80 FR 42747 - Fisheries of the Northeastern United States; Atlantic Surfclam and Ocean Quahog Fisheries

DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration

Federal Register Volume 80, Issue 138 (July 20, 2015)

This final rule implements an information collection program for the Atlantic surfclam and ocean quahog fisheries. The information collection program is intended to obtain more detailed information about individuals and businesses that hold fishery quota allocation in these individual transferable quota fisheries. This action is necessary to ensure that the Mid-Atlantic Fishery Management Council has the information needed to develop a future management action intended to establish an excessive share cap in these fisheries.

[Federal Register Volume 80, Number 138 (Monday, July 20, 2015)]
[Rules and Regulations]
[Pages 42747-42752]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17678]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 130822745-5611-02]
RIN 0648-BD64


Fisheries of the Northeastern United States; Atlantic Surfclam 
and Ocean Quahog Fisheries

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule implements an information collection program 
for the Atlantic surfclam and ocean quahog fisheries. The information 
collection program is intended to obtain more detailed information 
about individuals and businesses that hold fishery quota allocation in 
these individual transferable quota fisheries. This action is necessary 
to ensure that the Mid-Atlantic Fishery Management Council has the 
information needed to develop a future management action intended to 
establish an excessive share cap in these fisheries.

DATES: Effective January 1, 2016.

ADDRESSES: Written comments regarding the burden-hour estimates or 
other aspects of the collection-of-information requirements contained 
in this final rule may be submitted to the Greater Atlantic Regional 
Fisheries Office and by email to [email protected], or fax to 
(202) 395-7285.

FOR FURTHER INFORMATION CONTACT: Douglas Potts, Fishery Policy Analyst, 
(978) 281-9341.

SUPPLEMENTARY INFORMATION:

Background

    Section 402(a)(1) of the Magnuson-Stevens Fishery Conservation and 
Management Act (Magnuson-Stevens Act) authorizes the Secretary of 
Commerce to implement an information collection program if a fishery 
management council determines that additional information would be 
beneficial for developing, implementing, or revising a fishery 
management plan (FMP). The Mid-Atlantic Fishery Management Council 
formally requested that NMFS implement an information collection 
program in the Atlantic surfclam and ocean quahog individual 
transferable quota (ITQ) fisheries. The purpose of this information 
collection is to better

[[Page 42748]]

identify individuals who hold or control ITQ allocation in these 
fisheries. The Council will use the information collected to inform the 
development of a future management action intended to establish an 
excessive share cap as part of the Council's Surfclam/Ocean Quahog FMP.
    Currently, NMFS collects only basic information about the 
individuals or businesses that hold surfclam and ocean quahog ITQ 
allocations. This information is collected at the time that an entity 
first acquires ITQ allocation and is not routinely verified or updated. 
The information collection program implemented in this action is 
intended to identify the specific individuals who have an ownership 
interest in surfclam or ocean quahog ITQ allocation through a 
corporation, partnership, or other business entity, or control the use 
of ITQ allocation through the use of long-term contracts or other 
agreements. This action also ensures that the ownership information on 
file remains up to date by modifying the procedures for receiving and 
maintaining an ITQ permit.
    This action also makes minor corrections and clarifications to the 
surfclam and ocean quahog regulations.

Final Measures

    Full details and background on the measures in this rule are 
explained in the proposed rule published on August 7, 2014 (79 FR 
46233), and are not repeated here.

1. Surfclam/Ocean Quahog ITQ Permit Annual Renewal

    This final rule revises the regulations at Sec.  648.74 to change 
the validity period for ITQ Permits. ITQ permits will now expire at the 
end of the year and need to be renewed annually. This annual renewal 
requirement better ensures that ITQ-related information is kept 
current. Expired permits are eligible for renewal until the last day of 
the year for which they are needed. Permits not renewed by the deadline 
are considered voluntarily relinquished and will have their quota share 
and eligibility permanently revoked. This is commonly referred to as a 
``renew or lose'' provision. To renew a permit, an annual ITQ permit 
application must be completed. The ITQ permit application form requires 
information such as the applicant's name, address, telephone number, 
and date of birth (or taxpayer identification number for businesses). 
ITQ permit holders are also required to verify that they are eligible 
to own a U.S. Coast Guard documented vessel, as defined under 46 U.S.C. 
12103(b), which serves as a check of U.S. citizenship or corporate 
control by U.S. citizens.

