UNITED STATES OF AMERICA

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DEPARTMENT OF COMMERCE

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NATIONAL OCEANIC AND ATMOSPHERIC

ADMINISTRATION

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MARINE FISHERIES ADVISORY COMMITTEE

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Thursday,

November 13, 2008

The Marine Fisheries Advisory Committee

met in the Bienville Room in the Hotel Chateau

LeMoyne, 301 Rue Dauphine, New Orleans,

Louisiana, at 8:30 a.m., James Balsiger, Vice

Chair, presiding.

PRESENT:

JAMES BALSIGER, Vice Chair

MARK HOLLIDAY, Director, Office of Policy

TOM BILLY

RANDY CATES

BILL DEWEY

ANTHONY DILERNIA

PATTY DOERR

CHRIS DORSETT

ERIKA FELLER

MARTIN FISHER

RANDY FISHER, PSMFC

ROB FLETCHER

CATHERINE FOY

JIM GILMORE

STEVE JONER

PRESENT: (CONT.)

DOROTHY LOWMAN

HEATHER MCCARTY

VINCE O\'SHEA, ASMFC

TOM RAFTICAN

ERIC SCHWAAB

LARRY SIMPSON, GSMFC

DAVE WALLACE

OTHERS PRESENT:

ROBERT GILL

TOPHER HOLMES

JILL JENSEN

PETER JONES

TOM MCILWAIN

STEVE MURAWSKI

SAM RAUCH

GARY REISNER

ALAN RISENHOOVER

MICHAEL RUBINO

PETER SMITH

PHIL STEELE

BILL TUCKER

T‑A‑B‑L‑E O‑F C‑O‑N‑T‑E‑N‑T‑S

Opening Remarks

Tom Billy. . . . . . . . . . . . . . . . . .4

PRESENTATIONS

Update Briefing ‑ MSRA Implementation

Alan Risenhoover . . . . . . . . . . . . . .4

Update Briefing ‑ Budget/Transition

Gary Reisner . . . . . . . . . . . . . . . 58

Update Briefing ‑ Ecolabeling

Mark Holliday. . . . . . . . . . . . . . . 92

Vision 2020 and Transitioning Reports

Tony DiLernia. . . . . . . . . . . . . . .134

Jim Gilmore. . . . . . . . . . . . . . . .161

LAPPS IN THE GULF OF MEXICO ‑ DISCUSSION

NMFS Southeast Regional Office

Phil Steele. . . . . . . . . . . . . . . .172

Gulf of Mexico Regulatory Management Council

Robert Gill. . . . . . . . . . . . . . . .210

Industry

William Tucker . . . . . . . . . . . . . .224

LAPP ‑ Plans and Funding

Alan Risenhoover . . . . . . . . . . . . .262

GULF AQUACULTURE AMENDMENT DISCUSSION

Gulf Council

Tom McIlwain . . . . . . . . . . . . . . .286

Industry

Peter Smith. . . . . . . . . . . . . . . .311

NOAA Aquaculture Program

Michael Rubino . . . . . . . . . . . . . .334

P‑R‑O‑C‑E‑E‑D‑I‑N‑G‑S

8:35 a.m.

MR. BILLY: This morning, really all day, but particularly this morning
we\'re going to go through a series of presentations that are designed
to inform and update us on subject areas that we\'ve been involved in in
the past. I encourage the presenters to provide time for good discussion
by the Committee.

And having said that, it\'s my pleasure to introduce Alan Risenhoover,
who\'s the director of the NMFS Office of Sustainable Fisheries. He\'s
going to provide us an update briefing on the Magnuson‑Stevens Act
implementation.

MR. RISENHOOVER: All right. Thank you, Mr. Chairman. And it looks like
our computer may restart on us here, but we\'ll just press on.

So I figured, you know, I was in and out a little bit yesterday on some
conference calls and I didn\'t notice there were any PowerPoints. But I
thought this morning I\'d start you right. You know, a night after
Bourbon Street, hit you first thing in the morning with ‑‑ what is this,
about a 46‑slide PowerPoint here. And this thing just this morning
stopped, so I\'ll say I\'m done.

But anyway, so what I was going to do today is go for reboot, replay and
just read something here.

It\'s just to give you a general overview of where we are in the
Magnuson Act and implementation, about 22 months into it. If you
remember right, or if I remember right, the President signed the Act in
January of \'07 and you\'re talking about January of \'09 is coming up.
So this is kind of a two‑year update. I think that MAFAC last time I
gave a year‑and‑a‑half update. So there are some things that have
changed, some haven\'t. It\'s going to be a broad overview of kind of
where we\'ve had some successes, where we\'re a little bit behind and
trying to catch up.

Mark, I believe, asked me ‑‑ maybe he did and maybe he didn\'t, but what
I\'m going to do is say that Mark asked me to focus just a little bit
extra on the annual catch limit guidance and the NEPA guidance that are
pending. So I\'ll spend a few more slides, exciting slides, on those and
then hit a few slides on some of the other major provisions.

So if you do have questions, stop me. At the end we\'ll try and leave
some time that if you have questions on some specific things that I
don\'t know the answer to, we\'ll find somebody that can get you the
answer to those. We do have, and I\'ll give you the web site at the end,
a nice web site that gives the status of all the major actions we\'re
tracking. I\'ll show you how that\'s organized a little bit here.

So that we\'ve really tried to have it so that constituencies can follow
along, so that there\'s one place to go on our web site where people can
get the info they need, or at least a get a start on the info on where
we are in an implementation mode. But also we tried to link any
opportunities for public comment to that one web site. So if you feel
like making comments on something, that\'s your web site because
there\'s usually some comment period open.

Okay. So the first thing we did when we were looking at the Act, if you
went through it, on our first list we had several hundred actions that
needed to be done. So the first thing we did was try and prioritize,
sort and combine. So what we finally wound up doing on our to‑do list
here was we had three priorities and we were going to try and march into
those priorities in order with the resources that we had onto the first
one which would ‑‑ priority 1, and some of these, the due date, it
wasn\'t like it was due in 30 days, 60 days, 90 days, while there were
some of those, the first priority was where there was a date specified
in the Act. So if it said you need to have something done in 30 days, we
created a time line for that. If it said you needed to have something
done in three years, we created a time line for that and made those our
priority 1 tasks. There were about 30 of those priority 1 tasks.

