Consolidated Appropriations Act, 2005-Conference Report

CONSOLIDATED APPROPRIATIONS ACT, 2005-CONFERENCE REPORT

THE BERING SEA NONPOLLOCK GROUNDFISH FISHERIES BUYBACK PROGRAM

Mr. STEVENS. Mr. President, as part of the fiscal year 2005 Consolidated Appropriations conference report there is a section that provides for a vessel buyback program for the Bering Sea/Aleutian Islands nonpollock groundfish fisheries. Senator MURRAY, is it your intention that section 219 of Title II of the 2005 Consolidated Appropriations conference report is only to provide for a non-pollock groundfish fishery capacity reduction program for catcher processor vessels engaged in these fisheries in the Bering Sea/Aleutian Islands?

Mrs. MURRAY. That is correct. Section 219 is intended to provide a vessel buyback program to be financed through a capacity reduction loan for this fishery.

Mr. STEVENS. It is my understanding that the North Pacific Fishery Management Council will develop the fishery management plans for the Bering Sea/Aleutian Islands non-pollock groundfish fisheries and nothing in this section should be construed to impede or change the council's development of these plans. Is this your understanding?

Mrs. MURRAY. Yes. This section should not be interpreted as requiring the North Pacific Fishery Management Council to rationalize these fisheries. In fact, nothing in this section should interfere with the council process with respect to development of fishery management plans for this fishery or any ongoing work of the council on fishery management plans or "rationalization" of other fisheries.

Mr. STEVENS. Senator MURRAY, there is language in this section that states that future amendments to the fishery management plans in the Bering Sea/Aleutian Islands should not "penalize" members of any catcher processor subsector for achieving capacity reduction under this act or any other provision of law. Could you explain in greater detail what this means? In particular, I want to make sure that nothing in this act would preclude the North Pacific Fishery Management Council from accommodating CDQ interests in future Bering Sea and Aleutian Islands non-pollock fishery management plans.

Mrs. MURRAY. Yes. This language does not prevent the North Pacific Fishery Management Council, National Marine Fisheries Service, or any other agency from enforcing any Federal law with respect to any member of this sector, including the conservation and management provisions of the Magnuson-Stevens Act. The act shall not prevent the council from raising the CDQ share of the harvest for this fishery consistent with past Bering Sea and Aleutian Islands rationalization efforts or as part of any eventual rationalization process. And finally, this reference to penalties should never be construed to prevent the council from implementing initiatives to reduce bycatch in this sector, which has historically had the highest bycatch rates in the Bering Sea/Aleutian Islands.

Mrs. MURRAY. Mr. President, over the last several hours, much debate has taken place regarding section 222 of division H of this omnibus appropriations bill. I wish to associate myself with the remarks of many of my colleagues that have insisted that this egregious provision be removed. And, I wish to thank the majority leader and minority leader for establishing a path forward that will ensure that this provision will never become law.

Under the agreement announced earlier by the majority leader, the entire conference report on the omnibus appropriations bill, once passed by the Senate, will be held at the desk and will not be forwarded to the President for his signature until the House has passed a correcting resolution that will nullify section 222. That correcting resolution will also be passed by the Senate today.

With that guarantee in place, and with the knowledge that section 222 of division H of the omnibus bill will never become law, I am pleased to vote in favor of the bill so that the people of my State and all other States can reap the benefits of the important programs funded in this bill.

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Mrs. MURRAY. Mr. President, I am pleased to see that Section 219 of Title 2 of this Act includes the statutory language necessary to authorize and implement a Non-Pollock Groundfish Fishing Capacity Reduction Program for the catcher processor sector of the Bering Sea and Aleutian Islands SAI This program represents a positive step forward for the Puget Sound-based commercial fishing industry. Passage of this Act concludes more than a year-long effort to craft an appropriate capacity reduction program for the catcher processor sector of the BSAI non-pollock groundfish fisheries.

