Fishing Capacity Reduction Program for the Longline Catcher Processor Subsector of the Bering Sea and Aleutian Islands Non-pollock Groundfish Fishery

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: August 11, 2006 (Volume 71, Number 155)]
[Proposed Rules]
[Page 46363-46381]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11au06-32]
[[Page 46364]]

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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 060731207-6207-01; I.D. 051706F]
RIN 0648-AU42

Fishing Capacity Reduction Program for the Longline Catcher
Processor Subsector of the Bering Sea and Aleutian Islands Non-pollock
Groundfish Fishery

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Proposed rule; request for comments.

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SUMMARY: This proposed rule would implement the Bering Sea and Aleutian
Islands (BSAI) Catcher Processor Capacity Reduction Program (Reduction
Program) for the longline catcher processor subsector of the BSAI non-
pollock groundfish fishery (Reduction Fishery), in compliance with the
FY 2005 Appropriations Act. This program is voluntary and permit
holders of the Reduction Fishery (Subsector Members) are eligible to
participate. Subsector Members must first sign and abide by not only
the Capacity Reduction Agreement (Reduction Agreement) but also a
Fishing Capacity Reduction Contract (Reduction Contract) with the U.S.
Government. These key components of the Capacity Reduction Plan
(Reduction Plan) were prepared by the Freezer Longline Conservation
Cooperative (FLCC) and would be implemented by the proposed
regulations. The aggregate of all Reduction Agreements and those
Reduction Contracts signed by Subsector Members whose offers were
accepted by \2/3\ votes of the Subsector Members, will together with
the FLCC's supporting documents and rationale that these offers
represent the expenditure of the least money for the greatest capacity
reduction, constitute the Reduction Plan to be submitted to the
Secretary of Commerce for approval. Subsector Members participating in
the Reduction Program will receive up to $36 million in exchange for
relinquishing valid non-interim Federal License Limitation Program BSAI
groundfish licenses endorsed for catcher processor fishing activity,
Catcher/Processor (C/P), Pacific cod, and hook and line gear, as well
as any present or future claims of eligibility for any fishing
privilege based on such permit (the Groundfish Reduction Permit) and
additionally, any future fishing privilege of the vessel named on the
permit. Individual fishing quota (IFQ) quota shares would be excluded
from relinquishment. Following submission of the Reduction Plan and
approval by the Secretary, NMFS will conduct an industry referendum to
determine the industry's willingness to repay a fishing capacity
reduction loan to effect the Reduction Plan. A \2/3\ majority vote in
favor would bind all parties and complete the reduction process. NMFS
will issue a 30-year loan to be repaid by those harvesters remaining in
the Reduction Fishery. The intent of this proposed rule is to
permanently reduce harvesting capacity in the Reduction Fishery. This
should result in increased harvesting productivity for post-reduction
Subsector Members and help with conservation and management of the
Reduction Fishery.

DATES: Comments must be received by September 11, 2006.

ADDRESSES: Comments may be submitted by any of the following methods:
? E-mail: 0648-AU42.FreezerLongliner@noaa.gov. Include in
the subject line the following identifier: ``Non-pollock FCRP proposed
rule.'' E-mail comments, with or without attachments, are limited to 5
megabytes;
? Federal e-Rulemaking Portal: http://www.regulations.gov;
? Mail to: Michael A. Sturtevant, Financial Services
Division, NMFS - MB5, 1315 East-West Highway, Silver Spring, MD 20910;
or
? Fax to 301-713-1306.
Copies of the Environmental Assessment/Regulatory Impact Review/
Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) prepared for this
action may be obtained from the mailing address above or by calling
Michael A. Sturtevant (see FOR FURTHER INFORMATION CONTACT).
Send comments regarding the burden-hour estimates or other aspects
of the collection-of-information requirements contained in this
proposed rule to Michael A. Sturtevant at the address specified above
and also to the Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), Washington, DC 20503 (Attention: NOAA Desk
Officer) or e-mail to David_Rosker@ob.eop.gov, or fax to (202) 395-
7825.

FOR FURTHER INFORMATION CONTACT: Michael A. Sturtevant at 301-713-2390,
fax 301-713-1306, or michael.a.sturtevant@noaa.gov.

SUPPLEMENTARY INFORMATION:

Electronic Access

This Federal Register document is also accessible via the Internet
at http://www.access.gpo.gov/su-docs/aces/aces140.html.

Statutory and Regulatory Background

BSAI groundfish fisheries are managed under the authority of the
Magnuson-Stevens Fishery Conservation and Management Act (MSA) codified
at 16 U.S.C. 1801 et seq. NMFS implements conservation measures
developed for these groundfish fisheries by the North Pacific Fishery
Management Council (Council) and approved by the NMFS, through
regulations at 50 CFR part 679 (Fisheries of the Exclusive Economic
Zone Off Alaska), and in particular subparts A, B, C, D, and E. The
Council also developed, and NMFS approved and implemented, conservation
measures governing the king and Tanner crab fisheries off Alaska
through regulations at 50 CFR part 680 (Shellfish Fisheries Of the
Exclusive Economic Zone Off Alaska). Because the Reduction Program in
this proposed rule relates to management of both the groundfish and
crab fisheries, references to the fishery management plans (FMPs) and
regulations governing management of these fisheries are provided here.
Concerning NMFS existing regulations, fishing capacity reduction is
governed by subpart L to 50 CFR part 600 (50 CFR 600.1000 et seq.),
which contains a framework rule promulgated pursuant to section 312 of
the MSA (16 U.S.C. 1861a(b)-(e)). Also, NMFS' existing regulations
contain specific fishery or program fishing capacity reduction
regulations at subpart M to 50 CFR part 600 and NMFS proposes this rule
as a new Sec. 600.1105 under subpart M.
The measures contained in this proposed rule to establish the
Reduction Program are authorized by Title II, Section 219 of the FY
2005 Appropriations Act (Act)(Public Law 108-447; 2004 enacted H.R.
4818, December 8, 2004), and in particular by Section 219(e) of the
Act. Also, Public Law 108-199 provided the initial $500,000 subsidy
cost to fund a $50 million loan and Public Law 108-447 provided an
additional $250,000 subsidy cost to fund $25 million more (in addition
to providing for the buyback program itself). While the Act authorizes
the establishment of fishing capacity reduction programs for catcher
processor subsectors within the Alaska groundfish fisheries (i.e., the
longline catcher processor subsector, the

[[Page 46365]]

American Fisheries Act (AFA) trawl catcher processor subsector, the
non-AFA trawl catcher processor subsector, and the pot catcher
processor subsector) based on capacity reduction plans and contracts
developed by industry and approved by NMFS, this proposed rule only
addresses the longline catcher processor subsector of the Reduction
Fishery. The remaining subsectors may later develop capacity reduction
plans and contracts for the other three catcher processor subsectors.
The FLCC on behalf of the Reduction Fishery drafted the Reduction
Agreement which NMFS seeks to incorporate into its existing fishing
capacity reduction regulations by this proposed rule. The Reduction
Agreement, the Reduction Contract, and application of certain other
existing Federal law and regulations referred to above are the basis
for the Reduction Plan. The aggregate of all Reduction Agreements and
Reduction Contracts signed by Subsector Members whose offers to
participate in this buyback are ranked highest by the FLCC will
constitute the Reduction Plan and will be submitted to NMFS for approval.
The Reduction Agreement and the Reduction Contract are the two key
components of the Reduction Plan and this proposed rule. Substantive
provisions of the Reduction Agreement would be codified at 50 CFR
600.1105 along with a requirement for all members of the Reduction
Fishery submitting offers to participate in the Reduction Program to
execute the Reduction Contract (i.e., the requirement for an Offeror to
execute a Reduction Contract will be codified and the Reduction
Contract appended). Wherever the term Offeror is used in this preamble
and regulation, it also includes any co-Offeror.
The Act authorized not more than $36 million in loans (reduction
loan) to fund the Reduction Program. NMFS' authority to make this loan
resides in sections 1111 and 1112 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1279f and 1279g)(MMA)(title XI).

Reduction Program - Overview

Participation in the Reduction Program would be open to any member
of the Longline Subsector. Each Subsector Member will receive a notice
of the FLCC Reduction Agreement and Reduction Contract and enrollment
documents by certified mail. The FLCC Reduction Program is essentially
divided into four phases: (1) enrollment; (2) offer selection; (3) plan
submission; and (4) implementation, after approval by referendum. Only
LLP licenses and other assets (including fishing history) voluntarily
submitted for removal from the Reduction Fishery shall be subject to
reduction. Because there exist what are commonly referred to as
``latent licenses'' within the Reduction Fishery which the FLCC
membership desires to remove, latent LLP licenses need not be
associated with a vessel for inclusion as assets to be reduced under
the Reduction Program. Fees for repayment of the loan which funds the
Reduction Program will be collected from the Subsector Members who
continue operations in the Reduction Fishery after implementation of
the Reduction Program set forth in this proposed Sec. 600.1105.

Reduction Program - The Capacity Reduction Agreement

Basic Agreement

On April 12, 2006, the FLCC submitted a Reduction Agreement,
Reduction Contract, and Executive Summary for a Reduction Plan for the
Reduction Fishery to NMFS. The Reduction Plan's express objective is to
permanently reduce harvesting capacity in the Reduction Fishery by
removal of Groundfish Reduction Permit, Reduction Permits, and the
Reduction Fishing Interests that are specified in the Reduction
Contract (which is appended to the proposed Sec. 600.1105). The FLCC
will implement the process of qualifying and enrolling Subsector
Members and selecting offers from Subsector Members to remove fishing
capacity by means of this buyback. Once the FLCC has completed the
selection process, the highest ranking offers, the rationale for
acceptance, the Reduction Agreements and Reduction Contracts (or
Reduction Plan) will be submitted to NMFS for approval, on behalf of
the Secretary of Commerce, in compliance with Section 219(e) of the Act.
Those Subsector Members submitting approved offers would give up
all Federal fishery licenses, fishery permits, and area and species
endorsements issued for any vessel named on the Groundfish Reduction
Permit, as well as any present or future claims of eligibility for any
fishery privilege based upon such permit. In the event of Latent
Licenses, the Selected Offerors would give up all Federal fishery
licenses, fishery permits, and area and species endorsements issued for
the vessel that gave rise to the LLP permit still remaining in the
possession of the Offeror as of the date this proposed rule is
published (the Reduction Permits). Regarding the vessel named on the
Groundfish Reduction Permit (the Reduction Privilege Vessel), the
Offeror will accept the imposition of Federal vessel documentation
restrictions that have the effect of permanently revoking the Reduction
Privilege Vessel's legal ability to fish anywhere in the world as well
as its legal ability to operate under foreign registry or control--
including the Reduction Privilege Vessel's: fisheries trade endorsement
under the Commercial Fishing Industry Vessel Anti-Reflagging Act (46
U.S.C. 12108); eligibility for the approval required under section
9(c)(2) of the Shipping Act, 1916 (46 U.S.C. App. 808(c)(2)), for the
placement of a vessel under foreign flag or registry, as well as its
operation under the authority of a foreign country; and the privilege
otherwise to ever fish again anywhere in the world (the ``Reduction
Fishing Privilege.
The Reduction Fishing Interest that would be removed would not
include any: right, title and/or interest to harvest, process or
otherwise utilize individual fishing quota (``IFQ'') quota share in the
halibut, sablefish and crab fisheries pursuant to 50 CFR parts 679 and
680.

Reduction Agreement Terms and Definitions

Capitalized terms used in the Reduction Agreement are defined in
Schedule A to the Reduction Agreement; other terms are defined within
the text of the Reduction Agreement. Those Reduction Agreement terms
that are essential to understanding the regulatory provisions proposed
for Sec. 600.1105 are set forth in Sec. 600.1105(b) and include
``Application Form'', ``Capacity Reduction Agreement or Reduction
Agreement'', ``Closing Vote'', ``Current Offeror'', ``Fishing Capacity
Reduction Contract or Reduction Contract'', ``FLCC Counsel'', ``LLP
License'', ``Offer(s)'', ``Rejected Offer'', and ``Website''. Other
terms important to understanding these regulations and the Reduction
Contract, including ``Reduction Privilege Vessel'', are also set forth
in Sec. 600.1105(b).

