Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Amendment 29, 44732-44750 [E9-20954]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 74, Number 167 (Monday, August 31, 2009)]
[Rules and Regulations]
[Pages 44732-44750]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20954]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Part 622

[Docket No. 090206149-91081-03]
RIN 0648-AX39


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Amendment 29

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

ACTION:  Final rule.

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SUMMARY:  NMFS issues this final rule to implement Amendment 29 to the 
Fishery Management Plan for Reef Fish Resources of the Gulf of Mexico 
(FMP), as prepared and submitted by the Gulf of Mexico Fishery 
Management Council (Council). This final rule implements a multi-
species individual fishing quota (IFQ) program for the grouper and 
tilefish component of the commercial sector of the reef fish fishery in 
the Gulf of Mexico (Gulf) exclusive economic zone. In addition, the 
final rule allows permit consolidation and dual classifications to the 
shallow-water grouper (SWG) and deep-water grouper (DWG) management 
units for speckled hind, warsaw grouper, and scamp, and modifies some 
provisions of the Gulf red snapper IFQ program for consistency with 
this final rule. NMFS also informs the public of the approval by the 
Office of Management and Budget (OMB) of the collection-of-information 
requirements contained in this final rule and publishes the OMB control 
numbers for those collections. This rule is intended to reduce effort 
in the grouper and tilefish component of the commercial Gulf reef fish 
fishery.

DATES:  This final rule is effective September 30, 2009; however, the 
applicability date for all the amendments except for amendments to 
Sec.  622.7 (gg) and (hh), Sec.  622.20(b), Sec.  622.20(c)(3)(v), and 
Sec.  622.20(c)(6) is January 1, 2010.

[[Page 44733]]


ADDRESSES:  Copies of the Final Environmental Impact Statement (FEIS), 
Final Regulatory Flexibility Analysis (FRFA), and Record of Decision 
(ROD) may be obtained from Susan Gerhart, Southeast Regional Office, 
NMFS 263 13th Avenue South, St. Petersburg, FL 33701; telephone 727-
824-5305; fax 727-824-5308.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to Susan Gerhart, Southeast Regional 
Office, NMFS, and by e-mail to David_Rostker@omb.eop.gov, or by fax to 
202-395-7285.

FOR FURTHER INFORMATION CONTACT:  Susan Gerhart, telephone: 727-824-
5305.

SUPPLEMENTARY INFORMATION: The reef fish fishery of the Gulf of Mexico 
is managed under the FMP. The FMP was prepared by the Council and is 
implemented through regulations at 50 CFR part 622 under the authority 
of the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act).
    On April 8, 2009, NMFS published a notice of availability of 
Amendment 29 and requested public comments (74 FR 15911). On April 30, 
2009, NMFS published the proposed rule to implement Amendment 29 and 
requested public comments (74 FR 20134). NMFS approved Amendment 29 on 
July 2, 2009. The rationale for the measures in Amendment 29 is 
provided in the amendment and the preamble to the proposed rule and is 
not repeated here.
    Effective Dates and Applicability Dates
    To implement this IFQ program on January 1, 2010, it is essential 
that certain provisions of the final rule be effective earlier to allow 
for the logistical operations required prior to implementation, e.g., 
exchange of information between NMFS and fishers and dealers, 
preliminary determinations of eligibility, share values, etc. 
Therefore, NMFS has structured this rule to make the entire rule 
effective September 30, 2009 but is delaying the applicability date, 
the date on which compliance is required, until January 1, 2010, for 
all provisions of the rule except Sec.  622.7(gg) and (hh), Sec.  
622.20(b), Sec.  622.20(c)(3)(v), and Sec.  622.20(c)(6). Compliance 
with these sections of the rule is required September 30, 2009. 
Compliance with all other provisions of the rule is required beginning 
January 1, 2010, the start of the fishing year and the start of the IFQ 
program.

Comments and Responses

    NMFS received 153 public comments on Amendment 29 and the proposed 
rule, including 94 comments from individuals, 54 copies of a form 
letter sent by individuals, and 5 comments from non-governmental 
agencies. Several comments fell outside the scope of the amendment and 
the rule, including comments regarding the Council's role in fisheries 
management, bycatch in the red snapper IFQ program, IFQ programs in 
Iceland, and a comment questioning the legal authority of the Magnuson-
Stevens Act. These comments were not addressed in this final rule. 
Comments that pertain to the actions addressed in the amendment or the 
proposed rule were categorized by topic. The following are NMFS' 
respective responses for each category.
    Comment 1: An IFQ program is not needed because quotas are not 
being met.
    Response: The intention of the IFQ program is to rationalize effort 
and reduce overcapacity in the grouper and tilefish component of the 
commercial Gulf reef fish fishery to achieve and maintain optimum yield 
for the fishery. An IFQ program will also improve safety at sea by 
eliminating derby conditions under which fishermen race to harvest as 
many fish as possible before the quota is reached. Both DWG and 
tilefish quotas have been met or exceeded, annually, the past 5 years. 
SWG and red grouper quotas were not met the past 2 years, but were met 
before 2006. Preliminary results from the red grouper and gag stock 
assessments, in May 2009, indicate that quotas may need to be reduced 
to levels below landings in recent years.
    The fact that in some years certain grouper and tilefish components 
of the commercial Gulf reef fish fishery did not experience a closure, 
does not indicate a significant change in the prevailing incentive 
structure for derby behavior. Rather, it is simply an indication of 
changes in relative abundance due to biological factors.
    Comment 2: Actions to restrict longline gear and a new grouper 
stock assessment update that may indicate a need for further reduction 
in the quota will reduce capacity in the fishery; therefore an IFQ is 
not needed.
    Response: Amendment 31 to the Gulf reef fish FMP addresses hard 
shell sea turtle takes by the longline component of the commercial Gulf 
reef fish fishery. Proposed restrictions include time/area closures and 
gear endorsements. These actions could reduce effort for SWG; however, 
they are not expected to decrease effort for DWG or tilefish.
    Preliminary reports from the red grouper and gag stock assessment 
updates indicate total allowable catch (TAC) may need to be reduced for 
these species. If the same number of vessels that comprise the fishery 
were under a reduced TAC, this situation would compound the 
overcapacity issue and could continue to lead to early closures. Thus 
the intentions of the IFQ program to reduce overcapacity and eliminate 
the race for fish would become even more necessary in the Gulf reef 
fish fishery.
    Comment 3: The IFQ program will improve management, better utilize 
resources, and help meet National Standards (NS) 1, 9, and 10.
    Response: Current regulatory measures used in the management of the 
grouper complex have allowed the fishery to become overcapitalized, 
which means the collective harvest capacity of participants is in 
excess of that required to efficiently harvest the commercial share of 
the total allowable catch. The overcapitalization observed in the 
fishery has caused commercial grouper regulations to become 
increasingly restrictive over time, intensifying derby conditions under 
which fishermen race to harvest as many fish as possible before the 
quota is reached.
    Incentives for overcapitalization and derby fishing conditions are 
expected to be maintained as long as the current management structure 
persists. Therefore, the Council approved and NMFS is implementing an 
IFQ program to rationalize effort and reduce overcapacity in the 
grouper and tilefish component of the commercial Gulf reef fish fishery 
to achieve and maintain optimum yield in this multi-species fishery.
    IFQ programs can help meet NS 1, 9, and 10, by preventing 
overfishing, minimizing bycatch and bycatch mortality, and promoting 
safety at sea. NS 1 requires management measures to prevent overfishing 
while achieving optimum yield for the fishery. Assigning shares to 
individual permit holders helps prevent landings from exceeding catch 
limits.
    NS 9 requires management measures to minimize bycatch and bycatch 
mortality. Under an IFQ program, regulatory discards due to seasonal 
closures are eliminated because fishermen can catch their allocation 
any time during the year. Discards are further limited because ghost 
fishing is expected to significantly decrease when crew members are not 
racing to catch fish. In addition, provisions for multi-use allocation 
will allow fishermen to land gag incidentally caught when

