February 1, 1999
Tomie Lee
Superintendent
Glacier Bay National Park and Preserve
P.O. Box 140
Gustavus, Alaska 99826
Facsimile: (907) 697-2654
Re: Glacier Bay National Park,
Alaska:
Commercial Fishing Regulations(PDF File)
Dear Ms. Lee:
The Office of Advocacy of the U.S. Small Business Administration (SBA) was established by Congress under Pub. L. No. 94-305 to advocate the views of small business before federal agencies and Congress. Advocacy is also required by §612 of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) to monitor agency compliance with the RFA. On March 28, 1996, President Clinton signed the Small Business Regulatory Enforcement Fairness Act which made a number of significant changes to the Regulatory Flexibility Act, the most significant being provisions to allow judicial review of agencies' regulatory flexibility analyses.
On April 16, 1997, the National Park Service (NPS) published for public comment a proposed regulation on Glacier Bay National Park, Alaska; Commercial Fishing Regulations, Federal Register, Vol. 62, No. 73, p.18547. The purpose of the proposed rule is to prohibit commercial fishing in nonwilderness waters of Glacier Bay proper. NPS contends that the prohibition is necessary to "conserve the scenery and the natural and historic objects and wildlife therein". The proposal provides a seasonal exemption from that prohibition for 15 years for fishermen who demonstrate a reasonable history of participation in a specific Glacier Bay fishery. Id. at 18550. NPS contends that this action is necessary to bring Glacier Bay into conformance with the general policy and rule applicable to units of the National Park System and the underlying objectives of the establishment of Glacier Bay National Park. Id.
Potential Impact of the Rule
The proposal will affect all fishers in the Glacier Bay area. Although some of the fishers will be eligible for a fifteen year exemption from the prohibition, the exemption is only available to owners of valid fishing permits who can demonstrate a history of consistent participation in the Glacier Bay fishery for which the exemption is sought. Commercial fisheries eligible for the exemption include trolling for salmon; long lining for halibut; and pot or ring net fishing for Dungeness and tanner crab. While NPS indicates that these fishers will be affected by the proposal, the proposal is devoid of any economic information or information regarding the number of fishers that may not qualify for the exemption.
Although the proposal only refers to the effects on fishers, other industries may also be directly affected by the proposal. According to the Alaska Department of Fish and Game, Division of Commercial Fishing, there are several seafood processors that process seafood from the Glacier Bay area. Some of those processors have reported that they will not be able to continue operating if the proposed rule is finalized.(1) In addition, approximately one fourth of the vessel owners are not permit holders. Instead of fishing, they obtain income from leasing their vessels or through catch share agreements.(2) Needless to say, since these businesses are not mentioned in the proposal at all, there is no information regarding the economic impact of the proposal on those businesses.
The Office of Advocacy submits that the Federal Register notice is inadequate for RFA purposes. The Federal Register notice needs to contain an explanation of the activities that will be affected by the agency’s actions, as well as the economic implications for those business entities. This is necessary to elicit informed comments on the proposal. NPS has a statutory obligation to do an economic analysis, as the following will explain.
Regulatory Flexibility Act Requirements
The RFA requires administrative agencies to consider the effect of their actions on small entities, including small businesses, small non-profit enterprises, and small local governments. See 5 U.S.C. §§ 601, et. seq.; Northwest Mining Association v. Babbitt, 5 F. Supp. 2d 9. When an agency issues a rulemaking proposal, the RFA requires the agency to "prepare and make available for public comment an initial regulatory flexibility analysis" which will "describe the impact of the proposed rule on small entities." 5 U.S.C. § 603(a); Id..
Initial Regulatory Flexibility Analysis
If the proposed rule is expected to have a significant economic impact on a substantial number of small businesses, an initial regulatory flexibility analysis (IRFA) must be prepared and published with the proposed rule. The required IRFA is prepared in order to ensure that the agency has considered all reasonable regulatory alternatives that would meet the agency’s policy objectives but minimize the rule' s economic impact on affected small entities. In accordance with Section 603(b) of the RFA, each IRFA must address the reasons that an agency is considering the action; the objectives and legal basis of the rule; the type and number of small entities to which the rule will apply; the projected reporting, record keeping, and other compliance requirements of the proposed rule; and all federal rules that may duplicate, overlap or conflict with the proposed rule.
Certification
Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an IRFA, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities. If the head of the agency makes such a certification, the agency shall publish such a certification in the Federal Register at the time of the publication of the general notice of proposed rulemaking for the rule along with a statement providing the factual basis for the certification. (Emphasis added) Id.
RFA Non-Compliance in Proposed Rulemakings
NPS’s Certification Does Not Comply with the Requirements of the RFA
In the above referenced proposal, the NPS did not prepare an IRFA. Instead, it opted to certify the proposal. The certification states:
The Office of Advocacy asserts that the proposal and certification are absurd. This proposal that purportedly preserves the natural beauty of the area only prohibits one type of activity-fishing. From the proposal, there is no indication that other types of activities such as cruising or recreational touring will be affected or eliminated to preserve the "natural beauty" of Glacier Bay. If the intent is to preserve the environment and to create an area where fish and animals are allowed to roam freely, why are the prohibitions limited only to the fishing industry.
