Federal Register Vol. 81, No.226,

The Departments of Agriculture, the Interior, and Commerce (the Departments) are issuing final rules to implement section 241 of the Energy Policy Act of 2005. Energy Policy Act of 2005, 109 Public Law 58, 119 Stat. 594, 674, 109 Public Law 58, 2005. Section 241 created additional procedures applicable to conditions or prescriptions that a Department develops for inclusion in a hydropower license issued by Federal Energy Regulatory Commission (FERC). Specifically, section 241 amended sections 4 and 18 of the Federal Power Act (FPA) to provide for trial-type hearings on disputed issues of material fact with respect to a Department's conditions or prescriptions; and it added a new section 33 to the FPA, allowing parties to propose alternative conditions and prescriptions.

In 2015, the Departments promulgated three substantially similar revised rules—one for each agency—with a common preamble. The revised interim rules became effective on April 30, 2015, so that interested parties and the agencies more immediately could avail themselves of the improvements made to the procedures. At the same time, the Departments requested public comment on additional ways the rules could be improved.

The Departments have reviewed the public comments received on the revised interim rules, and are providing responses to the public comments and further analysis and clarification. The Departments have determined that no changes to existing regulations are warranted in the Final Rules.

On November 17, 2005, at 70 FR 69804, the Departments jointly published interim final rules implementing section 241 of the Energy Policy Act of 2005 (EPAct), Public Law 109-58. Section 241 of EPAct amended FPA sections 4(e) and 18, 16 U.S.C. 797(e), 811, to provide that any party to a license proceeding before FERC is entitled to a determination on the record, after opportunity for an agency trial-type hearing of no more than 90 days, of any disputed issues of material fact with respect to mandatory conditions or prescriptions developed by one or more of the three Departments for inclusion in a hydropower license. EPAct section 241 also added a new FPA section 33, 16 U.S.C. 823d, allowing any party to the license proceeding to propose an alternative condition or prescription, and specifying the consideration that the Departments must give to such alternatives.

The interim final rules were made immediately effective, but a 60-day comment period was provided for the public to suggest changes to the interim regulations. The Departments stated in the preamble that based on the comments received and the initial results of implementation, they would consider publication of revised final rules.

In July 2009, the Hydropower Reform Coalition (HRC) and the National Hydropower Association (NHA) sent a joint letter to the three Departments, asking that an additional 60-day comment period be provided before publication of final rules. The organizations noted that they and their members had gained extensive experience with the interim final rules since their initial comments were submitted in January 2006, and they now have additional comments to offer on ways to improve the trial-type hearing and alternatives processes. The Departments granted NHA and HRC's request. Instead of publishing final rules, the Departments published revised interim rules, effective on April 30, 2015, with a 60-day comment period.

On March 31, 2015, the Departments jointly published revised interim rules implementing EPAct section 241. 80 FR 17156. The rules and preamble addressed a few issues that remained open in the 2005 rulemaking, such as who has the burden of proof in a trial-type hearing and whether a trial-type hearing is an administrative remedy that a party must exhaust before challenging conditions or prescriptions in court. Additionally, the revised interim rules clarified the availability of the trial-type hearing and alternatives processes in the situation where a Department exercises previously reserved authority to include conditions or prescriptions in a hydropower license.

The revised interim rules went into effect on April 30, 2015, but a 60-day comment period was provided for the public to suggest changes to the revised interim regulations.

The Departments received comments on the revised interim rules from Exelon Generation Company, LLC (“Exelon”) and comments submitted jointly by the National Hydropower Association, American Public Power Association, Edison Electric Institute, and Public Utility District no. 1 of Snohomish County, Washington (“Industry Commenters”). Responses to these comments are provided below. The Departments also received a comment that is not relevant to this rulemaking and therefore does not necessitate a response. The reader may wish to consult the section-by-section analysis in the revised interim rules for additional explanation of all the regulations.

The Industry Commenters strongly disagree with the Departments' decision in the revised interim final rule to assign the burden of proof to the party requesting a hearing. See 7 CFR 1.657(a), 43 CFR 45.57(a), and 50 CFR 221.57(a). They assert that the burden of persuasion should be assigned, in accordance with § 7(d) of the Administrative Procedure Act (APA), 5 U.S.C. 556(d), to the party that is “the proponent of [the] rule or order,” and that the burden should be assigned to the Departments because they are the proponents of their mandatory conditions or prescriptions which they seek to attach to a licensing order as well as the alleged facts supporting those conditions or prescriptions. The Departments received these comments on the interim final rule and explained the Departments' rationale for disagreeing with the comment in the revised interim rules. 80 FR 17170-17171. For the reasons explained in the revised interim rules, the Departments do not agree with the comment and no changes to the regulations are required.

The Industry Commenters cite Escondido Mutual Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765 (1984), in support of the assertion that the Departments are the proponents. In that case the Supreme Court noted that a condition or prescription must be supported by evidence provided by the conditioning agency (or other interested parties). Id. at 777 nn.17, 20. The Industry Commenters assert that this is consistent with the APA requirement that the proponent of an order “has the burden of proof.” However, the Escondido case dealt with an appeal from a U.S. court of appeals' decision that § 4(e) of the FPA required FERC to accept without modification any license conditions recommended by the Secretary of the Interior. As noted by the Supreme Court, FERC's orders, including licenses, are reviewable by a U.S. court of appeals under 18 U.S.C. 825l(b), and the court of appeals, and not FERC, has exclusive authority to determine the validity of a condition or prescription in a license. 466 U.S. at 777 and 777 nn. 19, 21. Because conditions and prescriptions, and whether they are supported by substantial evidence, are only reviewable under § 825l(b), the conditions or prescriptions themselves are not the subject “orders” of the trial-type hearing. Rather, the subject of the hearing is the hearing requester's claim that the correct facts are different than the Department's factual basis for the conditions or prescriptions.

In a trial-type hearing, the requester seeks a decision from the ALJ upholding its claim and thus is the proponent of the order and bears the burden of persuasion. See Schaffer v. Weast, 546 U.S. 49, 62 (2005). The correctness of this position is strongly buttressed by the fact that the same conclusion was reached by all six independent ALJs who ruled on this issue prior to specifically assigning the burden of proof in the revised interim rules. No changes to the regulations are necessary.

The Industry Commenters state that the revised interim rules should, but do not appear to, provide for a trial-type hearing or the submission of alternative conditions or fishway prescriptions (alternatives) when an agency imposes conditions and prescriptions during the licensing proceeding, reserves its right to impose additional or modify existing conditions or prescriptions during the license term, and then exercises that reserved right. The Departments disagree with the commenter's premise that the rules do not provide for a trial type-hearing or the submission of alternatives in such a situation.

The revised interim rules provide that where a Department “has notified or notifies FERC that it is reserving its authority to develop one or more conditions or prescriptions at a later time, the hearing and alternatives processes under this part for such conditions or prescription will be available if and when DOI exercises its authority.” 7 CFR 1.601(c); 15 CFR 221.1(c); 43 CFR 45.1(c). Accordingly, if a Department exercises reserved authority during the license term to impose additional or modified conditions or prescriptions, the hearing and alternatives processes under this part for such conditions or prescriptions will be available.

The Industry Commenters contend that where a Department imposes new or substantially modified conditions or prescriptions under reserved authority during the license term, the Department has an obligation under the license to justify these changes based on a change in facts. This comment pertains to the justification for a Department's exercise of its reserved authority, which is beyond the scope of this rulemaking, and therefore merits no further response.

The revised interim rules extended a few of the deadlines in the 2005 rules, while not adopting some commenters' recommendations that the Departments significantly expand the hearing schedule. The Industry Commenters assert that these extensions do not go far enough because the compressed timeline set out in the rules imposes extreme hardship on the parties and forces parties to limit the scope of their challenges to agency conditions and prescriptions. They contend that EPAct does not require such a condensed schedule.

Specifically, they reiterate two recommendations rejected in the revised interim rules: (1) Extending the deadline for filing trial-type hearing requests and proposed alternative conditions or prescriptions from 30 to 45 days after a Department issues its preliminary conditions or prescriptions; see 7 CFR 1.621(a)(2)(i), 43 CFR 45.21(a)(2)(i), and 50 CFR 221(a)(2)(i), and (2) allowing for consecutive rather than concurrent 90-day hearings when there are two unconsolidated hearing requests pending for the same conditions or prescriptions, thus delaying by 90 days the issuance of a decision by the ALJ for one of the hearings. The Departments continue to reject these recommendations for the reasons stated in the revised interim rules, 80 FR 17164-65, including that adding more time to the hearing process raises a significant potential for delay in license issuance, a result Congress expressly sought to avoid in section 241 of EPAct.

The commenters also recommend a rule amendment to allow for supplementation of the exhibit and witness lists which must be filed with the hearing request. The Departments decline to make such an amendment because supplementation is already allowed. See 7 CFR 1.642(b), 43 CFR 45.42(b), and 50 CFR 221.42(b).

Another commenter recommendation is that the rules should mandate rather than merely allow consolidation of hearing requests with common issues of fact. In fact, the rules do require consolidation for all hearing requests with respect to any conditions from the same Department or any prescriptions from the same Department. See 7 CFR 1.623(c)(1) and (2), 43 CFR 45.23(c)(1) and (2), and 50 CFR 221.23(c)(1) and (2).

Regarding all other situations, certainly consolidation may be appropriate to avoid inconsistent decisions, promote economy of administration, and serve the convenience of the parties. However, especially where the commonality is minimal, allowing the requests to be processed separately may be the most economical and streamlined approach, avoiding complicating one process with the numerous, intricate issues of the other process. Consequently, the Departments decline to accept the recommendation, opting to retain the flexibility to determine the best approach based on the unique circumstances of each situation. See 7 CFR 1.623(c)(3), 43 CFR 45.23(c)(3), and 50 CFR 221.23(c)(3).

In the preamble to the revised interim rules, the Departments offered guidance on the types of issues which constitute disputed issues of material fact and are thus appropriate for resolution in a trial-type hearing, stating that legal or policy issues are not issues of material fact. The Industry Commenters contend that the Departments should revisit their guidance, asserting that the Departments' notion of what is a legal or policy issue is overbroad.

However, the focus of their comments is not on the relevant regulation or guidance, but on the positions taken by the Departments during previous trial-type hearings. They reference several instances in which ALJs disagreed with the Departments' litigation positions regarding what constitutes a disputed issue of material fact. The positions the Departments have taken in trial-type hearings are based on the specific facts and circumstances of the issues before the ALJ. The Departments' litigation positions are not the subject of this rulemaking; therefore, these comments do not necessitate a change to the regulations.

The commenters refer the Departments to the Departments preamble statement in the revised interim rules that “`historical facts' such as whether fish were historically present above a dam `may be resolved based on available evidence and do not involve attempts to predict what may happen in the future.'” 80 FR 17178. The commenters assert that the “Departments' attempt to distinguish between an `historical fact' and matters of `prediction' is a false dichotomy.” The commenters reason:

The Departments do not agree that the distinction between historical facts and matters of prediction is a false dichotomy. As explained in the revised interim rules, only disputed issues of material fact are appropriate for resolution in a trial-type hearing.80 FR 17177-17178. While the Departments agree that some predictive elements of a condition or prescription may represent disputed issues of material fact in a particular case, such as whether a prescription will result in the passage of fish, other predictive elements of a condition or prescription may represent legal, policy or non-material issues that are not appropriate for resolution in a trial-type hearing. The Departments continue to believe that only disputed issues of material fact are appropriate for determination by the ALJ.

The Industry Commenters also contend that disputed issues with respect to alternatives considered and rejected by a Department are material facts that should be resolved by the ALJ. They assert that if a Department, in issuing a preliminary condition or prescription, considered and rejected other potential conditions or prescriptions, the scientific justification for why those options were rejected is material.

This contention is responsive to the Departments' position in the revised interim rules that immaterial issues not appropriate for ALJ consideration include those that blur the distinction between the EPAct trial-type hearing process and the separate alternatives process created under new FPA section 33. The Departments' position and reasoning remain unchanged in this regard:

The Industry Commenters propose changes to the regulations based on the assumption that the Departments exert undue influence over the selection of a venue for the trial-type hearing and the presiding ALJ. The Departments disagree with this assumption and therefore the proposed changes are unnecessary.

Regarding venue selection, they offer purported examples of undue influence in support of a suggested rule change requiring the ALJ to balance the convenience of the parties. The commenters point to the assignment of an ALJ in the Pacific Northwest for FERC Project No. 2206, which involved a licensee based in Raleigh, North Carolina, with counsel in Birmingham, Alabama. However, that hearing was scheduled to take place in Charlotte, North Carolina, and was settled before a hearing was held.

The commenters also refer to the assignment of an ALJ in Sacramento, California, for FERC Project No. 2082, which involved a licensee based in Portland, Oregon, with counsel in Washington, DC However, the licensee withdrew a motion to hold the hearing in Portland after the overwhelming majority of the parties expressed to the ALJ a preference for a hearing in Sacramento during the prehearing conference. These examples do not demonstrate any undue influence.

Further, the apparent inference that the venue is determined by the location of the ALJ's office is not correct. Nor is it determined solely by balancing the convenience of the parties, as implied by the commenters suggested amendment. As pointed out in the preamble to the revised interim rules:

The Departments conclude that no change in the rules is needed regarding hearing venue selection.

Regarding the selection of an ALJ, the Industry Commenters assert that a Department “should not be allowed to hand pick a Department ALJ or an ALJ with a track record favorable to the Department.” They identify two potential remedial amendments: (1) Use a lottery system to select an ALJ, or (2) preferably, use FERC ALJs instead of Department ALJs under the assumption that FERC ALJs would be more neutral and have more subject matter expertise.

The Departments disagree with the unsupported assumptions that they are exercising undue influence over the selection of ALJs or that a Department would consider “hand picking” an ALJ to obtain an advantage. In accordance with the mandate of 5 U.S.C. 3105, administrative law judges are assigned to cases in rotation so far as practicable, with due consideration given to the demands of existing caseloads and the case to be assigned.

The Departments also dispute the assertion that FERC ALJs are “more neutral” or have more germane expertise. In fact, the independence of all ALJs is protected and impartiality fostered by laws which, among other things, exempt them from performance ratings, evaluation, and bonuses (see 5 U.S.C. 4301(2)(D), 5 CFR 930.206); vest the Office of Personnel Management rather than the employing agency with authority over the ALJs' compensation and tenure (see 5 U.S.C. 5372, 5 CFR 930.201-930.211); and provide that most disciplinary actions against ALJs may be taken only for good cause established and determined by the Merit Systems Protection Board on the record after opportunity for a hearing (see 5 U.S.C. 7521). As for expertise, the Departments' ALJs have considerable experience and expertise evaluating natural resource issues similar to those which typically underlie imposition of a condition or prescription.

Furthermore, the use of FERC ALJs would require the agreement of FERC and possibly a statutory amendment. In sum, the Departments disagree with the premises of the comment regarding the selection of ALJs and conclude that no related change in the rules is necessary or desirable.

The Industry Commenters also assert that the revised interim rules should permit settlement negotiations not only for 120 days before a case is referred to an Administrative Law Judge (ALJ)—as provided in the revised interim rules—but also during the period after the ALJ has issued the decision, yet before issuance of the Department's modified conditions. The Industry Commenters add that settlement discussions should not be prohibited under ex parte principles, considering that settlements ought to be encouraged at all points in a hearing process.

Notwithstanding the Industry Commenters' assertion, the Industry Commenters also offered support for the new 120-day stay period for purposes of facilitating settlement. We agree that both the length of this period and its placement at the pre-referral stage could lead to more settlements and avoid the more formal stages of the hearing process. We also agree with the Industry Commenters that settlements should be permitted whenever reached by parties. Yet here we note that the availability of a stay period is not the only mechanism or incentive by which settlements can be facilitated, and that parties are at liberty to conduct robust and meaningful settlement discussions concurrently with the ongoing hearing process, at any stage in such process. Further, given that Congress established in EPAct a short 90-day time limit for completion of the trial-type hearing to avoid the potential for substantial delay in license issuance, it would be unworkable to provide for any additional amount of time beyond the revised interim rules' 120 day-period for a stay in proceedings in which to pursue a settlement.

In the preamble to the revised interim rules, the Departments declined to amend the discovery provisions for the trial-type hearing in response to comments that the rules needlessly limit discovery by requiring authorization from the ALJ or agreement of the parties. The commenters recommended that the Departments adopt the approach of the FERC regulations at 18 CFR 385.402(a) and 385.403(a), which authorize discovery to begin without the need for ALJ involvement unless there are discovery disputes. Industry Commenters have reiterated these comments, further arguing that section 241 of EPAct guarantees the availability of discovery, not that such discovery must be first agreed to by the parties or authorized by the ALJ.

The Departments continue to disagree that the regulations should be changed for the reasons detailed in the preamble to the revised interim rules. See 80 FR 17168-69. In summary, the Departments' rules do allow for rapid initiation of discovery and the criteria for allowing discovery are fairly similar to those utilized by FERC and federal courts. More importantly, discovery limits are necessary in this specialized trial-type hearing context to fit within the expedited time frame mandated by section 241 of EPAct, and wide-ranging discovery should not be necessary, given the typical documentation generated during the license proceeding, including the record supporting the conditions or prescriptions.

Also, the fact that section 241 provides for “the opportunity to undertake discovery” does not guarantee unlimited discovery.

The revised interim rules reasonably incorporate similar standards for discovery, see 7 CFR 1.641(b), 43 CFR 45.41(b), and 50 CFR 221.41(b), to be applied by the administrative law judges to secure the just, speedy, and inexpensive determination of each case. The Industry Commenters have not addressed how application of those standards would unduly limit discovery. Because the Departments conclude that the standards are fair and reasonable, no change in the discovery provisions is warranted.

In preamble to the revised interim rules, the Departments declined to extend the page limits for hearing requests in response to comments requesting that the limit for describing each issue of material fact be increased from two pages to five pages and that the limit for each witness identification be increased from one to three pages. The Departments did conclude that the required list of specific citations to supporting information and the list of exhibits need not be included in the page restrictions and amended the rules accordingly. See 7 CFR 1.621(d), 43 CFR 45.21(d), and 50 CFR 221.21(d).

The Industry Commenters renew the same requests without offering any new reasons why the requests should be granted. The Departments continue to believe that the page limits are generally appropriate and provide sufficient space for parties to identify disputed issues, particularly in light of the expedited nature of the proceeding. The Departments further note that they are bound by the same page limits in submitting an answer. See 7 CFR 1.622, 43 CFR 45.22, and 50 CFR 221.22. Therefore, for the reasons stated in the preamble to the revised interim rules, the Departments decline to amend the page limitations.

In the preamble to the revised interim rules, the Departments rejected commenter suggestions to revise the regulations to allow parties to file documents electronically, using email or FERC's eFiling system. The Departments did agree that, in many circumstances, the electronic transmission of documents is a preferable means of providing documents to another party and revised the rules to allow for electronic service of documents on a party who consents to such service. However, the Departments noted that ALJ offices do not currently have the capacity or resources to accept electronically and print off the large volume of documents typically filed in connection with a trial-type hearing.

The Industry Commenters again suggest that electronic filing should be allowed at the ALJ's discretion, citing the example of a Coast Guard ALJ allowing filing by email pursuant to the agreement of the parties at a prehearing conference addressing a trial-type hearing request. For the reasons discussed in the revised interim rules, the Departments decline to adopt regulations that permit filing by email with the ALJ offices. 80 FR 17161-17612. Email is not a substitute for a dedicated electronic filing system in which administrative, information technology, and policy issues such as document management, storage, security, and access can be systematically addressed. Because none of the ALJ Offices have a dedicated system, the Departments will not authorize filing by electronic means.

The Industry Commenters request that the Departments revisit their interpretation of section 33 of the Federal Power Act (FPA section 33) as described in the revised interim rules. 80 FR 17176-17177. In the revised interim rules, the Departments interpreted FPA section 33 to require a Department to prepare an equal consideration statement only when a party has submitted an alternative condition or prescription.

The commenters state that the Departments' interpretation is contrary to the plain language of section 33(a)(4) and (b)(4), which they suggest should be read to require that a Department prepare an equal consideration statement whenever a Department submits any condition or prescription, regardless of whether a party submits an alternative. The commenters assert that the Departments' contextual analysis of FPA section 33, as described in the revised interim rules, is flawed because FPA section 33 unambiguously supports the commenters' interpretation. The Departments disagree with this comment.

As the Departments explained in the revised interim rules, the requirement that the Departments prepare an equal consideration statement must be read in the context of the overall statutory scheme. 80 FR 17177. Section 33 of the FPA is titled “Alternative Conditions and Prescriptions,” and it sets forth a series of sequential steps for considering an alternative and reaching a final determination. Section 33(a)(l) permits any party to a hydropower license proceeding to propose an alternative condition. Under section 33(a)(2), the Secretary must accept an alternative if it “(A) provides for the adequate protection and utilization of the reservation; and (B) will either, as compared to the condition initially [deemed necessary] by the Secretary[,] (i) cost significantly less to implement; or (ii) result in improved operation of the project works for electricity production.” 16 U.S.C. 823d(a)(2). When evaluating an alternative, section 33(a)(3) directs the Secretary to consider evidence otherwise available concerning “the implementation costs or operational impacts for electricity production of a proposed alternative.” The Departments continue to believe that a contextual analysis of FPA section 33 demonstrates that section 33 requires the preparation of an equal consideration statement only when a party submits an alternative condition or prescription. No changes to the regulations are needed in response to the comment.

The commenters also disagree with the Departments' perspective, as explained in the revised interim rules, that in the absence of an alternative the Departments will generally lack sufficient information to provide a meaningful equal consideration analysis of the factors required by FPA section 33(a)(4) and (b)(4). The commenters state that ample information is available to the Departments in the licensing application at the time the Departments adopt a condition or prescription, regardless of whether any alternatives were proposed under FPA section 33. The commenters observe that “[w]ithout this information, the Departments presumably would not have sufficient information to draft meaningful preliminary conditions and prescriptions.”

The Departments note FPA sections 4(e) and 18, which authorize the Departments to issue conditions and prescriptions, do not require the Departments to consider certain types of information otherwise required by FPA section 33 when evaluating alternatives, such as “the implementation costs or operational impacts for electricity production of a proposed alternative.” 16 U.S.C. 823d(a)(3). Accordingly, the Departments generally lack related information until such time that the Departments evaluate an alternative and prepare an equal consideration statement, which occurs after the Departments prepare preliminary conditions and prescriptions.

When preparing an equal consideration statement, the Departments must evaluate “such information as may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and other parties.” 16 U.S.C. 823d(a)(4) and (b)(4). The revised interim rules require a proponent of an alternative to submit information necessary to evaluate the alternative and prepare an equal consideration statement pursuant to FPA section 33. While such information may or may not be available in licensing applications prepared for FERC, the Departments will generally lack sufficient information to provide a meaningful equal consideration pursuant to FPA section 33 until such time as the proponent of an alternative submits the information with an explanation of how the alternative meets the criteria set forth in FPA section 33. No changes to the regulations are needed in response to the comment.

Commenters request that the Departments address perceived loopholes in the revised interim rules that would allow the Departments to avoid trial-type hearings in three scenarios. The commenters state that the interim final rules were silent as to whether a right to a trial-type hearing exists in situations where (1) the Department issues no preliminary conditions or prescriptions, but reserves the right to submit mandatory conditions or prescriptions later in the licensing process; (2) the Department adds conditions or prescriptions that were not included with its preliminary conditions or prescriptions; or (3) the Department's modified conditions or prescriptions include factual issues or justifications that were not presented with its preliminary conditions or prescriptions. The commenters write that the revised interim rules addresses the second scenario by handling it on a case-by-case basis, but do not address the first and third scenarios. The Departments believe that the revised interim rules address all three of these scenarios and no changes to the regulations are needed. The Departments again note that in several instances, the commenters discuss specific licensing proceedings. As stated above, such proceedings are not the subject of the rulemaking and therefore, the comments about them do not necessitate a change to the regulations.

The revised interim rules address the commenters' first scenario, in which a Department issues no preliminary conditions or prescriptions, but reserves a right to submit conditions and prescriptions later in the licensing process. The Departments received comments on the interim final rules that requested the availability of a trial-type hearing when a Department reserves its authority to include conditions or prescriptions in a license. The Department responded to this comment by stating that “under EPAct, it is only when a Department affirmatively exercises its discretion to mandate a condition or prescription that the hearing and alternatives processes are triggered. Allowing for trial-type hearings and alternatives when the agencies have not exercised this authority would be both inconsistent with the legislation and an inefficient use of the Departments' resources. Consequently, these final rules continue to provide that the hearing and alternatives processes are available only when a Department submits a preliminary condition or prescription to FERC, either during the initial licensing proceeding or subsequently through the exercise of reserved authority.” 80 FR 17159. Thus, the revised interim rules addressed the commenters' first scenario by providing a right to a trial-type hearing only when a Department submits a preliminary condition or prescription to FERC during the initial licensing proceeding, or when a Department submits a condition or prescription to FERC through the exercise of reserved authority after FERC has issued a license.

In discussing their first scenario, the commenters' language suggests that they may not be concerned about a Department's reservation of authority to submit conditions or prescriptions, but instead may actually be concerned with the availability of a trial-type hearing when a Department issues no preliminary conditions or prescriptions, but submits conditions and prescriptions outside of the timeframe contemplated in FERC's regulations for filing preliminary conditions or prescriptions, which is “no later than 60 days after the notice of acceptance and ready for environmental analysis.” 18 CFR 5.23(a). See also 18 CFR 4.34(b). The Departments note that in this scenario, the Departments would not be exercising reserved authority to submit preliminary conditions or prescriptions because, as long as a licensing proceeding is pending, a Department has authority to submit conditions and prescriptions without the need to “reserve” its authority. A reservation of authority is only necessary for submission of conditions or prescriptions after FERC has issued a license.

The revised interim rules, when addressing whether a trial-type hearing should be held to address disputed issues of fact at the preliminary or modified condition/prescription stage, impliedly addressed the scenario where the Departments submit conditions and prescriptions outside of the timeframe for doing so in FERC's regulations. The Departments explained the circumstances under which a Department may submit a preliminary condition or prescription later in the licensing process and that the availability of the trial-type hearing process would be decided on a case-by-case basis: “[E]xceptional circumstances may arise where facts not in existence and not anticipated at an earlier stage necessitate a new preliminary condition or prescription. This circumstance would be handled on a case-by-case basis, in coordination with FERC as necessary.” 80 FR 17164. The Departments have continued to apply this rationale and process in the final rules.

With respect to the third scenario, the Departments received similar comments on the interim final rule that requested “the regulations provide for trial type hearings at the modified stage if the modifications are based on new facts that did not exist or were not anticipated at the preliminary stage, or if the agency submits an entirely new condition or prescription at the modified stage.” 80 FR 17163. The Departments responded by stating that the revised interim rules “continue the approach taken in the interim regulations of scheduling the trial-type hearing process immediately following the issuance of preliminary conditions and prescription.” 80 FR 17164. The Departments reasoned that this approach allows trial-type hearings to occur during FERC's licensing time frame as required by Congress, that it promotes efficiency, and that providing for trial-type hearings at the modified stage is not a reasonable or efficient use of resources. 80 FR 17163-17164. The Departments maintain this rationale in the final rules.

Industry commenters state that any final rules must provide a remedy for licensees who object to new conditions and prescriptions imposed at the modified stage, or when the Department's modified conditions or prescriptions include factual issues or justifications that were not presented with its preliminary conditions or prescriptions. The commenters also state that the final rules must provide a standard for when a modified condition or prescription would trigger the right to a trial-type hearing. The Departments disagree with these comments. For the reasons discussed above and in the revised interim rules, the Departments will continue their approach of scheduling the trial-type hearing process immediately following the issuance of preliminary conditions and prescriptions. The Departments again acknowledge “that exceptional circumstances may arise where facts not in existence and not anticipated at an earlier stage necessitate a new preliminary condition or prescription. This circumstance would be handled on a case-by-case basis, in coordination with FERC as necessary.” 80 FR 17164. No changes to the regulations are needed in response to these comments.

The Industry Commenters believe the Departments are not complying with the requirements of FPA section 33 to accept a proposed alternative if the alternative: “(A) provides for the adequate protection and utilization of the reservation; and (B) will either, as compared to the condition initially proposed by the Secretary—(i) cost significantly less to implement; or (ii) result in improved operation of the project works for electricity production.” 16 U.S.C. 823(a)(2). The Departments disagree with this comment. Notwithstanding this comment, the Industry Commenters do not provide proposed revisions, and the Departments do not believe any changes to the regulations are necessary.

The Industry Commenters also “commend” the revised interim rules for adding a new change to allow for a revised alternative within 20 days of an ALJ decision, but express the view that this time period is still “unnecessarily short,” given an ALJ opinion's typical length and underlying complexity. The commenters compare this timeframe to the 60-day timeframe in which the Departments may revise conditions and prescriptions, and suggest that the deadline for a revised alternative be, similarly, 60 days.

In response, the Departments note that the FPA specifically provides that the Departments will evaluate alternatives “based on such information as may be available to the [Departments], including information voluntarily provided in a timely manner by the applicant and others.” 16 U.S.C. 823d(a)(4), (b)(4) (emphasis added). To achieve a proper balance between the Congressional mandate to consider evidence otherwise available to DOI, including information timely submitted, and Congressional intent to avoid delays in the FERC licensing process, the Departments established a 20-day period for submittal of revised alternatives.

Exelon submitted comments concerning 43 CFR 45.74(c), which generally provides that DOI will consider information regarding alternatives provided by the deadline for filing comments on FERC's National Environmental Policy Act (NEPA) document. This provision states that “[f]or purposes of paragraphs (a) and (b) of this section, DOI will consider evidence and supporting material provided by any license party by the deadline for filing comments on FERC's NEPA document under 18 CFR 5.25(c).” 43 CFR 45.74(c). Paragraph (a) in 43 CFR 45.74 specifies the evidence and supporting material DOI must consider when deciding whether to accept an alternative. Paragraph (b) in 43 CFR 45.74 identifies the criteria DOI must use to evaluate whether to accept an alternative. Paragraph (c) in 18 CFR 5.25 identifies which FERC hydropower license applications require FERC to issue a draft NEPA document. As discussed below in more detail, the provision's scope is limited to license applications under FERC's Integrated License Application Process, as opposed to proposed amendments to existing licenses.

Exelon interpreted 43 CFR 45.74(c) as establishing a strict deadline for submittal of information regarding a proposed alternative. The commenter noted that the subsequent finalization of any conditions or prescriptions may occur much later than this deadline, sometimes because of pending applications for water quality certifications (required under section 401 of the Clean Water Act). Exelon expressed concern that a potentially substantial time gap between the NEPA comment deadline and finalization of a prescription or condition could result in the exclusion of the best and most current scientific research to inform DOI's evaluation of alternative prescriptions and conditions.

DOI does not believe that 43 CFR 45.74(c) will result in the exclusion of the best and most current scientific research to inform the Department's evaluation of alternative conditions and fishway prescriptions. DOI believes that considering information regarding alternatives submitted by any license party by the close of the FERC NEPA comment period will provide the Departments with all reasonably available information to evaluate an alternative condition or fishway prescription in accordance with Section 33 of the Federal Power Act.

Furthermore, as noted in the interim final rule, “[g]iven the complexity of the issues and the volume of material to be analyzed in the typical case, the Departments cannot reasonably be expected to continue to accept and incorporate new information right up until the FERC filing deadline for modified conditions and prescriptions.” 80 FR 17156, 17176. Nevertheless, the language of 43 CFR 45.74(c) only sets forth the requirement that DOI must consider pre-deadline submittals, and thus it does not preclude DOI from considering, in exceptional circumstances, evidence and supporting material submitted after the deadline.

It is not unusual for a license applicant to have authorization petitions pending at the time a Department considers an alternative. These types of pending petitions include, but are not limited to, applications for a Clean Water Act section 401 water quality certification.

As a practical matter, the parties and stakeholders share an interest in the timely submittal of evidence and supporting materials in order to ensure a robust alternatives process and avoid delays during FERC's licensing proceedings. The timely submittal of evidence under 43 CFR 45.74(c) also reflects a statutory process that prescribes specific timeframes. The EPAct avoids delay by requiring the hearing process to be completed in a 90-day timeframe and “within the time frame established by [FERC] for each license proceeding.” As noted in the revised interim rules, the hearing process was crafted to work within FERC's licensing timeframes. 80 FR 17156, 17163 (Mar. 31, 2015). The process for submitting, evaluating, and adopting alternatives was similarly drafted with the timeframes in mind.

Under FERC's rules, modified conditions and prescriptions, including any adopted alternatives, must be filed within 60 days after the close of FERC's NEPA comment period. 18 CFR 5.25(d). The timely submission of information under 43 CFR 45.74(c) is necessary so DOI has adequate time to consider the information and file modified conditions and prescriptions 60 days after the close of FERC's NEPA comment period.

Additionally, the FPA specifically provides that the Departments will evaluate alternatives “based on such information as may be available to the [Departments], including information voluntarily provided in a timely manner by the applicant and others.” 16 U.S.C. 823d(a)(4), (b)(4) (emphasis added). DOI believes that 43 CFR 45.74(c) achieves the proper balance between the Congressional mandate to consider evidence otherwise available to DOI, including information timely submitted, and Congressional intent to avoid delays in the FERC licensing process.

Exelon also expressed concern that in instances where DOI exercises its reserved authority to include a condition or prescription in a license that FERC has previously issued, the language in 43 CFR 45.74(c), that the DOI “will consider” information submitted prior to the NEPA comment deadline, could potentially preclude the introduction of additional relevant and supporting information that was not submitted during the license-application-related NEPA process. As discussed above, the language of 43 CFR 45.74(c) only sets forth the requirement that DOI must consider pre-deadline submittals. Thus, it does not preclude DOI from considering evidence and supporting material submitted after the deadline in cases where FERC has issued a license and a Department exercises reserved authority. Therefore, notwithstanding Exelon's concern, paragraph (c) of 43 CFR 45.74 does not preclude the introduction of relevant information that would support a proposed alternative condition or prescription after DOI exercises its reserved authority to include a condition or fishway prescription in a FERC license.

Pursuant to EPAct's requirement that the agencies promulgate rules implementing EPAct section 241 “in consultation with the Federal Energy Regulatory Commission,” the agencies have consulted with FERC regarding the content of the revised interim rules. After considering post-promulgation comments, no changes were made to the revised interim final regulations in the final rules.

These final rules have been determined to be not significant for purposes of Executive Order 12866.

OMB has reviewed the information collection in these rules and approved an extension without change of a currently approved collection under OMB control number 1094-0001. This approval expires November 30, 2018.

The Departments have reviewed the comments received in response to the revised interim rules and have determined that no change to the rules is necessary.

Accordingly, the interim rules amending 6 CFR part 1, 43 CFR part 45, and 50 CFR part 221, which were published at 80 FR 17155 on March 31, 2015, are adopted as final without change.

Prior to the FCIC offering coverage for prevented planting, prevented planting payments were linked to USDA program provisions such as the farmer's program yield and the target price. Adjustments to the Federal Crop Insurance Act (Act) from the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 mandated that coverage for prevented planting be a part of crop insurance policies offered under the Federal crop insurance program, as appropriate. Following these changes to the Act, FCIC incorporated preventing planting provisions into the Common Crop Insurance Basic Provisions. A 1996 study by USDA's Economic Research Service (ERS) established the basis for the original prevented planting coverage levels. The study and estimated pre-planting costs were reviewed again by ERS in 2002, and FCIC adjusted prevented planting coverage levels accordingly.

Further, the Office of Inspector General for Audit (OIG) conducted an audit on the Federal crop insurance prevented planting program for 2011-2012 and recommended RMA obtain updated pre-planting cost information, and reevaluate the current prevented planting coverage levels making adjustments consistent with the pre-planting costs for each crop.

FCIC contracted to review the prevented planting policy and determine appropriate pre-planting costs to be covered, evaluate the reasonableness of current prevented planting payments by crop and region, examine alternative methods and approaches to the program, provide alternative payment amounts as appropriate, and develop a plan for routinely updating those amounts. For some crops or crops in certain regions, the contractor suggested FCIC raise or lower the current prevented planting coverage levels. RMA shared this study with stakeholders to determine if the recommendations made sense to growers. This final rule with comment makes changes to allow for revisions to the prevented planting coverage levels, based on the contractor's findings and report, stakeholder comments in response to the contractors report, and FCIC's re-examination of the evaluation and those stakeholder comments received. This rule allows for any new percentages of prevented planting coverage that FCIC determines provides adequate protection for those costs incurred even though the crop was prevented from planting to be specified in the actuarial documents and removes them from the Crop Provisions. The rule also leaves the option for additional prevented planting coverage if offered in the actuarial documents. This will allow FCIC to expedite its update of the percentages in response to changing production conditions.

FCIC is exempt from all requirements in the administrative procedure provisions in 5 U.S.C. 553, which includes the 30-day effective date. This rule allows FCIC to make the changes to the Crop Provisions in time for 2017 spring planted crops. Therefore, this final rule is effective when published in the Federal Register.

This rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, it has not been reviewed by the Office of Management and Budget (OMB).

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control numbers 0563-0085, 0563-0083, and 0563-0053.

FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Federal Crop Insurance Corporation has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, the Federal Crop Insurance Corporation will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act (Act) authorizes FCIC to waive collection of administrative fees from beginning farmers or ranchers and limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an impact on small entities, and, therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or to require the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

FCIC is issuing this final rule without opportunity for prior notice and comment. The Administrative Procedure Act exempts rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” from the statutory requirement for prior notice and opportunity for public comment (5 U.S.C. 553(a)(2)). However, FCIC is providing a 60-day comment period and invites interested persons to participate in this rulemaking by submitting written comments. FCIC will consider the comments received and may conduct additional rulemaking based on the comments.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends 7 CFR part 457 as follows:

This rule is issued under Marketing Agreement and Order No. 989, both as amended (7 CFR part 989), regulating the handling of raisins produced from grapes grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

This rule is also issued under section 8e of the Act, which provides that whenever certain specified commodities, including raisins, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically-produced commodities.

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Orders 12866, 13563, and 13175.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

This rule removes the term “midget” from § 989.702(a) of the order and § 999.300(b)(1) of the import regulations. This will make the order and the import regulations consistent with the recent changes to the standards.

The committee unanimously recommended that the term “midget” be removed from the order at a meeting on June 26, 2014. At a subsequent meeting on August 14, 2014, the committee also unanimously recommended that the word “midget” be removed from the standards. As required under the Act, the import regulations must be consistent with the changes to the order. In this instance, the order must also be consistent with changes to the standards.

Paragraph (a) of section 989.702 of the order specifies minimum grade standards for packed Natural (sun-dried) Seedless (NS) raisins, requiring that “small (midget)” sizes of raisins shall meet U.S. Grade C tolerances with respect to pieces of stem, and underdeveloped and substandard raisins. The word “midget” is redundant with the term “small,” and its removal is insignificant.

Pursuant to the recommendation of the committee and consistent with the recent amendment of the standards, the word “midget” is removed from the order language.

The committee's recommendations to delete the word “midget” from the order and the standards necessitates a corresponding change to the import requirements.

Under the raisin import regulations, in paragraph (b)(1) of section 999.300, raisins imported into the United States are required to meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically-produced commodities, when such commodities are regulated under an order. With the removal of the word “midget” from both the standards and the order, removal of “midget” is required under the import regulations.

Removal of the word “midget” should not impact the application of the order or the import regulations, since the word “midget” is redundant and appears in parentheses after the word “small.” Thus, removing the word “midget” has no effect on interpretation of the order or the import regulations; and, therefore, has no effect on raisin importers.

The final rule removing the word “midget” from the standards was published in the Federal Register on June 23, 2016 (81 FR 40779). Thus, this rule will make the order and the import regulations consistent with the standards, as recently revised.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 3,000 producers of California raisins and approximately 24 handlers subject to regulation under the marketing order. There are approximately 52 importers of raisins as well.

The Small Business Administration defines small agricultural producers as those having annual receipts less than $750,000, and defines small agricultural service firms, such as handlers and importers, as those whose annual receipts are less than $7,500,000. (13 CFR 121.201.)

There are approximately 3,000 California raisin producers and 24 handlers subject to regulation under the marketing order. The Small Business Administration defines small agricultural producers as those having annual receipts less than $750,000, and defines small agricultural service firms, such as handlers and importers, as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

Based on shipment data and other information provided by the committee, most producers and approximately 13 handlers of California raisins may be classified as small entities. This action should not have any impact on handlers' or growers' benefits or costs.

There is very limited information on the 52 importers. This action should not have any impact on importers' costs.

This rule removes the word “midget” from the order regulations in section 989.702(a) and from the import regulations in section 999.300(b)(1), bringing the order and the import regulations into conformance with the recent amendment to the standards.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178, “Vegetable and Specialty Crops.” No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This rule will not impose any additional reporting or recordkeeping requirements on either large or small raisin handlers or on raisin importers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this final rule.

AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Further, the committee's meetings were widely publicized throughout the California raisin industry and all interested persons were invited to attend the meetings and encouraged to participate in committee deliberations on all issues. Like all committee meetings, the June 26, 2014, and August 14, 2014, meetings were public meetings and all entities, both large and small, were encouraged to express their views on this issue.

A proposed rule was published in the Federal Register on September 16, 2016 (81 FR 63723). Copies of the rule were provided to California raisin handlers and committee members. Finally, the rule was made available through the Internet by USDA and the Office of the Federal Register. A 30-day comment period ending October 17, 2016, was provided for interested persons to respond to the proposal. One supportive comment was received. Accordingly, no changes are being made to the rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously-mentioned address in the FOR FURTHER INFORMATION CONTACT section.

In accordance with section 8e of the Act, the United States Trade Representative has concurred with this action.