Reduction Agreement: Major Sections

There are three major sections of the Reduction Agreement:
Qualification and Enrollment of Subsector Members; Selection of Offers
to Remove Fishing Capacity by the Reduction Plan; and Submission of
Reduction Plan. NMFS proposes to codify these provisions as Federal
regulations in a new 50 CFR 600.1105.
Qualification and Enrollment. Subsector Members may enroll in the
Reduction Program at any time prior to closing the selection of offers
to reduce capacity. Enrollment is accomplished by executing a Reduction
Agreement and submitting specified supporting

[[Page 46366]]

documents evidencing an applicant's status as a Subsector Member. Each
of the supporting documents will be reviewed by Tagart Consulting who
will serve as the Auditor for the Reduction Program. The Auditor will
review all documents for strict compliance with the regulatory
provisions proposed for Sec. 600.1105. Each Reduction Agreement
becomes effective 10 days after written notice is sent by the Auditor
to each holder of a LLP license endorsed for BS or AI catcher processor
activity, C/P, Pacific cod and hook and line gear, informing that more
than 70 percent of Subsector Members have submitted complete
applications certified by the Auditor as complying with Sec. 600.1105.
For more specific information on qualification and enrollment of
Subsector Members, see Sec. 600.1105(c) of this proposed rule.
Selection of Offers to Remove Fishing Capacity by the Reduction
Plan. Once more than 70 percent of the Subsector Members have effective
Reduction Agreements, the offer selection process begins. An offer is a
binding offer to relinquish to the United States Government the assets
identified in the offer in consideration of a dollar amount certain set
by the Offeror, and may not be withdrawn once entered, unless it is
rejected during the selection process.
Essentially, during the offer process, Subsector Members will
alternate on a weekly basis between Submission Periods (see proposed
Sec. 600.1105(d)(3)(ii)) and Ranking Periods (see proposed Sec.
600.1105(d)(5)(ii)). During any Submission Period, a Subsector Member
may offer, for inclusion in the Reduction Program, its LLP license(s)
and withdrawal of the vessel(s) designated on the LLP license(s) from
all fisheries. During the Ranking Period, nonoffering Subsector Members
may rank the offers submitted during the prior Submission Period. At
the end of each Ranking Period, the Auditor will tabulate and post on a
website the results of ranking the offers up to a total offer price of
$36 million. Those offers ranked within the $36 million are Selected
Offers and those that are not ranked within the $36 million are
Rejected Offers with the Rejected Offers being voided and no longer
binding on the offering member(s).
Once the offer rankings are posted, a new Submission Period begins
with the process repeated until at least \2/3\ of the Nonoffering
Subsector Members call for a closing vote. If \2/3\ of the Nonoffering
Members accept the Selected Offers proposed in the closing vote, the
selection process to remove capacity by the Reduction Plan terminates.
If not, the selection process resumes with a new Submission Period. For
more specific information on ranking and selection of offers to remove
capacity, see Sec. 600.1105(d) of this proposed rule.
Plan Submission, Including Repayment. After the Selection Process
is complete, the FLCC will develop the Reduction Plan in compliance
with the Act, the MSA, and other applicable laws and regulations for
submission to NMFS for approval on behalf of the Secretary of Commerce.
The Reduction Plan will include the LLP licenses and other fishing
interests selected by the offer process as the assets to be purchased
in the Reduction Program, and provide for repayment over a 30-year
term. The Reduction Plan must also include the FLCC's supporting
documents and rationale for recognizing that these offers represent the
expenditure of the least money for the greatest capacity reduction.
Acceptance of the Offers are at the sole discretion of NMFS on behalf
of the Secretary of Commerce. Further, the FLCC will give notice of the
Reduction Plan to the North Pacific Fishery Management Council as
required by the Act.
Repayment of the loan will begin by collection of annual fees
collected from the Subsector Members operating in the Reduction Fishery
after implementation of the Reduction Program. The amount of such fee
will be calculated on an annual basis as: the principal and interest
payment amount necessary to amortize the loan over a 30-year term,
divided by the Reduction Fishery portion of the BSAI Pacific cod
initial total allowable catch (ITAC) allocation in metric tons
(converted to pounds), provided that the fees should not exceed 5
percent of the average ex-vessel production value of the Reduction
Fishery. In the event that the total principal and interest due exceeds
5 percent of the ex-vessel Pacific cod revenues, a penny per pound
round weight fee will be calculated based on the latest available
revenue records and NMFS conversion factors for pollock, arrowtooth
flounder, Greenland turbot, skate, yellowfin sole and rock sole. For
more specific information on submission of the Reduction Plan,
including fees to repay the Reduction Loan, see Sec. 600.1105(e) of
this proposed rule.

The Reduction Program - Other Matters Relating to the Reduction
Agreement and Reduction Plan

Review/Disputes

The Reduction Agreement (but not these proposed regulations)
provides for an expedited process to review any decision by the Auditor
and for settlement of disputes utilizing an expedited review process by
pre-selected legal counsel and, if necessary, binding arbitration.
Also, all Offerors must comply with FLCC bylaws. By motion unanimously
accepted by the members of the FLCC on February 21, 2005, the members
of the FLCC approved the FLCC's development of a capacity reduction
program in compliance with the Act (the Motion).

Decisions of the Auditor and the FLCC

Under the proposed Sec. 600.1105(f), the Offerors would be subject
to the terms and conditions set forth in the Reduction Agreement to
settle any disputes regarding the decisions of the Auditor or the FLCC.
That proposed section also explains the scope of the Auditor's examination.

Other Provisions of the Reduction Agreement

Proposed regulatory provisions mirroring the Reduction Agreement's
provisions for Enforcement/Specific Performance, Miscellaneous,
Amendment, and Warranties are specified at Sec. Sec. 600.1105(g), (h),
(i), and (j), respectively.

Approval of the Reduction Plan

The criteria for NMFS, on behalf of the Secretary, to approve any
Reduction Plan are specified at Sec. 600.1105(k). Among other things,
the Assistant Administrator of NMFS must find that the Reduction Plan
is consistent with the Act and the MSA, and that it will result in the
maximum sustained reduction in fishing capacity at the least cost and
in the minimum amount of time.
The FLCC has not yet submitted the Reduction Plan to NMFS for
approval and cannot do so until after this proposed rule is published.
The FLCC may wish to wait to submit the Reduction Plan until after the
final rule (resulting from this proposed rule) is published, or the
FLCC may submit the Reduction Plan before that time but it may
necessitate a revision and re-submission of the Reduction Plan to
conform with the provisions of the final rule.

The Referenda

NMFS will conduct an industry referendum to determine the
industry's willingness to repay a fishing capacity reduction loan to
purchase the licenses, fishing rights, etc. identified in the Reduction
Plan subsequent to the publication of a final rule resulting from this
proposed rule. A successful referendum by \2/3\ of the members of the

[[Page 46367]]

Reduction Fishery would bind all parties and complete the reduction
process.
The current Fishing Capacity Reduction Framework regulatory
provisions of Sec. 600.1010 stipulate procedural and other
requirements for NMFS to conduct referenda on fishing capacity
reduction programs. The proposed Sec. 600.1105(l) makes those
framework referenda requirements applicable to the Reduction Program
for the Longline Subsector. After approval of the Reduction Program via
a referendum, the Reduction Program will be implemented.

The Contract

A proposed appendix to this Sec. 600.1105 sets forth the Contract
component of the Reduction Program for the Longline Subsector. The
appendix, or Contract, would also be codified along with the regulatory
text of Sec. 600.1105.
In addition to public comment about the proposed rule's substance,
NMFS also seeks public comment on any ambiguity or unnecessary
complexity arising from the language used in this proposed rule.

Classification

The Assistant Administrator for Fisheries, NMFS, determined that
this proposed rule is consistent with Title II, Section 219 of the FY
2005 Appropriations Act, Public Law 108-447, and with the Magnuson-
Stevens Fishery Conservation and Management Act, codified at 16 U.S.C.
1801 et seq.
In compliance with the National Environmental Policy Act, NMFS
prepared an environmental assessment for this proposed rule. The
assessment discusses the impact of this proposed rule on the natural
and human environment and integrates a Regulatory Impact Review (RIR)
and an Initial Regulatory Flexibility Analysis (IRFA). NMFS will send
the assessment, the review and analysis to anyone who requests a copy
(see ADDRESSES).
NMFS prepared an IRFA, as required by section 603 of the Regulatory
Flexibility Act (RFA), to describe the economic impacts this proposed
rule, if adopted, would have on small entities. NMFS intends the
analysis to aid us in considering regulatory alternatives that could
minimize the economic impact on affected small entities. The proposed
rule does not duplicate or conflict with other Federal regulations.

Summary of IRFA

The Small Business Administration (SBA) has defined small entities
as all fish harvesting businesses that are independently owned and
operated, not dominant in its field of operation, and with annual
receipts of $4 million or less. In addition, processors with 500 or
fewer employees for related industries involved in canned or cured fish
and seafood, or preparing fresh fish and seafood, are also considered
small entities. Small entities within the scope of this proposed rule
include individual U.S. vessels and dealers. There are no
disproportionate impacts between large and small entities.
Description of the Number of Small Entities:
The IRFA uses the most recent year of data available to conduct the
analysis (2003). The vessels that might be considered large entities
were either affiliated under owners of multiple vessels or were catcher
processors. However, little is known about the ownership structure of
the vessels in the fleet, so it is possible that the IRFA overestimates
the number of small entities. In the Reduction Fishery, 24 of the 39
vessels meet the threshold for small entities. The remaining 13 vessels
are not considered small entities for purposes of the RFA. There are 5
additional fishermen with permits but no vessels in the Longline
Subsector who would benefit if they later purchase vessels and
participate in the post-Reduction Fishery because there will be less
competition for the harvest. Also, they would benefit if they chose to
be bought out; and there would be no impact to them if they did not buy
a vessel and were not selected for the buyback. Implementation of the
buyback program would not change the overall reporting structure and
recordkeeping requirements of the vessels in the BSAI Pacific cod
fisheries. However, this program would impose collection of information
requirements totaling 16 hours 10 minutes.
Most firms operating in the Reduction Fishery have annual gross
revenues of less than $4 million. The IRFA analysis estimates that 24
of the 39 active longline catcher processor vessels (i.e., 39 vessels
constitute the Longline Subsector) that participated in 2003 are
considered small entities. The ownership characteristics of vessels
operating in the Reduction Fishery are not available and therefore it
is not possible to determine with certainty, if they are independently
owned and operated, or affiliated in one way or another with a larger
parent company. Furthermore, because analysts cannot quantify the exact
number of small entities that may be directly regulated by this action,
a definitive finding of non-significance for the proposed action under
the RFA is not possible. However, because the proposed action would not
result in changes to allocation percentages and participation is
voluntary, net effects would be expected to be minimal relative to the
status quo.
The proposed rule's impact would be positive for both those whose
offers NMFS accepts and for post-reduction catcher processors whose
landing fees repay the reduction loan because the Offerors and catcher
processors would have voluntarily assumed the impact:
1. Offerors would have volunteered to make offers at dollar amounts
of their own choice. Presumably, no Offeror would volunteer to make an
offer with an amount that is inconsistent with the Offeror's interest;
and
2. Reduction loan repayment landing fees would be authorized, and
NMFS could complete the Reduction Program, only if at least two-thirds
of Subsector Members voting in a post-offer referendum voted in favor
of the Reduction Plan. Presumably, Subsector Members who are not
Selected Offerors would not vote in favor of the Reduction Plan unless
they concluded that the Reduction Program's prospective capacity
reduction was sufficient to enable them to increase their post-
reduction revenues enough to justify the fee.
Those participants remaining in the fishery after the buyback will
incur additional fees of up to 5 percent of the ex-vessel production
value of post-reduction landings. However, the additional costs could be
mitigated by increased harvest opportunities by post-reduction fishermen.
NMFS believes that this proposed rule would affect neither
authorized BSAI Pacific cod ITAC and other non-pollock groundfish
harvest levels nor harvesting practices.
NMFS rejected the no action alternative considered in the EA
because NMFS would not be in compliance with the mandate of Section 219
of the Act to establish a buyback program. In addition, the longline
catcher processor subsector of the non-pollock groundfish fishery would
remain overcapitalized. Although too many vessels compete to catch the
current subsector total allowable catch (TAC) allocation, fishermen
remain in the fishery because they have no other means to recover their
significant capital investment. Overcapitalization reduces the
potential net value that could be derived from the non-pollock
groundfish resource, by dissipating rents, driving variable operating
costs up, and imposing economic externalities. At the same time, excess
capacity and effort diminish the

[[Page 46368]]

effectiveness of current management measures (e.g. landing limits and
seasons, bycatch reduction measures). Overcapitalization has diminished
the economic viability of members of the fleet and increased the
economic and social burden on fishery dependent communities.
NMFS determined that this proposed rule is not significant for
purposes of Executive Order 12866 based on the RIR/IRFA.
This proposed rule contains information collection requirements
subject to the Paperwork Reduction Act (PRA). The Office of Management
and Budget (OMB) previously approved this information collection under
OMB Control Number 0648-0376 with requirements for 878 respondents with
a total response time of 38,653 hours.
NMFS estimates that the public reporting burden for this
information collection would average 4 hours for making an offer (which
includes executing the Reduction Agreement and Reduction Contract) and
4 hours for voting in a referendum. Persons affected by this proposed
rule would also be subject to other collection-of-information
requirements referred to in the proposed rule and also approved under
OMB Control Number 0648-0376. These requirements and their associated
response times are: completing and filing a fish ticket (10 minutes),
submitting monthly fish buyer reports (2 hours), submitting annual fish
buyer reports (4 hours), and fish buyer/fish seller reports when a
person fails either to pay or to collect the loan repayment fee (2 hours).
These response estimates include the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
information collection. Public comment is sought regarding: whether
this proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; the accuracy of the burden
estimate; ways to enhance the quality, utility, and clarity of the
information to be collected; and ways to minimize the burden of the
collection of information, including through the use of automated
collection techniques or other forms of information technology.
Interested persons may send comments regarding this burden estimate, or
any other aspect of this data collection, including suggestions for
reducing the burden, to both NMFS and OMB (see ADDRESSES).
Notwithstanding any other provision of law, no person is required
to respond to, and no person is subject to a penalty for failure to
comply with, an information collection subject to the PRA requirements
unless that information collection displays a currently valid OMB
control number.
This action would not result in any adverse effects on endangered
species or marine mammals.

List of Subjects in 50 CFR Part 600

Fisheries, Fishing capacity reduction, Fishing permits, Fishing
vessels, Intergovernmental relations, Loan programs -business,
Reporting and recordkeeping requirements.