Reducing capacity in these fisheries will improve the ability of the North Pacific Fishery Management Council to manage the groundfish stock and contribute to the long term economic viability of the many businesses and people involved in the harvesting, processing and delivery of the highest quality seafood products to consumers. This is important not just to the fishermen who take such great risks up in the frigid waters of the North Pacific, but to the myriad of small businesses throughout the Puget Sound region that support this industry: ship repair yards, equipment suppliers, insurance brokers, transportation companies, and marketers.

My predecessor, Warren Magnuson, set out 24 years ago to put in place a system to Americanize and manage our nation fishery resources. His hard work and vision, championed also by a young Senator from Alaska, Ted Stevens, led to the innovative regional council structure we know today. I am proud that the North Pacific Council has managed the fisheries in its jurisdiction so successfully that it is singled out in this country as a model for maintaining sustainable fisheries.

Despite the success of the North Pacific Council in maintaining healthy fish stocks, there have been problems in the region as a result of overcapacity in the fishing fleets. The North Pacific Council has addressed many issues to help prevent overcapitalization, including license programs and limited entry requirements, but once there are too many fishing vessels it becomes a very challenging problem. These are situations where development of fisheries has outpaced the ability of the resource to support, either biologically or economically, the fleets of fishing vessels built to harvest this national resource. There is a Federal nexus here, when overcapitalization is the result of Federal programs or Federal management decisions. Congress has a record of stepping in when needed to assist in resolving these problems, and this Act follows the American Fisheries Act, the West Coast Groundfish Buyback, and the Crab Buyback in the North Pacific.

I disagree with those who say that this is a problem caused by the fishermen alone, and that they should bear the brunt of any economic consequences of an overcapitalized fishery. Yes, they do have responsibilities, and this bill makes them part of the solution. It is the remaining fishermen who will be responsible for repaying the loans used to reduce capacity in the fleets. That is an investment from them to preserve their future in these fisheries, and it will contribute to the broader economic stability of the Puget Sound region.

I must add that fisheries legislation is never easy to draft. It is a very technical subject overlaid with the very lively history of participants in the fisheries. As Maggie noted on the eve of passage of the original fisheries management act:

We cannot satisfy everybody. I know fishermen pretty well. They are pretty hard to get to agree on a lot of things. They are independent people.

This sentiment remains very much true today. We have worked hard to accommodate a variety of perspectives in this bill, and I am satisfied that the results are positive.

The Non-Pollock Groundfish Fishing Capacity Reduction Program for the catcher processor sector of the BSAI authorized in this Act is a legitimate use of Federal resources to restore balance in these fisheries and to promote their long term viability. I look forward to working with the people in the fishery and representatives from the National Marine Fisheries Service and the North Pacific Council to implement this program consistent with the intent of Congress.

The purpose of this program is to reduce excess harvesting capacity in the catcher processor sector of the BSAI non-pollock groundfish fisheries. Reducing excess harvesting capacity will contribute to the future rationalization and long term stability of these fisheries. This statement is intended to clarify certain provisions contained in the Act and to facilitate its prompt implementation.

Subsection (a) provides definitions relevant to this Act and defines the four subsectors participating in the capacity reduction program: AFA trawl catcher processors, longline catcher processors, non-AFA trawl catcher processors, and pot catcher processors.

Subsection (b) authorizes a $75 million capacity reduction program for the BSAI non-pollock groundfish fisheries.

Subsection © allocates the $75 million in loan authority among the four catcher processor subsectors to reflect their relative participation in the non-pollock groundfish fisheries: $36 million to the longline catcher processor subsector; $31 million to the non-AFA trawl catcher processor subsector; $6 million to the AFA trawl catcher processor subsector; and $2 million to the pot catcher processor subsector. In the event any of the subsectors does not use the funds allocated to them by January 1, 2009, then any remaining funds roll over to a fund available to all four subsectors.

Subsection (d) establishes the basic contractual relationship between members of a subsector who choose to participate in a capacity reduction plan by agreeing to sell their license, their vessel, or both, to the Federal Government. Before the Secretary may disburse funds, a seller must enter into a binding reduction contract with the Federal Government, subject only to approval of a capacity reduction plan pursuant to a referendum described in subsection (e). The binding reduction contract must include provisions governing revocation of all Federal fishing licenses, fishing permits, and area endorsements issued for a vessel, and if relevant, the scrapping of a vessel, that is purchased through a capacity reduction plan authorized by this Act. It is intended that licenses currently attached to a vessel and all associated vessel catch history will be retired.

