legally binding agreement. (iv) Board of directors. The name, address, and telephone number of each member of the board of directors of the qualified applicant. If a qualified applicant represents more than one community, the board of directors of the qualified applicant must include at least one member from each of the communities represented. (3) Business information. A proposed CDP must include the following business information: (i) Business relationships. A description of all business relationships between the qualified applicant and all individuals who have a financial interest in a CDQ project or subsidiary venture, including, but not limited to, any arrangements for management and audit control and any joint venture arrangements, loans, or other partnership arrangements, including the distribution of proceeds among the parties. (ii) Profit sharing. A description of all profit sharing arrangements. (iii) Funding. A description of all funding and financing plans. (iv) General budget for implementing the CDP. A general account of estimated income and expenditures for each CDQ project for the total number of calendar years that the CDP is in effect. (v) Financial statement for the qualified applicant. The most recent audited income statement, balance sheet, cash flow statement, management letter, and agreed upon procedures report. (vi) Organizational chart. A visual representation of the qualified applicant's entire organizational structure, including all divisions, subsidiaries, joint ventures, and partnerships. This chart must include the type of legal entity for all divisions, subsidiaries, joint ventures, and partnerships; state of registration of the legal entity; and percentage owned by the qualified applicant. (4) Request for CDQ and PSQ allocations. A list of the percentage of each CDQ reserve and PSQ reserve, as described at Sec. 679.31 that is being requested. The request for allocations of CDQ and PSQ must identify percentage allocations requested for CDQ fisheries identified by the primary target species of the fishery as defined by the qualified applicant and the gear types of the vessels that will be used to harvest the catch. (5) Fishing plan for groundfish and halibut CDQ fisheries. The following information must be provided for all vessels that will be groundfish CDQ fishing, all vessels equal to or greater than 60 ft (18.3 m) LOA that will be halibut CDQ fishing, and for all shoreside processors that will take delivery of groundfish CDQ species from these vessels. (i) List of eligible vessels and processors--(A) Vessels--(1) Information required for all vessels. A list of the name, Federal fisheries permit number (if applicable), ADF&G vessel number, LOA, gear type, and vessel type (catcher vessel, catcher/processor, or mothership). For each vessel, report only the gear types and vessel types that will be used while CDQ fishing. Any CDQ vessel that is exempt from license limitation requirements under Sec. 679.4(k)(2)(iv) of this part must be identified as such. (2) Information required for observed vessels using trawl or hook- and-line gear and motherships taking deliveries from these vessels. For each catcher/processor and catcher vessel 60 ft (18.29 m) LOA or greater using trawl or hook-and-line gear and not delivering unsorted codends, or for each mothership, the CDP must include the following information that will be used by NMFS to determine whether sufficient observer coverage is provided to sample each CDQ haul, set, or delivery. Provide the information for groundfish CDQ fishing as defined under Sec. 679.2 and provide separate information by management area or fishery if information differs among management areas or fisheries. [[Page 695]] (i) Number of CDQ observers that will be aboard the vessel. For catcher/processors using hook-and-line gear proposing to carry only one CDQ observer, the CDP must include vessel logbook or observer data that demonstrates that one CDQ observer can sample each set for species composition in one 12-hour shift per fishing day. (ii) Average and maximum number of hauls or sets that will be retrieved on any given fishing day while groundfish CDQ fishing. (iii) For vessels using trawl gear, the average and maximum total catch weight for any given haul while groundfish CDQ fishing. (iv) For vessels using trawl gear, the number of hours necessary to process the average and maximum haul size while groundfish CDQ fishing. (v) For vessels using hook-and-line gear, the average number of hooks in each set and estimated time it will take to retrieve each set while groundfish CDQ fishing. (vi) Whether any halibut CDQ will be harvested by vessels groundfish CDQ fishing. (B) Shoreside processors or stationary floating processors. A list of the name, Federal processor permit number, and location of each shoreside processor or stationary floating processor that is required to have a Federal processor permit under Sec. 679.4(f) and will take deliveries of, or process, groundfish CDQ catch from any vessel groundfish CDQ fishing or from vessels equal to or greater than 60 ft (18.3 m) LOA that are halibut CDQ fishing. (ii) Sources of data or methods for estimating CDQ and PSQ catch. The sources of data or methods that will be used to determine catch weight of CDQ and PSQ for each vessel or processor proposed as eligible under the CDP. For each vessel or processor, the CDP must specify whether the NMFS' standard sources of data set forth at Sec. 679.32(d)(2) or some other alternative will be used. For catcher vessels using nontrawl gear, the CDP must also specify whether the vessel will be retaining all groundfish CDQ catch (Option 1) or will be discarding some groundfish CDQ catch at sea (Option 2). The qualified applicant may propose the use of