Fish and Seafood Promotion Act Provisions; Seafood Marketing Councils, 3797-3814 [06-666]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 71, Number 15 (Tuesday, January 24, 2006)]
[Proposed Rules]
[Pages 3797-3814]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-666]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 270

[Docket No. 040720212-4212-01; I.D. 040204A]
RIN 0648-AS09


Fish and Seafood Promotion Act Provisions; Seafood Marketing 
Councils

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Department of Commerce.

ACTION: Proposed rule; request for comments.

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SUMMARY: In 1989, NMFS issued a final rule enacting the Fish and 
Seafood Promotion Act of 1986 (Act), as it pertains to Seafood 
Marketing Councils (Councils), for one or more species of fish or fish 
products. That rule, along with a large number of other rules and 
regulations unused or little used, was stricken from the Code of 
Federal Regulations (CFR) as part of a government-wide Presidential 
regulatory reform effort. Although the implementing regulations were

[[Page 3798]]

withdrawn from the CFR, the Act remains in effect. In response to 
renewed industry support for marketing and promotion-related 
activities, NMFS proposes regulations implementing the Act governing 
the establishment and operation of marketing Councils. Therefore, the 
intent of the proposed rule is to responsibly implement the Act to be 
consistent with NMFS' goals and mission statement. That is, to ensure 
that NMFS stewardship goal is not jeopardized while increasing benefits 
from domestic fisheries. Several revisions to the 1989 implementing 
regulations are proposed in this document in order to comply with new 
regulatory and/or legal requirements.

DATES: Comments on this proposed rule are requested, and must be 
received no later than 5 p.m., local time, February 23, 2006.

ADDRESSES: Written comments on this proposed rule should be sent by any 
of the following methods:
     E-mail: SMCcomments@noaa.gov. Include in the subject line 
the following: ``Comments on the Proposed Rule for Seafood Marketing 
Councils;''
     Federal e-Rulemaking Portal: https://www.regulations.gov;
     Mail: Paper, disk, or CD-ROM comments should be sent to 
Gordon J. Helm, Acting Director, Office of Constituent Services, Room 
9553, SSMC3, 1315 East-West Highway, Silver Spring, MD 20910; and
     Fax: (301) 713-2384.
    Copies of the Regulatory Impact Review are available from Gordon 
Helm. The Initial Regulatory Flexibility Analysis (IRFA) is contained 
in the Classification section of this proposed rule.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
rule should be submitted to Gordon Helm (see ADDRESSES) and to David 
Rostker, Office of Management and Budget (OMB), by e-mail at David--
Rostker@omb.eop.gov, or fax to (202) 395-7285.

FOR FURTHER INFORMATION CONTACT: Gordon J. Helm, Office of Constituent 
Services, telephone: (301) 713-2379 or E-mail: Gordon.J.Helm@noaa.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Fish and Seafood Promotion Act of 1986 (16 U.S.C. 4001 et 
seq.), enacted November 14, 1986, authorizes the creation of Seafood 
Marketing Councils. The Act provides authority to the Secretary of 
Commerce (Secretary) to: Establish Councils that would develop 
strategies and implement measures to better inform consumers; promote 
the utilization of one or more species of fish or fish products; enter 
into agreements with eligible members of the seafood industry; fund 
referenda to establish and terminate species-specific Councils; and 
establish quality standards, attend Council meetings, and approve 
seafood marketing plans.
    In 1986, when Congress enacted the Act, it found that: (1) The 
commercial fishing industry of the United States significantly 
contributed to the national economy, and could make a great 
contribution if fish resources within the United States Exclusive 
Economic Zone were more fully utilized; (2) the commercial fisheries of 
the United States provided significant employment in coastal areas and 
in processing and distribution centers; (3) fish contributed an 
important nutritional component to the American diet; (4) increased 
consumption of seafood in the United States could significantly lower 
the risk of many cardiovascular diseases; (5) Federally supported 
development programs for commercial fisheries were unable to meet 
present and future marketing needs; (6) many fish species were 
underutilized by the United States fishing industry because of 
underdeveloped markets; and (7) the United States fishing industry had 
the potential to expand greatly its contribution to interstate and 
foreign commerce, favorably affecting the balance of trade.
    A final rule implementing the Act was published in the Federal 
Register on December 7, 1989 (54 FR 50504). A National Seafood 
Marketing Council (National Council) was established under the Act. The 
National Council was authorized to enter into agreements with 
applicants to fund referenda to establish and terminate species-
specific marketing councils. However, no species-specific marketing 
councils were established and the National Council was disbanded. In 
1996, the regulations implementing the Act were removed from the CFR as 
part of the government-wide Presidential regulatory reform effort.
    The 1986 Congressional findings and statement of purpose (16 U.S.C. 
4001 & 4002) concerning the value of the commercial fisheries to the 
United States may still apply today. Furthermore, industry interest and 
support for seafood marketing and promotion-related activities has been 
expressed. Niche marketing programs have been initiated by both the 
Pacific salmon harvesters in Alaska and by the Wild American Shrimp 
organization in the southern Atlantic and Gulf of Mexico states. 
Additional interest has been expressed by U.S. tuna processors who are 
also facing declining market shares due to foreign competition. The 
accompanying IRFA and RIR indicate that at least twelve fish species 
could benefit from the development of organized marketing programs. 
Marketing and promotion plans prepared by a Council would be designed 
to increase the general demand for fish and fish products by 
encouraging, expanding, and improving the marketing and utilization of 
fish and fish products both in domestic or foreign markets, through 
consumer education, research, and other marketing and promotion 
activities. Therefore, NMFS proposes to implement regulations that 
would provide the foundation for the establishment, organization, and 
practices of the Councils. This proposed rule identifies the role of 
the Secretary of Commerce, who has delegated authority to NMFS, in the 
establishment and administration of the Council process. Also provided 
are guidelines for preparation of the application package including 
specific requirements for proposed charters, identification of sector 
participants who are eligible to vote in the referendum, descriptions 
of how a referendum would be conducted, and determination of payment 
and/or refunding of assessment fees. Also addressed are petitions of 
objection related to assessment fees and petitions for the dissolution 
of a Council. NMFS suggests that interested persons also read the Act 
along with this document for additional information.