After consideration of all relevant material presented, including the information and recommendation submitted by the committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because removal of the word “midget” should not impact the application of the order or the import regulations, since the word “midget” is redundant and appears in parentheses after the word “small.” Thus, removing the word “midget” has no effect on interpretation of the order or the import regulations; and, therefore, has no effect on handlers or raisin importers. Further, handlers are aware of this rule, which was recommended at two public meetings. Also, a 30-day comment period was provided for in the proposed rule.

For the reasons set forth in the preamble, 7 CFR parts 989 and 999 are amended as follows:

Summary of Major Actions

This final rule improves the timeliness and accuracy of sablefish catch reporting in the limited entry fixed gear fisheries and open access fisheries, provides more flexibility and efficiencies for harvesters in the Shorebased Individual Fishing Quota (IFQ) Program and limited entry fixed gear fisheries, and implements several administrative and clarifying changes to monitoring and permitting provisions of regulations for all of the limited entry and open access commercial groundfish fisheries on the West Coast.

This final rule contains eight major actions, along with related minor clarifications and non-substantive changes. The first action is a new requirement for electronic fish tickets to be submitted for all commercial landings of sablefish delivered to Washington, Oregon and California fish buyers. The second action provides qualified vessel owners an opportunity to apply for an exemption to the ownership limitation of three permits in the limited entry sablefish primary fishery. The third action allows a single vessel to be simultaneously (jointly) registered to multiple limited entry permits, one of which may have a trawl gear endorsement. The fourth action prohibits vessels that have been granted an at-sea processing exemption for sablefish in the limited entry fixed gear fishery from processing sablefish at sea when that vessel is participating in the Shorebased IFQ Program. The fifth action clarifies that, consistent with FMP Amendment 6, sablefish catch in incidental open access fisheries is counted against the open access allocation, and is not deducted from the commercial harvest guideline. The sixth action requires any vessel that has a VMS registered with NMFS Office of Law Enforcement (OLE) to submit a declaration report with OLE. The seventh action updates and simplifies equipment requirements for electronic fish tickets. The eighth action clarifies existing regulatory language prohibiting the retention of groundfish species taken in the limited entry fixed gear fishery beyond the allowable quota. In addition, the action includes housekeeping changes that are intended to better align the regulations with defined terms, and to provide clarity and consistency between paragraphs.

The groundfish fisheries in the exclusive economic zone (EEZ) off the west coast of the United States are managed under the FMP. The FMP was prepared by the Pacific Fishery Management Council (Council) under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) as amended by the Consolidated Appropriations Act of 2004 (Pub. L. 108-199, section 801). Regulations implementing provisions of the FMP are located at 50 CFR part 660, subparts C through G.

This final rule includes several actions that revise regulations for commercial fisheries that harvest sablefish. These regulatory changes apply to the Shorebased IFQ Program, the limited entry fixed gear fishery, which includes the limited entry sablefish primary fishery and the daily trip limit (DTL) fishery, and the open access fishery. A more detailed description of the fisheries affected by this rulemaking, and the major provisions of this action, is contained in the June 1, 2016, proposed rule (81 FR 34947).

This final rule includes a Federal electronic fish ticket submittal requirement for all commercial groundfish deliveries that include sablefish. An electronic fish ticket is a web-based form used to send groundfish landing data to the Pacific States Marine Fisheries Commission (PSMFC). Electronic fish tickets are used to collect information similar to the information required in state fish receiving tickets or landing receipts (henceforth referred to as paper tickets), but do not replace or change any state requirements. This requirement will improve the timeliness and accuracy of catch data for monitoring harvest relative to applicable tier limits in the limited entry fixed gear sablefish fishery and trip limits in the limited entry fixed gear and open access DTL fisheries. Electronic fish tickets have been required for IFQ species since the start of the Shorebased IFQ Program in 2011, and have allowed vessel owners/operators, buyers and dealers, and fishery managers timely access to catch information. This final rule expands the use of electronic fish tickets to the limited entry fixed gear and open access fisheries, and is expected to have similar benefits regarding timely access to catch data.

Regulations (§ 660.25(b)(3)(iv)(C)) state that no individual person, partnership, or corporation in combination may have ownership interest in or hold more than three permits with sablefish endorsements either simultaneously or cumulatively over the primary season (hereby referred to as “ownership limitation”). This ownership limitation was intended to prevent concentration of harvest privileges in the Pacific coast sablefish primary fishery. However, this restriction has led to unforeseen complications because many persons, partnerships and corporations have harvest privileges in both the Alaska IFQ sablefish fishery and the Pacific coast sablefish fishery. Under the existing regulations, Alaska IFQ holders are required to have a partial ownership interest in a vessel that fishes for their IFQ. These IFQ holders are deemed to hold any Pacific Coast permits with sablefish endorsements associated with a vessel in which they have an ownership interest. This has resulted in Alaska IFQ holders being “limited out” in the Pacific Coast sablefish primary fishery, even though they do not benefit from the permits associated with the vessels in which they have an interest. The Council recommended, and NMFS is implementing through this final rule, a process by which vessel owners who meet certain qualifying criteria may petition NMFS for a limited exemption to the ownership limitation, as described in detail in the preamble to the proposed rule

Originally, the license limitation program (LLP), implemented through Amendment 6 to the FMP (57 FR 54001, November 16, 1992, see also the EA under ADDRESSES for more information on the LLP), allowed vessels to register both a trawl and fixed gear (longline and fishpot) endorsed permit at the same time. Subsequently, regulations were modified and no longer allow vessels to register multiple limited entry permits unless the permits are sablefish-endorsed and stacked for use in the limited entry fixed gear sablefish primary fishery. This restriction was put in place to keep trawl and fixed gear fisheries temporally separated to meet enforcement and monitoring needs. In 2004, a vessel monitoring program was implemented that allowed vessels to identify which fishery they were participating in through a declaration system, which eliminated the need for temporal separation. As part of FMP Amendment 20 trailing actions, in April 2012 the Council recommended that vessels registered to a limited entry trawl permit be allowed to simultaneously register to a limited entry fixed gear permit, also called “joint registration.” This final rule implements joint registration and clarifies how fishery-specific regulations still apply to vessels that are jointly registered. Joint registration is permitted in one of two configurations, which are described in additional detail in the June 1, 2016, proposed rule (81 FR 34947):

(1) Configuration A: One trawl permit and one, two, or three sablefish endorsed permits.

(2) Configuration B: One trawl permit and one limited entry fixed gear permit.

Registering a vessel to a limited entry permit with a specific endorsement often triggers certain requirements in the groundfish regulations. Joint registration is not intended to change fishing operations of groundfish fisheries or change requirements that are applicable to vessels because of the type of the endorsement(s) on the limited entry permit to which they are registered, unless otherwise described above and in the June 1, 2016, proposed rule (81 FR 34947).

Processing of groundfish at-sea is prohibited for vessels fishing in the Shorebased IFQ Program or limited entry fixed gear fishery, unless exempted from that prohibition. One such exemption applies to certain vessels fishing in the limited entry fixed gear sablefish primary fishery. Those exempted vessels may freeze sablefish at-sea during the limited entry fixed gear sablefish primary fishery.

When trawl rationalization was implemented in 2011, the Council recommended that at-sea processing of groundfish in the Shorebased IFQ Program be prohibited, with limited exemptions. Regulations at § 660.112 (b)(1)(xii) prohibit at-sea processing of groundfish, and also list the exemptions that have been granted to date, including an exemption from the prohibition of at-sea processing that applies in the sablefish primary fishery. As written, those regulations grant vessels with an exemption from the prohibition of at-sea processing in the sablefish primary fishery when fishing in the Shorebased IFQ Program. However, regulations at § 660.25(b)(6)(i) only allow the sablefish at-sea processing exemption when the vessel is registered to a sablefish-endorsed limited entry permit.

Currently, because vessels cannot be registered to a sablefish-endorsed limited entry permit and a trawl-endorsed permit at the same time, Shorebased IFQ vessels cannot take advantage of the sablefish at-sea processing exemption. However, this rule's joint registration provisions would allow a vessel to register to a trawl endorsed and a sablefish endorsed limited entry permit simultaneously. If the exemption at § 660.112(b)(1)(xii)(B) is not removed, joint registration could allow vessels with an exemption from the at-sea processing prohibition for the sablefish primary fishery to also process sablefish at sea in the Shorebased IFQ Program. Consistent with the Council's recommendation, this rule removes the exemption to the prohibition of at-sea processing (at § 660.112(b)(1)(xii)(B)) that extended the limited entry fixed gear exemption in § 660.25(b)(6)(i) to vessels fishing sablefish in the Shorebased IFQ Program. Also, in light of joint registration, a clarifying sentence is added to § 660.25(b)(6)(i), stating that the at-sea processing exemption only applies to at-sea processing of sablefish caught in the limited entry fixed gear sablefish primary fishery.

During development of this rule, NMFS noted that a similar situation as the one described above may occur with the exemption from the processing-at-sea prohibition for non-whiting groundfish. When a vessel with a non-whiting exemption from that prohibition in the Shorebased IFQ Program is jointly registered, it could utilize that exemption when fishing in non-IFQ fisheries. NMFS proposed a clarifying sentence at § 660.25(b)(6)(ii), stating that the exemption only applies to processing non-whiting groundfish caught in the Shorebased IFQ Program, which is consistent with the Council's recommendation under joint registration with regards to the sablefish at-sea processing exemption. NMFS requested public comment on this issue, and received none. Therefore, the clarifying addition to § 660.25(b)(6)(ii) is included in this final rule. This final rule implements joint registration and does not allow at-sea processing of non-whiting groundfish in non-IFQ fisheries, as the exemption was granted to vessels participating in the Shorebased IFQ Program.

The allocation structure for sablefish north of 36° N. lat. was established in FMP Amendment 6. In April 2009, the Council recommended final preferred intersector allocations for groundfish species under Amendment 21. The Council and NMFS recommended that no change be made to the Amendment 6 allocation structure for sablefish. However, FMP Amendment 21 and its implementing regulations slightly changed the process for allocating sablefish north of 36° N. lat. (75 FR 60868, October 1, 2010). This final rule includes regulations aligning sablefish north of 36° N. lat. allocations with the Amendment 6 allocation structure, as recommended by the Council in 2009, and as described in the June 1, 2016 proposed rule (81 FR 34947).

In 2004, the Council and NMFS implemented a vessel monitoring program. Since 2004, all commercial fishing vessels that take and retain groundfish in federal waters, or transit through federal waters with groundfish on board, are required to have a working VMS. The VMS, along with a system of fishing declaration reporting requirements, allows for monitoring and enforcement of areas closed to fishing. With this 2004 program, NMFS type-approved hardware and software, or “units,” were installed on vessels in order to meet these new program requirements for the groundfish fishery. When a VMS unit is installed on a vessel, it is registered with NMFS OLE and catalogued.

There are a number of VMS units that have registered with OLE but those vessels have never made a declaration report. This final rule includes regulation changes at § 660.13(d) that require all vessels registered to a VMS unit to submit a declaration report. Vessels registered to a VMS unit are required to submit a declaration report, regardless of fishing activities. Obtaining a declaration report from these vessels will give OLE the information necessary to monitor the activities of these vessels relative to the applicable regulations. This final rule also revises fisher declarations at § 660.13(d)(5)(iv)(A)(24) to include “other.” This category will include on-the-water activities that may not be fishing (e.g., scientific research activities). NMFS anticipates vessels may make a declaration of “other” if they are not fishing.

As described in the proposed rule, a new interface has been developed that uses the internet for both entry and submission of electronic fish ticket data. The changes to regulations at § 660.15(d) in this rule reflect the move to a web-based electronic fish ticket for all first receivers. Note that an internet connection is necessary for all steps for completion of an electronic fish ticket, from creating the new ticket through submission. To reflect these changes, the definition of “electronic fish ticket” at § 660.11 is also revised to reflect the web-based form used to send electronic fish ticket information to the PSMFC.

NMFS is replacing “taking, retaining” with “taking and retaining,” consistent with the Council's recommendations under PCGFMP Amendment 14 and described in the 2016 proposed rule. With the exception of the sablefish primary fishery, in commercial groundfish fisheries vessels may “take” more than a single cumulative trip limit of a species while fishing for other species, but they may not retain any species above its cumulative trip limit. The phrase “taking, retaining” in this context is not clear. Therefore, to better align prohibitions for enforcing trip limits with the definition of “trip limit,” to improve enforceability of trip limit prohibitions, and to bring consistency to regulations that apply to commercial groundfish fisheries, prohibitions at §§ 660.12(a)(6), 660.212(a)(2), and 660.212(d)(1) and (2) are revised from “take, retain” to “take and retain.”

There are several outdated regulations, mis-specified cross-references, inconsistencies in terminology, and areas in need of clarification throughout the groundfish regulations that pertain to commercial sablefish fishing. For the reasons stated in the proposed rule, this rule implements all of the updates, corrections, clarifications and non-substantive edits described in the proposed rule.

During the comment period of the proposed rule, NMFS received two comment letters from participants in the fishing industry in support of the proposed regulation changes to allow joint registration of trawl and non-trawl permits and the limited exemption from ownership limitation restrictions. NMFS also received a letter of comment regarding VMS equipment requirements on board fishing vessels, which are not revised in this rule, are outside the scope of this action, and, therefore, are not discussed further here. NMFS addresses other comments below:

Comment 1: Information on an electronic fish ticket will not immediately become available to quota managers because the data will need to be entered by data entry personnel who do not work over the weekend.

Response: This is an automated system, and availability of submitted electronic fish ticket data does not rely on action by system administrators. Upon submission of the electronic fish ticket by first receivers, catch information is immediately available to vessel operators, enforcement, and federal and state fishery managers.

Comment 2: The time requirement for submitting a fish ticket under the new regulation is inconsistent with some California state fish ticket and transport ticket regulations.

Response: California Department of Fish and Wildlife is in the process of developing a monitoring system that incorporates electronic tickets. While the electronic fish tickets required by this provision contain similar information as submitted on state tickets, it does not replace or change the state requirements (§ 660.11). Furthermore, any vessels participating in federal fisheries are subject to federal regulations (§ 660.2).

Comment 3: NMFS should acknowledge that interruption of internet service, equipment failures, etc. may make electronic fish tickets impractical.

Response: NMFS has implemented a system in which a web browser on any electronic device can be used to create and submit electronic fish tickets. Therefore, even allowing for possible, temporary interruptions in service or equipment problems, 24 hours is deemed an appropriate amount of time to complete the fish ticket.

Comment 4: In some situations, the fish have been both landed and transported by the vessel operator, and no paperwork has been completed because the fish buyer has not yet taken possession of them.

Response: The trigger for written documentation of the landing is not the point at which the fish buyer or the first receiver takes possession of the fish. Written documentation of the fish offloaded from a vessel is required once the fish are removed from the vessel. Any fish removed from a vessel is considered a “landing,” per the definition at § 660.11. If the fish removed from the vessel will not have an electronic fish ticket submitted prior to transport, the fish must be accompanied by a dock ticket (or a transportation ticket for vessels landing into California) with the information needed to complete the electronic fish ticket, per regulations at §§ 660.213 and 660.313. It is the responsibility of the vessel operator or other person taking possession of the fish upon landing to comply with the requirements to complete the dock ticket or transportation ticket.

Comment 5: Regulations for the landing of fish and requirements of the new rule will unfairly impact first receivers that are not located at a processing plant.

Response: Regulations implemented in this rule were explicitly drafted to address the fact that some first receivers are not located at processing plants, by allowing for use of dock tickets. If the first receiver is taking possession of fish outside of regular business hours, a co-signed dock ticket meets the need for documentation of agreement between the first receiver and vessel operator regarding the specifics of the landing. The dock ticket must include the electronic fish ticket number, which can be generated remotely via any device with a web browser and internet connection (e.g., mobile phone), and the rest of the fish ticket can be completed and submitted from dock ticket data within 24 hours.

Comment 6: The requirement of electronic fish tickets will cause hardship to first receivers that must purchase and maintain the hardware and software needed to submit electronic fish tickets.

Response: The improved timeliness of catch data will increase the ability to manage the fishery to the benefit of all participants, offsetting the cost of equipment needed to complete electronic fish tickets. The electronic ticket portal is web-based, and can be accessed from any electronic device (such as a computer, tablet, or mobile phone) with an internet browser, allowing for increased accessibility with multiple ways to meet reporting requirements. NMFS notes that requirements for electronic fish ticket submission will include the ability of first receivers to request a temporary waiver from these requirements, enabling them to submit paper tickets on a temporary basis. Temporary waivers will be granted on a case-by-case basis by NMFS, per regulations at §§ 660.213 and 660.313.

Comment 7: Those responsible for filling out fish tickets may not have the training and technical knowledge to do so, and may be assisted by fishermen or others as is currently done for paper tickets.

Response: NMFS is providing a written compliance guide, and PSMFC staff will be available to provide training to help ensure that all first receivers are able to perform the duties required in this rule. See ADDRESSES for details on where to find these materials. Also, even though the first receiver must sign the fish ticket, regulations implemented in this final rule do not prohibit a first receiver from seeking technical assistance from a third party.

The electronic fish ticket requirements in the proposed and final rule offer a new, more flexible option that allows for vessels fishing in the sablefish primary fishery to apportion their sablefish from a single landing against multiple tier limits (if the vessel is registered to multiple sablefish endorsed permits), or against their the remainder of their tier limit(s) and applicable daily trip limits. During development of the proposed rule, it was thought that the electronic fish ticket system requirements were such that, in these situations, separate and distinct electronic fish tickets would need to be filled out and submitted for each part of the landing. For example, the first ticket for the delivery would document the sablefish pounds counting toward “Permit 13, Tier 2” and a second ticket for the same delivery would document the sablefish pounds counting toward “Permit 21, Tier 3.” Therefore, if a vessel operator chose to apportion their sablefish as described above, proposed regulations required multiple fish tickets to be filled out. Each fish ticket is estimated to take approximately 10 minutes to complete and submit.

Since publication of the proposed rule, there has been further exploration of how to document portions of a single sablefish delivery against either multiple tier limits or against both tier limits and DTL limits without having to duplicate some of the information by requiring submittal of multiple electronic fish tickets. A mechanism has been developed that allows catch of sablefish to be apportioned within a single electronic fish ticket when a vessel operator wishes to take advantage of the flexibility to apportion sablefish catch between permits (i.e., among sablefish tiers associated with the permits registered for use with the vessel) or between fisheries (i.e., among sablefish tiers harvested in the sablefish primary fishery and the DTL fishery). Utilizing this updated approach in the electronic fish ticket system, the requirement included in the proposed rule at § 660.213(e)(2)(iii) to submit multiple electronic fish tickets for a single delivery is unnecessary.

Therefore, in this final rule, NMFS is removing the requirement at § 660.213(e)(2)(iii) to submit multiple electronic fish tickets when a vessel operator wishes to take advantage of the flexibility to apportion sablefish catch between permits or between fisheries (as described above). This final rule provides vessel operators with the same flexibilities and gives fishery managers the same permit and landing information as the proposed regulations. However, the regulations at § 660.213(e)(2)(iii) in this final rule are anticipated to relieve first receivers of some of the recordkeeping and reporting burden by slightly reducing the total number of electronic fish tickets required. As noted above, it is unknown how many vessel operators in the sablefish primary fishery will elect to use this new flexibility, therefore it is not possible to estimate exactly how much time may be saved by first receivers. However, this change from the proposed rule relieves a restriction, and is anticipated to benefit vessel operators and first receivers.

The second change from the proposed rule pertains to the definition of “sablefish landing” included in that rule at §§ 660.211 and 660.311. The proposed rule would have required electronic fish tickets be submitted by first receivers of all the groundfish on board the vessel if that groundfish included any amount of sablefish. During development of the final rule, it became apparent that given the definition of “sablefish landing” the proposed rule language could be interpreted as requiring a first receiver of fish from a landing that included sablefish to submit an electronic fish ticket regardless of whether that first receiver was buying any sablefish. If a scenario arose where the sablefish landing were divided, all of the sablefish were sold to one first receiver, and the rest of the groundfish were sold to a second first receiver, the second first receiver, who did not take possession of any sablefish, would be required to submit an electronic fish ticket for those non-sablefish groundfish species. This would be because as proposed, the electronic fish ticket requirement would have applied to any “sablefish landing,” or any landing that includes any amount of sablefish harvested in the limited entry fixed gear fishery. “Landing” is defined at § 660.11 and means the transfer or offloading of fish from any vessel. Once transfer of fish begins, all fish aboard the vessel are counted as part of the landing. Therefore, all the fish on board the vessel, even if sold to multiple first receivers, are all counted as part of the same landing. Therefore, a vessel meets the definition of having a “sablefish landing” when they have any amount of sablefish on board and begins the transfer of any fish from the vessel. In the above described situation, under proposed electronic fish ticket regulations and the definition of “sablefish landing,” both of the first receivers of fish from the sablefish landing would be required to submit an electronic fish ticket, regardless of whether the first receiver is taking possession of any amount of sablefish.

The Council's recommendation was to capture all of the landings of sablefish for more accurate and timely accounting of sablefish harvest against applicable limits in the limited entry fixed gear and open access fisheries. Implementing an electronic fish ticket requirement for first receivers of non-sablefish groundfish deliveries was not intended and does not meet this purpose. Therefore, the proposed definitions of “sablefish landing” (as included in the proposed rule at §§ 660.211 and 660.311) are not included in this final rule.

Instead, regulations at §§ 660.212 and 660.312 are revised to clarify that, if the landing is split, only the portion of the landing (or a delivery/offload) that includes some amount of sablefish must be reported on an electronic fish ticket. With this revision, first receivers of a delivery that includes any amount of sablefish must report that entire delivery (both sablefish and non-sablefish groundfish) on an electronic fish ticket. First receivers of a delivery that does not include any sablefish would not be required to report via electronic fish ticket. These revisions better align with the Council's intent to improve the timeliness of sablefish catch data.

NMFS has determined that this action is consistent with the FMP, the Magnuson Stevens Conservation and Management Act, and other applicable laws.

The Office of Management and Budget (OMB) has determined that this action is not significant for purposes of Executive Order 12866.

A final regulatory flexibility analysis (FRFA) was prepared and incorporates the initial regulatory flexibility analysis (IRFA). A summary of the significant issues raised by the public comments in response to the IRFA, and NMFS responses to those comments, and a summary of the analyses completed to support the action are included below. NMFS also prepared a Regulatory Impact Review (RIR) for this action. A copy of the RIR/FRFA is available from NMFS (see ADDRESSES). A summary of the FRFA, per the requirements of 5 U.S.C. 604(a) follows:

The Small Business Administration (SBA) has established size criteria for all major industry sectors in the US, including fish harvesting and fish processing businesses. A business primarily involved in finfish harvesting is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $20.5 million for all its affiliated operations worldwide (13 CFR part 121; August 17, 2015). For commercial shellfish harvesters, the other qualifiers apply and the receipts threshold is $5.5 million. For other commercial marine harvesters, for-hire businesses, and marinas, the other qualifiers apply and the receipts threshold is $7.5 million. A business primarily involved in seafood processing is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual employment not in excess of 500 employees for all its affiliated operations worldwide. For seafood dealers/wholesalers, the other qualifiers apply and the employment threshold is 100 employees. A small organization is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. Small governmental jurisdictions are governments of cities, counties, towns, townships, villages, school districts, or special districts, with populations less than 50,000.

On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts for all businesses primarily engaged in the commercial fishing industry (North American Industry Classification System or NAICS 11411) for Regulatory Flexibility Act (RFA) compliance purposes only (80 FR 81194, December 29, 2015). The $11 million standard became effective on July 1, 2016, and is to be used in all NMFS rules subject to the RFA after July 1, 2016, in place of the U.S. SBA standards (described above) of $20.5 million, $5.5 million, and $7.5 million for the finfish (NAICS 114111), shellfish (NAICS 114112), and other marine fishing (NAICS 114119) sectors of the U.S. commercial fishing industry.

Pursuant to the RFA, and prior to July 1, 2016, an initial regulatory flexibility analysis was developed for this regulatory action using SBA's size standards. NMFS has reviewed the analyses prepared for this regulatory action in light of the new size standard. All of the harvesting entities directly regulated by this regulatory action were considered small under the SBA's size standards, and continue to be considered small under the new NMFS standard. Thus, NMFS has determined that the new size standard does not affect analyses prepared for this regulatory action.

No significant issues were raised during public comment, and no changes were made as a result of public comments.

An estimated 99 entities are potentially impacted by this rule, including 77 receivers and up to 22 vessels/permit holding entities. All of these entities are considered small according to both the SBA guidelines and the new NMFS standards described above. This rule is not anticipated to have a substantial or significant economic impact on small entities, or place small entities at a disadvantage to large entities.

Addition of an exemption to the ownership limitation and joint registration are expected to positively benefit directly impacted small entities.

It is assumed that all first receivers have access to a personal computer or other hardware/device. However, to reduce the potential impacts on first receivers should there be a system failure, a waiver may be granted by NMFS that temporarily exempts a first receiver from the reporting requirements and allow reasonable time to resolve the electronic fish ticket system problem. The duration of the waiver will be determined on a case-by-case basis. First receivers that are granted a temporary waiver from the requirement to submit electronic fish tickets must submit on paper the same data as are required on electronic fish tickets within 24 hours of the date received during the period that the waiver is in effect.

Implementation of an electronic fish ticket improves the accuracy and timeliness of landing data and provides managers with the real time data necessary to do inseason management of the primary and daily trip limit (DTL) fisheries. It also provides enforcement with the permit-specific landings data necessary to monitor overages in the primary (tier) and DTL sablefish fisheries, and could aid in enforcement of the owner-on-board requirement.

There are no significant alternatives to the rule that accomplish the stated objectives of applicable statutes and that minimize any of the significant economic impact of the final rule on small entities. However, Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule. The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide will be sent to all limited entry permit owners and holders, and all persons and entities that have requested information on groundfish management actions (i.e., persons and entities on the West Coast groundfish email list serve), and will be posted on the NMFS West Coast Region Web site at http://www.westcoast.fisheries.noaa.gov/. With regards to new electronic fish ticket requirements, outreach and compliance guidance will also be available through the Pacific States Marine Fisheries Commission at http://pacfin.psmfc.org/.

This final rule contains the implementation of a Federal requirement for an electronic fish ticket to capture essential fishery catch data for commercial non-trawl sablefish fisheries (every commercial fishery landing that includes any amount of sablefish) in a timely manner, which is a collection-of-information requirement subject to review and approval by OMB under the Paperwork Reduction Act (PRA). With regards to electronic fish tickets, this requirement has been approved by OMB as a new OMB collection (OMB collection 0648-0738). The public reporting burden is estimated to average 10 minutes per response. With regards to the ownership limitation exemption, this requirement has been approved by OMB as OMB collection 0648-0737. The public reporting burden is estimated to be 45 minutes per response. Send comments on the burden estimates or any other aspects of the collection of information to West Coast Region at the ADDRESSES above, by email to [email protected], or by 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.

The PRA (44 U.S.C. 3507) requires that agencies inventory and display a current control number assigned by the Director, Office of Management and Budget (OMB), for each agency information collection. § 902.1(b) identifies the location of NOAA regulations for which OMB approval numbers have been issued. Because this final rule adds requirements for scale test report recording and maintenance, § 902.1(b) is revised to reference correctly the section resulting from this final rule.

For the reasons set out in the preamble, 15 CFR part 902 and 50 CFR part 660 are amended as follows:

NMFS manages the groundfish and Pacific cod fisheries in the Exclusive Economic Zone of the BSAI under the FMP. The North Pacific Fishery Management Council (Council) prepared, and the Secretary of Commerce approved, the FMP pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and other applicable laws. Regulations implementing the FMP appear at 50 CFR part 679. General regulations that pertain to U.S. fisheries appear at 50 CFR part 600.

NMFS published the Notice of Availability of Amendment 113 on July 19, 2016 (81 FR 46883), with comments invited through September 19, 2016. NMFS published the proposed rule to implement Amendment 113 on August 1, 2016 (81 FR 50444), with comments invited through August 31, 2016. The Secretary approved Amendment 113 on October 17, 2016. NMFS received 35 unique comments on Amendment 113 and the proposed rule from 16 different commenters. A summary of these comments and the responses by NMFS are provided under the heading “Responses to Comments” below. These comments resulted in two minor changes from the proposed rule. One additional change to this final rule is not in response to comments, but is an administrative change that NMFS deemed necessary for timely implementation of this final rule.

A detailed review of the BSAI Pacific cod fishery, provisions of Amendment 113, the proposed regulations to implement Amendment 113, and the rationale for these regulations is provided in the preamble to the proposed rule (81 FR 50444, August 1, 2016) and is not repeated here. The preamble to this final rule briefly reviews the regulatory changes made by this final rule.

This final rule modifies the BSAI Pacific cod fishery to set aside a portion of the Aleutian Islands Pacific cod total allowable catch (TAC) for harvest by vessels directed fishing for Aleutian Islands Pacific cod and delivering their catch to Aleutian Islands shoreplants for processing. The harvest set-aside applies only if specific notification and performance requirements are met, and only during the first few months of the fishing year.

Table 3 in the proposed rule preamble (81 FR 50444, August 1, 2016) describes the Overfishing Levels (OFLs), the Acceptable Biological Catches (ABCs), TACs, the Western Alaska Community Development Quota (CDQ) and non-CDQ fishery sector allocations, and seasonal apportionments of BSAI Pacific cod in 2017, the first year of implementation of this final rule. Each of these terms is described in the preamble to the proposed rule. Table 3 of the proposed rule preamble includes data from Tables 2 and 9 in the 2016 and 2017 final harvest specifications for the BSAI groundfish fisheries (81 FR 14773, March 18, 2016).

A variety of vessels using a variety of gear types harvest the Aleutian Islands Pacific cod TAC each year. Trawl catcher vessels (CVs) and trawl catcher processors (CPs) have been among the most active participants in the Aleutian Islands Pacific cod fishery. Hook-and-line CPs have consistently participated in the Aleutian Islands Pacific cod fishery. Non-trawl CVs have harvested only a very small portion of the Pacific cod from the Aleutian Islands. The proposed rule and Section 2.6.6 of the Analysis provide additional detail on the types of vessels harvesting Pacific cod in the Aleutian Islands.

Trawl CVs deliver their catch of Aleutian Islands Pacific cod to several types of processors in the Aleutian Islands: CPs acting as motherships (vessels that process Pacific cod delivered by trawl CVs); stationary floating processors anchored in specific locations that receive and process catch on board but do not harvest and process their own catch; and shoreside processing facilities that are physically located on land west of 170° W. longitude in the Aleutian Islands (defined as “Aleutian Islands shoreplant” in this final rule).

Currently, Aleutian Islands shoreplants that may be capable of receiving Aleutian Islands Pacific cod from CVs are located in the communities of Adak and Atka. Although the Atka shoreplant has not received and processed Aleutian Islands Pacific cod, the shoreplant in Adak has received and processed relatively large amounts of Pacific cod. The proposed rule and Section 2.7.1 of the Analysis have additional detail on the delivery and processing of Aleutian Islands Pacific cod.

Since 2008, trawl CVs have primarily delivered their catch of Aleutian Islands Pacific cod to a small group of CPs that operate as motherships. As deliveries of Aleutian Islands Pacific cod harvest from trawl CVs to CPs operating as motherships have increased in recent years, the amount of trawl CV harvest delivered to Aleutian Islands shoreplants has decreased. Additionally, CPs operating as motherships have demonstrated the capacity to process the entire TAC of Pacific cod in the Aleutian Islands in years when no Aleutian Islands shoreplant is in operation. This final rule is intended in part to mitigate the risk that CVs, Aleutian Islands shoreplants, and the communities in which they are located will be preempted from participating in the Aleutian Islands Pacific cod fishery by CPs.

The proposed rule and Section 2.6 of the Analysis provide additional description of the factors that have affected the harvesting and processing of Pacific cod in the Aleutian Islands.

A thorough description of the history and need for this action is provided in the proposed rule and the Analysis prepared for this action and is not repeated here. The Council adopted its preferred alternative for Amendment 113 at its October 2015 meeting.

Since 2008, Aleutian Islands fishing communities, and specifically the community of Adak and its shoreplant, have seen a decrease in the amount of Pacific cod being harvested and delivered. The amount of Pacific cod delivered to Aleutian Islands shoreplants has been highly variable, which is not conducive to stable shoreside operations. Several factors have contributed to this instability, and therefore the need for this action, including decreased Pacific cod biomass in the Aleutian Islands subarea; the establishment of separate OFLs, ABCs, and TACs for Pacific cod in the Bering Sea and the Aleutian Islands; changing Steller sea lion protection measures; and changing fishing practices in part resulting from rationalization programs that allocate catch to specific fishery participants.

This rule establishes a harvest set-aside in which a portion of the Aleutian Islands Pacific cod TAC will be available for harvest by vessels directed fishing for Aleutian Islands Pacific cod and delivering their catch to Aleutian Islands shoreplants for processing. This harvest set-aside applies only if specific notification and performance requirements are met, and only during the first few months of the fishing year.

The Council determined and NMFS agrees that a harvest set-aside is needed for several reasons: The TAC for Aleutian Islands Pacific cod has been significantly lower than predicted so that less Pacific cod is available for harvest; the rationalization programs, and particularly the Amendment 80 Program, have allowed an influx of processing capacity into the Aleutian Islands Pacific cod fishery; and the Aleutian Islands communities and shoreplants (Adak) have received almost all of their total first wholesale gross revenue from Aleutian Islands Pacific cod.

This final rule strikes a balance between providing protections for fishing communities and ensuring that the fishery sectors have a meaningful opportunity to fully harvest their BSAI Pacific cod allocations by including several thresholds to prevent a portion of the Aleutian Islands Pacific cod TAC from being unharvested. This final rule will provide social and economic benefits to, and promote stability in, fishery-dependent fishing communities in the Aleutian Islands and is responsive to changes in management of the Aleutian Islands Pacific cod fishery such as rationalization programs, decreasing biomass of Pacific cod, and Steller sea lion protection measures that necessitate putting protections in place to protect other non-rationalized fisheries.

This final rule does not modify existing harvest allocations of BSAI Pacific cod to participants in the CDQ Program. This final rule does not modify existing harvest allocations of BSAI Pacific cod made to the nine non-CDQ fishery sectors defined in § 679.20(a)(7)(ii)(A). Although the nine non-CDQ sectors will continue to receive their existing harvest allocations of BSAI Pacific cod, each sector's ability to harvest a portion of its BSAI Pacific cod allocation in the Aleutian Islands may be affected by this rule.

The Aleutian Islands shoreplants in Adak and Atka currently are not processing Aleutian Islands Pacific cod. However, the protection measures and harvest set-aside in this final rule will minimize the risk of exclusion from, and maintain opportunities for participation in, the Aleutian Islands Pacific cod fishery by Aleutian Islands harvesters, shoreplants, and communities when those Aleutian Islands communities are able to accept deliveries of and process Aleutian Islands Pacific cod.

This final rule revises regulations to provide additional opportunities for harvesters to deliver Aleutian Islands Pacific cod to Aleutian Islands shoreplants. Recent Aleutian Islands Pacific cod TACs have not been sufficient to allow all sectors to prosecute the Aleutian Islands Pacific cod fishery at their historical levels. Without protections, Aleutian Islands harvesters, shoreplants, and fishing communities may be preempted from the fishery by harvests by CPs, or by harvests from CVs delivering their catch to CPs.

Because of their remote location and limited economic alternatives, Aleutian Islands communities rely on harvesting and processing of the nearby fishery resources to support and sustain the social and economic welfare of their communities. This final rule is intended to be directly responsive to National Standard 8 of the Magnuson-Stevens Act that states conservation and management measures shall take into account the importance of fishery resources to fishing communities in order to provide for the sustained participation of such communities, and to the extent practicable, minimize adverse economic impacts on such communities (16 U.S.C. 1851(a)(8)).

This final rule modifies several aspects of the BSAI Pacific cod fishery. This final rule sets aside a portion of the Aleutian Islands Pacific cod non-CDQ TAC for harvest by vessels directed fishing for Aleutian Islands Pacific cod and delivering their catch to Aleutian Islands shoreplants. However, the harvest set-aside applies only if specific notification and performance requirements are met, and only during the first few months of the fishing year.

In order to implement Amendment 113, this final rule:

• Defines the term “Aleutian Islands shoreplant” in regulation;

• Calculates and defines the amount of the Aleutian Islands Pacific cod TAC that will be available as a directed fishing allowance (DFA) and the amount that will be available as an incidental catch allowance (ICA);

• Limits the amount of early season (from January 20 until April 1), also known as A-season, Pacific cod that may be harvested by the trawl CV sector in the Bering Sea prior to March 21 (Bering Sea Trawl CV A-Season Sector Limitation);

• Sets aside some or all of the Aleutian Islands Pacific cod non-CDQ DFA for harvest by vessels directed fishing for Aleutian Islands Pacific cod and delivering their catch for processing by Aleutian Islands shoreplants from January 1 to March 15 (Aleutian Islands CV Harvest Set-Aside);

• Requires that either the City of Adak or the City of Atka annually notify NMFS of its intent to process Aleutian Islands Pacific cod during the upcoming fishing year in order for the Aleutian Islands CV Harvest Set-Aside and the Bering Sea Trawl CV A-Season Sector Limitation to be effective in the upcoming fishing year; and

• Removes the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside if less than 1,000 metric tons (mt) of the harvest set-aside is delivered to (i.e., landed at) Aleutian Islands shoreplants on or before February 28, or if the harvest set-aside is fully taken before March 15.

The following sections provide further explanation of the regulatory changes made by this rule. Additional detail about the rationale for and effect of the regulatory changes in this rule is provided in the preamble to the proposed rule and in the Analysis for this action.

This final rule adds a definition to § 679.2 for “Aleutian Islands shoreplant” to mean a processing facility that is physically located on land west of 170° W. longitude within the State of Alaska (State). This definition is needed because the existing term “shoreside processor” in § 679.2 can include processing vessels that are moored or otherwise fixed in a location (i.e., stationary floating processors), but not necessarily located on land. This new definition provides a clear and consistent term for referencing the processors located on land within the Aleutian Islands.

This final rule adds a new paragraph (viii) to § 679.20(a)(7). This new paragraph includes the primary regulatory provisions of this final rule. The preamble to the proposed rule provides examples to aid the reader in understanding how this final rule will apply using 2017 harvest specifications for BSAI Pacific cod (81 FR 14773, March 18, 2016). For the remainder of this preamble, unless otherwise specified, all references to allocations and apportionments of BSAI Pacific cod refer to non-CDQ allocations and apportionments of BSAI Pacific cod.

NMFS will annually specify an ICA and a DFA derived from the Aleutian Islands Pacific cod non-CDQ TAC. Each year, during the annual harvest specifications process described at § 679.20(c), NMFS will specify an amount of Aleutian Islands Pacific cod that NMFS estimates will be taken as incidental catch when directed fishing for non-CDQ groundfish other than Pacific cod in the Aleutian Islands. This amount will be the Aleutian Islands ICA and will be deducted from the Aleutian Islands non-CDQ TAC. The amount of the Aleutian Islands non-CDQ TAC remaining after subtraction of the Aleutian Islands ICA will be the Aleutian Islands DFA.

NMFS will specify the Aleutian Islands ICA and DFA so that NMFS can clearly establish the amount of Aleutian Islands Pacific cod that will be used to determine the amount of the Aleutian Islands CV Harvest Set-Aside described in the following sections of this preamble. The specification will also provide the public with notification of the amount of the Aleutian Islands non-CDQ TAC that is available for directed fishing prior to the start of the fishing season to aid in the planning of fishery operations. The Aleutian Islands DFA is the maximum amount of Pacific cod available for directed fishing by all non-CDQ fishery sectors in all seasons in the Aleutian Islands.

Although the amount of the Aleutian Islands ICA may vary from year to year, NMFS specifies an Aleutian Islands ICA of 2,500 mt for 2017. NMFS determined that this amount will be needed to support incidental catch of Pacific cod in other Aleutian Islands non-CDQ directed groundfish fisheries. In future years, NMFS will specify the Aleutian Islands ICA in the annual harvest specifications based on recent and anticipated incidental catch of Aleutian Islands Pacific cod in other Aleutian Islands non-CDQ directed groundfish fisheries.

This final rule establishes the Bering Sea Trawl CV A-Season Sector Limitation to restrict the amount of the trawl CV sector's A-season allocation that can be harvested in the Bering Sea subarea prior to March 21. The Bering Sea Trawl CV A-Season Sector Limitation ensures that some of the trawl CV sector's A-season allocation remains available for harvest in the Aleutian Islands subarea by trawl catcher vessels that deliver their catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing. On March 21, the restriction on Bering Sea harvest by the trawl CV sector will be lifted and the remainder, if any, of the BSAI trawl CV sector's A-season allocation can be harvested in either the Bering Sea or the Aleutian Islands (if still open to directed fishing for Pacific cod) for delivery to any eligible processor for processing.

The Bering Sea Trawl CV A-Season Sector Limitation will equal the lesser of either the Aleutian Islands DFA or 5,000 mt. The Bering Sea Trawl CV A-Season Sector Limitation will be equivalent to the Aleutian Islands CV Harvest Set-Aside, as discussed in the following section of the preamble. The amount of the trawl CV sector's A-season allocation that may be harvested in the Bering Sea prior to March 21 will be the amount of Pacific cod that remains after deducting the Bering Sea Trawl CV A-Season Sector Limitation from the BSAI trawl CV sector A-season allocation listed in the annual harvest specifications (and as determined at § 679.20(a)(7)(iv)(A)(1)(i)). NMFS will annually specify in the annual harvest specifications the Bering Sea Trawl CV A-Season Sector Limitation and the amount of the trawl CV sector's A-season allocation that may be harvested in the Bering Sea prior to March 21.

The preamble to the proposed rule provides additional background on the factors that the Council and NMFS considered when determining the amount and timing of the Bering Sea Trawl CV A-Season Sector Limitation and is not repeated here.