an alternative method such as the sorting and weighing of all catch by species on processor vessels or using larger sample sizes than could be collected by one observer. NMFS will review the proposal and approve it or notify the qualified applicant in writing if the proposed alternative does not meet these requirements. The qualified applicant may remove the vessel or processor for which the alternative method is proposed from the proposed CDP to facilitate approval of the CDP and add the vessel or processor to the approved CDP by substantial amendment at a later date. Alternatives to the requirement for a certified scale or an observer sampling station may not be proposed. NMFS will review the alternative proposal to determine if it meets all of the following requirements: (A) The alternative proposed must provide equivalent or better estimates than use of the NMFS standard data source would provide and the estimates must be independently verifiable; (B) Each haul or set on an observed vessel must be able to be sampled by an observer for species composition; (C) Any proposal to sort catch before it is weighed must assure that the sorting and weighing process will be monitored by an observer; and (D) The time required for the CDQ observer to complete sampling, data recording, and data communication duties shall not exceed 12 hours in each 24-hour period and the CDQ observer is required to sample no more than 9 hours in each 24-hour period. (iii) Amendments to the list of eligible vessels and processors. The list of eligible vessels and processors may be amended by submitting the information required in paragraphs (a)(5)(i) and (ii) of this section as an amendment to the approved CDP. A technical amendment may be used to remove any vessel from a CDP, to add any vessel to a CDP if the CDQ group will use NMFS' standard sources of data to determine CDQ and PSQ catch for the vessel, or to add any vessel to a CDP for which an alternative method of determining CDQ and PSQ catch has been approved by NMFS under an approved CDP for another CDQ group. A substantial amendment must be used to add a vessel to an approved CDP if the CDQ group submits a [[Page 696]] proposed alternative method of determining CDQ and PSQ catch for NMFS review. (6) CDQ planning--(i) Transition plan. A proposed CDP must include an overall plan and schedule for transition from reliance on CDQ allocations to self-sufficiency in fisheries. The plan for transition to self-sufficiency must be based on the qualified applicant's long-term revenue stream without CDQs. (ii) Post-allocation plan. [Reserved] (b) Public hearings on CDQ application. When the CDQ application period has ended, the State must hold a public hearing to obtain comments on the proposed CDPs from all interested persons. The hearing must cover the substance and content of proposed CDPs so that the general public, particularly the affected parties, have a reasonable opportunity to understand the impact of the proposed CDPs. The State must provide reasonable public notification of hearing date and location. At the time of public notification of the hearing, the State must make available for public review all State materials pertinent to the hearing. (c) Council consultation. Before the State sends its recommendations for approval of proposed CDPs to NMFS, the State must consult with the Council and make available, upon request, the proposed CDPs that are not part of the State's recommendations. (d) Review and approval of proposed CDPs. The State must transmit the proposed CDPs and its recommendations for approval of each of the proposed CDPs to NMFS, along with the findings and the rationale for the recommendations, by October 15 of the year prior to the first year of the proposed CDP, except in 1998, when CDPs for the 1998 through 2000 multispecies groundfish CDQs must be submitted by July 6, 1998. The State shall determine in its recommendations for approval of the proposed CDPs that each proposed CDP meets all applicable requirements of this part. Upon receipt by NMFS of the proposed CDPs and the State's recommendations for approval, NMFS will review the proposed CDPs and approve those that it determines meet all applicable requirements. NMFS shall approve or disapprove the State's recommendations within 45 days of their receipt. In the event of approval of the CDP, NMFS will notify the State in writing that the proposed CDP is approved by NMFS and is consistent with all requirements for CDPs. If NMFS finds that a proposed CDP does not comply with the requirements of this part, NMFS must so advise the State in writing, including the reasons thereof. The State may submit a revised proposed CDP along with revised recommendations for approval to NMFS. (e) Transfer. CDQ groups may request that NMFS transfer CDQ allocations, CDQ, PSQ allocations, or PSQ from one group to another by each group filing an appropriate amendment to its CDP. Transfers of CDQ and PSQ allocations must be in whole integer percentages, and transfers of CDQ and PSQ must be in whole integer amounts. If NMFS approves both amendments, NMFS will make the requested transfer(s) by decreasing the account balance of the CDQ group from which the CDQ or PSQ species is transferred by the amount transferred and by increasing the account balance of the CDQ group receiving the transferred CDQ or PSQ species by the amount transferred. NMFS will not approve transfers to cover overages of CDQ or PSQ. (1) CDQ allocation. CDQ groups may request that NMFS transfer any or all of one group's CDQ allocation to another by each group filing an amendment to its CDP through the CDP substantial amendment process set forth at paragraph (g)(4) of this section. The CDQ allocation will be transferred as of January 1 of the