[[Page 44734]]

fishing for red grouper (or red grouper incidentally caught when 
fishing for gag) rather than discard them. Other IFQ program 
requirements, including a limited landings overage and revisions to 
species classification for warsaw grouper, speckled hind, and scamp 
will also contribute to reducing discards in the IFQ program for Gulf 
groupers and tilefishes.
    NS 10 requires management measures to promote safety at sea. Under 
an IFQ program, fishermen can fish any time during the year and not 
feel obliged to fish during bad weather. A lack of derby conditions 
will improve safety and overall quality of working conditions.
    Comment 4: The IFQ program should be implemented because it has 
significant and widespread support.
    Response: In 2004, the Council created an IFQ Advisory Panel to 
develop a plan for creating a grouper IFQ program. The ten members of 
the panel were commercial fishermen and dealers. The program received 
widespread support because it was designed by members of the industry. 
After development of Amendment 29, NMFS conducted a referendum in 
December 2008. Individuals eligible to participate in the referendum 
accounted for approximately 89 percent of grouper and tilefish landings 
during the qualifying time period. Eighty-one percent of votes were in 
favor of the proposed IFQ program. At their January 2009 meeting, the 
Council voted 14-3 in favor of submitting Amendment 29 to NMFS for 
approval.
    Comment 5: The IFQ program is inconsistent with the Magnuson-
Stevens Act.
    Response: Section 303A of the Magnuson-Stevens Act specifically 
authorizes and establishes requirements for limited access privilege 
programs (LAPPs). LAPP requirements under the Magnuson-Stevens Act 
include goals and objectives of the program, program duration and 
provisions for regular review, appeals process, allocation, and 
transferability. Amendment 29 addresses all of these issues, as well as 
details of the implementation of the program for which the Magnuson-
Stevens Act allows discretion. Amendment 29 and the associated rule 
have been determined by NOAA and the Department of Commerce to be 
consistent with the Magnuson-Stevens Act and other applicable laws.
    Comment 6: The IFQ program grants permanent rights to individuals 
to use a public resource.
    Response: Section 303A(a) of the Magnuson-Stevens Act clearly 
states that a limited access system does not create a right, title, or 
interest. Awarded shares are considered a grant of permission to 
harvest that may be revoked at any time, in accordance with the 
Magnuson-Stevens Act. The IFQ program does not confer any right of 
compensation to shareholders if it is discontinued.
    Comment 7: The IFQ program will increase bycatch.
    Response: Under an IFQ program, regulatory discards due to seasonal 
closures are eliminated because fishermen can catch their allocation at 
any time during the year. Discards are further limited because ghost 
fishing, which refers to fish killed by abandoned or lost gear, is 
expected to significantly decrease when crew members are not racing to 
catch fish. In the Gulf, implementation of the red snapper IFQ program 
and the 13-inch minimum size limit in 2007 resulted in fewer fish 
discarded per fish landed.
    The allowance of multi-use allocation for gag and red grouper will 
further reduce discards. Annual multi-use allocation allows fishermen 
to use a small portion of their allocation for one species to harvest 
another species that would otherwise be discarded because the fisherman 
does not possess allocation for that species.
    Reduced bycatch of warsaw grouper, speckled hind, and scamp is 
expected to occur with revisions to species classifications in the DWG 
and SWG complexes under this IFQ program. Warsaw grouper and speckled 
hind, which are considered DWG species under current regulations, will 
be considered SWG species after an IFQ account holder's DWG allocation 
has been landed and sold, or transferred, or if an IFQ account holder 
has no DWG allocation. Scamp, considered a SWG species under current 
regulations, will be considered a DWG species after an IFQ account 
holder's SWG allocation has been landed and sold, or transferred, or if 
an IFQ account holder has no SWG allocation. Because these species are 
caught in both shallow water and deep water, classification changes are 
expected to reduce discards.
    IFQ program participants are also allotted a limited landings 
overage in each share category on their last fishing trip, which is 
expected to reduce bycatch. If catch exceeds a fisherman's allocation 
on his last trip, he is allowed to retain up to 10 percent more fish 
than his remaining allocation, which is then deducted from next year's 
allocation. This will prevent fishers from having to discard fish 
harvested in excess of available allocation.
    Comment 8: The program should be able to be reviewed and altered 
based on new information.
    Response: The Magnuson-Stevens Act specifies that a detailed review 
of the program be conducted within the first 5 years of implementation 
of the program and thereafter, no less than once every 7 years. 
Additionally, the Southeast Regional Office will conduct an annual 
review of the program activities and costs and disseminate a report of 
the results. If new information indicates the program should be 
altered, the Council may initiate the fisheries management plan 
amendment process.
    Comment 9: The amendment does not analyze the effects of the IFQ 
program on the recreational sector.
    Response: Actions contained in Amendment 29 are not directed at the 
recreational sector of the Gulf reef fish fishery and as such do not 
present many potential impacts to the recreational sector. The 
establishment of the IFQ program does not change the TAC, nor does it 
change the allocation between the recreational and commercial sectors. 
For example, the allocation of gag will remain 61 percent to the 
recreational sector and 39 percent to the commercial sector unless 
changed by a subsequent amendment. However, to the extent that actions 
contained in Amendment 29 do present potential impacts to the 
recreational sector, those impacts are addressed in the FEIS, 
particularly in the cumulative impacts assessment and the environmental 
baseline discussions.
    Comment 10: The amendment did not analyze the social impacts of an 
IFQ program.
    Response: In Amendment 29, the Fisheries Impact Statement (page 
vi), Description of the Social Environment (page 134), Environmental 
Consequences - Action A1 (page 150), as well as Environmental 
Consequences for other actions all address the social impacts of the 
IFQ program. Based on an analysis of landings and permit data, few 
communities in the Gulf of Mexico region can be described as dependent 
on these species. Fishing communities were ranked according to the 
dealer-reported number of pounds landed and value for the grouper and 
tilefish component of the commercial Gulf reef fish fishery for 2004-
2007. These data revealed that a substantial portion of groupers and 
tilefishes are historically landed off west Florida and south Texas. 
Permits data were also examined to determine where permit 
concentrations existed. As a result of these examinations, Madeira 
Beach and Panama City, Florida, and Port Isabel, Texas, were selected 
as representative communities for the grouper and tilefish component of 
the commercial Gulf reef fish fishery. Other communities would be 
impacted by the IFQ program, but