2. New Surfclam/Ocean Quahog ITQ Ownership Form

    This final rule implements a new ITQ ownership form that must be 
submitted along with the ITQ permit application form for a permit to be 
issued. This form is being implemented to capture detailed ownership 
information, such as information on bank-held shares and identification 
of corporate officers, major shareholders, and partners as well as any 
immediate family members who also hold ITQ permits. Corporations or 
other business entities that hold an ITQ permit will be required to 
identify their corporate officers and all shareholders who have a 10-
percent or larger stake in the company.

3. ITQ Transfer Form Changes

    This action modifies the existing ITQ transfer form to collect more 
detailed financial information about transactions in which ITQ is 
transferred. Information about the allocation holder is removed, as 
that is now collected through the ITQ permit application and the ITQ 
ownership form. The ITQ transfer form now clarifies whether or not a 
permanent transfer of ITQ quota share includes all of the cage tags for 
the current fishing year. This action also adds additional questions to 
better understand the nature of the transfer. This includes a 
requirement to submit total price paid for the transfer, including any 
fees; broker fees paid, if applicable; whether the transfer is part of 
a long-term (more than 1 year) contract; if so, the duration of the 
contract and whether the price is fixed or flexible; and any other 
conditions on the transfer.

4. Regulatory Corrections and Clarifications

    This final rule revises the regulations at Sec.  648.74(a)(1)(i) to 
correct a cross reference to 46 U.S.C. 12103(b), which defines the 
persons or entities that are eligible to own a documented vessel. This 
rule also corrects several cross references in Sec.  648.14(j) to other 
sections of the regulations in part 648 pertaining to surfclam and 
ocean quahogs. Finally, the regulations at Sec.  648.74(b)(3) 
specifying when the Regional Administrator may deny a transfer of ITQ 
quota share or cage tags have been made more detailed and clear.
    The new permit requirements in this rule are effective with the 
start of the next fishing year on January 1, 2016. However, the new 
forms will be distributed in early fall to give ITQ permit holders 
ample time to complete and submit the forms in order to receive their 
2016 ITQ permits and 2016 cage tags before the start of the fishing 
year. Many ITQ shareholders choose to submit cage tags transfer 
requests in December, ahead of the new fishing year, so they can be 
processed and ready before January 1. We will continue to work to 
accommodate these requests for the industry.

Comments and Responses

    We published a proposed rule in the Federal Register on August 7, 
2014, and accepted public comments until September 8, 2014. After the 
comment period closed, the Council requested that we reopen the comment 
period to allow for additional public comment to be submitted after the 
proposed action was discussed at a Council meeting. In response, we 
published an announcement in the Federal Register on October 2, 2014 
(79 FR 59472), announcing that the comment period was reopened until 
October 17, 2014. Altogether, we received comments from 23 individuals. 
Nearly all of the comments received were from the surfclam and ocean 
quahog industry including dealers, processors, harvesters, and surfclam 
and ocean quahog consumer product producers and manufacturers. All of 
these comments generally opposed the information collection program, 
and raised very similar issues. Related comments have been combined in 
our summary of comments and responses below. Two comments received 
generally supported the program, but provided no supporting 
information. The Mid-Atlantic Fishery Management Council submitted a 
comment informing us of a motion that was made at the Council meeting 
on October 7, 2014, regarding the information collected on the ITQ 
transfer form.
    Comment 1: Numerous comments expressed concern that an excessive 
share cap is not necessary for these fisheries, and, therefore, there 
is no reason to collect additional information to help determine such 
caps.
    Response: Two sections of the Magnuson-Stevens Act address the need 
to prevent an individual or corporation from acquiring an excessive 
share of fishing privileges: National Standard 4 and section 
303A(c)(5)(D). Amendment 8 to the Atlantic Surfclam and Ocean Quahog 
FMP, which established the ITQ fishery in 1990, cited existing anti-
trust laws as being sufficient to meet the requirements of National 
Standard 4, ``that no particular individual, corporation, or other 
entity acquires an excessive share of such privileges.''

