The NPFMC's IFQ program for the halibut and sablefish fisheries began in 1995. Eligibility for the initial issuance of QS was restricted to persons who owned or leased a vessel that made landings in these fisheries in at least one year over the 1988, 1989, or 1990 seasons.

The 1991 to 1994 time period represents the "gap" between the final year of eligibility and the actual beginning of the program. Some persons who were involved as vessel owners or permit holders during the "gap" time period did not receive QS. Some of these persons feel their participation during this time period should have counted toward an initial issuance of QS.

The purpose of this study was described in Chapter I. The specific objectives of the study can be summarized as follows:

For each species and IFQ management area:

1. Estimate which of the 1991-1994 fishing operations received initial allocations of QS under the IFQ program.

2. Estimate which of the 1991-1994 fishing operations did not receive an initial allocation of QS under the IFQ program.

3. Provide summary data and statistics of the 1991-1994 participation and harvests of fishing operations that received an initial allocation of QS. Compare these with the participation and harvest of those that did not receive an initial allocation.

4. Provide summary data and statistics on the permit holders and vessel owners of fishing operations that participated during the 1991 to 1994 time period but did not receive an initial allocation of QS. This includes participation and harvest of the relevant species in the IFQ regulatory area as well as harvests in other Alaska fisheries over the time period.

5. Examine, by species and area, the 1991-1994 harvest fractions of operations that received an initial allocation of QS. Compare their harvest fractions over the time period with the fraction of total QS that they were initially allocated. Provide summary information showing the number of persons whose 1991 to 1994 harvest share was relatively "more than", relatively "less than", and "about the same" as their relative share of the initial allocation of QS for the species and area.

While the study was simple in concept, in practice it was difficult because of sundry matching problems among disparate data sources. These problems are described in the sections below and are explained in more detail in Appendices I and III.

This study required several different sources of data. This section provides a listing of the main data sources and briefly explains how the data were used in the study.

The NMFS-AK RAM Division was the source of data on the entities that received initial allocations of halibut and/or sablefish QS. The two files that RAM provided to CFEC that were essential for this particular study were the following:

a. RAM Initial Allocation File

The NMFS-AK RAM (RAM) Division does not maintain a file of initial allocations as part of their database. As a result, they had to construct this file from the other electronic information which they do maintain. The constructed file that is used for this study provides information on initial allocations for both halibut and sablefish QS. The file contains data on initial allocations through January 3, 1996.

Each observation on this initial allocation data file includes 12 variables. It contains data on the species, area, blocking category, and vessel category of a QS segment, as well as the amount of QS and the starting serial number. It also provides an identifier for the entity (IFQ_ID) that was allocated the QS and an indication of the type of entity. Under the IFQ program, individuals (natural persons), partnerships, corporations, associations, and etc. are all entities ("persons") that may legally hold QS.

In addition, the file contains information on the city and state where the entity is located. According to RAM, this address information comes from their demographic file and represents the entity's current business address as of the date the initial allocation file was generated, and not necessarily the address at the time of initial allocation.

The initial allocation file also contains a "date of birth" variable from the demographic file which could mean either the date of birth of an individual or the date that the person's business started. The fact that this variable could take on either meaning reduced its usefulness for reporting purposes.

The early versions of the RAM initial allocation file were a major source of data errors that needed to be resolved during the course of this and another IFQ study. Any remaining errors on this file are not expected to have a substantial impact on the information and estimates provided in this particular study.

b. RAM Demographic File

A second RAM file that was essential for this study was the RAM Demographic file. The file contains observations for all entities involved in the IFQ program through January 3, 1996. Each observation contains information on the name, most recent address, and type of person (individual, partnership, corporation, etc.). It includes a unique identifier that could be either a federal employer identification number or a social security number. It also includes another identifier ("IFQ_ID") that could be merged directly to the RAM-generated initial allocation file, and other RAM files.

CFEC merged the information from this demographic file to the initial allocation file by the "IFQ_ID" identifier. The merged file provided information on the name and address of the entity and the additional identifier from the demographic file that could be matched to CFEC files.

c. Weekly Production Reports

Weekly production reports (WPRs) are completed by processors for the National Marine Fisheries Service. Since mid-1990, fish tickets have not been required for sablefish or other groundfish harvested in the EEZ if the catch is not processed in waters controlled by the State of Alaska.

While many processors have continued to fill out fish tickets, some have not. As a result, there is no single source of data that contains all of the sablefish harvest data, and persons working with both sources of data must try to develop procedures which count all of the catch while avoiding double-counting.

For this study, CFEC obtained 1991-1994 WPR data from NMFS-AK and developed a combined sablefish data set in a combined format. The process was complex, but ultimately involved substituting modified WPR records for the fish tickets of catcher-processors. The details of the process are explained in Appendix I.

