Fish and Seafood Promotion Act Provisions; Seafood Marketing Councils, 18105-18118 [E7-6751]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 72, Number 69 (Wednesday, April 11, 2007)]
[Rules and Regulations]
[Pages 18105-18118]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6751]



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Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / 
Rules and Regulations

[[Page 18105]]



DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Part 270

[Docket No. 040720212-6238-02; 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: Final rule.

-----------------------------------------------------------------------

SUMMARY: In response to renewed fishing industry support for marketing 
and promotion-related activities, NMFS enacts regulations to implement 
the Fish and Seafood Promotion Act (FSPA) of 1986 for the 
establishment, organization, and operation of Seafood Marketing 
Councils (Councils). Council marketing and promotion plans will 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. The intent of this rule is to increase benefits from 
domestic fisheries while maintaining consistency with NMFS' stewardship 
goals and mission statement.

DATES: Effective May 11, 2007.

ADDRESSES: Copies of this rule, its Regulatory Impact Review (RIR), and 
Initial Regulatory Flexibility Analysis (IRFA) are available from 
Christopher M. Moore, Chief, Federal-State Division, Office of 
Sustainable Fisheries, NMFS, 1315 East West Highway, Silver Spring, MD 
20910. The Final Regulatory Flexibility Analysis (FRFA) consists of the 
IRFA, public comments and responses, and the summary of impacts and 
alternatives contained in the Classification section of the preamble of 
this final rule.
    Comments regarding the burden-hour estimates or other aspects of 
the collection-of-information requirements contained in this final rule 
should be submitted to Christopher M. Moore at the address above or fax 
to (301) 713-0596 and to David Rostker by e-mail at David--
Rostker@omb.eop.gov, or fax to (202) 395-7285.

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

SUPPLEMENTARY INFORMATION:

Background

    This final rule enacts regulations that implement the Fish and 
Seafood Promotion Act (FSPA) of 1986 (16 U.S.C. 4001 et seq.) to 
establish and operate Seafood Marketing Councils (Councils) in order to 
promote the consumption of domestically harvested seafood. A proposed 
rule requesting public comment on this action published in the Federal 
Register on January 24, 2006 (71 FR 3797). Public comments were 
accepted through February 23, 2006. A full discussion of the background 
of this rule was presented in the preamble to the proposed rule for 
this action and is not repeated here.
    In summary, NMFS issued a final rule in 1989 enacting the FSPA, as 
it pertains to Councils, for one or more species of fish or fish 
products. The FSPA permitted the creation of Councils under a set of 
guidelines established by the Secretary of Commerce (Secretary), who 
delegated authority to NMFS, to establish a National Seafood Marketing 
Council (National Council). This National Council was authorized to 
fund applicants' 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 FSPA were removed from the Code of Federal 
Regulations (CFR) as part of the government-wide Presidential 
regulatory reform effort. Although the implementing regulations were 
withdrawn from the CFR, the FSPA remains in effect.
    The seafood promotion council rule addresses a market failure that 
reduces consumer demand for seafood as a result of the dissemination of 
partial, misleading or faulty information to consumers. In reality, no 
consumer can have perfect information about a seafood product. However, 
the dissemination of significantly incorrect information about a 
product can substantially lower consumer demand. In the case of 
seafood, this could reduce consumption of an important health-
beneficial food. While the role of the federal government is not to 
promote seafood, it does have a responsibility to the consumer to 
ensure that the information presented to them is accurate and 
scientifically valid. The Secretary of Commerce or designee on the 
Seafood Promotion Council has the responsibility of approving or 
rejecting proposed marketing plans based on the accuracy and scientific 
validity of the information presented to the public.
    An example of a case where partial information leads to a 
substantial reduction in the consumer demand for a seafood product 
includes recent marketplace confusion over contaminants such as mercury 
in seafood. The Food and Drug Administration and industry have promoted 
the health benefits of omega-3 fatty acids, but consumers also hear 
that many of the fish highest in omega-3 fatty acids also generally 
contain the higher levels of contaminants. This leads to consumer 
confusion over the degree to which the relative health benefits exceed 
the risk from contaminants and may result in consumers diverting their 
demand for protein to other products that may provide fewer health 
benefits or carry different health risks. While the seafood industry 
could tackle this imperfect information market failure on its own 
through promotional campaigns and consumer education, opponents could 
counter that the industry action is ``self serving.'' To counter this 
perceived conflict of interest, the Federal government can offer, 
through the Seafood Promotion Act, a seal of approval to assure 
consumers that the

[[Page 18106]]

information being offered is accurate and reliable.
    Industry has expressed to NMFS interest and support for seafood 
marketing and promotion-related activities. 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. In response to industry requests, NMFS promulgates 
regulations providing the foundation for the establishment, 
organization, and administrative practices of the Councils.

Application to Establish A Council

    An application package submitted to NMFS to establish a Council 
must 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, Executive Order 12866, National 
Environmental Policy Act, and other information which may include, but 
is not limited to, an analysis of the primary, secondary, and tertiary 
affects of increasing demand for seafood. This information will be used 
by NMFS to determine if the proposed council or its marketing program 
is consistent with NMFS conservation goals, national standards, and 
other guidelines. The applicant will also have to demonstrate to NMFS 
that the council or its marketing program is consistent with Federal 
standards and guidelines on nutrition and health. For detailed 
information regarding application requirements, see the preamble to the 
proposed rule published January 24, 2006.
    NMFS will determine if the application package is complete and 
complies with all of the requirements set forth in the implementing 
regulations, the FSPA of 1986, and other applicable law and make an 
initial decision on the application within 180 days of receipt.

