Groundfish Cost Recovery in Alaska

This Small Entity Compliance Guide satisfies the Small Business Regulatory Enforcement Fairness Act of 1996 that requires a plain language guide to assist small entities. If you are required to comply with the regulations, you should consult and rely on the actual regulatory text in the Code of Federal Regulations (CFR).

1. What is cost recovery?

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) authorizes and requires the collection of cost recovery fees for the Community Development Quota (CDQ) Program and limited access privilege programs. Limited access privilege programs are those that allocate a percentage of the total allowable catch of a fishery for exclusive use by a person. Cost recovery fees recover the actual costs directly related to the management, data collection, and enforcement of the programs. The Magnuson-Stevens Act mandates that cost recovery fees not exceed 3 percent of the annual ex-vessel value of fish harvested by a program subject to a cost recovery fee.

2. Which programs are subject to a groundfish cost recovery fee?

In 2016, NOAA Fisheries increased its collection of cost recovery fees to include four groundfish management programs: American Fisheries Act (AFA), Aleutian Islands (AI) pollock, CDQ, and Amendment 80. These FAQs provide information on these four new groundfish cost recovery programs.

3. Which fisheries are included in the new groundfish cost recovery programs?

For the AFA Program, landings of Bering Sea (BS) pollock are subject to cost recovery.

For AI pollock, landings of AI pollock are subject to cost recovery.

For the CDQ Program, landings of Bering Sea and Aleutian Islands (BSAI) arrowtooth flounder, BSAI Atka mackerel, BSAI flathead sole, BS Greenland turbot, BSAI Pacific cod, AI Pacific ocean perch, BSAI pollock, BSAI rock sole, BSAI sablefish, BSAI yellowfin sole, and BSAI Pacific halibut are subject to cost recovery.

For the Amendment 80 Program, landings of BSAI rock sole, BSAI yellowfin sole, BSAI Pacific cod, BSAI flathead sole, AI Pacific ocean perch, and BSAI Atka mackerel are subject to cost recovery.

NOAA Fisheries only calculates cost recovery fees for fish that are landed and deducted from the total allowable catch (TAC) in the fisheries subject to cost recovery. NOAA Fisheries does not calculate cost recovery fees for any portion of a permit holder’s exclusive harvest privilege that is not landed and deducted from the TAC. Discards, including prohibited species catch, are not subject to a cost recovery fee because this catch cannot be retained for sale and, therefore, does not have an ex-vessel value.

4. Who is responsible for paying the cost recovery fee?

The responsible party for each program is different. For the AFA Program, the designated representative of each cooperative or sector is responsible for paying the cost recovery fee. For AI pollock, the designated representative for the Aleut Corporation is responsible for paying the cost recovery fee. For the CDQ Program, the designated representative for each CDQ group is responsible for paying the cost recovery fee. And for the Amendment 80 Program, the designated representative for each cooperative is responsible for paying the cost recovery fee.

5. How does NOAA Fisheries calculate cost recovery fees?

NOAA Fisheries uses the following process to calculate the annual cost recovery fee for each permit holder in the AFA, AI pollock, CDQ, and Amendment 80 Programs:

1. Determine the standard price for each fishery species allocated under a program.
2. Calculate the ex-vessel value of each fishery species allocated under a program by multiplying the standard price by the total amount of landings in each fishery under the program
3. Calculate the total ex-vessel value of all fisheries landed under a program by adding together the ex-vessel values of each fishery species under the program.
4. Calculate the total program cost by adding together the costs of managing each fishery species under a program.
5. Calculate a fee percentage for a program by dividing total program costs by the total ex- vessel value for all fishery species under the program.
6. Calculate the fee amount that will be assessed for each permit holder by multiplying the fee percentage by the permit holder’s total ex-vessel value of the fishery landings under the program.

The final figure is the annual cost recovery fee owed by each permit holder.

6. How does NOAA Fisheries determine standard prices?

NOAA Fisheries uses standard prices rather than actual prices to calculate the ex-vessel value of landings for each fishery species under the groundfish cost recovery programs. A standard price is determined using information on reported landings purchased (volume) and estimated ex-vessel value paid (value). Each year, NOAA Fisheries summarizes volume and value information for landings of all fishery species subject to cost recovery in order to estimate a standard price for each fishery species.

Pollock

NOAA Fisheries calculates the pollock annual standard price for BS and AI pollock using the most recent annual value information reported to the Alaska Department of Fish & Game for the Commercial Operator’s Annual Report and compiled in the Commercial Fisheries Entry Commission Gross Earnings data. Due to the time required to compile the data, there is a one year delay between the gross earnings data year and the fishing year to which it is applied. For example, NOAA Fisheries will use 2015 gross earnings data to calculate a standard price for BS and AI pollock landings from January 1 through December 31, 2016.

The BS pollock standard price is applied to AFA and CDQ pollock landings. NOAA Fisheries calculates one standard price for BS pollock based on landings from January 1 through December 31. NOAA Fisheries also calculates a standard price for AI pollock based on landings from January 1 through December 31. The AI pollock standard price is applied to AI pollock landings.