NMFS-RAM did not maintain catch data files prior to the start of the IFQ program in 1995. For this study, State of Alaska catch and licensing records were used to examine 1991-1994 participation in the sablefish, halibut, and other fisheries.

a. CFEC People File

The CFEC maintains a file that contains the name, address, personal identifier, historical identifiers, and date of birth on every person that has been an interim- use permit holder, an entry permit holder, or a vessel owner since CFEC has handled permitting and licensing for the State of Alaska (1974 for permits and 1978 for vessel licenses). This file is often referred to as the "people" file.

Entry permit and interim-use permit holders are issued to the skipper (gear operator) of an operation. Under state law, only natural persons may hold permits.

b. CFEC Vessel License File

CFEC's vessel license file contains data on all of the vessels licensed in Alaska since CFEC took over vessel licensing in 1978. Among other information, the file contains the ADFG vessel number, information on the vessel's attributes, and information on the name, address, and a unique identifier for the vessel owner.

Vessel owners on the file can be natural persons or other entities. However, the vessel license file frequently lists only a single individual as an owner, even though the vessel may in fact be jointly owned by a partnership or corporation. CFEC has relied on the information provided by the applicant for this file, and as a result the file may contain information that is not totally accurate.

During the application process for the sablefish and halibut IFQ programs, RAM found that many vessels which CFEC had listed as being owned by a natural person were actually owned by a partnership, corporation, or other entity.

c. CFEC Catch and Gross Earnings File

CFEC's catch files are enhanced versions of original data sets. Sablefish harvest data ultimately comes from fish tickets maintained by the Alaska Department of Fish and Game (ADF&G) and NMFS Weekly Production Reports. Halibut harvest data ultimately comes from fish tickets maintained by the International Pacific Halibut Commission(IPHC). CFEC adds information to these underlying files and puts all of the data into a common record layout.

CFEC adds the name, address, the personal identifier, and other information on the interim-use permit holder to the catch record. In addition, CFEC adds other permit information and a gross earnings estimate to each fish ticket item. For this study, CFEC also added the name, address, personal identifier, and other information on the vessel owner from the vessel license file.

d. CFEC Census File

CFEC developed and extended a file that contains all of the known communities in Alaska. The file classifies the places as rural or urban based largely upon 1990 census information. In addition, the file indicates whether or not the place is "local" or "non-local" to various fishing areas. This Census file was used in this study to classify the resident type of the vessel owner and the permit holder. The rules for the rural/urban and local/non-local classifications are discussed in Appendix II.

This project required that the authors identify halibut and sablefish operations that fished over the 1991 to 1994 time period and determine which of those operations received initial QS allocations.

The CFEC unique personal identifier of the permit holder and the vessel owner were added to the 1991 to 1994 catch records for sablefish and halibut.

These 1991 to 1994 catch records were then condensed to one record per year, species, management area, permit holder, and vessel. The total pounds and gross earnings were summed and added to the condensed record.

A "fishing operation" for a particular species and management area was defined for empirical purposes as any unique vessel owner and permit holder combination that appeared on a 1991 to 1994 catch record. This was done because either entity could have received an initial allocation under the IFQ program.

Under this definition, if several permit holders recorded landings from the vessel(s) of a single vessel owner, each combination of permit holder and vessel owner was defined as a separate fishing operation.

The entities on RAM's Initial Allocation file were then matched to entities on CFEC's People file. Where a match occurred a variable was added to the RAM Initial Allocation file for the unique personal identifier of the person on the CFEC People file. This process was needed so that we could eventually identify the 1991 to 1994 fishing operations that received initial allocations, and the ones that did not. It was also needed to "assign" a particular initial QS allocation to a fishing operation.

This step was particularly complex involving several different sort and merge operations to find matches. In some cases, computer matches could not be made by any available personal identifier and the authors had to look up the names and dates of birth by hand. The "matches" were not always perfect and when the authors placed variables on the enhanced initial allocation file they indicated the nature and the "quality" of the match. This process is described in greater detail in the appendix.

The reader should be aware that the entity that was matched to an initial allocation could be a "natural person" on CFEC's files and a partnership or corporation on RAM's Initial Allocation file. In some cases, two natural persons would match to a partnership on the RAM Initial Allocation file. In such cases, the authors created an additional record on the RAM Initial Allocation file so that 1991 to 1994 harvests could be assigned to both partners and both partners would also match back to the initial QS allocation.

The vessel owner on the 1991 to 1994 condensed catch data was then matched to the enhanced initial allocation file by the vessel owner's personal identifier.

Three nominal variables were added to the 1991 to 1994 catch records which indicate (a) whether or not the vessel owner received an initial allocation of QS for the species and area on the catch record, (b) whether or not the vessel owner received an initial allocation of QS for the species on the catch record in any management area, and (c) whether or not the vessel owner received an initial allocation of QS for either halibut or sablefish in any area. This involved a series of computer sorts and matches of the underlying files.

The permit holder on the 1991 to 1994 condensed catch data was then matched to the enhanced initial allocation file by the permit holder's personal identifier. This involved a series of several sorts and matches of the underlying files, similar to the matches made for vessel owners.