This final rule requires that some or all of the Aleutian Islands DFA be set aside for harvest by vessels directed fishing for Aleutian Islands Pacific cod and delivering their catch to Aleutian Islands shoreplants for processing. This Aleutian Islands CV Harvest Set-Aside will be available for harvest by vessels using any authorized gear type and that deliver their directed catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing. NMFS will account for harvest and processing of Aleutian Islands Pacific cod under the Aleutian Islands CV Harvest Set-Aside separate from, and in addition to, its accounting of Aleutian Islands Pacific cod catch by the nine non-CDQ fishery sectors established in § 679.20(a)(7)(ii). Because of this separate accounting, the Aleutian Islands CV Harvest Set-Aside will not increase or decrease the amount of BSAI Pacific cod allocated to any of the non-CDQ fishery sectors. The Aleutian Islands CV Harvest Set-Aside will apply from January 1 until March 15 of each year if certain notification and performance measures, described in the following section of the preamble, are satisfied.

The amount of the Aleutian Islands CV Harvest Set-Aside will be calculated as described above for the Bering Sea Trawl CV A-Season Sector Limitation. It will be an amount equal to the lesser of either the Aleutian Islands DFA or 5,000 mt. NMFS will notify the public of the Aleutian Islands CV Harvest Set-Aside through the annual harvest specifications process.

When the Aleutian Islands CV Harvest Set-Aside is set equal to the Aleutian Islands DFA and the set-aside is in effect, directed fishing for Pacific cod in the Aleutian Islands may only be conducted by vessels that deliver their catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing. Vessels that do not want to deliver their directed catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing will be prohibited from directed fishing for Pacific cod in the Aleutian Islands when the Aleutian Islands CV Harvest Set-Aside is in effect. These vessels will be permitted to conduct directed fishing for groundfish other than Pacific cod in the Aleutian Islands when the Aleutian Islands CV Harvest Set-Aside is in effect, and their incidental harvests of Pacific cod will accrue toward the Aleutian Islands ICA. CPs will be permitted to conduct directed fishing for Pacific cod in the Aleutian Islands when the Aleutian Islands CV Harvest Set-Aside side is in effect as long as they act only as CVs and deliver their directed catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing. CPs also will be permitted to retain and process Aleutian Islands Pacific cod that is caught as incidental catch while directed fishing for groundfish other than Pacific cod, and those incidental harvests of Pacific cod will accrue toward the Aleutian Islands ICA.

When the Aleutian Islands DFA is greater than 5,000 mt, and therefore the Aleutian Islands CV Harvest Set-Aside is set equal to 5,000 mt, the difference between the DFA and the Aleutian Islands CV Harvest Set-Aside will be available for directed fishing by all non-CDQ fishery sectors with sufficient A-season allocations and may be processed by any eligible processor. This difference is called the “Aleutian Islands Unrestricted Fishery.” In years when there is both an Aleutian Islands CV Harvest Set-Aside and an Aleutian Islands Unrestricted Fishery, vessels may conduct directed fishing for Pacific cod in the Aleutian Islands and deliver their catch to Aleutian Islands shoreplants or to any eligible processor for processing as long as the Aleutian Islands Unrestricted Fishery is open to directed fishing. CPs will be permitted to conduct directed fishing for Pacific cod in the Aleutian Islands and process that directed catch as long as the Aleutian Islands Unrestricted Fishery is open to directed fishing. NMFS will determine whether the Aleutian Islands Unrestricted Fishery is sufficient to support a directed fishery and will notify the public through a notice in the Federal Register.

While the Aleutian Islands CV Harvest Set-Aside is in effect, NMFS will account for Aleutian Islands Pacific cod caught by vessels against the appropriate fishery sector allocation, the ICA or the DFA, and the Aleutian Islands CV Harvest Set-Aside. Examples illustrating this accounting are provided in the preamble of the proposed rule.

If certain notification and performance measures are met, the Aleutian Islands CV Harvest Set-Aside will be in effect from January 1 until March 15 of each year. If the entire set-aside is harvested and delivered prior to March 15, NMFS will lift the Bering Sea Trawl CV A-Season Sector Limitation and Aleutian Islands CV Harvest Set-Aside as soon as possible. The Aleutian Islands CV Harvest Set-Aside will end at noon on March 15 even if the entire set-aside has not been harvested and delivered to Aleutian Islands shoreplants.

When the set-aside ends, any remaining Aleutian Islands DFA may be harvested by any non-CDQ fishery sector with remaining A-season allocation, and the harvest may be delivered to any eligible processor. If a vessel has been directed fishing for Aleutian Islands Pacific cod, but has not yet delivered that Pacific cod for processing when the harvest set-aside is lifted, that vessel may deliver its Pacific cod to any eligible processor. If a vessel has been directed fishing for Aleutian Islands Pacific cod, but has not yet delivered that Pacific cod for processing when the Aleutian Islands Unrestricted Fishery closes, but the Aleutian Islands CV Harvest Set-Aside is still in effect, it will be required to deliver that Pacific cod to an Aleutian Islands shoreplant for processing or be in violation of the directed fishing closure.

The preamble to the proposed rule provides additional background on the factors that the Council and NMFS considered when determining the amount and timing of the Aleutian Islands CV Harvest Set-Aside and is not repeated here.

Stranding is a term sometimes used to describe TAC that remains unharvested due to regulations. This final rule includes performance measures intended to prevent the stranding of Aleutian Islands non-CDQ Pacific cod TAC if the set-aside is not requested, if limited processing occurs at Aleutian Islands shoreplants, or if the Aleutian Islands CV Harvest Set-Aside is taken before March 15.

The first performance measure requires that either the City Manager of the City of Adak or the City Administrator of the City of Atka notify NMFS of the city's intent to process Aleutian Islands Pacific cod in the upcoming fishing year. If neither city notifies NMFS in accordance with regulatory requirements described below, the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside will not be in effect for the upcoming fishing year.

This final rule requires annual notification to NMFS in the form of a letter or memorandum signed by the City Manager of Adak or the City Administrator of Atka stating the city's intent to process Aleutian Islands Pacific cod in the upcoming fishing year. This signed letter or memorandum is the official notification of intent. The official notification of intent must be postmarked no later than December 8, 2016, and no later than October 31 for each year after 2016. The official notification of intent must be submitted to the NMFS Alaska Regional Administrator by certified mail through the United States Postal Service. The City Manager of Adak or City Administrator of Atka must also submit an electronic copy of the official notification of intent and the certified mail receipt with postmark via email to NMFS ([email protected]) no later than December 8, 2016, and no later than October 31 for each year after 2016. Email submission of electronic copies of the official notification of intent and the certified mail receipt with postmark will provide NMFS with the timely information it needs to manage the upcoming fisheries. Email notification is in addition to notification via certified U.S. Mail and does not replace the requirement for notification through the U.S. Postal Service.

A city's notification of intent to process Aleutian Islands Pacific cod must contain the following information: Date, name of city, a statement of intent to process Aleutian Islands Pacific cod, statement of calendar year during which the city intends to process Aleutian Islands Pacific cod, and the signature of and contact information for the City Manager or City Administrator of the city whose shoreplant is intending to process Aleutian Islands Pacific cod.

On or shortly after December 8, 2016, and November 1 for each year after 2016, the Regional Administrator will send a signed and dated letter either confirming receipt of the city's notification of their intent to process Aleutian Islands Pacific cod, or informing the city that notification was not received by the deadline.

While this final rule will make the set-aside available for processing by any shoreplant west of 170° W. longitude in the Aleutian Islands, the notification requirement is required from either Adak or Atka and not another city that might have an Aleutian Islands shoreplant in the future. The Council and NMFS's rationale for this is provided in the preamble of the proposed rule.

The second performance measure removes the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside for the remainder of the A-season if less than 1,000 mt of the Aleutian Islands CV Harvest Set-Aside is delivered to Aleutian Islands shoreplants by February 28. This performance measure will lift the Aleutian Islands CV Harvest Set-Aside and make any remaining amount of the set-aside available to all participants if Aleutian Islands shoreplants are unable to process Pacific cod or if too few or no vessels decide to participate in the set-aside fishery.

The third performance measure suspends the Bering Sea Trawl CV A-Season Sector Limitation for the remainder of the year if the entire Aleutian Islands CV Harvest Set-Aside (5,000 mt in 2017) is fully harvested and delivered to Aleutian Islands shoreplants before March 15.

The preamble to the proposed rule provides additional background on the factors considered by the Council and NMFS when establishing these performance standards and is not repeated here.

During the annual harvest specifications process described in the proposed rule, NMFS will publish in the proposed harvest specifications the amounts for the Aleutian Islands ICA, DFA, CV Harvest Set-Aside, and Unrestricted Fishery, as well as the Bering Sea Trawl CV A-Season Sector Limitation, and the amount available for harvest by trawl CVs in the Bering Sea while the set-aside is in effect. These amounts will be published in a separate table to supplement the table in the harvest specifications that describes the final gear shares and allowances of the BSAI Pacific cod TAC for the upcoming year.

NMFS also will publish a notice in the Federal Register shortly after December 8, 2016, and November 1 for each year after 2016, announcing whether the Aleutian Islands CV Harvest Set-Aside and Bering Sea Trawl CV A-Season Sector Limitation will be in effect for the upcoming fishing year, and whether the harvest limits in the supplemental table will apply. If necessary, NMFS will publish in the Federal Register an adjustment of the BSAI A-season Pacific cod limits for the upcoming year after the Council adopts the harvest specifications in December.

With this final rule, NMFS amends the 2017 final harvest specifications for the groundfish fishery of the BSAI by adding the following Table 8a, which specifies the Aleutian Islands ICA, DFA, CV Harvest Set-Aside, and Unrestricted Fishery, as well as the Bering Sea Trawl CV A-Season Sector Limitation. If NMFS receives timely notification of intent to process from either Adak or Atka, the harvest limits in Table 8a will be in effect in 2017.

NMFS made three changes to the regulatory text from the proposed rule. Two of these changes are in response to comments received on the proposed rule, and one change is made to address administration of this final rule in 2016.

First, this final rule modifies § 679.20(a)(7)(viii)(E)(4) in response to Comment 8. The words “prior to” are changed to “on or before” to reflect the Council's intent. See the response to Comment 8 for the complete justification for this change.

Second, this final rule modifies § 679.20(a)(7)(viii)(D) and (E) to specify that the City Manager of Adak and the City Administrator of Atka are the individuals responsible for notifying NMFS of their city's intent to process Pacific cod in the upcoming year. See the response to Comment 5 for the complete justification for this change.

Third, this final rule modifies § 679.20(a)(7)(viii) to include a separate notification deadline for 2016 for the City Manager of Adak or the City Administrator of Atka to notify NMFS of the intent to process Aleutian Islands Pacific cod in 2017. This final rule requires that the official notification of intent to process for 2017 be postmarked and emailed no later than December 8, 2016. This final rule clarifies that for all years after 2016, this annual notification must be postmarked and emailed no later than October 31.

This change is required to ensure that NMFS provides an opportunity for the City of Adak and the City of Atka to notify NMFS of their intent to process after this final rule has published. Because this final rule will publish and become effective after October 31, 2016, the City of Adak and the City of Atka could not provide timely notification to NMFS of their intent to process in 2017 without this change in the notification deadline. This change enables the cities of Adak and Atka, and vessels delivering to Aleutian Island shoreplants, to receive the benefits of this final rule in 2017 that would otherwise be foregone without this change. NMFS is providing 15 days after the publication of this rule for the City of Adak or the City of Atka to notify NMFS so that the cities have adequate time after the publication of this final rule to prepare and submit their official notification of intent.

NMFS determined that this change will not affect participants in the Aleutian Islands Pacific cod fishery in ways not previously considered and analyzed. The 2016 deadline for submitting notification of intent to process falls between the two dates considered by the Council: Prior to November 1 or prior to December 15. In considering the effect these notification deadlines, the Analysis focuses on the ability of the industry to react if there are no Aleutian Islands shoreplants operating in the upcoming fishing year, stating that selection of the earlier deadline would provide more time for the industry to make the necessary arrangements to harvest and process the non-CDQ Aleutian Islands Pacific cod DFA, and that in general, more notification concerning processing of Aleutian Islands Pacific cod in the upcoming fishing year will help to reduce the risk of unharvested non-CDQ Aleutian Islands Pacific cod TAC. Even so, the Analysis concludes that both date options would give fishery participants sufficient time to plan and prepare before the A-season begins and that ideally notice of intent to process would be provided to NMFS by a date near the end of the December Council meeting. NMFS continues to agree with the Council that October 31 is the preferred deadline of the two dates considered, and this final rule establishes October 31 as the deadline for submission of notification of intent for each fishing year after 2016. However, NMFS has determined that the notification deadline for 2016 will allow Adak and Atka an opportunity to submit notification prior to the start of the 2017 fishing year, thus providing an opportunity for the set-aside to be effective in 2017, rather than having to wait an additional year. Additionally, the 2016 notification deadline will provide fishery participants with sufficient time to plan and prepare before the A-season begins because NMFS will be able to notify fishery participants as to whether the set-aside will be in effect for 2017 prior to December 15 and prior to the end of the December Council meeting. In addition, this change is applicable only for the first year of implementation of this final rule, and will therefore have a limited and temporary effect.

NMFS received 35 unique comments on Amendment 113 and the proposed rule in 18 comment letters from 16 different commenters. The 16 commenters consisted of 2 individuals; 7 companies representing CPs; the Alaska Department of Fish and Game; 1 fish processing company; 1 CDQ group; 2 community development corporations, 1 Aleutian Islands municipal government; and 1 non-profit conservation organization. Of the 16 commenters, 9 explicitly supported adoption of the proposed harvest set-aside. Opponents were companies representing CPs whose vessels could be restricted by this action.

In responding to these comments, when NMFS refers to Amendment 113, unless otherwise noted, NMFS means Amendment 113 and this final rule implementing Amendment 113.

Comment 1: This action is unnecessary. When Adak has an operational plant, it received a significant portion of the Aleutian Islands Pacific cod catch without delivery requirements.

Response 1: In February 2015, the Council identified in a modified problem statement the purpose and need for protections for Aleutian Islands communities as a result of the implementation of rationalization programs, the BSAI Pacific cod TAC split, and relatively low Pacific cod abundance in the Aleutian Islands, among other factors (Section 2.2 of the Analysis). The Council stated that these factors have “. . . increased the risk that the historical share of BSAI cod of other industry participants and communities that depend on shoreplant processing in the region may be diminished.” The Council's rationale for its preferred alternative stated that this action “. . . would provide benefits and stability to fishery dependent communities in the Aleutian Islands and is responsive to changes in management regimes like rationalization programs that necessitate putting protections in place to protect other non-rationalized fisheries” (Section 2.4.3 of the Analysis). The Council's purpose and need statement, the proposed rule, and the Analysis describe the range of factors that have affected delivery patterns in the Aleutian Islands that could limit opportunities for Aleutian Islands shoreplants, harvesters delivering to Aleutian Islands shoreplants, and the communities in the Aleutian Islands. Thorough descriptions of the factors necessitating this action, and the Council's rationale are provided in the “Need for This Proposed Rule” section of the proposed rule and the Analysis and are not repeated here.

In years when the Adak shoreplant was not operational, the offshore processing sector (primarily CPs) was able to process the entire Aleutian Islands TAC (Section 2.7.1.2 of the Analysis), demonstrating that the offshore sector is capable of fully harvesting available catch and preempting the onshore sector's access to the fishery. Table 2-32 of the Analysis shows that prior to 2008, the majority of the Aleutian Islands Pacific cod processed by the offshore sector originated from CP harvest, but after 2008, CV deliveries of Aleutian Islands Pacific cod to CPs played a more prominent role in the offshore processing of Aleutian Islands Pacific cod. Although Aleutian Islands shoreplants operating in Adak have received Pacific cod without a harvest set-aside in the past, NMFS and the Council determined that this action is necessary to minimize the risk of diminished share of Aleutian Islands Pacific cod to Aleutian Islands communities dependent on the fishery and to provide additional stability to promote and sustain Aleutian Islands shoreplants, harvesters delivering to Aleutian Islands shoreplants, and the communities in the Aleutian Islands.

Comment 2: The proposed rule assumes that the increase in offshore processing since the implementation of rationalization programs was a major cause of instability in onshore processing in the Aleutian Islands, but this is not true. There have been long-standing challenges to the viability of shore-based processing in the Aleutian Islands such as ownership changes of Aleutian Islands shoreplants, Steller sea lion protection measures, plant insolvency, energy costs, employment challenges, market conditions, and product transportation difficulties.

Response 2: As explained in the “Need for This Proposed Rule” section of the preamble to the proposed rule and in Section 2.2 of the Analysis, the Council and NMFS recognize that several factors have contributed to instability in processing operations in the Aleutian Islands, including decreased Pacific cod biomass in the Aleutian Islands subarea; the establishment of separate OFLs, ABCs, and TACs for Pacific cod in the Bering Sea and the Aleutian Islands (referred to as the “BSAI TAC split”); changing Steller sea lion protection measures; historical volatility in the Aleutian Islands shoreplant processing sector; and changing fishing practices in part resulting from rationalization programs. The Council, NMFS and this rule do not assume that rationalization programs are the primary cause of this instability, but rather, one of many contributing factors.

Comment 3: This is a wipe-out plan for cod. It will wipe out cod just as this agency did in Maine. Some other system has to be set up for economic sustainability for people in the area. Stop this plan now.

Response 3: NMFS disagrees that Amendment 113 will wipe out Pacific cod. This action will not change the TAC for Aleutian Islands Pacific cod, or conservation and management measures that ensure that harvests of Aleutian Islands Pacific cod do not exceed established OFL, ABC, or TAC limits. Aleutian Islands Pacific cod is managed to a TAC that is set at or below the ABC and the stock is neither overfished nor approaching an overfished condition (see Section 3.3 of the Analysis).

Comment 4: There is no provision in the proposed rule to remove the Aleutian Islands CV Harvest Set-Aside from the FMP and Federal regulations if no on-shore processing activity occurs for a number of years. Does the set-aside continue indefinitely? What would prompt Council re-examination?

Response 4: The commenter is correct; there is no provision in Amendment 113 or this rule that would end, or sunset, the Aleutian Islands CV Harvest Set-Aside if Aleutian Islands shoreplants are not operational for a specified number of years. However, under the performance measures established by this final rule, the Aleutian Islands CV Harvest Set-Aside is effective in a fishing year only if timely and complete notification of intent to process from the City of Adak or the City of Atka is received by NMFS. Presumably, if there is not likely to be an operational Aleutian Islands shoreplant in the upcoming fishing year, these cities would not submit a notification to NMFS. Also, in order for the set-aside to continue to be effective after February 28, a minimum of 1,000 mt of Aleutian Islands Pacific cod must be delivered to Aleutian Islands shoreplants on or before February 28. If, in the future, it appears that the Aleutian Islands CV Harvest Set-Aside is not being used, or Aleutian Islands shoreplants cannot meet the demand, the Council could consider and, if warranted, initiate an action to revise or remove the provisions of Amendment 113 and its implementing regulations.

Comment 5: The proposed rule grants de facto fishery management authority to municipal officials, by requiring them to provide notice to NMFS of the Aleutian Islands shoreplants intent to process Pacific cod in the upcoming year. NMFS is surrendering the determination of whether a shore plant is prepared to process Pacific cod to a community representative who is not a regulated participant in the fishery. This is granting too much power to one individual. The city manager could use this authority to undermine certain businesses or to grant favors. Additionally, Atka does not have a city manager.

Response 5: The Council specified that the City of Adak or the City of Atka should be the entity to provide official notification to NMFS of the community's intent to process Pacific cod, but it did not specify who from Adak or Atka should provide such notification (Section 2.7.2.4 of the Analysis). The Analysis describes that if the notification requirement is implemented, NMFS could specify the person representing the city who should provide the notification.

The commenter notes that the City of Atka does not have a city manager. Technically, that is accurate: Atka has a city administrator. Title 29 of the Alaska Statutes explains the distinctions between a city manager and a city administrator. In the manager form of municipality, the city manager is the chief executive. In a strong-mayor form of municipality, the mayor is the chief executive and the city administrator can exercise powers or duties only as delegated by the mayor and city council. In either case, the role of the manager or administrator is to represent the interests of the city, city council, and mayor. The language in the final rule has been changed to reflect that the city administrator is the person responsible for providing notification to NMFS for Atka.

This type of designation is not unprecedented. For example, in an action to create Community Quota Entities (CQE) for the Halibut and Sablefish Individual Fishing Quota Program (Amendment 66 to the Gulf of Alaska FMP, 69 FR 23681, April 30, 2004), NMFS specified which governing body would be responsible for proposing a potential CQE to NMFS, depending on the governance structure of the particular community. For communities incorporated as municipalities, the governing body identified was the city council. In communities represented by tribal governments, the governing body was the non-profit entity. In similar fashion, and as described in the proposed rule for this action, NMFS determined that the city manager or administrator would be the appropriate person responsible for submitting the required notification to NMFS.

While ownership and management of fish processing facilities may change, it is likely that there will always be someone performing the role of city manager or administrator for Adak and Atka. As elected or appointed officials, these representatives are bound by oath of office to uphold the wishes of their constituents. Currently, both the City of Adak and the City of Atka execute, in good faith, waivers for the delivery requirement for Western Aleutian Islands golden king crab when sufficient processing capacity does not exist in those communities. These cities issue the waiver knowing that it is not in the communities' best interests to strand the crab resource. The notification requirement under Amendment 113 is similar, and it is not clear how the requirement to notify NMFS of the communities' intent to process Pacific cod grants too much power to the city manager or administrator. NMFS expects that the city manager or administrator will be in communication with the shoreplant manager and local fishing fleet prior to the notification deadline to ensure that the shoreplant will be able to accept deliveries of Pacific cod once the set-aside goes into effect. If, for some reason, the shoreplant does not operate as anticipated, the 1,000 mt minimum processing performance measure would not be met by February 28 and the set-aside would be lifted.

NMFS does not consider the notification requirement to be a de facto grant of fishery management authority to the city manager or administrator. The Council and NMFS have established the fishery management policy with regard to Aleutian Islands Pacific cod. The intent of the Council and NMFS with Amendment 113 and this final rule is to have an Aleutian Islands CV Harvest Set-Aside in place for Aleutian Islands fishing communities, and the harvesters and shoreplants that are part of those communities, to utilize. Recognizing that there may be years when Aleutian Islands shoreplants may not be operational, the notification provision was a fishery management decision by the Council and NMFS to provide for an orderly start to the fishing year and as a way to prevent the set-aside from becoming effective if neither city intends to process in the upcoming fishing year. The city manager or administrator is the person from whom NMFS will expect to receive notification of the city's intent to process Pacific cod and to whom NMFS will confirm that notification has been received. Under this final rule, the city manager or administrator is providing information to NMFS on anticipated processing activities based on knowledge gained from Aleutian Islands shoreplants in their communities. City managers and administrators are not delegated any authority to open or close fisheries, assess catch amounts, or take other actions provided in regulation. Notification is not to be confused with an active role in administering regulations. NMFS is ultimately responsible for taking any management actions once a notification has been received.

Comment 6: If this rule is implemented, NMFS will notify Adak or Atka city managers if they have not received their notifications of intent to process. This seems at odds with other programs that have notification dates, such as submission of annual cooperative notifications to NMFS. There is no regulatory language that provides for NMFS to notify the entity or person that it has not received cooperative information regarding the next year's intent to process.

Response 6: The commenter is referring to the regulatory language at (a)(7)(viii)(D)(3) which explains how NMFS will provide confirmation to the City Manager of the City of Adak or the City Administrator of the City of Atka if their notification of intent to process Aleutian Islands Pacific cod has been received or not. This confirmation is to let the city know that the set-aside will or will not be in effect for the upcoming year. Similarly, NMFS will publish a notice in the Federal Register to inform the public whether the set-aside will be in effect. NMFS will not offer these cities additional time to provide notification if it was not received by the deadline and according to the requirements stated in regulations.

Comment 7: NMFS received 11 comment letters from 9 different entities in support of Amendment 113 and its implementing regulations. In general, the comments emphasized that three interacting issues have affected the viability of shoreside operations in the Aleutian Islands: the BSAI Pacific cod biomass estimates and TAC split, Steller sea lion protection measures, and rationalization programs. The commenters noted that fish processing is the core economic driver for the communities of Adak and Atka and that these communities have been negatively impacted by prior management actions. They stressed that Aleutian Islands communities, Adak and Atka in particular, need the kind of protections that the Council has provided to communities in the Gulf of Alaska (GOA) and Bering Sea for pollock, and to GOA communities for Pacific cod by limiting the amount that can be delivered either inshore or offshore. These commenters considered stable access to at least 5,000 mt of Aleutian Islands Pacific cod from the Federal fishery essential for maintaining viable communities in Adak and Atka. These commenters concluded that this final rule provides community protections for shorebased processing in the Aleutian Islands management area that are critical to the survival of Aleutian Islands communities.

Response 7: NMFS acknowledges the comments in support of Amendment 113. The Secretary, through her designee, the Assistant Administrator for Fisheries, approved Amendment 113 on October 17, 2016, and implements Amendment 113 with this final rule. The Secretary concluded that the Aleutian Islands CV Harvest Set-Aside in Amendment 113 is consistent with the Magnuson-Stevens Act, including the National Standards, and other applicable law.

Comment 8: The proposed regulatory language for the minimum Aleutian Islands shoreplant landing requirement at § 679.20(a)(7)(viii)(E)(4) states that “if less than 1,000 mt of the Aleutian Islands Catcher Vessel Harvest Set-Aside is landed at Aleutian Islands shoreplants prior to February 28, then paragraphs (a)(7)(viii)(E)(1) for the Bering Sea Trawl CV A-season Sector Limitation and (2) for the Aleutian Islands CV Harvest Set-Aside will not apply for the remainder of the fishing year.” However, the preamble to the proposed rule and the Council motion clearly state that this performance measure must be met “by” February 28. This change in the proposed regulatory language from the Council's motion would give Aleutian Islands shoreplants one less day to fulfill the minimum delivery requirements. This one-day difference is not insignificant to Aleutian Islands shoreplants. An average of 178 mt of Pacific cod was landed at Adak on February 28 from 2002 through 2009. Landings on February 28 represent a substantial portion of the proposed 1,000-mt minimum landing requirement performance measure. The commenters request that the proposed regulatory language at § 679.20(a)(7)(viii)(E)(4) be changed so that landings made “on or before” February 28 will count toward the performance measure threshold.

Response 8: NMFS agrees. The Council motion, the preamble to the proposed rule, the Analysis, the FMP amendment text, and the notice of availability for the FMP amendment all state that 1,000 mt must be landed “by,” not “prior to,” February 28. The proposed regulatory language was inadvertently written in a way that contradicts the Council's intent for this performance measure. Inclusion of February 28 in the minimum landings period is important and necessary. As noted in Section 2.7.2.5 of the Analysis, Aleutian Islands Pacific cod tend to aggregate in late February to early March, and these aggregations are optimal for efficient trawl fishing. NMFS has changed § 679.20(a)(7)(viii)(E)(4) to clarify that landings made “on or before” February 28, rather than “prior to” February 28, will be used to determine whether the minimum landings requirement has been met.

Comment 9: As a longtime, small boat, Aleutian Islands fisherman, it is vital to my longline operation and to other small and entry level vessel owners to have a stable shoreside processing facility in the Aleutian Islands. Amendment 113 will create numerous opportunities for small boats and the community of Adak.

Response 9: NMFS acknowledges the support for this action.

Comment 10: We support solutions that optimize and create sustainable social, economic, and conservation outcomes. Amendment 113 and this final rule will help the economic sustainability of Adak and Atka and will help the aspirations of the Aleut people to repopulate some of the islands of the western Aleutians. Amendment 113 and this final rule may also improve the conservation and ecosystem sustainability of the area. Giving the local inhabitants a larger financial stake in the sustainability of the local ecosystem is an important step in a long process leading to better conservation. We firmly believe that where local, and particularly Alaska Natives, have more control over resource extraction, the conservation outcome is likely to be better.

Response 10: NMFS acknowledges the comment and the support for Amendment 113 and this final rule.

Comment 11: Trawl vessels catch large quantities of vulnerable deep sea corals and sponges in the area. Shifting to other gear types in the Aleutian Islands Pacific cod fishery may help protect these vulnerable species.

Response 11: NMFS acknowledges the comment but notes that this final rule does not modify the areas or types of gear that can be used to harvest fishery resources in the Aleutian Islands.

Comment 12: There is an error in the fourth row of Table 4 in the preamble of the proposed rule. The fourth row in Table 4 refers to the “BSAI non-CDQ TAC.” This row should have read “BS non-CDQ TAC.”

Response 12: NMFS agrees that the fourth row in Table 4 of the proposed rule preamble should have read “BS non-CDQ TAC.” The amount of Pacific cod proposed for the BS non-CDQ TAC in the fourth row of Table 4 was accurate. This final rule modifies the final 2016 and 2017 harvest specifications to add a supplemental table, Table 8a, that provides the 2017 catch limits for Pacific cod under Amendment 113 and this final rule. NMFS will publish a notice in the Federal Register in December 2016 if there will be any changes to these amounts. NMFS will also publish a notice in the Federal Register to inform the public if the Aleutian Islands CV Harvest Set-Aside and Bering Sea Trawl Catcher Vessel Sector Limitation will be in effect in 2017. Table 8a displays the correct name of the allocation and the correct amount. No changes to the regulatory text are necessary in response to this comment.

Comment 13: The agency has not followed the requisite process under the National Environmental Policy Act (NEPA). In particular, an environmental impact statement (EIS) should have been completed. The action is clearly controversial, as it has been under consideration for over 8 years in the Council process. A more thorough review might have compelled NMFS to reject this action.

Response 13: According to NEPA and Council on Environmental Quality (CEQ) regulations at 40 CFR 1502.3, an EIS is required when a fishery management action may significantly affect the quality of the human environment. Determining whether an action may significantly affect the quality of the human environment requires considerations of both context and intensity, and regulations at 40 CFR 1508.27(b) list several factors that are to be considered in evaluating the intensity of an action. One of these factors is the degree to which the effects on the quality of the human environment are likely to be highly controversial (40 CFR 1508.27(b)(4)). Before deciding whether to complete an EIS, agencies may prepare an EA to determine whether an EIS must be prepared or a finding of no significant impact (FONSI) can be made (40 CFR 1501.3 and 1508.9). If the EA results in a FONSI, an EIS is not needed.

Courts have held that an action is “highly controversial” when there is a substantial dispute about the size, nature, or effect of the action, or when substantial questions are raised as to whether a proposed action may cause significant degradation of some human environmental factor. Courts have also held that the existence of opposition to an action does not raise the level of controversy to the point that an EIS is required. Additionally, as stated in 40 CFR 1508.14 and in Section 3 of the Analysis, economic and social impacts by themselves are not sufficient to require the preparation of an EIS.

In accordance with NEPA and the CEQ regulations, the Council and NMFS appropriately prepared an EA for this action, which analyzes the potential effects of the action on individual resource components, as well as the potential cumulative effects. The EA was prepared using the best available scientific information. Using the information and analysis in the EA, the Council and NMFS reviewed the potential impacts of this action on the human environment as required under NEPA. After reviewing the impacts of this action, the Regional Administrator prepared and signed a FONSI, determining that the action will not result in significant impacts to the quality of the human environment, and further analysis in an EIS is not needed. NMFS determined that the action will make relatively minor changes to the timing and location of fishing for Pacific cod by vessels in the BSAI and that no significant changes in total harvests or when, where, and how fishing occurs are expected with the action.

The commenter implies that the length of time it took the Council to consider and take final action on Aleutian Islands community protection measures makes Amendment 113 and the regulations inherently controversial and therefore requires the preparation of an EIS. NMFS disagrees that the mere length of time this action was under consideration by the Council is indicative of a level of controversy that requires the preparation of an EIS. The implementation of several rationalization programs, Steller sea lion protection measures, the BSAI TAC split, and decreasing biomass of Aleutian Islands Pacific cod, all of which occurred while the Council was considering community protection measures for the Aleutian Islands, considerably changed the way in which the BSAI Pacific cod fishery was managed and conducted by participants. The Council reasonably wanted to examine and understand the effects these changes would have on the BSAI Pacific cod fishery before taking final action. After examining the effects of these changes on Aleutian Islands communities, the Council determined that the community protections that will be implemented by Amendment 113 and this final rule are warranted and necessary. The effects of this action on the quality of the human environment are not in dispute. To the extent that there has been controversy over, or opposition to, the action, the controversy or opposition has been largely related to potential economic and social impacts which do not require the preparation of an EIS.

Comment 14: National Standard 4 of the Magnuson-Steven Act states, “Conservation and management measures shall not discriminate between residents of different states. If it becomes necessary to allocate or assign fishing privileges among various United States fishermen, such allocation shall be (A) fair and equitable to all such fishermen; (B) reasonably calculated to promote conservation; and (C) carried out in such manner that no particular individual, corporation, or other entity acquires an excessive share of such privileges.” Amendment 113 and this final rule violate National Standard 4. In fact, a 2009 letter from Acting Regional Administrator Mecum to North Pacific Fishery Management Council Chair Olson noted that the proposed set-aside could violate National Standard 4's requirements that allocations be fair and equitable and do not create excessive shares. They are not fair and equitable, do not promote conservation, and would allocate an excessive share to a particular entity. The plant in Atka has never processed cod and has no historical dependency on the Federal non-CDQ Aleutian Islands Pacific cod fishery. Adak is the sole entity that will benefit from this action. Adak would receive an excessive share, i.e., the entire Aleutian Islands CV Harvest Set-Aside, which is a de facto processor share not authorized by the Magnuson-Stevens Act.

Response 14: NMFS has determined that this action is consistent with National Standard 4. Amendment 113 and this final rule do not include any measures that discriminate between residents of different states. While Amendment 113 and this final rule establish the set-aside for vessels that deliver their catch of Aleutian Islands Pacific cod to Aleutian Islands shoreplants for processing, any properly permitted and licensed vessel, operated by any resident of any community or state, can participate in the Aleutian Islands CV Harvest Set-Aside. Participation in the set-aside or in the Unrestricted Fishery is not premised on residency in a particular state. Participation in the BSAI Pacific cod fishery is governed by regulations that were determined to be consistent with National Standard 4 and neither Amendment 113 nor this final rule change the permitting and licensing requirements currently in place. This final rule does not preclude residents of any state from participation in any fishery in the Aleutian Islands as either a harvester or operator of an Aleutian Islands shoreplant. Appropriately licensed and endorsed vessels will still have the opportunity to prosecute the fishery, and any person wishing to operate a processing facility with the appropriate license in the area may still do so.

Amendment 113 and this final rule establish a set-aside that allocates the Aleutian Islands non-CDQ Pacific cod DFA during a portion of the A-season among those harvesting vessels that conduct directed fishing for Aleutian Islands Pacific cod and deliver their catch to Aleutian Islands shoreplants for processing and those harvesting vessels that conduct directed fishing for Aleutian Islands Pacific cod and deliver their catch for processing to any eligible processor other than Aleutian Islands shoreplants. Therefore, this allocation must be fair and equitable to all such fishermen, reasonably calculated to promote conservation, and carried out in such manner that no particular individual, corporation, or other entity acquires an excessive share of such privileges, consistent with National Standard 4. For the reasons provided below, NMFS has determined that Amendment 113 and this final rule are consistent with National Standard 4's requirements for allocations.

NMFS has determined that the set-aside is fair and equitable to all participants in the BSAI Pacific cod fishery. Vessels from all non-CDQ sectors can participate in the set-aside and each sector will continue to have access to its entire BSAI Pacific cod allocation. This action also addresses an inequity that has occurred, in part, from the establishment of rationalization programs and minimizes the risk of future inequities in the prosecution of the Aleutian Islands Pacific cod fishery. The Council and NMFS determined that the protections in Amendment 113 and this final rule are necessary to mitigate the effects of previous Council actions. Offshore processing activity has taken an increasing proportion of the Aleutian Islands Pacific cod fishery in some recent years due to a variety of factors described in the preamble to the proposed rule and in the Analysis. At the same time, the historical share of the BSAI Pacific cod fishery delivered to Aleutian Islands shoreplants has decreased.

The maximum cap of 5,000 mt for set-aside is representative of the long-term average annual amount of Pacific cod processed by Aleutian Islands shoreplants that includes years both before and after significant changes in the BSAI Pacific cod fishery occurred. Establishing a maximum amount, rather than a percentage, for the set-aside will protect Aleutian Islands fishing communities during years of relatively low Aleutian Islands Pacific cod TAC, will ensure the set-aside remains representative of past participation levels by Aleutian Islands fishing communities, and will benefit those who do not participate in the set-aside fishery during years of relatively high Aleutian Islands Pacific cod TAC by allowing the amount allocated to the Unrestricted Fishery to increase with increases in TAC.

This action is also fair and equitable because the set-aside will be in effect only when the Aleutian Islands fishing communities it is intended to benefit are prepared and actively engaged in participation. When Aleutian Islands communities are unable to accept deliveries of Pacific cod for processing, there are mechanisms built into the final rule that will lift the set-aside and allow others to have access to the remaining harvest.

NMFS also has determined that the set-aside is reasonably calculated to promote conservation. Amendment 113 and this final rule do not modify the process for specifying OFLs, ABCs, or TACs for the Bering Sea and Aleutian Islands Pacific cod fishery, the allocation of BSAI Pacific cod to CDQ and non-CDQ fishery participants that is established in existing regulations, or the allocation of BSAI Pacific cod among non-CDQ fishery participants. NMFS will continue to manage the fishery so that harvests stay within specified and allocated amounts. Additionally, Amendment 113 and this final rule continue to promote and do not undermine the conservation measures established under the Steller sea lion protection measures, Amendment 85 allocations, and Amendment 80 rationalization.

Finally, NMFS determined that the set-aside will be carried out in such manner that no particular individual, corporation, or other entity acquires an excessive share of the Aleutian Islands Pacific cod fishery. NOAA's guidance on National Standard 4 states that “only those measures that result in direct distributions of fishing privileges will be judged against the allocation requirements of Standard 4” (§ 600.325(c)(1)). This final rule establishes a set-aside for any otherwise eligible vessel that conducts directed fishing for Aleutian Islands Pacific cod and delivers its catch to any Aleutian Islands shoreplant for processing. No particular individual, corporation, or other entity participating in either the set-aside or the Unrestricted Fishery will be able to acquire an excessive share of the Aleutian Islands Pacific cod fishery under Amendment 113 and this final rule. All vessels will continue to have catch attributed to their sector, and Amendment 113 and this final rule do not create any new allocations to particular individuals, corporations, or other entities fishing for Aleutian Islands Pacific cod. Additionally, Amendment 113 and this final rule do not limit participation in the set-aside to a discreet subset of vessels that meet certain criteria. As explained earlier, any properly permitted and licensed vessel, operated by any resident of any community or state, within any BSAI Pacific cod non-CDQ sector can participate in the Aleutian Islands CV Harvest Set-Aside.

The commenter asserts that Adak will receive an excessive share in violation of National Standard 4 because the shoreplant in Adak is the only processor in the Aleutian Islands that has processed Pacific cod and it therefore will receive the entire Aleutian Islands CV Harvest Set-Aside. Section 2.6.8 of the Analysis describes the two shoreplants currently in the Aleutian Islands—one in Adak and one in Atka. Although Atka has not processed Pacific cod and Adak has processed Pacific cod, this final rule does not provide a specific allocation of fishing privileges to either of these Aleutian Islands shoreplants. Amendment 113 does not provide Adak or Atka with fishing privileges in the Aleutian Islands Pacific cod fishery.

The commenter also asserts that Amendment 113 and this final rule establish a processor share or exclusive processing privilege for Adak which is not authorized by the Magnuson-Stevens Act. This aspect of Comment 14 is also expressed in Comment 18. NMFS refers the reader to its detailed response to this comment in its response to Comment 18.

Finally, the commenter refers to a letter dated January 28, 2009, from Robert D. Mecum, Acting Administrator, Alaska Region, NMFS, to Eric Olsen, then Chairman of the Council. According to the commenter, NMFS noted in this letter that the proposed set-aside could violate National Standard 4's requirement that allocations be fair and equitable and not create excessive shares. While NMFS acknowledges the letter, NMFS disagrees that the letter provides support for the claim that Amendment 113 and this final rule are inconsistent with National Standard 4.

The action under consideration by the Council when NMFS sent the letter was not the set-aside action in Amendment 113 but a different action that would have established processing sideboards on processing vessels eligible under the AFA, BSAI crab rationalization program, and BSAI Amendment 80 program that received deliveries of Pacific cod harvested in the Eastern and Central Aleutian Islands (Areas 541 and 542). Under that action, CPs, floating processors, and motherships in these programs would have been limited in the amount of CV deliveries they could receive of Pacific cod harvested in Area 541 and/or 542 on an annual basis, or prohibited from taking deliveries prior to a specific date. The 2009 letter from NMFS encourages the Council to pay particular attention to National Standard 4's prohibition against allocation of excessive shares of fishing privileges and requirement that allocation actions be reasonably calculated to promote conservation. NMFS advised the Council that if it chose to proceed with the action under consideration at that time, it would need to provide a rationale that clearly demonstrated that the action was consistent with these aspects of National Standard 4. However, NMFS also stated, “Based on our discussions with NOAA GC, these issues do not appear to preclude the proposed action . . . .”

In developing Amendment 113, the Council considered the advice provided by NMFS and modified the action to address inordinate control concerns by conditioning the set-aside on the achievement of certain performance measures which, if not satisfied, will lift the set-aside; by capping the maximum amount of the set-aside at a level that will provide the protections and stability the Council wanted to create for Aleutian Islands fishing communities, particularly in times of relatively low Aleutian Islands Pacific cod TAC, and that will allow for the continued participation of the offshore sector; and by allowing any vessel and any Aleutian Islands shoreplant to participate in the set-aside. The Council also designed Amendment 113 and this final rule to promote conservation and to prohibit acquisition of an excessive share of fishing privileges as explained earlier in this response.