The second priority we had was what are those provisions that the Act
requires us to do? What are the shalls? The Secretary shall and the
Secretary must, or the Councils must. What were those things that the
Act required us to do and we started developing a time line for those as
our priority 2. There were also about 30 ‑‑ I guess there about 50 of
those.

And then finally our third priority was where the Act said the Secretary
may do this or the Council should do that, where there wasn\'t a
requirement and a time line, or a time date certain with it and we
started working on those as well. There was a large number of those.
Some required action and some didn\'t. I\'ll try and run through those a
little bit.

So we organized a little bit up front to try and get going.

Now on our web site these are broken out by task so you can see what\'s
actually in there; I\'ll mention a couple of them as we go through. But
of those priority 1 tasks, again tasks that said the Secretary or the
Council must do something by a date, we\'ve got about half of them done;
a little over half actually. We\'ve got five that are delayed and you
can read down here kind of the status of things, but I wanted to just
give you a flavor of what some of those are, because I can\'t remember.

Right out of the gate we had a number of reports that were due in 30,
60, 90 days, so there was a conflict of interest report. What do we see
the Council\'s on conflict of interest? Which ones are recusing
themselves at the Council meetings.

Some deep sea coral reports. Those in New England may remember there was
a Framework 42 report. There were reports on state fisheries versus
federal fisheries in the Northeast and off Hawaii. Those we\'ve gotten
done. Let\'s see, some of the delayed ones then. There was a report
required on ecosystem research. We\'re running late on that, but it\'s
in‑process. The NEPA environmental review that I\'ll talk a little bit
about. That had a six‑month deadline to get something proposed and a
year deadline to get something final. We\'re about a year behind on that
one. So there are a few things we\'re behind on.

There\'s a number of things we\'re on track to complete. Now some of
those are on track to complete under our time lines; some of those on
track to complete under the Magnuson Act\'s time line. So example, the
annual catch limit rule I\'m going to be talking about, internally
we\'re on track. We\'re getting it done when we want to. There were no
set deadlines to‑do guidelines for the annual catch limits. But the
annual catch limit deadline for stocks, experience and overfishing is
2010, so we haven\'t hit that deadline yet. We\'re just hitting some of
our deadlines in front of that.

And then the final one, this task that has no milestone plans associated
with it, that\'s the one that staff always sticks in the presentation,
because, you know, it\'s always been what is that? So it\'s something
we\'re not planning on doing, we\'re not going to do or what ‑‑ that\'s
the one that says after January 1st, 2009 the Secretary of Commerce
needs to designate a senate‑appointed person for international
fisheries. So that\'s not one we have a lot of control over, but it\'s
not that we aren\'t doing anything, it\'s just that we really can\'t.

On priority 2 and 3 tasks, there were a number of these that are already
complete that didn\'t require a lot of work. For example, it established
our community‑based restoration program. For those of you familiar with
NOAA know we\'ve had a community‑based restoration program for a number
of years. So we just made sure that the terms in reference to that
program were operating on reflected the Magnuson Act, put a check by it.
So there\'s several of those, the Council coordination committee one,
cooperative research program, we\'ve had for a number of years. So those
are pretty much completed.

There\'s a number in progress. There are some requirements in the Act
for peer review, and I\'ll talk a little bit later about we\'re working
on some peer review modifications. There\'s a study on acidification of
the ocean that we\'re a little bit behind on, but I understand it\'s now
in progress.

And then finally, there are some that we didn\'t have any funding for.
There was a herring study authorized by the Act. It authorized \$2
million to do the herring study in the Northeast, but we haven\'t gotten
the \$2 million to do the study. So there may be some that there\'s no
funding with.

So that\'s a quick overview like where we are. I\'d like to say we\'re
halfway done. We\'ve got about half the items done. A lot of them are
going to take a lot of time, maybe years to complete.

So what I thought I\'d do is just really quickly go through some, spend
a little bit more time on NEPA and the ACLS, and then if folks have
questions, we can spend a little time on trying to answer those
questions as we go through. But this is the list, hopefully, of what
I\'m going to be talking about.

So the first one is the annual catch limits and I\'ve put the national
standard 1 up there because the annual catch limits affect how we catch
the stocks, prevent overfishing. We though it was more important to
revise all of national standard 1 to reflect that new requirement.

So the requirement in the Act was to establish mechanisms for specifying
annual catch limits at a level such that overfishing does not occur in
the fishery and ensuring that there\'s measures of accountability. So
that\'s a quick summary of the 37 or so words in the Act. But there\'s
four really key components to that.

First of all, you have to define what an annual catch limit is. Congress
didn\'t do that for us. You have to make sure somehow that it\'s such
that overfishing does not occur. So it has that annual catch limit link
to ending overfishing. Second of all, it says in a fishery. And you all
are from around the country. You know a fishery defined differently
around the country. Some places it is a single species, some places
it\'s a single stock, other places it\'s mixed stock and other places,
looking through the FMPs we weren\'t quite sure what it was. If you look
at the Hawaii FMPs, it says everything on the reef. So is that the
fishery? How are we going to manage everything on a reef, because one,
we don\'t know what\'s on the reef. Two, a lot of it\'s probably not
fish; maybe some bycatch or some habitat damage. But again, defining
what the fishery was was the third important thing. And then finally,
these measures to assure accountability. What does that mean?

So those are the four basic parts of this that we really focused on as
we were going through trying to develop this.

So again, specifying annual catch limits such that overfishing doesn\'t
occur, include measures of accountability. And then the hard part came
in. You\'ve got to do that by 2010 for any stock subject to overfishing.