Referendum on Adoption of Proposed Charter and Council Appointments

    NMFS will conduct a referendum on the adoption of the proposed 
charter within 90 days of its initial affirmative decision. The 
referendum will 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. 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 will establish a 
Council and approve the proposed charter.
    NMFS will initially pay all costs related to the conduct of the 
referendum to establish a Council. Once an application has been 
approved, NMFS will 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. After the referendum has been conducted, NMFS will 
inform the applicants of the exact cost. If the referendum is approved 
and the proposed charter is adopted, the Council will 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.
    Within 30 days after a Council is established, NMFS will solicit 
nominations for Council members from the sector participants 
represented on the Council in accordance with the approved charter. The 
members of each Council should 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. NMFS will appoint the 
members of the Council from among the nominees within 60 days. The term 
for members would be 3 years. Council members will serve without 
compensation but would be reimbursed for their reasonable expenses 
incurred in performing their duties as members of the Council.

Continued Operation of a Council

    Continued operation of a Council is 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 will not be the sole criteria for determining the effectiveness 
of a marketing program. The Council must demonstrate that the marketing 
plan will 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 should 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 NMFS 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, are programs that comply 
with this standard. NMFS retains the authority to determine if the 
continued operation of a Council would be in the public interest.
    Councils will be required to: (1) meet performance standards 
approved by NMFS that demonstrate that marketing and promotion programs 
are effective in increasing consumer demand for species-specific 
seafood products; (2) conduct market assessments based on economic, 
market, social and demographic, and biological information as deemed 
necessary by NMFS; (3) submit annual plans and budgets for species-
specific marketing and promotion plans; (4) submit progress reports on 
implementation of the marketing and promotion plans; and (5) submit 
financial reports with respect to the receipt and disbursement of funds 
entrusted to it. NMFS will require a complete audit report to be 
conducted by an independent public accountant and submitted to NMFS at 
the end of each fiscal year.

Assessments

    Councils will be funded through voluntary assessment of the 
industry

[[Page 18107]]

represented on the Councils. Assessments will be imposed on sector 
participants in the receiving sector or the importing sector or both as 
specified in the approved Council charter. Assessment rates will 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 participate in a Council, no future assessments will be 
imposed. With NMFS' concurrence, a Council will establish the 
applicable assessment for those seeking to rejoin or participate in a 
Council at a future time.
    The Council will notify a sector participant subject to assessment 
that the assessment is due. The notification informs the participant 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. 
The notification also informs the participant of the right to request a 
refund of the assessment and provides deadlines for submission of the 
request.
    Persons subject to an assessment will 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, a person who has demanded a refund under Sec.  270.22 or filed 
a petition of objection under Sec.  270.21 may submit proof of these 
actions in lieu 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.
    Pursuant to 16 U.S.C. 4014, any sector participant who pays an 
assessment under the FSPA 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 will be established before any such assessment 
will be collected. Once a refund has been requested by a sector 
participant and paid by the Council, that sector participant will no 
longer participate in a referendum or other business of the Council 
during the remainder of the assessment rate period. However, if 
assessments are paid during a future assessment rate period and no 
refund is requested, that sector participant will 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 will 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 FSPA. 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. Furthermore, 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 will 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.
    An official observer appointed by NMFS will 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 AdministrationSec.  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 (NOAA) or other recognized 
Federal standards and/or specifications for fish and fish products.

Dissolution of a Council

    In order to terminate a Council, at least three sector participants 
in any one sector must file a petition with NMFS. The petition should 
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, will 
conduct a referendum for termination of the Council among all sector 
participants in that sector.
    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 will by order terminate the Council effective as of a 
date by which the affairs of the Council should be concluded.

Cost of Referendum

    NMFS will initially pay all costs of this referendum. However, 
prior to conducting the referendum, NMFS will 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, will 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 will 
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 will recover the balance of the expenses from the 
petitioners that posted a bond.

Comments and Responses

    Sixteen commenters provided 15 comments during the comment period 
for the proposed rule for this action. Commenters included commercial 
and recreational fishermen, processors, importers, distributors, 
marketers, senior scientists, environmental non-governmental 
organizations, and concerned citizens.
    Comment 1: Several commenters were concerned that the establishment 
of Seafood Marketing Councils would promote over-fishing or favor the 
commercial industry at the expense of recreational fishing 
opportunities. Some of the species listed as candidates for a marketing 
program (e.g., some groupers,

