Magnuson-Stevens Act Provisions; Fishing Capacity Reduction Program; Crab Species Covered by the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs

AGENCY:

National Marine Fisheries Service, National Oceanic and Atmospheric Administration, Commerce.

ACTION:

Notice of second invitation to bid.

SUMMARY:

The National Marine Fisheries Service issues this notice to inform the interested public that on August 6, 2004, the National Marine Fisheries Service issued a second invitation to bid in the fishing capacity reduction program for the crab species covered by the Fishery Management Plan for Bering Sea/Aleutian Islands king and tanner crabs.

ADDRESSES:

Direct any questions about this notice to Michael L. Grable, Chief, Financial Services Division, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910-3282.

Any person who wants to contact the National Marine Fisheries Service's Restricted Access Management Program (which issues crab species licenses) may do so at: Restricted Access Management Program, National Marine Fisheries Service, P.O. Box 21668, Juneau, AK 99802-1668.

FOR FURTHER INFORMATION CONTACT:

Michael L. Grable, (301) 713-2390.

SUPPLEMENTARY INFORMATION:

Section 144(d) of Division B of Public Law 106-554, as amended, authorized this fishing capacity reduction program (program). The program's objective is reducing harvesting capacity in the Bering Sea/Aleutian Islands crab fishery. This will help financially stabilize this limited-entry fishery and manage its fish.

The National Marine Fisheries Service (we) published proposed program regulations on December 12, 2002 (67 FR 76329). We published final program regulations on December 12, 2003 (68 FR 69331 et seq.). We published a notice of qualifying bidders and voters on December 22, 2003 (68 FR 71082 et seq.). We published a notice of the program's first invitation to bid on Feb 17, 2004 (69 FR 7421 et seq.).

After the bidding period for the program's first invitation to bid closed on April 23, 2004, we administered and then readministered a referendum about the fee needed to repay the program's reduction loan of about $100 million. The readministered referendum was unsuccessful. This resulted in all parties in the first round of bidding being excused from any obligations associated with the first bid offers or any reduction contracts. Subsequently, we decided to issue a second invitation to bid and hold a second referendum based on the results of a second round of bidding.

Interested persons should carefully review the final program regulations and other relevant program documents for full details about the program and the second round of bids. Interested persons may obtain the final program regulations and the other relevant documents from Michael L. Grable (see ADDRESSES). The final program regulations and other relevant documents are also posted on our website at <http://www.nmfs.noaa.gov/ocs/financial_services/buyback.htm>.

In addition to the final program regulations, our website contains:

(1) The program's Second Invitation to Bid;

(2) The program's Second Fishing Capacity Reduction Program Bid and Terms of Agreement; and

(3) Our August 6, 2004, bidding guidance letter which then transmitted the first two documents to 281 qualifying bidders.

This is a voluntary program. In exchange for reduction payments, accepted bidders permanently relinquish their fishing licenses and their fishing vessels' catch histories and fishing privileges.

The program's maximum cost cannot exceed $100 million. Should a second referendum prove successful, a 30-year loan will finance 100 percent of whatever the reduction's cost turns out to be. Future crab landing fees will repay the loan.

We attach, as addendum 1, a facsimile of the second invitation to bid (second invitation) which we sent on August 6, 2004, to 281 qualifying bidders. We also attach, as addendum 2, a facsimile of the second bidding form and terms of capacity reduction agreement (second reduction contract) which we also sent on August 6, 2204, to 281 qualifying bidders. Qualifying bidders who bid in response to the second invitation will use the bid form section of the second reduction contract to make their bid offers. These addenda state all other applicable bid submission requirements and procedures. All bidders must bid in strict accordance with the second invitation and second reduction contract. We may reject any bids which do not.

Bidding in response to the second invitation opened on August 6, 2004. This bidding will close at 5 p.m., Eastern Daylight Time, on September 24, 2004. We will not accept bids which our Financial Services Division in Silver Spring, MD receives after bidding closes.

We will reject any bid a bidder submits on any form other than the bidding form portion of the second reduction contract in the bidding package which we sent to the qualifying bidders or the bidding form portion of the second reduction contract attached hereto as addendum 1.

Potential bidders who first become qualifying bidders after August 6, 2004, may request a bidding package by contacting Michael L. Grable (see ADDRESSES). Alternatively, they may download from our web site the second invitation and the second reduction contract and use these for their bids.

After receiving their bidding packages, qualifying bidders (along with co-bidders where appropriate) who wish to bid in the program's second round of bidding must submit their irrevocable bid offers to our Silver Spring, MD Financial Services Division in time for that Division to have received them before bidding closes on September 24, 2004.