So currently there are 41 stocks around the country that are subject to
overfishing. So that\'s going to be the focus over the next year of the
Council, is to look at those 41, ensure we have measures in place, or
annual catch limits in place such that overfishing does not occur on
those 41 by 2010.

Kind of the compounding problem on that is it\'s one thing to get those
measures in place that you think are going to end or prevent
overfishing, it\'s another to prove it. We don\'t do stock assessments
on every stock every year. So in 2010, we\'ll have these measures in
place hopefully, but we may not know if overfishing is actually ended
until the next stock assessment, until the next year. So if you\'ve gone
through our guidelines, you\'ll see there\'s provisions in there that
try to push the Councils toward an annual method of determining whether
overfishing is occurring, kind of an annual proxy typically in catch of
whether overfishing is occurring. So that\'s part of it as well.

And then for 2011 for all other stocks. We have those 41 stocks subject
to overfishing. We\'ve got information on them. We look at about 230
stocks under our annual performance measure, the fishery sustainability,
stock sustainability index. So we\'ve got pretty good information on
that 230. But if you look in our annual report to Congress, we have
about 500 to 700 stocks, depending on what year it is, that we actively
manage.

So we take care of those 41 that we have relatively good information on
in 2010, and then by 2011 we need to start looking at all those other
stocks. So our proposed guideline also addresses that. How do we sort
those stocks out? How do we put our resources and energies into those
stocks that: (1) need to have overfishing ended; but (2) that we can get
ACLs in place for 2011? So I\'ll talk a little bit more about that.

And then the final thing is the Council of Science and Statistical
Committees recommended a catch level that the Councils cannot exceed
with their annual catch limit.

Tony?

MR. DiLERNIA: Alan, is there a difference between an ACL and just a
quota that would be passed, like a quota management? Is there a
difference?

MR. RISENHOOVER: An ACL could be a quota. We\'ve tried to say an ACL is
an amount of catch. So you could have an amount of catch, your quota
could be below that or at that. And I\'ll show you something on how this
tried to relate.

MR. DiLERNIA: Okay.

MR. RISENHOOVER: So overall, what we wanted to do was have a strong but
flexible approach. So if you look at the language in the Act, it says
such that overfishing is prevented. That\'s fairly strong. But we need
to be flexible on how we get there to be careful with, you know, if you
want to prevent overfishing, the easiest way is just to have no fishing,
right? So we needed to create some sort of conceptual base for doing
that.

And so we\'re looking across all the fisheries. You have eight Councils
that manage 46 FMPs differently across the country. So again, looking at
all that, how do we get some sort of standards across the country when
you have all this diversity on how things are done. And that was one of
the things I\'ll talk more about, the major concerns for the complexity
of the rule.

Well, it\'s a complex process. And if you look across the eight regions,
it\'s very complex. But here are the main things we wanted to do was try
to address all of these characteristics but remain flexible so the
Councils could work within that, and we didn\'t have a rigid structure
that says ACL is a quota. Everybody must have a quota. Congress, at one
time in the draft, did have hard quotas, TACs and paybacks. That was
removed from the Act. So we knew that wasn\'t the standard they wanted.

So the conceptual framework we came up with in the proposed guidelines
is up here. Where the Councils would set an overfishing limit and then
their SSCs would recommend an acceptable biological catch to the
Council. The Council would then set an annual catch limit associated
with that. And then we also recommended that there be annual catch
targets, which are a lot like a quota. And so over time your annual
catch target would relate to OY, OY being a long‑term concept, annual
catch targets being an annual, yearly concept.

So that was our initial framework and I\'ll talk a little bit more about
the comments that came on that in a little bit.

So in the original guidance we said, you know, your overfishing limit,
your ABC, your ACT, your ACL and your ACT could be equal to each other.
Overfishing limit could equal the ABC. ABC could not exceed OFL,
however, because that\'s not preventing overfishing. Your ACL could
equal your ABC, but it couldn\'t be above it. And so we have this
greater than or equal, but we recommended in the guidance that your ABC
could be below your OFL to account for scientific uncertainty, and your
ACT, your annual catch target, what you\'re shooting for, should be
below your annual catch limit. Limits and targets.

MR. DiLERNIA: Is there a standard percent spread between those two? Have
you established one yet?

MR. RISENHOOVER: Depends on the fishery. If you have a fishery that\'s
very tightly regulated; think of an IFQ fishery where each individual
has to report an exact amount of catch and has an exact quota share,
those lines may be very close together. If you have broad effort or even
seasonal control, then you start thinking that those lines may need to
be further apart.

MR. DiLERNIA: Okay. Makes lots of sense. Thanks.

MR. RISENHOOVER: So that was our initial conceptual framework there,
trying to look at as the Councils are developing, or the SSCs are
developing their biological information, they need to say, well, how
much uncertainty is that? So if they set an OFL, and overfishing limit,
in the middle, if you\'re fishing at that OFL, you have a 50 percent
chance of being overfishing. Is that the risk policy a Council wants? If
your limit is also your target, you have a 50 percent chance of going
over it. You can\'t always hit that target. In some cases, maybe in a
LAPP program, you can hit that target. So that was the draft concept we
came up with for the proposed rule.

And here\'s kind of what Tony was talking about. If you think of the
fisheries around the country, if you have a limit and a target and
you\'re right around your target all the time, well you can push that
target toward the limit so you\'re not writing checks your bank account
can\'t handle. Right?

On the other side, if you\'re experience has shown that your limit is
here and your target is here, and you\'re either above it all the time
or below it all the time, then, in that one case, it looks like you\'ve
exceeded your limit, which may be your overfishing level as well, three
times out of five. That doesn\'t prevent overfishing per the Magnuson
Act\'s standard. So that\'s part of the background of the concept we
were working with there trying to get limits and targets. You can manage
at the limit if you have good information.

If you don\'t, you might want to stay away from that target a little bit
because the next part of this was the accountability measures; let\'s
just go back, would kick in at your annual catch limit. And the purpose
of the accountability measures were, if you go over your limit, you need
some mechanism in place that pushes you back under that limit for the
following year. So that might be if you over harvest, so you exceed your
ACL, the next year you just reduce your quota by that much, you change
your bag limit, you shorten the season, you push them out of a specific
area. There\'s a lot you can do with accountability measures.\*\*Tony?