Three nominal variables were added to the 1991 to 1994 catch records. The variables indicate: (a) whether or not the permit holder received an initial allocation of QS for the species and area on the catch record, (b) whether or not the permit holder received an initial allocation of QS for the species on the catch record in any area, and (c) whether or not the permit holder received an initial allocation of QS for either halibut or sablefish in any area.

For purposes of this study, if both the vessel owner and permit holder were "missing" on a catch record, that record was placed into a "missing" category. A very small number of records fell into this category.

In this study, a fishing operation that harvested a particular IFQ species in a given IFQ management area was considered to have received an initial allocation of QS for that species and management area if either the vessel owner or the permit holder on the condensed catch record matched to the enhanced initial allocation file by personal identifier, species, and area. The QS initial allocation assigned to the condensed catch record is described in Step 8 below.

Similarly, if neither the vessel owner nor the permit holder of a fishing operation on a 1991-1994 condensed catch record matched to the enhanced initial allocation file by personal identifier, species, and area, the fishing operation was considered to be a "leftout" as defined in this study, meaning the operation did not receive an initial allocation for that species and management area.

Note that by this methodology, a fishing operation might fall into a "leftout" category in one management area and be among the operations that received an initial allocation in another management area. The methodology is consistent with the reality that some fishing operations could have fished in different management areas over the 1991 to 1994 time period than they did during the qualification years.

The final step was to add a particular QS assignment to 1991 to 1994 catch records where matches had been made by species and area. This was done by a systematic set of decision rules.

The vessel owner and the permit holder on a 1991 to 1994 catch record could be the same person, or they could be two different entities. When the vessel owner and permit holder were two different entities, it would have been unclear which entity should be credited with the harvest, had these years counted toward an initial allocation.

NMFS's RAM Division had to contend with this same type of issue during the initial allocation process. Recall that eligibility to apply for QS under the halibut and sablefish IFQ programs was based on "present participation" in the fishery, where present participation meant ownership or lease of a vessel that made commercial halibut or sablefish landings during 1988, 1989, or 1990.

Therefore, to know which persons were eligible, RAM needed to determine which vessels made landings during the relevant time periods and whether the vessel owner or lease holder (usually the permit holder if a lease existed) should be credited with the harvest for initial allocation of QS. In some cases, this could only be resolved during the application and adjudication process as the data on existing catch and licensing files were not definitive.

The same type of problem exists with the 1991 to 1994 catch data. For purposes of this study, the authors assumed that the vessel owner was usually the entity that received an initial QS allocation. The following rules were then used to determine which of the 1991 to 1994 fishing operations received an initial allocation of QS for a particular species and area and to "assign" a particular initial QS allocation to these records.

a. If the vessel owner received an initial QS allocation for the species and area, then the QS allocation associated with the vessel owner for that species and area on the enhanced Initial Allocation file was assigned to the condensed catch record.

b. If the vessel owner did not receive an initial QS allocation for the species and area, but the permit holder on the condensed catch record did receive an allocation, then the QS allocation associated with the permit holder for that species and area on the enhanced Initial Allocation file was assigned to the condensed catch record.

As noted above, these rules assume that the initial QS allocation usually went to the vessel owner of an eligible vessel, rather than the permit holder. In cases where the vessel owner and permit holder were different entities on the condensed catch record, but both were associated with initial QS allocations for the particular species and area, the methodology links the particular 1991 to 1994 fishing operation to the vessel owner's QS.

Recall that as defined here, a fishing operation is a unique permit holder / vessel owner combination; therefore, the number of fishing operations assigned to entities that received an initial QS allocation is generally greater than the number of entities that received initial allocations. Again, this is because multiple permit holders could have fished for a vessel owner who received an initial allocation, or an initial QS recipient for the area might have used vessels owned by different persons over the 1991 to 1994 time period.

This chapter has summarized the data sources used in this study. It has also explained the empirical definition of a 1991 to 1994 "fishing operation" as being a unique permit holder / vessel owner combination that recorded a landing(s) over the 1991 to 1994 period. Some fishing operations that participated during this time period received initial QS allocations. This chapter has also explained the methodology used in estimating which 1991 to 1994 fishing operations received initial QS allocations and how particular QS allocations were assigned to the operation in species and area combinations.

The entities of a fishing operation that actually receive initial QS allocations are either permit holders or vessel owners. This methodology chapter has explained how QS allocations were assigned to the different entities. These QS assignments were needed to compare the entities' initial QS allocations with their fishing performance during the 1991 to 1994 time period.

The reader should be aware that the methodology needed many assumptions to determine which fishing operations received initial allocations and which fishing operations did not. These assumptions may not be entirely accurate, and some fishing operations may have been misclassified.

The actual assignment of a particular QS allocation to a 1991 to 1994 fishing operation is another source of potential error in the study. Some method of making the assignment was needed to carry out the analysis of the 1991 to 1994 fishing operations that received initial allocations. While the authors feel that the methodology provides a reasonably accurate picture of 1991 to 1994 participation of both the "leftout" operations and the operations that received initial allocations, the reader is again reminded that the data contained in this report must be considered as estimates.