[[Page 18108]]

snappers, cod, and flatfish) are already overexploited.
    Response: Seafood Marketing Councils and their marketing plans are 
required to comply with NMFS' conservation and stewardship goals and 
objectives. Marketing Councils will not play any role in the management 
of fisheries through the setting of annual quotas, limitations on 
fishing effort or the allocation of fishery resources. Rebuilding plans 
for overexploited stocks will not be affected by this rule.
    Comment 2: A number of commenters emphasized the importance of 
educating the public about the nutritional benefits of seafood and the 
risks associated with mercury and other contaminants.
    Response: NMFS agrees that educating the public on the benefits and 
risks of eating seafood is important. The establishment of Seafood 
Marketing Councils is an opportunity to provide the public with 
accurate information about contaminant risks for vulnerable sub-
populations and to document the health benefits associated with 
consuming seafood.
    Comment 3: Several commenters were concerned that NMFS would 
intrude in the industrySec.  s marketing decisions. Commenters 
suggested that NMFS should not review or be expected to approve 
marketing plans developed by private sector experts. Additionally, they 
were concerned that Federal intervention in marketing efforts would 
strip away free market abilities.
    Response: This rule is intended to create a voluntary program that 
operates under the control of its participants. NMFS' role is to ensure 
that scientifically accurate information is provided to consumers of 
seafood products and to ensure the smooth functioning of the Marketing 
Councils. Marketing Councils will improve the transmission of clear and 
accurate information about seafood products to consumers and thereby 
enhance free market capabilities to allocate and price seafood 
products.
    Comment 4: Several non-governmental organizations emphasized the 
need for an Environmental Impact Statement (EIS).
    Response: Based on preliminary analyses under the National 
Environmental Policy Act (NEPA), NMFS has concluded that preparation of 
an EIS is not necessary at this time because the effort is primarily 
educational and informational in nature. The promotional nature of the 
effort is such that it will not affect individually or cumulatively the 
quality of the human environment, or impact managed species, essential 
fish habitat, or species or their habitat protected under the 
Endangered Species Act (16 U.S.C. 1531 et seq.). Further analysis under 
NEPA will be required before any Seafood Marketing Council is 
considered for approval by the Secretary. There is nothing in this 
action that would establish a precedent about future proposals.
    Comment 5: Two non-governmental organizations were concerned that 
the Seafood Marketing Councils may raise seafood prices for U.S. 
consumers. Middle- to low-income families would be less likely to 
purchase seafood and receive its nutritional benefits.
    Response: The market for fish products is diverse and complex. An 
increase in price for one commodity does not translate into an increase 
across all commodities. One commodity's price increase could result in 
a price decline for other seafood products. Many lower cost fish 
product alternatives will still exist for consumers even with a price 
increase in one product.
    Comment 6: One commenter questioned why the regulations to create 
Seafood Marketing Councils were previously removed.
    Response: The Fish and Seafood Promotion Act (FSPA) initially 
established a National Seafood Council funded by Congress. When the 
Congressional funds were exhausted, the seafood industry did not choose 
to continue the funding for the National Seafood Council, and it was 
deactivated. During that time, seafood product prices remained at 
premium levels and industry did not feel the need to fund generic 
marketing programs. Since the 1990s, the advance of aquaculture 
production worldwide has contributed to a decline in general prices for 
seafood products. Today, domestic commercial seafood harvesters are 
facing a financial crisis. Therefore, there is some renewed industry 
interest and support for seafood marketing and promotion-related 
activities.
    Comment 7: Several commenters were concerned that the amount of 
required analytical documentation to apply is too burdensome for the 
industry, and that there would be little incentive for industry to 
participate in this program.
    Response: The amount of analysis will vary according to the design 
and composition of each potential Seafood Marketing Council. NMFS staff 
will coordinate with applicants in the development of specific analysis 
requirements, subject to NMFS review and approval.
    Comment 8: Some commenters were concerned about the associated 
costs to NMFS during a time when the agency struggles with meeting 
costs of established programs. They requested that NMFS funds be 
allocated for issues like conservation and education, rather than 
seafood promotion.
    Response: Expenses of operating the Marketing Councils are to be 
borne entirely by Council participants. These are voluntary, self-
financed, industry-based, marketing programs that will not interfere 
with NMFS' ability to meet its mission goals.
    Comment 9: One association suggested that the criteria for a 
referendum should be the participation of companies representing 
greater than fifty percent of the industry's revenue rather than the 
participation of more than half of the industry's participants.
    Response: According to the FSPA, the majority of sector 
participants that vote in favor of establishing the Marketing Council 
must represent 66 percent of the value of the fish and fish products 
produced in the last six months by the sector petitioning to create a 
Marketing Council.
    Comment 10: One commenter suggested that foreign seafood market 
development should not be among the responsibilities of the Marketing 
Councils, since this function is already filled by the U.S. Department 
of Agriculture.
    Response: The focus of the Marketing Councils is on the domestic 
marketing of seafood. They are not intended to compete with other 
federal or state programs that have jurisdiction for international 
marketing of seafood products.
    Comment 11: One commenter suggested that the rule include a 
provision that allows small, regional marketing organizations to 
organize under a Seafood Marketing Council if they so choose.
    Response: Existing regional marketing organizations have a voice in 
the formation of any new Councils through the referendum process.
    Comment 12: One commenting organization was concerned that the rule 
promotes a singular species message that may conflict with their 
broader multi-species message. Another commenter was concerned that the 
Marketing Councils would exclude some participants or finance the 
promotion of one type of seafood at the expense of another.
    Response: Existing regional marketing councils can petition to form 
multi-species Councils. The merits of each potential Marketing Council 
will be considered on a case-by-case basis.
    Comment 13: One commenting group was opposed to voluntary 
participation. If someone decides not to vote in the referendum, that 
person will not be