MR. DiLERNIA: When do you establish the accountability measure, before
or after the season?

MR. RISENHOOVER: You want to establish it before. So as you go in, you
say here\'s our limit. If we go over the limit, this is what will
happen. If we have good in‑season information, sometimes we do;
sometimes we don\'t, but if you have good season information, you may
slow the fishery down or stop the fishery during the season to prevent
going over that limit. If you don\'t have good information, then
whenever you get the information, you see if you\'ve exceeded your
limit, but then we wanted the Councils to figure out what would they do.
So if we get information 18 months after the fishery ends and we find
out we\'re way above or way below, what do we do? We don\'t go back to
the drawing board and at that time say, okay, we were above or below.
What do we do? And nine months later, or a year later, you implement
something, now you\'ve gone through another cycle the same season and
the problem, high or low, has gotten worse. And that\'s what we were
seeing. We were kind of chasing these overfishing problems where we\'d
recognize, okay, we\'re overfishing stock X. Take 18 months to develop a
new plan to address that. Well now you\'ve gone through two more seasons
and the hole is deeper. And so then you would have to try and chase that
with another amendment to try and make the whole thing over again. And
so it\'s reacting very quickly to exceeding your limit is what we\'re
looking for.

So just real quick, so the MSA required, you know, you prevent
overfishing. We said for stock complexes, you need to make sure you have
a limit and a target. What are you shooting for? How much uncertainty is
associated with that? And you act accordingly such that overfishing is
prevented.

It also talks about two exemptions here to the MSA. The exemptions were
for stocks with a life cycle of less than one year; think of shrimp, or
are subject to an international agreement; think of bluefin tuna where
we have to give people a reasonable opportunity to harvest that quota
set internationally. So those were the two exemptions.

We did also talk about for the West Coat folks, for salmon this sort of
framework may not quite make sense. So the Council could use an
alternative method of setting ACLs per ESA listed salmon, so we\'ve
provided a little bit of flexibility there.

The final thing that I didn\'t talk a lot about were these ecosystem
component categories. And that, we were trying to address such as the
Hawaii situation where you\'ve got a lot of species in there. So the
Councils are trying to move toward ecosystem approaches of management,
which means more inclusive. But we didn\'t want to create a situation
with the ACLs that every time you put, you know, every creature on the
reef into your fishery management plan, you\'ve had to set an ACL for
every creature on your reef. So the proposed guidance said your fishery
is defined as what your fishery is defined as now, and it will need an
ACL for every stock or stock complex in it unless the Council goes
through a process to move species into this ecosystem component category
and then you wouldn\'t need an ACL because it would be out of the
fishery. And so that would be a process that Council would go through
saying look, this isn\'t a target stock. The bycatch of it and the
relative national standard nine isn\'t that high and it\'s not in danger
of becoming overfished or subject to overfishing. And you could put that
in this ecosystem component category that gets it out of your fishery,
in that definition of what\'s in the fishery so you wouldn\'t have to
set an ACL for it. So that\'s what we had proposed.

I\'m going to skip the next one and go to the next one. So we went
through a proposed rule; all of you probably saw that, which is about
105 days to comment on it, we got 160,000 comments on it. So if you look
at those 160,000, a lot of them are form letters saying yes or no. And
like it, don\'t like it. If you sort that out, you know, there were 75
really substantial ones and then a couple hundred of minor comments. So
we\'ve gone through all those. Right now we\'re analyzing those comments
and trying to move forward with a final rule. Back to this one, I think
it makes more sense to do this. So here were the major issues that came
out in the comment period.

The first one was the use of annual catch targets. There were a lot of
comment on annual catch targets aren\'t prescribed in the Act. Should
you have it in there? Is it a useful concept? Does it change the meaning
of OY? And later on on Bourbon Street, I\'ll be happy to discuss these
with you in more detail. So, you know, ACLs were in the Act. Acceptable
biological catch was in the Act. This was a term we used. So people were
concerned with that.

People were concerned with the difference between, or the relationship
between those concepts, between OFL, ABC, ACL and ACT. You can kind of
imagine which sides those fell out on. Some thought those should be very
big buffers. Others thought they should be all equal.

Science and management uncertainty. How do we describe that? How do we
get a handle for that? Part of it is you look at your experience. Part
of it, you know, maybe you do have some scientific information.
Complexity and time line, people were concerned that the rule is too
complex. Some thought there should be more terms, more reference points,
more requirements in it. Everybody was concerned with the time line,
because the Councils were facing this 2010 deadline. Get the rule out
was the main comment.

Data limitations. How do you get all the data in‑season management to do
this, or stock information? What\'s required for those species intended
for inclusion in the ecosystem component? Some still thought that
Councils would try to move stocks into that so they didn\'t have to
manage them. Others thought, well, that\'s going to result in a lot of
stocks being moved into ecosystem components that we\'re now going to
have to manage. So we\'re working on trying to clarify a number of these
things.

The current status is hopefully we\'ll be going to OMB in a matter of
days. So we\'re trying to finalize it as we speak right now and get it
through the system and then decide if we can get it out this year.

MR. SCHWAAB: Alan, on the ecosystem issues, it sounds to me like most of
what you\'re focused on are the inter‑specific relationships and it
doesn\'t sound like you\'ve dealt much with habitat, quality, rise and
fall. Is that accurate?

MR. RISENHOOVER: That\'s right. And so it\'s mainly, you know, what
comes up in the net or what gets caught on the hook. The other things of
habitat concerns or pollution concerns, we have in the guidelines that
the Councils can make comment on that, you know, under other provisions.
But we\'re worried more of what comes up in the net, because if it\'s
coming up routinely and there may be a biological problem, then you may
need an ACL for it. But what mainly it does is establish a process for
determining is it in the fishery and we need to have an ACL for it, or
it is not in the fishery, one of these non‑target items, and we don\'t
need an ACL.