Atka mackerel, yellowfin sole, Pacific ocean perch, flathead sole, arrowtooth flounder, Greenland turbot, and trawl-caught sablefish

NOAA Fisheries calculates an annual standard price for each of these species based on volume and value information reported in the First Wholesale Volume and Value Report (see Q7), which includes data from January 1 through October 31. The Atka mackerel, yellowfin sole, Pacific ocean perch, and flathead sole standard prices are applied to Amendment 80 and CDQ landings. The trawl- caught sablefish standard price is applied to CDQ landings. The arrowtooth flounder and Greenland turbot standard prices are applied to CDQ fixed-gear and trawl-gear landings.

Rock sole

NOAA Fisheries calculates a standard price for rock sole for two time periods—January 1 through March 31 and April 1 through October 31—based on volume and value information reported in the First Wholesale Volume and Value Report. This captures significant differences in price and value between rock sole landed in the first quarter of the year and in the remaining part of the year. The rock sole standard prices are applied to CDQ and Amendment 80 landings

Pacific cod

NOAA Fisheries calculates two annual standard prices for Pacific cod, one for fixed gear and one for trawl gear. The standard prices are calculated using volume and value data reported in the Pacific Cod Ex-Vessel Volume and Value Report (see Q8), which includes data from January 1 through October 31. The fixed gear standard price is applied to CDQ fixed gear Pacific cod landings. The trawl gear standard price is applied to CDQ trawl gear Pacific cod landings and Amendment 80 Pacific cod landings.

Fixed gear halibut and sablefish

NOAA Fisheries calculates an annual price for CDQ fixed gear halibut and an annual price for CDQ fixed gear sablefish. The standard prices are the same as the Bering Sea port group prices calculated under the Observer Fee Program, which uses volume and value information reported annually on the IFQ Registered Buyer Ex-Vessel Volume and Value Report.

7. What is the First Wholesale Volume and Value Report?

NOAA Fisheries uses the First Wholesale Volume and Value Report to collect volume and value data for all fishery species of groundfish allocated under the Amendment 80 and CDQ Programs except Pacific cod, pollock, fixed gear halibut, and fixed gear sablefish. Amendment 80 vessel owners must submit a First Wholesale Volume and Value Report by November 10 of the year in which landings are made, including landings made under the CDQ Program. NOAA Fisheries uses data from the First Wholesale Volume and Value Report to calculate standard prices for groundfish species because these species are harvested primarily, if not almost exclusively, by Amendment 80 vessels. The First Wholesale Volume and Value Report requires Amendment 80 vessel owners to submit the total pounds landed by species and the total first wholesale value by species, reported as aggregated data from January 1 through October 31 for all species except rock sole. Rock sole is reported separately for two time periods: January 1 through March 31 and April 1 through October 31. You can access the First Wholesale Volume and Value Report through your eFISH account.

8. What is the Pacific Cod Ex-Vessel Volume and Value Report?

Shoreside processors, designated on a Federal Processor Permit, and motherships, designated on a Federal Fisheries Permit, that receive deliveries of unprocessed Pacific cod must submit a Pacific Cod Ex-Vessel Volume and Value Report every year by November 10 of the year in which the landings are made. The Pacific Cod Ex-vessel Volume and Value Report requires shoreside processors and motherships to submit the total pounds of Pacific cod purchased and the total gross ex-vessel value paid by gear type (trawl and fixed gear), reported as aggregated data from January 1 through October 31. You can access the Pacific Cod Ex-Vessel Volume and Value Report through your eFISH account.

9. How does NOAA Fisheries calculate the ex-vessel value?

NOAA Fisheries calculates the ex-vessel value of fish harvested by summing all payments of monetary worth made for the sale of raw, unprocessed catch of the species subject to cost recovery. This includes any retroactive payments (e.g., bonuses, delayed partial payments, post-season payments) made for fish harvested under a permit for previously landed fishery species. The fee liability for retroactive payments is based on the fee percentage in effect at the time the fish was received by the processor. NOAA Fisheries calculates the ex-vessel value of each fishery species allocated under a program by multiplying the standard price by the total amount of landings in each fishery under the program. NOAA Fisheries then adds together the ex-vessel values of each fishery species under the program to calculate the total ex-vessel value of all fisheries landed under that program. NOAA Fisheries calculates the ex-vessel value for each permit holder by multiplying the standard price by the permit holder’s fishery landings under the program.

For fisheries that are primarily harvested by catcher/processors, there is no reliable ex-vessel price generated from the sale of fish from a harvester to a processor. Therefore, NOAA Fisheries estimates the ex-vessel price for those fishery species by using reported information on the first wholesale price. The first wholesale price is the market price of the primary processed fishery product. The estimated ex-vessel price, also referred to as the proxy price, is the value of processed products from catcher/processors divided by the retained round-weight (unprocessed weight) of catch and multiplied by a factor of 0.4 to correct for the value added to the fish product by processing. The proposed rule for the cost recovery programs provides a detailed description of this process.