calendar year following the calendar year NMFS approves the amendments of both groups and is effective for the duration of the CDPs. (2) CDQ. CDQ groups may request that NMFS transfer any or all of one group's CDQ for a calendar year to another by each group filing an appropriate amendment to its CDP. If the amount to be transferred is 10 percent or less of a group's initial CDQ amount for that year, that group's request may be made through the CDP technical amendment process set forth at paragraph (g)(5) of this section. If the amount to be transferred is greater than 10 percent of a group's initial CDQ [[Page 697]] amount for the year, that group's request must be made through the CDP substantial amendment process set forth at paragraph (g)(4) of this section. The CDQ will be transferred as of the date NMFS approves the amendments of both groups and is effective only for the remainder of the calendar year in which the transfer occurs. (3) PSQ allocation. CDQ groups may request that NMFS transfer any or all of one group's PSQ allocation to another CDQ group through the CDP substantial amendment process set forth at paragraph (g)(4) of this section. Each group's request must be part of a request for the transfer of a CDQ allocation, and the requested amount of PSQ allocation must be the amount reasonably required for bycatch needs during the harvesting of the CDQ. Requests for the transfer of a PSQ allocation may be submitted to NMFS from January 1 through January 31. Requests for transfers of a PSQ allocation will not be accepted by NMFS at other times of the year. The PSQ allocation will be transferred as of January 1 of the calendar year following the calendar year NMFS approves the amendments of both groups and is effective for the duration of the CDPs. (4) PSQ. CDQ groups may request that NMFS transfer any or all of one group's PSQ for one calendar year to another by each group filing an amendment to its CDP through the CDP substantial amendment process set forth at paragraph (g)(4) of this section. Each group's request must be part of a request for the transfer of CDQ, and the requested amount of PSQ must be the amount reasonably required for bycatch needs during the harvesting of the CDQ. Requests for the transfer of PSQ may be submitted to NMFS from January 1 through January 31. Requests for transfers of PSQ will not be accepted by NMFS at other times of the year. The PSQ will be transferred as of the date NMFS approves the amendments of both groups and is effective only for the remainder of the calendar year in which the transfer occurs. (f) CDQ group responsibilities. A CDQ group's responsibilities include, but are not limited to, the following: (1) Direct and supervise all activities of the managing organization; (2) Maintain the capability to communicate with all vessels harvesting its CDQ and PSQ at all times; (3) Monitor the catch of each CDQ or PSQ; (4) Submit the CDQ catch report described at Sec. 679.5(n)(2); (5) Ensure that no CDQ, halibut PSQ, or crab PSQ is exceeded; (6) Ensure that the CDQ group's CDQ harvesting vessels and CDQ processors will: (i) Provide observer coverage, equipment, and operational requirements for CDQ catch monitoring; (ii) Provide for the communication of observer data from their vessels to NMFS and the CDQ representative; (iii) Maintain contact with the CDQ group for which it is harvesting CDQ and PSQ; (iv) Cease fishing operations when requested by the CDQ group; and (v) Comply with all requirements of this part while harvesting or processing CDQ species. (7) Comply with all requirements of this part. (g) Monitoring of CDPs--(1) Annual progress report. (i) The State must submit to NMFS, by October 31 of each year, an annual progress report for the previous calendar year for each CDP. (ii) Annual progress reports must be organized on a project-by- project basis and include information for each CDQ project in the CDP describing how each scheduled milestone in the CDP has been met, and an estimation by the State of whether each of the CDQ projects in the CDP is likely to be successful. (iii) The annual report must include a description by the State of any problems or issues in the CDP that the State encountered during the annual report year. (2) Annual budget report. (i) Each CDQ group must submit to NMFS an annual budget report by December 15 preceding the year for which the annual budget applies. (ii) An annual budget report is a detailed estimate of the income from the CDQ project and of the expenditures for each subsidiary, division, joint venture, partnership, investment activity, [[Page 698]] or CDQ project as described in paragraph (a)(1)(i) of this section for a calendar year. A CDQ group must identify the administrative costs for each CDQ project. The CDQ group's total administrative costs will be considered a separate CDQ project. (iii) An annual budget report is approved upon receipt by NMFS, unless disapproved by NMFS in writing by December 31. If disapproved, the annual budget report will be returned to the CDQ group for revision and resubmittal to NMFS. (3) Annual budget reconciliation report. A CDQ group must reconcile its annual budget by May 30 of the year following the year for which the annual budget applied. Reconciliation is an accounting of the annual budget's estimated income and expenditures with the actual income and expenditures, including the variance in dollars and variance in percentage for each CDQ project that is described in paragraph (a)(1)(i) of this section. (4) Substantial amendments. A CDP is a working business plan and must be kept up to date. (i) Substantial amendments to a CDP require a written request by the CDQ group to the State and NMFS for approval of the amendment. The State must forward the amendment