Content and Submission of Application Package to Establish A Council

    An application package submitted to NMFS to establish a Council 
would consist of the following information: (1) An application 
requesting NMFS to establish a Council; (2) a list of sector 
participants who are eligible to vote in the referendum; (3) a proposed 
charter under which the proposed Council would operate; and (4) an IRFA 
and/or other analytical documentation addressing the requirements of 
the Regulatory Flexibility Act, E.O. 12866, the National Environmental 
Policy Act, and other information NMFS considers necessary or 
appropriate for the review and approval of the application.
    One signed original and two copies of the completed application 
package should be submitted to the Assistant Administrator for 
Fisheries, 1315 East-West Highway, Silver Spring, MD 20910. NMFS would 
acknowledge receipt of the application package and

[[Page 3799]]

contact the applicant if further information is required.
1. Application.
    The application should be comprised of the signatures or corporate 
certifications of no less than three sector participants in each sector 
who collectively accounted for, in the previous 12-month period, not 
less than 10 percent of the value of the fish or fish products that 
were handled by each such sector during that period. For purposes of 
the Act and this proposed rule, ``sector'' means: (A) The sector 
consisting of harvesters; (B) the sector consisting of importers; (C) 
the sector consisting of marketers; (D) the sector consisting of 
processors; (E) the sector consisting of receivers; or (F) the consumer 
sector consisting of persons professionally engaged in the 
dissemination of information pertaining to the nutritional benefits and 
preparation of fish and fish products.
    Persons who meet these minimum requirements would be eligible to 
submit an application to NMFS to establish a Council. The application 
should include a statement that, if established, the Council would have 
sufficient resources, e.g., cash, donated office space, services, 
supplies, etc., available for initial administrative expenditures 
pending collection of assessments.
2. List of Sector Participants Eligible to Vote in the Referendum.
    The applicant would provide a list of sector participants, to the 
extent practicable, identifying the business name and address of all 
sector participants that the applicant believes meet the requirements 
for eligibility to vote in the referendum on the adoption of the 
proposed charter. The list would include all sectors in which a sector 
participant meets the eligibility requirements. If the sector 
participant has more than one place of business located within the 
geographic area of the Council, all such places would be listed and the 
primary place of business should be designated. At the time of 
submission of the application the referendum list of sector 
participants would also contain the list of required signatures or 
corporate certifications.
    NMFS acknowledges that development of the list of sector 
participants meeting the minimum requirements stated in the proposed 
charter may be difficult. The Act requires the applicant, to the extent 
practicable, to develop such a list. NMFS would, to the extent 
practicable, verify the validity of the applicant's list, which may 
require adding or deleting names provided by applicant. At the request 
of an applicant, NMFS would provide available information in its 
possession of a non-proprietary nature to assist in developing this 
list.
    The Council, if approved, would be required to maintain a list of 
sector participants. The Council would need a current list of sector 
participants in each sector represented on the Council, particularly 
for the purposes of collecting assessments and voting in referenda.
3. Charter.
    At a minimum the text of the proposed charter would contain the 
following information:
    (1) The name of the Council and a provision proclaiming its 
establishment;
    (2) A declaration of the purposes and objectives of the Council;
    (3) A description of the species of fish and fish products, 
including the scientific and common name(s), for which the Council 
would implement marketing and promotion plans under the Act;
    (4) A description of the geographic area (state(s)) within the 
United States covered by the Council;
    (5) The identification of each sector and the number and terms of 
representatives for each sector that would be voting members on the 
Council;
    (6) The identification of those sectors (which would be required to 
include a sector consisting of harvesters, a sector consisting of 
receivers, and, if subject to assessment, a sector consisting of 
importers) eligible to vote in the referendum to establish the Council;
    (7) For each sector a threshold level specifying the minimum 
requirements, as measured by income, volume of sales, or other relevant 
factors, that a person engaging in business in the sector would be 
required to meet in order to participate in a referendum;
    (8) A description of the rationale and procedures for determining 
assessment rates based on a fixed amount per unit of weight or measure, 
or on a percentage of value of the product handled;
    (9) The proposed rate or rates that would be imposed by the Council 
on receivers and, if subject to assessment, importers during its first 
year of operation;
    (10) The maximum amount by which an assessment rate for any period 
may be raised above the rate applicable for the immediately preceding 
period;
    (11) The maximum rate or rates that would be imposed by a Council 
on receivers or importers during the operation of the Council;
    (12) The maximum limit on the amount any one sector participant 
would be required to pay under an assessment for any period;
    (13) The procedures for providing refunds to sector participants 
subject to assessments who request refunds in accordance with the time 
limits;
    (14) A provision setting forth the voting procedures by which votes 
would be cast by proxy;
    (15) A provision that the Council would have voting members 
representing the harvesting, receiving and, if subject to assessment, 
importing sectors;
    (16) A provision setting forth the definition of a quorum for 
making decisions on Council business and the procedures for selecting a 
chairperson of the Council;
    (17) A provision that members of the Council would serve without 
compensation, but would be reimbursed for reasonable expenses incurred 
in performing their duties as members of the Council;
    (18) A provision containing a requirement for submission of 
documentation as requested by NMFS for purposes of evaluating the 
performance of proposed marking plans and the Council's related 
performance;
    (19) A provision containing the minimum number of participants that 
would be needed for sustained operations that cannot receive assessment 
refunds;
    (20) A provision acknowledging that NMFS would have the right to 
participate in Council meetings;
    (21) A provision that NMFS would have final approval authority over 
proposed marketing plans and Council actions;
    (22) A provision containing a requirement for the Council to 
arrange for a complete audit report to be conducted by an independent 
public accountant and submitted to NMFS at the end of each fiscal year;
    (23) A provision containing a requirement for the Council to 
conduct a market assessment based on economic, market, social and 
demographic, and biological information as deemed necessary by NMFS; 
and
    (24) A provision containing a requirement for the Council to update 
the list of sector participants eligible to vote in a referendum on an 
annual basis.
4. Analytical Documentation.
    Analytical documentation would be required as part of the 
application package in order to determine the impacts of the proposed 
Council under applicable law. Individual Councils, once established, 
may impact on small entities, but the impacts could not be determined 
until the charter is drafted with ranges of assessments based on 
volume, income, etc., of sector participants to be involved in the

[[Page 3800]]

Council. Specifically, the imposition of assessments on certain members 
of the industry would have an effect on a firm's financial situation. 
Any other costs or requirements which the Council would impose on 
industry would also have to be considered and analyzed. Since these 
parameters would vary with each application, a determination of impact 
would be made on a case-by-case basis. Therefore, the applicant would 
provide an IRFA and/or other analytical documentation addressing the 
requirements of the Regulatory Flexibility Act, E.O. 12866, the 
National Environmental Policy Act, and other information NMFS considers 
necessary or appropriate for the review and approval of the 
application. This other necessary and appropriate information required 
for the review of the application includes, but is not limited to, an 
analysis of the primary, secondary, and tertiary affects of increasing 
demand for seafood. This information would have to be incorporated into 
the NEPA analysis to determine if a proposed council or its marketing 
program is consistent with NMFS conservation goals, national standards, 
other national guidelines, and would have to be demonstrated to be 
consistent with Federal standards and guidelines on nutrition and 
health.