[[Page 42749]]

Section 303A was added to the Act by the Magnuson[hyphen]Stevens 
Fishery Conservation and Management Reauthorization Act of 2006. This 
section contains provisions and requirements for Limited Access 
Privilege Programs (LAPPS), which include ITQ programs. These added 
provisions include section 303A(c)(5)(D)(i), which requires LAPPs to 
ensure limited access privilege holders do not acquire an excessive 
share of the total limited access privileges in the program, by 
``establishing a maximum share, expressed as a percentage of the total 
limited access privileges, that a limited access privilege holder is 
permitted to hold, acquire, or use.'' Because the FMP does not 
currently include an excessive share cap expressed as a percentage of 
the total allocated quota, it is out of compliance with this provision 
of the Magnuson-Stevens Act.
    This information collection program is an important part of the 
Council's efforts to establish a cap that meets this requirement. See 
the response to Comment 2 for additional rationale for why this 
information collection is necessary.
    Comment 2: Several comments expressed concern that we are generally 
collecting too much information and that it is not necessary or 
applicable in helping determine excessive shares. These comments 
expressed concern that we should not collect this information because 
it involves business transactions that should be confidential.
    Response: We understand that this information collection includes 
more specific detail than is collected in other fisheries in the 
region. However, prior reports and analyses for these fisheries suggest 
this information is necessary and appropriate to determine current 
ownership and control of allocations in these fisheries. In the 
surfclam and ocean quahog fisheries, there is a series of complex 
corporate and business relationships involving control of quota shares. 
A 2002 GAO report on this ITQ program suggested that NMFS did not 
gather sufficient ownership information to appropriately characterize 
the amount of consolidation in the fishery. In 2011, NMFS and the MAFMC 
contracted an economic consulting firm to examine and report on 
potential excessive share caps in this fishery (Mitchell, Peterson and 
Willig. Recommendations for Excessive Share Limits in the SCOQ 
Fisheries. May 3, 2011), and subsequently convened a panel of 
independent reviewers to evaluate the report (Summary of Findings by 
the Center for Independent Experts Regarding Setting Excessive Share 
Limits for ITQ Fisheries; www.nefsc.noaa.gov/publications/crd/crd1122/
). In a series of public meetings, a special Council workgroup met and 
considered the recommendations of these reports, reviewed how ownership 
information is collected in other fisheries around the country, 
reviewed the information currently collected in this fishery, and then 
devised a suite of data elements that would provide the information the 
Council would need when developing an excessive shares cap. These 
recommendations were detailed in a white paper that was considered and 
approved by the Council. Without the additional information this action 
will collect, the Council may not have the information necessary to 
make informed decisions on excessive share caps. When the Council 
ultimately establishes an excessive shares cap, it is possible that not 
all of these data elements will be necessary to effectively monitor the 
cap. At that time, this collection will be reevaluated, and data 
elements may be added, removed, or modified to address the specific 
information needed to monitor the cap.
    We agree that some business transactions are confidential. Pursuant 
to section 402(b) of the Magnuson-Stevens Act, information submitted in 
compliance with the Act is confidential, and would not be distributed 
or made publicly available. These confidentiality requirements of the 
Magnuson-Stevens Act apply to information collected as a result of this 
action. Therefore, the collected information may be used to conduct 
analysis by NMFS, or Council staff who are subject to confidentiality 
agreements. Results of this analysis could only be presented in an 
aggregate form, which protects any confidential information.
    Comment 3: Nearly all of the comments received against this action 
were opposed to the provision that ITQ quota share could be considered 
permanently relinquished if the shareholder's ITQ permit is not renewed 
before the end of the fishing year. These comments explain that banks 
and other lending institutions hold much of the ITQ quota share in the 
surfclam and ocean quahog fisheries. Commenters expressed concern that 
lenders could view the potential loss of quota share as an unacceptable 
investment risk. Commenters stated this could result in the banks 
leaving the industry and discontinuing investment in the Atlantic 
surfclam and ocean quahog fisheries. These commenters further asserted 
that it is too easy to make an administrative error of not renewing a 
permit which would result in unfair loss of valuable ITQ quota share.
    Response: NMFS understands that there are concerns with losing the 
fishing rights associated with ITQ quota share if a permit is not 
renewed. However, based on the comments received, there appears to be a 
misunderstanding of how this provision would function. While a number 
of these comments seemed to be under the impression the rights to a 
permit would be lost immediately following the permit's expiration 
date, this is not the case. To clarify, an ITQ permit and quota share 
are not lost the day the permit expires. Although the permit cannot be 
used to harvest fish after it has expired, the applicant is eligible to 
renew the permit for the entire following year before the permit would 
be considered surrendered. For example, if an ITQ permit expires on 
December 31, 2015, the applicant has until December 31, 2016, to renew 
the permit before it is considered surrendered. It would not be 
surrendered when it expires on December 31, 2015.
    All limited access vessel permits in the Greater Atlantic Region 
have been subject to these renew-or-lose provisions since they were 
implemented in the mid-1990s. The Golden Tilefish Individual Fishing 
Quota program has operated under renew-or-lose provisions for tilefish 
quota share since the program's inception in 2010. If a permit is not 
renewed, NMFS makes multiple attempts to notify the permit holder of 
the need to renew the permit well before the deadline. Permanent loss 
of fishing rights has occurred for these other fisheries. However, loss 
of the right to a permit is rarely due to a clerical error such as 
simply forgetting to renew a permit. We believe such instances are 
infrequent given the system that provides a year to renew after permit 
expiration and multiple reminders prior to loss of fishing rights.
    Further, the ITQ permit must be current and valid in order for ITQ 
to be traded or for fishing activity to occur using ITQ. In 2014, there 
were 41 ocean quahog ITQ permits with quota share and 70 surfclam ITQ 
permits with quota share. Of these 111 ITQ permits, all but 15 
transferred allocation, used cage tags to land clams, or otherwise 
participated in the fishery in a manner that will now require a current 
valid permit. The majority of those permits not used in 2014, were used 
in the preceding two years. Therefore, it is likely that most if not 
all permits will be renewed each year in order for ITQ shareholders to 
continue participating in the fishery as they have in previous years. 
As a result,

