Guide Governing the Transfer of Coastal Pelagic Species Limited Entry Permits

January 2003

Amendment 10 to the Coastal Pelagic Species Fishery Management Plan (FMP) established the conditions by which a limited entry permit can be transferred to another individual and/or another vessel. This guide is intended to answer questions that might arise when transferring a permit is being considered. Regulations implementing Amendment 10 to the FMP were published in the Federal Register on January 27, 2003 (68 FR 3819). This guide is not a substitute for Federal Regulations. For further information contact Chris Fanning at (562) 980-4198.

Background

The purpose of Amendment 10 is to establish a maximum harvesting capacity level for the limited entry fleet and allow permits to be transferred to another individual and/or another vessel while assuring that the fleet capacity is not exceeded. The regulations implementing Amendment 10 will enable individuals to exit the fishery, enter the fishery, upgrade a vessel, or transfer a permit to a different vessel. The basic provisions of Amendment 10 are as follows:

Establishes a maximum harvesting capacity level for the limited entry fleet at 5,933.5 gross tons.
Establishes a capacity level based on the gross tons of each permitted vessel, calculated from the length, width, and depth as recorded in the Coast Guard documentation records.
Allows permits to be transferred to another vessel of comparable capacity, which is defined as the gross tonnage of the permitted vessel plus 10 percent.
Sets no limit on the number of transfers; however, only one transfer is allowed per calendar year.
Requires all transfers to be authorized by the Sustainable Fisheries Division (SFD).

Questions and Answers

Q.	*Why use gross tonnage rather than hold capacity to limit the fishing power of a vessel?*
A.	There are several ways to limit the harvesting power of a fishing fleet. A figure could be arrived at by measuring the dimensions of the hold of each vessel or use other attributes of the vessel such as length and horsepower. Usually a combination of various attributes are used and monitoring a fleet has had complications. Gross tonnage as used by the U.S. Coast Guard does, in general, serve as a reasonable proxy for harvesting capacity, although it may be more applicable to some vessels than others. Amendment 10 provides an explanation for this. Gross tonnage is easy to understand, easy to track, and the Coast Guard documentation records provide an official record for the length, width, and depth of U.S. vessels that is available to everyone. Gross tonnage (GT) of a vessel with ship-shaped hull is calculated by the formula: GT = 0.67(lengthBreadthDepth)/100.
Q.	*Can I appeal the gross tonnage assigned to my vessel?*
A.	Yes. However, the figures for length, width, and depth of your vessel were obtained from Coast Guard documentation records. If you disagree with the figure used for your vessel's gross tons, you should write to the Assistant Administrator for SFD stating the reasons for your disagreement and include a copy of your current Coast Guard Documentation Certificate (CG-1270).
Q.	*Can I sell my permit?*
A.	Yes. As of January 27, 2003, you can transfer your permit to another vessel owned by someone else or to another vessel owned by yourself. However, only one transfer per calendar year is allowed. An application for transfer must be submitted to the SFD. No transfer is complete until approved by the SFD. There is no cost for transferring a permit.
Q.	*Can I change the length, width, and depth of my vessel to do such things as install new equipment or to improve safety of the vessel?*
A.	Yes. However, alterations of the length, width, or depth will change the gross tonnage of the vessel. The new gross tonnage of your vessel with changes cannot be greater than the gross tonnage on your permit plus 10 percent.
Q.	*To what size vessel can I transfer my permit?*
A.	You may transfer your permit to a vessel with an official gross tonnage that is 10 percent greater than the gross tonnage on the permit for your vessel. For example, assume that the gross tonnage on the permit for your vessel is 75.5 tons. You may transfer your permit to a vessel that has a gross tonnage of 83.1 tons (75.5 x .10) = 7.55 + 75.5 = 83.05. Gross tonnage is rounded off to the nearest one-tenth of a ton; therefore, you may transfer your permit to a vessel that has a gross tonnage of 83.1 tons.
Q.	*What if the gross tonnage of my vessel is 75.5 tons and the vessel to which I intend to transfer the permit is 83.2 tons?*
A.	Each vessel must have a permit that equals the gross tonnage of the vessel. Therefore, if you own the new vessel, you must purchase a permit that will provide that additional one tenth of a ton. If another individual owns the vessel, he or she must purchase a permit to make up the missing one tenth of a ton. Both permits would remain on the new vessel, each with its official gross tonnage. In most cases, however, the differences in gross tonnage are not likely to be this close.
Q.	*If I hold a limited entry permit endorsed for 80 gross tons and I want to transfer the permit to a vessel that is 140 gross tons, what do I have to do?*
A.	To operate in the limited entry fishery, the 140 gross ton vessel must have permits that total 140 gross tons. You have a permit that is endorsed for 80 gross tons; however, during a transfer, the 80 gross ton permit will provide 10 percent more gross tons toward the transfer (80 x .10) = 8.0 + 80 = 88.0 gross tons. What you now need is a permit that will provide at least 52 gross tons toward the proposed transfer. Because of the 10 percent allowance, the permit you obtain need only be endorsed for 47.3 gross tons. Here is a summary: (80 x .10) = 8.0 + 80 = 88.0 (47.3 .10) = 4.73 + 47.3 = 52.03 88.0 + 52.0 = 140.0 You can find the missing tonnage by dividing your desired answer by 1.10. For instance, you needed a permit endorsed for 52 gross tons, and 52.0/1.10 = 47.27, which equals 47.3. The 10 percent allowance adds some complication to the process, but it is to your advantage. Once you have arranged for obtaining the required permit or permits, you must submit an application to the SFD for the new vessel.
Q.	*If I hold two permits for my vessel, what happens to the permits if I sell the vessel?*
A.	You can sell the vessel with the permits. You may also sell the vessel without the permits. If you sell the vessel without the permits, the vessel can no longer participate in the coastal pelagic species limited entry fishery unless a permit is obtained for the vessel. All permits are numbered and are endorsed with a specific gross tonnage. Assume that your vessel was 130 gross tons and that you held two permits in order to qualify your vessel for the limited entry fishery, one permit endorsed with 70 tons and one permit endorsed with 80 tons. The two permits totaling 150 tons was needed to operate your 130 ton vessel because at least one of the permits was all that was available on the market. You can now sell the permits separately and they retain their official endorsements of 70 and 80 tons.