Initial Decision

    NMFS would make an initial decision on the application, list of 
sector participants eligible to vote in the referendum, charter, and 
other required analytical documentation such as the IRFA within 180 
days of receipt. NMFS would determine if the application package is 
complete and complies with all of the requirements set forth in the 
implementing regulations, the Act, and other applicable law.
    If a negative determination is made, NMFS would advise the 
applicant in writing of the reasons for the negative determination, 
such as missing documentation. The applicant may submit a revised 
application package for reconsideration. NMFS would then have 180 days 
from receipt of the revised application package to make a 
determination.
    If an affirmative decision is made, the Act requires NMFS to 
publish (by such means as will result in wide publicity in regions 
affected by the proposed charter) the text of the proposed charter and 
a list of those sector participants eligible to vote in the referendum 
and provide for public comment, including the opportunity for public 
meeting and to amend the list of sector participants. NMFS intends to 
publish notification in the Federal Register and provide a formal 
comment period. That notice would serve as a proposed rule thus 
triggering the requirements of the Regulatory Flexibility Act. As is 
standard practice, NMFS in the Federal Register document would announce 
availability of the IRFA and/or other analytical documents for review 
and comment.

Referendum on Adoption of Proposed Charter

1. Sector Participant Vote
    NMFS would conduct a referendum on the adoption of the proposed 
charter within 90 days of its initial affirmative decision. The 
referendum would be conducted among all sector participants that meet 
the requirements for eligibility to participate in the referendum, as 
identified in the proposed charter. The vote may be made by any 
responsible officer, owner, or employee representing a sector 
participant.
    A vertically integrated seafood company may qualify to vote in more 
than one sector, depending on the requirements established for each 
sector by the Council. However, only one vote may be cast by each 
sector participant who is eligible to vote, regardless of the number of 
individuals that make up the ``sector participant'' and how many 
sectors the participant is engaged in. Therefore, it is requested that 
petitioners specify in the list of sector participants all sectors for 
which a sector participant meets the eligibility requirements to vote 
in a referendum. The ballot for each referendum would request that each 
person voting certify in which sector he/she is voting in that 
particular referendum. This certification by sector participants voting 
in a referendum will be important to NMFS and the Council in order to 
determine the success or failure of a referendum, since the percentage 
of sector participants voting favorably and the value of fish products 
they handled in a sector will determine the outcome.
    The referendum to establish a Council would pass if votes cast in 
favor of the proposed charter constitute a majority of the sector 
participants voting in each and every sector. Further, the majority 
must collectively account for, in the preceding 12-month period, at 
least 66 percent of the value of the fish and fish products described 
in the proposed charter that were handled during this period, in that 
sector, and by those who met the eligibility requirements to vote in 
the referendum. If the referendum passes, NMFS could establish a 
Council and approve the proposed charter. If a referendum fails to pass 
in any sector of the proposed Council, NMFS would not establish the 
Council or approve the proposed charter. NMFS would notify the 
applicants of the results of the referendum and publish the results of 
the referendum in the Federal Register.
2. Costs of Conducting a Referendum
    NMFS would initially pay all costs related to the conduct of the 
referendum to establish a Council. Once an application has been 
approved, NMFS would estimate the cost of conducting the referendum, 
notify the applicants, and request that they post a bond or provide 
other applicable security, such as a cashier's check, to cover costs of 
the referendum. Although the cost of each referendum would vary 
according to the size of the Council, there would be some cost 
categories that would be common to the conduct of all referenda, e.g., 
verification of the list of sector participants, publication of the 
application, charter, and list of sector participants in the Federal 
Register, printing and postage costs for the ballots, etc. In the event 
a public hearing is requested, this would also add to the cost.
    After the referendum has been conducted, NMFS would inform the 
applicants of the exact cost. If the referendum is approved and the 
proposed charter is adopted, the Council would be required to reimburse 
NMFS for the total actual costs of the referendum within 2 years after 
establishment of the Council. This amount would be paid for from 
assessments collected by the Council. If a referendum fails to result 
in establishment of a Council, NMFS would immediately recover all 
expenses incurred from the bond or security posted by applicants. In 
either case, such expenses would not include salaries of government 
employees or other administrative overhead, but would be limited to 
those additional direct costs incurred in connection with conducting 
the referendum to establish a Council.

Appointments, Terms, Vacancies, and Removal of Council Members

    Within 30 days after a Council is established, NMFS would solicit 
nominations for Council members from the sector participants 
represented on the Council in accordance with the approved charter. The 
members of each Council would be individuals who, by reason of their 
occupational or other experience, scientific expertise, or training, 
are knowledgeable with regard to the activities of the sector which the 
individual would represent on the Council. To the extent practicable, 
the nominations should result in equitable representation for the 
constituent regions.

[[Page 3801]]

    NMFS would appoint the members of the Council from among the 
nominees within 60 days. The term for members would be 3 years. 
Initially, to ensure continuity, half of the members' terms would be 2 
years and half would be 3 years. Reappointments would be permissible.
    Vacancies on a Council would be filled within 60 days after the 
vacancy occurs, in the same manner in which the original appointment 
was made. A member appointed to fill a vacancy occurring before the 
expiration of the term for which the member's predecessor was appointed 
would be appointed only for the remainder of that term.
    Council members would serve without compensation but would be 
reimbursed for their reasonable expenses incurred in performing their 
duties as members of the Council.
    NMFS would remove a member of a Council if the Council recommended, 
by not less than two-thirds of its members, removal for cause. Such a 
recommendation of a Council should be in writing and accompanied by a 
statement of the reasons upon which the recommendation would be based.