[[Page 44735]]

little data are available to include in the analysis.
    Comment 11: Small-scale fishermen will be put out of business and 
only large-scale fishermen will be allowed to fish for grouper and 
tilefish.
    Response: All individuals with annual average grouper and tilefish 
landings of one or more pounds during the qualifying time period, 1999-
2004 (with allowance for dropping one year), will receive IFQ shares, 
provided they have an active or renewable commercial Gulf reef fish 
permit, as of October 1, 2009. NMFS estimates nearly 1,000 out of the 
1,209 permit holders that comprise the commercial sector of the Gulf 
reef fish fishery will receive grouper and/or tilefish shares in this 
IFQ program. Shareholders will have the option of fishing their 
allocation or transferring their shares or allocation to other Gulf 
reef fish permit holders, for the first 5 years of the program, and to 
all U.S. citizens or resident aliens thereafter. LAPPs are designed for 
the fishermen to manage their share of the resource for the best net 
benefit to the nation.
    Comment 12: The program ignores new entrants to the fishery, who 
may have purchased permits after 2004.
    Response: Initial allocation of shares in the IFQ program for 
groupers and tilefishes will be based on landings history associated 
with a permit. All landings associated with a valid Gulf reef fish 
vessel permit for the applicable landings period (1999-2004) will be 
attributed to the current owner, including those reported by a person 
who held the permit prior to the current owner. Therefore, even 
individuals who purchased permits recently may be eligible to receive 
shares. Individuals who are not initially eligible may participate in 
the program through transfer of shares or allocation.
    Comment 13: Recreational fishermen should be allowed to purchase 
IFQ shares and allocation.
    Response: Five years after implementation of this IFQ program, all 
U.S citizens and permanent resident aliens will be eligible to purchase 
shares and allocation in the IFQ program for groupers and tilefishes. 
However a commercial permit would be required to fish the allocation.
    The Council is considering a variety of data collection methods 
that would allow development of a catch share program for the 
recreational sector. However, because recreational fishers are not 
currently required to report their catch, tracking of individual catch 
is not possible at this time and, therefore, an IFQ program for the 
recreational sector is premature.
    Comment 14: Landings history should not be based on logbooks as 
they may not be factual.
    Response: Logbooks provide the most complete set of landings data 
from individual vessels available to NMFS. Logbooks submitted to NMFS 
Southeast Fisheries Science Center contain landings for each trip by 
species, as well as other information such as trip length, number of 
sets, and bait used. While some information may not be entirely 
accurate, submitting false information to NMFS via a logbook is a 
violation of Federal law. Accordingly, logbooks are considered to be 
the most accurate source of vessel specific landings information.
    Comment 15: Each participant should receive a minimum of 10,000 
pounds of allocation.
    Response: Assigning 10,000 pounds to each participant would greatly 
exceed the catch limits for these species and allow overfishing to 
occur, which violates NS 1 of the Magnuson-Stevens Act. In addition, 
this amount would exceed the average annual landings for the majority 
of the permit holders currently participating in the fishery.
    Comment 16: The government should rent shares similar to leases for 
oil and gas resources.
    Response: The Council considered an alternative to distribute 
initial IFQ shares through an auction system. They determined the 
auction system could provide an unfair advantage to those participants 
who have greater financial resources than other participants. 
Similarly, allocation by a resource rental system could encounter 
environmental justice issues and discriminate against lower-income 
fishers. This alternative would also provide less consideration to 
historical dependence on the fishery since it might allow shares to be 
distributed to participants who have never fished but could afford to 
compete in the auction or buy leases.
    Comment 17: Transfer of shares and allocation should not be 
allowed. If a participant does not use his shares, these shares should 
be revoked.
    Response: A transferable IFQ program will allow the market to 
reduce fishing capacity, as quota could be consolidated among fewer 
vessel owners, who would then have an incentive to fish efficiently to 
maximize profits. Fishermen who desired more quota than they received 
through initial apportionment could purchase additional shares or 
allocation. Conversely, those fishermen who were apportioned too small 
a portion of the quota to make fishing worthwhile could sell their 
shares or allocation. Prohibiting transfers would not allow a fisherman 
to pass on his or her fishing privileges to other family members, 
including their children, a common practice within fishing communities.
    The Council considered implementation of a use it or lose it 
provision in Amendment 29. Under this policy, IFQ shares that remained 
inactive for 3 years would be revoked and redistributed proportionately 
among the remaining shareholders. However, a use it or lose it 
provision could create greater incentive for fishermen to increase 
their landings, resulting in higher fishing mortality rates. If 
fishermen choose not to harvest their allotted IFQ shares in any given 
year it would benefit rebuilding of overfished stocks and stocks 
undergoing overfishing (e.g., gag) as well as reduce gear-habitat 
interactions.
    Comment 18: The IFQ program should be designed to allow day 
trippers to fish during the same hours they currently fish.
    Response: All persons fishing in the IFQ program would be able to 
catch and land their fish 24 hours a day but would be required to 
notify NMFS enforcement agents 3-12 hours in advance of the time of 
landing. For enforcement purposes, fishermen participating in the IFQ 
program would be required to offload their grouper and tilefish 
landings only between 6:00 a.m. and 6:00 p.m. daily.
    Comment 19: Fishermen who do not support the IFQ program will not 
comply with the regulations.
    Response: Most individuals who participate in the Gulf reef fish 
fishery are honest and law-abiding. Those who are not will receive 
violations and appropriate penalties if apprehended. The IFQ program is 
designed to track fishing activity throughout the fishing, landing, and 
sale processes. Currently, reef fish fishermen must submit a 
declaration of fishing activity before a trip. Under the IFQ program, 
participants will also be required to submit a landing notification 3-
12 hours before landing ashore identifying the number of pounds of each 
IFQ species to be landed, as well as the landing time and location. 
NMFS Office for Law Enforcement then has the opportunity to meet the 
vessel at the landing location to check for compliance. Fishermen could 
not offload or transport fish until a landing transaction takes place 
with a dealer. A landing transaction number will be required to offload 
the fish and transport them. Any failure to comply with any of these 
steps could result in a violation.