MR. DEWEY: Alan, are there specific bullets here that would target a
form letter?

MR. RISENHOOVER: No, most of the form letters came from environmental
NGOs saying, just to paraphrase, it\'s a good rule, but it needs to be a
little bit stronger. The industry, the commercial and the recreational,
had some form letters and they were concerned that this sets a ‑‑ the
tiered system would push catches so far away from what\'s allowable it
would harm the industry.

Vince?

MR. O\'SHEA: Alan, could you go back to the slide with the target and
the scientific uncertainty?

MR. RISENHOOVER: If I can push the right button, I can.

MR. O\'SHEA: Yes, right there. You know, the bottom bullet, management
uncertainty, controlling the actual target, well, in species where we
have a state fishery, the proposed rule or the rule is it going to say
that you have to account for the uncertainty of what the state is going
to do? Is that where that potential harvest by the state needs to be
taken into account?

MR. RISENHOOVER: Right. And again, this is kind of a quick overview. We
did you say you can split your ACL into sectors, not like the New
England sector. You can have a commercial ACL and a recreational ACL.
You could have a federal ACL and a state ACL. Now we can only require
accountability for the federal sectors. But so, in the case of, you
know, the Atlantic states, you know, we would probably have a federal
ACL, whatever we thought would be the quota or the target, you know, for
the fishing ‑‑ in federal waters and if we reach that, this is what
happens.

The other side of that is that, well what happens if the states go over
their targets? Well, does that affect federal waters? What we\'re trying
to do is say no, we need to work with the states that it\'s a balanced
thing. There would be some state accountability measures, but the states
would come up with those and we can enforce them federally unless it\'s
something from the United States.

MR. O\'SHEA: We\'ve seen those two dimensions. One is going up front
before the season even opens. You\'re going to have an idea of what the
states are going to do. So that may put you in an overfished situation.
And then the second case is what in fact do they do?

MR. RISENHOOVER: Right. And so part of that management uncertainty is,
well, how has it worked in the past? Has a certain sector, states,
commercial, whoever have that sector gone over? And if they\'ve gone
over for five years in a row, one might believe that they\'re going to
do it again. And so that would affect how you would set your target
points.

MR. O\'SHEA: So just one last point. That shifts the burden then to the
federal permit holders.

MR. RISENHOOVER: It could, yes. And we\'ve talked a lot about, you know,
as you set this ACLs in federal waters, what happens to states, or in
state waters? And we\'ve had some cases where this has come up.

MR. O\'SHEA: Thank you.

MR. RISENHOOVER: Chris?

MR. DORSETT: I\'m curious if you\'re going to issue some technical
guidance documents, like for example, the paper from \'98 that will kind
of accompany the guidance. And I\'m particularly interested in the
Lenfest working group that\'s looking at productivity, susceptibility of
species and setting ACLs.

MR. RISENHOOVER: So on the first one, we\'ve been working with Steve\'s
folks to talk about, you know, data needs and some of the
technicological parts of this, so that may happen. Our first goal is to
get these guide limits out. On the other one, on the Lenfest, we just
see some similarities here. We did in the proposed rule mention the word
vulnerability, and I did not say we need to get a new word for that, but
vulnerability which is kind of a product of suspectibility and
productivity. So that if you have a stock that\'s highly productive and
not really susceptible to the fishery, it\'s not very vulnerable.
Whereas if it is highly susceptible to the fishery, low productivity,
maybe something like sharks, that\'s an example I have, then you may
need to move some of this away. You know, keep your OFL and your ABC
further apart, maybe set your limit below that. So we do have some those
concepts, but it\'s not based exactly on the Lenfest.

VICE CHAIR BALSIGER: Well, will there be something that will be ‑‑
something to issue to help the Councils do that type of analysis, or the
SSCs, or will you just lay those concepts out and then have the Councils
dig in?

MR. RISENHOOVER: Right now, we\'re probably just going to lay those
concepts out and then try to work with the Councils to work through
that.

MR. BILLY: Steve?

MR. MURAWSKI: I just wanted to comment on two things. First of all,
Lenfest.

The second issue is one of the things that we\'re trying to work on in
our technical guidelines in addition to, you know, what\'s in the
national standard, you know, the concepts, you know, that were strapped
to one another\'s ‑‑ put together I think kind of hold true, you know,
we need an offset. The offset should be greater, you know, as the degree
of precision. The biggest issue that we\'ve got right now is how do we
handle that. And so we\'re doing a lot of work internally to become ‑‑
we need better guidelines on that. Because frankly, the Councils are
going to be, you know, bumping up against annual fishing for the known
knowns. But it\'s the known unknowns that are basically going to, you
know, be the big challenge.

MR. RISENHOOVER: Let\'s do one more question and then I\'m going to
press on just to keep us on track.

Tom?

MR. RAFTICAN: On ecosystem, do you do any overlaps say with, you know,
the fishery and then forage or something like ‑‑

MR. RISENHOOVER: The Councils could. That can be a way they address
forage. If they\'re worried about, you know, the forage fish, whatever
it is needs to be managed. They\'re afraid it\'s going to become
overfished or overfishing is occurring, then that would probably push it
over into the fishery and it would need an ACL. If they say, well, you
know, it\'s highly productive and we don\'t see any susceptibility to
the fishery really, maybe it becomes an ecosystem component stock. But
the Council needs to do an analysis to tell us why they\'re doing it one
way or another. So it\'s not going to be an automatic split. In the FMP
right now, they mention stocks in the fishery that are managed. If they
want to move one of those current stocks in the fishery into an
ecosystem component status so it doesn\'t need the ACL, they would have
to do a public analysis or a public process and analysis to do that.

That help?

MR. RAFTICAN: A little.

MR. RISENHOOVER: A little bit. So there are some decisions to be made in
the future there. Because again, what we\'re worried about is if we try
to do an ACL for everything on the reef, all our resources are going to
be spread out. We need to concentrate our resources on what matters
right now and then we can work on those ecosystem components. But yes,
forage fish is something that people are talking about where should,
where should it fall? How should we manage it? But again, we\'re not
prescribing anything in this. It would be more up to the Councils on
what they like.