Continued Operation of the Council

    Continued operation of a Council would be at the discretion of NMFS 
and subject to NMFS' annual review of a market assessment prepared by 
the Council and evaluation of Council performance. Increases in product 
prices would not be the sole criteria for determining the effectiveness 
of a marketing program. The Council must demonstrate that the marketing 
plan would not adversely impact those fisheries for which conservation 
and management measures are necessary to prevent overfishing and 
rebuild overfished stocks, i.e., the market plan would be designed to 
increase profits rather than increase harvest. The marketing plan 
should also demonstrate that conservation and management efforts in 
other fisheries are not adversely affected, but the Secretary may use 
the primary, secondary, or tertiary impacts in evaluating whether the 
Council should be allowed to continue operating. Where measures have 
been implemented to reduce the overall harvest in a fishery, the 
marketing plan should clearly identify how stock conservation harvest 
capacity reduction would not be adversely impacted. Council support of 
the regional fishery management council's adoption of dedicated or 
controlled access programs, for example but not limited to programs 
such as Individual Fishing Quota, moratorium on new entrants into a 
fishery, and other effort control measures, would be programs that 
comply with this standard. In addition, NMFS would retain the authority 
to determine if the continued operation of a Council would be in the 
public interest. Councils would be required to meet performance 
standards approved by NMFS that demonstrate that marketing and 
promotion programs are effective in increasing consumer demand for 
species-specific seafood products. Councils would also be required to 
conduct market assessments based on economic, market, social and 
demographic, and biological information as deemed necessary by NMFS. 
This information and data would be provided to NMFS with the market 
assessment for review and verification of results and analysis and may 
be used by NMFS subject to normal rules and guidelines for industry 
generated data and information.

Reports and Marketing Plans

    Councils would be required to submit annual plans and budgets for 
species-specific marketing and promotion plans, including when 
applicable consumer education, research, and other activities of the 
Councils. Councils would also be required to submit progress reports on 
implementation of the marketing and promotion plans and a financial 
reports with respect to the receipt and disbursement of funds entrusted 
to it. NMFS would require a complete audit report to be conducted by an 
independent public accountant and submitted to NMFS at the end of each 
fiscal year.
    The Council must maintain reports, books, and records for a minimum 
of 3 years, even if the Council is terminated in less than 3 years. The 
purpose of this requirements is to enable NMFS to ensure that all 
remaining business of the terminated Council is concluded in an orderly 
manner. The 3-year time limit is in accordance with the Office of 
Management and Budget guidelines for implementing the Paperwork 
Reduction Act.

Assessments

    Councils would be funded through voluntary assessment of the 
industry represented on the Councils. Assessments would be imposed on 
sector participants in the receiving sector or the importing sector or 
both as specified in the approved Council charter. Assessment rates 
would be based on value that may be expressed in monetary units or 
units of weight or volume. Once a participant declines to pay an 
assessment, or elects not to participant in a Council, no future 
assessments will be imposed. With the concurrence of the Secretary, a 
Council would establish the applicable assessment for those seeking to 
rejoin or participate in a Council at a future time.
1. Sector Participant and Related Assessment.
    An assessment on sector participants in the receiving sector would 
be in the form of a percentage of the value or a fixed amount per unit 
of weight or volume of the fish described in the charter when purchased 
by receivers from fish harvesters.
    An assessment on sector participants who own fish processing 
vessels and harvest the fish described in the charter would be in the 
form of a percentage of the value or on a fixed amount per unit of 
weight or volume of the fish in the charter that is no less than the 
value if such fish had been purchased by a receiver other than the 
owner of the harvesting vessel.
    An assessment on sector participants in the importing sector would 
be in the form of a percentage of the value that an importer pays to a 
foreign supplier, as determined for the purposes of the customs laws, 
or a fixed amount per unit of weight or volume, of the fish or fish 
products described in the charter when entered or withdrawn from 
warehouse for consumption, in the customs territory of the United 
States by such sector participants.
2. Notice of Assessment to Sector Participant
    The Council would provide notice to a sector participant subject to 
assessment that the assessment is due. The notice of assessment would 
contain:
    a. A specific reference to the provisions of the Act, regulations, 
charter, and referendum that authorize the assessment;
    b. The amount of the assessment;
    c. The period of time covered by the assessment;
    d. The date the assessment would be due and payable, which would 
not be earlier than 30 days from the date of the notice;
    e. The form(s) of payment; and
    f. To whom and where the payment would be made.
    g. Notification of the right to seek review of the assessment by 
filing a written petition of objection with NMFS at any time during the 
time period to which the assessment applies in accordance with the 
procedures in Sec.  270.19.
    h. Notification of the right to request a hearing on the petition 
of objection.
    i. Notification of the a right to request a refund of the 
assessment; the request for a refund may be submitted for not less than 
90 days from the date of the

[[Page 3802]]

assessment; and the Council would make the refund within 60 days from 
the date of the receipt.
    Persons subject to an assessment would be required to pay the 
assessment on or before the date due, unless they have demanded a 
refund or filed a petition of objection with NMFS under Sec.  270.21. 
However, person who have demanded a refund under Sec.  270.22 or filed 
a petition of objection under Sec.  270.21 may submit proof of these 
actions in leu of payment. In the case of a petition of objection, NMFs 
will inform the Council and the petitioner of its finding at which time 
petitioner must pay the revised assessment if applicable.
3. Petition of Objection
    Requests for NMFS to modify or take other appropriate action 
regarding the assessment may be made by filing with NMFS a written 
petition of objection. Any sector participant subject to an assessment 
may file a written petition with NMFS alleging that the assessment, the 
plan approved upon which the assessment is based, or any obligation 
imposed under the plan, is not in accordance with the law. A petition 
of objection may request NMFS to modify or take other appropriate 
action regarding the assessment or plan. A petition may be filed only 
during the time period to which the assessment applies. The petitioner 
may also request a formal hearing. Following the hearing, or if no 
hearing is held, as soon as practicable, NMFS would decide the matter 
and serve written notice of the decision to the petitioner and the 
Council. NMFS's decision would be based on a consideration of all 
relevant documentation and other evidence submitted, and would 
constitute the final administrative decision and order of the agency.
4. Refund of Assessment
    Pursuant to 16 U.S.C. 4014, any sector participant who pays an 
assessment under the Act may demand and must promptly receive from the 
Council a refund of the assessment. A demand for refund must be made in 
accordance with procedures in the approved charter and within the time 
limits prescribed by the Council and approved by NMFS. Procedures to 
provide such a refund would be established before any such assessment 
would be collected. The refund procedures would allow the sector 
participant to request a refund for not less than 90 days from the date 
of the assessment and the Council would make the refund within 60 days 
from the date of the receipt of the request for the refund. Once a 
refund has been requested by a sector participant and paid by the 
Council, that sector participant would no longer participate in a 
referendum or other business of the Council during the remainder of the 
assessment rate period. However, if assessments should be paid during a 
future assessment rate period and no refund is requested, that sector 
participant would be able to again participate in a referendum or other 
business of the Council.

