50 C.F.R. § 679.41 Transfer of quota shares and IFQ.
Title 50 - Wildlife and Fisheries
(a) General. (1) Except as provided in paragraph (a)(2) of this section, transfer of QS or IFQ means any transaction requiring QS, or the use thereof in the form of IFQ, to pass from one person to another, permanently or for a fixed period of time. (2) Transactions requiring IFQ cards to be issued in the name of a vessel master employed by an individual or a corporation are not transfers of QS or IFQ. (b) Transfer procedure—(1) Application for transfer. An Application for Transfer of QS/IFQ (Application for Transfer) must be approved by the Regional Administrator before a person may use IFQ to harvest IFQ halibut or IFQ sablefish, whether the IFQ was the result of a direct transfer or the result of a QS transfer. An Application for Transfer will not be approved until the Regional Administrator has reviewed and approved the transfer agreement signed by the parties to the transaction. The Regional Administrator shall provide an Application for Transfer form to any person on request. Persons who submit an Application for Transfer to the Regional Administrator for approval will receive notification of the Regional Administrator's decision to approve or disapprove the Application for Transfer, and, if applicable, the reason(s) for disapproval, by mail posted on the date of that decision, unless another communication mode is requested on the Application for Transfer. (2) QS or IFQ accounts. QS or IFQ accounts affected by an Application for Transfer approved by the Regional Administrator will change on the date of approval. Any necessary IFQ permits will be sent with the notification of the Regional Administrator's decision. (c) Application for Transfer approval criteria. Except as provided in paragraph (f) of this section, an Application for Transfer will not be approved until the Regional Administrator has determined that: (1) The person applying for transfer received the QS or IFQ to be transferred: (i) By initial assignment by the Regional Administrator as provided in §679.40(a); or (ii) By approved transfer. (2) The person applying to receive the QS or IFQ meets the requirements of eligibility in paragraph (d) of this section. (3) The person applying for transfer and the person applying to receive the QS or IFQ have their notarized signatures on the Application for Transfer. (4) There are no fines, civil penalties, or other payments due and owing, or outstanding permit sanctions, resulting from Federal fishery violations involving either person. (5) The person applying to receive the QS or IFQ currently exists. (6) The transfer would not cause the person applying to receive the QS or IFQ to exceed the use limits in §679.42 (e) or (f). (7) The transfer would not violate the provisions of paragraph (g) of this section. (8)(i) The person applying to make or receive the IFQ or QS transfer has paid all IFQ fees that have become due as a result of an initial administrative determination. (ii) The person applying to make or receive the IFQ or QS transfer who has not paid all IFQ fees that are due (as provided under §679.45(a)) has timely appealed the administrative determination that IFQ fees have not been paid in full and has submitted to NMFS an amount sufficient to satisfy any disputed liability pending a final agency action. (9) Other pertinent information requested on the Application for Transfer has been supplied to the satisfaction of the Regional Administrator. (10) If the person applying to transfer or receive QS or IFQ is a CQE, the following determinations are required for each eligible community represented by that CQE: (i) An individual applying to receive IFQ from QS held by a CQE is an eligible community resident of the eligible community in whose name the CQE is holding QS; (ii) The CQE applying to receive or transfer QS, has submitted a complete annual report(s) required by §679.5 (l)(8); (iii) The CQE applying to transfer QS has provided information on the reasons for the transfer as described in paragraph (g)(7) of this section; (iv) The CQE applying to receive QS is eligible to hold QS on behalf of the eligible community in the halibut or sablefish regulatory area designated for that eligible community in Table 21 to this part; and (v) The CQE applying to receive QS has received notification of approval of eligibility to receive QS/IFQ for that community as described in paragraph (d)(1) of this section. (d) Eligibility to receive QS or IFQ by transfer—(1) Application for Eligibility. All persons applying to receive QS or IFQ must submit an Application for Eligibility to Receive QS/IFQ (Application for Eligibility) containing accurate information to the Regional Administrator, except that an Application for Eligibility to Receive QS/IFQ (Application for Eligibility) is not required for a CQE if a complete application to become a CQE, as described in paragraph (l)(3) of this section, has been approved by the Regional Administrator on behalf of an eligible community. The Regional Administrator will not approve a transfer of IFQ or QS to a person until the Application for Eligibility for that person is approved by the Regional Administrator. The Regional Administrator shall provide an Application for Eligibility