11 Changes by Management Area, Rural-Urban, Local- Nonlocal

The initial distribution of QS and changes in the QS distribution over time are topics of interest for those who have been concerned about the potential consequences of the new IFQ program. The previous chapter examined this topic by breaking out QS holders based upon the state where they reside. This section examines the topic using five resident types that were originally developed by Langdon to study permit holdings under Alaska's limited entry program. These resident types have since been used by the Commercial Fisheries Entry Commission to monitor distributional changes under the State's limited entry program.1 The five resident types are defined as follows:

AK Rural Local (ARL) A person residing in an Alaska rural community which is local to the IFQ management area for which the QS applies;

AK Rural Nonlocal (ARN) A person residing in an Alaska rural community which is not local to the IFQ management area for which the QS applies;

AK Urban Local (AUL) A person residing in an Alaska urban community which is local to the IFQ management area for which the QS applies.

AK Urban Nonlocal (AUN) A person residing in an Alaska urban community which is not local to the IFQ management area for which the QS applies.

Nonresident A person residing in a location outside of Alaska.

The decision rules for designating rural/urban and local/nonlocal classifications are described in Appendix I. Essentially, the rural/urban distinction is based on a population of 2,500 or more persons as of the 1990 census. Some communities with populations less than 2,500 are classified as urban because they lie on a road system and are within a certain radius of an urban center. For instance, Auke Bay is designated as urban, even though it has a small population, because it is situated on a road system and is within 20 miles of Juneau.2

Table 11-1a provides the initial distribution and the year-end 1996 distribution of halibut QS by area and resident type. For each resident type within an area it also shows the initial and year-end percentage of the area's QS held by that resident type, and the change in QS held by that resident type over the period.

Alaska Rural Locals received QS in seven of the eight areas (they received none in Area 4D). Their largest percentage shares of the initial allocations came in Areas 4E (59.3%), 4C (34.0%), and 2C (29.6%). They received lower percentages in the other areas, ranging from 0.3% in Area 4A to 10.3% in Area 3B. By the end of 1996 their holdings had decreased in Areas 2C, 3B, 4A, and 4E, and had risen in Areas 3A and 4C. Their holdings remained unchanged in Area 4B and 4D (where they received none).

Alaska Urban Locals received QS only in Areas 2C, 3A, and 4A.3 In Areas 2C and 3A they received more QS than any other resident category, while in Area 4A they received a relatively small amount. Their holdings increased in Areas 2C and 4A, and decreased by 4.5% in Area 3A. They acquired a small amount of QS in Area 4B.

Alaska Rural Nonlocals received QS in every area. Their allocations were generally relatively small, ranging from less than 1% in Areas 2C, 4C, and 4D, up to 6.8% in Area 4A. Their holdings decreased in Areas 2C, 3A, 3B, and 4A and increased in Areas 4B, 4C, and 4D.

Alaska Urban Nonlocals received QS in every area. In Areas 3B, 4A, 4B, 4C, and 4E they received over 20% of the QS. Their holdings increased in Areas 3A, 4D, and 4E, and decreased in all other areas. Area 2C had a 53.1% drop in AUN quota share holdings over the two-year period.

Nonresidents received QS in every area. They received over half of the QS in three areas (4A, 4B, and 4D), and over 35% of it in six areas. By the end of 1996, QS held by nonresidents declined in Areas 2C, 3A, 4C, and 4D and rose slightly in 3B, 4A, and 4B.

Table 11-1b provides similar information on the initial and year-end 1996 distribution of QS holders by area and resident type. The table includes data on the change and percentage change in the number of QS holders by area and resident type. The table also includes data on the percentage of QS holders in each area from each resident type and their average QS holdings both at initial issuance and at year-end 1996.

As can be seen, the number of QS holders declined and the average QS holdings increased in most of the non-CDQ areas and resident types. This again indicates that some consolidation of QS holdings has occurred from initial allocation through 1996.

Table 11-1a. Initial Allocation and Year-end 1996 QS Holders by Management Area and Resident Type

Table 11-1b. Initial Allocation and Year-end 1996 QS Holders by Area and Resident Type

11.2 Net Result of QS Transfers, Migrations, and Revocations

Table 11-2 repeats some of the information presented in Table 11-1a. It shows the total QS initially issued to each resident type in each management area and also shows the total net change in the QS held by each resident type at the end of 1996. The other columns in Table 11-2 provide detail on the three components of that change: the net result of transfers, migrations, and revocations.

It is important to remember that the measures of transfers and migrations are net changes. For example, persons will move away from Alaska Rural Local places, which contributes to a decrease in QS held by that resident type. However, at the same time persons are moving away from ARL places, other persons are moving to them. Whether there is a positive or negative net QS change due to migration depends upon the total number of persons who migrated to and from the place and how much QS they hold.