[[Page 44736]]

Classification

    The Administrator, Southeast Region, NMFS, determined that 
Amendment 29 is necessary for the conservation and management of Gulf 
groupers and tilefishes and is consistent with the Magnuson-Stevens Act 
and other applicable laws.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    NMFS prepared an FEIS for this amendment. A notice of availability 
for the FEIS was published on May 8, 2009 (74 FR 21684). A copy of the 
ROD is available from NMFS (see ADDRESSES).
    An FRFA was prepared. The FRFA incorporates the initial regulatory 
flexibility analysis (IRFA), a summary of the significant economic 
issues raised by public comments, NMFS responses to those comments, and 
a summary of the analyses completed to support the action. A copy of 
the full analysis is available from NMFS (see ADDRESSES). A summary of 
the FRFA follows.
    Although no comments were received specific to the IRFA, several 
comments were received that pertain to the economic effects of the 
proposed rule. These comments were addressed in the comments and 
responses section of this final rule. The economic analysis conducted 
for the proposed rule estimated the expected quantitative effects of 
each alternative to the extent possible. Qualitative discussion of 
expected effects was provided where data or analytical techniques were 
not available. The economic analysis concluded that the proposed rule 
would enhance the overall net benefits to the nation. No changes were 
made to the final rule in response to public comments, therefore, the 
final rule is expected to enhance the overall net benefits to the 
nation.
    This final rule implements an IFQ program for the grouper and 
tilefish component of the commercial Gulf reef fish fishery; allows a 
single owner of multiple commercial reef fish permits to consolidate 
his or her permits into one, with the consolidated permit having a 
catch history equal to the sum of the catch histories associated with 
the individual permits; maintains the current composition of the multi-
species DWG unit and revises the SWG unit to include speckled hind and 
warsaw grouper; restricts initial eligibility to valid commercial reef 
fish permit holders; distributes initial IFQ shares proportionately 
among eligible participants based on the average annual landings from 
logbooks associated with their current permit(s) during the time period 
1999 through 2004 with an allowance for excluding one year; establishes 
IFQ share types as follows: red grouper, gag, other SWG, DWG, and 
tilefish shares; converts four percent of each IFQ participant's red 
grouper individual species share into multi-use red grouper allocation 
valid for harvesting red or gag groupers, and converts eight percent of 
each IFQ participant's gag grouper individual species share into multi-
use gag grouper allocation valid for harvesting gag or red groupers; 
allows transfers of IFQ shares or allocations only to commercial reef 
fish permit holders during the first five years of the IFQ program and 
to all U.S. citizens and permanent resident aliens thereafter; sets a 
cap on any one person's ownership of IFQ shares to no more than the 
maximum percentage issued to the recipient of the largest shares at the 
time of the initial apportionment of IFQ shares, with the cap(s) 
calculated as separate caps for each type of share; sets a total 
allocation cap calculated as the sum of the maximum allocations 
associated with the share caps for each individual share category; 
allocates adjustments in the commercial quota proportionately among 
eligible IFQ shareholders based on their respective shareholdings at 
the time of the adjustments; lets the RA review, evaluate, and render 
the final decision on appeals (hardship arguments will not be 
considered for appeals); sets aside three percent of the current 
commercial quota or allowance to resolve appeals, with any remaining 
amount proportionately distributed back to initial IFQ shareholders 
after the appeals process has been terminated; implements an IFQ cost 
recovery fee based on actual ex-vessel value at the time of sale of 
fish, with the payment of the fee being the responsibility of the 
recognized IFQ shareholder and collection/remittance of the fee being 
the responsibility of the dealer; and establishes certified landing 
sites for all IFQ programs for the commercial Gulf reef fish fishery, 
with the sites selected by the fishermen but certified completed by 
NMFS Office for Law Enforcement.
    This final rule is expected to directly affect vessels that operate 
in the commercial Gulf reef fish fishery and reef fish dealers or 
processors. The Small Business Administration (SBA) has established 
size criteria for all major industry sectors in the U.S. including fish 
harvesters, fish processors, and fish dealers. A business involved in 
fish harvesting is classified as a small business if it is 
independently owned and operated, is not dominant in its field of 
operation (including its affiliates), and has combined annual receipts 
not in excess of $4.0 million (NAICS code 114111, finfish fishing) for 
all affiliated operations worldwide. For seafood processors and 
dealers, rather than a receipts threshold, the SBA uses an employee 
threshold of 500 or fewer persons on a full-time, part-time, temporary, 
or other basis, at all affiliated operations for a seafood processor 
and 100 or fewer persons for a seafood dealer.
    This final rule introduces new or additional reporting, record-
keeping and other compliance requirements. A summary of the general 
requirements of the IFQ program for Gulf groupers and tilefishes 
follows.
    An IFQ dealer endorsement is required of any dealer purchasing 
groupers or tilefishes subject to this IFQ program. The IFQ dealer 
endorsement will be issued at no cost to those individuals who possess 
a valid reef fish dealer permit and request the endorsement. Although 
the current reef fish dealer permit must be renewed annually at a cost 
of $60 for the initial permit ($12.60 for each additional permit), the 
IFQ dealer endorsement will remain valid as long as the individual 
possesses a valid Gulf reef fish dealer permit and abides by all 
reporting and cost recovery requirements of the IFQ program. This 
requirement will affect all 159 existing dealers (as of November 2008) 
of groupers or tilefishes.
    An electronic reporting system will serve as the main vehicle for 
tracking IFQ activities. The electronic nature of the reporting system 
will render the reporting of most IFQ activities on a real time basis. 
For example, to effect a sale of grouper or tilefish landings, the 
purchasing dealer will log into the electronic reporting system and 
enter all the required information about the grouper or tilefish sale. 
The required information includes, but is not limited to, the name of 
the dealer and that of the fisherman, identification number of the 
harvesting vessel, and the pounds and ex-vessel values of groupers and 
tilefishes. Electronic validation of the dealer-supplied information by 
the selling fisherman is necessary to complete the sale. Also, transfer 
of IFQ allocations and shares will be effected and recorded through the 
electronic reporting system. Holders of IFQ allocations will be able to 
access the system to check on the outstanding IFQ allocations remaining 
in their account/possession. In this scenario, an IFQ shareholder 
account, an IFQ vessel account, and an IFQ dealer account will be 
established with NMFS. There will