form to any person on request. (2) Type of eligibility. A person must indicate on the Application for Eligibility whether the eligibility sought is as: (i) An individual; or (ii) A corporation, partnership, or other entity. (3) Application filing order. A person may submit the Application for Eligibility with the Application for Transfer or file the Application for Eligibility prior to submitting the Application for Transfer. If a person, as described in paragraph (d)(2)(ii) of this section, files the Application for Eligibility prior to submitting the Application for Transfer, and that person's status subsequently changes, as described in §679.42(j), that person must resubmit an Application for Eligibility before submitting, or with, the Application for Transfer. (4) Notification of approval. Applicants will be notified by mail of the Regional Administrator's approval of an application for eligibility. (5) Notification of disapproval. The Regional Administrator will notify the applicant if an Application for Eligibility is disapproved. This notification of disapproval will include: (i) The disapproved Application for Eligibility. (ii) An explanation of why the Application for Eligibility was not approved. (6) Reasons for disapproval. Reasons for disapproval of an Application for Eligibility may include, but are not limited to: (i) Fewer than 150 days of experience working as an IFQ crewmember. (ii) Lack of compliance with the U.S. citizenship or corporate ownership requirements specified by the definition of “person” at §679.2. (iii) An incomplete Application for Eligibility. (iv) Fines, civil penalties, or other payments due and owing, or outstanding permit sanctions, resulting from Federal fishery violations. (e) Transfers of QS blocks—(1) General. A QS block must be transferred as an undivided whole, unless the size of the QS block exceeds the use limits specified at §679.42. If the QS block to be transferred exceeds the use limits specified at §679.42, the Regional Administrator will divide the block into two blocks, one block containing the maximum amount of QS allowable under the QS use limits and the other block containing the residual QS. (2) Sablefish. QS blocks for the same IFQ regulatory area and vessel category that represent less than 5,000 lb (2.3 mt) of sablefish IFQ, based on the 1996 TAC share for fixed gear sablefish in a specific IFQ regulatory area and the QS pool for that IFQ regulatory area on January 31, 1996, may be consolidated into larger QS blocks provided that the consolidated blocks do not represent greater than 5,000 lbs (2.3 mt) of sablefish IFQ based on the preceding criteria. A consolidated block cannot be divided and is considered a single block for purposes of use and transferability. The maximum number of QS units that may be consolidated into a single QS block in each IFQ regulatory area is as follows: (i) Southeast Outside district: 33,270 QS. (ii) West Yakutat district: 43,390 QS. (iii) Central GOA regulatory area: 46,055 QS. (iv) Western GOA regulatory area: 48,410 QS. (v) Aleutian Islands subarea: 99,210 QS. (vi) Bering Sea subarea: 91,275 QS. (3) Halibut. QS blocks for the same IFQ regulatory area and vessel category that represent less than 3,000 lbs (1.4 mt) of halibut IFQ, based on the 1996 catch limit for halibut in a specific IFQ regulatory area and the QS pool for that IFQ regulatory area on January 31, 1996, may be consolidated into larger QS blocks provided that the consolidated blocks do not represent greater than 3,000 lbs (1.4 mt) of halibut IFQ based on the preceding criteria. A consolidated block cannot be divided and is considered a single block for purposes of use and transferability. The maximum number of QS units that may be consolidated into a single block in each IFQ regulatory area is as follows: (i) Area 2C: 19,992 QS. (ii) Area 3A: 27,912 QS. (iii) Area 3B: 44,193 QS. (iv) Subarea 4A: 22,947 QS. (v) Subarea 4B: 15,087 QS. (vi) Subarea 4C: 30,930 QS. (vii) Subarea 4D: 26,082 QS. (viii) Subarea 4E: 0 QS. (4) A CQE may not purchase or use sablefish QS blocks less than or equal to the number of QS units specified in (e)(2)(i) through (e)(2)(iv) of this section. (5) A CQE may not purchase or use halibut QS blocks less than or equal to the number of QS units specified in (e)(3)(i) and (e)(3)(ii) of this section. (f) Transfer of QS or IFQ with restrictions. If QS or IFQ must be transferred as a result of a court order, operation of law, or as part of a security agreement, but the person receiving the QS or IFQ by transfer does not meet all of the eligibility requirements of this section, the Regional Administrator will approve the Application for Transfer with restrictions. The Regional Administrator will not assign IFQ resulting from the restricted QS to any person. IFQ with restrictions may not be used for harvesting halibut or sablefish with fixed gear. The QS or IFQ will remain restricted until: (1) The person who received the QS or IFQ with restrictions meets the eligibility requirements of this section and the Regional Administrator approves an Application for Eligibility for that person; or (2) The Regional Administrator approves the Application for Transfer from the person who received the QS or IFQ with restrictions to a person who