Comment 15: This action was reasonably calculated to promote conservation as required under National Standard 4 because it will reduce the amount of halibut prohibited species catch (PSC).

Response 15: NMFS acknowledges the comment. NMFS believes that the commenter is referring to data that indicate that halibut PSC rates are much lower in the Aleutian Islands Pacific cod fishery than in the Bering Sea Pacific cod fishery (Section 2.7.2.2 of the Analysis). The commenter seems to suggest that if more fishing occurs in the Aleutian Islands relative to the Bering Sea because of this final rule, overall halibut PSC usage in the BSAI could potentially decrease. NMFS cannot predict how halibut PSC rates or overall use may change in response to this final rule, if at all. NMFS notes that this final rule will not affect the total maximum permissible amount of halibut PSC established for BSAI groundfish fisheries. As stated in the response to Comment 14, Amendment 113 and this final rule continue to promote and do not undermine the conservation measures established under existing regulations.

Comment 16: The proposed rule will result in TAC being “stranded” in the Aleutian Islands Pacific cod fishery and it therefore violates National Standard 1 of the Magnuson-Stevens Act because it does not promote achievement of optimal yield. The proposed rule suggests that performance measures, such as the 1,000-mt minimum landings requirement, would prevent the stranding of Aleutian Islands Pacific cod because other sectors would have access to the fishery once the harvest restrictions and delivery requirements are lifted. However, the fleet cannot adjust in the time frames proposed. The midseason announcements intended to prevent stranding a portion of the Aleutian Islands Pacific cod TAC cannot possibly be effective, given that vessels will be fishing at that time and will likely need to interrupt that fishing to prepare gear for the Aleutian Islands Pacific cod fishery. These vessels would then need to transit to the area from the Bering Sea or Gulf of Alaska. Additionally, delays between when catch is landed and reported to NMFS, and when NMFS can reopen the fishery may further reduce the amount of time available to harvest the remaining TAC while the desirable aggregations of Pacific cod are still available.

Response 16: The Council and NMFS determined that Amendment 113 and this final rule are consistent with National Standard 1. Optimum yield, as defined in the Magnuson-Stevens Act, is that amount of fish which “will provide the greatest overall benefit to the Nation, particularly with respect to food production and recreational opportunities, and taking into account the protection of marine ecosystems” and the amount of fish which “is prescribed as such on the basis of the maximum sustainable yield from the fishery, as reduced by any relevant economic, social, or ecological factor” (16 U.S.C. 1802(33)(A) and (B)). Amendment 113 and this final rule do not change the optimum yield of the BSAI groundfish fisheries, which is specified in regulations as a range from 1.4 million to 2.0 million mt (§ 679.20(a)(1)(i)(A)). NMFS notes that optimum yield refers to a broad range of harvest spanning all species within the BSAI groundfish fisheries, not the TAC for a given species and area in a year. Even if the entire Aleutian Islands Pacific cod TAC were not harvested in a year, optimum yield could still be achieved, consistent with National Standard 1.

The Aleutian Islands Pacific cod OFL, ABC, and TAC, and the process by which NMFS manages the fishery to stay within those limits, will not change as a result of this action. Specifically, this final rule includes several provisions to prevent stranded Pacific cod TAC in the Aleutian Islands and should ensure full harvest of the Aleutian Islands Pacific cod DFA, thus promoting the achievement of optimum yield in the Bering Sea and Aleutian Islands groundfish fisheries. As noted in the response to Comment 14, this final rule does not limit or constrain the proportion of the TAC allocated to CDQ or non-CDQ fishery participants.

NMFS expects that vessel operators will adapt their fishing plans in a variety of ways to accommodate the Aleutian Islands CV Harvest Set-Aside, and expects that sufficient catch monitoring already exists, and notification requirements will be put into effect with this final rule, for vessel operators to predict when and if they should gear up and transit to the Aleutian Islands to fish for Pacific cod. For example, if NMFS has not received notification prior to November 1 of an Aleutian Islands city's intent to process Pacific cod, the A-season Pacific cod fishery will be available to all participants and those participants will have more than two months to prepare. In years with sufficient TAC for an Unrestricted Fishery to commence, vessels may already be fishing in the Aleutian Islands when the Aleutian Islands CV Harvest Set-Aside is lifted. In years when the Aleutian Islands TAC is low and an Unrestricted Fishery will not be available, vessel operators may choose to only fish in the Bering Sea. NMFS posts weekly landing reports by fishery to help the agency and fishery participants project when fisheries will open and close.

NMFS disagrees that delays in catch accounting will further shorten the time available for the fleet to harvest the remaining Aleutian Islands TAC if the 1,000-mt performance standard is not met on or before February 28 or if the full Aleutian Islands CV Harvest Set-Aside is harvested allowing the fishery to be opened to all participants. NMFS tracks harvests and projects when catch limits will be reached so that the announcement can be prepared and the fishery can be opened or closed, as applicable, on the appropriate date. NMFS expects to open the Aleutian Islands Pacific cod fishery as soon as necessary. For example, if Aleutian Islands shoreplants have not met the 1,000-mt performance measure by February 28, NMFS would have anticipated that in advance and be prepared to open the fishery to all eligible participants promptly on March 1 (or February 29, if a leap year). Likewise, NMFS would be prepared to lift the Bering Sea Trawl CV A-Season Sector Limitation if the full set-aside were harvested prior to March 15. The Council considered NMFS' Catch Accounting and Inseason Management protocols when selecting dates for the set-aside.

Comment 17: This final rule promotes conservation and should be viewed as a “trailing amendment” to the actions to establish separate Aleutian Islands and Bering Sea Pacific cod OFLs, ABCs, and TACs, and to implement new Steller sea lion protection measures. Both of these actions were implemented for conservation purposes and the Council chose to wait to enact community protections until they could determine what the effects of those actions on Aleutian Islands communities would be.

Response 17: NMFS acknowledges the comment. As stated in the response to Comment 14, Amendment 113 and this final rule continue to promote and do not undermine the conservation measures established under existing regulations, such as the BSAI TAC split and Steller sea lion protection measures.

Comment 18: This action is a violation of National Standard 8. National Standard 8 does not constitute a basis for allocating resources to a specific fishing community nor for providing preferential treatment based on residence in a fishing community. National Standard 8 applies to allocation of fishing, not processing, privileges.

Response 18: Because of their remote location and limited economic alternatives, Aleutian Islands communities rely on harvesting and processing of the nearby fishery resources to support and sustain their communities. National Standard 8 requires that conservation and management measures take into account the importance of fishery resources to fishing communities by utilizing economic and social data that meet the requirements of National Standard 2 in order to provide for the sustained participation of such communities, and to the extent practicable, minimize adverse economic impacts on such communities (16 U.S.C. 1851(a)(8)). National Standard 8 guidelines recommend that “. . . where two alternatives achieve similar conservation goals, the alternative that provides the greater potential for sustained participation of such communities and minimizes the adverse economic impacts on such communities would be the preferred alternative” (50 CFR 600.345(b)(1)). The guidelines further state that “fishing community” means a community that is substantially dependent on or substantially engaged in the harvest or processing of fishery resources to meet social and economic needs, and includes fishing vessel owners, operators, and crew, and fish processors that are based in such communities. A fishing community is a social or economic group whose members reside in a specific location and share a common dependency on commercial, recreational, or subsistence fishing or on directly related fisheries-dependent services and industries (for example, boatyards, ice suppliers, tackle shops) (50 CFR 600.345(b)(3)). The Council and NMFS considered the importance of fishery resources to Aleutian Islands fishing communities such as Adak and Atka and determined that community protections were necessary to provide for the sustained participation of these communities in the Aleutian Islands Pacific cod fishery. The Council and NMFS determined that Amendment 113 and this final rule are therefore consistent with National Standard 8.

As discussed in the preamble to the proposed rule and in the Analysis, this final rule does not allocate processing privileges. This final rule allocates fishing privileges for Aleutian Islands Pacific cod through the establishment of a set-aside for a portion of the Aleutian Islands Pacific cod TAC available for harvest by vessels directed fishing for Aleutian Islands Pacific cod and that deliver their catch to Aleutian Islands shoreplants for a portion of the year and only if specific notification and performance requirements are met. This final rule does not change any percentage allocations of Pacific cod established under Amendment 85 to the FMP and existing regulations for the CDQ or non-CDQ fishery sectors as described in § 679.20(a)(7). This final rule does not allocate exclusive fishing privileges to a specific harvester, community, processor, or to residents of a specific community.

Under this final rule, any properly permitted and licensed vessel, operated by any resident of any community or state, can harvest the portion of the Aleutian Islands Pacific cod TAC in the Aleutian Islands CV Harvest Set-Aside. Under this final rule, catch harvested from the set-aside can be delivered to any Aleutian Islands shoreplant in any Aleutian Islands community, and no exclusive opportunity to receive any portion of the set-aside is provided to an Aleutian Islands shoreplant or to a person based on residency in an Aleutian Islands community. As explained in the response to Comments 14 and 19, Amendment 113 and this final rule do not create a processing privilege.

As described in the Analysis, the preamble to the proposed rule, and in public testimony provided at Council meetings, Aleutian Islands Pacific cod is an important component of the socioeconomic health of the community of Adak, and may become a more critical piece of the processing in Atka. In Adak, the Aleutian Islands Pacific cod fishery provides income to harvesters, processors, and other businesses providing support services. Section 2.6.8 of the Analysis suggests that without the set-aside, it is very likely that the processing plant in Adak will not be capable of sustained participation in the future (see also Comment 1). Although Atka has not historically participated in the Aleutian Islands Pacific cod fishery, the Aleutian Pribilof Islands Community Development Association (APICDA) has been working with investors to make substantial infrastructure improvements to their harbor to enhance the local fishing fleet and to the shoreplant so it may operate year-round. Comments submitted by APICDA indicate that harvesting and processing Aleutian Islands Pacific cod are critical to the success of these developments in this remote community. Additional information about Atka is provided in Section 2.6.8 of the Analysis.

The Aleutian Islands Pacific cod fishery is a pulse fishery that operates for several weeks in late February and March. This pulse is the most profitable time of the season for Pacific cod in the region. These few weeks of the Federal-waters Pacific cod fishery are a critical part of these remote operations.

This action is consistent with the management objectives in the FMP and the Programmatic Supplemental Environmental Impact Statement (available at https://alaskafisheries.noaa.gov/node/33552). Specifically, NMFS refers the reader to objectives related to potential societal benefits, such as providing socially and economically viable fisheries for the well-being of fishing communities and balancing many competing uses of marine resources and different social and economic goals for sustainable fishery management, including protection of the long-term health of the resource and the optimization of yield.

Comment 19: This action should have been analyzed as a limited access privilege program. The eligibility requirements to grant limited access privileges to communities under the Magnuson-Stevens Act were not followed.

Response 19: Amendment 113 and this final rule do not create a limited access privilege as defined in the Magnuson-Stevens Act (16 U.S.C. 1802(26)). The Magnuson-Stevens Act defines “limited access privilege” as a Federal permit, issued as part of a limited access system under section 303A to harvest a quantity of fish expressed by a unit or units representing a portion of the total allowable catch of the fishery that may be received or held for exclusive use by a person, and includes an individual fishing quota, but does not include community development quotas as described in section 305(i). As stated in responses to previous comments, this final rule does not provide any person a portion of the Aleutian Islands Pacific cod TAC that may be received or held for exclusive use. Amendment 113 and this final rule do not assign the Aleutian Islands CV Harvest Set-Aside, in whole or in part, to any one person, Aleutian Islands shoreplant, or community for harvesting or delivery. All harvesters have access to the Aleutian Islands CV Harvest Set-Aside if they are willing to deliver their catch to an Aleutian Islands shoreplant. Any Aleutian Islands shoreplant can accept deliveries from the Aleutian Islands CV Harvest Set-Aside. While the practical effect of Amendment 113 and this final rule may be that harvesters in the Aleutian Islands CV Harvest Set-Aside may have only one Aleutian Islands shoreplant to deliver their catch (Adak), one or more Aleutian Islands shoreplants could become operational at any time and accept deliveries from harvesters in the Aleutian Islands CV Harvest Set-Aside, reducing the amount that Adak could receive. Therefore, Adak is not provided an exclusive processing privilege under Amendment 113 or this final rule (see also response to Comments 14 and 18). Amendment 113 and this final rule set-aside a portion of the Aleutian Islands DFA during the A-season for vessels that conduct directed fishing for Aleutian Islands Pacific cod and deliver their catch to Aleutian Islands shoreplants for processing. Because Amendment 113 and this final rule do not establish a limited access privilege, Amendment 113 and this final rule do not create a limited access privilege program and the eligibility requirements for limited access privilege programs in the Magnuson-Stevens Act at section 303A (16 U.S.C. 1853a) do not apply to Amendment 113 and this final rule.

Comment 20: National Standard 5 states that “Conservation and management measures shall, where practicable, consider efficiency in the utilization of fishery resources; except that no such measure shall have economic allocation as its sole purpose.” This action is inconsistent with National Standard 5 because it fosters inefficiency and has no purpose other than economic allocation. The Draft Analysis acknowledged that the set-aside “could potentially lead to a lower price for catch and reduce efficient utilization,” and it is uncertain that this action would benefit Aleutian Islands communities. Adak serves as a port of embarkation and provides goods and services to the fleet. By reducing the number of port visits by CPs during a critical part of the year, this action may actually result in lost economic activity for Adak.

Response 20: Amendment 113 and this final rule set aside a portion of the Aleutian Islands Pacific cod fishery for harvest by certain vessels. The primary objective of this action is to provide Aleutian Islands communities with access to and sustained participation in the Aleutian Islands Pacific cod fishery, and to minimize the adverse impacts of a range of management actions on those communities. This objective is consistent with the goals of the FMP and with National Standard 8 (see response to Comment 18 for additional explanation of consistency with National Standard 8).

The Council and NMFS have determined that Amendment 113 and this final rule are also consistent with National Standard 5. According to the National Standard 5 guidelines, the term “utilization” encompasses harvesting, processing, marketing, and non-consumptive uses of the resource, since management decisions affect all sectors of the industry (§ 600.330(b)(1)). National Standard 5 does not refer exclusively to harvesting. While rationalization programs increased efficiency of harvesting the resource, they did so in part at the expense of Aleutian Islands communities. The Council and NMFS can, and must, implement conservation and management measures that are consistent with all of the National Standards.

Section 2.6.2.2 of the Analysis examines some of the potential gains and losses in efficiency that may result from Amendment 113. The Analysis acknowledges that there may be some losses to communities resulting from fewer port visits by CPs. On the other hand, efficiencies may be gained by having a local fishing fleet that can fish closer to shore. Public comments submitted in support for Amendment 113 and this final rule suggest that the communities believe the benefits of this action to Aleutian Islands outweigh any potential losses (see Comment 7). While the efficiency of utilizing shoreplant processing in remote parts of the Aleutian Islands can be debated, the social and economic benefits the shoreplants provide to the communities in which they are located are tangible.

In this particular case, the Council and NMFS have sought to balance the objectives of efficiency under National Standard 5 with the social and economic considerations of Aleutian Island communities under National Standard 8. This type of balance is contemplated in the National Standard 5 guidelines which note, “Unless the use of inefficient techniques or the creation of redundant fishing capacity contributes to the attainment of other social or biological objectives, an FMP may not contain management measures that impede the use of cost-effective techniques of harvesting, processing, or marketing, and should avoid creating strong incentives for excessive investment in private sector fishing capital and labor” (§ 600.330(b)(2)(ii)). In this case, the Council and NMFS considered a range of social factors in addition to efficiency, including providing socially and economically viable fisheries for the well-being of Aleutian Islands fishing communities. Consistent with the National Standard 5 guidelines, the Council and NMFS have prepared an analysis and rulemaking that justify these measures “in light of the biological, ecological, and social objectives of the FMP, as well as the economic objectives” (§ 600.330(e)).

Comment 21: Reduced competition means lower prices for harvesters. By creating an exclusive processing privilege for Aleutian Islands shoreplants, this action has the potential to cause uncompetitive acts. Creating and enforcing a single market for fish is devastating for harvesters who are not protected by any sort of price arbitration structure. Having only a single plant limits competition for landings and the seller has limited negotiating leverage. This drives down the prices paid to fishermen. Additionally, having only a single processor means that some CVs could be excluded if the lone processor does not want to do business with them.

Response 21: As explained in the response to Comments 14, 18 and 19, Amendment 113 and this final rule do not create an exclusive processing privilege for Aleutian Islands shoreplants. As acknowledged in Section 2.7.2.3 of the Analysis, under Amendment 113, CVs may have less ability to use processor competition for Aleutian Islands Pacific cod landings to leverage higher prices. However, the Analysis also acknowledges several ways that CVs may retain leverage in negotiating fair prices from Aleutian Islands shoreplants. To remain solvent, Aleutian Islands shoreplants will need to offer harvesters competitive prices or CVs could withhold delivery of catch to that shoreplant. CVs could choose not to participate in the Aleutian Islands CV Harvest Set-Aside, wait until the set-aside has ended, or shift fishing operations to the Bering Sea. If Aleutian Islands shoreplants are not competitive, they likely will not be able to operate, and NMFS would not expect to receive notification from the City of Adak or the City of Atka by the annual deadline. If less than 1,000 mt of Aleutians Island Pacific cod have been delivered to Aleutian Islands shoreplants on or before February 28, the set-aside will be lifted and the fishery will be opened to all eligible participants for delivery to any eligible processor. This performance measure serves as an additional incentive for Aleutian Islands shoreplants to offer competitive prices to all interested harvesters so that harvesters do not wait until after February 28 for the opportunity to deliver to offshore processors. In addition, this final rule does not provide for only one Aleutian Islands shoreplant or prevent multiple Aleutian Islands shoreplants from operating at the same time. Even when the set-aside is in place, this final rule does not preclude CPs or stationary floating processors from receiving catch from CVs harvesting from the Aleutian Islands Unrestricted Fishery in years when the Aleutian Islands TAC is large enough for the Unrestricted Fishery to occur, or from operating after March 15. CPs and stationary floating processors present in the Aleutian Islands for the Unrestricted Fishery could be ready to accept deliveries of Pacific cod if the set-aside were lifted early.

Comment 22: The Analysis does not consider the effects of the BSAI TAC split, and assumes the loss of Aleutian Islands Pacific cod can be made up in the Bering Sea, despite the fact that Bering Sea and Aleutian Islands cod are different fisheries with unique products.

Response 22: Sections 2.2 and 2.6 of the Analysis describe some of the effects the BSAI TAC split has had on the amount of Pacific cod available for harvest in the Aleutian Islands. Likewise, the “Need for This Proposed Rule” section of the proposed rule identifies the BSAI TAC split and resulting relatively low TAC in the Aleutian Islands as just one of several factors prompting the need for the community protections in this rule. NMFS acknowledges that this action may result in losses to some participants in the Aleutian Islands Pacific cod fishery. Section 2.7.2 of the Analysis and the response to Comment 23 discuss ways that shifting effort to the Bering Sea may mitigate the effects of Amendment 113 on participants.

Comment 23: The Analysis supposes that the loss of Pacific cod harvest by the hook-and-line CP sector in the Aleutian Islands can be offset by shifting effort to the eastern Bering Sea; however, Aleutian Islands Pacific cod are typically larger and fetch a higher price in international markets than Bering Sea Pacific cod. Bering Sea Pacific cod cannot be substituted for Aleutian Islands Pacific cod.

Response 23: The Council and NMFS recognize that Pacific cod fisheries and products differ between the Bering Sea and the Aleutian Islands. The Analysis does not suggest that the same product harvested and processed in the Aleutian Islands can be substituted by one harvested and processed in the Bering Sea and notes that harvesters generally fetch higher prices for Aleutian Islands Pacific cod because of their typically larger size (Section 2.7.2.2 of the Analysis). The Analysis further notes that moving to the Bering Sea to fish for Pacific cod may not be viable for all vessels because they may participate in other Aleutian Islands fisheries, or are subject to harvest sideboards in other fisheries as a result of their eligibility in rationalization programs. Additionally, vessels that formerly fished for Aleutian Islands Pacific cod that move to the Bering Sea to fish for Pacific cod will compete with vessels that have historically fished in the Bering Sea. The Council recognized these limitations on recuperating losses that may be incurred by some participants as a result of Amendment 113, but determined that CPs are better able to adapt to changing conditions in the Aleutian Islands Pacific cod fishery given their ability to move to different locations to fish and process their catch, than Aleutian Islands shoreplants and the vessels that deliver to them, which have less flexibility and adaptability.

The Council and NMFS recognized that CP sectors will not be able to participate in the Aleutian Islands Pacific cod fishery unless the set-aside is not in effect for that year, some of the set-aside remains available for harvest after the set-aside ends, or there is sufficient Aleutian Islands DFA for an Unrestricted Fishery during the set-aside period. The Council determined that in years of low TAC, when an Unrestricted Fishery will not occur, it was important to protect Aleutian Islands fishing communities that cannot easily participate in other fisheries or other areas to make up for lost revenue.

The Council and NMFS recognized the participation of hook-and-line CPs in the Aleutians Islands Pacific cod fishery by capping the amount of Aleutian Islands Pacific cod that goes to the Aleutian Islands CV Harvest Set-Aside and by providing mechanisms to lift the set-aside if no Aleutian Islands city will be processing in the upcoming year or if deliveries do not meet established thresholds by certain dates. This final rule limits the amount of the Aleutian Islands CV Harvest Set-Aside to 5,000 mt, which will allow the participation of all sectors in the Unrestricted Fishery except during years when the Aleutian Islands Pacific cod TAC is extremely low. The Council wanted to provide the Unrestricted Fishery so that vessels not participating in the Aleutian Islands CV Harvest Set-Aside can participate to some extent in the Aleutian Islands Pacific cod fishery and get some of the benefits from it. Additionally, because the Aleutian Islands CV Harvest Set-Aside is for a specific amount, rather than a percentage of TAC, the set-aside will not increase even if Aleutian Islands TAC increases, which will provide for an even greater amount in the Unrestricted Fishery.

Comment 24: The proposed Aleutian Islands CV Harvest Set-Aside period is too long and would prevent others from accessing the fishery altogether. If the Adak plant is expected to be capable of processing more than 400 mt of Pacific cod per day, and the proposed Atka plant has a planned capacity of 180 mt per day, Aleutian Islands shoreplants could process the entire proposed set-aside in just 8 to 11 days.

Response 24: If both of the existing Aleutian Islands shoreplants are operational, they may have the combined capacity to process 500 mt to 600 mt per day. However, if the Pacific cod have not yet arrived and aggregated on the fishing grounds, there would be no deliveries for them to process. To be effective, the Aleutian Islands CV Harvest Set-Aside and Bering Sea Trawl CV A-Season Sector Limitation need to be in place long enough for the Pacific cod to aggregate on the fishing grounds, and for the fish to be harvested and delivered to Aleutian Islands shoreplants for processing. An earlier end date might mean that the peak fishery occurs after the Aleutian Islands CV Harvest Set-Aside and Bering Sea Trawl CV A-Season Sector Limitation have been lifted. Conversely, if the Aleutian Islands CV Harvest Set-Aside and Bering Sea Trawl CV A-Season Sector Limitation did not go into place until later during the A-season, the entire trawl CV allocation could be taken in the Bering Sea before the fishery begins in the Aleutian Islands.

As discussed in the preamble of the proposed rule, the Council determined and NMFS agrees that March 15 is the preferred date for lifting the Aleutian Islands CV Harvest Set-Aside for several reasons. March 15 represents the average date of the peak of the Aleutian Islands Pacific cod fishery for CVs. During the period analyzed (2003 through 2015), a significant portion of Aleutian Islands Pacific cod was not delivered shoreside until mid-March (see Table 2-37 of the Analysis). Establishing a date much earlier than March 15 to relieve the set-aside would not meet the Council's goals to provide access to and to sustain participation in the Aleutian Islands Pacific cod fishery by Aleutian Islands communities because the protections afforded by the set-aside would be lifted before the Pacific cod aggregated on the fishing grounds.

The Council and NMFS considered earlier dates by which to lift these restrictions, but given historical harvesting and delivery patterns for Aleutian Islands Pacific cod, the longer the Aleutian Islands CV Harvest Set-Aside remains in effect during the A-season each year, the greater the opportunity for complete harvest and delivery of the Aleutian Islands CV Harvest Set-Aside. The March 15 date provides greater social and economic stability for Aleutian Islands fishing communities than earlier dates. Limiting the duration of the Aleutian Islands CV Harvest Set-Aside to March 15 also would provide an opportunity for CPs to harvest Pacific cod, and for CVs to harvest and deliver Pacific cod to CPs or stationary floating processors, before the end of the A-season. The proposed March 15 date balances the opportunities for all participants. Additional information is provided in Section 2.7.2.4 of the Analysis.

Comment 25: The proposed threshold of 5,000 mt for the Aleutian Islands CV Harvest Set-Aside exceeds the recent historical average of deliveries made to Aleutian Islands shoreplants. Excluding the years of no processing by Aleutian Islands shoreplants (2010, 2011, and 2015), the 2010 through 2015 average is 3,073 mt and the average proportion of the Federal Aleutian Islands Pacific cod fishery processed at the Adak and Atka shoreplants from 2003 through 2015 is 32 percent. Applying the historic average to the projected 2017 DFA of 8,965 mt would result in a 2017 set-aside of 2,869 mt. Therefore, a threshold of 3,000 mt would more accurately reflect the “historical place” of Aleutian Islands shoreplants in the federal Aleutian Islands Pacific cod fishery.

Response 25: As discussed in the preamble to the proposed rule and in Section 2.7.1.2 of the Analysis, the Council examined harvest and landings data from 2003 through July 2015 and considered a range of options for the amount of the Aleutian Islands CV Harvest Set-Aside (and equivalent Bering Sea Trawl CV A-Season Sector Limitation). The average amount of non-CDQ Aleutian Islands Pacific cod processed by Aleutian Islands shoreplants during this period was 4,732 mt. The Council considered amounts for the Aleutian Islands CV Harvest Set-Aside ranging from 3,000 to 7,000 mt. The Council determined and NMFS agrees that a maximum of 5,000 mt is the appropriate amount because it represents a large percentage of the total amount of Aleutian Islands Pacific cod available to the non-CDQ fishery sectors in recent years, and is in the range necessary to provide benefits to Aleutian Islands fishing communities, including shoreplant operations, when considered in combination with the State guideline harvest level (State GHL) A-season harvest. Additionally, the Analysis shows that 5,000 mt is the approximate long-term average of the annual amount of Pacific cod processed at Aleutian Islands shoreplants between 2003 and 2015, when Aleutian Islands shoreplants were operational.

The Council considered an option that would have reserved a percentage, rather than a fixed amount, of the Aleutian Islands TAC for the Aleutian Islands CV Harvest Set-Aside (see Section 2.7.2.5 of the Analysis). The Council chose a fixed amount (5,000 mt) so that more of the DFA would be available to Aleutian Islands fishing communities in years of low TAC, and so that more of the DFA would be available to all participants in the Unrestricted Fishery in years when the Aleutian Islands TAC is high, providing more opportunities for other participants. Further explanation for the Council's choice of years to examine in the Analysis is given in the response to Comment 27.

Comment 26: The Aleutian Islands Pacific cod fishery is important for all hook-and-line CPs. While Amendment 113 will have negative impacts on all CPs with historical participation in the Aleutian Islands Pacific cod fishery, the negative effects are more profound on specific hook-and-line CP companies with a higher dependence on the Aleutian Islands Pacific cod fishery.

Response 26: The Council and NMFS examined participation in the Aleutian Islands Pacific cod fishery by all sectors over a range of years that included years before major changes in the fishery occurred and years since those changes occurred. The Council recognized that to offer protections to Aleutian Islands communities, there could be some negative effects on other participants in the Aleutian Islands Pacific cod fishery, including the hook-and-line CP sector. In years when the TAC is low and the set-aside is in effect, it is likely that CPs will not have access to the Aleutian Islands Pacific cod fishery at all or at levels to which they are accustomed. To minimize those negative effects, the Council included several provisions that lift the restrictions if minimum performance measures are not met and prevent the stranding of Aleutian Islands Pacific cod. For 2017, the hook-and-line CP sector will have access to 3,965 mt through the Aleutian Islands Unrestricted Fishery. The annual average targeted Aleutian Islands Pacific cod catch by the hook-and-line CP sector between 2003 and 2015 was 2,399 mt (Table 2-34 of the Analysis). Excluding years that Aleutian Islands shoreplants did not operate, the annual average targeted Pacific cod catch by the hook-and-line CP sector was 2,311 mt (Table 2-34 of the Analysis). Even under current management, there is no guarantee that any sector will have access to the Aleutian Islands Pacific cod fishery because of the ability of one sector to harvest Pacific cod up to the Aleutian Islands TAC before other sectors arrive.

NMFS and the Council acknowledge that the hook-and-line CP sector may have a higher dependence on the Aleutian Islands Pacific cod fishery than some other CP sectors; however, like other offshore sectors, the hook-and-line CP sector has the ability to react to changes in the fishery. The hook-and-line CP sector has formed a voluntary cooperative, which provides many of the benefits and flexibility of a rationalized fishery. In contrast, shoreside processors cannot move their operations in response to changing conditions or a low Aleutian Islands Pacific cod TAC. As discussed in the response to Comment 14, each sector continues to receive a percentage of the combined BSAI Pacific cod allocation as established in 2008 under Amendment 85, and can fish their allocations in either the Bering Sea or Aleutian Islands (and under this action shift effort to the Bering Sea or access the Aleutian Islands after a specified date). This action does not change the allocation to the hook-and-line CP sector.

This final rule may provide a benefit to the hook-and-line CP sector in years when the Aleutian Islands DFA is large enough for the Aleutian Islands Unrestricted Fishery to occur. The A-season for hook-and-line CPs and CVs opens on January 1, whereas the A-season for trawl CPs and CVs does not open until January 20. The hook-and-line CPs and CVs will have earlier access to the Aleutian Islands Unrestricted Fishery between January 1 and January 20.

Comment 27: The historical participation of the hook-and-line CP sector in the Aleutian Islands Pacific cod fishery is significantly larger and longer than as stated in the proposed rule. The hook-and-line CP sector has historically harvested more than 95 percent of the non-trawl harvest of Pacific cod in the Aleutian Islands. The hook-and-line CP sector's proportion of the Aleutian Islands Pacific cod harvest was much higher before 2002, when Steller sea lion protection measures were first implemented.

Response 27: NMFS acknowledges that the hook-and-line CP sector has consistently participated in the Aleutian Islands Pacific cod fishery annually, harvesting 14% of the Aleutian Islands Pacific cod on an average annual basis during 2003 through 2015 (Table 2-13 of the Analysis), and that the hook-and-line CP sector participated in the fishery prior to 2003. NMFS also acknowledges that the hook-and-line CP sector harvests a large percentage of the non-trawl harvest of Aleutian Islands Pacific cod, but also notes that the overall non-trawl harvest is a small proportion of the Aleutian Islands TAC. The Council chose to use 2003 as a starting point for the Analysis for this action for several reasons. First, data from years prior to 2003 is not compatible with data from 2003 to the present. NMFS implemented its Catch Accounting System in 2003, which significantly changed the methodologies used to determine catch estimates (Section 2.5 of the Analysis). Second, data before 2003 represent harvests made prior to the implementation of Steller sea lion protection measures, which substantively changed the management of, and the participation patterns in, the Aleutian Islands Pacific cod fishery. The Council determined and NMFS agrees that catch data prior to 2003 does not reflect how the fishery has been managed and prosecuted during the last 13 years (2003 through 2015) considered by NMFS and Council in developing Amendment 113 and this final rule. Third, the Council determined and NMFS agrees that it was important to consider data from the largest set of years both before and after the implementation of Steller Sea Lion measures, rationalization programs, and the BSAI TAC split to understand the effects of those actions on the Aleutian Islands Pacific cod fishery.

Comment 28: The proposed action will further concentrate the Aleutian Islands Pacific cod harvest spatially and temporally in the Aleutian Islands with more harvest by the trawl sector. In the proposed rule for the 2014 Steller sea lion protection measures (available at https://alaskafisheries.noaa.gov/sites/default/files/79fr37486.pdf), NMFS stated that, “Pacific cod hook-and-line and pot gear harvests occur in much smaller quantities and at slower rates for these gears than trawl gear. This makes it less likely that hook-and-line and pot gear harvests would result in localized depletion of Steller sea lion prey resources.” The proposed action, combined with the BSAI TAC split, GHL fishery, and consequences of the Steller sea lion protection measures will further limit the hook-and-line CP sector's participation and increase trawl harvests of Aleutian Islands Pacific cod.

Response 28: NMFS acknowledges that the Analysis predicts some spatial concentration of harvest because vessels participating in the set-aside are expected to be trawl CVs that will likely fish closer to shore and nearer to Adak and Atka, the Aleutian Islands communities that are most likely to receive Pacific cod deliveries under the set-aside. The amount of Aleutian Islands Pacific cod harvest that might be caught closer to shore under a maximum set-aside amount of 5,000 mt that is roughly equivalent to the average annual amount of Pacific cod caught by CVs and delivered to Aleutian Islands shoreplants between 2003 and 2015, which reduces the potential for spatial concentration (see Section 3.4 of the Analysis). Fishing closer to shore may increase efficiency in the fishery (Section 2.7.2.2 of the Analysis) by reducing transit times, allowing vessels to make more frequent offloads, and not having to coordinate fishing operations with an offshore processor (Section 2.7.2.2 of the Analysis). Allowing other participants to target the Aleutian Islands Unrestricted Fishery when the DFA is greater than 5,000 mt, and the performance measures that remove the set-aside if there is insufficient shoreplant processing will also limit spatial concentration. Finally, the Council and NMFS will continue to use the current harvest specifications process for setting the Aleutian Islands Pacific cod TAC and manage harvest within these limits. Any potential changes in harvest location as a result of the set-aside are not expected to impact Aleutian Islands Pacific cod stock status (see Section 3.3.1 of the Analysis), or have an impact on Steller sea lions in a manner not previously considered in previous consultations (see Section 3.4 of the Analysis).

NMFS disagrees that Amendment 113 and this final rule will cause additional temporal concentration of the fishery. In the years since the BSAI TAC split, the Aleutian Islands Pacific cod fishery has closed on March 16, 2014, February 27, 2015, and June 8, 2016, so as not to exceed the Aleutian Islands Pacific cod TAC. Setting aside a maximum of 5,000 mt of Aleutian Islands Pacific cod until March 21 may actually prolong the season for Aleutian Islands Pacific cod because CPs will not be able to harvest Pacific cod from the set-aside (unless they are delivering their catch to Aleutian Islands shoreplants for processing) or process any Aleutian Islands Pacific cod remaining from the set-aside until after the conclusion of the Aleutian Islands CV Harvest Set-Aside on March 15.

As examined in the FONSI (Section 3.6 of the Analysis), Amendment 113 and this final rule will not adversely affect endangered or threatened species, marine mammals, or critical habitat of these species in any manner not considered in prior consultations on the BSAI groundfish fisheries. While this action may increase the harvest of Pacific cod nearshore in the Aleutian Islands subarea, the harvest of Pacific cod will continue to occur within the limits established in the annual groundfish harvest specifications by vessels the same as or similar to those currently fishing for Pacific cod in the BSAI.

The vessels affected by this action will continue to be required to comply with all Steller sea lion protection measures including no-transit areas, closed areas, and the requirement to carry vessel monitoring systems (50 CFR part 679). Therefore, Amendment 113 and this rule will result in no substantial change to the actions analyzed in the biological opinion dated April 2, 2014, in which NMFS found that the groundfish fisheries in the BSAI are not likely to jeopardize the continued existence of the western distinct population segment of Steller sea lions or destroy or adversely modify its designated critical habitat (Section 3.4 of the Analysis).

Comment 29: The hook-and-line CP sector's proportion of the Aleutian Islands Pacific cod harvest has been reduced since the establishment of the State Pacific cod GHL fishery, which is designed for harvest by CVs that deliver to Aleutian Islands communities. The State GHL fishery sets aside 28 percent of the Aleutian Islands Pacific cod TAC for fishing in State waters, which is essentially an allocation to shore-based processors. The State GHL fishery cannot be harvested by CPs and is not prosecutable by the Federal offshore sector. The State GHL fishery has resulted in considerable stranded Pacific cod. A large proportion of the State GHL fishery has remained unharvested and unavailable to the Federal fisheries because there is no rollover provision. Adak and Atka have unique access to processing the State GHL fishery, but have chosen not to participate in this fishery in recent years.

Response 29: The State GHL fishery for Aleutian Islands Pacific cod is managed exclusively by the State within State waters. This final rule does not modify the State GHL fishery. Management of the State GHL fishery is outside of the scope of this final rule. Absent preemption under section 306(b) of the Magnuson-Stevens Act, NMFS does not have authority to determine catch amounts or the types of gear or vessels used in the Aleutian Islands Pacific cod State GHL fishery.

The State established two GHL fisheries for Pacific cod in 2006; one in the Bering Sea and one in the Aleutian Islands. The Aleutian Islands State GHL fishery is currently set at a harvest limit equivalent to 27 percent of the Aleutian Islands Pacific cod ABC, not 28 percent of the Aleutian Islands Pacific cod TAC as stated by the commenter. The harvest limit may be increased (or decreased) in the following fishing year depending on how much of the State GHL fishery is harvested, and the harvest limit can increase to a maximum of 39 percent of the Aleutian Islands Pacific cod ABC if the harvest limit continues to be fully harvested each year. In addition, the Aleutian Islands State GHL fishery is capped at a maximum of 15 million pounds (6,804 mt). Therefore, if 27 percent of the Aleutian Islands Pacific cod ABC represents an amount that is greater than 15 million pounds in some future year, the State GHL fishery for that year would be 15 million pounds. The Aleutian Islands State GHL for 2016 is 4,752 mt.

The amount of the Aleutian Islands State GHL fishery is deducted from the Aleutian Islands Pacific cod ABC to calculate the Aleutian Islands Pacific cod TAC. While the establishment of the State GHL fishery in 2006 reduced the Aleutian Islands TAC, it did not change the hook-and-line CP sector's allocation of 48.7 percent of the combined BSAI Pacific cod TAC. The reduction in the Aleutian Islands TAC resulting from the State GHL fishery is distributed proportionately across all sectors, and is not borne by the hook-and-line CP sector alone.

NMFS assumes that the commenter is concluding that setting aside an additional amount of Aleutian Islands Pacific cod for Aleutian Islands communities is not warranted because these communities are not processing the full amount of what has already been allocated to them through the State GHL fishery. The commenter is correct that the full amount of the Aleutian Islands State GHL fishery has not been harvested every year; however, it is incorrect to state that Adak has chosen not to participate in the fishery in recent years. As noted in Table 2-31 in the Analysis, Aleutian Islands shoreplants have processed over 4,000 mt of Pacific cod from Federal and State GHL fisheries each year from 2012 through 2014. On average, Aleutian Islands shoreplants processed 2,046 mt of Pacific cod from the State GHL fishery annually since the inception of the Aleutian Islands Pacific cod State GHL fishery in 2006. The Council determined that the State GHL fishery alone was inadequate to sustain Aleutian Islands communities and shoreplants. Based on information received in public testimony, the Council determined that Aleutian Islands communities need about 9,000 mt of Pacific cod annually to support shoreplant operations. The Council selected a set-aside amount that in combination with the State GHL fishery would give Aleutian Islands communities access to at least 9,000 mt of Pacific cod annually. See also the response to Comment 25.

Comment 30: The data presented in the Analysis do not reflect CP participation and dependence in the Aleutian Islands Pacific cod fishery. Processing by the offshore sector has also declined since rationalization programs were implemented. This rule will cause economic harm to CPs that are invested and have historically participated in the Aleutian Islands Pacific cod fishery. This rule also harms CVs that cannot make onshore landings and must deliver to CPs.

Response 30: NMFS and the Council recognize, and the Analysis shows, that CPs have a history of participation in the Aleutian Islands Pacific cod fishery (Sections 2.6.6.1 through 2.6.6.3 of the Analysis), that the average annual amount of Aleutian Islands Pacific cod processed by the offshore sector has declined since 2011 (coinciding with the BSAI TAC split, Table 2-31 of the Analysis), and that this rule may cause some economic losses to CPs. The Council also recognized that the amount of Pacific cod harvested by trawl CPs, and the number of participating trawl CPs, have declined since 2003 (Table 2-10 in the Analysis). However, Aleutian Islands Pacific cod represents only a small portion of the total landings and revenue by the trawl CP fleet (Table 2-11 in the Analysis). The declining biomass and BSAI TAC split have resulted in reduced Pacific cod catches in the Aleutian Islands for all participants in both the onshore and offshore sectors. The Council and NMFS have chosen to set aside a portion of the harvest for vessels delivering their catch to Aleutian Islands shoreplants because these Aleutian Islands fishing communities do not have the flexibility available to offshore sector participants to redeploy into other BSAI or GOA groundfish fisheries, move their operations to the Bering Sea, or participate in rationalization programs that grant greater flexibility (Section 2.7.2.2 of the Analysis). The Council and NMFS have determined that the onshore sector had a greater dependence on the Aleutian Islands Pacific cod fishery than the offshore sector. Section 2.7.2.2 of the Analysis discusses some of the ways trawl CPs, trawl CVs, and hook-and-line CPs may respond to the restrictions imposed by this rule.

The Council and NMFS recognize that some trawl CVs that have historically participated in the Aleutian Islands Pacific cod fishery lack the ability to make onshore deliveries. These vessels will likely experience a loss of economic activity from this action (Section 2.7.2.3 of the Analysis), particularly in years of low Aleutian Islands Pacific cod TAC. The options for mitigating losses incurred by this action on trawl CVs are the same as for other sectors that may be excluded from the fishery during the set-aside: they may fish in the Bering Sea, fish the Aleutian Islands Unrestricted Fishery, or wait for the set-aside to be lifted.