[[Page 44737]]

be no charge for establishing any of these accounts.
    By the very nature of the reporting system, IFQ dealers will be 
required to have access to computers and the Internet. If a dealer does 
not have current access to computers and the Internet, he/she may have 
to expend approximately $1,500 for computer equipment (one-time cost) 
and $300 annual cost for Internet access. Dealers will need some basic 
computer and Internet skills to input information for all grouper and 
tilefish purchases into the IFQ electronic reporting system.
    Dealers will also be required to remit to NMFS, on a quarterly 
basis, the cost recovery fees initially set at three percent of the ex-
vessel value of groupers and tilefishes purchased from IFQ share/
allocation holders. Although IFQ share/allocation holders will pay this 
fee, it will be the responsibility of dealers to collect and remit it 
to NMFS. Dealers will be required to remit fees electronically by 
automatic clearing house (ACH), debit card or credit card. There is 
currently no available information to determine how many of the 159 
grouper or tilefish dealers have the necessary electronic capability to 
participate in the IFQ program. However, demonstration of this 
capability will be necessary for IFQ program participation. Those 
dealers currently participating in the red snapper IFQ program will 
generally meet most, if not all, of the requirements under the 
electronic reporting system.
    Holders of IFQ shares and allocations will need access to computers 
and the Internet to effect allocation transfers through the electronic 
reporting system. These persons will then be subject to the same cost 
and skill requirements as dealers. It is very likely that most 
individuals have access to computers and the Internet. It should also 
be pointed out that in the case of reporting a sale of groupers or 
tilefishes to a dealer, all the fisherman will do is to validate the 
sale using the dealer's computer. This requirement affects all those 
who will initially qualify for, or those who will decide to participate 
in, the IFQ program for Gulf groupers and tilefishes.
    One other compliance issue under the IFQ system involves landing 
and offloading of IFQ groupers or tilefishes. The owner or operator of 
a vessel landing IFQ groupers or tilefishes will provide NMFS an 
advance landing notification at least 3 hours but no more than 12 hours 
before arriving at a dock, berth, beach, seawall, or ramp. In addition, 
offloading of IFQ groupers or tilefishes is allowed only between 6 a.m. 
and 6 p.m.
    A total of 1,209 vessels is assumed to comprise the universe of 
commercial harvest operations in the Gulf reef fish fishery. This total 
includes vessels with active or renewable permits. An examination of 
permits in conjunction with logbook information revealed, however, that 
1,028 permits (as of November 2008) have some records of landings 
during the Council's chosen period of 1999-2004 for purposes of 
determining initial apportionment of IFQ shares.
    Whereas there is a one-to-one correspondence between permits and 
vessels, the total number of vessels actually harvesting reef fish, or 
groupers or tilefishes, may be lower or higher than the number of 
permits. Some vessels may remain inactive in the reef fish fishery 
during the entire year, so there will be fewer vessels than permits. 
Because a permit can be transferred from one vessel to another during 
the year, the number of vessels harvesting any of the species in this 
amendment during the year may exceed the number of permits. This 
distinction is important when using logbook information to count 
vessels.
    For the period 1993-2006, an average of 1,123 vessels harvested at 
least 1 pound (0.45 kg) of reef fish, 993 vessels harvested any 
groupers or tilefishes, 765 vessels harvested red groupers, 591 vessels 
harvested gag, 977 vessels harvested SWG, 376 vessels harvested DWG, 
and 212 vessels harvested tilefishes. For the period 1999-2004, an 
average of 1,075 vessels harvested at least 1 pound (0.45 kg) of reef 
fish, 968 vessels harvested any groupers or tilefishes, 767 vessels 
harvested red groupers, 655 vessels harvested gag, 958 vessels 
harvested SWG, 368 vessels harvested DWG, and 193 vessels harvested 
tilefishes.
    Vessels harvesting reef fish in general and groupers or tilefishes 
in particular use a variety of gear. Some vessels use only one gear 
type while others use multiple gear types; thus, classification of 
vessels by gear type is not straightforward for some vessels. For the 
period 1993-2006, an average of 805 vessels harvested groupers or 
tilefishes using vertical lines, 171 vessels harvested groupers or 
tilefishes using longlines, and 162 vessels harvested groupers or 
tilefishes using other gear types (diving, trap, unclassified). For the 
period 1999-2004, an average of 790 vessels harvested groupers or 
tilefishes using vertical lines, 167 vessels harvested groupers or 
tilefishes using longlines, and 148 vessels harvested groupers or 
tilefishes using other gear types (diving, trap, unclassified).
    Collection of information regarding vessel operating costs was only 
initiated in mid-2005. Information from this survey was used in 
estimating overall economic effects on the commercial sector of an IFQ 
system in the fishery. This was possible as the evaluation was 
conducted on a trip basis. However, vessel-level gross and net revenues 
could not be readily derived using the same trip-based information. For 
our current purpose, cost and return information derived from an 
earlier survey of commercial reef fish fishermen in the Gulf of Mexico 
was used. High-volume vertical line vessels in the northern Gulf 
grossed an average of approximately $110,000 (2005 dollars) and those 
in the eastern Gulf grossed approximately $68,000. Their respective net 
revenues were approximately $28,000 and $24,000. Low-volume vertical 
line vessels in the northern Gulf grossed approximately $24,000 and 
those in the eastern Gulf grossed approximately $25,000. Their 
respective net revenues were approximately $7,000 and $4,000. High-
volume longline vessels grossed approximately $117,000 while low-volume 
longline vessels grossed $88,000. Their respective net revenues were 
approximately $25,000 and $15,000. High-volume fish traps (fish traps 
have been banned since February 2007) grossed approximately $93,000 
while their low-volume counterparts grossed approximately $86,000. 
Their respective net revenues were approximately $19,000 and $21,000.
    A definitive calculation of which commercial entities will be 
considered large entities and small entities cannot be made using 
average income information. However, based on those data and the permit 
data showing the number of permits each person/entity owns, it appears 
that all of the commercial reef fish fleet will be considered small 
entities. The maximum number of permits reported to be owned by the 
same person/entity was six, additional permits (and revenues associated 
with those permits) may be linked through affiliation rules. 
Affiliation links cannot be made using permit data. If one entity held 
six permits and was a high-volume bottom longline gear vessel, they are 
estimated to generate about $700,000 in annual revenue. That estimate 
is well below the $4 million threshold set by the SBA for defining a 
large entity.
    Also affected by the measures in this amendment are fish dealers, 
particularly those who receive gag and red groupers and tilefishes from 
harvesting vessels. Currently, a Federal permit is required for a fish 
dealer to receive reef fish from