It is anticipated that the subsectors will use their loan authority to reduce both active and latent capacity. The importance of encouraging the elimination of latent licenses is to prevent the re-capitalization of the fishery from within the fleet. The August 2004 Department of Commerce report on addressing overcapitalized fisheries, U.S. Action National Plan of Action for the Management of Fishing Capacity, identifies latent capacity as a serious problem to be addressed in capacity reduction programs. The report cautions that simply targeting active vessels with large catch histories may result in ctivating the latent boats and licenses, and frustrating the intent of the buyback effort. Unless latent capacity is addressed, the goal of the Non-Pollock Groundfish Fishing Capacity Reduction Program will be undermined.

When dealing with active capacity, a participant will sell both a vessel and its qualified licenses. However, when eliminating latent capacity, there may be circumstances where only a license is purchased through the capacity reduction program. This could occur when a vessel has sunk or was otherwise destroyed by fire or accident, and is not presently active in the BSAI non-pollock groundfish fisheries. There also will be circumstances where vessels have little or no catch history, but have qualified for a license. In this situation such vessels and licenses represent another form of latent capacity and should be targeted in specific capacity reduction plans. In some cases there may be no current vessel named on a qualified license. The price paid to purchase such licenses associated with a sunk or destroyed vessel is expected to be less than the price paid for an active vessel and its licenses.

Subsection (e)(1) establishes a framework within which individual subsectors may develop capacity reduction plans. This includes a fee system that will repay the full amount of a capacity reduction loan amount in a timely fashion. The subsectors may use negotiations, bidding systems, a reverse auction, or other methods appropriate for identifying excess capacity to be reduced. This flexible approach is intended to utilize the knowledge and incentives of the participants in a subsector to develop capacity reduction programs that maximize the elimination of excess fishing capacity at the least cost and in the shortest time.

Subsection (e)(2) authorizes the Secretary of Commerce to review and approve capacity reduction plans devised by each subsector. Once a subsector completes its capacity reduction plan, it is submitted to the Secretary for review to determine consistency with this Act. Subsection (e)(2)(A-E) sets forth the requirements for Secretarial approval. To approve a subsector capacity reduction plan, the Secretary must determine that plan is consistent with the requirements of subsection
(b) of section 312 of the Magnuson-Stevens Act, with certain exceptions spelled out in this Act. Each subsector plan must include a fee system for full and timely repayment of the loan, and must achieve the maximum sustained reduction in fishing capacity for the least cost in the minimum amount of time. Maximum sustained reduction may be demonstrated through a showing that the vessels and licenses to be purchased will achieve the greatest reduction in harvest capacity through use of the loan authority available to a subsector. Data related to vessel catch history and performance capabilities may be used to satisfy this provision.

Subsection (e)(2)(E) expressly allows subsectors covered by this Act to upgrade their vessels to achieve efficiencies in fishing operations. This provision does not alter the existing statutory or regulatory restrictions on vessel length, tonnage or horsepower. The North Pacific Council retains authority to tailor vessel upgrades to meet the goals of fisheries management plans within its jurisdiction.

Subsection (e)(3) authorizes the Secretary to oversee referenda by each subsector to approve capacity reduction plans and requires the Secretary to notify subsector participants of an upcoming referendum. Following secretarial review and approval of a subsector capacity reduction plan, the Secretary is required to notify, to the extent practicable, all members of the subsector affected by such plan. The Secretary notice will include information on the proposed fee system, the schedule, procedures, and eligibility requirements for participation in a subsector referendum, and an estimate of the capacity to be reduced. This is purely a notice requirement-not a rulemaking-and it is not required to be published in the Federal Register.