Dated: August 7, 2006.
Samuel D. Rauch, III,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 600, subpart
M, is proposed to be amended as follows:

PART 600--MAGNUSON-STEVENS ACT PROVISIONS

Subpart M--Specific Fishery or Program Fishing Capacity Reduction
Regulations

1. The authority citation for 50 CFR part 600, subpart M, is
revised to read as follows:

Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C.
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d)
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20,
and section 205 of Pub. L. 107-117, Pub. L. 107-206, Pub. L. 108-7,
Pub. L. 108-199, and Pub. L. 108-447.

2. Section 600.1105 is added to subpart M to read as follows:

Sec. 600.1105 Longline catcher processor subsector of the Bering Sea
and Aleutian Islands (BSAI) non-pollock groundfish fishery program.

(a) Purpose. This section implements the capacity reduction program
that Title II, Section 219(e) of Public Law 108-447 enacted for the
longline catcher processor subsector of the Bering Sea and Aleutian
Islands (BSAI) non-pollock groundfish fishery.
(b) Definitions. Unless otherwise defined in this section, the
terms defined in Sec. 600.1000 of Subpart L of this part expressly
apply to this section. The following terms have the following meanings
for the purpose of this section:
Act means Title II, Section 219 of Public Law 108-447.
AI means the Aleutian Islands.
Application Form means the form published on the FLCC's website
that sets forth whether the qualifying LLP License is a Latent License
and identifies the individual(s) authorized to execute and deliver
Offers and Offer Ranking Ballots on behalf of the Subsector Member.
Auditor means Jack V. Tagart, Ph.D., d.b.a. Tagart Consulting.
Authorized Party means the individuals authorized by Subsector
Members on the application form to execute and submit Offers, Rankings,
protests and other documents and/or notices on behalf of Subsector Member.
Ballot means the form found on the auditor's website used to cast a
vote in favor of, or in opposition to, the currently Selected Offers.
BS means the Bering Sea.
BSAI means the Bering Sea and the Aleutian Islands.
BSAI Pacific Cod ITAC means the Total Allowable Catch for Pacific
cod after the subtraction of the 7.5 percent Community Development
Program reserve.
Capacity Reduction Agreement or Reduction Agreement means an
agreement entered into by the Subsector Members and the FLCC under
which the FLCC is permitted to develop and submit a Capacity Reduction
Plan to the Secretary.
Certificate of Documentation (COD) means a document issued by the
U. S. Coast Guard's National Documentation Center that registers the
vessel with the United States Government.
Closing Vote means a vote held pursuant to paragraph (d)(7) of this
section, after two-thirds (\2/3\) or more of the Nonoffering Subsector
Members submit Ranking Forms electing to accept the Selected Offerors
and close the Selection Process, and there are no unresolved Protests
or Arbitrations.
Current Offer means an Offer submitted by a Subsector Member to the
Auditor during any Submission Period and, with regard to such Offer,
Offeror has not become a Rejected Offeror. The term ``Current Offer''
includes Selected Offers.
Current Offeror means an Offering Subsector Member that has
submitted an Offer to the Auditor during any Submission Period and,
with regard to such Offer, Offeror has not become a Rejected Offeror.
The term ``Current Offeror'' includes Selected Offerors.
Database means the online LLP License database maintained by NMFS
as downloaded by the Auditor pursuant to paragraph(c)(1) of this section.
Effective Date means the date the Capacity Reduction Agreement
becomes effective pursuant to section 4.e of the Capacity Reduction
Agreement.
Fishing Capacity Reduction Contract or Reduction Contract means the
contract that any Current Offeror must sign and agree to abide by if NMFS

[[Page 46369]]

accepts the offer by signing the Reduction Contract.
FLCC Counsel means Bauer Moynihan & Johnson LLP or other counsel
representing the FLCC in any review or arbitration under this Capacity
Reduction Agreement.
Latent License means an LLP License on which a vessel was not
designated at the time an Offer is submitted.
LLP License means a Federal License Limitation Program groundfish
license issued pursuant to Sec. 679.4(k) of this chapter or successor
regulation that is noninterim and transferable, or that is interim and
subsequently becomes noninterim and transferable, and that is endorsed
for BS or AI catcher processor fishing activity, C/P, Pacific cod and
hook and line gear.
Longline Subsector means the longline catcher processor subsector
of the BSAI non-pollock groundfish fishery as defined in the Act.
Longline Subsector ITAC means the longline catcher processor
subsector remainder of the Total Allowable Catch after the subtraction
of the 7.5 percent Community Development Program reserve.
Nonoffering Subsector Member shall have the meaning ascribed
thereto in paragraph (d)(5)(i) of this section.
Offer Content means all information included in Offers submitted to
the Auditor pursuant to paragraph (d)(2)(ii) of this section.
Offer Form means the form found on the Auditor's website used to
make an offer.
Offer(s) means a binding offer(s) from a Subsector Member to sell
its LLP, right to participate in the fisheries, the fishing history
associated with such LLP, and any vessel set forth on the Offer Form
submitted by Offeror pursuant to the terms of this Capacity Reduction
Agreement.
Opening Date means the first Monday following the Effective Date
set forth in paragraph (c)(3) of this section.
Person includes any natural person(s) and any corporation,
partnership, limited partnership, limited liability company,
association or any other entity whatsoever, organized under the laws of
the United States or of a state.
Prequalification Offer shall have the meaning ascribed thereto in
paragraph (d)(2)(iii) of this section.
Ranking Form means the form posted by the Auditor pursuant to
paragraph (d)(5)(iii) of this section.
Ranking Period shall have the meaning ascribed thereto in paragraph
(d)(5)(ii) of this section.
Reduction Fishery means the BSAI non-pollock groundfish fishery.
Reduction Fishing Interests shall have the meaning ascribed thereto
in the Fishing Capacity Reduction Contract.
Reduction Plan means a business plan prepared by the Subsector
Members in accordance with Section 1 of the Capacity Reduction
Agreement and forwarded to the Secretary for approval.
Reduction Privilege Vessel means the vessel listed on the Offeror's
License Limitation Program license.
Rejected Offer means an Offer that has been through one or more
Rankings and is not a Selected Offer following the latest Ranking
Period, with respect to which the Offering Subsector Member's
obligations have terminated pursuant to paragraphs (d)(2)(i) and
(d)(6)(v) of this section.
Rejected Offeror means a Subsector Member that has submitted an
Offer which has been ranked and was not posted as a Selected Offer
pursuant to paragraph (d)(6)(ii) of this section.
Restricted Access Management (RAM) refers to restricted access
management program within Office of Sustainable Fisheries, Alaska
Region, NMFS, located in Juneau, Alaska.
Secretary means the Secretary of Commerce or a designee.
Selected Offer shall have the meaning ascribed thereto in paragraph
(d)(6)(iv) of this section.
Selected Offeror means a Subsector Member that has submitted an
Offer which has been ranked and is posted as a Selected Offer pursuant
to paragraph (d)(6)(ii) of this section.
Selection Process means the process set forth in paragraph (d) of
this section for selecting the fishing capacity to be removed by the
Reduction Plan.
Submission Period(s) or Submitting Period(s) shall have the meaning
ascribed thereto in paragraph (d)(3)(ii) of this section.
Subsector Member(s) means a member(s) of the Longline Subsector.
Website means the internet web site developed and maintained on
behalf of the FLCC for implementation of the Selection Process
described herein with a URL address of http://www.freezerlonglinecoop.org.

(c) Qualification and Enrollment of Subsector Members--(1)
Distribution. A copy of the Reduction Agreement, Application Form, and
Reduction Contract shall be mailed to each holder of record of an LLP
License endorsed for BS or AI catcher processor activity, C/P, Pacific
cod and hook and line gear, as the Auditor determines from the Database
downloaded by the Auditor as of January 30, 2006, regardless of whether
the LLP License is indicated in the Database as noninterim and
transferable or otherwise.
(2) Application. Any person, regardless of whether having received
the mailing described in paragraph (c)(1) of this section, may apply as
a Subsector Member, by submitting all of the following documents:
(i) Fully executed Reduction Agreement;
(ii) Photocopy of the LLP License(s) evidencing Subsector Member's
qualification as a member of the Longline Subsector;
(iii) Unless applying as the holder of a Latent License, a
photocopy of Federal Fisheries Permit for the vessel(s) designated on
the LLP License(s) on the date the Reduction Agreement is signed by the
Subsector Member;
(iv) Unless applying as the holder of a Latent License, a photocopy
of the Certificate of Documentation (COD) for the vessel(s) designated
on the LLP License(s) on the date the Reduction Agreement is signed by
the Subsector Member;
(v) An executed Application Form which sets forth whether the
qualifying LLP License is a Latent License and identifies the
individual(s) authorized to execute and deliver Offers and Offer
Ranking Ballots on behalf of the Subsector Member; and
(vi) A fully executed Reduction Contract consistent with the
appendix to this section.
(3) Examination by Auditor--(i) In general. Each application must
be submitted to the Auditor who will examine applications for
completeness and inconsistencies, whether on the face of the documents
or with the Database. Any application which is incomplete or which
contains inconsistencies shall be invalid. The Auditor shall notify by
e-mail or mail an applicant of the basis for the Auditor's finding an
application invalid. An applicant may resubmit a revised application.
If the application meets all requirements, the Auditor may accept the
application as valid and enroll the applicant as a Subsector Member.
(ii) Interim LLP Licenses. If an LLP License is interim and/or
nontransferable, the applicant's enrollment shall be accepted as a
Subsector Member and may fully participate in the Selection Process.
However, any posting of an Offer submitted with respect to such LLP
License shall note the status of such LLP License until that Subsector
Member submits to the Auditor a letter from the RAM confirming that it
is within the Subsector Member's control to cause the qualifying LLP
License to be issued as noninterim and transferable upon withdrawal of
all applicable appeals.

[[Page 46370]]

(4) Enrollment period. Applications that meet all requirements will
be accepted until the Selection Process is completed.
(5) Effective date. The Effective Date of any Reduction Agreement
shall be ten (10) calendar days after written notice is sent by the
Auditor to each holder of record of an LLP License endorsed for BS or
AI catcher processor activity, C/P, Pacific cod and hook and line gear
(as determined by the Auditor from the Auditor's examination of the
Database) advising that the number of Subsector Members that have
delivered to the Auditor a complete Application, including a fully
executed Reduction Agreement, exceeds seventy percent (70 percent) of
the members of the Longline Subsector (as determined by the Auditor
from the Auditor's examination of the Database).
(6) Notice. All notices related to the effective date of the
Reduction Agreement shall be sent by the Auditor via registered mail.
(7) Withdrawal. A Subsector Member, unless such Subsector Member is
a Current Offeror or Selected Offeror, may terminate the Reduction
Agreement at any time with respect to that Subsector Member by giving
ten (10) calendar days written notice to the Auditor preferably via e-
mail. Withdrawal of a Subsector Member shall not affect the validity of
the Reduction Agreement with respect to any other Subsector Members.
Once effective, the Reduction Agreement shall continue in full force
and effect regardless of whether subsequent withdrawals reduce the
number of Subsector Members below that level required to effectuate the
Reduction Agreement. Attempted withdrawal by a Current Offeror or
Selected Offeror shall be invalid, and such Offer shall remain a
binding, irrevocable Offer, unaffected by the attempted withdrawal.
(d) Selection of Fishing Capacity to be Removed by Reduction Plan.
The fishing capacity removed by the Reduction Plan will be the
Reduction Fishing Interests voluntarily offered through the Reduction
Plan by offering Subsector Members and as selected by the Nonoffering
Subsector Members, up to an aggregate amount of thirty six million
dollars ($36,000,000) as set forth in this paragraph (d).
(1) Overview. The Selection Process will begin upon the Effective
Date of the Reduction Agreement. The Selection Process will alternate
on a weekly basis between:
(i) Submitting Periods, during which individual Subsector Members
may submit Offers of fishing capacity they wish to include in the
Reduction Plan; and
(ii) Ranking Periods, during which Nonoffering Subsector Members
will rank the submitted Offers.
(2) Offers--(i) Binding Agreement. An Offer from a Subsector Member
shall be a binding, irrevocable offer from a Subsector Member to
relinquish to NMFS the Reduction Fishing Interests for the price set
forth on the Offer contingent on such Offer being a Selected Offer at
the closing of the Selection Process. Once submitted, an Offer may not
be revoked or withdrawn while that Offer is a Current Offer or Selected
Offer. An Offer that is submitted by a Subsector Member, but is not a
Selected Offer during the subsequent Ranking Period, shall be deemed to
be terminated and the Subsector Member shall have no further obligation
with respect to performance of that Offer.
(ii) Offer Content. All Offers submitted to the Auditor shall
include the following information: LLP License number; LLP License
number(s) of any linked crab LLP Licenses; license MLOA (MLOA - maximum
length overall of a vessel is defined at Sec. 679.2 of this chapter);
the license area, gear and species endorsements; a summary of the
Pacific cod catch history for the calendar years 1995-2004; and the
offered price. The Offer shall also state whether a vessel is currently
designated on the LLP License and as such will be withdrawn from all
fisheries if the Offer is selected for reduction in the Reduction Plan.
If so, the Offer shall identify such vessel by name, official number,
and current owner. In addition, the Offer shall provide a summary of
the Pacific cod catch history for the calendar years 1995-2004 of the
vessel to be retired from the fisheries. All summary catch histories
included in Offers shall be calculated utilizing both the weekly
production report and best blend methodology and shall separately state
for each methodology the Pacific cod catch in metric tons and as a
percentage of the overall catch for the longline catcher processor
subsector on an annual basis for each of the required years. If the
vessel stated to be withdrawn from the fisheries is not owned by the
LLP License owner of record, the Offer shall be countersigned by the
owner of record of the vessel. An Offer offering a Latent License shall
state on the Offer Form that the offered LLP License is a Latent
License. The Offer Form shall also include a comment section for any
additional information that Offerors wish to provide to the Subsector
Members concerning the Offer.
(iii) Prequalification of Offers. A Subsector Member may submit a
Prequalification Offer to the Auditor at any time prior to the Opening
Date. A Prequalification Offer shall contain all elements of an Offer,
except that a price need not be provided. The Auditor shall notify the
Subsector Member submitting a Prequalification Offer as to any
deficiencies as soon as practicable. All details of a Prequalification
Offer shall be kept confidential by the Auditor.
(3) Submitting an Offer--(i) Offer Submission. Commencing on the
first Tuesday following the Opening Date and during all Submission
Periods until the Selection Process is closed, any Subsector Member may
submit an Offer. All Offers are to be on the applicable form provided
on the FLCC website, executed by an Authorized Party and submitted to
the Auditor by facsimile. Any Subsector Member may submit an Offer
during any Submission Period, even if that Subsector Member has not
submitted an Offer in any previous Submission Period. If a Subsector
Member holds more than one LLP License, such Subsector Member may, but
is not required to, submit an Offer for each LLP License held during a
Submission Period.
(ii) Submission Periods. The initial Submission Period shall
commence at 9 a.m. (Pacific time) on the Tuesday following the Opening
Date and end at 5 p.m. (Pacific time) on the Friday of that week.
Subsequent Submission Periods shall commence at 9 a.m. (Pacific time)
on the first Tuesday following the preceding Ranking Period and end at
5 p.m. (Pacific time) on the Friday of that week. All times set forth
in the Reduction Agreement and used in the Offer process shall be the
time kept in the Pacific time zone as calculated by the National
Institute of Standards and Technology.
(iii) Validity of Offer. The Auditor shall examine each Offer for
consistency with the Database and information contained in the
enrollment documents. If there is an inconsistency in the information
contained in the Offer, any of the elements required of an Offer
pursuant to paragraph (d)(2)(ii) of this section are missing, or the
Auditor does not receive the original Offer Form before the Offers are
to be posted pursuant to paragraph (d)(4) of this section, the Auditor
shall notify the offering Subsector Member by e-mail or mail that the
Offer is nonconforming as soon as practicable after discovering the
basis of invalidity. The Subsector Member may submit a revised,
conforming Offer prior to the close of that Submission Period or, in
any subsequent Submission Period. Only one Offer may be submitted with
respect to an LLP License during a Submission