to NMFS with a recommendation as to whether it should be approved. (ii) NMFS will notify the State in writing of the approval or disapproval of the amendment within 30 days of receipt of both the amendment and the State's recommendation. Except for substantial amendments for the transfer of CDQ and PSQ, which are effective only for the remainder of the calendar year in which the transfer occurs (see paragraphs (e)(2) and (4) of this section), once a substantial amendment is approved by NMFS, the amendment will be effective for the duration of the CDP. (iii) If NMFS determines that the CDP, if changed, would no longer meet the requirements of this subpart, NMFS will notify the State in writing of the reasons why the amendment cannot be approved. (iv) For the purposes of this section, substantial amendments are defined as changes in a CDP, including, but not limited to: (A) Any change in the list of communities comprising the CDQ group or replacement of the managing organization. (B) A change in the CDP applicant's harvesting or processing partner. (C) Funding a CDP project in excess of $100,000 that is not part of an approved general budget. (D) More than a 20-percent increase in the annual budget of an approved CDP project. (E) More than a 20-percent increase in actual expenditures over the approved annual budget for administrative operations. (F) A change in the contractual agreement(s) between the CDQ group and its harvesting or processing partner or a change in a CDP project, if such change is deemed by the State or NMFS to be a material change. (G) Any transfer of a CDQ allocation, PSQ allocation, PSQ, or a transfer of more than 10 percent of a CDQ. (H) The addition of a vessel to a CDP if the CDQ group submits a proposed alternative method of determining CDQ and PSQ catch under paragraph (a)(5)(ii) of this section for NMFS review. (v) The request for approval of a substantial amendment to a CDP shall include the following information: (A) The background and justification for the amendment that explains why the proposed amendment is necessary and appropriate. (B) An explanation of why the proposed change to the CDP is a substantial amendment. (C) A description of the proposed amendment, explaining all changes to the CDP that result from the proposed amendment. (D) A comparison of the original CDP text, with the text of the proposed changes to the CDP, and the revised pages of the CDP for replacement in the CDP binder. The revised pages must have the revision date noted, with the page number on all affected pages. The table of contents may also need to be revised to reflect any changes in pagination. (E) Identification of any NMFS findings that would need to be modified if [[Page 699]] the amendment is approved, along with the proposed modified text. (F) A description of how the proposed amendment meets the requirements of this subpart. Only those CDQ regulations that are affected by the proposed amendment need to be discussed. (5) Technical amendments. Any change to a CDP that is not considered a substantial amendment under paragraph (g)(4)(iv) of this section is a technical amendment. (i) The CDQ group must notify the State in writing of any technical amendment. Such notification must include a copy of the pages of the CDP that would be revised by the amendment, with the text highlighted to show the proposed deletions and additions, and a copy of the CDP pages as they would be revised by the proposed amendment for insertion into the CDP binder. All revised CDP pages must include the revision date, amendment identification number, and CDP page number. The table of contents may also need to be revised to reflect any changes in pagination. (ii) The State must forward the technical amendment to NMFS with its recommendations for approval or disapproval of the amendment. A technical amendment is approved by NMFS and is effective when, after review, NMFS notifies the State in writing of the technical amendment's receipt and approval. (h) Suspension or termination of a CDP. An annual progress report, required under paragraph (g)(1) of this section, will be used by the State to review each CDP to determine whether the CDP, CDQ, and PSQ allocations thereunder should be continued, decreased, partially suspended, suspended, or terminated under the following circumstances: (1) If the State determines that the CDP will successfully meet its goals and objectives, the CDP may continue without any Secretarial action. (2) If the State recommends to NMFS that an allocation be decreased, the State's recommendation for decrease will be deemed approved if NMFS does not notify the State in writing within 30 days of receipt of the State's recommendation. (3) If the State determines that a CDP has not successfully met its goals and objectives or appears unlikely to become successful, the State may submit a recommendation to NMFS that the CDP be partially suspended, suspended, or terminated. The State must set out, in writing, the reasons for recommending suspension or termination of the CDP. (4) After review of the State's recommendation and reasons thereof, NMFS will notify the Governor, in writing, of approval or disapproval of the recommendation within 30 days of its receipt. In the case of suspension or termination, NMFS will publish notification in the Federal Register, with reasons thereof. [63 FR 30403, June 4, 1998, as amended at 64 FR 3882, Jan. 26, 1999; 64 FR 20214, Apr. 26, 1999; 65 FR 45318, July 21, 2000; 67 FR 4148, Jan. 28, 2002] Effective Date Note: At 63 FR 30403, June 4, 1998, Sec. 679.30 was revised. Section 679.30(a)(5)(i)(A)(2) contains information collection and recordkeeping requirements and will not become effective until approval has been given by the Office of Management and Budget.