[[Page 18109]]

assessed even if the majority of other sector participants agree to the 
formation of a Seafood Marketing Council. In their view, if a Marketing 
Council is formed for a particular fish or fish product, assessments 
should be required of all sector participants.
    Response: Recent decisions by the U.S. Supreme Court (Johanns v. 
Livestock Marketing Association; 544 U.S. 550; 2005 U.S. LEXIS 4343), 
while not specifically addressing voluntary participation in Seafood 
Marketing Councils, strongly indicated that a voluntary Marketing 
Council program would be preferable to mandatory participation in 
future councils.
    Comment 14: One commenter suggested that the quality seal should 
not be used as an eco-label; this perception could be confusing to the 
public.
    Response: The criteria supporting a quality seal will be subject to 
approval by the Secretary, and made known to the public. A quality seal 
will not be taken to mean environmentally friendly.
    Comment 15: Several organizations believe the rule is inconsistent 
with NOAASec.  s goal of decreasing the seafood trade deficit. They 
suggested that by allowing importers to participate in the Marketing 
Councils, NMFS would be providing an indirect subsidy for imported 
seafood, thus undermining a program such as offshore aquaculture that 
was intended to reduce U.S. dependence on seafood imports.
    Response: The establishment of Seafood Marketing Councils will not 
be a Government subsidy to the commercial fishing industry, either 
foreign or domestic, since all costs will be funded by the Marketing 
Council's participants. It is not expected to contribute to the seafood 
trade deficit.

Changes From the Proposed Rule

    Pursuant to the Paperwork Reduction Act (PRA), part 902 of title 15 
CFR displays control numbers assigned to NMFS information collection 
requirements by the Office of Management and Budget (OMB). This part 
fulfills the requirements of section 3506(c)(1)(B)(I) of the PRA, which 
requires that agencies display a current control number assigned by the 
Director of OMB, for each agency information collection requirement. 
This final rule codifies OMB control numbers for 0648-0556 for Sec.  
270.
    Under NOAA Administrative Order 205-11, 07/01, dated December 17, 
1990, the Under Secretary for Oceans and Atmosphere has delegated 
authority to sign material for publication in the Federal Register to 
the Assistant Administrator for Fisheries, NOAA.

Classification

    This final rule has been determined to be significant for purposes 
of Executive Order 12866.
    This final rule contains a collection-of-information requirement 
subject to the Paperwork Reduction Act (PRA) and which has been 
approved by OMB under control number 0648-0556. The information 
collection requirements contained in this final rule can be broadly 
categorized into two categories: (1) Information required of an 
individual or organization applying for consideration to form a 
Council, and (2) information required of a formed and operating 
Council. Information required of an individual or organization applying 
for consideration to form a Council, consists of an ``application for 
charter'' that is composed of three sections: petition, proposed 
charter, and a list of eligible referendum participants. Public 
reporting burden for this portion of the collection requirement in 50 
CFR part 270 is 320 hours in total, with an average of 80 hours to 
develop a petition, 200 hours to develop a proposed charter, and 40 
hours to develop a list of eligible referendum participants. All other 
information requirements in the final rule are imposed on the Councils, 
once they are established. The estimated reporting time for these 
information requirements varies from 1 to 120 hours per response. 
Council submission of an annual plan, an annual budget, and an annual 
financial report are estimated at 120 hours each for a total of 360 
hours. Council submissions of semi-annual progress reports are 
estimated at 40 hours twice a year, notice of assessments at 20 hours 
once a year, list of Council nominations following a favorable 
referendum at 20 hours once a year, and meeting notices at 1-2 hours 
once a year. Other submissions are optional and are dependent upon the 
operation of a particular Council and its participants. For instance, 
Council submission of a plan to conduct a referendum on development of 
quality standards is estimated at 40 hours with no more than annual 
frequency. Additionally, assessed participants of a Council submission 
of a petition of objection and/or request for refund is estimated at 2 
hours each no more than 6 times a year. These estimated reporting times 
include the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. The total time estimate is 
1,127 hours. The total annual cost burden to respondents is expected to 
be $4,700 based on the need for outside auditing of Seafood Marketing 
Council financial records. Start up costs are $3,200 and annual 
operating costs are $1,500. Send comments regarding these burden 
estimates or any other aspects of the data collection to NMFS (see 
ADDRESSES) and by e-mail to David--Rostker@omb.eop.gov, or fax to (202) 
395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection-of-information displays 
a currently valid OMB control number.

Final Regulatory Flexibility Analysis

    NMFS prepared this FRFA which incorporates the Initial Regulatory 
Flexibility Analysis (IRFA) published in the Federal Register on 
January 24, 2006 (71 FR 3797). The IRFA is not repeated here in its 
entirety. The need for and the objectives of the rule are explained in 
the SUMMARY and SUPPLEMENTARY INFORMATION sections of the proposed rule 
and this final rule.

Description of and Estimate of the Number of Small Entities to Which 
the Final Rule Will Apply

    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 $4.0 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.

Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    The information collection requirements contained in this final 
rule can be broadly categorized into two categories: (1) Information 
required of an individual or organization applying for consideration to 
form a Council, and

[[Page 18110]]

(2) information required of a formed and operating Council. Information 
required of an individual or organization applying for consideration to 
form a Council, consists of an ``application for charter'' that is 
composed of three sections: petition, proposed charter, and a list of 
eligible referendum participants. The estimated reporting time for this 
portion of the collection requirement in 50 CFR part 270 is 320 hours 
in total, with an average of 80 hours to develop a petition, 200 hours 
to develop a proposed charter, and 40 hours to develop a list of 
eligible referendum participants. All other information requirements 
are imposed on the Councils, once they are established. The estimated 
reporting time for these information requirements varies from 1 to 120 
hours per response. Council submission of an annual plan, an annual 
budget, and an annual financial report are estimated at 120 hours each 
for a total of 360 hours. Council submissions of semi-annual progress 
reports is estimated at 40 hours twice a year, notice of assessments at 
20 hours once a year, list of Council nominations following a favorable 
referendum at 20 hours once a year, and meeting notices at 1-2 hours 
once a year. Other submissions are optional and are dependent upon the 
operation of a particular Council and its participants. For instance, 
Council submission of a plan to conduct a referendum on development of 
quality standards is estimated at 40 hours with no more than annual 
frequency. Additionally, assessed participants of a Council's 
submission of an objection petition and/or request for refund is 
estimated at 2 hours each no more than 6 times a year. These estimated 
reporting times include the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    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 final 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.

A Summary of the Significant Issues Raised by the Public Comments in 
Response to the IRFA, a Summary of the Assessment of the Agency of Such 
Issues, and a Statement of Any Changes Made in the Final Rule as a 
Result of Such Comments

    NMFS received 15 comments from 16 commenters on the proposed rule. 
Of these, seven comments were submitted either directly on the 
conclusions reached in the IRFA or on the economic viability of the 
rulemaking vis-a-vis small businesses.
    Comment A: Several commenters believed that the promotion of 
fishery exports is already supported by the Foreign Agricultural 
Service (FAS), United States Department of Agriculture (USDA), and the 
proposed seafood marketing councils may overlap with rulemaking 
specific to the FAS.
    Response: NMFS recognizes that there may be a slight overlap with 
rulemaking that may be specific to the functions of the FAS. However, 
NMFS believes that the overlaps are not significant and seafood 
marketing councils may provide additional benefits to constituents by 
providing unique services. Discussions between FAS and NMFS are ongoing 
to address any overlaps that could result from this rulemaking.
    Comment B: One commenter believes that too much Federal involvement 
strips away free market abilities from any individual.
    Response: The IRFA notes that the implementation of this final rule 
does not guarantee that all firms will benefit equally from a seafood 
promotion program. However, NMFS believes that increasing the demand 
for seafood products would only serve to enhance the markets for 
seafood via increased demand and increased pricing power.
    Comment C: One commenter believes the Council should not give money 
to one seafood at the expense of a different type.
    Response: NMFS is requiring seafood councils, as part of their 
planning process, to submit an economic analysis that would support 
Regulatory Flexibility Act (RFA) and Executive Order 12866 (E.O. 12866) 
analysis used for rulemaking to determine impacts to other seafood 
products. NMFS will not support marketing plans for one product that 
would significantly affect the profitability of firms operating in 
another seafood sector of the economy. If the analysis indicates 
potential impacts to small entities, the Agency will attempt to 
mitigate to the extent practicable adverse impacts to other sectors 
that may accrue.
    Comment D: One commenter disagreed with the Agency's assertion that 
the free rider problem would be less significant for fisheries than 
agricultural products.
    Response: As noted in the IRFA, NMFS believes that relative price 
changes would be less severe in situations where increased supplies 
from the aggregate of firms respond to higher demand (also known as an 
elastic demand for most fishery products). However, NMFS did not state 
that a free rider problem would not exist and pointed out that product 
differentiation could alleviate much of the perceived problem.
    Comment E: One commenter believed that requiring analyses that 
would support RFA or E.O. 12866 analyses would be burdensome.
    Response: NMFS agrees that this would be time consuming but the 
benefits of performing these analyses would far outweigh the costs in 
regard to the ability to estimate the effects of marketing plans on 
small entities, producers of other seafood and agricultural products, 
and the general economy as well.
    Comment F: One commenter representing a regional fisheries 
marketing council noted that direct competition from species-specific 
Federally-guided councils would directly compete against their products 
and dilute their position in the marketplace.
    Response: See Response to Comment C.
    Comment G: One commenter representing a fishing industry sector 
believes that all firms identified as part of a sector should pay a 
mandatory fee regardless of whether they desire to participate in a 
council or not and further asserts that voluntary or ``de facto 
voluntary'' formation of seafood promotion councils is not what the 
Fish and Seafood Promotion Act (FSPA) intended.
    Response: NMFS specifically requested comments on whether the 
amount of funds collected through ``de facto'' voluntary assessments 
after considering administrative costs, program costs, the effect of 
free riders, and other economic considerations would enable Councils to 
develop and maintain marketing, assessment, and research programs 
sufficient to benefit both the industry and those firms choosing to pay 
``de facto'' voluntary assessments. There were no comments received on 
this specific solicitation.