meets the requirements of this section. (g) Transfer restrictions. (1) Except as provided in paragraph (f), paragraph (g)(2), or paragraph (l) of this section, only persons who are IFQ crew members, or who were initially issued QS assigned to vessel categories B, C, or D, and meet the eligibility requirements in this section, may receive by transfer QS assigned to vessel categories B, C, or D, or the IFQ resulting from it. (2) Except as provided in paragraph (g)(3) of this section, only persons who are IFQ crew members, and meet the other requirements in this section, may receive by transfer QS assigned to vessel categories B, C, or D, or the IFQ resulting from it, in IFQ regulatory area 2C for halibut or in the IFQ regulatory area east of 140° W. long. for sablefish. (3) Individuals who were initially issued QS assigned to vessel categories B, C, or D may transfer that QS to a corporation that is solely owned by the same individual. Such transfers of QS assigned to vessel categories B, C, or D in IFQ regulatory area 2C for halibut or in the IFQ regulatory area east of 140° W. long. for sablefish will be governed by the use provisions of §679.42(i); the use provisions pertaining to corporations at §679.42(j) shall not apply. (4) The Regional Administrator will not approve an Application for Transfer of QS assigned to vessel categories B, C, or D subject to a lease or any other condition of repossession or resale by the person transferring QS, except as provided in paragraph (h) of this section, or by court order, operation of law, or as part of a security agreement. The Regional Administrator may request a copy of the sales contract or other terms and conditions of transfer between two persons as supplementary information to the transfer application. (5) A CQE may not hold QS in halibut IFQ regulatory areas 2C or 3A that is assigned to vessel category D. (6) IFQ derived from QS held by a CQE on behalf of an eligible community may be used only by an eligible community resident of that eligible community. (7) A CQE may transfer QS: (i) To generate revenues to provide funds to meet administrative costs for managing the community QS holdings; (ii) To generate revenue to improve the ability of residents within the community to participate in the halibut and sablefish IFQ fisheries; (iii) To generate revenue to purchase QS to yield IFQ for use by community residents; (iv) To dissolve the CQE; or (v) As a result of a court order, operation of law, or as part of a security agreement. (8) If the Regional Administrator determines that a CQE transferred QS for purposes other than those specified in paragraph (g)(7) of this section, then: (i) The CQE must divest itself of any remaining QS holdings and will not be eligible to receive QS by transfer for a period of three years after the effective date of final agency action on the Regional Administrator's determination; and (ii) The Regional Administrator will not approve a CQE to represent the eligible community in whose name the CQE transferred quota for a period of three years after the effective date of final agency action on the Regional Administrator's determination. (h) Transfer of IFQ. (1) Pursuant to paragraph (a) of this section, an Application for Transfer must be approved by the Regional Administrator before a person may use any IFQ that results from a direct transfer to harvest halibut or sablefish. After approving the Application for Transfer, the Regional Administrator will change any IFQ accounts affected by the approved transfer and issue all necessary IFQ permits. (2) IFQ resulting from category B, C, or D QS may not be transferred separately from its originating QS, except as provided in paragraph (k) of this section. (i) Transfer across catcher vessel categories—(1) CDQ compensation. Persons issued CDQ compensation QS in a catcher vessel category, pursuant to §679.41(j), and in an IFQ regulatory area in which they do not hold QS other than CDQ compensation QS, may use that CDQ compensation QS on any catcher vessel. This exemption from catcher vessel categories ends upon the first transfer of the CDQ compensation QS. CDQ compensation QS being transferred will be permanently assigned to a specific catcher vessel category as designated by the person receiving the transfer. (2) CDQ compensation QS definition. For purposes of this paragraph (i), CDQ compensation QS is QS issued as compensation for halibut and sablefish harvest privileges foregone due to the CDQ Program, as provided in paragraph (j) of this section. (j) Compensation for CDQ allocations. (1) The Regional Administrator will compensate persons that receive a reduced halibut QS in IPHC regulatory areas 4B, 4C, 4D, or 4E because of the halibut CDQ program by adding halibut QS from IPHC regulatory areas 2C, 3A, 3B, and 4A. This compensation of halibut QS from areas 2C, 3A, 3B, and 4A will be allocated in proportion to the amount of halibut QS foregone due to the CDQ allocation authorized by this section. (2) The Regional Administrator will compensate persons that receive a reduced sablefish QS in any BSAI IFQ regulatory area because of the sablefish CDQ program by taking sablefish QS from the IFQ regulatory areas of the GOA and allocating it in proportion to the loss suffered by persons in the