[[Page 46371]]

Period. In the event a Subsector Member submits more than one Offer
with respect to an LLP License during a Submission Period, the first
conforming Offer received by the Auditor shall be binding and
irrevocable and any subsequent Offers shall be deemed invalid.
(iv) Warranty. By submitting an Offer, the Offering Subsector
Member, warrants and represents that the Offering Subsector Member has
read and understands the terms of the Reduction Agreement, the Offer,
and the Reduction Contract and has had the opportunity to seek
independent legal counsel regarding such documents and/or agreements
and the consequences of submitting an Offer.
(4) Posting Offers--(i) Current Offers. For each Offer received
during a Submission Period, the Auditor shall post on the Website no
later than 5 p.m. (Pacific time) on the following Tuesday all of the
details of such Offer as set forth on the Offer Form. In addition, the
Auditor shall post, as available to Auditor, a summary by year of up to
ten (10) years catch history during the period 1995-2004 in total round
weight equivalents and percentage of Longline Subsector ITAC harvested
for any vessel that is included in the Offer. Subsector Member (or
vessel owner, if other than the Subsector Member) expressly authorizes
Auditor to release the catch history summary information previously
prepared for that Subsector Member or vessel owner by the Auditor as
part of the analysis of FLCC's membership's catch history previously
conducted by the Auditor on behalf of the FLCC.
(ii) Posting Order. Offers shall be posted on the Website by the
Auditor in alphabetical order of the Offering Subsector Member's name.
(iii) Questions as to Offer. The Auditor shall respond to no
questions from Subsector Member regarding Offers except to confirm that
the posting accurately reflects the details of the Offer. If an
Offering Subsector Member notices an error in an Offer posting on the
Website, such Subsector Member shall notify the Auditor as soon as
practicable. The Auditor shall review such notice, the posting and the
original Offer. If an error was made in posting the Auditor shall
correct the posting as soon as practicable and notify the Subsector
Members via e-mail or mail of the correction. In the event such an
error is not discovered prior to Ranking, an Offering Subsector Member
shall be bound to the terms of the submitted Offer, not the terms of
the posted Offer.
(iv) Archive. The Auditor shall maintain on the Website an archive
of prior Offers posted, which shall be available for review by all
Subsector Members.
(5) Ranking--(i) Eligibility. Each Subsector Member that has not
submitted an Offer during the preceding Submission Period, or whose
vessel is not included as a withdrawing vessel in an Offer during the
preceding Submission Period (i.e., a Nonoffering Subsector Member), may
submit to the Auditor a Ranking Form during a Ranking Period. With
respect to Ranking, a Subsector Member that holds more than one LLP
License may participate in the Ranking process for each LLP License not
included in an Offer.
(ii) Ranking Period. The initial Ranking Period shall commence
immediately after the Offers from the preceding Submission Period have
been posted and end at 5 p.m. (Pacific time) on the Friday of that
week. Subsequent Ranking Periods shall commence immediately after the
Offers from the preceding Submission Period have been posted and end at
5 p.m. (Pacific time) on the Friday of that week.
(iii) Ranking Form. Prior to each Ranking Period, the Auditor will
post a Ranking Form on the Website in ``pdf'' file format. Each
eligible Subsector Member wishing to rank the current Offers shall rank
the Offers on the Ranking Form numerically in the Subsector Member's
preferred order of purchase. The Offer that Subsector Member would most
like to have accepted should be ranked number one (1), and subsequent
Offers ranked sequentially until the Offer that the Subsector Member
would least like to see accepted is ranked with the highest numerical
score. A Subsector Member wishing to call for a Closing Vote shall, in
lieu of ranking the Current Offers, mark the Ranking Form to accept the
Selected Offers selected during the prior Ranking Period and close the
Selection Process. To be valid, the Ranking Form must rank each Current
Offer listed on the Ranking Form or, if applicable, be marked to call
for a Closing Vote. Ranking Forms shall be submitted by sending a
completed Ranking Form, signed by an Authorized Party, to the Auditor
by facsimile or mail prior to the end of the Ranking Period. A
Subsector Member is not required to rank the Offers during a Ranking
Period or call for a Closing Vote.
(iv) Validity of Subsector Member Ranking. The Auditor shall
examine each Ranking Form for completeness, whether the form either
ranks the Offers or calls for a Closing Vote (but not both), and
authorized signature. Any incomplete or otherwise noncompliant Ranking
Form(s) shall be invalid, and shall not be included in the Rankings of
the Current Offers. The Auditor shall notify the Subsector Member of
the reason for declaring any Ranking Form invalid as soon as
practicable. A Subsector Member may cure the submission of an invalid
Ranking Form by submitting a complying Ranking Form if accomplished
before the end of the applicable Ranking Period.
(6) Ranking Results--(i) Compiling the Rankings. Unless two-thirds
(\2/3\) of the Nonoffering Subsector Members have called for a Closing
Vote, the Auditor shall compile the results of the Ranking Forms by
assigning one point for each position on a Ranking Form. That is, the
Offer ranked number one (1) on a Ranking Form shall be awarded one (1)
point, the Offer ranked two (2) shall receive two (2) points, and
continuing on in this manner until all Offers have been assigned points
correlating to its ranking on each valid Ranking Form. The Offer with
the least number of total points assigned shall be the highest ranked
Offer, and the Offer with the greatest total points assigned shall be
the lowest ranked Offer.
(ii) Posting Rankings. The Auditor shall post the results of the
compilation of the Ranking Forms on the Website in alphabetical order
based on the Offering Subsector Member's name no later than 5 p.m.
(Pacific time) on the Monday following the Ranking Period. The Auditor
shall post the highest consecutive ranking Offers that total thirty six
million dollars ($36,000,000) or less. Those Offering Subsector Members
whose Offers are posted shall be deemed Selected Offerors and their
Offers shall be deemed Selected Offers. Those Offering Subsector
Members whose Offers are not posted shall be deemed Rejected Offerors.
(iii) Selected Offer Information or Confidentiality. The Auditor
shall post the name of the Offering Subsector Member, the amount of the
Offer, and a summary of the total number of Ranking Forms received and
the number of such forms on which the Members called for a Closing
Vote. Other than the foregoing, the Auditor shall not post any details
of the compilation of the Ranking Forms.
(iv) Selected Offerors. Selected Offerors may not withdraw their
Offers unless in subsequent rankings their Offers no longer are within
the highest ranking Offers and they become Rejected Offerors. A
Selected Offeror may, however, modify a Selected Offer solely to the
extent such modification consists of a reduction in the Offer price. A
Selected Offeror may submit a modified Offer to the Auditor during the
next Offering Period as set forth in paragraph (d)(3) of this section.
Unless

[[Page 46372]]

a Selected Offeror becomes a Rejected Offeror in a subsequent Ranking,
a Selected Offeror shall be bound by the terms of the lowest Selected
Offer submitted as if such modified Offer had been the original
Selected Offer. In the event a Selected Offeror submits a modified
Offer and such Offer is not ranked because sufficient votes are
received to call for a Closing Vote, the previously Selected Offer
shall remain the Selected Offer.
(v) Rejected Offerors. The Offer of a Rejected Offeror is
terminated and the Rejected Offeror is no longer bound by the terms of
its Offer. A Rejected Offeror may, at its sole discretion, resubmit the
same Offer, submit a revised Offer, or elect not to submit an Offer
during any subsequent Submission Period until the Selection Process is
closed.
(vi) Ties. In the event there is a tie with respect to Offers which
results in the tied Offers exceeding thirty six million dollars
($36,000,000), the tied Offers and all Offers ranked lower than the
tied Offers shall be deemed to be rejected and the Rejected Offerors
may, at their option, submit an Offer in a subsequent Submission Period.
(vii) Archive. Auditor shall maintain on the Website an archive of
prior Offer Rankings as posted over the course of the Selection
Process, which shall be available for Subsector Member review.
(7) Closing. The Selection Process will close when two-thirds (\2/
3\) or more of the Nonoffering Subsector Members of the Longline
Subsector, as determined by the Auditor, affirmatively vote to accept
the Selected Offerors selected during the prior Ranking Period as part
of the Reduction Plan to be submitted to the Secretary.
(i) Call for Vote. A Closing Vote will be held when: at least two-
thirds (\2/3\) of the Nonoffering Subsector Members submit Ranking
Forms electing to accept the Selected Offerors and close the Selection
Process in lieu of Ranking the current Offers; and there are no
unresolved Protests or Arbitrations. The Auditor shall notify all
Subsector Members by e-mail or mail and posting a notice on the Website
as soon as practicable that a Closing Vote is to be held. Such notice
shall state the starting and ending dates and times of the voting
period, which shall be not less than three (3) nor more than seven (7)
calendar days from the date of such notice. A voting period shall
commence at 9 a.m. (Pacific time) on Monday and end at 5 p.m. on the
Friday of that week.
(ii) Voting. No less than three (3) calendar days prior to the
voting period, the Auditor will post a Closing Ballot on the Website in
``pdf'' file format. Each eligible Nonoffering Subsector Member wishing
to vote shall print out the Closing Ballot, and, with respect to each
of the currently Selected Offers on the Closing Ballot, vote either in
favor of or opposed to accepting that Selected Offer and submit a
completed and signed Closing Ballot to the Auditor preferably by
facsimile prior to the end of the Voting Period.
(iii) Ballot Verification. The Auditor shall examine each submitted
Closing Ballot for completeness and authorized signature. Any
incomplete Closing Ballot shall be void, and shall not be included in
the voting results. The Auditor shall not notify the Subsector Member
of an invalid Closing Ballot.
(iv) Voting Results. The Auditor shall post the results of the Vote
as soon as practicable after voting closes. Each Offer on the Closing
Ballot that receives votes approving acceptance of such Offer from two-
thirds (\2/3\) or more of the total number of Nonoffering Subsector
Members shall be a Selected Offeror and shall be the basis for the
Reduction Plan submitted to NMFS. Any Offer on the Closing Ballot that
does not receive such two-thirds (\2/3\) approval shall be rejected and
shall not be included among the Offers included among the Reduction
Plan submitted to NMFS.
(v) Notification to NMFS. Upon closing of the Selection Process,
FLCC shall notify NMFS in writing of the identities of the Selected
Offerors and provide to NMFS a completed and fully executed original
Reduction Agreement from each of the Selected Offerors and a certified
copy of the fully executed Reduction Agreement and Reduction Contract.
(e) Submission of Reduction Plan, Including Repayment. Upon
completion of the offering process, the FLCC on behalf of the Subsector
Members shall submit to NMFS the Reduction Plan which shall include the
provisions set forth in this paragraph (e).
(1) Capacity Reduction. The Reduction Plan shall identify as the
proposed capacity reduction, without auction process, the LLP Licenses
as well as the vessels and the catch histories related to the LLP
Licenses, linked crab LLP Licenses, and any other fishing rights or
other interests associated with the LLP Licenses and vessels included
in the Selected Offers. The aggregate of all Reduction Agreements and
Reduction Contracts signed by Subsector Members whose offers to
participate in this buyback were accepted by votes of the Subsector
Members, will together with the FLCC's supporting documents and
rationale for recognizing that these offers represent the expenditure
of the least money for the greatest capacity reduction, constitute the
Reduction Plan to be submitted to NMFS for approval on behalf of the
Secretary of Commerce.
(2) Loan Repayment--(i) Term. As authorized by Section 219(B)(2) of
the Act, the capacity reduction loan (the ``Reduction Loan'') shall be
amortized over a thirty (30) year term. The Reduction Loan's original
principal amount may not exceed thirty six million dollars
($36,000,000), but may be less if the reduction cost is less. Subsector
Members acknowledge that in the event payments made under the Reduction
Plan are insufficient to repay the actual loan, the term of repayment
shall be extended by NMFS until the loan is paid in full.
(ii) Interest. The Reduction Loan's interest rate will be the U.S.
Treasury's cost of borrowing equivalent maturity funds plus 2 percent.
NMFS will determine the Reduction Loan's initial interest rate when
NMFS borrows from the U.S. Treasury the funds with which to disburse
reduction payments. The initial interest rate will change to a final
interest rate at the end of the Federal fiscal year in which NMFS
borrows the funds from the U.S. Treasury. The final interest rate will
be 2 percent plus a weighted average, throughout that fiscal year, of
the U.S. Treasury's cost of borrowing equivalent maturity funds. The
final interest rate will be fixed, and will not vary over the remainder
of the reduction loan's 30-year term. The Reduction loan will be
subject to a level debt amortization. There is no prepayment penalty.
(iii) Fees. The Reduction Loan shall be repaid by fees collected
from the Longline Subsector. The fee amount will be based upon: The
principal and interest due over the next twelve months divided by the
product of the Hook & Line, Catcher Processor (Longline Subsector;
sometimes referred to as the ``H&LCP Subsector'') portion of the BSAI
Pacific cod ITAC (in metric tons) set by the North Pacific Fishery
Management Council (NPFMC) in December of each year multiplied by 2,205
(i.e., the number of pounds in a metric ton). In the event that the
Longline Subsector portion for the ensuing year is not available, the
Longline Subsector portion forecast from the preceding year will be
used to calculate the fee.
(A) The fee will be expressed in cents per pound rounded up to the
next one-tenth of a cent. For example: If the principal and interest
due equal $2,900,000 and the Longline Subsector portion equals 100,000
metric tons, then the fee per round weight pound of Pacific cod will
equal 1.4 cents per pound. [2,900,000 /(100,000 x 2,205) =