The Office of Advocacy further contends that the certification does not meet the requirements of the RFA that a certification contain a factual basis. The certification simply contains statements of opinion that are not supported by any "facts" or economic data in the certification or the preamble of the proposal. Although the certification states that this proposed rule merely clarifies the existing statutory law, the preamble states that in Alaska Wildlife Alliance v. Jensen a court found that "there is no statutory ban on commercial fishing in Glacier Bay National Park…".Id. It is totally nonsensical to state that the proposal merely clarifies existing law when a court has found that no such law exists. To place a ban on commercial fishing after a court has found that there is not statutory ban is not a clarification of the law. If anything, it is a misstatement of the law. (3)
Furthermore, there is no evidence that the redistribution of the commercial fishing efforts to areas outside of the parks will not have a significant effect on a substantial number of small businesses. As a practical matter, it should be fairly obvious that fishing outside of the park will cause the fishers to incur additional costs. For example, the vessels may need to travel farther to fish. The fishers will incur additional costs through gas, repairs and wear and tear on the vessels. Moreover, there is no indication that the catch potential is similar outside of the Glacier Bay area.
There was no economic evidence to support NPS’ allegation of no significant economic impact anywhere in the certification or the preamble of the proposal. Such an absence of information violates the intent and purpose of the RFA. Without economic information, the public cannot determine fully the economic impact of a proposal and provide the agency with meaningful comments.
NPS Should Have Prepared an IRFA
Although there was no economic information in the April 17, 1997 proposal, NPS did provide some economic information in its environmental assessment that it made available to the public in April 1998, one year after the Notice of Proposed Rulemaking. The Office of Advocacy’s Office of Economic Research reviewed the data found in the environmental assessment. David Schnare, Ph.D. found that the proposal will have a significant economic impact on a substantial number of small entities. In short, Dr. Schnare found that:
The RFA requires an agency to prepare an IRFA when the agency’s actions are expected to have a significant economic impact on a substantial number of small entities. The information elicited from NPS’s environmental assessment indicates that the proposal will have such an impact. Accordingly, a certification is improper for this proposal. NPS must prepare an IRFA if it intends to abide by the requirements of the RFA.
The Proposal Detrimental Effects on Small Communities is Reasonably Foreseeable
In addition to the effect of the proposal on small businesses, the Office of Advocacy is also concerned about the effect of the proposal on small communities. The RFA clearly states that a small entity "shall have the same meaning as the terms ‘small business’, ‘small organization’, and ‘small governmental jurisdiction’." 5 U.S.C. §601 (6). A "small governmental jurisdiction" is defined as governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand. 5 U.S.C. §601 (5).
In Alaska, all but three governmental jurisdictions qualify as small entities. The Alaska Department of Fish and Game, Division of Fishing, estimates that at least three of these communities, Elfin Cove, Hoonah, and Pelican, may be detrimentally affected by the proposal. These communities of approximately 150-350 people are highly dependent on the fishing industry. In that the State of Alaska taxes are directly tied into seafood landings, the tax bases for those communities will be reduced significantly.(4) Because of the heavy reliance on fishing, NPS should consider the economic impact on the communities of this regulation in performing an IRFA and in considering alternatives to this action.
Conclusion
Because of the potentially severe economic implications that the proposed rule may have on small entities, it is incumbent upon the NPS to comply with the requirements of the RFA. Failure to do so may lead to judicial review of the agency' s actions. Republishing the rule with the proper RFA information is necessary to rectify NPS’s egregious noncompliance.
The Office of Advocacy recognizes the importance of protecting the environment and preserving the natural beauty of the area. However, NPS is proposing an action that will totally eliminate an activity that is crucial to the economic viability of the Glacier Bay area. Fishing has been a mainstay activity for the Glacier Bay area for decades. Before an agency enacts a prohibition, whether it is immediate or within fifteen years, the agency should provide an economic analysis for its actions. The requirements of the RFA are not intended to prevent an agency from fulfilling its statutory mandate. Rather it is intended to assure that the economic impacts are fairly weighed in the regulatory decision making process.
The public has an interest in knowing the potential economic impact of a particular proposed regulation. As the court stated when remanding a rule to the agency in Northwest Mining v. Babbitt, "While recognizing the public interest in preserving the environment, the Court also recognizes the public interest in preserving the rights of parties which are affected by government regulation to be adequately informed when their interests are at stake and to participate in the regulatory process as directed by Congress."Supra. at 13.
If you would like to discuss this matter or if this office can be of any further assistance, please contact Jennifer A. Smith, Assistant Chief Counsel for Economic Regulation. She may be reached either by mail at the above address or by telephone at (202) 205-6943.
Thank you for your attention to this matter.
Sincerely,
Jere W. Glover
Chief Counsel
Office of Advocacy
Jennifer A. Smith
Assistant Chief Counsel
for Economic Regulation
ENDNOTES
1. February 1, 1999, Conference call with Jeff Hartman, Alaska Department of Fish and Game, Division of Commercial Fishing.
2. Id.
3. The Office of Advocacy recognizes the fact that Section 123 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of FY 1999establishes statutory requirements for the management of commercial fishing in Glacier Bay National Park. However, this provision was not signed into law until October 21, 1998, approximately 18 months after the date of the proposal. The fact that a law subsequently went into effect does not cure the defective certification. If anything, the change in the law should necessitate the reproposal of the rule.
4. February 1, 1999, Conference call with Jeff Hartman, Alaska Department of Fish and Game, Division of Commercial Fishing.