[[Page 18111]]

Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes

    There are two major provisions of this final rule that will 
minimize economic impacts to small entities. Firstly, the Agency has 
provided a means for a small entity to forego a mandatory assessment 
fee even though they may be listed as a participant for a proposed 
Council. By making Council participation voluntary, small businesses 
that believe it will not be cost effective to participate in a Council 
would not be required to do so. Consequently, these businesses could 
avoid additional cost of sales that could reduce or squeeze their 
overall profit margin. Secondly, the provision that will require 
Councils to submit, to NMFS, economic analysis of the impacts to small 
entities of proposed marketing and promotion plans will allow the 
Agency to mitigate to the extent practicable any adverse impacts that 
may accrue to participants in a Council, other fishery sectors, or non-
fishery sectors.

Small Entity Compliance Guide

    Section 212 of the Small Business Enforcement Fairness Act of 1996 
states that, for each rule or group of related rules for which an 
agency is required to prepare a FRFA, the agency shall publish one or 
more guides to assist small entities in complying with the rule, and 
shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. There are no 
compliance issues directly associated with the implementation of this 
rule. However, when a petition to form a Council is received by the 
Agency, a copy of this published final rule with a cover letter 
informing the petitioners of administrative requirements for initiating 
the Council process including requirements for conducting a referendum 
will be provided to the petitioners. The cover letter will also list 
Agency contacts responsible the Seafood Marketing Council program. 
Copies of this final rule and cover letter are available from the 
Office of Sustainable Fisheries, NMFS (see ADDRESSES).

List of Subjects

15 CFR Part 902

    Reporting and recordkeeping requirements.

50 CFR Part 270

    Administrative practice and procedure, Fish, Marketing, Seafood.

    Dated: April 4, 2007.
William T. Hogarth,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.

0
For the reasons set out in the preamble, 15 CFR Chapter IX and 50 CFR 
Chapter II are amended as follows:

15 CFR Chapter IX

PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE 
PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS

0
1. The authority citation for part 902 continues to read as follows:

    Authority: 44 U.S.C. 3501 et seq.


0
2. In Sec.  902.1, the table in paragraph (b) under ``50 CFR'' is 
amended by adding new entries to read as follows:


Sec.  902.1  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                                 Current OMB control
 CFR part or section where the information     number(all numbers begin
     collection requirement is located               with 0648-)
------------------------------------------------------------------------
                                * * * * *
 
50 CFR                                       ...........................
                                * * * * *
270.3                                        -0556
270.6                                        -0556
270.8                                        -0556
270.10                                       -0556
270.12                                       -0556
270.13                                       -0556
270.14                                       -0556
270.15                                       -0556
270.19                                       -0556
270.20                                       -0556
270.23                                       -0556
                                * * * * *
 
------------------------------------------------------------------------


0
3. A new subchapter H consisting of part 270 is added to Chapter II to 
read as follows:

50 CFR Chapter II

SUBCHAPTER H--FISH AND SEAFOOD PROMOTION

PART 270--SPECIES-SPECIFIC SEAFOOD MARKETING COUNCILS

Sec.
270.1 Scope.
270.2 Definitions.
270.3 Submission of application.
270.4 Review of application.
270.5 Conduct of referendum.
270.6 Sector participants eligible to vote.
270.7 Results of referendum.
270.8 Nomination and appointment of Council members.
270.9 Terms, vacancies, and removal of Council members.
270.10 Responsibilities of a Council.
270.11 Responsibilities of NMFS.
270.12 Notice of Council meetings.
270.13 Books, records and reports.
270.14 Update of sector participant data.
270.15 Quality standards.
270.16 Deposit of funds.
270.17 Authority to impose assessments.
270.18 Method of imposing assessments.
270.19 Notice of assessment.
270.20 Payment of assessments.
270.21 Petition of objection.
270.22 Refunds.
270.23 Dissolution of Councils.

    Authority: 16 U.S.C. 4001-4017


Sec.  270.1  Scope.

    This part 270 describes matters pertaining to the establishment, 
representation, organization, practices, procedures, and termination of 
Seafood Marketing Councils.


Sec.  270.2  Definitions.

    The following terms and definitions are in addition to or amplify 
those contained in the Fish and Seafood Promotion Act of 1986:
    Act means the Fish and Seafood Promotion Act of 1986 (Public Law 
99-659) and any subsequent amendments.
    Consumer education means actions undertaken to inform consumers of 
matters related to the consumption of fish and fish products.
    Council means a Seafood Marketing Council for one or more species 
of fish and fish products of that species established under section 210 
of the Act (16 U.S.C. 4009).
    Expenditure means monetary or material worth of fishery products. 
Expenditure is determined at the point a receiver obtains product from 
a harvester or an importer obtains product from a foreign supplier. 
Value may be expressed in monetary units (the price a receiver pays to 
a harvester or an importer pays to a foreign supplier).
    Fiscal year means any 12-month period as NMFS may determine for 
each Council.
    Fish means finfish, mollusks, crustaceans, and all other forms of 
aquatic animal life used for human consumption; the term does not 
include marine mammals and seabirds.
    Harvester means any person in the business of catching or growing 
fish for purposes of sale in domestic or foreign markets.