Okay. I\'m going to press on with NEPA.

MR. BILLY: Just to let you know, Tom and Gary ‑‑ he feels he can do what
he needs to do in about a half‑hour, so ‑‑

MR. RISENHOOVER: Okay.

MR. BILLY: ‑‑ that gives you a target of 9:30 instead of 9:15. You\'ve
got about 20 more minutes.

MR. RISENHOOVER: Okay. I can do that. But, you know, we got to reserve
time for Gary, because I have questions of Gary.

MR. BILLY: All right.

MR. RISENHOOVER: Okay. The second really big thing we\'re working on is
this NEPA guideline, you\'ve seen the proposed rule on that, and I\'ll
give you some of the comments. But just to remind you what the Act said,
Congress directed us to revise our NEPA procedures relative to the
Magnuson Act to try and make the time lines better to streamline the
process. And they indicated that this should be our sole way of doing
environmental analysis with FMPs.

So we put out a public notice again, worked with the Councils through
their Council chairs coordination committee. They actually put out a
straw man. We put out some questions. We took public comment on those
and then developed our proposed rule. So the proposed rule was released
I believe back in May. So our goals in this one were, you know,
obviously we had to comply with both NEPA and the MSRA, the Magnuson
Act. We just needed to mesh the time lines a little bit more. We were
going to adhere to the policy and principles that are in the current CEQ
guidelines. So if you look at the draft guidelines we put out, it
follows fairly closely to current CEQ guidelines which allow for
individual agencies as well to do their own guidelines. So we did get
legislative authority, but we could have actually done it under the
current CEQ guidelines as well.

We mentioned integrate them. We looked at the CCC, the Council Chair\'s
Coordination Committee straw man that they put out. And our goal was to
keep public comment as part of the process, but have that as part of the
Council process. And I think I can talk a little bit more about that.

So we started with their guidelines, I guess probably major proposed
changes. So we took the ‑‑ and kept the basic documents. So there are
still EAs, environmental assessments, and categorical exclusions, and
findings of no significant impacts, but we added this new ‑‑ and I
don\'t know why they didn\'t put on here, but new forms of documentation
which the IFEMS, the Integrated Fishery Ecosystem Management Statement
‑‑ I think that\'s what it is.

So anyway, we created this new document, but a lot of the Councils were
doing that anyway. If you think of your Council experiences, a lot of
times the EISs and the plan amendments, they\'re all in the same
document. And so we thought by trying to guide the Councils to
integrating those all the time, that would be helpful. But that
wouldn\'t be helpful because they wanted to see every EIS document. So
that was a new documentation.

We also encouraged frameworking and tiering so that you would have this
IFEMS document that you could then tier off. So if it was analyzed in
that document, you wouldn\'t need another environmental document to move
forward with an action that had already been analyzed. Again, part of
this was trying to get the documentation down a little.

We tried to maintain some public comment. That was one of the ones that
folks really hit us on where if you look at the public comment now on an
EIS, it\'s about 45 days. Under our proposed rule, that could have gone
up to 90 days because there would be a comment period at the Council
level before they vote, which we thought was important. Right now
sometimes they vote first under preferred alternative. Other times they
don\'t before they take public comment. But then there would also be 45
days of public comment at the secretarial level, so you could have had
90. However, we did say you could shorten the Council comment period and
you could shorten the public comment the Secretary would take and that
knocked it down to ‑‑ you know, in the rare case that would happen, it
would be 29 days. And the environmental community was very concerned
that Councils would strategically drive that so everything would have,
you know, a maximum of 29 days of public comment. In writing it, we
thought we could be more in the 60 to 90 days public comment on
environmental documents as opposed to the current 45. So we lost a
little bit of public relations work on that one. So those are some of
the things that were in this.

And the other thing, if we kind of moved it down to the Council level,
right now it\'s done differently in each of the regions how the Council
participates in the development of EISs. This would have said that the
scoping would have occurred at the Council level. Sometimes it does now.
Sometimes the Secretary does that separately. It depends on where you
live. So we tried to align those. And another broad concern was, you
know, are we delegating that to the Councils.

So I guess I did talk about this. The length of the public comment
period was a major issue. And then the second one was the one I was just
talking about, how NEPA is developing and by the Council to provide the
Secretary. And the proposal that was out there, we tried to make very
clear that this is still the Secretary\'s document. NEPA is a
requirement for the federal agencies, not the Councils. The Councils
would only help us inform that NEPA development process. By having NEPA
developed at the Council level, again you get that. The Council puts it
out for public comment and then addresses those or considers those
comments before they vote. Then it\'s submitted to the Secretary and
then the Secretary would have another public comment period on that to
ensure there weren\'t any concerns. So we would have retained review of
that.

So as I said, we published it in May. We held three public hearings. We
held numerous meetings with the Councils. We also held a workshop with
folks on the proposed rule to help us move toward a final rule. Where we
are right now ‑‑ I guess I should say, I think it was actually ‑‑ this
should be 250,000 comments, none of which accused my mom of anything,
but there was some mention of me and ‑‑ what was it, a spineless mammal.
I thought all mammals had spines. So if anybody knows about a spineless
mammal, other than me, I\'d like to know what that is.

So we did get a ‑‑ this really brought out a lot of #‑ this brought out
a lot of comments, a lot of people deeply concerned about is this, you
know, subsuming NEPA completely into the fisheries management process.
On the other side, people were saying, no, this subsumes the fisheries
management process completely into NEPA. So very polarized comments on
this, my mother aside.

So we got all the comments. We\'ve developed a final rule and that is
currently pending at OMB and we\'ll see how things go in the coming
weeks on whether that comes out. But that\'s public. You can go on the
OMB web site and see that it\'s there. You can\'t see what\'s in it, but
that\'s where were are in that process.