[[Page 46373]]

.01315]. The fee will be accessed and collected on Pacific cod to the
extent possible and if not, will be accessed and collected as provided
for in this paragraph (e).
(B) Fees must be accessed and collected on Pacific cod used for
bait or discarded. Although the fee could be up to 5 percent of the ex-
vessel production value of all post-reduction Longline Subsector
landings, the fee will be less than 5 percent if NMFS projects that a
lesser rate can amortize the fishery's reduction loan over the
reduction loan's 30-year term. In the event that the total principal
and interest due exceeds 5 percent of the ex-vessel Pacific cod
revenues, a penny per pound round weight fee will be calculated based
on the latest available revenue records and NMFS conversion factors for
pollock, arrowtooth flounder, Greenland turbot, skate, yellowfin sole
and rock sole.
(C) The additional fee will be limited to the amount necessary to
amortize the remaining twelve months principal and interest in addition
to the 5 percent fee accessed against Pacific cod. The additional fee
will be a minimum of one cent per pound. In the event that collections
exceed the total principal and interest needed to amortize the payment
due, the principal balance of the loan will be reduced. To verify that
the fees collected do not exceed 5 percent of the fishery revenues, the
annual total of principal and interest due will be compared to the
latest available annual Longline Subsector revenues to ensure it is
equal to or less than 5 percent of the total ex-vessel production
revenues. In the event that any of the components necessary to
calculate the next year's fee are not available, or for any other
reason NMFS believes the calculation must be postponed, the fee will
remain at the previous year's amount until such a time that new
calculations are made and communicated to the post reduction fishery
participants.
(D) It is possible that the fishery may not open during some years
and no Longline Subsector portion of the ITAC is granted. Consequently,
the fishery will not produce fee revenue with which to service the
reduction loan during those years. However, interest will continue to
accrue on the principal balance. When this happens, if the fee rate is
not already at the maximum 5 percent, NMFS will increase the fisheries'
fee rate to the maximum 5 percent of the revenues for Pacific cod and
the species mentioned in paragraph (e)(2)(iii)(B), apply all subsequent
fee revenue first to the payment of accrued interest, and continue the
maximum fee rates until all principal and interest payments become
current. Once all principal and interest payments are current, NMFS
will make a determination about adjusting the fee rate.
(iv) Reduction loan. NMFS has promulgated framework regulations
generally applicable to all fishing capacity reduction programs (Sec.
600.1000 et seq.). The reduction loan shall be subject to the
provisions of Sec. 600.1012, except that: the borrower's obligation to
repay the reduction loan shall be discharged by the owner of the
Longline Subsector license regardless of which vessel catches fish
under this license and regardless of who processes the fish in the
reduction fishery in accordance with Sec. 600.1013. Longline Subsector
license owners in the reduction fishery shall be obligated to collect
the fee in accordance with Sec. 600.1013.
(v) Collection. The LLP License holder of the vessel harvesting in
the post-capacity reduction plan Longline Subsector shall be
responsible for self-collecting the repayment fees owed by that LLP
License holder. Fees shall be submitted to NMFS monthly and shall be
due no later than fifteen (15) calendar days following the end of each
calendar month.
(vi) Recordkeeping and Reporting. The holder of the LLP License on
which a vessel harvesting in the post-capacity reduction plan Longline
Subsector is designated shall be responsible for compliance with the
applicable recordkeeping and reporting requirements.
(3) Agreement with Secretary. Each Selected Offeror, and vessel
owner if not the Subsector Member, that has submitted a Selected Offer
shall complete and deliver to the FLCC for inclusion in the Reduction
Plan submitted to NMFS, designee for the Secretary, a completed and
fully executed Reduction Contract. Any and all LLP License(s) and or
vessels set forth on a Selected Offer shall be included as Reduction
Fishing Interests in such Reduction Contract.
(f) Decisions of the Auditor and the FLCC. Time is of the essence
in developing and implementing a Reduction Plan and, accordingly, the
Offerors shall be limited to, and bound by, the decisions of the
Auditor and the FLCC.
(1) The Auditor's examination of submitted applications, Offers,
Prequalification Offers and Rankings shall be solely ministerial in
nature. That is, the Auditor will verify whether the documents
submitted by Subsector Members are, on their face, consistent with each
other and the Database, in compliance with the requirements set forth
in the Reduction Agreement, and, signed by an Authorized Party. The
Auditor may presume the validity of all signatures on documents
submitted. The Auditor shall not make substantive decisions as to
compliance (e.g., whether an interim LLP License satisfies the
requirements of the Act, or whether a discrepancy in the name appearing
on LLP Licenses and other documents is material).
(2) [Reserved]
(g) Enforcement/Specific Performance. The parties to the Reduction
Agreement have agreed that the opportunity to develop and submit a
capacity reduction program for the Longline Subsector under the terms
of the Act is both unique and finite and that failure of a Selected
Offeror, and vessel owner, if not a Subsector Member, to perform the
obligations provided by the Reduction Agreement will result in
irreparable damage to the FLCC, the Subsector Members and other
Selected Offerors. Accordingly, the parties to the Reduction Agreement
expressly acknowledge that money damages are an inadequate means of
redress and agree that upon the failure of the Selected Offeror, and
vessel owner if not a Subsector Member, to fulfill its obligations
under the Reduction Agreement that specific performance of those
obligations may be obtained by suit in equity brought by the FLCC in
any court of competent jurisdiction without obligation to arbitrate
such action.
(h) Miscellaneous--(1) Time/Holidays. All times related to the
Selection Process shall be the time kept in the Pacific time zone as
calculated by the National Institute of Standards and Technology. In
the event that any date occurring within the Selection Process is a
Federal holiday, the date shall roll over to the next occurring
business day.
(2) Termination. The Reduction Agreement shall automatically
terminate if no vote of acceptance is completed by December 31, 2007.
The Reduction Agreement may be terminated at any time prior to approval
of the Reduction Plan by NMFS, on behalf of the Secretary, by written
notice from 50 percent of Subsector Members.
(3) Choice of Law/Venue. The Reduction Agreement shall be construed
and enforced in accordance with the laws of the State of Washington
without regard to its choice of law provisions. The parties submit to
the exclusive personal jurisdiction of the United States District Court
located in Seattle, Washington, with respect to any litigation arising
out of or relating to the Reduction Agreement or out of the performance
of services hereunder.

[[Page 46374]]

(4) Incorporation. All executed counterparts of the Reduction
Agreement, Application Forms and Offers constitute the agreement
between the parties with respect to the subject matter of the Reduction
Agreement and are incorporated into the Reduction Agreement as if fully
written.
(5) Counterparts. The Reduction Agreement may be executed in
multiple counterparts and will be effective as to signatories on the
Effective Date. The Reduction Agreement may be executed in duplicate
originals, each of which shall be deemed to be an original instrument.
All such counterparts and duplicate originals together shall constitute
the same agreement, whether or not all parties execute each counterpart.
(i) The facsimile signature of any party to the Reduction Agreement
shall constitute the duly authorized, irrevocable execution and
delivery of the Reduction Agreement as fully as if the Reduction
Agreement contained the original ink signatures of the party or parties
supplying a facsimile signature.
(ii) [Reserved]
(i) Amendment. Subsector Member acknowledges that the Reduction
Agreement, the Reduction Contract, and the Reduction Plan may be
subject to amendment to conform to the requirements for approval of the
Reduction Plan by NMFS on behalf of the Secretary. The Auditor shall
distribute to each Subsector Member in electronic format the amended
form of the Reduction Agreement, the Reduction Contract, and the
Reduction Plan, which amended documents in the form distributed by the
Auditor and identified by the Auditor by date and version, the version
of each such document then in effect at the time of any dispute arising
or action taken shall be deemed binding upon the parties with respect
to such dispute and/or action.
(j) Warranties. Subsector Member must expressly warrant and
represent in the Reduction Agreement that:
(1) Subsector Member has had an opportunity to consult with
Subsector Member's attorney or other advisors of Subsector Member with
respect to the Reduction Agreement, the Reduction Contract, and the Act
and the ramifications of the ratification of the Reduction Plan
contemplated therein;
(2) Subsector Member has full understanding and appreciation of the
ramifications of executing and delivering the Reduction Agreement and,
free from coercion of any kind by the FLCC or any of its members,
officers, agents and/or employees, executes and delivers the Reduction
Agreement as the free and voluntary act of Subsector Member;
(3) The execution and delivery of the Reduction Agreement, does not
and will not conflict with any provisions of the governing documents of
Subsector Member;
(4) The person executing the Reduction Agreement has been duly
authorized by Subsector Member to execute and deliver the Reduction
Agreement and to undertake and perform the actions contemplated herein;
and
(5) Subsector Member has taken all actions necessary for the
Reduction Agreement to constitute the valid and binding obligation of
Subsector Member, enforceable in accordance with its terms.
(k) Approval of the Reduction Plan. Acceptance of the Offers are at
the sole discretion of NMFS on behalf of the Secretary of Commerce. To
be approved by NMFS, on behalf of the Secretary, any Reduction Plan
developed and submitted in accordance with this section and Subpart M
to this part must be found by the Assistant Administrator of NMFS, to:
(1) Be consistent with the requirements of Section 219(e) of the FY
2005 Appropriations Act (Public Law 108-447);
(2) Be consistent with the requirements of Section 312(b) of the
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C.
1861(a)) except for the requirement that a Council or Governor of a
State request such a program (as set out in section 312(b)(1)) and for
the requirements of section 312(b)(4);
(3) Contain provisions for a fee system that provides for full and
timely repayment of the capacity reduction loan by the Longline
Subsector and that it provide for the assessment of such fees;
(4) Not require a bidding or auction process;
(5) Result in the maximum sustained reduction in fishing capacity
at the least cost and in the minimum amount of time; and
(6) Permit vessels in the Longline Subsector to be upgraded to
achieve efficiencies in fishing operations provided that such upgrades
do not result in the vessel exceeding the applicable length, tonnage,
or horsepower limitations set out in Federal law or regulation.
Acceptance of the Offers are at the sole discretion of NMFS on
behalf of the Secretary of Commerce.
(l) Referenda. The provisions of Sec. 600.1010 (including
Sec. Sec. 600.1004(a), 600.1008, 600.1009, 600.1013, 600.1014, and
600.1017(a)(5),(6) and (7)) shall apply to the Reduction Plan of this
section to the extent that they do not conflict with this section or
with subpart M of this part.
3. Add an appendix to Sec. 600.1105 in subpart M to read as follows:

Appendix to Sec. 600.1105--Fishing Capacity Reduction Contract: Bering
Sea and Aleutian Islands Longline Catcher Processor Subsector

FISHING CAPACITY REDUCTION CONTRACT: BERING SEA AND ALEUTIAN ISLANDS
LONGLINE CATCHER PROCESSOR SUBSECTOR

THIS AGREEMENT, (the ``Reduction Contract'') is entered into by and
between the party or parties named in section 46 of this contract
entitled, ``Fishing Capacity Reduction Offer Submission Form and
Reduction Fishing Interests Identification,'' as the qualifying
Offeror and as the co-Offeror (if there is a co-
Offeror)(collectively the ``Offeror'') and the United States of
America, acting by and through the Secretary of Commerce, National
Oceanic and Atmospheric Administration, National Marine Fisheries
Service, Financial Services Division (``NMFS''). The Reduction
Contract is effective when NMFS signs the Reduction Contract and,
thereby, accepts the Offeror's offer, subject to the condition
subsequent of NMFS' formal notification of a successful referendum.