[[Page 42750]]

there would be little to no threat of an ITQ shareholder permanently 
losing his/her quota share.
    Certainly, lenders will continue to evaluate investment risk as it 
relates to these fisheries. We believe it unlikely that investors will 
find the ``renew or lose'' provision to be an additional risk that 
would preclude investment.
    Comment 4: The Council submitted a comment informing us of a motion 
approved at the October 2014 Council meeting to request we remove much 
of the information to be collected on the ITQ transfer form.
    Response: While the motion was supported by a majority of the 
Council members present, the vote was not unanimous and there were 
members who expressed a strong interest in having this information 
available when they consider an excessive shares cap. Removing these 
fields from the ITQ transfer form would be contrary to the 
recommendations in the white paper prepared by the Council's special 
workgroup and the 2011 report Economic Guidelines for Excessive Share 
Limits in the Surfclam and Ocean Quahog Fisheries. Currently, no 
information is collected on the financial aspects of allocation 
transfers in the surfclam and ocean quahog ITQ fishery. Similar 
programs around the country routinely collect information about the 
price paid for allocation. This information can provide valuable 
insight into the market for quota or long-term contracts and agreements 
that would not otherwise be apparent. These additional details about 
transfers can illuminate situations where individuals or companies 
exert effective control over ITQ allocation, even if they do not 
directly hold the quota share.
    As mentioned above in the response to Comment 2, we anticipate that 
the specific data elements will be reevaluated and revised when an 
excessive share cap is implemented. For these reasons, we continue to 
support the inclusion of all of the proposed elements of this 
information collection program, at least for the short term. Therefore, 
this action implements the ITQ transfer form as described in the 
proposed rule.

Changes From Proposed Rule

    There are no substantive changes from the measures described in the 
proposed rule. The preamble to the proposed rule explained that banks 
holding quota share as collateral on a loan would not need to provide 
as much detail about ownership if the borrower maintains a valid ITQ 
permit and the bank could only transfer quota share or cage tags to the 
borrower. However, the regulatory text in the proposed rule did not 
fully reflect these requirements. These requirements have been added at 
Sec.  648.74(a)(1)(ii)(C) and (b)(3) in this final rule to reflect 
these provisions as they were described in the preamble of the proposed 
rule.