Comment 31: The F/V Katie Ann, a trawl CP, is one of the earliest and most consistent participants in the Aleutian Islands Pacific cod fishery. The F/V Katie Ann is more dependent on the Aleutian Islands Pacific cod fishery than any other CP. Participation by the F/V Katie Ann predates the American Fisheries Act and the first entry of any shorebased processor in the Aleutian Islands. The intermittent entry into the fishery by the Adak shoreplant has harmed the ability of the F/V Katie Ann to harvest and process its long-term historical share of the Aleutian Islands Pacific cod fishery. Amendment 113, if implemented, threatens to destroy one of the only remaining viable fishing operations for the F/V Katie Ann.

Response 31: The Council and NMFS recognized the long history of participation in the Aleutian Islands Pacific cod fishery by the F/V Katie Ann as Amendment 113 was being developed and considered. The Council considered an option that would have allowed CPs that had processed Pacific cod in the Aleutian Islands management area in at least 12 years between 2000 and 2014, such as the F/V Katie Ann, to be exempt from restrictions on processing for up to 2,000 mt of Pacific cod. Ten CPs that harvested and processed both targeted and incidental catch of Pacific cod during that period would have qualified for this exemption. The F/V Katie Ann is the only vessel that operated as a mothership processing targeted Pacific cod during this period.

The Council did not select this option for an exemption for the F/V Katie Ann or other qualified CPs. The 2,000-mt exemption would have represented 40 percent of the 5,000-mt set-aside. The Council determined, and NMFS agrees, that this amount would have substantially reduced the amount available to vessels delivering to Aleutian Islands shoreplants and could have undermined the efficacy of Amendment 113. The primary objective of Amendment 113 and this final rule is to provide access to and promote sustained participation in the Aleutian Islands Pacific cod fishery by Aleutian Islands fishing communities in this remote area, especially at very low TAC levels. At TACs larger than 5,000 mt, CPs and motherships may participate in the Aleutian Islands Unrestricted Fishery. The Council considered historical participation of the offshore sector, including the F/V Katie Ann, but determined that the fishery cannot support historical levels of effort by all sectors (Section 2.7.2.5 of the Analysis). The Council selected a maximum level of 5,000 mt for the set-aside to provide continued access to the Aleutian Islands Pacific cod fishery by the offshore sector when the Aleutian Islands TAC is at a level that can accommodate both the needs of the inshore fishery and Aleutian Islands fishing communities, as well as offshore fishery participants. See also the response to Comment 33.

Comment 32: In any fishery management plan that awards fishing privileges to one group and takes them away from another, there are certain to be winners and losers; however, the benefits to the winners must be balanced against the harm to the losers. Amendment 113 fails to achieve the required balance. There is little to no evidence that the harm that will be suffered by historical participants will be offset by any net benefits to either Adak or Atka. History has shown that it may be impossible to operate a viable shoreplant in Adak, and there is currently no one committed to future operations of the existing plant in Adak.

Response 32: Amendment 113 and this final rule provide access to and sustained participation in the Aleutian Islands Pacific cod fishery by Aleutian Islands fishing communities, especially during periods when the Pacific cod TAC in the Aleutian Islands is relatively low. This is an appropriate action for the Council and NMFS to take, in recognition of the dependence on the Pacific cod fishery by Aleutian Islands fishing communities, the lack of protections for Aleutian Island harvesters and communities seeking to establish viable community-based fishing operations under the status quo, and the lack of opportunity for Aleutian Islands shoreplants and CVs to expand to other areas and fisheries.

While it is accurate that the Aleutian Islands shoreplants in Adak or Atka did not process Pacific cod during the 2015 or 2016 fishing years, comments received during public testimony to the Council and the public comment period for the proposed rule state that investors and processors are planning to process Pacific cod in one or both communities if this final rule is implemented. The commenters believe that without the Aleutian Islands CV Harvest Set-Aside, it is doubtful that any operator will have a viable opportunity to process Pacific cod in Adak or Atka, and the inshore sector will continue to be preempted from the fishery. Public comments in favor of the action also state that there will be considerable social and economic benefits to Aleutian Islands communities as a result of this action that offset the expected costs to other participants.

The Council included provisions to mitigate the costs of the set-aside on other participants by providing access to the fishery by other participants if the Aleutian Islands shoreplants do not submit a notification of their intent to process Pacific cod in the upcoming year or if those shoreplants do not meet the minimum processing requirement of 1,000 mt on or before February 28. Additionally, historical participants who cannot participate in the set-aside may participate in the Aleutian Islands Unrestricted Fishery, when available, or fish in the Aleutian Islands for Pacific cod when the set-aside is lifted (see also the response to Comment 16).

Comment 33: This action would significantly impact the revenue and operations of Amendment 80 CPs that also have a history of dependence on the Aleutian Islands Pacific cod fishery. These CPs take deliveries from CVs that are unable to deliver to shore.

Response 33: Amendment 113 and this rule do not prohibit Amendment 80 CPs and CVs delivering to Amendment 80 CPs from participating in the A-season Pacific cod fishery in the Aleutian Islands; those vessels may participate in the Aleutian Islands Unrestricted Fishery, when available, and may harvest any remaining BSAI non-CDQ Pacific cod up to the Aleutian Islands DFA after the set-aside is lifted. In addition, if NMFS does not receive timely notification from the City of Adak or the City of Atka, there will be no Aleutian Islands CV Harvest Set-Aside, and no additional regulatory harvesting or delivery limitations imposed on these vessels.

When the Aleutian Islands DFA is greater than 5,000 mt, the difference between the DFA and the Aleutian Islands CV Harvest Set-Aside is available as the “Aleutian Islands Unrestricted Fishery” for directed fishing by all non-CDQ fishery sectors with sufficient A-season allocation and may be processed by any eligible processor, including Amendment 80 CPs and CVs making deliveries to them. The amount of the Aleutian Islands Unrestricted Fishery will be published in the BSAI Harvest Specifications. Given the current 2017 harvest specifications for Aleutian Islands Pacific cod, 3,965 mt of Pacific cod will be available for the Aleutian Islands Unrestricted Fishery.

The Aleutian Islands CV Harvest Set-Aside will only be in effect for a portion of the A-season. The set-aside will be lifted if the entire amount of the set-aside has been delivered to Aleutian Islands shoreplants, or on March 15, whichever comes first. Additionally, if Aleutian Islands shoreplants do not meet certain performance requirements, the harvest and delivery restrictions will be lifted and the Aleutian Islands Pacific cod DFA can be harvested by any eligible vessel for delivery to any eligible processor. For example, if Aleutian Islands shoreplants have not processed at least 1,000 mt of Pacific cod by February 28, the set-aside will be lifted. Any amount of the set-aside remaining after that date, plus the remainder of the Aleutian Islands DFA, will be available for harvest by any eligible vessel for delivery to any eligible processor. Likewise, if the entire set-aside is harvested prior to March 15, the harvest and delivery restrictions will be lifted immediately. At the latest, the harvest set-aside will be lifted on March 15, and any amount of the set-aside remaining will be added to the remaining Aleutian Islands DFA for harvest by any eligible vessel for delivery to any eligible processor.

Comment 34: Section 2.7.2 of the Analysis states that the set-aside “would preclude the future participation of other participants that may benefit or have historically benefitted from the harvesting and processing of Aleutian Islands Pacific cod unless Aleutian Islands shoreplants are unable to process the Aleutian Islands Pacific cod received from catcher vessels.” The justification for this is presented as the Council having made inshore-offshore allocations previously. This, however, is not an inshore-offshore allocation; this is pre-emption of the offshore sector to the benefit of the onshore sector.

Response 34: The sentence that follows the material quoted by the commenter states, “The Council and NMFS have allocated fishery resources between inshore and offshore participants in the past, consistent with the purpose and need for the action, the National Standards and other provisions of the MSA [Magnuson-Stevens Act].” This sentence simply refers to past actions taken by the Council and NMFS that allocate fishery resources between inshore and offshore participants and does not represent the Council's and NMFS' justification for recommending and approving the Aleutian Islands Pacific cod harvest set-aside. The justification and rationale for establishing the set-aside is provided generally in the administrative record for Amendment 113, and specifically in Section 2.4.3 of the Analysis, in the preamble of the proposed rule, and in the preamble of this final rule.

Although the Aleutian Islands Pacific cod set-aside is not identical to other inshore-offshore allocation actions the Council and NMFS have implemented, the set-aside does allocate Aleutian Islands Pacific cod among an inshore sector (those vessels that deliver their catch to Aleutian Islands shoreplants for processing) and an offshore sector (those vessels that process their catch at sea or that deliver their catch to offshore processors for processing), making it a type of inshore-offshore allocation. Another type of inshore-offshore allocation was the Gulf of Alaska (GOA) pollock and Pacific cod inshore-offshore allocations under Amendment 23 to the Fishery Management Plan for Groundfish of the GOA (GOA FMP). Under Amendment 23, 100 percent of the GOA pollock TAC was allocated to vessels delivering their catch of pollock to onshore processors. In the preamble of the final rule implementing Amendment 23, NMFS stated, “The allocation of 100 percent of the GOA pollock TAC to the inshore sector proposed by the Council and approved by the Secretary slightly exceeds the harvest rates of the inshore sector in recent years and results in a redistribution of the pollock resource from the offshore sector to the inshore sector. The Secretary determined that this redistribution was appropriate based on the social and other benefits that would be derived from implementation of the allocation” (57 FR 23321, June 3, 1992). In contrast to the inshore-offshore allocation of GOA pollock under Amendment 23 to the GOA FMP, the Aleutian Islands Pacific cod CV Harvest Set-aside will allow the offshore sector to participate in the Aleutian Islands Pacific cod fishery in years when the Aleutian Islands Pacific cod DFA provides for the Unrestricted Fishery, and in years when no Aleutian Islands shoreplant is processing Pacific cod or participating vessels fail to deliver 1,000 mt of Aleutian Islands Pacific cod to Aleutian Islands shoreplants by February 28.

Comment 35: This action would create an exclusive processing privilege for Adak under the assumption that shore-based processors are entitled to an allocated share of processing privileges. The Council and NMFS have attempted to disguise an exclusive processing allocation to Adak by defining qualifying participants as “Aleutian Islands shoreplants” within a specified geographic region. However, the shoreplant in Atka has never processed Pacific cod and has no historical dependence on the fishery and it is unlikely that competing processing will be developed in the region in the foreseeable future. Therefore, this action is an exclusive allocation to Adak, whose shoreplant has a dubious track record for paying fisherman and has had numerous operational difficulties.

The Magnuson-Stevens Act does not allow a fishery management council to allocate fishery privileges to shore-based processors. The express Federal prohibition of creating such a privilege was acknowledged by NOAA General Counsel (GC) in a letter from Lisa Lindeman to the Council Chair in 2009. Section 303A of the Magnuson-Stevens Act specifies that limited access privilege programs authorized under this act pertain to fish harvesting. Had Congress intended to create an individual processor quota, it could have done so, as it did for the crab fisheries in the BSAI. No such congressional grant of authority applies to shore-based processors operating in the Aleutian Islands Pacific cod fishery.

Response 35: In a memorandum dated September 30, 2009, from Lisa Lindeman, Regional Counsel for the Alaska Region of NOAA General Counsel, to Eric Olsen (then Chairman) and Chris Oliver (Executive Director) of the Council, NOAA GC provided the Council with legal advice in response to four questions posed by the Council. Questions 1, 2, and 4 of the 2009 memorandum are relevant in responding to this comment. In response to the first question, NOAA GC advised that except for the authority provided at section 313(j) for the Crab Rationalization Program (16 U.S.C. 1862(j)), the Magnuson-Stevens Act does not provide the Council or NMFS with the authority to require fixed linkages between harvesters and shore-based processors. In fixed linkages, a harvester is required to deliver his or her catch to a specific shore-based processor. NOAA GC explained that requiring fixed linkages between harvesters and shore-based processors is similar to issuing processor quota, which is not authorized by the Magnuson-Stevens Act except for the Crab Rationalization Program. Therefore, with the exception of the Crab Rationalization Program, NMFS acknowledges that the Council and NMFS do not have authority under the Magnuson-Stevens Act to require fixed linkages between harvesters and processors or to establish exclusive processing privileges or processor quota.

In response to the second question, NOAA GC advised that the Magnuson-Stevens Act does authorize allocation of harvesting privileges to shore-based processors if other requirements of the Magnuson-Stevens Act are met. Therefore, NMFS generally disagrees with the commenter's assertion that the Magnuson-Stevens Act does not allow a fishery management council to allocate fishery privileges to shore-based processors. Finally, in response to the fourth question, whether the Magnuson-Stevens Act authorizes the Council to establish an exclusive class of shore-based processors that would be the recipients of all, or a specific portion of all, landings from a fishery, NOAA GC advised that the answer is dependent on the purpose of the action and the record developed by the Council. NOAA GC stated, “The Magnuson-Stevens Act does not authorize placing a limit on the number of shore-based processing sites if the purpose is to allocate shore-based processing privileges. . . . However, if the Council developed an adequate record demonstrating that an action, which had the practical effect of limiting the number of sites to which deliveries could be made, was necessary for legitimate management or conservation objectives (e.g., . . . protection of fishing communities that depend on the fisheries) and not a disguised limited entry program, then there could be a legal basis for such an action.”

NMFS disagrees that this action creates an exclusive processing privilege for Adak or a disguised processing allocation to Adak. No aspect of this action establishes exclusivity. This final rule does not provide a specific allocation of processing privileges to either Aleutian Islands shoreplant. Nothing in Amendment 113 or this final rule prevents the Atka shoreplant from processing Aleutian Islands Pacific cod and reducing the amount of Pacific cod that is delivered to Adak by vessels participating in the set-aside, prevents other Aleutian Islands shoreplants from processing Aleutian Islands Pacific cod in Adak or Atka, or prevents a shoreplant in any other onshore location west of 170° W. longitude from processing Aleutian Islands Pacific cod. The fact that the set-aside will be lifted if notification of intent to process is not provided, or if less than 1,000 mt of Aleutian Islands Pacific cod is processed by February 28, is directly contrary to exclusive privileges that permit the holder of the privilege exclusive access to the resource without diminishment by other participants or revocation without procedural due process. As explained throughout this final rule, the Council and NMFS have articulated legitimate management and conservation objectives for the Aleutian Islands CV Harvest Set-Aside to protect Aleutian Islands fishing communities that depend on access to and sustained participation in the fisheries for the socioeconomic benefits and stability provided by that access and participation. Therefore, Amendment 113 and this final rule do not create an exclusive processing privilege for Adak.

Section 3507(c)(B)(i) of the Paperwork Reduction Act (PRA) requires that agencies inventory and display a current control number assigned by the Director of the Office of Management and Budget (OMB), for each agency's information collection. Section 902.1(b) identifies the location of NOAA regulations for which OMB approval numbers have been issued. Because this final rule revises and adds data elements within a collection-of-information for recordkeeping and reporting requirements, 15 CFR 902.1(b) is revised to reference correctly the sections resulting from this final rule.

The NMFS Assistant Administrator, Alaska Region, NMFS, determined that Amendment 113 to the FMP and this rule are necessary for the conservation and management of the groundfish fishery and that they are consistent with the Magnuson-Stevens Act and other applicable laws.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The NMFS Assistant Administrator finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness for this final rule. This finding is based on the need to provide the City of Adak and the City of Atka with sufficient time to submit a notification of intent to process that complies with the regulatory requirements after the notification requirements are effective; to provide NMFS with sufficient time to notify the general public and the affected industry as to whether the Aleutian Islands CV Harvest Set-Aside will be in effect for 2017; and to provide the affected industry with sufficient time to adequately prepare for the start of the 2017 fishing year on January 1, 2017.

NMFS has determined that it must give the City of Adak and the City of Atka 15 days after the effective date of the notification of intent to process regulations to take all necessary steps to prepare, sign, and submit a notification of intent to process that complies with the regulatory requirements at § 679.20(a)(7)(viii)(D). Because these cities are aware of this action, have been anticipating its approval, and support its implementation in time for the 2017 fishing year, NMFS has determined that 15 days will provide the cities with enough time to comply with the notification requirements in 2016. Without waiver of the 30-day delay in effectiveness, the deadline for submission of a notification of intent to process would occur 45 days after publication of the final rule in the Federal Register, which means the deadline would occur very late in December 2016 or in early January 2017. A deadline in late December would not provide NMFS with adequate time to notify the industry as to whether the set-aside will be in effect on January 1, 2017, or provide the affected industry with sufficient time to prepare for the fishery which begins on January 1 for some participants in the Aleutian Islands Pacific cod fishery. Because NMFS must receive a notification of intent prior to the start of the fishing year to provide for an orderly start to the fishing year and to ensure the appropriate specifications are in place before fishing occurs on January 1, any notification deadline for 2016 that would occur after December 31, 2016, renders the set-aside meaningless for the 2017 fishing year. For reasons set forth in the Analysis and the preambles of the proposed rule and this final rule, the Council and NMFS have determined that the Aleutian Islands CV Harvest Set-Aside will provide important socioeconomic benefits and stability to Aleutian Islands fishing communities that intend to process Aleutian Islands Pacific cod in the upcoming fishing year. Waiving the 30-day delay in effectiveness will provide Aleutian Islands fishing communities with an opportunity to realize those benefits starting with the 2017 fishing year; failure to waive the delay in effectiveness will postpone that opportunity for an entire fishing year until 2018. One Aleutian Islands shoreplant has already informally notified NMFS that it intends to process Aleutian Islands Pacific cod in 2017.

Additionally, as explained earlier in this final rule, the Analysis determined that the affected fishing industry would have sufficient time to prepare for the upcoming fishing year if notification of intent to process was received from Adak or Atka prior to December 15. Waiving the delay in effectiveness for these regulations provides for a submission deadline that will occur before December 15, thus providing NMFS with sufficient time to notify the public and affected industry as to whether the set-aside will be in effect, and for the affected industry, including vessels that deliver their catch to Aleutian Islands shoreplants and those that deliver their catch to at-sea processors, to prepare for the start of the fishing year with that knowledge. As explained above, failure to waive the delay in effectiveness could result in a notification deadline that occurs in late December, which would not provide NMFS or the affected industry with sufficient time to prepare for the upcoming fishery that starts on January 1, 2017.

For these reasons, the NMFS Assistant Administrator finds good cause to waive the 30-day delay in effectiveness for this final rule.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a Final Regulatory Flexibility Analysis, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The preambles to the proposed rule and this final rule serve as the small entity compliance guide. This action does not require any additional compliance from small entities that is not described in the preambles. Copies of the proposed rule and this final rule are available from the NMFS Web site at http://alaskafisheries.noaa.gov.

Section 604 of the Regulatory Flexibility Act (RFA) requires that, when an agency promulgates a final rule under section 553 of Title 5 of the U.S. Code, after being required by that section or any other law to publish a general notice of proposed rulemaking, the agency shall prepare a FRFA. Section 604 describes the required contents of a FRFA: (1) A statement of the need for and objectives of the rule; (2) a statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments; (3) the response of the agency to any comments filed by the Chief Counsel for Advocacy of the U.S. Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments; (4) a description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available; (5) a description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and (6) a description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

A statement of the need for and objectives of this rule is contained earlier in the preamble and is not repeated here. This FRFA incorporates the IRFA (see ADDRESSES) and the summary of the IRFA in the proposed rule (81 FR 50444, August 1, 2016), a summary of the significant issues raised by the public comments, NMFS' responses to those comments, and a summary of the analyses completed to support the action.

No comments were received that raised significant issues in response to the IRFA specifically; therefore, no changes were made to this rule as a result of comments on the IRFA. However, several comments were received on the economic impacts of Amendment 113 on the Amendment 80 trawl CP and hook-and-line CP sectors. For a summary of the comments received and NMFS' responses, refer to the section above titled “Responses to Comments.”

NMFS published the proposed rule on August 1, 2016 (81 FR 50444), with comments invited through August 31, 2016. An IRFA was prepared and summarized in the “Classification” section of the preamble to the proposed rule. NMFS received 18 letters of public comment on the proposed rule and Amendment 113 to the FMP. The Chief Counsel for Advocacy of the SBA did not file any comments on the proposed rule.

This final rule directly regulates three groups of entities. This final rule will directly regulate trawl CVs harvesting Pacific cod in the BSAI because it limits how much Pacific cod those trawl CVs may harvest in the Bering Sea, and it may prohibit trawl CVs from participating in the Aleutian Islands Pacific cod fishery if they do not deliver their Pacific cod catch to Aleutian Islands shoreplants. It also directly regulates all non-trawl CVs who are harvesting Pacific cod in the Aleutian Islands because it will prohibit those non-trawl CVs from participating in the Aleutian Islands Pacific cod fishery if they do not deliver their Pacific cod catch to Aleutian Islands shoreplants. Finally, this final will directly regulate all CPs harvesting Pacific cod in the Aleutian Islands because it limits how much Pacific cod those CPs can harvest and process in the Aleutian Islands. This rule does not directly regulate the City of Adak or the City of Atka because it does not impose a requirement on those cities. This rule does not directly regulate entities participating in the harvesting and processing of Pacific cod managed under State GHL fisheries in State waters in the Bering Sea or Aleutian Islands.

The SBA has established size standards for all major industry sectors in the United States. For RFA purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 114111) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide.

Based on the best available and most recent complete data from 2012 through 2014, between 10 and 16 CPs, and an estimated 43 CVs (trawl and non-trawl) will be directly regulated by this action in the BSAI. Of these, no CP is estimated to be a small entity, while 6 trawl CVs and 26 non-trawl CVs are estimated to be small entities based on the best available data on the gross receipts from these entities and their known affiliates. Therefore, a total of 32 vessels considered to be small entities will be directly regulated by this action. The IRFA assumes that each vessel is a unique entity; therefore, the total number of directly regulated entities may be an overestimate because some vessels are likely affiliated through common ownership. These potential affiliations are not known with the best available data and cannot be predicted.

This final rule adds a recordkeeping and reporting requirement to notify NMFS of an Aleutian Islands shoreplant's intent to process Aleutian Islands Pacific cod in the upcoming year; therefore, the recordkeeping, reporting, and other compliance requirements are increased slightly under this final rule. This final rule contains a new requirement for the City of Adak or the City of Atka to notify NMFS of its intent to process Aleutian Islands Pacific cod in the upcoming fishing year in order for the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside to go into effect in the upcoming fishing year. The City Manager of Adak or the City Administrator of Atka is required to provide NMFS with an official notification of intent prior to December 8, 2016, and no later than October 31 for each year after 2016, for the harvest set-aside to go into effect in the upcoming year. The professional skills necessary to provide this notice include writing, sending email, and access to a U.S. Post Office.

The RFA requires identification of any significant alternatives to the final rule that accomplish the stated objectives of the final action, consistent with applicable statutes, and that would minimize any significant economic impact of the final rule on small entities. The Council considered a status quo alternative and one action alternative with several options and suboptions. The combination of options and suboptions under the action alternative effectively provided a broad range of potential alternative approaches to status quo management. Under the status quo, there would have been a continued risk that fishing communities in the Aleutian Islands would not be able to sustainably participate in the Aleutian Islands Pacific cod fishery. The action alternative does not affect any non-CDQ fishery sector's Pacific cod allocation, or the TAC of Aleutian Islands Pacific cod. The action alternative accomplishes the stated objectives of prioritizing a portion of the Aleutian Islands Pacific cod TAC for harvest by vessels that deliver their catch to Aleutian Islands shoreplants for processing, while minimizing adverse economic impacts on small entities and the potential for stranding a portion of the Aleutian Islands Pacific cod TAC.

The Council considered a range of dates, varying amounts of Aleutian Islands Pacific cod for the harvest set-aside and Bering Sea sector limitation, and a suite of mechanisms to relieve the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside under the action alternative. The Council recommended the final combination of dates, harvest set-aside amounts, harvest limitations, and provisions to relieve the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside that would give fishery participants sufficient opportunity to harvest and deliver Aleutian Islands Pacific cod to the benefit of Aleutian Islands communities and shoreplants without stranding the trawl CV sector allocation or the Aleutian Islands Pacific cod TAC. The Council recommended and NMFS is implementing selected options in the action alternative such that if specific notification or minimum harvest and processing requirements are not met by a specific date, the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside will either not go into effect in the upcoming year, or they will be lifted for the remainder of the year.

The Council considered and rejected two options under the action alternative. One option would have required that if less than 50 percent of the Aleutian Islands CV Harvest Set-Aside had been landed at an Aleutian Islands shoreplant by a given date, ranging from February 28 to March 15, the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside would be lifted. Instead, the Council selected an option that requires a minimum weight (1,000 mt) rather than a minimum percentage of the Aleutian Islands CV Harvest Set-Aside that must be landed at an Aleutian Islands shoreplant for processing by a given date (February 28) for the Bering Sea Trawl CV A-Season Sector Limitation and the Aleutian Islands CV Harvest Set-Aside to remain in place.

The Council also considered and rejected an option that would have exempted certain processing vessels with a history of processing Aleutian Islands Pacific cod in at least 12 out of 15 recent years from the final restrictions on processing and would have allowed them to process up to 2,000 mt of Aleutian Islands Pacific cod while the set-aside was in effect. This option could have allowed up to 10 processing vessels to continue to process Pacific cod during the A-season, limiting the effectiveness of this final rule to minimize the risk of a diminished historical share of Aleutian Islands Pacific cod being delivered to Aleutian Islands shoreplants and the communities where those shoreplants are located.

NMFS has not identified any duplication, overlap, or conflict between this final action and existing Federal rules.

This final rule contains a collection-of-information requirement subject to the PRA and which has been approved by OMB under control number 0648-0743.

Public reporting burden for Notification of Intent to Process Aleutian Islands Pacific cod is estimated to average 30 minutes per individual response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Send comments regarding this data collection, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS Alaska Region (see ADDRESSES), and by email to [email protected], or fax to (202) 395-5806.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at: http://www.cio.noaa.gov/services_programs/prasubs.html.

For the reasons set out in the preamble, NMFS amends 15 CFR part 902 and 50 CFR part 679 as follows:

Background

Pursuant to the provisions of the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention, implemented by the Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601 et seq.), the United States made a bilateral agreement with Greece, which entered into force on November 21, 2011, concerning the imposition of import restrictions on archaeological materials representing Greece's cultural heritage from the Upper Paleolithic (beginning approximately 20,000 B.C.) through the 15th century A.D., and ecclesiastical ethnological material representing Greece's Byzantine culture (approximately the 4th century through the 15th century A.D.). On December 1, 2011, CBP published CBP Dec. 11-25 in the Federal Register (76 FR 74691), which amended 19 CFR 12.104g(a) to indicate the imposition of these restrictions and included a list designating the types of archaeological and ecclesiastical ethnological material covered by the restrictions.

Import restrictions listed in 19 CFR 12.104g(a) are effective for no more than five years beginning on the date on which the agreement enters into force with respect to the United States. This period can be extended for additional periods not to exceed five years if it is determined that the factors which justified the initial agreement still pertain and no cause for suspension of the agreement exists (19 CFR 12.104g(a)).

On February 5, 2016, the Department of State received a request by the Government of the Hellenic Republic to extend the Agreement. Subsequently, the Department of State proposed to extend the Agreement. After considering the views and recommendation of the Cultural Property Advisory Committee, the Assistant Secretary for Educational and Cultural Affairs, United States Department of State, determined that the cultural heritage of Greece continues to be in jeopardy from pillage of archaeological materials representing Greece's cultural heritage from the Upper Paleolithic (beginning approximately 20,000 B.C.) through the 15th century A.D., and ecclesiastical ethnological material representing Greece's Byzantine culture (approximately the 4th century through the 15th century A.D.); and made the necessary determinations to extend the import restrictions for an additional five years. Diplomatic notes have been exchanged, reflecting the extension of those restrictions for an additional five-year period. Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect this extension of the import restrictions.

The Designated List archaeological materials representing Greece's cultural heritage from the Upper Paleolithic (beginning approximately 20,000 B.C.) through the 15th century A.D., and ecclesiastical ethnological material representing Greece's Byzantine culture (approximately the 4th century through the 15th century A.D.) covered by these import restrictions is set forth in CBP Dec. 11-25. The Agreement and Designated List may also be found at the following Internet Web site address: https://eca.state.gov/cultural-heritage-center/cultural-property-protection/bilateral-agreements/greece.

The restrictions on the importation of these archaeological and ecclesiastical ethnological materials from Greece are to continue in effect for an additional five years. Importation of such material continues to be restricted unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met.

This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure (5 U.S.C. 553(a)(1)). In addition, CBP has determined that such notice or public procedure would be impracticable and contrary to the public interest because the action being taken is essential to avoid interruption of the application of the existing import restrictions (5 U.S.C. 553(b)(B)). For the same reasons, a delayed effective date is not required under 5 U.S.C. 553(d)(3).

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

It has been determined that this rule is not a significant regulatory action under Executive Order 12866.

This regulation is being issued in accordance with 19 CFR 0.1(a)(1).

For the reasons set forth above, part 12 of title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below:

Table of Contents I. Executive Summary A. Purpose and Coverage of the Final Rule B. Summary of the Major Provisions of the Final Rule C. Legal Authority D. Costs and Benefits II. Table of Abbreviations and Acronyms Commonly Used in This Document III. Background A. Need for the Regulation/History of This Rulemaking B. Summary of Comments on the Proposed Rule C. General Overview of the Final Rule IV. Legal Authority V. Comments on the Proposed Rule and FDA Response A. Introduction B. Description of General Comments and FDA Response C. Specific Comments on Timelines for FDA Review and Action and FDA Response D. Specific Comments on the Filing Determination and FDA Response E. Technical Amendments VI. Effective Date VII. Economic Analysis of Impacts A. Introduction B. Summary VIII. Analysis of Environmental Impact IX. Paperwork Reduction Act of 1995 X. Federalism XI. Reference I. Executive Summary A. Purpose and Coverage of the Final Rule

This final rule implements part of the SIA (Pub. L. 113-195) enacted November 26, 2014, by establishing timelines and related performance metrics for the review of certain submissions under FDA's regulation governing TEAs, which is codified in § 330.14 (21 CFR 330.14). The TEA regulation sets forth criteria and procedures by which OTC drugs initially marketed in the United States after the OTC Drug Review began in 1972 and OTC drugs without any U.S. marketing experience can be considered in the OTC drug monograph system. Section 586F(b) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360fff-6(b)), which was added by the SIA, requires FDA to issue regulations providing for the timely and efficient review of submissions under the TEA regulation, including establishing: (1) Reasonable timelines for reviewing and acting on such submissions for non-sunscreen OTC active ingredients and other conditions (non-sunscreen TEA conditions) and (2) measurable metrics for tracking the extent to which such timelines are met.

FDA is also amending the TEA regulation to make the TEA process more efficient and predictable for product sponsors, consumers, and FDA by adding filing determination requirements and criteria, and by addressing the withdrawal of consideration of TEAs and safety and effectiveness data submissions.

The timelines and metrics in this final rule apply to non-sunscreen TEA conditions. FDA is addressing timelines for review of sunscreen active ingredients and other related topics regarding sunscreens separately, under other provisions of the SIA.

This final rule implements the SIA requirements for non-sunscreen TEAs by establishing timelines for FDA to review and take action on non-sunscreen TEA conditions. Timelines are provided for each stage of the TEA process and are intended to be reasonable while taking into consideration FDA public health priorities and available resources. The timelines established by this rule provide sponsors, other interested persons, and the public with consistent time frames for expected Agency action.

This rule also implements the SIA requirements for non-sunscreen TEAs by establishing measurable metrics that FDA will use for tracking the extent to which the timelines set forth in the regulations are met. The Agency anticipates that, among other potential benefits, making the metrics publicly available will improve transparency by providing sponsors, other interested persons, and the public with information that will enable them to quickly find out the number of TEAs that have been submitted to FDA. Over time, these measurements may also assist the Agency with resource planning and use.

The applicability of these metric and timeline provisions are generally limited to non-sunscreen TEAs submitted after the enactment of the SIA.

The final rule also amends the existing TEA regulation to provide for FDA to make filing determinations regarding safety and effectiveness data submissions for eligible TEA conditions. This additional procedural step provides early notification on whether submissions are sufficiently complete to permit a substantive review by FDA.

In addition, the rule amends the existing TEA regulation to include a provision regarding the withdrawal of consideration of TEAs, and safety and effectiveness data submissions. The withdrawal provision provides clarity on the status of TEAs, and safety and effectiveness data submissions that are no longer being pursued, so that FDA does not spend resources on these submissions.

Finally, the final rule adds certain definitions, and makes minor conforming and clarifying changes to the existing TEA regulation.

This rule is issued under FDA's authority to regulate OTC drug products under the FD&C Act (see sections 201, 501, 502, 503, 505, 510, 586F, and 701(a) of the FD&C Act (21 U.S.C. 321, 351, 352, 353, 355, 360, 360fff-6, and 371(a))). As stated in the Federal Register of January 23, 2002 (67 FR3060), in which the final rule establishing the TEA process was published, submission of a new drug application (NDA) has been required before marketing a new drug since passage of the FD&C Act in 1938 (21 U.S.C. 355). To market a new drug, the drug must first be approved under section 505 of the FD&C Act. Section 701(a) of the FD&C Act authorizes FDA to issue regulations for the efficient enforcement of the FD&C Act. FDA's regulations in part 330 describe the conditions for a drug to be considered GRASE and not misbranded. If a drug meets each of the conditions contained in part 330, as well as each of the conditions contained in any applicable OTC drug monograph, and other applicable regulations, it is considered generally recognized as safe and effective (GRASE) and not misbranded, and is not required by FDA to obtain approval under section 505 of the FD&C Act.

In addition, section 586F of the FD&C Act requires FDA to issue regulations providing for the timely and efficient review of certain submissions under the TEA regulation in § 330.14. Section 586F of the FD&C Act specifically requires these regulations to include timelines and metrics associated with the review of those submissions under the TEA regulation. This rule adds timeline and metrics provisions that are intended to implement section 586F of the FD&C Act.

We expect that the final rule will make the TEA process more efficient and predictable, and improve communication between FDA, sponsors, and other interested persons. Sponsors and other interested persons may benefit from knowing whether additional data are needed and what optimal steps to take to receive a GRASE determination, and we will be able to bring resolution to TEA conditions. However, we do not know the monetary value of added predictability.

We expect the rule will create a minimal burden on persons that submit safety and effectiveness data submissions, primarily when they send a letter to request a meeting with us. Thus, we anticipate no increase in annual recurring costs for either small or large sponsors or other interested persons. We expect the six current sponsors of non-sunscreen TEAs covering conditions that have been found eligible to be considered for inclusion in the OTC drug monograph system will incur one-time costs to read and understand the rule.

We also estimate sponsors will submit two additional TEAs annually, and each of these sponsors will also spend time reading and understanding the rule. The present value of the total costs over 10 years ranges from about $17,000 to $35,000 with a 7 percent discount rate and from about $19,000 to $38,000 with a 3 percent discount rate. With a discount rate of 7 percent and 3 percent, we estimate that on average affected sponsors will incur less than $150 of annualized costs per year.

The OTC drug monograph system was established to evaluate the safety and effectiveness of all OTC drug products marketed in the United States before May 11, 1972, that were not covered by NDAs and all OTC drug products covered by “safety” NDAs that were marketed in the United States before enactment of the 1962 drug amendments to the FD&C Act. In 1972, FDA began its OTC Drug Review to evaluate OTC drugs by therapeutic categories or classes (e.g., sunscreens, antacids), rather than on a product-by-product basis, and to develop “conditions” under which classes of OTC drugs are GRASE and not misbranded.

FDA publishes these conditions in the Federal Register in the form of OTC drug monographs, which consist primarily of active ingredients, labeling, and other general requirements. Final monographs for OTC drugs that are GRASE and not misbranded are codified in part 330. Manufacturers of drugs that meet each of the conditions contained in part 330, including each of the conditions contained in any applicable OTC drug monograph, and other applicable regulations, need not seek FDA clearance before marketing.

Initially, OTC drug conditions not marketed in the United States prior to the inception of the OTC Drug Review were not eligible for review under the OTC drug monograph process. The TEA process, established by regulations finalized in 2002 (§ 330.14), expanded the scope of the OTC Drug Review. A “condition,” for purposes of the TEA regulation, is an active ingredient or botanical drug substance (or a combination of active ingredients or botanical drug substances), dosage form, dosage strength, or route of administration marketed for a specific OTC use. The TEA process provides a potential pathway for OTC conditions, including new active ingredients or dosage forms that previously had no U.S. marketing history or that were marketed in the United States after the OTC Drug Review began, to be marketed under an OTC drug monograph.

Active ingredients and other conditions that satisfy the TEA eligibility requirements are subject to the same safety, effectiveness, and labeling standards that apply to other conditions under the OTC monograph process (see § 330.14(g)). The TEA regulation requires multistep, notice-and-comment rulemaking procedures before an active ingredient or other condition is added to an OTC drug monograph.

The TEA process begins with the submission of a TEA containing data documenting the OTC marketing history of the active ingredient, combination of active ingredients, or other condition(s) (e.g., a new dosage strength for an active ingredient already included in an OTC drug monograph). FDA reviews the application and determines whether the sponsor's marketing data establish that the condition or conditions have been marketed to a material extent and for a material time, as set forth in the TEA regulation's eligibility requirements. If the condition is not found eligible, FDA will send a letter to the sponsor explaining why the condition was not found acceptable. If the marketing data satisfy the TEA regulation's eligibility criteria, FDA publishes a notice of eligibility (NOE) in the Federal Register announcing that the active ingredient or other condition is being considered for inclusion in an OTC drug monograph and calling for submissions of safety and efficacy data for the proposed OTC use.

We note that although a TEA is the application regarding the time and extent of marketing, which leads to an eligibility determination (resulting in publication of an NOE or a letter of ineligibility), references to TEAs or applications (including in the SIA) sometimes encompass FDA's review of the condition's eligibility and the GRASE determination for the condition. Thus, these references may be used to mean the TEA itself, the safety and effectiveness data submission, FDA's GRASE determination, associated order or rulemaking actions, or all of these. In this rule and preamble, the terms “TEA” and “safety and effectiveness data submission” are used, where appropriate, to describe the two distinct submissions under the TEA regulation. However, the term “TEA process” may be used when referring to one or more actions under the TEA regulation.

If, after FDA reviews the safety and effectiveness data, the Agency initially determines that the active ingredient or other condition is GRASE, it will publish a notice of proposed rulemaking (NPRM) to include the condition in an appropriate OTC drug monograph.

If the condition is initially determined not to be GRASE, FDA will inform the sponsor and other interested persons that submitted data of its decision by letter, and will include the letter in the relevant public docket (§ 330.14(g)(4)). The Agency will also publish a NPRM to include the condition in § 310.502 (21 CFR 310.502). The sponsor and other interested persons will have an opportunity to submit comments and new data on FDA's initial determination and NPRM (§ 330.14(g)(5)). After evaluation of any additional data submitted, FDA will either issue a final rule or a new NPRM, if necessary, in the Federal Register.

In November 2014, Congress passed the SIA to supplement the TEA process with regard to both sunscreen and non-sunscreen OTC drug products. Section 586F of the FD&C Act was added by the SIA and only applies to TEAs for drugs other than nonprescription sunscreen active ingredients or combinations of nonprescription sunscreen active ingredients (see sections 586 and 586F of the FD&C Act (21 U.S.C. 360fff and 360fff-6) as amended by the SIA). For FDA review of non-sunscreen TEA conditions, section 586F includes two main requirements. The first requirement (see section 586F(a) of the FD&C Act), which is generally outside the scope of this rule, is regarding a framework and timelines for review of certain eligible TEA conditions pending before the date of enactment of the SIA. The second general requirement (see section 586F(b) of the FD&C Act) is that FDA issue a regulation that includes: (1) Timelines for review of new non-sunscreen TEA conditions (with certain exceptions noted in sections 586F(a)(1) and (3)) and (2) measurable metrics for tracking the extent to which the timelines are met. Accordingly, FDA published a proposed rule on April 4, 2016, to address both timelines and metrics, as required by the SIA.

As described in the proposed rule “Food and Drug Administration Review and Action on Over-the-Counter Time and Extent Applications” (81 FR 19069, April 4, 2016) (Proposed Rule), FDA had determined that with regard to non-sunscreen TEAs, the best way to both address the statutory requirements of the SIA and to make certain FDA-initiated modifications to the TEA process set forth in § 330.14 was to: (1) Propose a new section (§ 330.15) that is specific to non-sunscreen TEA conditions and establishes the SIA-required timelines and metrics and (2) amend § 330.14 with regard to process improvements for TEAs for all OTC drugs (such as providing format and content criteria for a filing determination and addressing withdrawal of consideration).

We refer readers to the preamble of the Proposed Rule for additional information about the development of the Proposed Rule. The Agency requested public comments on the Proposed Rule, and the comment period closed June 3, 2016.

We received comments from a trade association and several individual citizens. The comments were generally supportive. In addition to a few general comments, we received comments specific to the proposed timeline provision as well as on the format and content of the safety and effectiveness submissions.

This rule finalizes the Proposed Rule. The following subsections give a brief summary of the proposed provisions we are finalizing, including a summary of the key changes between the proposed and final rules.

We proposed that a condition in a TEA submitted under § 330.14 would be subject to the timelines for FDA review and action except for: (1) A sunscreen active ingredient or a combination of sunscreen active ingredients, or other conditions for sunscreen ingredients or (2) a non-sunscreen active ingredient or combination of non-sunscreen active ingredients, and other conditions for such ingredients submitted in a TEA under § 330.14 before November 27, 2014, subject to section 586F(a)(1)(C) of the FD&C Act. The exceptions are based on provisions of the SIA, including section 586F(b) of the FD&C Act, which directs the Agency to issue regulations establishing timelines for drugs other than nonprescription sunscreen active ingredients or combinations of nonprescription active ingredients. For additional discussion on the development of this provision see the preamble (81 FR 19069 at 19073) of the Proposed Rule.