[[Page 44738]]

commercial vessels. As of November 2008, there were 159 active permits 
for dealers buying and selling reef fish species; but because the reef 
fish dealer permitting system in the Gulf is an open access program, 
the number of dealers can vary from year to year. As part of the 
commercial reef fish logbook program, reporting vessels identify the 
dealers who receive their landed fish. Commercial reef fish vessels 
with Federal permits are required to sell their harvest only to 
permitted dealers. For the period 2004-2007, these dealers handled an 
average of 10.8 million lb (4.9 million kg) of groupers and tilefishes 
valued at $25.4 million. These dealer transactions were distributed as 
follows: Florida, with 10 million lb (4.5 million kg) worth $23.5 
million; Alabama and Mississippi, with 102,000 lb (46,266 kg) worth 
$222,000; Louisiana, with 270,000 lb (122,476 kg) worth $592,000: and, 
Texas, with 434,000 lb (196,859 kg) worth $1.03 million. The rest of 
the transactions were handled by dealers outside of the Gulf.
    Average employment information per reef fish dealer is unknown. It 
is estimated that total employment for reef fish processors in the 
Southeast is approximately 700 individuals, both part and full time. It 
is assumed all processors must be dealers, yet a dealer need not be a 
processor. Further, processing is a much more labor intensive exercise 
than dealing. Therefore, given the employment estimate for the 
processing sector, it is assumed that the average dealer's number of 
employees will not surpass the SBA employment benchmark.
    Based on the gross revenue and employment profiles presented above, 
all permitted commercial reef fish vessels and fish dealers directly 
affected by the final rule may be classified as small entities.
    Because all entities that are expected to be affected by the final 
rule are considered small entities, the issue of disproportional 
impacts on small and large entities does not arise. Although some 
vessel and dealer operations are larger than others, they nevertheless 
fall within the definition of small entities.
    The various measures in this final rule have varying effects on 
small entities. Adoption of an IFQ program for the grouper and tilefish 
component of the commercial Gulf reef fish fishery has been estimated 
to result in variable cost savings to the fishing industry of $2.23 to 
$3.24 million per year. There will also be some unknown reductions in 
fixed costs. In addition, possible increases in revenues could result 
as improved product quality will most likely command higher prices.
    Permit stacking will allow owners to consolidate their multiple 
permits into one with corresponding consolidation of landings history 
for all permits. This may be expected to accelerate the reduction in 
the number of permits, resulting in cost savings to permit owners and 
in administrative cost reductions.
    Dual classification of both speckled hind and warsaw grouper into 
SWG and DWG tends to reduce discards of both species and allow 
fishermen to keep more of these two species they catch. Also, this has 
been estimated to increase revenues of fishermen by $450,000.
    Restricting the number of participants eligible to receive initial 
IFQ shares to commercial permit holders will prevent over-extended 
distribution of IFQ shares while allowing active participants in the 
fishery to immediately benefit from the implementation of the grouper 
and tilefish IFQ program. This limitation also tends to speed up the 
process of consolidation in the fishery, a result that allows 
participants to reap the gains from an IFQ program over a relatively 
short time.
    Initial apportionment of IFQ shares based on landings history for 
the years 1999-2004, with allowance to drop one year, provides a higher 
likelihood that active participants in the fishery are allotted IFQ 
shares in accordance with the extent of their participation in the 
fishery. This tends to preserve the historical landings status of 
eligible participants, so the initial impacts on their profits are not 
be diminished. As the IFQ program progresses, their profits may 
increase depending on whether or not they choose to fish their IFQs or 
lease or sell them to others.
    By defining IFQ shares on a species-specific basis, the eventual 
true value of each species may be generated. This option, however, 
could result in more discards of some species and complicate balancing 
of catch and quota as well as the monitoring of the IFQ program. It 
thus needs to be complemented by flexibility measures to assist IFQ 
participants in balancing their catch and quota holdings. The provision 
for multi-use allocations introduces certain flexibility as IFQ 
participants have some leeway in balancing their catch and quota 
holdings.
    The transferability aspect of IFQ shares/allocation provides the 
mechanism to allow the IFQ program to generate greater efficiency and 
higher profitability in the fishery. As such, the lesser the 
limitations on transferability the better the system is. The final rule 
limits transfers only to reef fish permit holders the first five years 
of the program and to a broader pool of participants thereafter. While 
the five-year limitation is unlikely to bring about cost increases, it 
does not allow proper pricing of IFQ shares. This condition, however, 
may be necessary to allow IFQ holders to get familiar with the IFQ 
program before they engage in transfers outside of the limited pool of 
eligible IFQ transfer recipients.
    Establishing a cap on IFQ share holdings is consistent with the 
Magnuson-Stevens Act provision to prevent the acquisition of excessive 
shares in the IFQ program. The final rule to set the share cap to the 
maximum assigned to a participant during initial apportionment allows 
every participant to at least maintain their existing scale of 
operation. Costs of operation and possibly revenues are expected to 
remain the same. Over time, all participants, except the highest one, 
will be able to increase their scale of operation they deem most 
profitable to them. The highest holders, however, and presumably the 
current more efficient producers will not have the same opportunity as 
the others.
    The same reasoning provided in the preceding paragraph for a share 
cap also applies to the establishment of a cap on IFQ allocation 
holdings. In addition, the established cap on IFQ allocations could 
possibly close the loophole allowing some participants to circumvent 
the established cap on IFQ share holdings by entering into a long-term 
contract with other participants.
    Quotas change periodically, so there is a need to address this in 
the IFQ program. The final rule allocates quota adjustments, increases 
or decreases, in proportion to a participant's IFQ share ownership at 
the time of quota adjustments. This may not allocate quota adjustments 
as efficiently as an auction alternative, but it appears to be the 
least costly and least disruptive option.
    The establishment of an appeals process affords participants the 
opportunity to correct any mistakes in the initial allocation of IFQ 
shares. This could result in more costs to participants and the 
administering agency, but such costs are expected to be relatively 
small especially when seen against the potential benefits an appeals 
process will generate. The added provision to set aside three percent 
of the quota to settle appeals prevents the possibility of taking back 
some allocations already distributed to participants.
    The cost recovery fee feature of the IFQ program (a requirement 
under the Magnuson-Stevens Act) undoubtedly