WITNESSETH:

Whereas, Section 219, Title II, Division B of the Consolidated
Appropriations Act, 2005, as enacted on December 8, 2004, (the
``Act'') authorizes a fishing capacity reduction program
implementing capacity reduction plans submitted to NMFS by catcher
processor subsectors of the Bering Sea and Aleutian Islands
(``BSAI'') non-pollock groundfish fishery as set forth in the Act;

Whereas, the longline catcher processor subsector (the ``Longline
Subsector'') is among the catcher processor subsectors eligible to
submit to NMFS a capacity reduction plan under the terms of the Act;

Whereas, the Freezer Longline Conservation Cooperative (the
``FLCC'') has developed and is submitting to NMFS concurrently with
this Reduction Contract a capacity reduction plan for the Longline
Subsector (the ``Reduction Plan'');

Whereas, the selection process will be pursuant to the fishing
capacity Reduction Contract and the Reduction Plan;

Whereas, the term ``Reduction Fishery'' is defined by the Reduction
Plan as the longline catcher processor subsector of the BSAI non-
pollock groundfish fishery;

Whereas, the Reduction Plan's express objective is to permanently
reduce harvesting capacity in the Reduction Fishery;

[[Page 46375]]

Whereas, NMFS implements the Reduction Plan pursuant to Section 219
of the Act as well as the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1861 a(b)-(e))(as excepted by the Act,
including inter alia, any requirement that the Reduction Plan
include a bidding or auction process) and other applicable law;

Whereas, NMFS has promulgated framework regulations generally
applicable to all fishing capacity reduction programs, portions of
which are applicable to the Reduction Plan, (50 CFR 600.1000 et seq.);

Whereas, NMFS can implement the Reduction Plan only after giving
notice to all members of the Longline Subsector of the Reduction
Plan pursuant to Section 219(3)(b) of the Act and approval of the
Reduction Plan by referendum of the Longline Subsector; and

Whereas, this Reduction Contract is submitted by Offeror and the
FLCC as an integral element of the Reduction Plan and is expressly
subject to the terms and conditions set forth herein, the framework
regulations, the final rule (as used in this contract ``final rule''
means the final rule promulgated by NMFS which sets forth the
regulations implementing the Reduction Plan for the Longline
Subsector) and applicable law.

NOW THEREFORE, for good and valuable consideration and the premises
and covenants hereinafter set forth the receipt and sufficiency of
which the parties to the Reduction Contract hereby acknowledge, and
intending to be legally bound hereby, the parties hereto agree as
follows:

1. Incorporation of Recitals. The foregoing recitals are true and
correct and are expressly incorporated herein by this reference.

2. Further Incorporation. The Act, framework regulations, final rule
and any other rule promulgated pursuant to the Act are expressly
incorporated herein by this reference. In the event of conflicting
language, the framework regulations, the final rule and any other
rule promulgated pursuant to the Act, take precedence over the
Reduction Contract.

3. Contract Form. By completing and submitting the Reduction
Contract to NMFS the Offeror hereby irrevocably offers to relinquish
its Reduction Fishing Interests. If NMFS discovers any deficiencies
in the Offeror's submission to NMFS, NMFS may, at its sole
discretion, contact the Offeror in an attempt to correct such offer
deficiency. ``Reduction Fishing Interests'' means all of Offeror(s)
rights, title and interest to the Groundfish Reduction Permit,
Reduction Permit(s), Reduction Fishing Privilege and Reduction
Fishing History as defined in this Reduction Contract.

4. Groundfish Reduction Permit. Offeror expressly acknowledges that
it hereby offers to permanently surrender, relinquish, and have NMFS
permanently revoke the valid non-interim Federal License Limitation
Program groundfish license issued pursuant to 50 CFR 679.4(k) (or
successor regulation) endorsed for Bering Sea or Aleutian Islands
catcher processor fishing activity, C/P, Pacific cod, and hook and
line gear identified in section 46 of this contract as well as any
present or future claims of eligibility for any fishery privilege
based upon such permit, including any Latent License and any offered
and accepted interim permit that Offeror causes to become a non-
interim permit, (the ``Groundfish Reduction Permit'').

5. Reduction Permit(s). Offeror hereby acknowledges that it offers
to permanently surrender, relinquish, and have NMFS permanently
revoke any and all Federal fishery licenses, fishery permits, and
area and species endorsements issued for any vessel named on the
Groundfish Reduction Permit as well as any present or future claims
of eligibility for any fishery privilege based upon such permit,
including any Latent License, (the ``Reduction Permits'').

6. Reduction Privilege Vessel. The Reduction Privilege Vessel is the
vessel listed on the Offeror's License Limitation Program license.

7. Reduction Fishing Privilege. If a vessel is specified in section
46 of this contract (the ``Reduction Privilege Vessel''), Offeror
hereby acknowledges that Offeror offers to relinquish and surrender
the Reduction Privilege Vessel's fishing privilege and consents to
the imposition of Federal vessel documentation restrictions that
have the effect of permanently revoking the Reduction Privilege
Vessel's legal ability to fish anywhere in the world as well as its
legal ability to operate under foreign registry or control--
including the Reduction Privilege Vessel's: fisheries trade
endorsement under the Commercial Fishing Industry Vessel Anti-
Reflagging Act (46 U.S.C. 12108); eligibility for the approval
required under section 9(c)(2) of the Shipping Act, 1916 (46 U.S.C.
App. 808(c)(2)), for the placement of a vessel under foreign flag or
registry, as well as its operation under the authority of a foreign
country; and the privilege otherwise to ever fish again anywhere in
the world (the ``Reduction Fishing Privilege''). Offeror agrees to
instruct the United States Coast Guard's Vessel Documentation Center
to remove the fishery endorsement from the Reduction Privilege
Vessel. If the Reduction Privilege Vessel is not a federally
documented vessel, the Offeror offers to promptly scrap the vessel
and allow NMFS whatever access to the scrapping NMFS deems
reasonably necessary to document and confirm the scrapping.

8. Reduction Fishing History. Offeror surrenders, relinquishes, and
consents to NMFS' permanent revocation of the following Reduction
Fishing History (the ``Reduction Fishing History''):

a. The Reduction Privilege Vessel's full and complete documented
harvest of groundfish;

b. For any documented harvest of the Reduction Privilege Vessel
whatsoever, including that specified in section 8 of this contract,
any right or privilege to make any claim in any way related to any
fishery privilege derived in whole or in part from any such other
and documented harvest which could ever qualify any party for any
future limited access system fishing license, permit, and other
harvest authorization of any kind; including without limitation crab
LLP licenses linked to License Limitation Program (``LLP'')
licenses, state fishing rights appurtenant to Reduction Fishing
Vessels, and all fishing history associated therewith, but without
prejudice to any party who before submission of this offer may have
for value independently acquired the fishing history involving any
such documented harvest;

c. Any documented harvest on any other vessel (Reduction Fishing
Vessel) that gave rise to the Groundfish Reduction Permit; and

d. All fishing history associated with any Latent License that
remains in the Offeror's possession as of August 11, 2006.

9. Halibut, Sablefish and Crab IFQs Excluded. Notwithstanding any
other provision of this Reduction Contract, no right, title and/or
interest to harvest, process or otherwise utilize individual fishing
quota (``IFQ'') quota share in the halibut, sablefish and crab
fisheries pursuant to 50 CFR parts 679 and 680, nor crab LLP license
history to the extent necessary for the issuance of crab IFQ
pursuant to 50 CFR part 680 as in effect as of the date of this
Contract, shall be included among Offeror's Reduction Fishing Interests.

10. Representations and Warranties. Offeror represents and warrants
that, as of the date of submission of this Reduction Contract,
Offeror is:

a. The holder of record, according to NMFS' official fishing license
records, at the time of offer, of the Groundfish Reduction Permit
and the Reduction Permit(s).

b. The Reduction Privilege Vessel's owner of record, according to
the National Vessel Documentation Center's official vessel
documentation records, at the time of offer, and that the Reduction
Privilege Vessel is neither lost nor destroyed at the time of offer.

c. In retention of and fully and legally entitled to offer and
dispose of hereunder, full and complete rights to the Reduction
Privilege Vessel's full and complete Reduction Fishing History
necessary to fully and completely comply with the requirements of
section 8 of this contract.

11. Offer Amount. NMFS' payment to Offeror in the exact amount of
the amount set forth by Offeror in section 46 of this contract is
full and complete consideration for the Offeror's offer.

12. Additional Offer Elements. Offeror shall include with its offer
an exact photocopy of the Reduction Privilege Vessel's official
vessel documentation or registration (i.e., the certificate of
documentation the U.S. Coast

[[Page 46376]]

Guard's National Vessel Documentation Center issued for federally
documented vessels or the registration a State issues for State
registered vessels) and an exact photocopy of the Groundfish
Reduction Permit and all Reduction Permit(s). The Offeror shall also
include with the offer all other information required in this Reduction
Contract and otherwise comply with Reduction Contract requirements.

13. Use of Official Fishing License or Permit Databases. Offeror
expressly acknowledges that NMFS shall use the appropriate official
governmental fishing license or permit database to:

Determine the Offeror's address of record; verify the Offeror's
qualification to offer; determine the holder of record of the
Groundfish Reduction Permit and Reduction Permit(s); and verify the
Offeror's inclusion in the offer of all permits and licenses
required to be offered in the Offer.

14. Use of National Vessel Documentation Center Database. Offeror
expressly acknowledges that NMFS shall use the records of the
National Vessel Documentation Center to determine the owner of
record for a federally documented Reduction Privilege Vessel and the
appropriate State records to determine the owner of record of a non-
federally documented Reduction Privilege Vessel.

15. Offeror to Ensure Accurate Records. Offeror shall, to the best
of its ability, ensure that the records of the databases relevant to
sections 13 and 14 of this contract are true, accurate, and complete.

16. Submissions are Irrevocable. The parties hereto expressly
acknowledge as the essence hereof that the Offeror voluntarily
submits to NMFS this firm and irrevocable offer. The Offeror
expressly acknowledges that it hereby waives any privilege or right
to withdraw, change, modify, alter, rescind, or cancel any portion
of the Reduction Contract and that the receipt date and time which
NMFS marks on the Reduction Contract constitutes the date and time
of the offer's submission.

17. Offer Rejection. NMFS shall reject an offer that NMFS deems is
in any way unresponsive or not in conformance with the Reduction Contract,
and the applicable law or regulations unless the Offeror corrects the
defect and NMFS, in its sole discretion, accepts the correction.

18. Notarized Offeror Signature(s) Required. NMFS shall deem as non-
responsive and reject an offer whose Offer Submission Form does not
contain the notarized signatures of all persons required to sign the
form on behalf of the Offeror.

19. Offer Rejections Constitute Final Agency Action. NMFS's offer
rejections are conclusive and constitute final agency action as of
the rejection date.

20. Effect of Offer Submission. Submitting an irrevocable offer
conforming to the requirements stated herein entitles the Offeror to
have NMFS accept the offer if NMFS, in its sole discretion, deems
that the offer is fully responsive and complies with the Act, the
final rule and any other rule promulgated pursuant to the Act.

21. Offeror Retains Use. After submitting an offer, the Offeror
shall continue to hold, own, or retain unimpaired every aspect of
any and all LLP License(s) and or vessels set forth on an Offer
included as Reduction Fishing Interests, until such time as: NMFS
notifies the Offeror that the Reduction Plan is not in compliance
with the Act or other applicable law and will not be approved by
NMFS; notifies the Offeror that the referendum was unsuccessful;
NMFS tenders the reduction payment and the Offeror complies with its
obligations under the Reduction Contract; or NMFS otherwise excuses
the Offeror's performance.

22. Acceptance by Referendum. NMFS shall formally notify the Offeror
in writing whether the referendum is successful, which written
notice shall inform Offeror that the condition subsequent has been
satisfied. Therefore, Offeror expressly acknowledges that all
parties must perform under the Reduction Contract and the Reduction
Contract is enforceable against, and binding on, the Reduction
Contract parties in accordance with the terms and conditions herein.

23. Reduction Contract Subject to Federal Law. The Reduction
Contract is subject to Federal law.

24. Notice to Creditors. Upon NMFS' offer acceptance notice to the
Offeror, Offeror agrees to notify all parties with secured interests
in the Reduction Fishing Interests that the Offeror has entered into
the Reduction Contract.

25. Referendum. Offeror acknowledges that the outcome of the
referendum of the Reduction Plan is an occurrence over which NMFS
has no control.