Quota share revocations will decrease the amount of QS held by a resident type. RAM Division may revoke QS after initial issuance when subsequent information provides details on a person's fishing history that was not formerly available to RAM. Revocations do not occur until the QS holder has been given an opportunity to appeal the administrative decision to revoke some, or all, of their QS.

Table 11-2 indicates that most of the net QS changes between resident types were due to transfer activity; however, migration of QS holders was often very significant. For example, Alaska Urban Nonlocals show a net gain of 6,191,286 QS units in Area 3A. Of that amount, 5,777,229 QS units were gained due to transfer activity, and 424,958 were gained through migrations. Another 10,901 units were lost due to revocations. In Area 3B, AUN persons gained a total of 888,303 QS units by transfers, yet show a net loss of 837,739 QS units through migration, and show another loss of 128,970 QS units through revocations, for a total net loss of 78,406 QS units over the time period.

Table 11-2. Net Result of Halibut QS Transfers, Migrations, and Revocations From Initial Issuance Through Year-end 1996, by Management Area and Resident Type

11.3 Details of Halibut QS Transfers: To and From Each Resident Category

Table 11-3a shows again how much QS was issued to each resident category in each management area. It also shows how much QS was held by those persons at the end of 1996. Again, the changes between initial issuance and year-end 1996 will be affected by transfers, migrations, and revocations.

The net result of QS transfers involves transfers to and from persons in each resident category. Table 11-3a shows how many transfers shifted QS away from persons in each resident category. It also shows the quantity of QS associated with those "transfers from" transactions. Likewise, the table shows the number of transfers and amount of QS that shifted to persons in each resident category. Finally, the last columns of the table show the net result of these from-to transactions.

Table 11-3b indicates the number of QS holders in each resident category at initial issuance and at year-end 1996, and the number of transfers to and from persons in those categories. A person may transfer some or all of their QS. Also, persons may transfer QS to more than one other person. For these reasons the number of transfers reported in Table 11-3 is usually not the same as the number of transferors or transfer recipients.

The last two columns of Table 11-3b show the total change in QS holders between initial issuance and year-end 1996. These columns indicate the overall net change in persons, and include changes due to migrations and revocations as well as transfers. Note that the corresponding last two columns of Table 11-3a show only the net change in QS due to transfers.

These tables show that the net result of QS transfers often involved large movements of QS both to and from resident types. For example, the net loss of 1,271,695 QS units to Alaska Rural Locals in Area 2C involved the transfer of 5,677,295 QS units away from this resident type and the transfer of 4,405,600 QS units to them.

Table 11-3a. Halibut QS Transfers From Initial Issuance Through Year-end 1996: The Number of Transfers and the Amount of QS Transferred To and From Each Resident Type, by Management Area

Table 11-3b. Halibut QS Transfers From Initial Issuance Through Year-end 1996: The Number of Transfers, Tranferors, and Transfer Recipients, by Resident Type and Management Area

11.4 Intra-cohort and Cross-cohort Transfers

Tables 11-4a and 11-4b provide more data on QS transfer patterns by the five resident types defined in Section 11-1. QS transfers may occur between persons in the same resident category (intra-cohort) or between persons of different resident categories (cross-cohort). Cross-cohort transfers result in net changes in QS distribution between resident categories.

Table 11-4a allows one to compare intra-cohort and cross-cohort transfer rates in 1995, 1996, and over the entire two-year time period. For example, in Area 2C in 1995, persons in the Alaska Rural Local category received 58.3% (1,343,613 QS units) of the QS transferred to them from other ARLs. This compares to 46.0% (966,694 QS units) in 1996. Over the entire time period from initial issuance through year-end 1996, 52.4% (2,310,307 units) of the QS received by ARLs came in intra-cohort transfers. The remainder of the QS received by ARLs came through cross-cohort transfers.

Table 11-4b provides similar information on resident category intra-cohort and cross- cohort transfers by management area; however, this table shows the number of transfers rather than the amount of QS transferred. The percentages of intra and cross-cohort transfer transactions can vary from the percentages of QS associated with these transfers because the amount of QS in a transaction can vary widely.

Both tables indicate a large percentage of cross-cohort transfers in most management areas and resident categories.

Table 11-4a. Intra-cohort and Cross-cohort Transfers of Halibut QS From Initial Issuance Through Year-end 1996, by Management Area

Table 11-4b. Intra-cohort and Cross-cohort Transfers From Initial Issuance Through Year-end 1996, by Management Area