10. Why does NOAA Fisheries estimate landings for November 12 through December 31?

NOAA Fisheries assesses the fee liability through the end of the year (December 31). However, the fee liability notice must be sent by December 1 because NOAA Fisheries requires the fee payment by December 31. Due to the logistical steps necessary to have notices mailed by December 1, NOAA Fisheries must estimate landings that occur for the fisheries that remain open between approximately November 12 and December 31. Historical data indicates that a small amount of landings occurs in late November and December, relative to the previous months, specifically in Amendment 80 and CDQ fisheries for Pacific ocean perch, Pacific cod, yellowfin sole, and other flatfish. NOAA Fisheries estimates the landings for these fisheries. NOAA Fisheries does not need to estimate landings for fisheries that are closed before November 12, such as pollock.

11. How does NOAA Fisheries estimate landings for November 12 through December 31?

NOAA Fisheries estimates landings for fisheries that remain open in late November and December based on the permit holder’s remaining allocation during that year and projections of landings from November 12 through December 31.

12. What if NOAA Fisheries' estimates of my landings are not correct?

Every year NOAA Fisheries evaluates its estimate of each permit holder’s landings for November 12 through December 31 in comparison to the actual landings. If actual landings from November 12 through December 31 were less than the estimated landings during this period, NOAA Fisheries deducts the difference from the permit holder’s fee liability for the following year. If actual landings are greater than the estimated landings during this period, NOAA Fisheries adds the difference to the permit holder’s fee liability for the following year.

13. What management costs are recoverable under cost recovery programs?

NOAA Fisheries recovers the incremental costs (program costs) associated with management, data collection, and enforcement of the AFA, AI pollock, CDQ, and Amendment 80 Programs. NOAA Fisheries captures the incremental costs of managing the fisheries through an established accounting system that allows NOAA Fisheries to track labor, travel, and procurement. NOAA Fisheries tracks costs for each program separately. AFA Program costs are tracked separately for the inshore, catcher/processor, and mothership sectors. NOAA Fisheries also uses this accounting system to track program costs for the Halibut and Sablefish IFQ Program, Crab Rationalization Program, and Rockfish Program.

Once NOAA Fisheries identifies the program costs for the most recent Federal fiscal year, NOAA Fisheries recovers that amount, up to 3 percent of the ex-vessel value of the fisheries subject to cost recovery, from all permit holders in the programs. Cost recovery fees do not increase agency budgets or expenditures. The fee offsets funds that would otherwise have been appropriated. No budgetary advantage is gained by inflating program costs. Examples of the specific management activities that are recoverable are at-sea scale inspections, creation and maintenance of software programs to track exclusive harvest privileges, development and implementation of regulation changes for programs subject to cost recovery, and staff time devoted to monitoring and tracking catch associated with a fishery subject to cost recovery.

14. How will I know my fee?

By December 1, NOAA Fisheries sends a fee liability summary letter to the designated representative for each entity subject to cost recovery. The letter includes the total estimated fee due to NOAA Fisheries for that calendar year. See Q5 for more information on the fee calculation. Additionally, by December 1, NOAA Fisheries publishes a notice in the Federal Register with the annual fee liability percentage and standard prices, subject to confidentiality restrictions, used to calculate fee liabilities.

Fee Percentages and Standard Prices - Federal Register Notices

• Amendment 80 Program, American Fisheries Act Program, Aleutian Islands Pollock Program, and Western Alaska Community Development Quota Groundfish and Halibut Programs
• Central Gulf of Alaska Rockfish Program
• Halibut and Sablefish Individual Fishing Quota (IFQ)

15. When is my fee due?

• Aleutian Islands Pollock - Payments due by December 31.
• Amendment 80 - Payments due by December 31.
• American Fisheries Act Inshore and Motherships - Payments due by December 31.   
• Central GOA Rockfish - Payments due by February 15.
• Community Development Quota - Payments due by December 31. 
• Halibut/Sablefish IFQ - Payments due by January 31

16. How do I pay my fee?

The designated representative must pay their cost recovery fee electronically using the Department of the Treasury’s online payment system, pay.gov. You can access pay.gov through your eFISH account. Payments can be made using credit card, debit card, or electronic check via the pay.gov system.

17. What happens if I don't pay my fee?

If a designated representative fails to submit full payment of their cost recovery fee by December 31 of the year in which the landings were made, NOAA Fisheries will:

1. not issue allocations to that entity for the following calendar year (except NOAA Fisheries may issue a partial allocation of pollock to the AFA catcher/processor sector if that sector submits a partial fee payment
2. disapprove any application to transfer quota to or from the entity which receives an annual allocation
3. send an initial administrative determination (IAD) to the permit holder or designated representative stating their fee liability. The IAD may be appealed.

Contact

• Charmaine Weeks, Alaska Region Fee Coordinator 

More Information

• Cost Recovery Programs and Fee Payment