William Hogarth ,Acting Chief
Highly Migratory Species
Management Division
Office of Sustainable Fisheries (F/SF1)
National Marine Fisheries Service
1315 East-West Highway
Silver Spring 20910-3282
Dear Mr. Hogarth:
By the way of introduction, the Office of Advocacy of the U.S. Small Business Administration (SBA) was established by Congress under Pub. L. No. 94-305 to represent 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 (SBRFA) which made a number of significant changes to the Regulatory Flexibility Act, the most significant being provisions to allow judicial review of agencies' compliance with the RFA.
On March 4, 1997, the National Marines Fishery Service (NMFS) National Oceanic and Atmospheric Administration (NOAA) published the proposed rule for the Atlantic Highly Migratory Species Fisheries; Tuna Fishery Regulatory Adjustments, page 9726 of the Federal Register, Vol. 62, No. 42. The proposed rule would 1) impose quotas on the Atlantic Bluefin Tuna; 2) establish a new permit program; 3)prohibit all fishing on designated restricted fishing days; and 4)prohibit the use of spotter aircraft except in purse seine fisheries.
Advocacy' s comments on the proposal are limited to the certification as it applies to the prohibition on the use of spotter aircraft.
In the proposed rule, the agency certifies to the Office of Advocacy that the rule will not have a significant impact on a substantial number of small entities. The basis of the certification is that, although the prohibition on the use of spotter aircraft will affect 30 pilots, some of the pilots will continue to fly for purse seine vessels. The certification is devoid of any information about the lost revenue to the spotter pilots. It simply states that the fishing vessel operators that employ the spotter planes will lose revenue without analyzing the amount or the impact on the fishing industry, as required by RFA.
In accordance with NOAA's criteria for assessing regulatory impact, a rule has a significant impact on a substantial number of small entities if 20 percent of those engaged in the fishery have either a reduction in gross revenues by more than 5 percent; an increase in total costs of production by more than 5 percent; a 10 percent increase in compliance costs; or if 2 percent of small business entities are forced to cease business operations. In view of NOAA' s standards, Advocacy is bewildered by the conclusion that the proposed regulatory actions, considered separately or in aggregate, will not have a significant impact on a substantial number of small businesses.
By NOAA's standards, a proposed rule is considered significant if 2% of the small business entities are forced to cease operations. NOAA contends that this action will not have a significant effect on a substantial number of small entities because some of the pilots will continue to fly for the purse seine vessels.
It is unrealistic to assume that all, or even the majority, of the spotter planes will be absorbed by the purse seine vessels. NOAA acknowledges that there are approximately 30 spotter planes in the region. According to the Atlantic Fish Spotters Association, there are only five purse seine vessels in the region. Each purse seine vessel employs one spotter plane. If the prohibition on spotter planes applies to all planes but those flying for purse seine vessels, then 25 of the 30 planes are not covered by the exception. Accordingly, 83% of the planes will be affected by this proposed ruling.
It is Advocacy' s understanding that the pilots who fly spotter planes derive the majority, if not all, of there income from fish spotting. The planes are single engine one or two seater planes that cannot be used for commercial transportation or deliveries. Moreover, the pilots may not be licensed to fly any other type of plane.
Since the planes and the licensing requirements are specific for fish spotting, the pilots cannot transfer there skills without major expenditures and training. Such expenditures, which may include purchasing a new plane, could easily exceed hundreds of thousands of dollars. Because of the lack of transferability of skills and the loss of spotter income, the majority of pilots will be forced out of business.
A proposed rule that will possibly force 83% of the businesses to cease operation is definitely significant by NOAA's standards. Because of the potential effect on the spotter pilots, it is difficult for Advocacy to understand the contention that the rule will not have a significant economic effect on a substantial number of small entities.
Advocacy is not saying that NMFS should not impose the prohibition on spotter planes. Advocacy is simply saying that NMFS should give serious thought to and provide proper justification for a regulation that could potentially eliminate 83% of a particular industry. Forthright information and proper justification are necessary for small businesses to be able to understand the necessity and the potential effects of a proposed action so that the industry can make informed decisions and comments about the proposal. Given the fact that this proposed regulation could result in the majority of the spotter aircraft industry being forced out of business, an IRFA is mandatory so that the spotter aircraft industry and the fishery users can evaluate NMFS' s rationale and possible regulatory alternatives.
If you would like to discuss this matter or if this office can be of any further
assistance, please contact our Department of Interior advocate, Jennifer A. Smith. She may
be reached either by mail at the above address or by telephone at (202) 205-6943.
Sincerely, Sincerely,
Jere W. Glover
Chief Counsel
Jennifer A. Smith
Assistant Chief Counsel
for Economic Regulation