A couple other things I\'ll touch on real quickly and then we\'ll see if
there are any questions.

The MRIP program replacing the MRFSS program, looking at the NAS study.
We\'ve had a real outreach program on that, moving it through. Again,
the big part of that is developing this registry. A proposed rule for
that came out in June. Public comment is closed. I\'m not sure how many
they got on that. But the final rule for that program is also pending at
OMB right now. So we hope to have that out. The Act, that\'s one of the
requirements in the Act, that this program be established by January 1,
2009. We\'re going to be very close to that. Part of this is getting
that registry established and whether a state program can be used for
that registry, or if the Secretary needs to implement their own
registry. There\'s more information coming out on that.

They have an implementation plan on the web site. I want to make sure
folks realize that. This implementation plan is already up there. So if
you want some initial information, the web site\'s there, but the
general web site will help you as well.

Limited access privilege programs. We set a goal internally inside the
administration for doubling the number of these programs to 16. We\'re
up to about 11 right now. So we\'re on track. I\'ll talk a little bit
more about LAPP programs tomorrow, I guess. The major accomplishment
here was the report there at the bottom that design and use of limited
access privileges programs that marks coauthor/coeditor of. So that\'s
the basic guidance right now. What we\'re doing is soliciting public
comment on LAPP programs, on whether folks thought we needed some more
regulatory guidance. We\'re going through those comments right now to
decide if we want to propose formal guidance. It wasn\'t a requirement
of the Act. Folks thought we needed some additional guidance, so we\'re
looking at that. But this is a staff resource problem. Right now we just
don\'t have any people to work on it until we get over the ACL on it.

And then a couple additional rule makings related to the LAPP programs.
The IFQ referendum guidelines. The Act requires that if you\'re in New
England or the Gulf of Mexico and want to implement an IFQ program, you
need to have a referendum. We\'ve got guidance pending on that. We\'ve
got a proposed rule out, got comments. We\'re just trying to wrap that
up.

Experimental fishing permits, EFPs. Again regionally based, nationally
streamlined program. We\'ve had a proposed rule out. Got a lot of
comments on that. We\'re trying to finalize those now. So those two will
be coming out soon, too.

Another big part of the Act are the international provisions related to
IUU. We need to have a biannual report to Congress in January that
identifies those nations that are conducting IUU. And then we also need
a process for certifying whether they, the individual nations, or the
competent Regional Fishery Management Programs is doing anything to
solve that. So we do have a proposed rule that\'s also pending at OMB
right now on how we would do that. So there will be a public comment on
that IUU rule hopefully in the near future.

Just a final couple quick ones. Deep sea coral. Authorized a deep sea
coral program. We\'ve put that together. We\'ve put out a draft plan on
a research and technology program. We\'ve announced availability of that
research and management strategic plan. It\'s out for public comment
right now. You have until January 17th to give us comments on that.

Then we talked a little bit about peer review. The Act says Councils may
establish a peer review process. Steve and his folks are trying to get
some guidance out on what that means, how would the language work, how
do we again, across eight Councils, have some standards that they would
follow. So we have an advanced notice of proposed rule making out on
that right now. So there\'s plenty of opportunity to comment on things,
if you don\'t have anything to do.

And then I\'ll wind it up here with the web site I mentioned at the
beginning. It\'s where I go for my information, so hopefully other folks
will, too. We\'re trying to keep that updated.

So, questions? We\'ve got six minutes before Gary rocks on budget.

MR. DiLERNIA: Alan, the angler registry program, when it was first
passed and the last re‑authorization, I said to myself, this should be
easy to get the states down to ‑‑ those states that don\'t have fishing
licenses, to have licenses in place. And I thought at the time that what
the feds were going through was an exercise that would really not be
implemented. I now am ‑‑ my opinion on that is 180 degrees around now at
this point. The states, there\'s obviously budgetary problems of where
they are. I sense that a number of the states in the Northeast, the
governors are resistant to pass recreational license programs. And so, I
mean, as much as I\'ve seen it planned in New York, I don\'t see it
happening soon. And so, you know, I\'m glad that ‑‑ you know, eventually
you had to bold with it, but I hope all those ducks are in place and
they\'ll hold well because I really ‑‑ that\'s going to happen. I see so
many of the states up in the Northeast that I didn\'t think it would
ever happen before, I thought okay, this is enough. Bills will be enough
of a push. But until you start charging the fees, it\'s just ‑‑ states
are not going to ‑‑ they\'re going to let you do it for them.\*\*

MR. RISENHOOVER: Right.

MR. DiLERNIA: Which is unfortunate, I think.

MR. RISENHOOVER: The states could charge a fee and keep the money. If we
charge a fee, it\'s goes back to the general treasury.

MR. DiLERNIA: Right.

MR. RISENHOOVER: So there\'s that. And we thought the same thing, that
this would kind of force some of the states to ‑‑ you know, anything\'s
better if we do it instead of the feds, which I think I believe in that
as well, except for fisheries management ‑‑ but anyway, so ‑‑ yes,
Steve, did you want to add to that?

MR. MURAWSKI: Just tell me, the dialogue that we\'ve had with a lot of
the Northeast states, I\'m thinking a bit more positive. A lot of the
states are actually waiting until our final rule is published because
they need a piece of paper to go to their legislatures with. So, you
know, for example, we\'ve had some pretty productive discussions in
Massachusetts. New Hampshire is a little bit of an outlier. Gordon, of
course is working for us now in that program. And he\'s got a lot of
internal discussions at the state level.

MR. DiLERNIA: I mean, internally in New York we\'re ‑‑ we\'ve advocated
clearly. My very first issue at fisheries management over the ‑‑ whole
30 years ago was a block of saltwater license in New York State. That
was the very thing that was in the drift to. And now I\'m probably the
most vocal supporter of having the license in the state. But what I hear
from the governor\'s office and all, is uh‑uh. You know, now Jersey is
saying no, no, no. And so that\'s why I just encourage you. And I hope
I\'m wrong, because I really feel we should have it, but it just seems
that in this fiscal climate, things are not going to happen right away.