26. Unsuccessful Referendum Excuses Performance. An unsuccessful
referendum excuses all parties hereto from every obligation to
perform under the Reduction Contract. In such event, NMFS need not
tender reduction payment and the Offeror need not surrender and
relinquish or allow the revocation or restriction of any element of
the Reduction Fishing Interest specified in the Reduction Contract.
An unsuccessful referendum shall cause the Reduction Contract to
have no further force or effect.

27. Offeror Responsibilities upon Successful Referendum. Upon NMFS'
formal notification to the Offeror that the referendum was
successful and that NMFS had accepted the Reduction Contract,
Offeror shall immediately become ready to surrender and relinquish
and allow the revocation or restriction of (as NMFS deems
appropriate) the Reduction Fishing Interests.

28. Written Payment Instructions. After a successful referendum,
NMFS shall tender reduction payment by requesting the Offeror to
provide to NMFS, and the Offeror shall subsequently so provide,
written payment instructions for NMFS' disbursement of the reduction
payment to the Offeror or to the Offeror's order.

29. Request for Written Payment Instructions Constitutes Tender.
NMFS' request to the Offeror for written payment instructions
constitutes reduction payment tender, as specified in 50 CFR 600.1011.

30. Offeror Responsibilities upon Tender. Upon NMFS' reduction
payment tender to the Offeror, the Offeror shall immediately
surrender and relinquish and allow the revocation or restriction of
(as NMFS deems appropriate) the Reduction Fishing Interests. The
Offeror must then return the original of its Groundfish Reduction
Permit and Reduction Permit(s) to NMFS. Concurrently with NMFS'
reduction payment tender, the Offeror shall forever cease all
fishing for any species with the Reduction Privilege Vessel and
immediately retrieve all fishing gear, irrespective of ownership,
previously deployed from the Reduction Privilege Vessel. Offeror
agrees to authorize the United States Coast Guard to cancel the
fishery endorsement in the Reduction Privilege Vessel.

31. Reduction Privilege Vessel Lacking Federal Documentation. Upon
NMFS' reduction payment tender to the Offeror, the Offeror shall
immediately scrap any vessel which the Offeror specified as a
Reduction Privilege Vessel and which is documented solely under
state law or otherwise lacks documentation under Federal law. The
Offeror shall scrap such vessel at the Offeror's expense. The
Offeror shall allow NMFS, its agents, or its appointees reasonable
opportunity to observe and confirm such scrapping. The Offeror shall
conclude such scrapping within a reasonable time.

32. Future Harvest Privilege and Reduction Fishing History
Extinguished. Upon NMFS' reduction payment tender to the Offeror,
the Offeror shall surrender and relinquish and consent to the
revocation, restriction, withdrawal, invalidation, or extinguishment
by other means (as NMFS deems appropriate), of any claim in any way
related to any fishing privilege derived, in whole or in part, from
the use or holdership of the Groundfish Reduction Permits and the
Reduction Permit(s), from the use or ownership of the Reduction
Privilege Vessel (subject to and in accordance with the provisions
of section 8 of this contract), and from any documented harvest
fishing history arising under or associated with the same which
could ever qualify the Offeror for any future limited access fishing
license, fishing permit, and other harvest authorization of any kind.

33. Post Tender Use of Federally Documented Reduction Privilege
Vessel. After NMFS' reduction payment tender to the Offeror, the
Offeror may continue to use a federally documented Reduction
Privilege Vessel for

[[Page 46377]]

any lawful purpose except ``fishing'' as defined under the Magnuson-
Stevens Act and may transfer--subject to all restrictions in the
Reduction Contract, other applicable regulations, and the applicable
law--the vessel to a new owner. The Offeror or any subsequent owner
shall only operate the Reduction Privilege Vessel under the United
States flag and shall not operate such vessel under the authority of
a foreign country. In the event the Offeror fails to abide by such
restrictions, the Offeror expressly acknowledges and hereby agrees
to allow NMFS to pursue any and all remedies available to it,
including, but not limited to, recovering the reduction payment and
seizing the Reduction Privilege Vessel and scrapping it at the
Offeror's expense.

34. NMFS' Actions upon Tender. Contemporaneously with NMFS'
reduction payment tender to the Offeror, and without regard to the
Offeror's refusal or failure to perform any of its Reduction
Contract duties and obligations, NMFS shall: permanently revoke the
Offeror's Groundfish Reduction Permit and Reduction Permit(s);
notify the National Vessel Documentation Center to permanently
revoke the Reduction Privilege Vessel's fishery trade endorsement;
notify the U.S. Maritime Administration to make the Reduction
Privilege Vessel permanently ineligible for the approval of requests
to place the vessel under foreign registry or operate the vessel
under a foreign country's authority; record in the appropriate NMFS
records that the Reduction Fishing History represented by any
documented harvest fishing history accrued on, under, or as a result
of the operation of the Reduction Privilege Vessel and/or Reduction
Fishing Vessel (subject to and in accordance with the provisions of
section 8 of this contract), the Groundfish Reduction Permit, and
the Reduction Permit(s) which could ever qualify the Offeror for any
future limited access fishing license, fishing permit, or other
harvesting privilege of any kind shall never again be available to
anyone for any fisheries purpose; and implement any other
restrictions the applicable law or regulations impose.

35. Material Disputes to be Identified. Members of the public shall,
up until NMFS receives the Offeror's written payment instructions,
be able to advise NMFS in writing of any material dispute with
regard to any aspect of any accepted Reduction Contract. Such a
material dispute shall neither relieve the Offeror of any Reduction
Contract duties or obligations nor affect NMFS' right to enforce
performance of the Reduction Contract terms and conditions.

36. Reduction Payment Disbursement. Once NMFS receives the Offeror's
written payment instructions and certification of compliance with
the Reduction Contract, NMFS shall as soon as practicable disburse
the reduction payment to the Offeror. Reduction payment disbursement
shall be in strict accordance with the Offeror's written payment
instructions. Unless the Offeror's written payment instructions
direct NMFS to the contrary, NMFS shall disburse the whole of the
reduction payment to the Offeror. If the qualifying Offeror offers
with a co-Offeror, both the qualifying Offeror and the co-Offeror
must approve and sign the written payment instructions.

37. Reduction Payment Withheld for Scrapping or for Other Reasons.
In the event that a Reduction Privilege Vessel which is not under
Federal documentation must be scrapped, NMFS shall withhold from
reduction payment disbursement an amount sufficient to scrap such
vessel. NMFS shall withhold such sum until the vessel is completely
scrapped before disbursing any amount withheld. NMFS may confirm, if
NMFS so chooses, that the vessel has been scrapped before disbursing
any amount withheld. If NMFS has reason to believe the Offeror has
failed to comply with any of the Reduction Contract terms and
conditions, NMFS shall also withhold reduction payment disbursement
until such time as the Offeror performs in accordance with the
Reduction Contract terms and conditions.

38. Offeror Assistance with Restriction. The Offeror shall, upon
NMFS' request, furnish such additional documents, undertakings,
assurances, or take such other actions as may be reasonably required
to enable NMFS' revocation, restriction, invalidation, withdrawal,
or extinguishment by other means (as NMFS deems appropriate) of all
components of the Reduction Contract's Reduction Fishing Interest in
accordance with the requirements of the Reduction Contract terms and
conditions, applicable regulations and the applicable law.

39. Recordation of Restrictions. Upon the Reduction Fishing
Privilege's revocation, the Offeror shall do everything reasonably
necessary to ensure that such revocation is recorded on the
Reduction Privilege Vessel's Federal documentation (which the
National Vessel Documentation Center maintains in accordance with
Federal maritime law and regulations) in such manner as is
acceptable to NMFS and as shall prevent the Reduction Privilege
Vessel, regardless of its subsequent ownership, from ever again
being eligible for a fishery trade endorsement or ever again
fishing. The term ``fishing'' includes the full range of activities
defined in the Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1802).

40. Reduction Element Omission. In the event NMFS accepts the offer
and the Offeror has failed, for any reason, to specify in the
Reduction Contract any Groundfish Reduction Permit, non-Groundfish
Reduction Permit(s), Reduction Privilege Vessel, Reduction Fishing
Vessel, Reduction Fishing History, or any other element of the
Reduction Fishing Interest which the Offeror should under Reduction
Contract, applicable regulations and the applicable law have
specified in Reduction Contract, such omitted element shall
nevertheless be deemed to be included in the Reduction Contract and
to be subject to the Reduction Contract's terms and conditions; and
all Reduction Contract terms and conditions which should have
applied to such omitted element had it not be omitted shall apply as
if such element had not been omitted. Upon the Offeror discovering
any such omission, the Offeror shall immediately and fully advise
NMFS of such omission. Upon either NMFS or the Offeror discovering
any such omission, the Offeror shall act in accordance with the
Reduction Contract, applicable regulations and the applicable law.

41. Remedy for Breach. Because money damages are not a sufficient
remedy for the Offeror breaching any one or more of the Reduction
Contract terms and conditions, the Offeror explicitly agrees to and
hereby authorizes specific performance of the Reduction Contract, in
addition to any money damages, as a remedy for such breach. In the
event of such breach, NMFS shall take any reasonable action,
including requiring and enforcing specific performance of the
Reduction Contract, NMFS deems necessary to carry out the Reduction
Contract, applicable regulations and the applicable law.

42. Waiver of Data Confidentiality. The Offeror consents to the
public release of any information provided in connection with the
Reduction Contract or pursuant to Reduction Plan requirements,
including any information provided in the Reduction Contract or by
any other means associated with, or necessary for evaluation of, the
Offeror's Reduction Contract if NMFS finds that the release of such
information is necessary to achieve the Reduction Plan's authorized
purpose. The Offeror hereby explicitly waives any claim of
confidentiality otherwise afforded to catch, or harvest data and
fishing histories otherwise protected from release under the
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C.
1881 a(b)) or any other law. In the event of such information
release, the Offeror hereby forever fully and unconditionally
releases and holds harmless the United States and its officers,
agents, employees, representatives, of and from any and all claims,
demands, debts, damages, duties, causes of action, actions and suits
whatsoever, in law or equity, on account of any act, failure to act
or event arising from, out of, or in any way related to, the release
of any information associated with the Reduction Program.

43. Oral Agreement Invalid. The Reduction Contract, any addendums to
section 46 of this contract, and enclosures of photocopies of
licenses and permits required under section 46 of this contract,
contain the final terms and conditions of the agreement between the
Offeror and NMFS and represent the entire and exclusive agreement
between them. NMFS and the Offeror forever waive all right to sue,
or otherwise counterclaim against each other, based on any claim of
past, present, or future oral agreement between them.

44. Severable Provisions. The Reduction Contract provisions are
severable; and, in the event that any portion of the Reduction
Contract is held to be void, invalid, non-binding, or otherwise
unenforceable, the

[[Page 46378]]

remaining portion thereof shall remain fully valid, binding, and
enforceable against the Offeror and NMFS.

45. Disputes. Any and all disputes involving the Reduction Contract,
and any other Reduction Plan aspect affecting them shall in all
respects be governed by the Federal laws of the United States; and
the Offeror and all other parties claiming under the Offeror
irrevocably submit themselves to the jurisdiction of the Federal
courts of the United States and/or to any other Federal
administrative body which the applicable law authorizes to
adjudicate such disputes.

46. Fishing Capacity Reduction Offer Submission Form and Reduction
Fishing Interests Identification.

a. Completion and Submission. The Offeror must fully, faithfully,
and accurately complete this section 46 of this contract and
thereafter submit the full and complete Reduction Contract to NMFS
in accordance with the Reduction Contract. If completing this
section requires inserting more information than the places provided
for the insertion of such information allows, the Offeror should
attach an addendum to the Reduction Contract that: includes and
identifies the additional information, states that the addendum is a
part of the Reduction Fishing Interests Identification portion of
the Reduction Contract, states (as a means of identifying the
Reduction Contract to which the addendum relates) the NMFS license
number designated on the Reduction Contract's Groundfish Reduction
Permit, and is signed by all persons who signed the Reduction
Contract as the Offeror.

b. Offeror Information.

(1) Offeror name(s). Insert in the table provided under this section
46.b(1) of this contract the name(s) of the qualifying Offeror and
of the co-Offeror (if there is a co-Offeror), and check the
appropriate box for each name listed.

Each name the Offeror inserts must be the full and exact legal name
of record of each person, partnership, corporation or other business
entity identified on the offer. If any Reduction Fishing Interest
element is co-owned by more than one person, partnership,
corporation or other business entity, the Offeror must insert each
co-owner's name.

In each case, the Offeror is the holder of record, at the time of
Offeror's execution of this Reduction Contract, of the Groundfish
Reduction Permit and the Reduction Permit(s). A co-Offeror is not
allowed for either the Groundfish Reduction Permit or the Reduction
Permit(s). If the Offeror is also the owner of record, at the time
of offering, of the Reduction Privilege Vessel, the qualifying
Offeror is the sole Offeror. If, however, the owner of record, at
the time of execution of this Reduction Contract, of the Reduction
Privilege Vessel is not exactly the same as the Offeror, then the
owner of record is the co-Offeror; and the Offeror and the co-
Offeror jointly offer together as the Offeror.