We will then score each bid amount of each responsive bid against the dollar value of the bidder's documented crab harvests during the bid scoring period. We will get each bidder's documented crab harvest data directly from the State of Alaska, and no bidder need attempt to include any crab harvest data in its bid.

We will, in a reverse auction, next accept each bid whose amount is the lowest percentage of the bidder's ex-vessel crab revenues during the bid scoring period until either the $100 million is fully committed or no other responsive bid remains to be accepted. Bid acceptances create reduction contracts between the United States and the bidders, subject to the condition subsequent that the second referendum approves the fee required to repay the potential reduction loan.

Next, we will conduct a second referendum, based on the results of the second round of bidding, about the crab landing fees required to repay the potential reduction loan. We will mail a voting package to each person then on, and at the address in, our qualifying voter list. This will include a detailed synopsis of accepted bids (e.g., capacities reduced, reduction costs, and prospective loan repayment fees) by area/species endorsement categories. It will also include a ballot as well as questions and answers about voting and other program details.

We anticipate that we will send second referendum ballots to qualifying voters on October 1, 2004. Qualifying voters may vote as soon as they receive the ballots. We anticipate mailing these on October 1, 2004. Second referendum voting will close at 5 p.m., Eastern Standard Time, on November 15, 2004.

Reduction contracts will become inoperable unless at least two thirds of the second referendum votes cast approve the landing fee required to repay the reduction loan.

If the second referendum is successful, we will then mail a bid acceptance letter to each accepted bidder. This will be the bidder's first notification that we accepted its bid. The letter will also state that a successful referendum fulfilled the one condition subsequent to reduction contract performance.

We will next publish a reduction payment tender notice in the Federal Register. We anticipate doing this on November 22, 2004. Thirty days afterwards, we will tender reduction payments to accepted bidders and complete the program. We anticipate tendering reduction payments on December 22, 2004.

If the second referendum is unsuccessful, the program may then terminate.

Our notice of qualifying bidders and voters included only one license holder name and mailing address for each crab license listed. We note that some crab licenses are co-held by more than one person, corporation, or partnership. Where this is the case, our notice included only the co-holder, and its mailing address, whom the RAM Program's crab license database inferred as the designated contact for the other co-holders.

Nevertheless, all co-holders required to do so must sign each bid involving a co-held license. Even if a qualifying bidder's crab license is co-held, we mailed the bidding package only to the designated contact co-holder at the address specified in our notice. We are, however, also notifying the other co-holders that we have done so. Each designated contact co-holder will be responsible to ensure that all required co-holders sign the bid as the qualifying bidder. We will reject any bid involving a co-held license unless all co-holders required to sign the bid as the qualifying bidder do so.

Do not confuse the terms “co-holder” and “co-owner” with the term “co-bidder”. Co-bidders are involved only when a bid's reduction/privilege vessel is owned by someone other than the qualifying bidder who holds the crab license included in the bid as the crab reduction permit. In each bid involving a co-bidder, the crab license holder or co-holders must sign the bid as the qualifying bidder and the reduction/privilege vessel owner or co-owners must sign the bid as a co-bidder. Like co-owned qualifying bidders, co-bidders who are co-owned must also have all co-owners who are required to sign the bid as the co-bidder do so.

Addendum 1 and addendum 2 hereto contain the following minor corrections of the second invitation to bid and the second reduction contract which we mailed to 281 qualifying bidders on August 6, 2004:

(1) In the second invitation, we struck the superfluous word “be” from the last paragraph of section VI;

(2) In the second invitation, we substituted the word “fully” for the word “full” in the fourth paragraph of section VIII; and

(3) In the second reduction contract, the seventeen words “Contract is effective as of the date NMFS accepts the Bidder's offer by signing the Reduction Contract” appear alone on page No. 20. The rest of page No. 20 is, without further explanation, blank. We repositioned these seventeen words to directly follow the last two words (“the Reduction”) which appear in the partial sentence ending page No. 19. Consequently, page No 20 of the addendum's second reduction contract becomes what was Page No. 21 of the bid package's second reduction contract, and the former's page No. 21 becomes what was the latter's page No. 22.

These addendum changes to the second invitation and second reduction contract which we sent to 281 qualifying bidders on August 6, 2004, are non-substantive. Qualifying bidders bidding in this second round of program bidding may, consequently, do so either by using the uncorrected second reduction contract in the bidding packages which we sent them on August 6, 2004, or by downloading from our web site the corrected second reduction contract and using the corrected second reduction contract instead.

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.

[The addenda will not be codified in the Code of Federal Regulations]

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