[[Page 44739]]

imposes additional cost on fishing participants both in terms of 
reductions in revenue and increases in costs (particularly on dealers) 
to comply with the collection and remittance of the fees to NMFS. A 
three-percent cost recovery fee based on total revenues could translate 
into larger reductions in profits, particularly for small fishing 
operations.
    Requiring pre-approved landing sites where fishermen are obligated 
to land their IFQ catches may increase the cost of fishing operations. 
Fishermen may need to travel farther to land their catch, if for some 
reasons, such as weather conditions or fishing opportunities, the 
closest landing site is not pre-approved. This could, however, enhance 
the enforcement of the IFQ program, which may help ensure that benefits 
from the program are not impaired.
    It is expected that the combined effects of the final rule will 
result in significant changes to the profitability status of fishing 
operations in the grouper and tilefish component of the commercial Gulf 
reef fish fishery. This is especially true over the long run when 
significant benefits, both in terms of revenue increases and cost 
decreases, may be expected to accrue. The net economic effects on 
dealers cannot be readily ascertained.
    Several alternatives were considered by the Council in their 
deliberation of the various measures contained in the final rule. For 
purposes of the succeeding discussion, each of the Council's preferred 
alternatives is termed final action.
    Three alternatives, including no action, were considered for 
establishment of an IFQ program. The first alternative (no action) to 
the final action would maintain the incentives to overcapitalize the 
fishery and to promote derby fishing. Such conditions may be expected 
to result in increased operating costs, increased likelihood of 
shortened seasons, reduced at-sea safety, wide fluctuations in domestic 
grouper and tilefish supply, and depressed ex-vessel prices for 
groupers and tilefishes. The other alternative to the final action, 
establishment of an endorsement system, would have short-term 
effectiveness in addressing overcapitalization and derby fishing by 
reducing the number of participants. Over the long run, remaining 
participants may be expected to increase their effort either through 
vessel, crew, and equipment upgrades or via additional or longer 
fishing trips.
    The only alternative to the final action of consolidating multiple 
commercial reef fish permits is the no action alternative. This 
alternative would not accelerate the reduction in the number of 
permits, thus forgoing the benefits from permit stacking due to cost 
savings by permit owners and reductions in administrative costs.
    Four alternatives, including no action, were considered regarding 
the species composition of DWG and SWG. The first alternative (no 
action) to the final action would maintain the composition of the SWG 
and DWG management units. This alternative would neither reduce the 
discards of speckled hind or warsaw grouper nor grant flexibility to 
IFQ participants. The second alternative to the final action would 
classify speckled hind as both SWG and DWG while the third alternative 
to the final action would classify warsaw grouper as both SWG and DWG. 
These two alternatives would reduce discards and add flexibility to IFQ 
participants but only with respect to either speckled hind or warsaw 
grouper but not both as in the final action.
    Four alternatives, including no action, were considered for initial 
eligibility in the IFQ program. The first alternative (no action) to 
the final action would not specify initial eligibility requirements for 
IFQ share allocation, and thus is deemed to provide insufficient 
guidance in initially allocating IFQ shares. The other alternatives to 
the final action would include more entities for initial distribution 
of IFQ shares: a) commercial reef fish permit holders and reef fish 
captains and crew, b) commercial reef fish permit holders and permitted 
dealers, and c) commercial reef fish permit holders, reef fish captains 
and crew, and permitted dealers. These other alternatives to the final 
action would complicate the determination of initial IFQ holders, slow 
down the eventual consolidation of fishing operations in the fishery, 
and lessen the likelihood of maintaining viable fishing operations.
    Four alternatives, including no action, were considered for the 
initial apportionment of IFQ shares. The first alternative (no action) 
to the final action would not provide any guidance in initially 
apportioning IFQ shares. The second alternative to the final action 
would proportionately allocate IFQ shares based on average annual 
landings during 1999-2004. This alternative is less flexible than the 
final action where eligible participants can drop one year in 
calculating annual average landings. The third alternative to the final 
action would initially distribute IFQ shares through an auction. This 
alternative may be deemed best in generating the most appropriate value 
for IFQ shares at the start of the program. However, this alternative 
offers some possibility that some historical yet active participants in 
the fishery would not receive any IFQ share or receive only few shares 
that would not make their fishing operations viable.
    Four alternatives, including no action, were considered for IFQ 
share definitions. The first alternative (no action) to the final 
action would not establish IFQ shares and is therefore not a viable 
alternative under an IFQ system. The second alternative to the final 
action would establish a single IFQ share for the combined groupers and 
tilefishes. While this alternative would tend to minimize transaction 
costs and eliminate the need to trade shares to balance catch and quota 
holdings, it would limit the effectiveness of species-specific 
management measures and complicate the future establishment of annual 
catch limits required by the Magnuson-Stevens Act. The third 
alternative to the final action would establish separate IFQ shares for 
the DWG complex, the SWG complex, and tilefish. As with the second 
alternative, this particular alternative would limit the effectiveness 
of species-specific management measures and complicate the future 
establishment of annual catch limits required by the Magnuson-Stevens 
Act.
    Three alternatives, including no action, were considered for multi-
use allocation and trip limits. The first alternative (no action) to 
the final action would not establish multi-use IFQ shares or trip 
allowances and thus, would not contribute to catch and quota balancing 
under the IFQ program. The second alternative to the final action would 
establish a trip allowance granting IFQ participants the flexibility to 
land red or gag for which the IFQ participant has no allocation by 
using allocation from the other species (i.e., red or gag). This 
alternative would not cap the amount of multi-use allocation and would 
be associated with a higher likelihood of exceeding allowable harvest 
levels.
    Three alternatives, including no action, were considered for 
transfer eligibility requirements. The first alternative (no action) to 
the final action would make any U.S. citizen or permanent resident 
alien eligible for IFQ share or allocation transfer. Among the 
alternatives, this one would immediately allow the largest pool of IFQ 
share/allocation recipients, thereby providing the best mechanism for 
eliciting the highest value of an IFQ share or allocation. The 
difference between this alternative and the final action is the 
provision in the latter that transfers be allowed only among holders of 
commercial reef fish permits during