BSAI area. Such additional compensation of sablefish QS will be allocated in proportion to the amount of sablefish QS foregone due to the CDQ allocation authorized by this section. (3) Persons initially issued QS for IFQ regulatory areas in which a portion of the TAC is allocated to the CDQ Program will be compensated for halibut and sablefish harvest privileges foregone due to the CDQ Program. If a person does not hold QS in an IFQ regulatory area on the date the compensation is issued, that person's compensation will be issued as unblocked. If a person does hold QS in an IFQ regulatory area on the date compensation is issued, that person's compensation will be added to their existing QS in that IFQ regulatory area. The resulting QS amount will be blocked or unblocked according to the criteria found at §679.40(a). Compensation will be calculated for each non-CDQ area using the following formula: QN = (QC × QSPN × RATE)/(SUMCDQ − [RATE × SUMTAC]) ([1 − RATE] × TACAVE)(QSPC × [CDQ PCT − RATE])
Where: QN = quota share in non-CDQ area QC = quota share in CDQ area QSPN = quota share pool in non-CDQ area (as existing on January 31, 1995) RATE = SUMCDQ/average of the TAC (1988–1994) for all CDQ and non-CDQ areas TACAVE = average of the TAC (1988–1994) for CDQ area QSPC = quota share pool in CDQ area (as existing on January 31, 1995) CDQPCT = CDQ percentage for CDQ area SUMCDQ = sum [TACAVE×CDQPCT] SUMTAC = sum [TACAVE] (k) Survivorship transfer privileges—(1) On the death of an individual who holds QS or IFQ, the surviving spouse or, in the absence of a surviving spouse, a beneficiary designated pursuant to paragraph (k)(2) of this section, receives all QS and IFQ held by the decedent by right of survivorship, unless a contrary intent was expressed by the decedent in a will. The Regional Administrator will approve an Application for Transfer to the surviving spouse or designated beneficiary when sufficient evidence has been provided to verify the death of the individual. (2) QS holders may provide the Regional Administrator with the name of a designated beneficiary from the QS holder's immediate family to receive survivorship transfer privileges in the event of the QS holder's death and in the absence of a surviving spouse. (3) The Regional Administrator will approve, for 3 calendar years following the date of death of an individual, an Application for Transfer of IFQ from the surviving spouse or, in the absence of a surviving spouse, from a beneficiary from the QS holder's immediate family designated pursuant to paragraph (k)(2) of this section to a person eligible to receive IFQ under the provisions of this section, notwithstanding the limitations on transfers of IFQ in paragraph (h)(2) of this section. (l) Transfer of QS to CQEs. (1) Each eligible community must designate a CQE to transfer and hold QS on behalf of that community. (2) Each eligible community may designate only one CQE to hold QS on behalf of that community at any one time. (3) Prior to initially receiving QS by transfer on behalf of a specific eligible community, a non-profit entity that intends to represent that eligible community as a CQE must have approval from the Regional Administrator. To receive that approval, the non-profit entity seeking to become a CQE must submit a complete application to become a CQE to the Regional Administrator, NMFS, P.O. Box 21668, Juneau, AK 99802. The Regional Administrator will provide a copy of the complete application to the Alaska Department of Community and Economic Development, Commissioner, P.O. Box 110809, Juneau, AK 99811–0809. NMFS will consider comments received from the Alaska Department of Community and Economic Development when reviewing applications for a non-profit entity to become a CQE. The Alaska Department of Community and Economic Development must submit comments on an application to the Regional Administrator, NMFS, P.O. Box 21668, Juneau, AK 99802, within 30 days of receipt of the application in order for those comments to be considered by the Regional Administrator during the approval process. If an application is disapproved, than that determination may be appealed under the provisions established at 50 CFR 679.43. A complete application to become a CQE consists of: (i) The articles of incorporation under the laws of the State of Alaska for that non-profit entity, except that a non-profit entity that is representing the Metlakatla Indian Village may provide articles of incorporation under Federal Law; (ii) A statement indicating the eligible community, or communities, represented by that non-profit entity for purposes of holding QS; (iii) Management organization information, including: (A) The bylaws of the non-profit entity; (B) A list of key personnel of the managing organization including, but not limited to, the board of directors, officers, representatives, and any managers; (C) A description of how the non-profit entity is qualified to manage QS on behalf of the eligible community, or communities, it is designated to represent, and a demonstration that the non-profit entity has the management, technical expertise, and ability to manage QS and IFQ; and (D) The name of the non-profit organization, taxpayer ID number, NMFS person number, permanent business mailing addresses, name