Quality Standards

    Each Council may develop and submit to NMFS for approval, or upon 
the request of a Council, NMFS would develop quality standards for the 
species of fish or fish products described in the approved charter. Any 
quality standard developed should be consistent with the purposes of 
the Act. A quality standard should be adopted by a Council by a 
majority of its members following a referendum conducted by the Council 
among sector participants of the concerned sector(s). In order for a 
quality standard to be brought before Council members for adoption, the 
majority of the sector participants of the concerned sector(s) must 
vote in favor of the standard. Further, according to the best available 
data, the majority must collectively account for, in the preceding 12-
month period, not less than 66 percent of the value of the fish or fish 
products described in the charter that were handled during such period 
in that sector by those who meet the eligibility requirements to vote 
in the referendum. Councils may develop quality standards establishing 
the criteria for the fish or fish products being promoted. The Council 
would submit a plan to conduct the referendum on the quality standards 
to NMFS for approval at least 60 days in advance of such referendum 
date. The plan would consist of the following:
    (1) Date(s) for conducting the referendum;
    (2) Method (by mail or in person);
    (3) Copy of the proposed notification to sector participants 
informing them of the referendum;
    (4) List of sector participants eligible to vote;
    (5) Name of individuals responsible for conducting the referendum;
    (6) Copy of proposed ballot package to be used in the referendum; 
and
    (7) Date(s) and location of ballot counting.
    An official observer appointed by NMFS would be allowed to be 
present at the ballot counting and any other phase of the referendum 
process, and may take whatever steps NMFS deems appropriate to verify 
the validity of the process and results of the referendum.
    Quality standards developed must meet or exceed the U.S. Food and 
Drug Administration's minimum requirements for fish and fish products 
for human consumption and must be consistent with applicable standards 
of the U.S. Department of Commerce (National Oceanic and Atmospheric 
Administration) or other recognized Federal standards and/or 
specifications for fish and fish products.
    The intent of quality standards must not be to discriminate against 
importers who are not members of the Council. Quality standards must 
not be developed for the purpose of creating non-tariff barriers. Such 
standards must be compatible with U.S. obligations under the General 
Agreement on Tariffs and Trade, or under other international standards 
deemed acceptable by NMFS.
    No quality standard adopted by a Council can be used in false or 
misleading advertising or promotion of fish or fish products. A quality 
standard may be adopted which requires sector participants to be in the 
U.S. Department of Commerce voluntary seafood inspection program.
    With respect to a quality standard adopted under this section, the 
Council would develop and file with NMFS an official identifier in the 
form of a symbol, stamp, label or seal that would be used to indicate 
that a fish or fish product meets the quality standard at the time the 
official identifier is affixed to the fish or fish product, or is 
affixed to or printed on the packaging material of the fish or fish 
product. The use of such identifier would be governed by Sec.  270.15.

Dissolution of a Council

1. Petition for Termination
    No less than three sector participants in any one sector may file a 
petition to terminate a Council. The petition would be accompanied by a 
written document explaining the reasons for the petition. If NMFS 
initially determines that the petition is accompanied by the 
signatures, or corporate certifications, of no less than three sector 
participants in the sector who collectively accounted for, in the 
preceding 12-month period, not less than 20 percent of the value of the 
fish or fish products that were handled by that sector during the 
period, NMFS within 90 days after the initial determination, would 
conduct a referendum for termination of the Council among all sector 
participants in that sector.
    NMFS would publish notification in the Federal Register of the 
referendum, including an explanation of the reasons for the petition 
for termination and any other relevant information NMFS considers 
appropriate. The notification

[[Page 3803]]

would be published at least 30 days prior to the referendum.
2. Referendum Vote on Termination
    If the referendum votes which are cast in favor of terminating the 
Council constitute a majority of the sector participants voting and the 
majority, in the preceding 12-month period, collectively accounted for 
not less than 66 percent of the value of such fish and fish products 
the that were handled during that period by the sector who filed the 
petition, NMFS would by order terminate the Council effective as of a 
date by which the affairs of the Council would be concluded.
3. Cost of Referendum
    NMFS would initially pay all costs of this referendum. However, 
prior to conducting the referendum, NMFS would require petitioners to 
post a bond or other security acceptable to NMFS in an amount which 
NMFS determines to be sufficient to pay any expenses incurred for the 
conduct of the referendum.
    If a Council is terminated, NMFS, after recovering all expenses 
incurred for the conduct of the referendum, would take action as is 
necessary and practicable to ensure that moneys remaining in the 
account established by the Council are paid on a prorated basis to the 
sector participants from whom those moneys were collected. If a 
referendum fails to result in the termination of the Council, NMFS 
would immediately recover the amount of the bond posted by the 
petitioners.
    If the amount remaining in the Council account is insufficient for 
NMFS to recover all expenses incurred for the conduct of the 
referendum, NMFS would recover the balance of the expenses from the 
petitioners that posted a bond.

Proprietary Business Data or Commercial Information

    Commercial or financial information submitted to NMFS in compliance 
with any requirement or regulation related to the Act, implementing 
regulations, or other applicable law would be treated as proprietary or 
confidential and protected from public disclosure to the extent 
possible under applicable law (see 16 U.S.C. 4012(f)). However, NMFS 
may release or make public general or statistical statements based upon 
reports of a number of persons (in aggregate or summary form) which 
does not directly or indirectly disclose the identify or business of 
any individual or business who submits the information.