Classification

    The Administrator, Greater Atlantic Region, NMFS, determined that 
this action is necessary for the conservation and management of the 
Atlantic surfclam and ocean quahog fishery and that it is consistent 
with the Magnuson-Stevens Fishery Conservation and Management Act and 
other applicable laws.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration during the proposed rule stage that this action would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis for this certification was published in the 
proposed rule and is not repeated here. No comments were received 
regarding this certification. As a result, a regulatory flexibility 
analysis was not required and none was prepared.
    This final rule contains a change to a collection-of-information 
requirement subject to the Paperwork Reduction Act (PRA) and which has 
been approved by the Office of Management and Budget (OMB) under OMB 
Control Number 0648-0240: Northeast Region Surfclam and Ocean Quahog 
Individual Transferable Quota (ITQ) Administration. The public 
reporting burden is estimated to average 5 minutes per response for the 
application for surfclam/ocean quahog ITQ permit; 60 minutes per 
response for new entrants completing the surfclam/ocean quahog ITQ 
ownership form and to average 5 minutes per response when the form is 
pre-filled for renewing entities; and the application to transfer 
surfclam/ocean quahog ITQ are estimated to average 5 minutes per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. The costs 
burden associated for all of the requirements is $.49 per submission 
for postage. Send comments regarding these burden estimates or any 
other aspect of this data collection, including suggestions for 
reducing the burden, to NMFS (see ADDRESSES) and by email to 
[email protected], or fax to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.

List of Subjects in 50 CFR Part 648

    Fisheries, Fishing, Reporting and recordkeeping requirements.

    Dated: July 14, 2015.
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 648 is amended 
as follows:

PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES

0
1. The authority citation for part 648 continues to read as follows:

    Authority: 16 U.S.C. 1801 et seq.


0
2. In Sec.  648.14, revise paragraphs (j)(1)(ii), (j)(2)(i), (j)(3)(v), 
(j)(3)(vi), (j)(5)(ii), (j)(5)(iv), (j)(5)(v), (j)(6)(ii), and 
(j)(6)(iii) to read as follows:


Sec.  648.14  Prohibitions.

* * * * *
    (j) * * *
    (1) * * *
    (ii) Shuck surfclams or ocean quahogs harvested in or from the EEZ 
at sea, unless permitted by the Regional Administrator under the terms 
of Sec.  648.75.
* * * * *
    (2) Transfer and purchase. (i) Receive for a commercial purpose 
other than solely for transport on land, surfclams or ocean quahogs 
harvested in or from the EEZ, whether or not they are landed under an 
allocation under Sec.  648.74, unless issued a dealer/processor permit 
under this part.
* * * * *
    (3) * * *
    (v) Possess an empty cage to which a cage tag required by Sec.  
648.77 is affixed, or possess any cage that does not contain surfclams 
or ocean quahogs and to which a cage tag required by Sec.  648.77 is 
affixed.
    (vi) Land or possess, after offloading, any cage holding surfclams 
or ocean quahogs without a cage tag or tags required by Sec.  648.77, 
unless the person can demonstrate the inapplicability of the 
presumptions set forth in Sec.  648.77(h).
* * * * *

[[Page 42751]]

    (5) * * *
    (ii) Land unshucked surfclams and ocean quahogs harvested in or 
from the EEZ within the Maine mahogany quahog zone in containers other 
than cages from vessels capable of carrying cages unless, with respect 
to ocean quahogs, the vessel has been issued a Maine mahogany quahog 
permit under this part and is not fishing for an individual allocation 
of quahogs under Sec.  648.74.
* * * * *
    (iv) Offload unshucked ocean quahogs harvested in or from the EEZ 
within the Maine mahogany quahog zone from vessels not capable of 
carrying cages, other than directly into cages, unless the vessel has 
been issued a Maine mahogany quahog permit under this part and is not 
fishing for an individual allocation of quahogs under Sec.  648.74.
    (v) Land or possess ocean quahogs harvested in or from the EEZ 
within the Maine mahogany quahog zone after the effective date 
published in the Federal Register notifying participants that Maine 
mahogany quahog quota is no longer available for the respective fishing 
year, unless the vessel is fishing for an individual allocation of 
ocean quahogs under Sec.  648.74.
    (6) * * *
    (ii) Surfclams or ocean quahogs landed from a trip for which 
notification was provided under Sec.  648.15(b) or Sec.  648.74(b) are 
deemed to have been harvested in the EEZ and count against the 
individual's annual allocation, unless the vessel has a valid Maine 
mahogany quahog permit issued pursuant to Sec.  648.4(a)(4)(i) and is 
not fishing for an individual allocation under Sec.  648.74.
    (iii) Surfclams or ocean quahogs found in cages without a valid 
state tag are deemed to have been harvested in the EEZ and are deemed 
to be part of an individual's allocation, unless the vessel has a valid 
Maine mahogany quahog permit issued pursuant to Sec.  648.4(a)(4)(i) 
and is not fishing for an individual allocation under Sec.  648.74; or, 
unless the preponderance of available evidence demonstrates that he/she 
has surrendered his/her surfclam and ocean quahog permit issued under 
Sec.  648.4 and he/she conducted fishing operations exclusively within 
waters under the jurisdiction of any state. Surfclams and ocean quahogs 
in cages with a Federal tag or tags, issued and still valid pursuant to 
this part, affixed thereto are deemed to have been harvested by the 
individual allocation holder to whom the tags were issued or 
transferred under Sec.  648.74 or Sec.  648.77(b).
* * * * *

