(3) See 50 CFR Part 679.41 (j)(3) for a description of the formula.

(4) Again, these were Areas 2C, 3A, 3B, and 4A. According to a NMFS contract analyst-programmer, in rare instances it was possible for the CDQ compensation QS calculation to result in something smaller than one share for an area. If that occurred, the entity was not issued any CDQ compensation QS for that particular area.

(5) Under the NPFMC's IFQ program, initial allocations of QS for a given area and vessel category were to be placed into a block if that QS divided by all other QS in the QS pool as of October 17, 1994 resulted in less than 20,000 pounds of a hypothetical "IFQ" when multiplied by the 1994 TAC for the area. QS placed into a block could only be transferred as a block under most circumstances. See 50 CFR Part 679.40 (a) and 50 CFR Part 679.41 (e).

(6) See 50 CFR Part 679.41 (j) (3). A May 31, 1996 conversation with NMFS contractor Frank Pfeiffer and NMFS-RAM Deputy Director Jessie Gharrett suggested that NMFS-RAM is currently interpreting this rule as an area-vessel category rule. In other words, the CDQ compensation QS would be combined with a person's other QS in an area only if the person's other QS was for the same vessel category. If the CDQ compensation QS was for a different vessel category than the person's initial allocation of regular QS, then NMFS-RAM is treating the CDQ compensation QS shares as unblocked and "swappable." This appears to be a variant of the rule as currently written.

(7) See 50 CFR Part 679.41 (i). On NMFS-RAM computer files a "swap" is treated as a separate type of transaction that changes the catcher vessel category but retains the original owner. The "swap" is then normally followed by a transfer transaction that changes the ownership of the QS. In practice, NMFS-RAM has allowed one entity to permanently swap their CDQ compensation QS to another catcher vessel category. Conversations with NMFS officials suggest that the rule governing swaps of the QS to a different catcher vessel category will be interpreted similarly in the future if a holder of such "swappable" QS wants to permanently change the swappable QS to a particular catcher vessel category. Again, this appears to be a variant of the rule as currently written.

(8) To estimate the "swap-ability" of CDQ compensation QS the authors used the NMFS rules as currently written. Thus CDQ compensation QS was estimated to be swappable if the entity was not allocated any other regular QS for the area. As noted above, NMFS-RAM indicated that their computer programs allow CDQ compensation QS to be swappable if the entity was issued no regular QS for the same area and vessel category. In other words, the CDQ compensation QS is still classified as swappable if the entity was issued other regular QS in the area but for a different vessel category. If this interpretation prevails, these tables may change slightly in future updates of this report. During 1995, only one other CDQ compensation QS segment would be classified as "swappable" using this variant of the current rule.

(9) As noted above, one computer "swap" transaction occurred without a subsequent computer "transfer" transaction. Discussions with the NMFS-RAM division indicated that the person wanted to permanently use the QS in another catcher-vessel category so they made the swap without a transfer to another person. They also indicated that the "swap-ability" of that QS went away with the computer "swap" transaction. The observation is treated in that manner in this report.

(10) The table shows the "post-swap" amount of QS in each area. On an area basis, this is equal to the original amount of QS in the area as swaps across vessel categories do not affect area totals.

(11) Recall that the entire TAC in Area 4E is allocated to CDQs. Thus the only benefit from receiving an initial allocation of QS for Area 4E was the CDQ compensation QS provided in non-CDQ areas. While Area 4E QS might be valuable at some time in the future if some TAC would be allocated to the IFQ fishery, it likely would be seen as a speculative purchase under the present program rules.

(12) See 50 CFR 679.41 (e) and (h).

(13) The table shows the number of QS holders "after swaps" but before any transfers, including those associated with swaps. On an area basis, this number will be equal to the number of initial issuees in the area.

(14) See 50 CFR Part 679.40 through 50 CFR Part 679.42

(15) Recall that "swap" transactions change the QS catcher vessel category for "swappable" CDQ compensation QS. These changes are made upon the first permanent transfer of this type of QS. The computer "swap" transactions are separate from the "transfer" associated with the swap on RAM data files. Thus applying the "swap" computer transaction changes the vessel category of the QS without changing the QS owner. That is what has been done in this table. At the halibut IFQ management area level, the amount of post-swap QS and the number of QS holders are identical to their values at initial issuance. The "transfers" reported in the table include both transfers associated with the swap transactions and all other permanent QS transfers. Note that the average QS holdings per QS holder have been rounded to the nearest QS unit.

(16) Again, the transfer transactions associated with the swaps are reflected in the transfer activity. This table, like Table 4.3.3-1, separates the cross-vessel category "swap" transaction from the transfer associated with it. NMFS-RAM transaction files also treat the swap and subsequent transfer as a two-step process.

(17) See 50 CFR 679.40(a) and 50 CFR 679.41(e)(2). The 1,000 pounds of IFQ is being used loosely here. The sweep-up rule is set implicitly by regulations as an amount of QS. The QS pool in an area as of October 17, 1994 was compared to the 1994 TAC in an area. The "sweep-up limit" amount of QS in each area was then the amount of QS from that QS pool that would have resulted in 1,000 pounds of IFQ if 1994 TACs were applied.

(18) The reader should be aware that the authors had to estimate the amount of sweepable QS at initial issuance and the amount of sweepable QS at year-end 1995. The estimates were made using the rules of the IFQ program. However, there appear to be many problems with the blocking factors in the RAM database and these problems have not been resolved as of this writing. The most obvious problems are included in the footnotes to the tables. Some of the data in these tables may change in updates to this report as problems with the RAM database are corrected.

(19) NPFMC April 1996 newsletter.

(20) Recall, that all resident- type assignments are based on addresses that were current at year-end 1995 (1/3/96). Thus resident-type changes due to "migrations" of QS holders during 1995 cannot be discerned from the data. Permanent transfers include all regular transfers ["T" transactions (including those following swaps)], sweep-up transfers ["W" transactions], and transfers due to court or administrative actions ["C" transactions]. Lease transactions are temporary and have not been included.

(21) Recall that Area 4E is a CDQ area and 100% of the TAC in 4E is devoted to CDQs. Thus persons with QS for Area 4E cannot harvest halibut there.

(22) See 50 CFR 679.41(h) for catcher vessel leasing rules. There is no corresponding rule on freezer vessel QS leases.

(23) IFQ program rules would not allow the original transfer if it were clear that there was a condition for repossession or resale. See 50 CFR 679.41(g)(4).

(24) This discussion is adapted from FR 58(215):59392. November 9, 1993.

(25) Rules have been proposed to allow QS holders to lease up to 10% of the current year IFQs associated with that QS. The proposed rule change was published for comment in the Federal Register on April 24, 1996, but had not been adopted at the time of writing.

(26) See 50 CFR 679.42(i)(1).

(27) Records were selected for situations where the transferor in an earlier transaction was the transferee in a later transaction and where the transferee in the earlier transaction was the transferor in the later transaction.