of contact persons and additional contact information of the managing personnel for the non-profit entity, resumes of management personnel, name of community or communities represented by the CQE, name of contact for the governing body of each community represented, date, name and notarized signature of applicant, Notary Public signature and date when commission expires. (iv) A statement describing the procedures that will be used to determine the distribution of IFQ to residents of the community represented by that CQE, including: (A) Procedures used to solicit requests from residents to lease IFQ; and (B) Criteria used to determine the distribution of IFQ leases among qualified community residents and the relative weighting of those criteria. (v) A statement of support from the governing body of the eligible community as that governing body is identified in Table 21 to this part. That statement of support is: (A) A resolution from the City Council or other official governing body for those eligible communities incorporated as first or second class cities in the State of Alaska; (B) A resolution from the tribal government authority recognized by the Bureau of Indian Affairs for those eligible communities that are not incorporated as first or second class cities in the State of Alaska; but are represented by a tribal government authority recognized by the Secretary of the Interior; or (C) A resolution from a non-profit community association, homeowner association, community council, or other non-profit entity for those eligible communities that are not incorporated as first or second class cities in the State of Alaska, and is not represented by a tribal government authority recognized by the Bureau of Indian Affairs. The non-profit entity that provides a statement of support must: (1) Have articles of incorporation as a non-profit community association, homeowner association, community council, or other non-profit entity; and (2) Have an established relationship with the State of Alaska Department of Community and Economic Development for purposes of representing that community for governmental functions. (D) If an eligible community is not incorporated as a first or second class city in the State of Alaska, is not represented by a tribal government authority recognized by the Secretary of the Interior, and does not have a non-profit community association, homeowner association, community council, or other non-profit entity within that community with an established relationship with the Alaska Department of Community and Economic Development for purposes of representing that community for purposes of governmental functions, then the Regional Administrator, NMFS, will not consider any statement from a non-profit entity representing that community until that community: (1) Is incorporated as a first or second class city in the State of Alaska; (2) Establishes a tribal government authority recognized by the Secretary of the Interior; or (3) Establishes a non-profit community association, homeowner association, community council, or other non-profit entity within that community that meets the requirements established in paragraph (E) of this section. (E) If a community described under paragraph (l)(3)(v)(D) of this section establishes a non-profit community association, homeowner association, community council, or other non-profit entity within that community, then the Regional Administrator, NMFS, will consider any recommendations from this entity to support a particular applicant after reviewing: (1) Petitions from residents affirming that the non-profit community association, homeowner association, community council, or other non-profit entity within that community represents the residents within that community; and (2) Comments from the State of Alaska Department of Community and Economic Development on the articles of incorporation for that non-profit entity and the ability of that non-profit entity to adequately represent the interests of that community for purposes of governmental functions. (3) If the Regional Administrator determines that this statement of support is not adequate, than that determination may be appealed under the provisions established at 50 CFR 679.43. (4) The governing body of an eligible community as that governing body is identified in Table 21 to this part, must provide authorization for any transfer of QS by the CQE that holds QS on behalf of that eligible community prior to that transfer of QS being approved by NMFS. This authorization must be submitted as part of the Application for Transfer. That authorization consists of a signature on the Application for Transfer by a representative of the governing body that has been designated by that governing body to provide such authorization to approve the transfer of QS. [61 FR 31230, June 19, 1996, as amended at 61 FR 33385, June 27, 1996; 61 FR 41526, Aug. 9, 1996; 61 FR 67964, Dec. 26, 1996; 63 FR 47368, Sept. 4, 1998; 65 FR 14942, Mar. 20, 2000; 66 FR 27910, May 21, 2001; 67 FR 4133, 4148, Jan. 28, 2002; 69 FR 23691, Apr. 30, 2004]
Title 50: Wildlife and Fisheries
PART 679—FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA
Subpart D—Individual Fishing Quota Management Measures
§ 679.41 Transfer of quota shares and IFQ.
