9 Changes in QS Holdings by Type of Person

Table 9-1 summarizes information on the distribution of QS by management area and type of person. Table 9-2 provides similar information on the number of persons holding QS. Tables 9-3 and 9-4 provide similar information, but break the data out by vessel category and management area.

These tables provide information on the following types of QS holders:

Corporate: QS held by corporations (other than solely owned corporations, or restricted owners).

New Corporation: Corporations that were not initial QS recipients but subsequently acquired freezer vessel QS

Estates: QS held by estates of initial QS recipients or other owners.

Individual: QS held by natural persons (other than crew) who were initial QS recipients.

Partnership: QS held by partnerships (other than restricted owners).

Restricted: QS held by organizations (possibly partnerships or corporations) that do not have the right to fish with it.

One-owner corp: QS held by solely-owned corporations. In some cases individuals exercised an IFQ program option to transfer the QS to their solely-owned corporation.

Crew: QS held by natural persons who were not initial QS recipients and who entered the system for the first time as IFQ crew and met the qualifications to buy QS.

The halibut IFQ program contains restrictions on the ability of corporations and partnerships to hold and use catcher vessel QS and IFQ. The intent of these restrictions appears to be to assign QS to corporations and partnerships that qualified as initial issuees, but to impose restrictions on the ability of corporations and partnerships to expand their positions in the fishery. These restrictions are somewhat more strict in Area 2C than elsewhere.

Corporations and partnerships that are initial catcher vessel QS recipients can use the QS and IFQ and (except in Area 2C) can buy and use additional QS. The QS must be used on a vessel owned by the corporation or partnership and operated by one of its employees. In Area 2C, corporations and partnerships can only use the catcher vessel QS that they received as an initial allocation.1

Corporations and partnerships that are not initial catcher vessel QS recipients cannot acquire catcher vessel QS by transfer. If a corporation or partnership that is not an initial issuee comes into possession of catcher vessel QS, perhaps following a default on a loan, it will not be able to fish with the QS.2

A corporation or partnership, except for a publicly held corporation, loses the rights to fish its initial catcher vessel allocation and to buy additional QS if a new shareholder or partner is added (except for court appointed trustees acting on behalf of shareholders or partners who become incapacitated). In these cases, QS must be transferred to an individual before it can be fished again.3

Corporations and partnerships that are not initial issuees may purchase freezer vessel QS.4

An IFQ crew person is defined in the IFQ program as one who has at least 150 days experience working as part of a harvesting crew in any United States commercial fishery or any individual who receives an initial allocation of QS. An individual must meet these requirements to buy QS.

Table 9-1 shows the initial and year-end 1996 distribution of QS by IFQ area and type of person. Data are supplied on the initial QS issued to each type of owner in each management area, the QS held at year-end 1996 by each type of owner, the change in QS held, the percent change, and the percentage of area QS held by each type of owner at initial issuance and at year-end 1996.

The table shows that:

Individuals, meaning natural persons who were initial QS recipients, held the highest proportion of the QS in all areas except 4D at both initial issuance and at year-end 1996. The percentage of an area's QS held by individuals at year-end 1996 varied from 28.5% in Area 4D to 90.3% in Area 4E.

The amount of QS held by individuals declined in Areas 2C to 4A, rose slightly in areas 4B to 4D, and remained unchanged in Area 4E. Recall that no transfers have occurred in Area 4E where 100% of the TAC has been devoted to CDQs.

QS holdings by "one-owner corporations" are relatively small. There was no clear pattern of change in the holdings for this group. Holdings fell in Areas 3A and 3B, rose in 2C, and were unchanged elsewhere.

The amount of QS held by "crew," meaning new entrants who are individuals, increased in all areas except 4E. In four areas, crew held over 10% of the QS at the end of 1996.

The table shows that the proportion of QS initially allocated to corporate holders varied considerably among IFQ areas. Initial allocations of QS to corporations ranged from 3.0% in Area 2C to 58.4% in Area 4D.

The percentage of QS held by corporations increased from initial allocation to year- end 1996 in Areas 3A and 3B, fell in Areas 2C, 4A, 4B, 4C, and 4D, and remained unchanged in 4E. At the end of 1996 the proportions of QS that were held by corporations ranged from 2.3% in Area 2C to 52.5% in 4D (these percentages include the percentages in the corporate and "new corporations" lines).

Table 9-2 provides similar information on the number of persons holding QS by area and type of entity. In non-CDQ Areas 2C through 4A, the number of persons generally declined for all types of entities except for new individuals entering the fishery as "IFQ crew" and "new corporations" which rose in all cases, and for "one-owner corporations" which generally remained unchanged or changed by one person.

The declines in QS holders were largely due to the consolidation of QS holdings that occurred in 1995 and 1996. The declines in QS holders led to some changes in the percentage distribution of total QS holders in most areas by type of entity. The most noticeable changes were the decline in the percentage of QS that was held by individuals who were initial issuees and the increase in the percentage of QS held by crew who were new individuals entering the system.

In Tables 9-3 and 9-4 the categories of estates, individuals, one owner corporations, and crew are reported as a single, consolidated "effective individual" category. The categories of "corporate" and "new corporations" have likewise been consolidated. These tables show the management areas and vessel classes in which corporate, partnership, and effective individual QS holdings are most common. Table 9-3 looks at the amount of QS held and Table 9-4 looks at the numbers of persons holding QS. These tables are sorted by type of QS holder, vessel category, and management area.

Table 9-3 provides the total initial QS, the total year-end 1996 QS, the change and the percentage change in QS during 1995 and 1996 for each person type, vessel category, and management area combination. It also shows the percentage of total QS for the vessel category and area that was held by each person type at initial issuance and at year-end 1996.

"Effective individuals" held a majority of the QS in the "36 to 60 feet" and "less than or equal to 35 feet" catcher vessel classes in all areas, both at initial issuance and at year-end 1996. Effective individuals also held a majority of the freezer vessel class QS in all areas except 4B and 4D and a majority of the "greater than 60 feet" catcher vessel class in IFQ Areas 2C, 3A, and 4C.

The data indicate that corporate owners held a majority of the "greater than 60 feet" catcher vessel class QS in IFQ Areas 4A, 4B, 4D, and 4E both at initial issuance and at year-end 1996. Corporate owners also held a majority of the freezer vessel class QS in Areas 4B and 4D at initial allocation and year end 1996.

Partnerships held small portions of the QS in most vessel classes and areas. The largest percentage of QS held by partnerships occurred in the "less than or equal to 35 feet" catcher vessel class in Area 4C where partnerships held 28.9% of the QS at initial issuance. However, by year-end 1996 partnership holdings in this area and vessel category had dropped to 6.4%.

As noted, Table 9-4 shows the numbers of QS holders of the different types. Data are supplied on the numbers of QS holders of each type that were initial issuees and that held QS at year end, the change and percent change in the numbers of holders, the percent of each vessel class and area's QS holders that were of that type at initial issuance and at the end of the year, and the average QS holdings for that holder type, area, and vessel class combination at original issuance and the end of the year.

Table 9-1. Halibut QS by Area and Type of Holder

Table 9-2. Halibut QS Holders by Area and Type of Holder

Table 9-3. Halibut QS By Type of Holder, Vessel Category, and Area

Table 9-4. Halibut QS Holders By Type of Holder, Vessel Category, and Area