0
3. Revise Sec.  648.74 to read as follows:


Sec.  648.74  Individual Transferable Quota (ITQ) Program.

    (a) Annual individual allocations. Each fishing year, the Regional 
Administrator shall determine the initial annual allocation of 
surfclams and ocean quahogs for the next fishing year for each ITQ 
permit holder holding ITQ quota share pursuant to the requirements of 
this section. For each species, the initial allocation for the next 
fishing year is calculated by multiplying the quota share percentage 
held by each ITQ permit holder as of the last day of the previous 
fishing year in which quota shareholders are permitted to permanently 
transfer quota share percentage pursuant to paragraph (b) of this 
section (i.e., October 15 of every year), by the quota specified by the 
Regional Administrator pursuant to Sec.  648.72. The total number of 
bushels of annual allocation shall be divided by 32 to determine the 
appropriate number of cage tags to be issued or acquired under Sec.  
648.77. Amounts of annual allocation of 0.5 cages or smaller created by 
this division shall be rounded downward to the nearest whole number, 
and amounts of annual allocation greater than 0.5 cages created by this 
division shall be rounded upward to the nearest whole number, so that 
annual allocations are specified in whole cages.
    (1) Surfclam and ocean quahog ITQ permits. Surfclam and ocean 
quahog ITQ allocations shall be issued in the form of annual ITQ 
permits. The ITQ permit shall specify the quota share percentage held 
by the ITQ permit holder and the annual allocation in cages and cage 
tags for each species.
    (i) Eligibility. In order to be eligible to hold a surfclam or 
ocean quahog ITQ permit, an individual must be eligible to own a 
documented vessel under the terms of 46 U.S.C. 12103(b).
    (ii) Application--(A) General. Applicants for a surfclam or ocean 
quahog ITQ permit under this section must submit a completed ITQ permit 
application and a completed ITQ ownership form on the appropriate forms 
obtained from NMFS. The ITQ permit application and ITQ ownership form 
must be filled out completely and signed by the applicant. The Regional 
Administrator will notify the applicant of any deficiency in the 
application.
    (B) Renewal applications. Applications to renew a surfclam or ocean 
quahog ITQ permit must be received by November 1 to be processed in 
time for permits to be issued by December 15, as specified in paragraph 
(a)(1)(iii) of this section. Renewal applications received after this 
date may not be approved, and a new permit may not be issued before the 
start of the next fishing year. An ITQ permit holder must renew his/her 
ITQ permit(s) on an annual basis by submitting an application and an 
ownership form for such permit prior to the end of the fishing year for 
which the permit is required. Failure to renew a surfclam or ocean 
quahog ITQ permit in any fishing year will result in any surfclam or 
ocean quahog ITQ quota share held by that ITQ permit holder to be 
considered abandoned and relinquished as specified in paragraph 
(a)(1)(ix) of this section.
    (C) Lenders Holding ITQ Quota Share as Collateral. A bank or other 
lender that holds ITQ quota share as collateral on a loan may be 
allowed to provide less detailed information on the ITQ ownership form 
under the following conditions.
    (1) The lender certifies that the ITQ quota share is held solely as 
collateral on a loan and the lender does not exert any control over the 
use of the annual allocation of cage tags.
    (2) The lender identifies the borrower, and the borrower maintains 
a valid ITQ permit including all required ownership information.
    (3) The lender may only transfer quota share or cage tags to the 
identified borrower. The borrower could then transfer the quota share 
or cage tags to another party, if desired.
    (iii) Issuance. Except as provided in subpart D of 15 CFR part 904, 
and provided an application for such permit is submitted by November 1, 
as specified in paragraph (a)(1)(ii)(B) of this section, NMFS shall 
issue annual ITQ permits on or before December 15, to allow allocation 
owners to purchase cage tags from a vendor specified by the Regional 
Administrator pursuant to Sec.  648.77(b).
    (iv) Duration. An ITQ permit is valid through December 31 of each 
fishing year unless it is suspended, modified, or revoked pursuant to 
15 CFR part 904, or revised due to a transfer of all or part of the ITQ 
quota share or cage tag allocation under paragraph (b) of this section.
    (v) Alteration. An ITQ permit that is altered, erased, or mutilated 
is invalid.
    (vi) Replacement. The Regional Administrator may issue a 
replacement permit upon written application of the annual ITQ permit 
holder.
    (vii) Transfer. The annual ITQ permit is valid only for the person 
to whom it is issued. All or part of the ITQ quota share or the cage 
tag allocation specified in the ITQ permit may be transferred in 
accordance with paragraph (b) of this section.