Classification

    The proposed rule has been determined to be significant for the 
purposes of Executive Order 12866. The primary concern is that the 
market may have failed to provide information on the quality, safety, 
and availability of fishery products that is accurate and easily 
available to consumers. NMFS requests comments from the public on what 
market failures justifiy creation of seafood marketing councils, the 
degree to which industry structure affects these market failures, and 
whether this program is narrowly tailored to remedy those market 
failures.
    NMFS prepared an IRFA that describes the economic impacts of this 
proposed rule, if adopted, would have on small entities. A description 
of the action, why it is being considered, and the legal basis for this 
action are contained in the SUMMARY and SUPPLEMENTARY INFORMATION 
section of the preamble. This proposed rule does not duplicate, 
overlap, or conflict with other Federal rules.

Recordkeeping and Reporting Requirements

    In addition to recordkeeping and reporting requirements required to 
create a Council, small entities could also be required to complete 
forms required to administer assessment fees, petition for a refund of 
assessment fees, or participate in any referendum under a specific 
Council's charter. NMFS believes the number of burden hours to small 
entities to meet Council obligations could range between 5 and 20 hours 
annually. This proposed rule does not implement a seafood marketing 
program, therefore, the Paperwork Reduction Act requirements are not 
triggered. However, there may be a need for additional burden hours 
once a Council's charter is accepted.

Description of Small Entities Affected by this Proposed Rule

    The potential universe of entities affected by this action includes 
all harvesters, importers, marketers, and processors of seafood. With 
the exception of a small number of catcher-processor vessels, most 
harvesters are identified as small entities under the Regulatory 
Flexibility Act meeting a size standard of less than $3.5 million in 
gross receipts. Importers and marketers are characterized as small if 
the number of employees working in a typical pay period number are 100 
or fewer while seafood processors employing 500 people or less are 
considered small. A Council could be made up of any combination of 
small or large firms depending upon the sector or sectors of a 
particular fishery the Council is representing. NMFS statistics 
indicate that there are approximately 17,679 harvesters, 935 processing 
plants, and 2,446 wholesale and marketing establishments that could be 
affected by this proposed rule.

Economic Impact Analysis

Overview
    Despite a strong U.S. demand for fish and shellfish, the domestic 
seafood industry is faced with a number of challenges. The industry has 
been experiencing declining prices, sales, and earnings; increased 
input costs, particularly fuel; increasingly restrictive management; 
strong competition from imports and aquaculture; loss of access to 
supporting infrastructure (e.g., dock space); and numerous health 
advisories regarding seafood consumption. The nominal price of canned 
tuna, for example, declined from $2.55 in 1980 to $1.78 in 2004. 
Between 1979 and 2003, the real or deflated (2004 constant dollar 
value) ex-vessel price of all finfish and shellfish combined declined 
from $0.76 to $0.35 per pound. The domestic seafood industry is 
experiencing problems in the form of competition from imports and 
increased fuel prices, and established generic marketing programs have 
been shown to be effective in improving the demand for some food 
commodities. The RIR analysis summarized below indicates that similar 
marketing programs, if effective in raising prices, could generate 
positive net benefits and provide for increased national economic 
impacts.
    The economic analysis performed in support of this action examined 
12 species complexes: (1) Grouper (all species of group), (2) snapper 
(all species of snapper), (3) roundfish (cod, haddock, and pollock), 
(4) tuna (all species of tuna), (5) halibut, (6) flatfish (all species 
of flatfish), (7) salmon (all wild caught species of salmon), (8) 
scallops (all species of scallops), (9) Dungeness and snow crab, (10) 
all other species of crabs, (11) lobster (spiny and North American), 
and (12) all species of shrimp. Per capita consumption was defined as 
per-capita landings between 1950 and 2003. A synthetic inverse demand 
system (SIDS) model was specified and estimated following Park et al. 
(2004). The SIDS model was used to estimate changes in ex-vessel 
revenues and compensating variation or economic value, which might be 
induced by a successful generic marketing program. Economic impacts 
were estimated using a national input/output model, which was developed 
for NOAA Fisheries in 2004. The estimation of impacts also did not 
include the potential impacts of other

[[Page 3804]]

meat producing and consuming sectors (e.g., cattle producers and 
consumers of beef).
    Based on the potential changes in sales of Alaska's, Maryland's, 
and the Tilapia Marketing Association's marketing campaigns for salmon, 
blue crabs, and tilapia, the analysis of economic impact prepared by 
NMFS assumed that a marketing campaign could promote a 10 percent 
increase in demand. These relatively small, homogeneous groups with 
common goals were successful in reaching agreement on developing a 
marketing strategy. During the Alaskan salmon campaign, sales (quantity 
demanded) increased by 19.6 percent; sales of blue crabs in Maryland 
increased by 52.2 percent; and sales of Tilapia increased by more than 
54.5 percent between 2001 and 2003. As much as 40% of Alaskan salmon 
wild landings are based on hatchery production and tilapia is a fresh 
water aquaculture product; both products can be increased to respond to 
increases in demand. Maryland blue crab while a substantial part is 
still only a single component of a much larger market allowing for the 
reallocation of sales between different markets due to real or 
perceived quality differences. Larger, heterogeneous groups with 
different goals and objectives could have substantially higher costs of 
reaching agreement on a marketing strategy; preventing an effective 
strategy from being developed. The Federal government can assist in 
reducing these costs, but its involvement must be limited in these TAC-
limited, marine, wild-capture fisheries to the extent that an increase 
in demand would not jeopardize conservation goals and objectives.
    NOAA stewardship of fisheries resources under the Magnuson-Stevens 
Act, Endangered Species Act, and other applicable laws in managing U.S. 
fisheries ensures that conservation and management goals and objectives 
are not jeopardized. As part of this process, NMFS must submit annually 
a Status of Fisheries Stocks report to Congress reporting on the status 
of overfished fisheries and fisheries where overfishing is continuing. 
Seafood Council actions established under this rule may not interfere 
with the continued management and conservation of fisheries required 
under other statutes.
    The analysis estimated potential changes in revenues and welfare 
and was limiting since: it considered only the harvesting sector; the 
processing and final retail sectors were not included; the analysis 
considered a marketing program, which increased the per capita quantity 
demanded; no attention was given to whether or not a marketing program 
would shift out the demand or change the various quantity coefficients, 
which would be an expected effect of a marketing campaign. 
Alternatively, a marketing program would be expected to increase the 
demand for a given price, and thus, shift the demand curve out from the 
origin so that at every price, consumers would demand more seafood. 
Without detailed information on the relationship between advertising 
and seafood demand, it is difficult to even state the magnitude of bias 
from assuming that a marketing program increases the quantity demanded.
    As illustrated in Tables 1, a 10 percent increase in the demand for 
seafood generates considerable economic activity for the U.S. economy. 
If the demand for all 12 species or species grouping were to increase 
by 10 percent (or $108.1 million ex-vessel), this would, in turn, 
generate total sales of $500.7 million in the U.S. economy and $172.3 
million in income (which includes profits). Those species with the 
potential greatest level of economic impacts are shrimp, salmon, and 
tuna. Combined, they account for nearly 60 percent of the total 
potential output, 58 percent of the total potential income, and 59 
percent of the total potential employment.