--------------------------------------------------------------------------------------------------------------------------------------------------------
OFFEROR NAME(S) If Offeror or co-Offeror consists of more Check appropriate box for each name listed in the adjacent column.
than one owner, use one row of this column to name each co----------------------------------------------------------------------------------------------
Offeror. If not, use only one row for Offeror and one row
for any co-Offeror. Offeror Co-Offeror (if any)
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(4) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(5) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Offeror address(s) of record. Insert in the table provided under
this section 46.b(2) of this contract the Offeror's and the co-
Offeror's (if there is a co-Offeror) full and exact address(s) of
record, and check the appropriate box for each address listed.

--------------------------------------------------------------------------------------------------------------------------------------------------------
OFFEROR ADDRESS(S) If Offeror or co-Offeror consists of Check appropriate box for each address listed in the adjacent column.
more than one owner, use one row of this column for ---------------------------------------------------------------------------------------------
address of each co-owner. If not, use only one row for
Offeror and one row for any co-Offeror. Always use the
same row order as is Offeror Name(s) table in section 46.b Offeror Co-Offeror (if any)
(1), i.e., address (1) is for name (1), address (2) is for
name (2), address (3) is for name (3), etc.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(4) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(5) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

(3) Offeror business telephone number(s). Insert in the table
provided under this section 46.b(3) the Offeror's and the co-
Offeror's (if there is a co-Offeror) full and exact business
telephone number(s), and check the appropriate box for each number listed.

[[Page 46379]]

--------------------------------------------------------------------------------------------------------------------------------------------------------
OFFEROR BUSINESS TELEPHONE NUMBERS(S) If Offeror or co- Check appropriate box for each telephone number listed in the adjacent column.
Offeror consists of more than one owner, use one row of ---------------------------------------------------------------------------------------------
this column for the telephone number of each co-owner. If
not, use only one row for Offeror and one row for any co-
offeror. Always use the same row order as is Offeror
Name(s) table in section 46.b(1), i.e., telephone number Offeror Co-Offeror (if any)
(1) is for name (1), telephone number (2) is for name (2),
telephone number (3) is for name (3), etc.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(4) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(5) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

(4) Offeror electronic mail address(s) (if available). Insert in the
table printed under this section 46.b(4) the Offeror's and the co-
Offeror's (if there is a co-Offeror) full and exact electronic mail
(e-mail) address(s), and check the appropriate box for each address,

--------------------------------------------------------------------------------------------------------------------------------------------------------
OFFEROR E-MAIL ADDRESS(S) If Offeror or co-Offeror Check appropriate box for each e-mail address listed in the adjacent column.
consists of more than one owner, use one row of this ---------------------------------------------------------------------------------------------
column for the e-mail address of each co-owner. If not,
use only one row for Offeror and one row for any co-
Offeror. Always use the same row order as is Offeror Name
in section 46.b(1) of this contract, i.e., e-mail (1) is Offeror Co-Offeror (if any)
for name (1), e-mail (2) is for name (2), e-mail (3) is
for name (3), etc.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(4) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
(5) ............................................. .............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. LLP license number for Groundfish Reduction Permit. Insert in the
place this section 46.c provides the full and exact license number
which NMFS designated on the LLP license which the Offeror specifies
as the Groundfish Reduction Permit. Attach with the Reduction
Contract an exact photocopy of such license.

------------------------------------------------------------------------
LLP LICENSE NUMBER(S) AND FISHERY(S) OF LLP LICENSE(S) SPECIFIED AS
GROUNDFISH REDUCTION PERMIT(S)
-------------------------------------------------------------------------
License Number(s) Fishery(s)
------------------------------------------------------------------------
(1) .................................
------------------------------------------------------------------------
(2) .................................
------------------------------------------------------------------------
(3) .................................
------------------------------------------------------------------------
(4) .................................
------------------------------------------------------------------------
(5) .................................
------------------------------------------------------------------------

d. License number(s) for Reduction Permit(s). Insert in the place
this section 46.d provides the fishery(s) involved in, and the full
and exact license number(s) with NMFS designated on the license(s)
which the Offeror specifies in the Reduction Contract as the
Reduction Permit(s). Enclose with the Reduction Contract an exact
photocopy of each such license.

------------------------------------------------------------------------
LICENSE NUMBER(S) AND FISHERY OF LICENSE(S) SPECIFIED AS REDUCTION
PERMITS
-------------------------------------------------------------------------
License Number(s) Fishery(s)
------------------------------------------------------------------------
(1) .................................
------------------------------------------------------------------------
(2) .................................
------------------------------------------------------------------------
(3) .................................
------------------------------------------------------------------------
(4) .................................
------------------------------------------------------------------------
(5) .................................
------------------------------------------------------------------------

e. Reduction Fishing History. For all Reduction Fishing History
insert in the place provided in the table under this section 46.e
the chronological and other information with each column heading
therein requires. The information required does not include any
actual landing data. Any Offeror whose Groundfish Reduction Permit
whose issuance NMFS based on the fishing history of a lost or
destroyed vessel plus a replacement vessel must insert information
for both vessels and meet the requirements of the framework
regulations, final rule and any other regulations promulgated
pursuant to the Act. Any Offeror whose Groundfish Reduction Permit
whose issuance NMFS in any part based on acquisition of fishing
history from another party must insert information regarding such
catch history.

[[Page 46380]]

------------------------------------------------------------------------
FOR EACH FISHING HISTORY IN 2\ND\
COLUMN
NAMES(S) AND -----------------------------------
OFFICIAL NUMBER FOR EACH If Reduction
OF REDUCTION REDUCTION License No. of Privilege Vessel
PRIVILEGE VESSEL PRIVILEGE VESSEL each Groundfish acquired fishing
AND NAME(S) AND IN 1\ST\ COLUMN Reduction Permit history from
OFFICIAL PROVIDE FROM/TO and Reduction another party,
NUMBER(S) OF ANY DATE OF EACH Permit(s) provide name of
VESSEL FROM WHICH FISHING HISTORY associated with party, manner in
FISHING HISTORY OFFEROR POSSESSES each vessel which acquired,
WAS ACQUIRED involved and date
acquired
------------------------------------------------------------------------
(1) ................. ................ ................
------------------------------------------------------------------------
(2) ................. ................ ................
------------------------------------------------------------------------
(3) ................. ................ ................
------------------------------------------------------------------------
(4) ................. ................ ................
------------------------------------------------------------------------
(5) ................. ................ ................
------------------------------------------------------------------------

f. Reduction Privilege Vessel. Insert the full and exact name and
official number which the National Vessel Documentation Center
designated for the Reduction Privilege Vessel which the Offeror or
the co-Offeror (if there is a co-Offeror) specifies in the Reduction
Contract, and check the box appropriate for the vessel's ownership
of record. Enclose with the Reduction Contract an exact photocopy of
such vessel's official certificate of documentation.

------------------------------------------------------------------------
REDUCTION PRIVILEGE VESSEL Check appropriate Ownership box
------------------------------------- below
-----------------------------------
Official Name Official Number Co-Offeror (if
Offeror any)
------------------------------------------------------------------------
................. ................ ................
------------------------------------------------------------------------

g. Offer Amount. Insert in the place this section 46.g provides the
Offeror's full and exact offer amount, both in words and in numbers.

------------------------------------------------------------------------
OFFER AMOUNT (U.S. DOLLARS)
-------------------------------------------------------------------------
In Words In Numbers
------------------------------------------------------------------------
........................
------------------------------------------------------------------------

h. Reduction Contract Signature. In compliance with the Reduction
Contract, applicable regulations and the applicable law, the Offeror
submits the Reduction Contract as the Offeror's irrevocable offer to
NMFS for the permanent surrender and relinquishment and revocation,
restriction, withdrawal, invalidation, or extinguishment by other
means (as NMFS deems appropriate) of the Groundfish Reduction
Permit, any Reduction Permit(s), the Reduction Fishing Privilege,
and the Reduction Fishing History all as identified in the Reduction
Contract or as required under applicable regulations, or the
applicable law.

The Offeror expressly acknowledges that NMFS' acceptance of the
Offeror's offer hereunder and NMFS' tender, following a successful
referendum, of a reduction payment in the same amount specified in
section 46.g of this contract (less any sum withheld for scrapping
any Reduction Privilege Vessel lacking Federal documentation or for
any other purpose) to the Offeror shall, among other things, render
the Reduction Privilege Vessel permanently ineligible or any fishing
worldwide, including, but not limited to, fishing on the high seas
or in the jurisdiction of any foreign country while operating under
United States flag, and shall impose or create other legal and
contractual restrictions, impediments, limitations, obligations, or
other provisions which restrict, revoke, withdraw, invalidate, or
extinguish by other means (as NMFS deems appropriate) the complete
Reduction Fishing Interest and any other fishery privileges or
claims associated with the Groundfish Reduction Permit, any
Reduction Permit(s), the Reduction Privilege Vessel, and the
Reduction Fishing History--all as more fully set forth in the
Reduction Contract, applicable regulations, and the applicable law.

By completing and signing the Reduction Contract, the Offeror
expressly acknowledges that the Offeror has fully and completely
read the entire Reduction Contract. The Offeror expressly states,
declares, affirms, attests, warrants, and represents to NMFS that
the Offeror is fully able to enter into the Reduction Contract and
that the Offeror legally holds, owns, or retains, and is fully able
under the Reduction Contract provisions to offer and dispose of, the
full Reduction Fishing Interest which the Reduction Contract
specifies and the applicable regulations, and the applicable law
requires that any person or entity completing the Reduction Contract
and/or signing the Reduction Contract on behalf of another person or
entity, expressly attests, warrants, and represents to NMFS that
such completing and/or signing person or entity has the express and
written permission or other grant of authority to bind such other
person or entity to the Reduction Contract's terms and conditions.
The Offeror expressly attests, warrants, and represents to NMFS that
every co-owner of the Offeror necessary to constitute the Offeror's
full and complete execution of the Reduction Contract has signed the
Reduction Contract. The Offeror expressly attests, warrants, and
represents to NMFS that the Offeror: fully understands the
consequences of submitting the completed Reduction Contract of which
it is a part to NMFS; pledges to abide by the terms and conditions
of the Reduction Contract; and is aware of, understands, and
consents to, any and all remedies available to NMFS for the
Offeror's breach of the Reduction Contract or submission of an offer
which fails to conform with the Reduction Contract, final rule,
applicable regulations and the applicable law. The Offeror expressly
attests, warrants, and represents to NMFS that all information which
the Offeror inserted in the Reduction Contract is true, accurate,
complete, and fully in accordance with the Reduction Contract, final
rule, other applicable regulations and the applicable law.

IN WITNESS WHEREOF, the Offeror has, in the place provided below,
executed the Reduction Contract either as an Offeror offering alone
or as an Offeror and co-Offeror (if there is a co-Offeror) jointly
offering together, in accordance with the requirements specified
above, and on the date written below. The Reduction Contract is
effective as of the date NMFS accepts the Offeror's offer by signing
the Reduction Contract.

The Offeror and co-Offeror (if there is a co-Offeror) must each sign
the Reduction Contract exactly as instructed herein. Each co-owner
(if there is a co-owner) of each Offeror and co-Offeror (if there is
a co-Offeror) must also sign the Reduction Contract exactly as
instructed herein. A notary public must, for each person or entity
signing on behalf of the Offeror, complete and sign the
acknowledgment and certification provision associated with each such
person or entity's signature.

I. Offeror and co-Offeror's (if there is a co-Offeror) signature(s)
and notary's acknowledgment(s) and certification(s).

[[Page 46381]]

------------------------------------------------------------------------
OFFEROR'S SIGNATURE AND NOTARY'S ACKNOWLEDGMENT AND CERTIFICATION If
Offeror or co-Offeror consists of more than one owner, use one row of
column 1 for each co-owner's signature. If not, use only one row for
Offeror and one row for co-Offeror (if any). Always use same Offeror row
order as in Offeror Name in the table under section 46.b(1) of this
contract (i.e., signature (1) is for name (1), signature (2) is for name
(2) signature (3) is for name (3), etc.)
-------------------------------------------------------------------------
OFFEROR SIGNATURE Check appropriate column for each NOTARY SIGNATURE
(1) Sign. (2) signature in 1st column (1) Sign. (2)
Print: the ------------------------------------ Print: the
following: (a) following: (a)
signer's name, name, (b) signing
(b) signer's date, (3) date
title (if signing commission
for corporation expires, and (4)
or other business State and county.
entity), and (c) Each notary
signing date signature attests
------------------ to the following:
``I certify that
I know or have
satisfactory
evidence that the
person who signed
in the 1st column
Qualifying Co-Offeror (if of this same row
Offeror any) is the person who
appeared before
me and: (1)
acknowledged his/
her signature;
(2) on oath,
stated that he/
she was
authorized to
sign; and (3)
acknowledged that
he/she did so
freely and
voluntarily.''
------------------

------------------------------------------------------------------------
(1) ................ ................ .................
------------------------------------------------------------------------
(2) ................ ................ .................
------------------------------------------------------------------------
(3) ................ ................ .................
------------------------------------------------------------------------

II. United States of America's signature.

United States of America,
Acting by and through the Secretary of Commerce
National Oceanic and Atmospheric Administration
National Marine Fisheries Service,
Financial Services Division
Dated: ----------

By: --------------------
Charles Cooper,
Acting Chief Financial Services Division,
National Marine Fisheries Service

[FR Doc. 06-6844 Filed 8-10-06; 8:45 am]
BILLING CODE 3510-22-P

Notices For
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994

Fishing Capacity Reduction Program for the Longline Catcher Processor Subsector of the Bering Sea and Aleutian Islands Non-pollock Groundfish Fishery

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