We are finalizing this provision without change.

In accordance with section 586F(b) of the FD&C Act, FDA proposed timelines for each of the various stages of the TEA process for conditions within the scope of the rule. The proposed timelines for each stage take into consideration factors set forth under the SIA. For additional discussion on the development of this provision, see the preamble (81 FR 19069 at 19073 to 19077) of the Proposed Rule.

We are finalizing this provision with one clarifying change to acknowledge that, with respect to the 90-day timeline for FDA to issue a filing determination, a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

Section 586F(b) of the FD&C Act requires FDA to establish measurable metrics for tracking the extent to which the timelines set forth in the regulations are met. We proposed to maintain a publicly available posting of metrics for the review of TEAs and safety and effectiveness data submissions submitted under § 330.14 that are subject to the timelines, and update the posting annually. The proposed metrics, when publically posted, should provide sponsors and the public with information that will enable them to quickly ascertain the number of TEAs that have been submitted to FDA, and the Agency's performance in meeting the proposed timelines. For additional discussion on the development of this provision, see the preamble (81 FR 19069 at 19077) of the Proposed Rule.

We are finalizing this provision without change.

We proposed additional definitions that, in general, are intended to clarify the beginning or ending of the timelines for FDA review and action. We proposed to add these definitions to § 330.14 instead of § 330.15 because § 330.14 describes the TEA process to which these definitions apply. For additional discussion on the development of this provision, see the preamble (81 FR 19069 at 19077 to 19078) of the Proposed Rule.

We are finalizing this provision with clarifying changes to the definition of “Date of filing” and “Safety and effectiveness data submission” to acknowledge that a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

We proposed certain filing determination requirements to help improve the content and format of a safety and effectiveness data submission. We also proposed timelines related to these proposed new requirements and proposed processes that apply whether the submission is accepted for filing, refused, or filed over protest. The proposed requirement and related timelines were developed, in part, to provide a clear pathway for the Agency to indicate when a submission does not contain the information necessary for a complete review and what additional information is needed. For additional discussion on the development of this provision, see the preamble (81 FR 19069 at 19078 to 19079) of the Proposed Rule.

We are finalizing the provision with several changes to the Proposed Rule for clarification purposes (for additional details on the changes, see section V.E):

• Throughout the provision, we have made clarifying changes to acknowledge that a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

• With respect to § 330.14(j)(2), we are clarifying in this final rule that data submitted after a submission has been filed will be reviewed as part of the proposed rulemaking if there is adequate time before the NPRM will publish, or if there is not adequate time, the data will be evaluated as comments to the NPRM.

• In § 330.14(j)(3), we are changing the proposed term “informal conference” to “meeting” to use consistent terminology with the SIA.

• In both § 330.14(j)(2) and (3), we clarify that a copy of the notice will be posted to the docket.

• In § 330.14(j)(3), we originally proposed the process that a person that submitted a safety and effectiveness data submission must follow to request that FDA file a submission over protest. To avoid potential ambiguity, we are modifying § 330.14(j)(3) to clarify that the submitter cannot request to file over protest without first having a meeting with FDA. In addition, this final rule clarifies the status of the submission and the TEA condition once FDA has refused to file a submission.

We proposed to add a withdrawal provision to new § 330.14(k). The proposed provision allowed a sponsor to request withdrawal of consideration of a TEA or safety and effectiveness data submission. In addition, we also proposed (§ 330.14(k)(1)(ii)) that inaction by a sponsor in certain circumstances may be deemed by FDA as a withdrawal of consideration. The proposed § 330.14(k)(2) also included a provision that FDA would give notice to the sponsor before deeming the submission withdrawn from consideration to give the sponsor an opportunity to provide an update and request FDA not withdraw the submission. Another proposed provision, § 330.14(k)(3), provided that the notice of withdrawal of consideration would be posted to the docket. In addition, we proposed in § 330.14(k)(4) that if the TEA or safety and effectiveness data submission is deemed withdrawn, the timelines under § 330.15(c) and the metrics under § 330.15(b) no longer apply. The provisions were proposed in part to enable the Agency to better allocate resources by providing a process for the Agency to suspend work on TEAs or safety and effectiveness data submissions that are no longer being pursued by the sponsor. For additional discussion on the development of these provisions see the preamble (81 FR 19069 at 19079 to 19080) of the Proposed Rule.

We are finalizing the provision with several clarifying changes to the Proposed Rule (for additional details on the changes, see section V.E):

• Throughout the provision, we have made clarifying changes to acknowledge that a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

• Under § 330.14(k)(1)(ii), we no longer include that a sponsor's failure to act on a submission is a reason for FDA's deeming the submission withdrawn because until the sponsor or other interested person acts and files a TEA submission or safety and effectiveness data submission, there is nothing for FDA to deem withdrawn from consideration. For example, once a notice of eligibility is issued, the TEA is no longer under consideration and the eligible condition is not deemed under consideration until a safety and effectiveness data submission is filed.

• We have revised the proposed § 330.14(k)(2) to extend the time period to make a request that FDA not deem a submission withdrawn from consideration.

• The final rule makes a technical change to proposed § 330.14(k)(3) to account for the situation in which an NOE for a TEA has not been issued and the TEA therefore is not in the public docket.

• The final rule also clarifies in § 330.14(k)(3) that if FDA deems a submission withdrawn from consideration, the condition still remains eligible for consideration if an NOE was issued, and the sponsor or any interested person can pursue consideration of the condition in the future by submitting a new safety and effectiveness data submission.

We proposed minor changes to § 330.14 for clarity and consistency purposes. These changes included adding definitions to proposed new paragraph (a). We proposed several minor amendments to § 330.14(f) for clarity and for consistency with the OTC monograph regulations under § 330.10. We also revised § 330.14(f) to use terminology consistent with the new definition in § 330.14(a)(5) for “safety and effectiveness data submission” when referring to a data package submitted for an eligible TEA condition. We also proposed to add the word “feedback” prior to the word “letter” in the first sentence of § 330.14(g)(4) to use terminology consistent with the proposed new definition for “feedback letter” in § 330.14(a)(7). For additional discussion on the development of this provision, see the preamble (81 FR 19069 at 19080) of the Proposed Rule.

We are finalizing this provision with changes to § 330.14(f) in order to clarify that a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

This rule is issued under FDA's authority to regulate OTC drug products under the FD&C Act (see sections 201, 501, 502, 503, 505, 510, 586F, and 701(a) of the FD&C Act). As stated in the Federal Register of January 23, 2002, in which the final rule establishing the original TEA process was published, submission of an NDA has been required before marketing a new drug since passage of the FD&C Act in 1938 (21 U.S.C. 355). To market a new drug, the drug must first be approved under section 505 of the FD&C Act. Section 701(a) of the FD&C Act authorizes FDA to issue regulations for the efficient enforcement of the FD&C Act. FDA's regulations in part 330 describe the conditions for a drug to be considered GRASE and not misbranded. If a drug meets each of the conditions contained in part 330, as well as each of the conditions contained in any applicable OTC drug monograph, and other applicable regulations, it is considered GRASE and not misbranded, and is not required by FDA to obtain approval under section 505 of the FD&C Act.

In addition, section 586F of the FD&C Act requires FDA to issue regulations providing for the timely and efficient review of certain submissions under the TEA regulation in § 330.14. Section 586F of the FD&C Act specifically requires these regulations to include timelines and metrics associated with the review of certain submissions under the TEA regulation. Therefore, § 330.15 adds timeline and metrics provisions that are intended to implement section 586F of the FD&C Act.

We received three comment letters on the Proposed Rule, each containing one or more comments on one or more issues. The comments were submitted by a trade association and individual consumers. The submissions overall support the objectives of the rule. None of the comments suggested changes to specific provisions of the Proposed Rule.

We describe and respond to the comments in sections V.B. through V.D. We have numbered each comment to help distinguish between different comments. The number assigned to each comment or comment topic is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.

(Comment 1) The comments generally support the TEA process, the establishment of timelines associated with the general steps in that process, and the proposed revisions to the TEA regulation.

(Response 1) We appreciate the support expressed in the comments received. The TEA process is intended to provide a potential pathway for OTC conditions, including newer active ingredients that previously had no U.S. marketing history or that were marketed in the United States after the OTC Drug Review began, to be marketed under an OTC drug monograph. The associated timelines and revisions to the TEA regulation are intended to implement certain requirements in the SIA and to make the TEA process more efficient and predictable.

(Comment 2) One comment stated that the explanation for the proposed timelines was clear. However, the comment suggested that additional changes to the monograph system could further streamline the projected TEA timeline.

(Response 2) This final rule establishes timelines within the context of the general OTC monograph process, which involves rulemaking to establish general recognition of safety and effectiveness for conditions in a monograph. Because this rule is limited to the TEA process and not the overall monograph regulatory framework, changes to the OTC monograph process that in turn could affect the timelines established in this rule are outside the scope of this rulemaking.

(Comment 3) One comment expressed concern that factors such as the format and content of the data submission, the complexity of the data, competing Agency priorities, and available Agency resources and reasonableness could delay TEA reviews and actions many years beyond the established timelines.

(Response 3) As explained in the preamble to the Proposed Rule, section 586F(b) of the FD&C Act provides that the timelines for review of non-sunscreen TEA conditions shall: (1) Reflect FDA public health priorities (including potential public health benefits of including additional drugs in the OTC drug monograph system), (2) take into consideration the resources available for carrying out such public health priorities and the relevant review processes and procedures, and (3) be reasonable, taking into account the required consideration of priorities and resources. We accordingly took these factors into consideration when establishing timelines. Furthermore, we determined that instead of setting multiple timelines for submissions of varying content, complexity, and format, it would be more efficient and sensible, for each stage of the TEA process, to set one general timeline for the review of non-sunscreen TEA conditions that accommodates anticipated variation among submissions. Because anticipated variation is already accounted for, FDA expects the time frames to be achievable in most circumstances.

(Comment 4) With respect to the format and content of submissions, one comment seeks FDA guidance on the inclusion of certain information from foreign data sources for non-sunscreen active ingredients. The comment incorporated a comment that was previously submitted to FDA on its draft guidance for industry “Nonprescription Sunscreen Drug Products—Content and Format of Data Submissions To Support a GRASE Determination Under the Sunscreen Innovation Act” 1 (nonprescription sunscreen content and format draft guidance) (Ref. 1).

(Response 4) As explained in the preamble to the Proposed Rule, the general advice provided in the nonprescription sunscreen content and format draft guidance (Ref. 1) may also be useful to persons preparing safety and effectiveness data submissions for non-sunscreen TEAs. The comment's request for guidance on the inclusion of certain information from foreign data sources in the safety and effectiveness data submission is outside the scope of this rulemaking. However, the Agency will consider providing additional guidance to address this issue.

The revised regulatory text includes technical amendments that we have made to the proposed provisions in order to clarify requirements. In the following subsections, we summarize the changes that are intended to clarify amendments to the relevant provisions.

We are finalizing §§ 330.14(a), (f), (j), (k), and 330.15(c)(2) with changes to clarify that a safety and effectiveness data submission can be submitted by a person other than the sponsor of the TEA.

In proposed § 330.14(a), we defined the term “Sponsor” to mean the person that submitted the TEA, and we defined “Safety and effectiveness data submission” to mean, in part, a data package submitted by a sponsor. Generally we expect the person submitting the TEA (i.e., the sponsor) will submit a safety and effectiveness data submission upon issuance of a NOE. However, upon issuance of the NOE, the TEA is no longer under consideration, and the sponsor does not necessarily have to be the person that submits the safety and effectiveness data submission. Therefore, while we are not changing the definition of “Sponsor,” we are modifying the definition of “Safety and effectiveness data submission” to clarify that the submission can be submitted by a person other than the sponsor.

Correspondingly, we are clarifying the proposed definition of “Date of filing” under § 330.14(a) and clarifying the proposed §§ 330.14(f) and 330.15(c)(2) by removing references to the “sponsor” in order to acknowledge that the safety and effectiveness data submission can be submitted by a person other than the sponsor. In addition, throughout § 330.14(j) and (k), we have removed references to the “sponsor” in the context of a safety and effectiveness data submission and replaced the term with more general terms, such as “submitter” or “person that submitted the safety and effectiveness submission,” in order to acknowledge that the safety and effectiveness data submission can be submitted by a person other than the sponsor.

In addition to the changes noted in the previous subsection, we are finalizing the provision with several additional changes for clarification purposes.

In § 330.14(j)(2), FDA proposed that the date of filing will begin the FDA timelines described in § 330.15(c)(3) and (4). Because FDA needs adequate time to review submitted data and the timeline for FDA to review and develop a NPRM begins as soon as the safety and effectiveness data submission has been filed, we are clarifying that data submitted after a submission has been filed will be reviewed before issuance of the NPRM if there is adequate time; otherwise, the data will be evaluated as comments to the NPRM. We note that although other submitted data submissions may be considered under the rulemaking process, they will not be subject to a filing determination. Furthermore, as with comments submitted after the comment period, any data submitted after the comment period for the NPRM may not be considered before issuance of the final rule.

We are also adding language to both § 330.14(j)(2) and (3) to clarify that when FDA sends a notice to the person that submitted a safety and effectiveness data submission informing that person that the submission is filed or filed over protest, a copy of the corresponding notice will be posted to the docket. The posting to the docket, which is public, provides other interested persons notice that a submission is filed and FDA is beginning its review.

Additionally, in proposed § 330.14(j)(3), we described the process for cases in which FDA refuses to file the safety and effectiveness data submission. The Proposed Rule provided that the sponsor (now submitter) can request an informal conference within 30 days of FDA notifying the sponsor that it refuses to file the submission. We are changing the term “informal conference” to “meeting” to be consistent with the SIA. In addition, the proposed provision explained that a sponsor's request to file over protest must be within 120 days of the meeting with FDA. To avoid potential ambiguity, we are modifying § 330.14(j)(3) to clarify that a sponsor (now submitter) cannot request to file over protest without first meeting with FDA.

Finally, we are clarifying the status of a safety and effectiveness data submission that FDA has refused to file by including at the end of § 330.14(j)(3) that if FDA refuses to file a safety and effectiveness data submission and the submission is not filed over protest, then the submission is no longer deemed under consideration. If the original submitter or other interested person wishes to pursue consideration of an eligible condition at some point in the future, a new safety and effectiveness data submission must be submitted.

We are finalizing the provision with several clarifying changes.

We no longer include failure to act on a submission as a reason that FDA may deem the submission to be withdrawn from consideration, as was proposed under § 330.14(k)(1)(ii). In the preamble to the Proposed Rule, we explained there have been past instances when a NOE was issued but the sponsor never submitted safety and effectiveness data and the TEA condition remained unresolved. We proposed that a failure to act on a submission, which could include a sponsor's failure to file a safety and effectiveness data submission for a TEA-eligible condition, is one reason for FDA to deem the submission withdrawn from consideration and that, for purposes of the provision, this could include deeming a TEA-eligible condition withdrawn from consideration. However, in such a scenario when a condition is found eligible and there has not been a safety and effectiveness data submission, there is no action for FDA to take. Once a NOE is issued, the TEA is no longer under consideration. Also, since the sponsor or any other interested person is not obligated or under an established deadline for submitting a safety and effectiveness data submission, we do not consider the TEA-eligible condition to be under consideration until such a submission is filed. As a result, a sponsor's failure to act on a submission will not result in the need for FDA to deem a submission or other aspect of the TEA process withdrawn from consideration, and inclusion of this provision is not necessary.

We also proposed in § 330.14(k)(1)(ii) that FDA may deem a submission to be withdrawn from consideration due to the sponsor's failure to respond to communications from FDA. This provision remains, and we note the reference to “communications” encompasses the notice of withdrawal under § 330.14(k)(2) and any preceding communication from FDA that the sponsor failed to respond to.

In § 330.14(k)(2), we proposed that FDA will notify the sponsor of a submission that FDA intends to deem withdrawn under § 330.14(k)(1)(ii), and that the sponsor will then have 30 days from the date of the notice to request that FDA not withdraw consideration of the TEA or safety and effectiveness data submission. We are changing the time provided to request that FDA not withdraw consideration from 30 days to 90 days.

We are also further revising proposed § 330.14(k)(3), in which FDA proposed that a notice of withdrawal will be posted to the docket when FDA deems a submission withdrawn from consideration. We are including a clarification that when a condition has been found eligible, even if the safety and effectiveness data submission is withdrawn, not only does the NOE remain in the public docket but the condition remains eligible for consideration, so that the condition can still be considered in the future if a new safety and effectiveness data submission is received. In addition, we are adding an exception to the notice of withdrawal being posted to the docket. Specifically, when a TEA submission is withdrawn from consideration before the issuance of an NOE, the notice of withdrawal will not be posted to the public docket and will only be sent to the sponsor because in such an instance the TEA, itself, is not on public display.

Finally, although not a change to the Proposed Rule, we note as we discussed in the preamble to the Proposed Rule, that if a sponsor requests withdrawal of consideration of its TEA or safety and effectiveness data submission, FDA generally intends to stop its review. However, although FDA may withdraw consideration of a TEA or safety and effectiveness determination, we may determine not to withdraw or not to stop review in some cases. For example, if FDA has already issued a NPRM that tentatively determines that the active ingredient or other condition is GRASE for an OTC use or is not GRASE for an OTC use, FDA may continue the rulemaking and proceed to issue a final rule.

The SIA requires that the final rule be published not less than 30 calendar days before the effective date of the regulation. Consequently, this final rule will become effective 30 calendar days after the date of the rule's publication in the Federal Register.

Beginning on that date, the timelines and metrics set forth in this regulation will apply to the review of non-sunscreen TEAs, and safety and effectiveness data submissions to which this regulation is applicable, and any amended provisions of § 330.14 will apply to the TEA process under that regulation.

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. We believe that this final rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this final rule does not impose significant new economic burdens on any entity, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $146 million, using the most current (2015) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

In table 1, we provide the Regulatory Information Service Center/Office of Information and Regulatory Affairs Consolidated Information System accounting information.

Section 118 of the Copyright Act, title 17 of the United States Code, creates a statutory license for the use of published nondramatic musical works and published pictorial, graphic, and sculptural works in connection with noncommercial broadcasting.

On November 29, 2012, the Copyright Royalty Judges (Judges) adopted final regulations governing the rates and terms of copyright royalty payments under section 118 of the Copyright Act for the license period 2013-2017. See 77 FR 71104. Pursuant to these regulations, on or before December 1 of each year, the Judges shall publish in the Federal Register a notice of the change in the cost of living for the rate codified at § 381.5(c)(3) relating to compositions in the repertory of SESAC. The adjustment, fixed to the nearest dollar, shall be the greater of “the change in the cost of living as determined by the Consumer Price Index (all consumers, all items) [CPI-U] * * * during the period from the most recent index published prior to the previous notice to the most recent index published prior to December 1, of that year,” or 2%. 37 CFR 381.10.

The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2014, to the most recent index published before December 1, 2016, is 1.6%.1 In accordance with 37 CFR 381.10(b), the Judges announce that the COLA for calendar year 2017 shall be 2%. Application of the 2% COLA to the current rate for the performance of published nondramatic musical compositions in the repertory of SESAC—$149 per station—results in an adjusted rate of $152 per station.

In consideration of the foregoing, the Judges amend part 381 of title 37 of the Code of Federal Regulations as follows:

The satellite carrier compulsory license establishes a statutory copyright licensing scheme for the retransmission of distant television programming by satellite carriers. 17 U.S.C. 119. Congress created the license in 1988 and has reauthorized the license for additional five-year periods, most recently with the passage of the STELA Reauthorization Act of 2014, Public Law 113-200.

On August 31, 2010, the Copyright Royalty Judges (Judges) adopted rates for the section 119 compulsory license for the 2010-2014 term. See 75 FR 53198. The rates were proposed by Copyright Owners and Satellite Carriers 1 and were unopposed. Id. Section 119(c)(2) of the Copyright Act provides that, effective January 1 of each year, the Judges shall adjust the royalty fee payable under Section 119(b)(1)(B) “to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index (for all consumers and for all items) [CPI-U] published by the Secretary of Labor before December 1 of the preceding year.” Section 119 also requires that “[n]otification of the adjusted fees shall be published in the Federal Register at least 25 days before January 1.” 17 U.S.C. 119(c)(2).

The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2015, to the most recent index published before December 1, 2016, is 1.6%.2 Application of the 1.6% COLA to the current rate for the secondary transmission of broadcast stations by satellite carriers for private home viewing—27 cents per subscriber per month—results in an unchanged rate of 27 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(1). Application of the 1.6% COLA to the current rate for viewing in commercial establishments—56 cents per subscriber per month—results in a rate of 57 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(2).

In consideration of the foregoing, the Judges amend part 386 of title 37 of the Code of Federal Regulations as follows:

I. Background and Overview

On January 22, 2010 (75 FR 6474, February 9, 2010), EPA promulgated a new 1-hour primary NAAQS for NO2 at a level of 100 parts per billion, based on a 3-year average of the 98th percentile of the yearly distribution of 1-hour daily maximum concentrations. Pursuant to section 110(a)(1) of the CAA, states are required to submit SIPs meeting the requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were required to submit such SIPs for the 2010 NO2 NAAQS to EPA no later than January 22, 2013.

In a proposed rulemaking published on July 20, 2016 (81 FR 47094), EPA proposed to approve Florida's 2010 1-hour NO2 NAAQS infrastructure SIP submission submitted on January 22, 2013, with the exception of the elements related to the ambient air quality monitoring and data system of section 110(a)(2)(B), and the prevention of significant deterioration (PSD) permitting requirements for major sources of sections 110(a)(2)(C), prong 3 of D(i), and (J). EPA is not acting on Florida's January 22, 2013, infrastructure SIP submission regarding the PSD permitting requirements for major sources of sections 110(a)(2)(C), prong 3 of D(i) and (J) for the 2010 1-hour NO2 NAAQS because it previously approved these requirements. See 80 FR 14019, March 18, 2015. Regarding section 110(a)(2)(B), EPA is not taking any action on this portion of Florida's 2010 1-hour NO2 NAAQS infrastructure SIP submission in this action and will instead address this requirement in a separate action. Also note that EPA did not propose any action regarding the interstate transport provisions pertaining to the contribution to nonattainment or interference with maintenance in other states of prongs 1 and 2 of section 110(a)(2)(D)(i) because Florida's January 22, 2013 SIP submission did not address these requirements. The details of Florida's submission and the rationale for EPA's actions for this final rulemaking are explained in the July 20, 2016, proposed rulemaking. Comments on the proposed rulemaking were due on or before August 19, 2016. EPA received no adverse comments on the proposed action.

With the exception of the elements related to the ambient air quality monitoring and data system of section 110(a)(2)(B), and the PSD permitting requirements for major sources of sections 110(a)(2)(C), prong 3 of D(i), and (J), EPA is taking final action to approve Florida's infrastructure SIP submission for the 2010 1-hour NO2 NAAQS submitted on January 22, 2013. EPA is taking final action to approve Florida's infrastructure SIP submission for the 2010 1-hour NO2 NAAQS because the submission is consistent with section 110 of the CAA.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 23, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

40 CFR part 52 is amended as follows:

Throughout this document, “we”, “us,” and “our” refer to the EPA.

On October 6, 2016 (81 FR 69448), the EPA proposed to determine that the San Joaquin Valley Serious nonattainment area failed to attain the 1997 PM2.5 national ambient air quality standards (NAAQS or “standards”) by the applicable attainment date of December 31, 2015, based on complete, quality-assured and certified ambient air quality data for the 2013 to 2015 monitoring period. The San Joaquin Valley PM2.5 nonattainment area (or “the Valley”) covers San Joaquin County, Stanislaus County, Merced County, Madera County, Fresno County, Tulare County, Kings County, and the valley portion of Kern County (see 40 CFR 81.305 for the precise boundaries of the PM2.5 nonattainment area).

As discussed further in our October 6, 2016 proposed rule, in 1997, the EPA established annual and 24-hour PM2.5 standards of 15.0 micrograms per cubic meter (μg/m3) and 65 μg/m3, respectively (see 40 CFR 50.7). Since promulgation of the 1997 PM2.5 NAAQS, the EPA has established more stringent PM2.5 NAAQS but, for reasons given in the proposed rule, the 1997 PM2.5 NAAQS remain in effect in the San Joaquin Valley and represent the standards for which today's determinations are made. See pages 69448-69449 of the proposed rule.

Our proposed rule provided background information on: The effects of exposure to elevated levels of PM2.5; the designations and classifications of the San Joaquin Valley under the Clean Air Act (CAA or “Act”) for the 1997 PM2.5 NAAQS; the plans developed by California to address nonattainment area requirements for San Joaquin Valley; the reclassification of the San Joaquin Valley from “Moderate” to “Serious” for the 1997 PM2.5 NAAQS and the related extension of the applicable attainment date to December 31, 2015; the request by California to extend the December 31, 2015 attainment date for San Joaquin Valley under CAA section 188(e); and the denial of that request by the EPA. The EPA published its final denial of the State's attainment date extension request on October 6, 2016 at 81 FR 69396.

In our October 6, 2016 proposed rule, we also described the following: The statutory basis (i.e., CAA sections 179(c)(1) and 188(b)(2)) for the obligation on the EPA to determine whether an area's air quality meets the 1997 PM2.5 NAAQS; the EPA regulations establishing the specific methods and procedures to determine whether an area has attained the 1997 PM2.5 NAAQS; and the PM2.5 monitoring networks operated in the Valley by the California Air Resources Board and the San Joaquin Valley Unified Air Pollution Control District and related monitoring network plans. We also documented our previous review of the networks and network plans, the agencies' annual certifications of ambient air monitoring data, and our determination that 15 of the 17 monitoring sites within the Valley produced valid design values for purposes of comparison with the 1997 PM2.5 NAAQS.

Under EPA regulations in 40 CFR part 50, section 50.7 and in accordance with Appendix N, the 1997 annual PM2.5 standards are met when the design value is less than or equal to 15.0 μg/m3, and the 1997 24-hour PM2.5 standards are met when the design value is less than or equal to 65 μg/m3. More specifically, the design value for the annual PM2.5 standards is the 3-year average of annual mean concentration, and the 1997 annual PM2.5 NAAQS are met when the design value for the annual PM2.5 standards at each eligible monitoring site is less than or equal to 15.0 μg/m3. With respect to the 24-hour PM2.5 standards, the design value is the 3-year average of annual 98th percentile 24-hour average values recorded at each eligible monitoring site, and the 1997 24-hour PM2.5 NAAQS are met when the design value for the 24-hour standards at each such monitoring site is less than or equal to 65 μg/m3.

In our proposed rule, to evaluate whether the San Joaquin Valley attained the 1997 PM2.5 NAAQS by the December 31, 2015 attainment date, we determined the 2013-2015 design values at each of the 17 PM2.5 monitoring sites for the 1997 annual and 24-hour PM2.5 standards. See Tables 1 and 2 of our October 6, 2016 proposed rule. Based on the design values at the various sites, we found that eight sites, all in the central and southern San Joaquin Valley, did not meet the 1997 annual PM2.5 NAAQS of 15.0 μg/m3, and that four sites, all in southwestern San Joaquin Valley, did not meet the 1997 24-hour PM2.5 NAAQS of 65 μg/m3 by the December 31, 2015 attainment date. The 2015 annual design value site, i.e., the site with the highest design value based on 2013-2015 data, is the Corcoran site with a 2015 annual PM2.5 design value of 22.2 μg/m3 and a 24-hour PM2.5 design value of 79 μg/m3.

For the San Joaquin Valley to attain the 1997 PM2.5 NAAQS by December 31, 2015, the 2015 design value (reflecting data from 2013-2015) at each eligible monitoring site in the Valley must be equal to or less than 15.0 μg/m3 for the annual standards and 65 μg/m3 for the 24-hour standards. Since several sites for each averaging period had 2015 design values greater than those values, based on quality-assured and certified data for 2013-2015, we proposed to determine that the San Joaquin Valley failed to attain the 1997 annual and 24-hour PM2.5 standards by the December 31, 2015 attainment date. With today's action, we finalize this determination.

Finally, in our proposed rule, we described the CAA requirements that would apply if the EPA were to finalize the proposed finding of failure to attain. See our October 6, 2016 proposed rule for more information about the topics summarized above.

Our October 6, 2016 proposed rule provided for a 30-day comment period. During this period, we received no comments.

Under CAA sections 179(c)(1) and 188(b)(2), and based on reasons set forth in our proposed rule and summarized above, the EPA is taking final action to determine that the San Joaquin Valley Serious nonattainment area failed to attain the 1997 annual and 24-hour PM2.5 NAAQS by the December 31, 2015 attainment date. This determination is based upon monitored air quality data from 2013 through 2015.

As a result of this final determination, the State of California is required under CAA sections 179(d) and 189(d) to submit, by December 31, 2016, a revision to the SIP for the San Joaquin Valley. The SIP revision must, among other elements, demonstrate expeditious attainment of the standards within the time period provided under CAA section 179(d), provide for annual reduction in the emissions of PM2.5 or a PM2.5 plan precursor pollutant within the area of not less than five percent until attainment,1 demonstrate reasonable further progress, and include contingency measures. The requirement for a new attainment demonstration under CAA section 189(d) also triggers the requirement for the SIP revision for quantitative milestones under section 189(c) that are to be achieved every three years until redesignation to attainment.

The new attainment date is set by CAA section 179(d)(3), which relies upon section 172(a)(2) to establish a new attainment date but with a different starting point than provided in section 172(a)(2). Under section 179(d)(3), the new attainment date is the date by which attainment can be achieved as expeditiously as practicable, but no later than five years from the publication date of the final determination of failure to attain. The EPA may extend the attainment date for a period no greater than 10 years from the final determination, considering the severity of nonattainment and the availability and feasibility of pollution control measures.

This final action in and of itself establishes no new requirements; it merely documents that air quality in the San Joaquin Valley did not meet the 1997 PM2.5 standards by the CAA deadline. For that reason, this final action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this final action does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP obligations discussed herein do not apply to Indian tribes and thus this action will not impose substantial direct costs on tribal governments or preempt tribal law. Nonetheless, the EPA has notified the tribes within the San Joaquin Valley PM2.5 nonattainment area of this final action.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 23, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

Chapter I, title 40 of the Code of Federal Regulations is amended as follows:

The National Flood Insurance Act of 1968 (NFIA), as amended (42 U.S.C. 4001 et seq.), authorizes the Administrator of the Federal Emergency Management Agency (FEMA) to establish and carry out a National Flood Insurance Program (NFIP) to enable interested persons to purchase insurance against loss resulting from physical damage to or loss of real or personal property arising from flood in the United States. See 42 U.S.C. 4011(a). Under the NFIA, FEMA has the authority to undertake arrangements to carry out the NFIP through the facilities of the Federal government, utilizing, for the purposes of providing flood insurance coverage, insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations, as fiscal agents of the United States. See 42 U.S.C. 4071. To this end, FEMA is authorized to “enter into any contracts, agreements, or other arrangements” with private insurance companies to utilize their facilities and services in administering the NFIP, and on such terms and conditions as may be agreed upon. See 42 U.S.C. 4081(a).

Pursuant to this authority, FEMA enters into a standard Financial Assistance/Subsidy Arrangement (Arrangement) with private sector property insurers, also known as Write Your Own (WYO) companies, to sell NFIP flood insurance policies under their own names and adjust and pay claims arising under the Standard Flood Insurance Policy (SFIP). Each Arrangement entered into by a WYO company must be in the form and substance of the standard Arrangement, a copy of which is in Title 44 of the Code of Federal Regulations (CFR) Part 62, Appendix A. See 44 CFR 62.23(a). Since the primary relationship between the Federal government and WYO companies is one of a fiduciary nature (that is, to ensure that any taxpayer funds are appropriately expended), FEMA established “A Plan to Maintain Financial Control for Business Written Under the Write Your Own Program,” also known as the “Financial Control Plan.” See 42 U.S.C. 4071; 44 CFR 62.23(f), Part 62, App. B. To ensure financial and statistical control over the NFIP, as part of the Arrangement, WYO companies agree to adhere to the standards and requirements in the Financial Control Plan.

On May 23, 2016, FEMA published a proposed rule (81 FR 32261) proposing to remove the copy of the Arrangement in 44 CFR part 62, Appendix A, and the summary of the Financial Control Plan in 44 CFR part 62, Appendix B. In addition, FEMA proposed to make conforming amendments to remove citations to these appendices in 44 CFR 62.23.

FEMA proposed to remove the Arrangement from the NFIP regulations because it is no longer necessary to include a copy of the Arrangement in the CFR. FEMA originally included the Arrangement in the CFR to inform the public of the procedural details of the WYO Program. See 50 FR 16236 (April 25, 1985). There are now more efficient ways to inform the public of the procedural details of the WYO Program, and after more than 30 years of operation, the public is more familiar with the procedural details of the WYO Program and the flood insurance provided through WYO companies. Further, the NFIA does not require FEMA to include a copy of the Arrangement in the CFR. See 42 U.S.C. 4081. Finally, it is inappropriate to codify in regulation a contract, agreement, or other arrangement between FEMA and private insurance companies.

With the removal of the copy of the Arrangement from the NFIP regulations, FEMA and its industry partners can have flexibility to make operational adjustments and corrections to the Arrangement more quickly and efficiently. Although the rulemaking process plays an important role in agency policymaking, when this process is not required or necessary, the requirement to undergo rulemaking can unnecessarily slow down the operation of the NFIP by FEMA and its industry partners and can result in the use of alternate, less than ideal measures that result in business and operational inefficiencies.

FEMA also proposed to remove the summary of the Financial Control Plan in Appendix B, because this information is contained in either FEMA's Financial Control Plan,1 or in 44 CFR Section 62.23. Reprinting these requirements elsewhere in the CFR is duplicative and unnecessary.

Finally, FEMA proposed to make conforming amendments to the language in 44 CFR 62.23 where FEMA references Appendix A and Appendix B of 44 CFR part 62, because those appendices will be removed.

FEMA received five comments in response to the proposed rule, one from a WYO company (Allstate/FEMA-2016-0012-0003), one from a member of the public, two from organizations representing agents and brokers (Independent Insurance Agents & Brokers of America, Inc./FEMA-2016-0012-0004; National Association of Professional Insurance Agents/FEMA-2016-0012-0005), and one collective comment from four organizations representing insurance companies (The American Insurance Association (AIA), The Financial Services Roundtable (FSR), The National Association of Mutual Insurance Companies (NAMIC), The Property and Casualty Insurers Association of America (PCIAA)/FEMA-2016-0012-0006). FEMA responds to these comments below.

With this regulatory action, FEMA finalizes the proposed rule, with one revision made in response to the comments received. FEMA is adding a requirement to 44 CFR 62.23 that FEMA must publish the Arrangement in the Federal Register at least 6 months prior to the effective date of the Arrangement.

Under the terms of the Arrangement, FEMA must publish in the Federal Register each year, and make available to the WYO companies, the terms for subscription or re-subscription to the Arrangement. WYO companies must notify FEMA of their intent to re-subscribe or not re-subscribe within 30 days of the publication of the notice in the Federal Register. See Financial Assistance/Subsidy Arrangement, Article V(B).

FEMA received two comments requesting FEMA to provide WYO companies sufficient notice prior to the effective date of a revised Arrangement (FEMA-2012-2016-0003/FEMA-2012-2016-0006). The commenters said this would provide time for WYO companies to assess the impact to their business (FEMA-2012-2016-0003), and provide time for the marketplace to assess the impact of changes, thereby allowing WYO companies to determine what, if any, changes would be necessary (FEMA-2012-2016-0006). They stated that this would also provide WYO companies time to decide whether to continue in or withdraw from the NFIP (FEMA-2012-2016-0003; FEMA-2012-2016-0006). One commenter suggested this notice be at least 1 year prior to the effective date of the revised Arrangement (FEMA-2012-2016-0003).

The current Arrangement does not specify how far in advance FEMA must publish the Arrangement in the Federal Register. Typically, FEMA publishes the Arrangement in the Federal Register in August, and the Arrangement becomes effective October 1.2 As a result, WYO companies typically have less than a month to decide whether to subscribe, because they must notify FEMA of their intent to re-subscribe or not re-subscribe within 30 days of the publication of the Arrangement in the Federal Register. WYO companies commented that they accepted this short timeline because they knew that they would receive notice of substantive changes to the Arrangement as part of the notice-and-comment rulemaking process. (FEMA-2016-0012-0006).

FEMA agrees it should provide sufficient notice to WYO companies prior to the effective date of a revised Arrangement. Therefore, FEMA is adding a requirement to paragraph (a) of Section 63.23 which states that each year, FEMA must publish the Arrangement at least 6 months before the effective date of the Arrangement. FEMA adds this 6-month notice requirement to the NFIP regulations to provide the WYO companies time to assess the impact of any changes to the Arrangement, including whether to re-subscribe. In addition, by placing this requirement in the CFR, FEMA will preserve certainty and protect the ability of WYO companies to adjust to any changes to the Arrangement. FEMA believes the 6-month notice provision is an appropriate balance between the 1-year notice proposed by the commenter, and the language of the current Arrangement, which does not specify how much notice FEMA must provide WYO companies, other than it must publish it each year.

Much like how WYO companies need time to adjust to changes to the Arrangement, FEMA needs time to evaluate the need for changes to the Arrangement. A 6-month notice period will enable FEMA, working with WYO companies, to incorporate lessons learned from the performance of the previous year's Arrangement into the next year's Arrangement. With a 1-year notice period, FEMA would have to publish the Arrangement for the next Arrangement Year the same day the current year's Arrangement takes effect. Accordingly, if stakeholders requested a change to the Arrangement based on experience for the current year, FEMA could not implement the change until nearly two years later. A 1-year notice period would also hinder FEMA's ability, in partnership with WYO companies, to make these operational adjustments and corrections to the Arrangement more quickly and efficiently, which is one of the stated purposes of this rule.

FEMA believes the 6-month notice provision is appropriate because it aligns with the amount of notice FEMA typically provides when it makes changes, for example, through bulletins announcing program changes or changes to the Flood Insurance Manual. Finally, FEMA believes the notice provision provides flexibility to both FEMA and WYO companies, because the 6-month notice is the minimum notice; FEMA may provide more notice than 6 months as necessary.

In addition to providing notice in the Federal Register 6 months prior to the effective date of the Arrangement, FEMA will continue to engage WYO companies, as it does currently, before it makes any changes to the Arrangement.

Two commenters stated that removing the copy of the Arrangement from the NFIP regulations might lead to significant variation among agreements executed between FEMA and the various WYO companies, including disparity in the obligations and expectations between entities not party to, but affected by, the Arrangement (FEMA-2016-0012-0003; FEMA-2016-0012-0006). Currently, 44 CFR 62.23(a) requires that arrangements between the NFIP and private insurance companies as part of the WYO Program be in the “form and substance” of the copy of the Arrangement found in Appendix A of Part 62. This final rule maintains this requirement. However, the rule no longer requires that the copy of the Arrangement be found in the CFR. As a result, FEMA will continue to enter into the same standard Arrangement with each WYO company or other insurer. Any changes FEMA makes to the Arrangement will be uniformly reflected in each arrangement entered into by WYO companies in a particular year.

One commenter stated that in 1983, as a condition of private insurance companies returning to the NFIP, FEMA agreed to propose and implement the Arrangement through the Federal Register so that it could not be changed quickly (FEMA-2016-0012-0003). The commenter stated that the current regulatory structure creates an incentive for FEMA to work with the WYO companies to avoid surprises, which promotes the sharing of information and helps prevent unintended consequences. A second commenter stated that the condition of the return of the private insurance companies to the NFIP in 1983 was that the Arrangement would be codified in the CFR (FEMA-2016-0012-0006). The second commenter echoed the statement of the first commenter, stating that since 1983, both FEMA and the companies operate in an atmosphere of trust and certainty, as the regulatory process ensures that any issues or proposed changes will be adequately aired before implementation. The second commenter stated that if FEMA removes the Arrangement from the CFR, FEMA must provide a clear, consistently followed, and easily enforced alternative notice requirement.

FEMA is not aware of an agreement between FEMA and WYO companies that, as a condition of the WYO companies returning to the flood program, FEMA agreed to place the Arrangement in the appendices of the NFIP regulations. The WYO Program began in 1983, and FEMA added a copy of the WYO Arrangement to the appendices of the NFIP regulations in 1985 for the stated purpose of informing the public of the procedural details of the WYO Program. See 50 FR 16236 (April 25, 1985).

Two commenters mentioned FEMA's past failure to provide sufficient notice of the Arrangement offer prior to the new Arrangement year (FEMA-2016-0012-0003 and FEMA-2016-0012-0006). Article V.B of the Arrangement requires that a WYO company currently subject to the Arrangement inform FEMA of its intent to re-subscribe or not re-subscribe within 30 days of receiving the offer for the upcoming Arrangement Year. The provision is intended to help FEMA determine whether a current WYO company intends to continue participating or if they intend to not participate again, thus triggering the transition process described in Article V.C. No other similar deadlines or other timelines exist in statute, regulation, or in the Arrangement.

In practice, the Article V.B requirement has led FEMA to aim to provide the annual offer more than 30 days prior to the beginning of the next Arrangement Year to ensure clear program continuity. FEMA believes that the addition of the 6-month notice requirement in the Federal Register provides a clearer timeline going forward and will give WYO companies much greater notice before deciding whether to subscribe for the upcoming Arrangement Year.

Although FEMA is removing the copy of the Arrangement from the NFIP regulations, FEMA is committed to maintaining an atmosphere of trust and certainty with WYO companies. As discussed, FEMA is adding language to the NFIP regulations in Section 63.23(a) providing that each year, FEMA will publish the Arrangement in the Federal Register at least 6 months before the effective date of the Arrangement. However, FEMA intends to work with WYO companies through the NFIP's Industry Management Branch well before publication of the Arrangement in the Federal Register. FEMA believes that the 6-month notice requirement and ongoing collaboration efforts will encourage a more responsive Arrangement-modification process than what is possible through the formalities of the notice-and-comment rulemaking process.