[[Page 3805]]



                   Table 1. Changes in Output (1,000$ of 2004 Constant Dollars) Generated by a 10% Increase in the Demand for Seafood
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvesting Sector             Harvesting Sector Impacts           Processor, Wholesaler, and Dealer Impacts           Impacts for All Sectors
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Change In
  Species   Ex-vessel    Direct    Indirect   Induced     Total      Direct    Indirect   Induced     Total      Direct    Indirect   Induced     Total
             Revenues
--------------------------------------------------------------------------------------------------------------------------------------------------------
Grouper         561.1        335        228        745      1,308        389        272        871      1,532        724        500      1,616     2,840
--------------------------------------------------------------------------------------------------------------------------------------------------------
Snapper       1,391.3        830        566      1,846      3,242        966        673      2,159      3,797      1,796      1,239      4,005     7,040
--------------------------------------------------------------------------------------------------------------------------------------------------------
Roundfish     8,018.8      4,088      2,840     11,204     18,132      5,569      3,876     12,442     21,887      9,657      6,716     23,646    40,019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tuna         15,920.5     10,135      6,956     14,519     31,610      9,966      7,899     25,399     43,264     20,101     14,855     39,918    74,874
--------------------------------------------------------------------------------------------------------------------------------------------------------
Salmon       23,620.2     17,173     12,499     27,314     56,985     16,404     11,418     36,650     64,473     33,577     23,917     63,964   121,458
--------------------------------------------------------------------------------------------------------------------------------------------------------
Halibut       3,555.7      2,045      1,445      4,777      8,267      2,469      1,719      5,517      9,705      4,514      3,164     10,294    17,972
--------------------------------------------------------------------------------------------------------------------------------------------------------
Flatfish      6,518.5      3,891      2,808      8,563     15,262      4,447      3,166     10,165     17,778      8,338      5,974     18,728    33,040
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sea           3,362.6      1,991      1,576      4,380      7,947      2,335      1,625      5,217      9,178      4,326      3,202      9,597    17,125
 Scallop
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dungeness     2,995.3      2,102      1,338      3,737      7,178      2,080      1,448      4,647      8,176      4,182      2,786      8,385    15,353
 and Snow
 Crab
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Other    10,984.6      7,709      4,908     13,706     26,332      7,629      5,310     17,043     29,981     15,338     10,218     30,749    56,313
 Crabs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lobster       2,393.1      1,875      1,456      2,678      6,009      1,221      1,239      3,995      6,455      3,096      2,695      6,674    12,464
--------------------------------------------------------------------------------------------------------------------------------------------------------
Shrimp       28,756.5     19,681     15,987     32,489     68,157      8,450      5,916     19,631     33,998     28,131     21,903     52,120   102,155
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total       108,078.2     71,853     52,607    125,960    250,430     61,927     44,561    143,736    250,223    133,781     97,169    269,696   500,653
 harvester
 s........
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 3806]]