Subsection (e)(4)(A) authorizes the Secretary to implement the individual subsectors capacity reduction plans. Within 90 days after a successful referendum, the Secretary is required to publish in the Federal Register a notice that includes the specific terms and conditions governing the purchase of licenses and vessels and a description of the fee system established for repayment of the loan. This is not a rulemaking. The purpose of this notice is to provide a public record of what has been purchased and how the loan is to be repaid.

Subsection (e)(4)(B) expresses the intent of Congress that Section 312(e) of the Magnuson-Stevens Act not apply to the capacity reduction plans governed by this Act.

Section (e)(5) establishes the authority of the Secretary to collect fees from the remaining members of a subsector necessary to repay the debt obligations incurred as a result of an approved capacity reduction plan. It is intended that the Secretary exercise this authority through regulations that will govern the fee collection system and ensure that the Federal Government can collect such fees. These regulations will bind the remaining members of a subsector and obligate them to repay the capacity reduction loan. Revenues to cover the loan repayment fees will be derived from the sale of fish harvested in the BSAI non-pollock groundfish fisheries.

Subsection (f) establishes the required actions by entities other than the Secretary to impose restrictions on vessels, revoke licenses and associated fishing rights, and scrap vessels. Subsection (f)(1)(A) requires the National Vessel Documentation Center, at the request of the Secretary, to revoke any fishery endorsements issued to a vessel under section 12108 of Title 46, U.S.C. It is expected that the National Vessel Documentation Center will annotate each buyback vessel documentation with language provided by the Secretary to notify future purchasers that they will not be able to receive any fishery endorsements. Subsections (f)(1)(B and C) require the Maritime Administration to restrict a vessel to U.S. flag status and refuse to grant approval for foreign registration or operation under foreign authority by such vessel. Subsection (f)(2) requires that vessels purchased under this Act designated for scrapping conform to the procedures established for a reduction vessel under section 600.1011(c) of Title 50, CFR. Scrapping of vessels pursuant to this provision shall be overseen by the National Oceanic and Atmospheric Administration-NOAA-and performed consistent with NOAA requirements. The cost to scrap a vessel will be paid by the buyback participant.

Subsection (g)(1) specifies the eligibility criteria for participation in the BSAI Non-Pollock Groundfish Fishing Capacity Reduction Program. It also limits participation in the BSAI non-pollock groundfish fishery to ensure the goal of capacity reduction is achieved.

Subsection (g)(2) expresses the sense of Congress that the North Pacific Council continue with its efforts to rationalize the BSAI non-pollock groundfish fisheries. This statement is intended to reinforce the Council commitment to adopt such management measures necessary to promote stability in these fisheries. This includes final action in a timely fashion on Amendments 80a and 80b, and the development and approval of sector allocations for the BSAI Pacific cod fishery. It is the understanding of Congress that the North Pacific Council will take final action on Amendments 80a and 80b by the fall of 2005, and adopt BSAI Pacific cod sector allocations by the end of 2005. Amendments 80a and 80b are particularly important to the non-AFA trawl catcher processor subsector as this fleet seeks to comply with the North Pacific Council pending Improved Retention/Improved Utilization-IR/IU-requirements. It is essential that the North Pacific Council take final action on Amendments 80a and 80b prior to implementing new IR/IU requirements.

Subsection (g)(2)(B) makes clear that subsectors who eliminate excess capacity through a capacity reduction plan authorized by this Act not be penalized by the North Pacific Council. This provision is intended to discourage the Council from reducing a subsector BSAI non-pollock groundfish allocations as a result of that subsector reduction of fishing effort through programs authorized under this Act. This does not preclude the North Pacific Council from exercising its authority to manage these fisheries, including taking actions to address bycatch concerns or changes in stock levels. In addition, this
Subsection would not prevent the North Pacific Council from raising the CDQ share of the harvest for this fishery consistent with past Bering Sea and Aleutian Islands rationalization efforts or as part of any eventual rationalization process.

Subsection (h) requires the Secretary to report annually to the relevant Congressional oversight committees on the implementation of this Act. Reports shall include details on the individual capacity reduction plans, an assessment of their cost-effectiveness, and the achievement of the goals set forth in section 312(b) of the Magnuson-Stevens Act.