[[Page 18112]]

    Importer means any person in the business of importing fish or fish 
products from another country into the United States and its 
territories, as defined by the Act, for commercial purposes, or who 
acts as an agent, broker, or consignee for any person or nation that 
produces, processes or markets fish or fish products outside of the 
United States for sale or for other commercial purposes in the United 
States.
    Marketer means any person in the business of selling fish or fish 
products in the wholesale, export, retail, or restaurant trade, but 
whose primary business function is not the processing or packaging of 
fish or fish products in preparation for sale.
    Marketing and promotion means any activity aimed at encouraging the 
consumption of fish or fish products or expanding or maintaining 
commercial markets for fish or fish products.
    Member means any person serving on any Council.
    Participant means a member of a sector or business identified in an 
application for a Council charter as being subject to the referendum or 
assessment process.
    Person means any individual, group of individuals, association, 
proprietorship, partnership, corporation, cooperative, or any private 
entity of the U.S. fishing industry organized or existing under the 
laws of the United States or any state, commonwealth, territory or 
possession of the United States who meets the eligibility requirements 
as defined in a proposed charter to vote in a referendum.
    Processor means any person in the business of preparing or 
packaging fish or fish products (including fish of the processor's own 
harvesting) for sale in domestic or foreign markets.
    Receiver means any person who owns fish processing vessels and any 
person in the business of acquiring (taking title to) fish directly 
from harvesters.
    Research means any type of research designed to advance the image, 
desirability, usage, marketability, production, quality and safety of 
fish and fish products.
    Secretary means the Secretary of Commerce, or the Secretary's 
designee.
    Sector means
    (1) The sector consisting of harvesters;
    (2) The sector consisting of importers;
    (3) The sector consisting of marketers;
    (4) The sector consisting of processors;
    (5) The sector consisting of receivers; or
    (6) 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;
    Sector participant means any individual, group of individuals, 
association, proprietorship, partnership, corporation, cooperative, or 
any private entity of the U.S. fishing industry organized or existing 
under the laws of the United States or any state, commonwealth, 
territory or possession of the United States who meets the eligibility 
requirements as defined in a proposed charter to vote in a referendum.
    Species means a fundamental category of taxonomic classification, 
ranking after genus, and consisting of animals that possess common 
characteristic(s) distinguishing them from other similar groups.
    Value means monetary or material worth of fishery products. Value 
is the difference between what a receiver is willing to pay for a 
product provided by a harvester and its market price or an importer is 
willing to pay for a product from a foreign supplier and its market 
price. Value may be expressed in monetary units representing consumer 
surplus or producer surplus.


Sec.  270.3  Submission of application.

    (a) Persons who meet the minimum requirements for sector 
participants as described in the proposed charter may file an 
application with NMFS for a charter for a Seafood Marketing Council for 
one or more species of fish and fish products of that species. One 
signed original and two copies of the completed application package 
must be submitted to the Assistant Administrator for Fisheries, 
National Marine Fisheries Service, NOAA, 1315 East-West Highway, Silver 
Spring, MD 20910. Applications should not be bound.
    (b) The application consists of four parts:
    (1) A document requesting NMFS to establish a Council;
    (2) A proposed charter under which the proposed Council will 
operate;
    (3) A list of eligible referendum participants; and
    (4) Analytical documentation addressing requirements of applicable 
law.
    (c) Content of application--(1) Application or requesting document. 
The application or requesting document submitted by the applicants to 
NMFS requesting that the Council be established, to the extent 
practicable, must include the signatures or corporate certifications, 
of no less than three sector participants representing each sector 
identified in accordance with paragraph (c)(2)(v) of this section and 
who, according to the available data, collectively accounted for, in 
the 12-month period immediately preceding the month in which the 
application was filed, not less than 10 percent of the value of the 
fish or fish products specified in the charter that were handled during 
such period in each sector by those who meet the eligibility 
requirements to vote in the referendum as defined by the application. 
The application must also include a statement that, if established, the 
Council will have sufficient resources (e.g., cash, donated office 
space, services, supplies, etc.) available for initial administrative 
expenditures pending collection of assessments.
    (2) Proposed charter. A proposed charter must contain, at a 
minimum, the following information:
    (i) The name of the Council and a provision proclaiming its 
establishment;
    (ii) A declaration of the purposes and objectives of the Council;
    (iii) A description of the species of fish and fish products, 
including the scientific and common name(s), for which the Council will 
implement marketing and promotion plans under the Act. (The American 
Fisheries Society's ``List of Common and Scientific Names of Fishes 
from the United States and Canada'' (latest edition) or where 
available, an appropriate volume of its ``List of Common and Scientific 
Names of Aquatic Invertebrates of the United States and Canada'' 
(latest edition) should be used as the authority for all scientific and 
common names.);
    (iv) A description of the geographic area (state(s)) within the 
United States covered by the Council;
    (v) The identification of each sector and the number and terms of 
representatives for each sector that will be voting members on the 
Council. (The number of Council members should be manageable, while 
ensuring equitable geographic representation. The term for members will 
be 3 years. Initially, to ensure continuity, half of the members' terms 
will be 2 years and half will be 3 years. Reappointments are 
permissible.);
    (vi) The identification of those sectors (which must 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;
    (vii) For each sector described under paragraph (c)(2)(v) of this 
section, a threshold level specifying the minimum requirements, as 
measured by income,