One commenter asked whether WYO companies would be subject to government contract laws if FEMA takes the Arrangement out of the regulatory process and WYO companies sign individual contracts with FEMA (FEMA-2016-0012-0003).

Since 1983, the first year of the WYO program, FEMA has not utilized contracting to effectuate its arrangement with the WYO companies and it has no intention of doing so in the future.

The NFIA authorizes FEMA to “enter into any contracts, agreements, or other arrangements” with private insurance companies to utilize their facilities and services in administering the NFIP, and on such terms and conditions as may be agreed upon. 42 U.S.C. 4081(a) (emphasis added). FEMA interprets section 4081(a) as distinguishing “contracts” from “agreements” and “other arrangements.” Accordingly, FEMA has relied upon section 4081(a)'s authority to enter into appropriate arrangements with private insurance companies.

On these grounds, FEMA has never utilized a contracting mechanism for the arrangements entered into between private insurance companies and FEMA as part of the WYO program. As this rule only changes the manner in which the Arrangement is published, FEMA does not intend to alter the Agency's longstanding interpretation of the NFIA and does not foresee any changes to the legal status of arrangements between FEMA and WYO companies.

One commenter noted that while the NFIA does not require the Arrangement to be codified in the CFR and be subject to public notice and comment, it has been so since the Arrangement's inception, and as a result, FEMA is entitled to the highest Chevron 3 deference in any judicial challenges to its interpretations of the NFIA under the Administrative Procedure Act. The commenter stated that once the Arrangement is removed from the CFR, FEMA would be entitled to only weaker Skidmore 4 deference, and that undoubtedly future judicial challenges to FEMA's interpretations of the Arrangement will raise the fact that FEMA sponsored the Arrangement's removal from the CFR and understood the negative impact on the deference given to its interpretations (FEMA-2016-0012-0006).

FEMA acknowledges the commenter's concern. However, FEMA believes that the effects of this change will be minimal given that the Arrangement is a largely technical document that does little to interpret or expand upon statute. Rather, the NFIP's regulations, particularly 44 CFR part 62, contain the substantive policies and statutory interpretations relevant to the WYO Program. FEMA does not expect the level of deference owed to these regulations to change due to this rule.

Three commenters expressed concern that by removing the Arrangement from the rulemaking process, interested persons not a party to the Arrangement will not have an opportunity to comment on proposed changes (FEMA-2016-0012-0003; FEMA-2016-0012-0004; FEMA-2016-0012-0006). One of these commenters stated that the removal of the Arrangement would prejudice third-party stakeholders (FEMA-2016-0012-0006). The commenter suggested that FEMA establish an alternative mechanism that would allow for meaningful stakeholder and public consultation.

Another commenter stated that the removal of the Arrangement would exclude independent insurance agents from the NFIP purchasing process at an unacceptable detriment to consumers, and that independent insurance agents, through their interactions with consumers, play a pivotal role in educating property owners about their flood insurance purchasing options and providing information vital to the NFIP's current and potential future policy holders (FEMA-2016-2012-0005). This commenter pointed out how the notice of proposed rulemaking stated that removing the Arrangement and the summary of the Financial Control Plan from regulation would keep the Arrangement between FEMA and WYO companies, and thus FEMA's position seemed to be that excluding “the multitude of others involved in the program would improve the complex NFIP process.” The commenter noted that in reality, consumers depend on the wisdom, experience, and access to information provided by independent insurance agents in navigating the program. The commenter acknowledged that the Arrangement is technically between FEMA and the WYO companies, but asserted that other stakeholders including independent insurance agents and members of the public, while not technically direct parties to the contract, are equally affected by the terms of the Arrangement and therefore must be included in any discussions about changes to it. The commenter pointed out that while the notice of proposed rulemaking asserts that removing the Arrangement would allow FEMA and its “industry partners” to be flexible in negotiating changes to the Arrangement, FEMA should be aware that its “industry partners” include more than just the WYO companies.

This commenter expressed “grave concerns” about the appearance of a lack of transparency that would be engendered in the removal of the Arrangement and the summary of the Financial Control Plan, and that NFIP stakeholders and members of the public who hope to see the NFIP reauthorized and improved over the next 18 months will be shut out of any changes being made to these documents if they are removed from regulation, and the essential input the stakeholders and public provide in the regulatory process would be lost. The commenter referred to FEMA's statement in the notice of proposed rulemaking that FEMA has carried out the regulatory process 21 times when seeking changes to the Arrangement, and the regulatory process is necessary and vital to the credibility of both FEMA as a Federal agency and the NFIP as a Federal program.

This commenter noted how, although the notice of proposed rulemaking characterized the removal of the Arrangement as nonsubstantive, FEMA's “description of the benefits of the removal belies FEMA's intent to make substantive changes to the Arrangement upon its removal from regulation.” The commenter stated that once removed from the CFR, changes to the Arrangement would no longer be subject to the valuable input of many parties affected by the terms of the Arrangement, such as independent agents, consumers, adjusters, State insurance regulators, and others.

A third commenter echoed this commenter's concerns that the flexibility and efficiencies that may be gained by removing the Arrangement from the rulemaking process will compromise the current transparent process where interested persons such as adjusters, consumers, or insurance agents who are not a party to the Arrangement but are impacted by the Arrangement are afforded an opportunity to comment on proposed changes (FEMA-2016-0004). This commenter stated that although the notice of proposed rulemaking stated that FEMA will continue to post the Arrangement online and in the Federal Register, it did not provide information on how the Arrangement negotiation process is intended to work, including how interested persons who are not a party to the Arrangement but impacted by it can comment on proposed changes or participate in the negotiation process. The commenter asked that FEMA continue to provide an avenue for interested persons to be informed and involved when changes to the Arrangement are considered.

As discussed, FEMA enters into arrangements with insurance companies to utilize their facilities and services in administering the NFIP, and on such terms and conditions as may be agreed upon. See 42 U.S.C. 4081(a). These insurance companies are fiscal agents of the United States, and through the terms of the Arrangement, sell NFIP flood insurance policies under their own names and adjust and pay claims arising under the SFIP. See 42 U.S.C. 4071. As discussed in the proposed rule, FEMA is removing the copy of the Arrangement from the NFIP regulations, because the NFIA does not require FEMA to include a copy of the Arrangement in the CFR and it is inappropriate to codify in regulation a contract, agreement, or other arrangement between FEMA and private insurance companies.

While FEMA appreciates the input of other stakeholders such as adjusters, consumers, and insurance agents, FEMA does not believe it is necessary to establish a formal alternative mechanism to allow for stakeholder and public consultation on the Arrangement. All members of the public have opportunities to comment on proposed rulemakings affecting the NFIP. Such regulations reflect the overarching policies and structures of the NFIP.

In addition to comments made as part of a rulemaking, FEMA encourages the public to comment on any other aspect of the NFIP. The NFIP Office of the Flood Insurance Advocate provides an excellent avenue for voicing comments, questions, or concerns. Members of the public can contact the Office via email at [email protected]. Members of the public can also send inquiries to Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 400 C Street SW., Washington, DC 20472.

Two commenters stated the current structure, with the copy of the Arrangement in the NFIP regulations, helps to promote consistent policies, procedures, and claims handling, and helps to shield FEMA from political pressures (FEMA-2016-2012-0003; FEMA-2016-2012-0006). FEMA believes the NFIP regulations, including the SFIP, help to promote consistent policies and claims handling. The copy of the Arrangement in the NFIP regulations is a copy of an arrangement between FEMA and private insurance companies acting as fiscal agents of the United States. As such, FEMA believes removing a copy of the Arrangement from the CFR will not have an impact on NFIP policies, procedures, and claims handling. The public will still have an opportunity to comment on proposed changes to the NFIP, including claims handling, whenever FEMA makes changes to its NFIP regulations.

One commenter asked whether FEMA intended to repeal any portion of 44 CFR Section 63.23(a), which requires the Arrangement to be in the form and substance of the standard arrangement, a copy of which is included in Appendix A (FEMA-2016-2012-0003). In the proposed rule, FEMA proposed to remove reference to Appendix A in paragraph (a) of Section 62.23, because FEMA was proposing to remove Appendix A. As a result, FEMA will remove reference to Appendix A in the last sentence of paragraph (a) of Section 62.23 which will then read: “Arrangements entered into by WYO companies or other insurers under this subpart must be in the form and substance of the standard arrangement, titled `Financial Assistance/Subsidy Arrangement.' ”

FEMA received two comments outside the scope of this rulemaking. One comment was on an individual's observation of a flood event, which is outside the scope of this rulemaking (FEMA-2016-2012-0002). Another comment recommended changes to the existing Arrangement (FEMA-2016-2012-0006). As noted in this final rule, FEMA is adding a requirement to the regulations that FEMA will publish the Arrangement in the Federal Register at least 6 months before the effective date of the Arrangement. FEMA will continue to engage WYO companies, as it does currently, before it makes any changes to the Arrangement. In accordance with the process in the current Arrangement, FEMA published notice for the Fiscal Year 2017 Arrangement on August 4, 2016 (81 FR 51460), but FEMA will consider the commenter's recommendations for future possible revisions to the Arrangement.

Executive Orders 13563 and 12866 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget has not reviewed this rule.

FEMA is issuing a final rule removing Appendix A and B from Part 62 of 44 CFR. These Appendices contain a copy of the WYO Financial Assistance/Subsidy Arrangement (Arrangement) and a summary of the “Plan to Maintain Financial Control for Business Written Under the Write Your Own Program” (Financial Control Plan), respectively. In addition, FEMA makes conforming amendments to remove citations to these appendices in 44 CFR 62.23.

Since 1983, FEMA has entered into a standard Arrangement with WYO companies to sell NFIP insurance policies under their own names and adjust and pay SFIP claims.5 Since 1985, FEMA has included a copy of the Arrangement in the CFR. In order to maintain the Arrangement, FEMA has undertaken rulemaking approximately 21 times to update the copy of the Arrangement in the regulations. The NFIA does not require FEMA to place the Arrangement in the CFR. Accordingly, undergoing such rulemakings is an unnecessary requirement.

FEMA is removing the copy of the Arrangement in 44 CFR part 62, Appendix A, because the NFIA does not require FEMA to include a copy of the Arrangement in the CFR. Therefore, its inclusion is no longer necessary. In 1985, FEMA added a copy of the Arrangement to the regulations to inform the public of the procedural details of the WYO Program. However, since that time, there have been technological advances for disseminating information to the public, and there are now more efficient ways to inform the public of the procedural details of the WYO Program. For example, FEMA now posts a copy of the Arrangement on its Web site. This serves the purpose of promoting awareness and disseminating program information, without needing to go through the rulemaking process. This rulemaking does not impose any changes to the current Arrangement with WYO companies. As such, FEMA believes there will not be any costs imposed on participating WYO companies because of this final rule.

FEMA received a public comment highlighting that “circumventing” the rulemaking process could permit FEMA to more easily make changes to the Arrangement. Changes to the Arrangement would not necessarily occur more frequently or be any more impactful in nature than they had been thus far. The pattern of changes seen in the history of the Arrangement, with relatively frequent minor changes and the occasional substantive adjustment, is expected to continue into the future and will not change due to this rule. FEMA will continue to enter into the Arrangement with WYO companies, and make available the Arrangement, as well as the terms for subscription or re-subscription, through Federal Register notice. FEMA will also publish the Arrangement at least 6 months prior to it becoming effective.

One of the benefits associated with this final rule is enhanced flexibility for FEMA and WYO companies to make operational adjustments to the Arrangement more quickly and efficiently in order to be more responsive to the needs of WYO companies and the operation of the NFIP. FEMA received two public comments requesting that FEMA provide WYO companies notice prior to the effective date of a revised Arrangement. FEMA agrees it should provide notice to the WYO companies and will publish the Arrangement in the Federal Register at least 6 months before the effective date of the Arrangement. This 6-month notice requirement will provide the marketplace time to assess the impact of any changes to the Arrangement, including whether to re-subscribe. FEMA believes that the primary benefits will be reinforced as FEMA, working with WYO companies, is able to make operational adjustments and corrections to the Arrangement more quickly and efficiently incorporating lessons learned from the performance of the previous year's Arrangement into the next year's Arrangement. These revisions, both the removal from the CFR as well as the 6- month advance notice, will preserve certainty, maintain transparency, and protect the ability of WYO companies to adjust to any changes to the Arrangement.

As discussed in the proposed rule, although the rulemaking process plays an important role in agency policymaking, when this process is not required or necessary, the requirement to undergo rulemaking can unnecessarily slow down the operation of the NFIP and can result in the use of alternate, less than ideal measures that result in business and operational inefficiencies. The elimination of the administrative burden that accompanies repeated updates to the CFR and the use of alternative, less than ideal measures are an additional benefit. FEMA believes there will be no economic impact associated with implementing the final rule.

Additionally, FEMA will remove a summary of the Financial Control Plan. FEMA removed the plan itself in 1985 thus FEMA does not anticipate any economic impacts from removing the summary.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) requires agency review of proposed and final rules to assess their impact on small entities. When an agency promulgates a final rule under 5 U.S.C. 553, after being required by that section or any other law to publish a general notice of proposed rulemaking, the agency must prepare a final regulatory flexibility assessment (FRFA) or have the head of the agency certify pursuant to 5 U.S.C. 605(b) that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. Having conducted and published an Initial Regulatory Flexibility Analysis (IRFA) for the proposed rule, and having received no public comments on that analysis, FEMA does not believe this final rule will have a significant economic impact on a substantial number of small entities.

NFIA authorizes FEMA to “enter into any contracts, agreements, or other arrangements” with private insurance companies to utilize their facilities and services in administering the NFIP, and on such terms and conditions as may be agreed upon. See 42 U.S.C. 4081. Pursuant to this authority, FEMA enters into a standard Arrangement with private sector property insurers, also known as WYO companies, to sell NFIP flood insurance policies under their own names and adjust and pay claims arising under the policy. Since the primary relationship between the Federal government and WYO companies is one of a fiduciary nature, FEMA established the Financial Control Plan. The NFIA does not require FEMA to include a copy of the Arrangement or a summary of the Financial Control Plan in the CFR.

“Small entity” is defined in 5 U.S.C. 601. The term “small entity” can have the same meaning as the terms “small business”, “small organization” and “small governmental jurisdiction.” Section 601(3) defines a “small business” as having the same meaning as “small business concern” under Section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated, and is not dominant in its field of operation. Section 601(4) defines a “small organization” as any not-for-profit enterprises that are independently owned and operated, and are not dominant in their field of operation. Section 601(5) defines small governmental jurisdictions as governments of cities, counties, towns, townships, villages, school districts, or special districts with a population of less than 50,000. No small organizations or governmental jurisdictions participate in the WYO Program and therefore will not be affected.

The Small Business Administration (SBA) stipulates in its size standards 6 the largest an insurance firm that is “for profit” may be and still be classified as a “small entity.” The small business size standards for North American Industry Classification System (NAICS) code 524126 (direct property and casualty insurance carriers) is 1,500 employees. The size standard for the four remaining applicable codes of 524210 (Insurance Agencies and Brokerages), 524113 (Direct Life Insurance Carriers), 524292 (Third Party Administration of Insurance and Pension Funds) and 524128 (Other Direct Insurance) is $7.0 million in revenue as modified by the SBA, effective February 26, 2016.

This final rule directly affects all WYO companies. There are currently 73 companies participating in the WYO Program; these 73 companies are subject to the terms of the Arrangement and the standards and requirements in the Financial Control Plan. FEMA researched each WYO company to determine the NAICS code, number of employees, and revenue for the individual companies. FEMA used the open-access database, www.manta.com, as well as www.cortera.com to find this information for the size determination. Of the 73 WYO companies, FEMA found a majority of 50 firms were under code 524210 (Insurance Agencies and Brokerages), of which 19 firms or 38 percent were found to be small (with only one lacking full data but presumed to be small). The second largest contingent of 13 firms were under code 524126 (direct property and casualty insurance carriers), of which 9 firms or 69 percent were found to be small (with only one missing data points but presumed to be small). Of the other three aforementioned industry codes, 524113, 524292 and 524128, there was one firm under each and none were small. Finally, six firms were missing industry classifications, and FEMA believes that all but one are likely to be small. In total, we found that 33 of the 73 companies are below these thresholds, and therefore will be considered small entities. Consequently, small entities comprise 45 percent of participating companies.

FEMA believes that the final rule will impose no direct cost on any participating company because it is removing a copy of the Arrangement and a summary of the Financial Control Plan from the CFR, and is not making substantive changes to the Arrangement or the Financial Control Plan itself.

During the proposed rule public comment period, FEMA did not receive any comments discussing the IRFA. Pursuant to the RFA (5 U.S.C. 605 (b)), the administrator of FEMA hereby certifies that this rule will not have a significant economic impact on a substantial number of small entities. Although a substantial number of these small entities will be affected by the final rule, none of these entities will be significantly impacted.

Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. The final rule will not result in such an expenditure, and thus preparation of such a statement is not required.

Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321 et seq. an agency must prepare an environmental assessment and environmental impact statement for any rulemaking that significantly affects the quality of the human environment. FEMA has determined that this rulemaking does not significantly affect the quality of the human environment and consequently has not prepared an environmental assessment or environmental impact statement. Although rulemaking is a major Federal action subject to NEPA, the list of exclusion categories within DHS Instruction 023-01-001-01 includes a categorical exclusion for rules that are of a strictly administrative or procedural nature (A3). This is a rulemaking related to an administrative function. An environmental assessment will not be prepared because a categorical exclusion applies to this rulemaking and no extraordinary circumstances exist.

Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the agency obtains approval from the Office of Management and Budget (OMB) for the collection and the collection displays a valid OMB control number. See 44 U.S.C. 3506, 3507. This final rule does not call for a new collection of information under the PRA. The removal of the Arrangement from the regulation will not impact any existing information collections in that it would not substantively change any of the information collection requirements, because the information collection requirements still exist in the regulations. The existing information collections listed include citations to 44 CFR part 62 Appendices A and B. FEMA will update these citations in the next information collection renewal cycle. FEMA will continue to expect WYO companies to comply with each of the information collection requirements associated with the WYO Program.

The collections associated with this regulation are as follows: (1) OMB Control Number 1660-0038, Write Your Own Company Participation Criteria, 44 CFR 62 Appendix A, which establishes the criteria to return to or participate in the WYO Program; (2) OMB control number 1660-0086, the National Flood Insurance Program—Mortgage Portfolio Protection Program (MPPP), 44 CFR part 62.23 (l)(2) and Appendix B, which is a program lenders can use to bring their mortgage loan portfolios into compliance with flood insurance purchase requirements; and (3) OMB control number 1660-0020, WYO Program, 44 CFR 62.23 (f) and Appendix B, the Federal Insurance and Mitigation Administration program that requires each WYO company to submit financial data on a monthly basis into the National Flood Insurance Program's Transaction Record Reporting and Processing Plan (TRRPP) system as referenced in 44 CFR 62.23(h)(4). Part 62 still requires each of these collections. The removal of the Arrangement from the regulation will not impact these information collections because the existing information collections cover requirements in the regulations, not requirements in the Appendices.

Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a regulation will result in a system of records. A record is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of records is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.

The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires specific procedures when an agency takes action to develop or procure information technology that collects, maintains, or disseminates information that is in an identifiable form. This Act also applies when an agency initiates a new collection of information that will be collected, maintained, or disseminated using information technology if it includes any information in an identifiable form permitting the physical or online contacting of a specific individual. A Privacy Threshold Analysis was completed. This rule does not require a Privacy Impact Analysis or System of Records Notice.

Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.

This rule does not have Tribal implications. Currently, Indian Tribal governments cannot participate in the WYO Program as WYO companies, and thus are not affected by this rule. To participate in the WYO Program, a company must be a licensed property or casualty insurance company and meet the requirements in FEMA regulations at 44 CFR 62.24.

Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.

As noted in the notice of proposed rulemaking, FEMA has determined that this rulemaking does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore does not have federalism implications as defined by the Executive Order. No commenters disagreed with this determination. This rule does not have federalism implications because participation as a WYO company is voluntary and does not affect State policymaking discretion. Moreover, States cannot participate in the WYO Program as WYO companies, and thus are not affected by this regulatory action. To participate in the WYO Program, a company must be a licensed property or casualty insurance company and must meet the requirements in FEMA regulations at 44 CFR 62.24.

Pursuant to Executive Order 11988, each agency is required to provide leadership and take action to reduce the risk of flood loss, to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains in carrying out its responsibilities for (1) Acquiring, managing, and disposing of Federal lands and facilities; (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. In carrying out these responsibilities, each agency must evaluate the potential effects of any actions it may take in a floodplain; to ensure that its planning programs and budget requests reflect consideration of flood hazards and floodplain management; and to prescribe procedures to implement the policies and requirements of the Executive Order.

Before promulgating any regulation, an agency must determine whether the regulations will affect a floodplain(s), and if so, the agency must consider alternatives to avoid adverse effects and incompatible development in the floodplain(s). If the head of the agency finds that the only practicable alternative consistent with the law and with the policy set forth in Executive Order 11988 is to promulgate a regulation that affects a floodplain(s), the agency must, prior to promulgating the regulation, design or modify the regulation in order to minimize potential harm to or within the floodplain, consistent with the agency's floodplain management regulations and prepare and circulate a notice containing an explanation of why the action is to be located in the floodplain. The changes in this rule would not have an effect on land use, floodplain management, or wetlands.

Pursuant to Executive Order 11990, each agency must provide leadership and take action to minimize the destruction, loss or degradation of wetlands, and to preserve and enhance the natural and beneficial values of wetlands in carrying out the agency's responsibilities for (1) Acquiring, managing, and disposing of Federal lands and facilities; and (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. Each agency, to the extent permitted by law, must avoid undertaking or providing assistance for new construction located in wetlands unless the head of the agency finds (1) that there is no practicable alternative to such construction, and (2) that the action includes all practicable measures to minimize harm to wetlands which may result from such use. In making this finding the head of the agency may take into account economic, environmental and other pertinent factors.

In carrying out the activities described in the Executive Order, each agency must consider factors relevant to a proposal's effect on the survival and quality of the wetlands. Among these factors are: Public health, safety, and welfare, including water supply, quality, recharge and discharge; pollution; flood and storm hazards; and sediment and erosion; maintenance of natural systems, including conservation and long term productivity of existing flora and fauna, species and habitat diversity and stability, hydrologic utility, fish, wildlife, timber, and food and fiber resources; and other uses of wetlands in the public interest, including recreational, scientific, and cultural uses. The changes in this rule would not have an effect on land use or wetlands.

Pursuant to Executive Order 12898, —Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994, as amended by Executive Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates environmental justice into its policies and programs. The Executive Order requires each Federal agency to conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that those programs, policies, and activities do not have the effect of excluding persons from participation in programs, denying persons the benefits of programs, or subjecting persons to discrimination because of race, color, or national origin.

This rulemaking will not have a disproportionately high or adverse effect on human health or the environment. Therefore, the requirements of Executive Order 12898 do not apply to this rule.

Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must submit to Congress and to the Government Accountability Office (GAO) a copy of the rule, a concise general statement relating to the rule, including whether it is a major rule, the proposed effective date of the rule, a copy of any cost-benefit analysis, descriptions of the agency's actions under the RFA and the Unfunded Mandates Reform Act, and any other information or statements required by relevant executive orders.

FEMA will send this rule to the Congress and to GAO pursuant to the CRA. The rule is not a major rule within the meaning of the CRA. It will not have an annual effect on the economy of $100,000,000 or more, it will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions, and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

For the reasons stated in the preamble, the Federal Emergency Management Agency amends 44 CFR Chapter I as follows:

Background

The Atlantic commercial shark fisheries are managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The 2006 Consolidated Highly Migratory Species (HMS) Fishery Management Plan (FMP) and its amendments are implemented by regulations at 50 CFR part 635. For the Atlantic commercial shark fisheries, the 2006 Consolidated HMS FMP and its amendments established, among other things, commercial shark retention limits, commercial quotas for species and management groups, accounting measures for under- and overharvests for the shark fisheries, and adaptive management measures such as flexible opening dates for the fishing season and inseason adjustments to shark trip limits, which provide management flexibility in furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas.

On August 29, 2016 (81 FR 59167), NMFS published a rule proposing the 2017 opening dates for the Atlantic commercial shark fisheries, commercial shark fishing quotas based on shark landings information reported as of July 15, 2016, and the commercial shark retention limits for each region and sub-region. The August 2016 proposed rule (81 FR 59167; August 29, 2016) for the 2017 season contains details that are not repeated here. The comment period on the proposed rule ended on September 28, 2016.

During the comment period, NMFS received approximately 300 written and oral comments on the proposed rule. Those comments, along with the Agency's responses, are summarized below. As further detailed in the Response to Comments section below, after considering all the comments, NMFS is opening the fishing seasons for all shark management groups except the blacktip, aggregated LCS, and hammerhead shark management groups in the western Gulf of Mexico sub-region on January 1, 2017, as proposed in the August 29, 2016, proposed rule. The blacktip, aggregated LCS, and hammerhead shark management groups in the western Gulf of Mexico sub-region will open on February 1, 2017, which is a change from the proposed rule. For directed shark limited access permit holders, the blacktip, aggregated LCS, and hammerhead management groups in the entire Gulf of Mexico region will start the fishing season with a retention limit of 45 LCS other than sandbar sharks per vessel per trip. The aggregated LCS and hammerhead shark management groups in the Atlantic region will start the fishing season with a retention limit of 25 LCS other than sandbar sharks per vessel per trip for directed shark limited access permit holders, which is a change from the proposed rule. The retention limit for incidental shark limited access permit holders for all regions has not changed from the proposed rule and remains at 3 LCS other than sandbar sharks per trip and a combined total of 16 small coastal sharks (SCS) and pelagic sharks, combined per trip consistent with § 635.24(a)(3) and (4).

This final rule serves as notification of the 2017 opening dates for the Atlantic commercial shark fisheries and 2017 quotas, based on shark landings data updated as of October 14, 2016, and considering the “opening commercial fishing season” criteria at § 635.27(b)(3). These criteria consider factors such as the available annual quotas for the current fishing season, estimated season length and average weekly catch rates from previous years, length of the season and fishermen participation in past years, impacts to accomplishing objectives of the 2006 Consolidated HMS FMP and its amendments, temporal variation in behavior or biology target species (e.g., seasonal distribution or abundance), impact of catch rates in one region on another, and effects of delayed season openings. This action does not establish or change the annual base commercial quotas established under the 2006 Consolidated HMS FMP and its amendments for any shark management group. The base quotas were established under previous actions, and any changes to those base quotas would be performed through a separate action. Rather, this action adjusts the annual commercial quotas for 2017 based on over- and/or underharvests that occurred in 2016 and previous fishing seasons, consistent with existing regulations and establishes the opening dates for the fisheries. Only the adjusted blacktip quota in the Gulf of Mexico region has changed since the proposed rule, based on updated landings information as of October 14, 2016; all other quotas remain the same as proposed.

NMFS received approximately 300 written and oral comments on the proposed rule from fishermen, dealers, and other interested parties. All written comments can be found at http://www.regulations.gov/ by searching for RIN 0648-XE696. NMFS received approximately 10 oral comments through phone conversations or at the HMS Advisory Panel meeting on September 8, 2016. All of the oral comments are represented with the written comments below.

Comment 1: NMFS received comments regarding the proposed opening dates for the western Gulf of Mexico LCS fisheries on January 1. Some commenters supported the proposed January 1 opening date for both Gulf of Mexico sub-regions, while other commenters supported a delayed western Gulf of Mexico opening date of February 1 to coincide with the religious holiday of Lent.

Response: After considering public comment, NMFS has determined that changing the opening date to February 1 for the blacktip shark, aggregated LCS, and hammerhead shark management groups in the western Gulf of Mexico region, in combination with the change in retention limit (see discussion in Comment 2), will promote equitable fishing opportunities throughout this region. In reaching this determination, NMFS considered, in particular, the regulatory criterion regarding the length of the season in previous years for the different species and/or management groups and whether fishermen had been able to participate in the fishery in those years (§ 635.27(b)(3)(iii)). In 2016, NMFS opened the season on January 1 and closed it on March 12, 2016 (81 FR 12602; March 10, 2016). The State of Louisiana annually plans a state-water closure from April 1 through June 30. However, once NMFS announced that it was closing the Federal fishery, the State of Louisiana closed its waters as well, 2 weeks before its initially planned closure. Shark fishermen and dealers in the western Gulf of Mexico who were not expecting the closure did not have as much of an opportunity to fish as those few fishermen who fished earlier. Based on 2016 landings data, the majority of the shark landings from the western Gulf of Mexico region did not begin to occur until February, which is when other non-shark fisheries close. If NMFS were to open the fishery on January 1, 2017, it is likely that once again the fishery would need to close earlier than April 1 and a number of fishermen who would otherwise participate in the shark fishery based on traditional expectations would not have the opportunity. Furthermore, based on the review of the landings data, delaying the opening until February 1 will provide more equitable fishing opportunities. Thus, opening the season in February, in combination with the higher retention limit (see change discussion in Comment 2), should give all fishermen in the sub-region an equitable opportunity to harvest the quota before the state-water closure.

Comment 2: NMFS received comments regarding the proposed commercial retention limit for the blacktip, aggregated LCS, and hammerhead management groups in the western Gulf of Mexico sub-region. Specifically, some commenters from the western Gulf of Mexico sub-region preferred a retention limit of 45 LCS other than sandbar sharks per vessel per trip instead of the proposed 30 LCS other than sandbar sharks per vessel per trip.

Response: NMFS has determined that the default retention limit of 45 LCS other than sandbar sharks per vessel per trip at the start of the season will ensure equitable fishing opportunities in the western Gulf of Mexico sub-region. In the proposed rule, NMFS proposed a lower trip limit (30 LCS other than sandbar sharks per vessel per trip) in order to slow the harvest level due to the potential for a reduced hammerhead shark quota based on the 2016 sub-regional overharvest and given that the Aggregated LCS and hammerhead shark quotas are linked. The lower proposed trip limit was also intended to ensure the management groups remain open until at least April 2017, which is when the State of Louisiana closes state waters to shark fishing and when that State has asked that we close Federal shark fisheries to match state regulations if quotas are limited (see the criteria listed at § 635.27(b)(3)(vii) and 635.24(a)(8)(iii)). With the change in the western Gulf of Mexico LCS fisheries opening date to February 1 (see Comment 1), and because there are no sub-regional blacktip shark, aggregated LCS, and hammerhead shark management group quota adjustments due to overharvest, NMFS no longer believes a lower retention limit is needed to slow the harvest level to ensure the management groups will remain open until at least April 2017. Rather, NMFS will start the commercial retention limit at 45 LCS other than sandbar sharks per vessel per trip as of February 1, 2017, which is the retention limit preferred in public comments. However, NMFS may utilize the inseason retention limit adjustment during the fishing season if needed to ensure the quotas are not harvested too quickly and the management groups remain open at least until April 2017.

Comment 3: NMFS received several comments regarding the proposed opening date and retention limits for the aggregated LCS and hammerhead management groups in the Atlantic region. Regarding the opening dates, some commenters from the southern and northern part of the Atlantic region supported the proposed opening date of January 1 for the aggregated LCS and hammerhead management groups and retention limits. Some of these commenters requested that NMFS modify the retention limits on an inseason basis to ensure the majority of the quota remains available later in the year since there are no other fisheries open in Florida at the end of the year. Other commenters suggested that NMFS delay the opening of the Atlantic region fishery until the western Gulf of Mexico LCS fisheries closes to ensure better market prices for the shark products. Additionally, comments from some of the fishermen in the southern part of the region preferred lowering the proposed retention limit of 36 to a lower retention limit of three to five LCS other than sandbar sharks per vessel per trip on January 1 with the potential for later inseason retention limit adjustments to ensure the opportunity to fish for sharks in October through December because they participate in other, non-shark fisheries at the beginning of the year and in the shark fisheries later in the year. NMFS also received comments that the LCS retention limit in the Atlantic region should stay at 36 LCS other than sandbar sharks per vessel per trip all season long and that NMFS should not later consider increasing the retention limit to 45 LCS other than sandbar sharks per vessel per trip since the aggregated LCS and hammerhead shark management groups quotas have not increased.

Response: After considering the “opening commercial fishing season” criteria in light of the comments, which reflected general support of the proposed opening date, NMFS has decided to open the fisheries in the Atlantic region on January 1, 2017, as proposed, but with a lower retention limit than proposed. Specifically, on January 1, 2017, the LCS fisheries in the Atlantic region will open with a retention limit of 25 LCS other than sandbar sharks per vessel per trip for directed shark limited access permit holders. NMFS has determined that a lower retention limit at the start of the season will allow NMFS to more easily and closely monitor the quota and catch rates in the beginning of the year to help ensure equitable fishing opportunities later in the year, while still allowing the majority of quota to be harvested later in the year (see the criteria listed at § 635.24(a)(8)(iii)). NMFS chose 25 LCS other than sandbar sharks per vessel per trip because that is the commercial retention limit for the fishery from October 19, 2016, through the rest of the 2016 fishing season (81 FR 72007; October 19, 2016), and would not cause additional changes in fishing practices, thus minimizing any economic or compliance issues within the fishery. Also, this change seemed a reasonable amount between that of an incidental level (3 LCS other than sandbar sharks per vessel per trip) and maximum retention levels (between 36 and 55 LCS other than sandbar sharks per vessel per trip). The January 1 opening date, in combination with this reduced retention limit, should allow fishermen in the southern and northern portions of the Atlantic region the opportunity to fish at the beginning of the year, while providing all fishermen in the Atlantic region fishing opportunities later in the year, when the majority of fishing occurs, as the majority of the quota should still be available.

The proposed rule stated that, if it appears that the quota is being harvested too quickly to allow fishermen throughout the entire region an opportunity to fish, NMFS will consider reducing the commercial retention limit after a portion of the quota is harvested (e.g., 20 percent) and later consider raising the commercial retention limit to 45 LCS other than sandbar sharks per vessel per trip around July 15 to allow greater fishing opportunities later in the year. After considering public comment, NMFS anticipates that it would consider increasing the commercial retention limit around July 15, 2017, as this was the date used for prior season opening dates and was the date NMFS increased the retention limit in 2016 (81 FR 44798; July 11, 2016).

Regarding the request to delay the fishery in the Atlantic region until the shark fisheries in the Gulf of Mexico close, NMFS decided to not delay the LCS fisheries opening date in the Atlantic region until the western Gulf of Mexico fisheries are closed since this would not promote equitable fishing opportunities throughout the Atlantic region. In past fishing seasons, the LCS fisheries in the Gulf of Mexico have closed as early as March 17 or as late as July 17, and never on the same date year to year. Without knowing when the western or eastern Gulf of Mexico LCS fisheries will close, NMFS could not evaluate the “opening commercial fishing season” criteria (§ 635.27(b)(3)) when choosing an opening date for the Atlantic region based on the commenters' request. Thus, NMFS is not making a change in response to this comment and will open the Atlantic LCS fisheries on January 1. NMFS will consider adjusting the commercial retention limit during the season as appropriate to ensure equitable fishing opportunities.

Regarding the comments that having the LCS fisheries in the Atlantic and western Gulf of Mexico regions open at the same time will impact the market prices, while NMFS considers economic impacts as required, market prices are not one of the criteria NMFS evaluates when choosing an opening date. However, in the past, the LCS fisheries in the Atlantic and Gulf of Mexico regions have been open at the same time, and during those times, NMFS has noticed impacts on the ex-vessel prices in either region. For example, in 2016, when both regional LCS fisheries were open in January, the ex-vessel price for Atlantic aggregated LCS was at its lowest when compared to the rest of the year, but was higher than the western Gulf of Mexico aggregated LCS ex-vessel prices.

Comment 4: NMFS received comments regarding the overharvest of the western Gulf of Mexico sub-regional hammerhead shark quota. Some commenters were concerned that NMFS did not propose to adjust the western Gulf of Mexico sub-regional hammerhead shark quota even though the quota was overharvested by 41 percent in 2016.

Response: Based on landings through October 14, 2016, NMFS is not adjusting the western Gulf of Mexico sub-regional hammerhead shark quota in this final rule. As stated in the proposed rule, even though the reported landings in the western Gulf of Mexico exceeded the 2016 sub-regional quota, the total regional Gulf of Mexico reported landings have not exceeded the 2016 regional quota as of October 14, 2016. The regulations implemented through Amendment 6 to the 2006 Consolidated HMS FMP (80 FR 50073; August 18, 2015), provide that sub-regional quota overages (e.g., western Gulf of Mexico sub-region) are only deducted from the next year's quota if the total regional quota (e.g., Gulf of Mexico region) is exceeded. Thus, at this time, because the overall regional quota has not been overharvested, NMFS is not adjusting the western Gulf of Mexico sub-region quota to account for the overharvest. However, because the eastern Gulf of Mexico sub-region remains open at the time of this final rulemaking and quota is still available in that sub-region, NMFS expects that landings will continue to occur. If landings in the eastern Gulf of Mexico sub-region exceed 8.5 mt dw (18,594 lb dw) (i.e., the remainder of the total regional Gulf of Mexico quota), then NMFS will take additional action to reduce the western Gulf of Mexico sub-region quota to account for overharvests in 2018.

Comment 5: NMFS received some comments in support of the proposed rule regulating commercial shark fishing, while other commenters opposed the regulations that allow for increased adjusted quotas as a result of underharvest. Specifically, those in opposition were concerned with the accuracy and the potential for under reporting of shark landings.

Response: As discussed in the proposed rule, shark stocks or management groups that are not overfished and have no overfishing occurring may have any underharvest carried over in the following year, up to 50 percent of the base quota (81 FR 59167; August 29, 2016). Since the Gulf of Mexico blacktip shark management group and smoothhound shark management groups in the Gulf of Mexico and Atlantic regions have been determined not to be overfished and to have no overfishing occurring, available underharvest from the 2016 fishing season for these management groups may be applied to the respective 2017 quotas to the extent allowable, and NMFS is doing so in this final rule.

All commercial shark landings and quotas are monitored with the HMS electronic dealer reporting system, which has been in use since January 1, 2013. This improvement in commercial quota monitoring technology and the weekly, as opposed to biweekly, reporting on paper provides more information on each dealer transaction, including a requirement of reporting all shark landings to the species level, and ensures that quotas are not exceeded. Overall, this improvement helps with monitoring of commercial landings of all shark species and with closing management groups in a more efficient and timely manner.

Comment 6: NMFS received approximately 280 comments in support of more conservative shark management measures by, for example, implementing lower commercial shark fishing quotas or prohibiting all commercial shark fishing to stop shark finning.

Response: These comments are outside the scope of this rulemaking because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. The quotas and general management measures were established in previous rulemakings, which were the final rules to implement Amendment 2 to the 2006 Consolidated HMS FMP (73 FR 35778, June 24, 2008; corrected on 73 FR 40658; July 15, 2008), Amendment 5a to the 2006 Consolidated HMS FMP (78 FR 40318; July 3, 2013), Amendment 6 to the 2006 Consolidated HMS FMP (80 FR 50073; August 18, 2015), and Amendment 9 to the 2006 Consolidated HMS FMP (80 FR 73128; November 24, 2015). Management of the Atlantic shark fisheries is based on the best available science to achieve optimum yield while also rebuilding overfished shark stocks and preventing overfishing. NMFS currently is considering conservation and management to rebuild the dusky shark stock and prevent overfishing in Amendment 5b to the 2006 Consolidated HMS FMP (81 FR 71672; October 18, 2016). The comment period for that rulemaking ends on December 22, 2016.

Comment 7: NMFS received a comment suggesting that we change the start of the fishing year for all shark species from January to September.

Response: This comment is outside the scope of this rulemaking because the fishing year is defined in the regulations as January 1 to December 31. The rule did not reanalyze the overall start date of the shark fishing year, which was established in the 2006 Consolidated HMS FMP.

Comment 8: NMFS received a comment suggesting that we not implement these regulations until such time that adequate shark research can be accomplished.

Response: Management of the Atlantic shark fisheries is based on the best available science to achieve optimum yield while preventing overfishing and to rebuild overfished shark stocks. Domestic shark stock assessments are generally conducted through the Southeast Data, Assessment, and Review (SEDAR) process, in which NMFS participates. This process is also used by the South Atlantic, Gulf of Mexico, and Caribbean Fishery Management Councils and is designed to provide transparency throughout the stock assessment process. Generally, SEDAR stock assessments have three stages (data availability, assessment models, and peer review). Meetings in these stages may be face-to-face or by webinar or conference call. All meetings are open to the public. All reports from all stages of the process are available online at http://www.sefsc.noaa.gov/sedar/. The SEDAR process can take several months to over a year depending on whether the species has been assessed before, if a species needs a full review of a previous assessment, or if the assessment is more of an update to previous assessments. Because the process takes so long and because of the large number of shark stocks that need to be assessed, there are times where we have reviewed stock assessments that were completed and peer reviewed outside of the SEDAR process and have determined the assessment to be appropriate for management. We have done that for both porbeagle and scalloped hammerhead sharks. Additionally, there are some shark stocks that are assessed internationally via the process established by ICCAT. In all cases, we ensure the data and models used are appropriate, all sources of mortality are considered, and that the end result constitutes the best available science, consistent with National Standard 2 and other requirements.

Comment 9: NMFS received comments asserting that sharks are worth more to eco-tourism than commercial fishermen.

Response: In adjusting quotas for the 2017 shark seasons based on over- and underharvests from the previous years and setting opening dates and commercial retention limits for the 2017 shark seasons, NMFS considers specific regulatory criteria, including the available annual quotas for the current fishing season, estimated season length and average weekly catch rates from previous years, length of the season and fishermen participation in past years, impacts to accomplishing objectives of the 2006 Consolidated HMS FMP and its amendments, temporal variation in behavior or biology target species (e.g., seasonal distribution or abundance), impact of catch rates in one region on another, and effects of delayed season openings. NMFS does not consider the economic impacts of sharks to eco-tourism compared to commercial shark fishing. Such impacts are appropriately considered when establishing the base quotas.