[[Page 44740]]

the first five years of the IFQ program. Over the long-run, then, the 
two alternatives would have the same economic effects. The final action 
reflects the Council's intent to provide enough time for current 
fishery participants to be familiar with the nature of the IFQ system, 
particularly with respect to proper valuation of IFQ shares/
allocations, before opening up the market to a broader pool of 
participants. The second alternative to the final action would limit 
transfer eligibility only to commercial reef fish permit holders. This 
alternative was not chosen, because it would constrain the process of 
valuing IFQ shares/allocations over a long time.
    Three alternatives, including no action, were considered for caps 
on IFQ share ownership. The first alternative (no action) to the final 
action would not impose any cap on IFQ share ownership. Although this 
alternative offers the best environment for individual fishing 
operations to determine their most profitable scale of operations, this 
was not chosen because it also offers the highest probability for an 
individual fishing operation or very few fishing operations to obtain 
``excessive share'' which the Magnuson-Stevens Act disallows. The 
second alternative to the final action would impose an IFQ share cap of 
5 percent, 10 percent, or 15 percent of either the total grouper and 
tilefish shares or each type of species-specific shares. Part of this 
second alternative is the provision for grandfathering in those with 
initial percentage shares higher than the chosen ownership cap. 
Although this alternative appears to balance the concern over excessive 
share and that of constraining the operations of the most efficient 
producers, this was not chosen because it would appear to impose 
arbitrary levels of maximum share ownership. The issue of 
grandfathering in those with initial share above the maximum would also 
limit the ability of some producers to compete in the open market 
against those grandfathered in. Part of the rationale for the final 
action was to achieve consistency with similar provisions in the red 
snapper IFQ program, and this would not be achieved under the two 
alternatives to the final action. A sub-option under the final action 
which would impose a cap on total grouper and tilefish IFQ shares but 
not on each type of IFQ share was not chosen, because it could result 
in some entities obtaining excessive shares of certain species.
    Three alternatives, including no action, were considered for caps 
on IFQ allocation ownership. The first alternative (no action) to the 
final action would not limit the amount of IFQ allocation to be owned 
by any entity each year. Although this alternative would provide the 
best economic environment relative to the holding of IFQ allocations, 
it would afford some entities the opportunity to circumvent the 
provision on IFQ share cap by entering into long-term arrangements with 
IFQ share/allocation holders. The second alternative to the final 
action would impose an allocation cap of an additional one percent, two 
percent, or five percent above the percent cap on IFQ share ownership. 
This alternative was not chosen because of the potential complication 
it would add to the monitoring and enforcement of share ownership cap.
    Three alternatives, including no action, were considered for 
adjustments in annual allocations of commercial TAC. The first 
alternative (no action) to the final action would not specify the 
allocation mechanism of any changes in commercial TAC. This alternative 
was not chosen because it would require the Council to address the 
allocation issue every time the commercial quota is adjusted and thus 
would impose additional administrative costs. This could also delay the 
determination of each entity's allocation at the start of the fishing 
season which could be disruptive to the affected entity's fishing 
operations. The second alternative to the final action would allocate 
adjustments in the commercial quota via an auction system. This 
alternative was not chosen because it could complicate and thus 
increase the cost of allocating quota adjustments. Moreover, it could 
raise equity concerns if the winners were new entrants who did not 
share the cost of managing the fishery.
    Four alternatives, including no action, were considered regarding 
the appeals process. The final action consists of two alternatives. One 
pertains to the establishment and structure of an appeals process and 
the other to the provision of a commercial quota set-aside to resolve 
appeals. The first alternative (no action) to the final action on 
appeals process would not provide a formal, in-house means of 
addressing disputes particularly regarding initial IFQ share allocation 
and so was not chosen by the Council. The second alternative to the 
final action on appeals process would establish a special board 
composed of state directors/designees who will review, evaluate, and 
make individual recommendations to the NMFS RA on appeals. This 
alternative was not chosen because it would merely add layers to the 
appeals process that would tend to increase the administrative costs, 
with no corresponding benefits. Besides, this alternative would mainly 
provide board members' advice to the RA on appeals matters. The three-
percent quota set-aside is based on a similar percent level chosen for 
the red snapper IFQ program that sufficiently accommodated all appeals.
    Three alternatives, including no action, were considered for a cost 
recovery plan. The first alternative (no action) to the final action 
would not impose a cost recovery fee. This would not be consistent with 
provisions of the Magnuson-Stevens Act. The second alternative to the 
final action would require each IFQ registered buyer who purchased IFQ 
groupers or tilefishes to submit an IFQ buyer report either on a 
quarterly or annual basis. This alternative was deemed to mainly impose 
additional costs with relatively small economic or social benefits. 
Under the final action, several sub-options were also considered but 
rejected. The first such sub-option would calculate the recovery fee 
based on standard, as opposed to actual, ex-vessel value. The second 
sub-option would impose the responsibility of collecting and remitting 
the fees on the IFQ shareholders. The third sub-option would require 
the remittance of collected fees on a monthly basis. The rationale for 
their rejection was that being inconsistent with corresponding 
provisions in the red snapper IFQ system would add complication to the 
cost recovery plan and add costs to both the participants and NMFS.
    Three alternatives, including no action, were considered for 
certifying landing sites. The first alternative (no action) to the 
final action would not establish certified landing sites for IFQ 
programs in the commercial reef fish fisheries, thus providing no 
additional means to improve enforcement of the IFQ program for groupers 
and tilefishes. The second alternative to the final action would 
require that landing sites be certified by the Office for Law 
Enforcement in order for IFQ fishermen to use the VMS units as an 
option for reporting landing notifications. This was deemed unnecessary 
for monitoring and enforcing the IFQ program for groupers and 
tilefishes. Under the final action, a sub-option providing for the 
selection of certified landing sites by the Council and NMFS, based on 
industry recommendations and resource availability was not adopted. 
This sub-option was deemed more restrictive than the final action in 
identifying landing sites for certification purposes.
    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group

[[Page 44741]]

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.'' As part of the rulemaking process, 
NMFS prepared a fishery bulletin, which also serves as a small entity 
compliance guide. The fishery bulletin will be sent to all vessel 
permit holders for the Gulf Reef Fish fishery.
    This final rule contains collection-of-information requirements 
subject to the Paperwork Reduction Act (PRA) and which have been 
approved by OMB under control number 0648-0587. The collections and the 
associated estimated average public reporting burden per response are 
provided in the following table.

------------------------------------------------------------------------
                                                        ESTIMATED BURDEN
               COLLECTION  REQUIREMENT                    PER RESPONSE
------------------------------------------------------------------------
Dealer Account Activation                                     5 minutes
------------------------------------------------------------------------
Dealer Transaction Report                                     7 minutes
------------------------------------------------------------------------
Shareholder Account Activation                                5 minutes
------------------------------------------------------------------------
Fisherman Account Activation                                 10 minutes
------------------------------------------------------------------------
Active Vessels Report                                        10 minutes
------------------------------------------------------------------------
Approval of Landing Location                                  5 minutes
------------------------------