    A generic marketing campaign, if successful, would be expected to 
increase sales of seafood. Using the estimated changes in revenues 
associated with a generic marketing campaign, which is assumed to 
generate at least a 10 percent increase in sales, and the national I/O 
model, changes in output or sales and income are estimated. The 
analysis, however, ignores potential changes in other sectors of the 
economy, which might result from increased sales in seafood (e.g., the 
impacts on beef, pork, and poultry producers and processors). The 
impacts do, however, explicitly consider changes in demand from 
supporting or related seafood sectors (e.g., fuel and gear for vessels, 
purchases of supplies by processors, etc.).
    It was estimated that a successful generic commodity program for 
all 12 species could generate up to $108.1 million (2004 constant 
dollar value) in addition ex-vessel revenues, and $115.5 million in 
consumer welfare or compensating variation; i.e., net benefits. The 
largest gains were determined to be associated with shrimp, salmon, and 
tuna. In terms of the potential changes in economic impacts, it was 
estimated that generic commodity programs for the 12 species or species 
groupings could increase sales and income by, respectively, $500.7 
million and $172.3 million. Shrimp, salmon, and tuna were determined to 
be the largest beneficiaries of generic commodity programs, which 
successfully increased consumption by 10 percent. In addition to the 
limitations already discussed, the analysis excludes the costs of 
generic commodity programs. Existing programs in the U.S., regardless 
of whether or not the program promotes seafood or beef, pork, or 
poultry, typically impose charges on producing and/or marketing 
companies. These costs, if known, would have to be deducted from the 
estimated benefits.
    The analysis also does not consider the distribution of potential 
benefits or economic welfare; that is, it remains unknown whether or 
not a generic commodity program would benefit fishers, processors and 
dealers, retailers, all, or one group more than the other. The analysis 
also does not consider the possibility that generic commodity programs 
will potentially benefit importers and foreign producers of seafood. 
Most U.S. fisheries are heavily regulated, and there has been an 
increasing reliance on imports, and thus, it is unlikely that in the 
near future, domestic producers would be able to satisfy an increased 
demand for seafood. Alternatively, a generic commodity program, which 
resulted in increased supplies of imports, could drive domestic ex-
vessel and retail prices down. Producers would experience declining 
revenues and profits, but consumers might experience increased welfare. 
Although the RIR indicates that the potential exists for the generation 
of positive net benefits from a marketing program, the merits of a 
specific proposed council would have to be judged on a case by case 
basis.
    Unfortunately, data necessary for conducting an economic analysis 
of the potential benefits and impacts of generic marketing campaigns or 
generic commodity programs are not available. There is insufficient 
information to statistically examine the relationship between 
advertising expenditures for seafood and the demand for seafood. Data 
are not available on retail prices and consumption, by species, or mode 
of sale (e.g., fish markets, grocery stores, and restaurants). Cost and 
earnings data are highly inconsistent over time, and thus it is not 
possible to consider returns to the various producing and marketing 
sectors--harvesters, processors, wholesalers, retail outlets, and 
restaurants. Moreover, no seafood entity has yet proposed a generic 
commodity program.
    A review of the scant empirical data available on generic commodity 
programs reveals mixed evidence about the success of generic marketing 
campaigns, particularly relative to seafood. One study suggests that 
generic advertising to promote the sales of seafood either had no 
effect on sales or depressed sales. Another study concluded that 
advertising and health awareness significantly affected the demand for 
seafood; these studies, however, were restricted to one retail firm in 
Houston, and used inches of print in fliers and newspapers as a measure 
of advertising. The Alaska Seafood Marketing Institute (ASMI), the 
Maryland Seafood Marketing Advisory Commission, and the Tilapia 
Marketing Institute have stated that they implemented successful 
marketing campaigns, respectively, for salmon, blue crabs, and tilapia. 
Up to 40 percent of the wild-capture, Alaskan salmon starts its life in 
hatcheries and tilapia is a product of fresh-water aquculture product, 
both of which can be increased in supply to match market pressures. Per 
capita consumption of tilapia increased by nearly 55.0 percent between 
2001 and 2003; they initiated the marketing campaign in 1999. Total 
landings of Alaskan salmon increased 21.8 percent between 2001 and 
2002; the years the ASMI conducted a generic marketing program for 
salmon. Maryland blue crab, on the other hand, is a wild-capture 
fishery that needs to be carefully monitored to ensure that overfishing 
does not occur. Large increases in sales were also found to 
characterize Maryland blue crabs following their implementation of a 
marketing program for blue crabs. While a significant part, Maryland 
blue crab landings are only a portion of the total fishery and these 
increases in landings could represent a reallocation of demand from one 
segment of the market to another in response to changes in perceived 
product quality. While promotional programs involving homogeneous and 
species-specific products have been for the most part successful, an 
attempt to form a national seafood Council to promote an increase in 
consumption of all seafood failed because of difficulty in getting 
agreement among fishermen, processors, and marketing firms over 
funding, program thrusts, and other elements required to make a program 
successful. In addition, increases in generic seafood demand in times 
prior to the large scale availability of imported seafood products 
created concerns among managers that increased prices at the dockside 
might create additional harvesting pressure for already overexploited 
fish stocks.
    While data are not available to measure the direct effects of 
advertising on seafood demand, over the last two decades agricultural 
economists have estimated rates of return from promotional programs 
under the Department of Agriculture's checkoff programs developed for 
beef, pork, and soybeans. In a checkoff program, producers are required 
to pay a fee based on a fraction of their production to commodity 
marketing and development boards. The fees are used to promote 
consumption and support production and utilization research. A 2000 
study to measure effects of the pork checkoff program on demand 
estimated returns to advertising investment as measured by a net 
benefit cost ratio (NBCR) to be 15 to 1, while in 2001, the NBCR for 
advertisement and research investment for soybeans was estimated at 8 
to 1. These large benefit to cost ratios need to be tempered when 
applied to fishery products because agricultural product supplies can 
be increased when prices rise creating additional benefits in the form 
of producer and consumer surplus. Fish product supplies are generally 
fixed by regulation and increases in prices can cause the dissipation 
of rents in a command and control managed fishery. In a rationalized 
fishery, such as

[[Page 3807]]

halibut/sablefish or wreck fish, such rent dissipation would not occur 
and net benefits could increase substantially as was demonstrated in 
recent studies of proposed rationalization programs for the Gulf of 
Mexico shrimp fishery.

Potential Economic Impact to Small Entities

    Agricultural commodity promotional programs have yielded aggregate 
profitability of varying degrees as measured by several studies using 
econometric techniques. Furthermore, as indicated through referenda for 
beef, poultry, and pork, agricultural producers have in large part 
supported checkoff programs in their respective commodities. The few 
studies involving seafood marketing programs indicate that they have 
been, for the most part, successful when involving a specific product. 
Based on the results of these studies NMFS has concluded that marketing 
boards that are species and or product specific are likely to be 
successful in increasing demand and, hence, profitability for the 
sector or sectors of the fishery represented by the Council. Therefore, 
small entities, on average, would likely profit, at least in the short 
term, from a well-run and managed Council. While the typical fishery 
may profit from increased demand through advertising and other 
promotions, there would be no guarantee that all fisheries and all 
sectors of fisheries and the firms comprising those sectors would 
profit equally. This would depend on individual firm's profit margins, 
the assessment fee, and price effects caused by advertising (positive) 
and the ability of non-participants to profit from free advertising 
(negative) by increasing supply and driving down prices (also known as 
the free rider problem). There is also the mandatory versus voluntary 
participation or the ``under-advertising'' argument.

Profit Margins

    NMFS recognizes that profit margins will vary largely by fishery 
sector and individual firms within fishery sectors. There are examples 
of small firms with larger profit margins within a fishery or sector of 
a fishery than their larger counterparts, e.g., small-vessel groundfish 
harvesters in the Northeast. Producers of specialty products for niche 
markets such as fancy canned albacore, smoked mussels, shrimp cocktail, 
etc. are assumed to have higher profit margins than their large volume 
counterparts. Nevertheless, direct impacts to the profit margins of 
individual firms from seafood marketing programs would depend on the 
increase in gross receipts attributable a Council's marketing efforts 
versus the amount of fees they are assessed. Increased demand would 
increase revenues to the aggregate of firms comprising any one market, 
but this does not guarantee that individual firms would have similar 
increases in gross receipts measured in magnitude or as a percentage of 
the total increase. Therefore, there could be marginal firms whose 
profit margins are smaller than the representative sector that would 
not benefit greatly from an increased demand yet be saddled with an 
assessment fee. The number of these firms, if they exist, is 
indeterminate. However, it is unlikely