Comment 10: NMFS received a comment expressing concern about the high mercury levels in shark meat. Specifically, the commenter is concerned that NMFS still allows fishing for sharks even though the health impacts are well known about high levels of mercury in shark meat.

Response: This comment is outside the scope of this rulemaking because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons.

Comment 11: NMFS received comments regarding the stock status of hammerhead shark and other shark species. Some commenters requested more protective management for hammerhead sharks and other shark species due to their threatened or endangered stock status listing by the International Union for the Conservation of Nature (IUCN).

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. NMFS published Amendment 5a on July 3, 2013 (78 FR 40318) which implemented quotas for the hammerhead shark complex, including scalloped hammerhead sharks, linked the hammerhead shark quota to the aggregated LCS quota, and established a hammerhead shark recreational minimum size limit to reduce fishing mortality and rebuild the scalloped hammerhead stock. That rulemaking addressed this issue and it is not further addressed in this rulemaking.

Comment 12: NMFS received a comment requesting that NMFS implement individual fishing quotas for each of the three species of hammerhead sharks within the hammerhead shark management group.

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. The current hammerhead shark quota was established in Amendment 5a to the 2006 Consolidated HMS FMP based on the best available science (78 FR 40318; July 3, 2013). In that rulemaking, NMFS decided to include all hammerhead shark landings in one quota because the three hammerhead sharks are difficult to differentiate, with the most evident differences being small differences in the shape of the front of the head. Once the head has been removed and the carcass has been dressed, species identification becomes more difficult. NMFS intends to conduct stock assessments on scalloped, smooth, and great hammerhead sharks in the future, as soon as practicable given timing, resource limits, and data availability and NMFS could consider individual fishing quotas for each of the three species of hammerhead sharks in the future if warranted and supportable.

Comment 13: NMFS received comments regarding state-water landings and discards of sharks with no observer coverage and fewer requirements and training than Federal fishermen. The commenters supported the need to have consistency between state, Council, and Federal regulations.

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. Many states allow landings of sharks by state-permitted fishermen. However, these fishermen must comply with the state fishing regulations, which in some cases are the same as Federal regulations or, in other cases, are more restrictive. NMFS will continue to work closely with the states to ensure consistent regulations for shark fishing, to the extent practicable.

Comment 14: NMFS received comments that all quota linkages should be removed since it has contributed to underfishing for the past several years.

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. The current LCS and SCS quota linkages were implemented in the final rules for Amendment 5a and Amendment 6 to the 2006 Consolidated HMS FMP and NMFS is citing the rationale provided in the previous rulemakings. The issue of removing quota linkages is not being re-considered or re-addressed in this rulemaking now.

As explained in those rulemakings, quota linkages were created for shark species that are in separate management groups, but that have the potential to be caught together on the same shark fishing trip (e.g. aggregated LCS and hammerhead sharks). If the quota for one management group has been harvested and the management group is closed, that species could still be caught as bycatch by fishermen targeting other shark species, possibly resulting in excess mortality and negating some of the conservation benefit of management group closures. In addition, shark quota linkages were put into place as part of the rebuilding plans for shark species that are overfished in order to reduce excess mortality of the overfished species during commercial fishing for other shark species. Thus, NMFS closes the linked shark management groups together.

Comment 15: NMFS received comments requesting that we consider increasing the Federal fishery closure trigger for the shark management groups from 80 percent to greater than 90 percent to prevent quota underharvests and to promote harvesting quotas fully for the greater profitability for fishermen and for increased access to shark products for consumers.

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. The 80-percent Federal fishery closure trigger for the shark management groups was implemented in the final rule for Amendment 2 to the 2006 Consolidated HMS FMP and NMFS is citing the rationale provided in the previous rulemakings. The issue of changing this closure trigger is not being re-considered or re-addressed in this rulemaking now.

As explained in Amendment 2, NMFS' goal is to allow shark fishermen to harvest the full quota without exceeding it in order to maximize economic benefits to stakeholders while achieving conservation goals, including preventing overfishing and rebuilding overfished stocks. Based on past experiences with monitoring quotas for HMS species, the 80-percent threshold works well, allowing for all or almost all of the quota to be harvested without exceeding the quota. As such, NMFS expects that, in general, the quotas would be harvested between the time that the 80-percent threshold is reached and the time that the season actually closes. In addition, NMFS must also account for late reporting by shark dealers even with the improved electronic dealer system. Closing shark fisheries when 80 percent of quotas have been harvested provides a buffer to include landings received after the reporting deadline in an attempt to avoid overharvests.

Comment 16: NMFS received a comment to present all shark landings by species in addition to management group, particularly for hammerhead sharks given the listing of hammerhead sharks on Appendix II of the Convention on International Trade in Endangered Species (CITES).

Response: This comment is outside the scope of this rulemaking, because the purpose of this rulemaking is to adjust quotas for the 2017 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2017 shark seasons. NMFS presents the shark landings by species and region in the annual Stock Assessment and Fisheries Evaluation (SAFE) Report that is released in December of each year, consistent with confidentiality requirements.

CITES is an international treaty designed to control and regulate international trade of certain animal and plant species that are now or potentially may be threatened with extinction and are affected by trade. Some shark species (e.g., oceanic whitetip sharks, great, scalloped, and smooth hammerhead sharks, and porbeagle sharks) are now listed on Appendix II, which imposes strict trade monitoring and could impact the ability of dealers to sell these species to international costumers. Additionally, starting in October 2017, silky and thresher sharks will be listed on Appendix II. Due to this listing, any U.S. fishermen or dealer who wishes to export these shark products will have to obtain a CITES permit in order to export or re-export these products.

NMFS made four changes to the proposed rule, as described below.

1. NMFS changed the final blacktip shark quota in the western Gulf of Mexico sub-region from the 331.8 mt dw (730,803 lb dw) in the proposed rule to 331.6 mt dw (730,425 lb dw), a difference of 378 lb dw, based on updated landings through October 14, 2016. The 2017 shark season proposed rule (81 FR 59167; August 29, 2016) was based on dealer reports available through July 15, 2016. NMFS explained in the proposed rule that it would adjust the proposed quotas based on dealer reports as of mid-October or mid-November 2015. Based on updated landings data through October 14, 2016, the overall available adjustment amount for the blacktip shark management group in the western Gulf of Mexico sub-region was 100.1 mt dw (220,164 lb dw), resulting in a small reduction in the amount of quota that could be carried over to 2017. Landings information beyond October 14, 2016, was not available while NMFS was writing this rule. Any landings between October 14 and December 31, 2016, will be accounted for in the 2018 shark fisheries quotas, as appropriate.

2. NMFS changed the retention limit for directed shark limited access permit holders at the start of the commercial shark fishing season for the aggregated LCS and hammerhead shark management groups in the Atlantic region from 36 LCS other than sandbar sharks per vessel per trip to 25 LCS other than sandbar sharks per vessel per trip. As explained above, NMFS changed the retention limit after considering the “opening commercial fishing season” criteria (§ 635.27(b)(3)), public comment, and the 2016 landings data in order to promote equitable fishing opportunities throughout the Atlantic region.

3. NMFS changed the retention limit for directed shark limited access permit holders for the aggregated LCS, blacktip shark, and hammerhead shark management groups in the western Gulf of Mexico sub-region from 30 LCS other than sandbar sharks per vessel per trip to 45 LCS other than sandbar sharks per vessel per trip. As explained above, NMFS changed the retention limit after considering the “opening commercial fishing season” criteria (§ 635.27(b)(3)), public comment, and the 2016 landings data in order to promote equitable fishing opportunities throughout the Gulf of Mexico region.

4. NMFS changed the fishing season opening date for the western Gulf of Mexico from January 1, to February 1, 2017. NMFS changed the opening date based upon public comments that indicated a preference for a delayed opening when market conditions would be more optimal in that sub-region.

This final rule adjusts the 2017 commercial quotas due to over- and/or underharvests in 2016 and previous fishing seasons, based on landings data through October 14, 2016. Based on overharvest in 2012 and 2015, NMFS had previously reduced the Atlantic blacknose shark base annual quota by 1.5 mt dw (3,268 lb dw) in 2016, 2017, and 2018. However, in 2016, the Atlantic blacknose shark quota was underharvested by 3.5 mt dw (7,725 lb dw). In the proposed rule for this action, NMFS noted that preliminary reported landings of blacknose sharks were at 78 percent (12.2 mt dw) of their 2016 quota levels (15.7 mt dw) in the Atlantic region. Given this large underharvest, NMFS notified the public that rather than spread out the previous years' overharvests over several years, it proposed to use the 2016 underharvest to cover the remaining 2012 and 2015 overharvest. Since NMFS received no comments on this proposal, 3.0 mt dw of the 2016 quota will be used to account for the past years' overharvests. An underharvest of 0.5 mt dw occurs in 2016 after this accounting but, pursuant to § 635.27(b)(2), NMFS cannot carry forward underharvest because blacknose sharks have been declared to be overfished with overfishing occurring in the Atlantic region. Therefore, the 2017 Atlantic blacknose shark quota is equal to the annual base quota without adjustment.

The 2017 annual quotas by species and management group are summarized in Table 1. Any dealer reports that are received by NMFS after October 14, 2016, will be used to adjust the 2018 quotas, if necessary. A description of the quota calculations is provided in the proposed rule and is not repeated here. Any changes are described in the “Changes from the Proposed Rule” section.

Based on the seven “opening commercial fishing season” criteria listed in § 635.27(b)(3), NMFS is opening the 2016 Atlantic commercial shark fishing seasons on January 1, 2017, except for the aggregated LCS, blacktip shark, and hammerhead shark management groups in the western Gulf of Mexico sub-region which will open on February 1, 2017 (Table 2).

Regarding the LCS retention limit, as shown in Table 2, for directed shark limited access permit holders, the Gulf of Mexico blacktip shark, aggregated LCS, and hammerhead shark management groups will start the commercial fishing season at 45 LCS other than sandbar sharks per vessel per trip, and the Atlantic aggregated LCS and hammerhead shark management groups will start the commercial fishing season at 25 LCS other than sandbar sharks per vessel per trip. In the Atlantic region, as described above, NMFS will closely monitor the quota at the beginning of the year. If it appears that the quota is being harvested too quickly to allow fishermen throughout the entire region an opportunity to fish (e.g., if approximately 20 percent of the quota is caught at the beginning of the year), NMFS will consider reducing the commercial retention limit, then consider raising it later in the season. Based on prior years' fishing activity, to allow greater fishing opportunities later in the year, NMFS anticipates considering raising the commercial retention limit to the default limit of 36 LCS other than sandbar sharks per vessel per trip around July 15, 2017. Any retention limit reductions and increases will be based on consideration of the trip limit adjustment criteria at 50 CFR 635.24(a)(8).

All of the shark management groups will remain open until December 31, 2017, or until NMFS determines that the fishing season landings for any shark management group has reached, or is projected to reach, 80 percent of the available quota; however, consistent with § 635.28(b)(5), NMFS may close the Gulf of Mexico blacktip shark management group before landings reach, or are expected to reach, 80 percent of the quota. Additionally, NMFS has previously established non-linked and linked quotas; linked quotas are explicitly designed to concurrently close multiple shark management groups that are caught together to prevent incidental catch mortality from exceeding the total allowable catch. The linked and non-linked quotas are shown in Table 2. NMFS will file for publication with the Office of the Federal Register a notice of closure for that shark species, shark management group including any linked quotas, and/or region that will be effective no fewer than 5 days from date of filing. From the effective date and time of the closure until NMFS announces, via the publication of a notice in the Federal Register, that additional quota is available and the season is reopened, the fisheries for the shark species or management group are closed, even across fishing years.

The NMFS Assistant Administrator has determined that the final rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, and other applicable law.

This final rule is exempt from review under Executive Order 12866.

In compliance with section 604 of the Regulatory Flexibility Act (RFA), NMFS prepared a Final Regulatory Flexibility Analysis (FRFA) for this final rule, which analyzed the adjustments to the Gulf of Mexico blacktip shark, Gulf of Mexico smoothhound shark, and Atlantic smoothhound shark management group quotas based on underharvests from the previous fishing season(s). The FRFA analyzes the anticipated economic impacts of the final actions and any significant economic impacts on small entities. The FRFA is below.

Section 604(a)(1) of the RFA requires an explanation of the purpose of the rulemaking. The purpose of this final rulemaking is, consistent with the Magnuson-Stevens Act and the 2006 Consolidated HMS FMP and its amendments, to establish the 2017 Atlantic commercial shark fishing quotas, retention limits, and fishing seasons. Without this rule, the Atlantic commercial shark fisheries would close on December 31, 2016, and would not reopen until another action was taken. This final rule will be implemented according to the regulations implementing the 2006 Consolidated HMS FMP and its amendments. Thus, NMFS expects few, if any, economic impacts to fishermen other than those already analyzed in the 2006 Consolidated HMS FMP and its amendments. While there may be some direct negative economic impacts associated with the opening dates for fishermen in certain areas, there could also be positive effects for other fishermen in the region. The opening dates were chosen to allow for an equitable distribution of the available quotas among all fishermen across regions and states, to the extent practicable.

Section 604(a)(2) of the RFA requires NMFS to summarize significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis (IRFA), provide a summary of NMFS' assessment of such issues, and provide a statement of any changes made as a result of the comments. The IRFA was done as part of the proposed rule for the 2017 Atlantic Commercial Shark Season Specifications. NMFS did not receive any comments specific to the IRFA. However, NMFS received comments related to the overall economic impacts of the proposed rule, and those comments and NMFS' assessment of and response to them are summarized above (see Comments 3 and 9 above). As described in the responses to those comments relating to the season opening dates, consistent with § 635.27(b)(3), the opening date for the all of the commercial shark fisheries will be implemented as proposed (January 1, 2017), except for the western Gulf of Mexico sub-region, which will open on February 1, 2017.

Section 604(a)(4) of the RFA requires NMFS to provide an estimate of the number of small entities to which the rule would apply. The Small Business Administration (SBA) has established size criteria for all major industry sectors in the United States, including fish harvesters. Provision is made under SBA's regulations for an agency to develop its own industry-specific size standards after consultation with Advocacy and an opportunity for public comment (see 13 CFR 121.903(c)). Under this provision, NMFS may establish size standards that differ from those established by the SBA Office of Size Standards, but only for use by NMFS and only for the purpose of conducting an analysis of economic effects in fulfillment of the agency's obligations under the RFA. To utilize this provision, NMFS must publish such size standards in the Federal Register (FR), which NMFS did on December 29, 2015 (80 FR 81194, December 29, 2015). In this final rule effective on July 1, 2016, NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes (80 FR 81194, December 29, 2015). NMFS considers all HMS permit holders to be small entities because they had average annual receipts of less than $11 million for commercial fishing.

As of October 2016, the proposed rule would apply to the approximately 223 directed commercial shark permit holders, 271 incidental commercial shark permit holders, 103 smoothhound shark permit holders, and 111 commercial shark dealers. Not all permit holders are active in the fishery in any given year. Active directed commercial shark permit holders are defined as those with valid permits that landed one shark based on HMS electronic dealer reports. Of the 494 directed and incidental commercial shark permit holders, only 40 permit holders landed sharks in the Gulf of Mexico region and only 99 landed sharks in the Atlantic region. Of the 103 smoothhound shark permit holders, only 59 permit holders landed smoothhound sharks in the Atlantic region and none landed smoothhound sharks in the Gulf of Mexico region. NMFS has determined that the proposed rule would not likely affect any small governmental jurisdictions.

Section 604(a)(5) of the RFA requires NMFS to describe the projected reporting, recordkeeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities which would be subject to the requirements of the report or record. None of the actions in this final rule would result in additional reporting, recordkeeping, or compliance requirements beyond those already analyzed in the 2006 Consolidated HMS FMP and its amendments.

Section 604(a)(6) of the RFA requires NMFS to describe the steps taken to minimize the economic impact on small entities, consistent with the stated objectives of applicable statutes. Additionally, the RFA (5 U.S.C. 603(c)(1)-(4)) lists four general categories of “significant” alternatives that would assist an agency in the development of significant alternatives that would accomplish the stated objectives of applicable statutes and minimize any significant economic impact of the rule on small entities. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) use of performance rather than design standards; and (4) exemptions from coverage of the rule, or any part thereof, for small entities.

In order to meet the objectives of this rule, consistent with the Magnuson-Stevens Act, NMFS cannot exempt small entities or change the reporting requirements only for small entities because all the entities affected are small entities. Thus, there are no alternatives discussed that fall under the first, second, and fourth categories described above. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act; therefore, there are no alternatives considered under the third category.

This rulemaking does not establish management measures to be implemented, but rather implements previously adopted and analyzed measures as adjustments, as specified in the 2006 Consolidated HMS FMP and its amendments and the Environmental Assessment (EA) for the 2011 shark quota specifications rule (75 FR 76302; December 8, 2010). Thus, in this rulemaking, NMFS adjusted the base quotas established and analyzed in the 2006 Consolidated HMS FMP and its amendments by subtracting the underharvest or adding the overharvest, as specified and allowable in existing regulations. Under current regulations (§ 635.27(b)(2)), all shark fisheries close on December 31 of each year, or when NMFS determines that the fishing season landings for any shark management group has reached, or is projected to reach, 80 percent of the available quota, and do not open until NMFS takes action, such as this rulemaking to re-open the fisheries. Thus, not implementing these management measures would negatively affect shark fishermen and related small entities, such as dealers, and also would not provide management flexibility in furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas.

Based on the 2015 ex-vessel price, fully harvesting the unadjusted 2017 Atlantic shark commercial baseline quotas could result in total fleet revenues of $8,265,467 (see Table 3). For the Gulf of Mexico blacktip shark management group, NMFS will increase the baseline sub-regional quotas due to the underharvests in 2016. The increase for the eastern Gulf of Mexico blacktip shark management group would result in a $24,099 gain in total revenues for fishermen in that sub-region, while the increase for the western Gulf of Mexico blacktip shark management group would result in a $221,815 gain in total revenues for fishermen in that sub-region. For the Gulf of Mexico and Atlantic smoothhound shark management groups, NMFS will increase the baseline quotas due to the underharvest in 2016. This would cause a potential gain in revenue of $270,323 for the fleet in the Gulf of Mexico region and a potential gain in revenue of $965,095 for the fleet in the Atlantic region.

All of these changes in gross revenues are similar to the changes in gross revenues analyzed in the 2006 Consolidated HMS FMP and its amendments. The FRFAs for those amendments concluded that the economic impacts on these small entities are expected to be minimal. In the 2006 Consolidated HMS FMP and its amendments and the EA for the 2011 shark quota specifications rule, NMFS stated it would be conducting annual rulemakings and considering the potential economic impacts of adjusting the quotas for under- and overharvests at that time.

For this final rule, NMFS reviewed the “opening commercial fishing season” criteria at § 635.27(b)(3)(i) through (vii) to determine when opening each fishery will provide equitable opportunities for fishermen while also considering the ecological needs of the different species. Over- and/or underharvests of 2016 and previous fishing season quotas were examined for the different species/complexes to determine the effects of the 2017 final quotas on fishermen across regional fishing areas. The potential season lengths and previous catch rates were examined to ensure that equitable fishing opportunities would be provided to fishermen. Lastly, NMFS examined the seasonal variation of the different species/complexes and the effects on fishing opportunities. In addition to these criteria, NMFS also considered other relevant factors, such as recent landings data and public comments, before arriving at the final opening dates for the 2017 Atlantic shark management groups. For the 2017 fishing season, NMFS is opening the shark management groups on January 1, 2017, except for the aggregated LCS, blacktip shark, and hammerhead shark management groups in the western Gulf of Mexico sub-region, which will open on February 1, 2017. The direct and indirect economic impacts will be neutral on a short- and long-term basis for the eastern Gulf of Mexico blacktip shark, eastern Gulf of Mexico aggregated LCS, eastern Gulf of Mexico hammerhead shark, Gulf of Mexico non-blacknose shark SCS, Atlantic non-blacknose shark SCS, Atlantic blacknose shark, sandbar shark, blue shark, porbeagle shark, and pelagic shark (other than porbeagle or blue sharks) management groups, because NMFS did not change the opening dates of these fisheries from the status quo. For the aggregated LCS, blacktip shark, and hammerhead shark management groups in the western Gulf of Mexico sub-region, the delayed opening to February 1, 2017, anticipates minor positive short- and long-term economic impacts, because, according to public comments, ex-vessel prices for sharks are expected to be higher at that time in that sub-region.

Opening the aggregated LCS and hammerhead shark management groups in the Atlantic region on January 1 will result in short-term, direct, moderate, beneficial economic impacts, as fishermen and dealers in the southern portion of the Atlantic region will be able to fish for and sell aggregated LCS and hammerhead sharks starting in January. These fishermen will be able to fish earlier in the 2017 fishing season compared to the 2010, 2011, 2012, 2014, and 2015 fishing seasons, which did not start until June or July. Based on public comment, some Atlantic fishermen in the southern and northern part of the region prefer a January 1 opening for the fishery as long as the majority of the quota is available later in the year. With the implementation of the HMS electronic reporting system in 2013, NMFS now monitors the quota on a more real-time basis compared to the paper reporting system that was in place before 2013. This ability, along with the inseason retention limit adjustment criteria in § 635.24(a)(8), should allow NMFS the flexibility to further provide equitable fishing opportunities for fishermen across all regions, to the extent practicable. Depending on how quickly the quota is being harvested, NMFS will consider reducing the commercial retention limit, then consider raising it later in the season to ensure that fishermen farther north have sufficient quota for a fishery later in the 2017 fishing season. The direct impacts to shark fishermen in the Atlantic region of reducing the trip limit depend on the needed reduction in the trip limit and the timing of such a reduction. Therefore, such a reduction in the trip limit for directed shark limited access permit holders is only anticipated to have minor adverse direct economic impacts to fishermen in the short-term; long-term impacts are not anticipated as these reductions would not be permanent.

In the northern portion of the Atlantic region, a January 1 opening for the aggregated LCS and hammerhead shark management groups, with inseason trip limit adjustments to ensure quota is available later in the season, will have direct, minor, beneficial economic impacts in the short-term for fishermen as they will potentially have access to the aggregated LCS and hammerhead shark quotas earlier than in past seasons. Fishermen in this area have stated that, depending on the weather, some aggregated LCS species might be available to retain in January. Thus, fishermen will be able to target or retain aggregated LCS while targeting non-blacknose SCS. There will be indirect, minor, beneficial economic impacts in the short- and long-term for shark dealers and other entities that deal with shark products in this region as they will also have access to aggregated LCS products earlier than in past seasons. Thus, opening the aggregated LCS and hammerhead shark management groups in January and using inseason trip limit adjustments to ensure the fishery is open later in the year in 2017 will cause beneficial cumulative economic impacts, because it allows for a more equitable distribution of the quotas among constituents in this region, consistent with the 2006 Consolidated HMS FMP and its amendments.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS has prepared a listserv summarizing fishery information and regulations for Atlantic shark fisheries for 2017. This listserv also serves as the small entity compliance guide. Copies of the compliance guide are available from NMFS (see ADDRESSES).

The U.S. Atlantic swordfish and tuna fisheries are managed under the 2006 Consolidated HMS Fishery Management Plan (FMP) and its amendments. Implementing regulations at 50 CFR part 635 are issued under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801 et seq., and the Atlantic Tunas Convention Act (ATCA), 16 U.S.C. 971 et seq. ATCA authorizes the Secretary of Commerce (Secretary) to promulgate regulations, as may be necessary and appropriate, to implement recommendations of the International Commission for the Conservation of Atlantic Tunas (ICCAT).

This final rule removes vessel upgrading restrictions for vessels issued swordfish directed and Atlantic tunas Longline category LAPs. A brief summary of the background of this final rule is provided below. The details were described in the proposed rule for this action (81 FR 48731, July 26, 2016) and are not repeated here. Additional information regarding Atlantic HMS management can be found in the 2006 Consolidated Atlantic HMS FMP and its amendments, the annual HMS Stock Assessment and Fishery Evaluation (SAFE) Reports, and online at http://www.nmfs.noaa.gov/sfa/hms/. The comments received on the proposed rule for this action, and NMFS' responses to those comments, are summarized below in the section labeled “Response to Comments.”

In 1999, NMFS issued initial LAPs in the Atlantic swordfish and shark fisheries (64 FR 29090, March 28, 1999). To be eligible to fish with pelagic longline gear, a vessel had to be issued a swordfish directed or incidental LAP, a shark directed or incidental LAP, and an Atlantic tunas Longline category permit. After initial issuance of these permits, no new permits were issued by NMFS, but permits could be transferred to other vessels. Swordfish and shark directed LAPs included restrictions on vessel upgrading and permit transfers. Vessel upgrades and permit transfers were allowed only if the upgrade or permit transfer to another vessel did not result in an increase in horsepower of more than 20 percent or an increase of more than 10 percent in length overall, gross registered tonnage, or net tonnage relative to the respective specifications of the first vessel issued the initial LAP (the baseline vessel). Additionally, vessels could only be upgraded one time. These vessel upgrading restrictions were put into place to limit capacity in the swordfish fishery. Incidental LAPs for these species did not have vessel upgrading restrictions. Upgrading restrictions for Atlantic tunas Longline category LAPs were not explicitly implemented in the 1999 rule. However, as a practical effect, Atlantic tunas Longline category LAPs were limited by the same upgrading restrictions as the swordfish and shark directed permits due to the requirement to hold all three permits when fishing with pelagic longline gear.

On June 7, 2007 (72 FR 31688), NMFS issued a final rule amending the HMS fishery regulations to provide additional opportunities for U.S. vessels to more fully utilize the North Atlantic swordfish quota, recognizing the improved status of the species. The 2007 action modified limited access vessel upgrading and permit transfer restrictions for vessels that were concurrently issued, or were eligible to renew, directed or incidental swordfish, directed or incidental shark, and Atlantic tunas Longline category LAPs (i.e., vessels that were eligible to fish with pelagic longline gear). The rule also clarified that Atlantic tunas Longline category LAPs were subject to the same vessel upgrade restrictions as swordfish and shark directed LAPs. These measures allowed eligible vessel owners to upgrade their vessels by 35 percent in size (length overall, gross registered tonnage, and net tonnage) relative to the specifications of the baseline vessel, and removed upgrade limits on horsepower. Additionally, these permits could be upgraded more than once, provided that the new maximum upgrade limits were not exceeded.

Since implementing the vessel upgrade requirements in 1999 and modifying them in 2007, several important things have changed in the Atlantic HMS pelagic longline fishery. As described in the proposed rule for this action, NMFS was concerned about ensuring that pelagic longline fishing effort and fleet capacity were commensurate with the available swordfish quota in 1999. The vessel upgrading restrictions were part of NMFS' management strategy to reduce fleet capacity. Since then, fleet capacity has been reduced through the successful application of the initial LAP qualification criteria and attrition over time. In 1998, prior to the implementation of upgrade restrictions, 233 pelagic longline vessels among the 2,000 permit holders landed swordfish and thus were considered “active.” The number of such vessels dropped to a low of 102 in 2006 and has since remained between 109 and 122 vessels. Similarly, as of December 30, 1999, approximately 451 directed and incidental swordfish LAPs had been issued. By 2015, permit numbers had been reduced to 260 directed and incidental swordfish LAPs. Permit numbers are expected to remain at approximately these levels because no new LAPs are being issued.

Other requirements implemented since 1999, such as those designed to reduce bycatch in the pelagic longline fishery (e.g., closed areas, bait requirements, individual bluefin tuna quotas, and gear restrictions), have also limited fishing effort. The directed North Atlantic swordfish quota has not been exceeded in almost 20 years and, in fact, has been underharvested for a number of years.

During this same time period, the stock status of North Atlantic swordfish has significantly improved. In 2009, ICCAT declared that the stock had been fully rebuilt. Using domestic stock status thresholds, NMFS has also declared that the North Atlantic swordfish stock is not overfished and that overfishing is not occurring.

In addition to limiting capacity in the HMS pelagic longline fishery, a secondary goal for implementing the specific swordfish directed and Atlantic tunas Longline vessel upgrade limits adopted in 1999 was to be consistent with similar regulations previously established by the New England and Mid-Atlantic Fishery Management Councils (Councils). In August 2015, the Councils removed gross registered and net tonnage limits (80 FR 51754) so that only length and horsepower limits remain in effect. Because this HMS action will remove all upgrade restrictions for vessels issued swordfish directed and Atlantic tunas Longline category LAPs, only the Council regulations will limit vessel upgrading for vessels issued LAPs for both Council-managed species and HMS. Thus, there will be no conflict between Council and HMS vessel upgrade restrictions. This action will simplify compliance for dually permitted vessels and provide greater flexibility for HMS permitted vessels.

Because the overall reduction in pelagic longline fleet capacity, in combination with the totality of effort controls implemented since 1999, has sufficiently limited the Atlantic HMS pelagic longline fishery's capacity, vessel upgrading and related permit transfer restrictions are no longer necessary at this time. Therefore, this final rule removes all upgrading restrictions for vessels issued swordfish directed and Atlantic tunas Longline category LAPs. Although limited in scope, this action eases a barrier to entry in the pelagic longline fishery, facilitates LAP transfers, provides increased business flexibility, and helps vessel owners address safety issues. Eliminating vessel upgrading restrictions will have short- and long-term minor beneficial socioeconomic impacts, since it will allow fishermen to buy, sell, or transfer swordfish directed and Atlantic tunas Longline category LAPs without concerns about exceeding the maximum upgrade limit for the permits. It will also allow vessel owners to transfer their permits to newer vessels, which could have greater capacity, and address safety issues that exist with older vessels.

Removing the upgrading restrictions is not expected to affect the overall number of swordfish and tunas being landed by vessels, as these amounts are determined by established quotas and effort controls (including, for example, individual vessel quotas for bluefin tuna), not the size of the vessel. Thus, this action is expected to have no ecological impacts beyond those previously analyzed regarding the quotas and existing conservation and management measures, and will not result in additional interactions with protected resources, given the other restrictions on the Atlantic HMS pelagic longline fishery.

The comment period for the proposed rule closed on September 26, 2016. NMFS received three written comments, which can be found at https://www.regulations.gov/ by searching for NOAA-NMFS-2016-0087. Comments were also received from the Atlantic HMS Advisory Panel during its meeting on September 7, 2016. No comments were received during a conference call/webinar held on August 23, 2016. NMFS received comments in support of, and one opposed to, removing vessel upgrade restrictions for vessels issued Atlantic tunas Longline category and swordfish directed permits. A summary of the comments received during the public comment period is provided below along with NMFS's responses.

Comment 1: A commenter opposed to removing HMS pelagic longline vessel upgrade restrictions stated that the proposal will enable permits to be transferred to larger vessels that could catch more fish. The commenter also wrote that there should be a complete ban on catching swordfish because the species is virtually extinct.

Response: North Atlantic swordfish are not virtually extinct. In 2009, ICCAT declared that the stock was fully rebuilt, and it has remained so ever since. Using domestic stock status thresholds, NMFS has also declared that the north Atlantic swordfish stock is not overfished and that overfishing is not occurring. The most recent stock assessment, conducted in 2013, indicates that the stock is not overfished (B2011/BMSY = 1.14) and overfishing is not occurring (F2011/FMSY = 0.82). North Atlantic swordfish quotas are set by ICCAT considering the stock's status and to ensure that the stock is sustainably harvested and to prevent overfishing from occurring. The United States adheres to its ICCAT-designated quota and, in fact, has underharvested the quota for the past several years. Numerous conservation and management measures remain in place in addition to the quota limitations to ensure that the stock is protected. The vessel upgrading restriction removal does not affect the amount of fish caught, nor does it relieve other restrictions that ensure effective conservation and management of this rebuilt fishery. Thus, the commenter's concerns about the stock being “virtually extinct” are unfounded and do not warrant modification of the proposed action.

While removing the upgrade restrictions for vessels issued swordfish directed and Atlantic tunas Longline category permits could facilitate the transfer of permits to larger vessels which could catch more swordfish, overall compliance with the quota in this fishery ensures that the stock is not negatively affected by fishing effort. North Atlantic swordfish landings are regulated by semi-annual quotas, and the fishery can be adjusted or closed as those quotas are approached. Similarly, landings of most tunas and pelagic sharks are regulated by quotas which can be adjusted, as necessary, to remain within the quotas.

Comment 2: A supporter of the proposal to remove upgrade restrictions for vessels issued Atlantic tunas Longline category and swordfish directed permits stated that when the upgrade restrictions were first implemented, the commercial swordfish industry was at a peak in terms of both participation and landings. The commenter stated that the swordfish fleet is currently in decline due to increased operating costs, competition from foreign product, and regulatory restrictions, despite a fully recovered north Atlantic swordfish stock; that NMFS should pursue management measures to allow new entrants into the fishery and to expand the production capabilities of the existing fleet; and that eliminating vessel upgrading restrictions is a small step toward encouraging new entrants in the pelagic longline fishery to keep the fleet operative.

Response: Although this final action is limited in scope, it will ease a barrier to entry in the pelagic longline fishery, facilitate LAP transfers, and provide increased business flexibility. As discussed above, both the North Atlantic swordfish stock status and the pelagic longline fishery have changed significantly since 1999. The vessel upgrading restrictions were part of NMFS' initial management strategy to reduce fleet capacity. Since then, capacity has been reduced through the successful application of the initial LAP qualification criteria and attrition over time. Both the number of swordfish LAPs and the number of pelagic longline vessels actively landing swordfish have declined by approximately 50 percent since 1999. As a result of these and other management measures, swordfish are no longer overfished and overfishing is not occurring. The overall reduction in fleet capacity, in combination with the totality of effort controls implemented since 1999, has sufficiently limited the Atlantic HMS pelagic longline fishery's capacity. Thus, vessel upgrading and related permit transfer restrictions are no longer necessary or relevant at this time. Adverse impacts on stock status can be avoided because swordfish landings are regulated by semi-annual quotas, and the fishery can be adjusted or closed as those quotas are approached. Similarly, landings of most tunas and pelagic sharks are regulated by quotas which can be adjusted, as necessary, to remain within the quotas.

Comment 3: When the upgrade restrictions were first implemented, vessel observers were not considered. The requirement to carry observers requires more space onboard a vessel, thus there is sometimes a need to increase the size of vessels more than might be allowed by the existing upgrade restrictions.

Response: Pelagic longline vessels are required to carry observers if selected by NMFS. Removing the upgrade restrictions for vessels issued swordfish directed and Atlantic tunas Longline category permits could allow owners to modify their vessels or purchase newer, larger vessels that would better accommodate these observers.

Comment 4: A commenter in support of the proposed action indicated that fishing vessels and fishing equipment needs improvement from time to time and that vessel upgrading restrictions have sometimes restricted that ability.

Response: NMFS agrees. Removing upgrade restrictions for vessels issued swordfish directed and Atlantic tunas Longline category vessels could facilitate improvements in safety, working conditions, and overall living conditions for both crew members and fishery observers while onboard. This final rule will allow pelagic longline vessel owners to make necessary modifications to their vessels without restrictions on vessel length and tonnage.

Comment 5: A commenter indicated that it has been almost impossible to replace their older engine with a similar engine due to the horsepower upgrade limits.

Response: Horsepower upgrade limits for most HMS pelagic longline vessels were removed in a final rule that published on June 7, 2007 (72 FR 31688).

Comment 6: NMFS should remove vessel upgrade restrictions on swordfish handgear LAPs in order to convert permits that are currently useless due to low horsepower upgrade limits and allow them to be used because handgear vessel owners often prefer high horsepower ratings.

Response: NMFS has previously considered this request in a final rule that published on June 7, 2007 (72 FR 31688) and will continue to do so. The swordfish handgear LAP authorizes the deployment of buoy gear, and buoy gear may be deployed in areas including the East Florida Coast pelagic longline closed area. This area contains oceanographic features that make it biologically unique. It provides important juvenile swordfish habitat, and is essentially a narrow migratory corridor containing high concentrations of swordfish located in close proximity to high concentrations of people who may fish for them. As stated in 2007, horsepower upgrade restrictions can limit the number of swordfish handgear LAPs that are issued because newer handgear vessels have very high horsepower ratings. Public comment indicated a concern that removing vessel upgrade restrictions on swordfish handgear LAPs could result in increased numbers of fishermen in the area, and the potential for crowding of fishermen, which could lead to potential fishing gear and user conflicts. Those concerns remain valid and NMFS decided not to pursue similar adjustments in the swordfish handgear fishery at this time.

Comment 7: Some fishermen might obtain swordfish directed permits because those permits could be used to fish with handgear (including buoy gear). This final action could provide a preliminary preview of lifting the vessel upgrade restrictions on swordfish handgear permits.

Response: Vessels in the swordfish buoy gear fishery are generally small. NMFS believes that the current vessel size restrictions (for maximum length and tonnage) applicable to pelagic longline vessels issued swordfish directed and Atlantic tunas Longline category LAPs have not been a limiting factor in the number of vessels that use buoy gear. Rather, commenters indicated that buoy gear vessel owners are primarily limited by horsepower upgrade restrictions. Because the horsepower upgrade restrictions have already been removed from most swordfish directed limited access and Atlantic tunas Longline category LAPs (72 FR 31688) and because vessels owners who wish to enter the buoy gear fishery and whose vessels have large horsepower engines have already obtained permits and entered the fishery, it is unlikely that this action will result in significant increases in persons obtaining swordfish directed and Atlantic tunas Longline category LAPs to fish with buoy gear.

Comment 8: NMFS should remove vessel upgrade restrictions on swordfish and shark incidental LAPs, and shark directed LAPs.

Response: Swordfish and shark incidental LAPs and shark directed LAPs do not have vessel upgrade restrictions.

There are no changes from the proposed rule.

The NMFS Assistant Administrator has determined that this final action is necessary for the conservation and management of the Atlantic HMS fisheries, and that it is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, ATCA, and other applicable laws.

This final action has been determined to be categorically excluded from the requirement to prepare an environmental assessment in accordance with NOAA Administrative Order 216-6. A memorandum for the file has been prepared that sets forth the decision to use a categorical exclusion because the rule would implement minor changes to the regulations whose effects have already been analyzed, and additional effects are not expected. This action will have no additional effects that were not already analyzed, and the action is not precedent-setting or controversial. It would not have a significant effect, individually or cumulatively, on the human environment.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

NMFS has determined that this final rule will have no effects on any coastal use or resource, and a negative determination pursuant to 15 CFR 930.35 is not required. Therefore, pursuant to 15 CFR 930.33(a)(2), coordination with appropriate state agencies under section 307 of the Coastal Zone Management Act is not required. No changes to the human environment are anticipated because removing the vessel upgrading restrictions would not affect the number of swordfish and tunas being landed by vessels, as these amounts are determined by the established quotas and effort controls, not the size of the vessel.

For reasons set out in the preamble, 50 CFR part 635 is amended as follows:

Framework Adjustment 55 to the Northeast (NE) Multispecies Fishery Management Plan (FMP) (May 2, 2016, 81 FR 26412) set annual catch limits for groundfish stocks for the 2016 fishing year, including allocations for the groundfish fishery and other fisheries with incidental catch of groundfish. The midwater trawl herring fishery is allocated 1 percent of the U.S. acceptable biological catch of Gulf of Maine (GOM) and Georges Bank (GB) haddock. If the herring midwater trawl fishery exceeds its GOM or GB haddock catch cap, we are required to reduce the respective catch cap by the amount of the overage in the following fishing year.

In fishing year 2015, the midwater trawl fishery exceeded its GB haddock catch cap by 8.54 mt. Therefore, this rule reduces the fishing year 2016 GB haddock catch cap by 8.54 mt to account for this overage. Table 1 provides the midwater trawl adjustment for GB haddock that this rule implements.

The NMFS Assistant Administrator has determined that this final rule is consistent with the FMP, other provisions of the Magnuson-Stevens Fishery Conservation and Management Act, and other applicable law.

This action is exempt from the procedures of E.O. 12866 because this action contains no implementing regulations.

Pursuant to 5 U.S.C. 553(b)(3)(B), we find good cause to waive prior public notice and opportunity for public comment on the catch cap adjustment because allowing time for notice and comment is impracticable, unnecessary, and contrary to the public interest. We also find good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(3), so that this final rule may become effective upon publication.

Prior notice and comment are impracticable and contrary to the public interest, because this is a non-discretionary action required by provisions of Framework 46 to the NE Multispecies FMP, which was subject to public comment. The proposed rule to implement Framework 46 requested public comment on these measures, including the specific accountability measure implemented by this rule, with the understanding that a catch cap adjustment would be required if an overage occurred. As a result, the public and industry are expecting this adjustment.

Final 2015 catch data only recently became available in September 2016. This information allows us to determine the amount of an overage, if any, and it was not possible to finalize this information sooner. If this rule is not effective immediately, the midwater trawl fishery will be operating under an incorrect 2016 catch cap for GB haddock. This could increase the likelihood of a subsequent overage and uncertainty on when to trigger an inseason accountability measure, which in turn could cause confusion and negative economic impacts to the midwater trawl fishery. Therefore, it is important to implement the reduced catch limit as soon as possible. For these reasons, we are waiving the public comment period and delay in effectiveness for this rule, pursuant to 5 U.S.C. 553(b)(3)(B) and (d), respectively.

A final regulatory flexibility analysis (FRFA) was previously prepared as part of the regulatory impact review of Framework 55. This minor adjustment does not change the conclusions drawn from that FRFA. The FRFA is contained in the Framework 55 final rule.

Each item in section 604(a)(1) through (5) of the Regulatory Flexibility Act (5 U.S.C. 604(a)(1) through (5)) was addressed in the Classification section of the Framework 55 final rule.