[[Page 42752]]

    (viii) Fee. The Regional Administrator may, after publication of a 
fee notification in the Federal Register, charge a permit fee before 
issuance of the permit to recover administrative expenses. Failure to 
pay the fee will preclude issuance of the permit.
    (ix) Abandonment or voluntary relinquishment. Any ITQ permit that 
is voluntarily relinquished to the Regional Administrator, or deemed to 
have been voluntarily relinquished for failure to renew in accordance 
with paragraph (a)(1)(ii) of this section, shall not be reissued or 
renewed in a subsequent year, except as specified in paragraph 
(a)(1)(x) of this section.
    (x) Transitional grace period. A surfclam or ocean quahog quota 
share holder who does not submit a complete application for an ITQ 
permit before the end of the 2016 fishing year, may be granted a grace 
period of up to one year to complete the initial application process, 
and be issued an ITQ permit, before the quota share is considered 
permanently relinquished. If an individual is issued a 2016 ITQ permit, 
but fails to renew that ITQ permit before the end of the 2017 fishing 
year, the Regional Administrator may allow a grace period until no 
later than July 1, 2018, to complete the renewal process and retain the 
permit. A permit holder may not be issued cage tags or transfer quota 
share until a valid ITQ permit is issued. Failure to complete the ITQ 
permit application or renewal process, and be issued a valid ITQ permit 
before the end of such a grace period would result in the ITQ permit 
and any associated ITQ quota share being permanently forfeit.
    (2) [Reserved]
    (b) Transfers--(1) Quota share percentage. Subject to the approval 
of the Regional Administrator, part or all of a quota share percentage 
may be transferred in the year in which the transfer is made, to any 
person or entity with a valid ITQ permit under paragraph (a) of this 
section. Approval of a transfer by the Regional Administrator and for a 
new ITQ permit reflecting that transfer may be requested by submitting 
a written application for approval of the transfer and for issuance of 
a new ITQ permit to the Regional Administrator at least 10 days before 
the date on which the applicant desires the transfer to be effective, 
in the form of a completed transfer form supplied by the Regional 
Administrator. The transfer is not effective until the new holder 
receives a new or revised ITQ permit from the Regional Administrator 
reflecting the new quota share percentage. An application for transfer 
may not be made between October 15 and December 31 of each year.
    (2) Cage tags. Cage tags issued pursuant to Sec.  648.77 may be 
transferred at any time, and in any amount subject to the restrictions 
and procedure specified in paragraph (b)(1) of this section; provided 
that application for such cage tag transfers may be made at any time 
before December 10 of each year. The transfer is effective upon the 
receipt by the transferee of written authorization from the Regional 
Administrator.
    (3) Denial of ITQ transfer application. The Regional Administrator 
may reject an application to transfer surfclam or ocean quahog ITQ 
quota share or cage tags for the following reasons: The application is 
incomplete; the transferor or transferee does not possess a valid 
surfclam or ocean quahog ITQ permit for the appropriate species; the 
transfer is not allowed under paragraph (a)(1)(ii)(C)(3) of this 
section; the transferor's or transferee's surfclam or ocean quahog ITQ 
permit has been sanctioned pursuant to an enforcement proceeding under 
15 CFR part 904; or any other failure to meet the requirements of this 
subpart. Upon denial of an application to transfer ITQ allocation, the 
Regional Administrator shall send a letter to the applicant describing 
the reason(s) for the denial. The decision by the Regional 
Administrator is the final decision of the Department of Commerce; 
there is no opportunity for an administrative appeal.

[FR Doc. 2015-17678 Filed 7-17-15; 8:45 am]
 BILLING CODE 3510-22-P