[[Page 18113]]

volume of sales, or other relevant factors, that a person engaging in 
business in the sector must meet in order to participate in a 
referendum;
    (viii) A description of the rationale and procedures for 
determining assessment rates as provided in Sec.  270.18, based on a 
fixed amount per unit of weight or measure, or on a percentage of value 
of the product handled;
    (ix) The proposed rate or rates that will be imposed by the Council 
on receivers and, if subject to assessment, importers during its first 
year of operation;
    (x) The maximum amount by which an assessment rate for any period 
may be raised above the rate applicable for the immediately preceding 
period;
    (xi) The maximum rate or rates that can be imposed by a Council on 
receivers or importers during the operation of the Council;
    (xii) The maximum limit on the amount any one sector participant 
may be required to pay under an assessment for any period;
    (xiii) The procedures for providing refunds to sector participants 
subject to assessment who request the same in accordance with the time 
limits specified Sec.  270.22;
    (xiv) A provision setting forth the voting procedures by which 
votes may be cast by proxy;
    (xv) A provision that the Council will have voting members 
representing the harvesting, receiving and, if subject to assessment, 
importing sectors;
    (xvi) 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;
    (xvii) A provision that members of the Council will serve without 
compensation, but will be reimbursed for reasonable expenses incurred 
in performing their duties as members of the Council;
    (xviii) A provision containing a requirement for submission to NMFS 
the criteria and supporting data for evaluating the annual and/or 
multi-year performance of proposed marketing plans and the Council's 
performance;
    (xix) A provision containing a requirement for submission of 
documentation as requested by NMFS for purposes of evaluating 
performance of proposed marking plans and the Council's related 
performance;
    (xx) Where adequate funds are not available, a provision containing 
the minimum number of participants needed for sustained operations that 
cannot receive assessment refunds;
    (xxi) A provision acknowledging that NMFS will have the right to 
participate in Council meetings;
    (xxii) A provision that the Council will conduct its activities in 
accordance with applicable NMFS requirements and that NMFS has final 
approval authority over proposed marketing plans and Council actions;
    (xxiii) 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;
    (xxiv) 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
    (xxv) A provision containing a requirement for the Council to 
update the list of referendum participants on an annual basis.
    (3) List of referendum participants. The list of referendum 
participants, to the extent practicable, must identify the business 
name and address of all sector participants that the applicants believe 
meet the requirements for eligibility to vote in the referendum on the 
adoption of the proposed charter.
    (i) The list should include all sectors in which a sector 
participant meets the eligibility requirements to vote in a referendum. 
If a sector participant has more than one place of business located 
within the geographic area of the Council, all such places should be 
listed and the primary place of business should be designated. The 
agency will provide appropriate information in its possession of a non-
proprietary nature to assist the applicants in developing the list of 
sector participants.
    (ii) [Reserved]
    (4) Analytical documentation. The applicant must address the 
requirements of the Act, implementing regulations, and other applicable 
law, i.e., E.O. 12866, Regulatory Flexibility Act, National 
Environmental Policy Act, and other law as NMFS determines appropriate.


Sec.  270.4  Review of application.

    Within 180 days of receipt of the application to establish a 
Council, NMFS will:
    (a) Determine if the application is complete and complies with all 
of the requirements set out in Sec.  270.3 and complies with all 
provisions of the Act and other applicable laws.
    (b) Identify, to the extent practicable, those sector participants 
who meet the requirements for eligibility to participate in the 
referendum to establish the Council. NMFS may require additional 
information from the applicants or proposed participants in order to 
verify eligibility. NMFS may add names to or delete names from the list 
of sector participants believed eligible by the applicants until the 
time of the referendum based on additional information received.
    (c) If NMFS finds minor deficiencies in an application that can be 
corrected within the 180-day review period, NMFS will advise the 
applicants in writing of what must be submitted by a specific date to 
correct the minor deficiencies.
    (d) If NMFS makes a final negative determination, on an 
application, NMFS will advise the applicant in writing of the reason 
for the determination. The applicant may submit another application at 
any time thereafter. NMFS then has 180 days from receipt of the new 
application to render a final determination on its acceptability.


Sec.  270.5  Conduct of referendum.

    (a) Upon making affirmative determinations under Sec.  270.4, NMFS, 
within 90 days after the date of the last affirmative determination, 
will conduct a referendum on the adoption of the proposed charter.
    (b) NMFS will estimate the cost of conducting the referendum, 
notify the applicants, and request that applicants post a bond or 
provide other applicable security, such as a cashierSec.  s check, to 
cover costs of the referendum.
    (c) NMFS will initially pay all costs of a referendum to establish 
a Council. Within two years after establishment, the Council must 
reimburse NMFS for the total actual costs of the referendum from 
assessments collected by the Council. If a referendum fails to result 
in establishment of a Council, NMFS will immediately recover all 
expenses incurred for conducting the referendum from the bond or 
security posted by applicants. In either case, such expenses will not 
include salaries of government employees or other administrative 
overhead, but will be limited to those additional direct costs incurred 
in connection with conducting the referendum.
    (d) No less than 30 days prior to holding a referendum, NMFS will:
    (1) Publish in the Federal Register the text of the proposed 
charter and the most complete list available of sector participants 
eligible to vote in the referendum; and
    (2) Provide for public comment, including the opportunity for a 
public meeting.

[[Page 18114]]

Sec.  270.6  Sector participants eligible to vote.

    (a) Any participant who meets the minimum requirements as measured 
by income, volume of sales or other relevant factors specified in the 
approved charter may vote in a referendum.
    (b) Only one vote