MR. RISENHOOVER: Right. And a lot of these are kind of getting
interrelated, especially on recognition data and ACLs, you know, better
data, better management, some of the overruns in the past.

Eric?

MR. SCHWAAB: Well, just a quick comment on that. I agree with Steve and
Tony. I think that one of the things the states are waiting for is,
first of all, the rule. And secondly, there\'s sort of a grace period
there between now and 2011 when it\'s free at the federal level. And so
the states aren\'t in a rush. But I think they\'re going to get there
before 2011 for the most part.

MR. BILLY: Erika?

MS. FELLER: You just touched for a moment on the changes in the fishing
permit rules.

MR. RISENHOOVER: Yes.

MS. FELLER: Are there any sort of high points where there wouldn\'t be
changes that you can see?

MR. RISENHOOVER: There\'s a lot to the rule on the difference between
research set asides and staff research on whether they would need a rule
exempting fishing permit or not. The Act says we don\'t regulate
science, the research side. And so this would have closed what some
argue was a loophole that anybody could do ‑‑ under the guise of
research you could actually be fishing out of season. So there was that.

We tried to set some standards across the country so that EFPs would be
handled in the same way ‑‑ we got a lot of comment on that. So the
proposed language is somewhat different than what we proposed. But if
you\'re interested, I can, you know, get you a summary of that or, you
know, the comment period is closed, but the rules would be on our web
site as well.

MR. DEWEY: You touched briefly on the ocean acidification requirement,
there at section 701 of the re‑authorization bill. And that directed the
Commerce Secretary to request the NRC to do a study. Can you give more
specifics on what\'s in that.

MR. RISENHOOVER: I can\'t, but I\'ll turn that to Steve.

MR. MURAWSKI: Yes, what we\'ve done is we\'ve given the National
Research Council the funding to initiate that study. There\'s a call for
membership on that panel right now. We\'re actually going to split that
study. The National Science Foundation is interested in going part way,
and actually two other bureaus of NOAA ‑‑ in particular the coral
program and the climate program are interested in splitting it with us
as well. It\'s about a \$400,000 study. That\'s what the NRC studies
cost these days. So, you know, we should point out that the other, you
know, NSF and then the other bureaus of NOAA are there.

We anticipate a preliminary report in February, like an interim report
and then a final report. It\'s about an 18‑month study, when you wrap up
everything. But I think the Ocean Studies Board is very keen in this
study. This is clearly an issue that has kind of popped up on the radar
scope and they want to be relevant as the new crowd, you know, is going
to run the, government and starts to play with this issue.

MR. BILLY: Other questions? Comments?

MR. RISENHOOVER: If you have anything, check the web site, if you can\'t
find it there give us a call. Thanks.

MR. BILLY: Thank you very much, Alan.

Okay. I\'d like to move on then. the next briefing is from Gary Reisner,
the director of the NMFS Office of Management and Budget. He\'s going to
provide us an update on budget and transition.

Gary?

DR. HOLLIDAY: These are slides that are not on the web site.

MR. REISNER: Yes, I wasn\'t aware I was going to make a presentation on
this, so I sort of put these together yesterday. And I\'ll go through
this fairly quickly.

You guys have seen this slide before. It\'s essentially showing the
Congressional request and the enacted numbers. They\'re not showing up
very good in the colors. But in general, the taller line is the enacted,
the lower line is the President\'s budget. Until you get over to \'09,
you have our request and then the House and the Senate mark there.

You see a lot of fluctuation. The line draft here is the enacted levels
in real terms. And so you see it\'s not gone up. It\'s sort of
fluctuated around and downward, but in \'09 are requested about 782
million.

So here\'s our request. Seven‑hundred‑ eighty‑two million, that\'s in
total. It\'s about 46 million below the enacted level, 13 million below
last year\'s request. However, within that, we have about 10 million in
net adjustments. What that is is inflation, pay raises that are mandated
by Congress and other adjustments to inflation. Those are sort of our
highest priority because we\'re going to pay them. No matter what, we
have to. And then 34 million in net program changes, which I\'ll go over
in a second.

In part, getting down to these numbers is that if you look at the \'08
enacted level, there\'s about 53 million in Congressionally‑ directed
projects, earmarks. And so those aren\'t in our request in large part.

I thought I\'d throw this up just so you can see the various priorities,
or the splits in our budget for the programmatic activities. The red
part on the bottom is for the MSRA fisheries management.
Magnuson‑Stevens makes up almost half of our budget. The yellow on the
top is actually activities. It includes aquaculture, cooperative
research, information systems, Antarctic research and a few other
sundry. NEPA money is in there. The 89 million is our law enforcement
and observers programs. Within that, about 56 million is for
enforcement. About 33 is for observers around the country. And the 43
million, the small component there, is for habitat. And within that, we
have about 21 million for habitat protection activities, essentially ESA
activities and other consultations. And then about 22 million for
restoration activities. So the Open Rivers Program, community‑based
restoration programs.

This is a breakout essentially of the 34 million you saw on the other
slides so that you can understand at least what I priorities are for
\'09, whether we ever see these or not, that\'s sort of up to Congress.
But I told you the 10 million is our ATB, which is our inflation area
and mandatory pay raises that we have to cover.

The next biggest component is Magnuson‑ Stevens re‑authorization and we
have almost 32 million that we\'ve requested in our budget for that. And
the largest component again, as I mentioned yesterday, was this expanded
stock assessment activity so that we can get good information to develop
the ACLs.

We also have some funds for IUU enforcement and economics and social
science. That\'s one of the areas where we have problems. And some of
our regulatory analyses is getting good information on the socioeconomic
impacts.

We have funding for Atlantic salmon, which is an increase, and I\'ll
explain. We do have an increase there. It\'s going towards conservation
planning, Section 6‑type activities related to Atlantic salmon. And we
have an increase for Open Rivers. Together, those things are about \$10
million. And if you\'ll notice, in \'08 we had requested, and it was
enacted, \$10 million for acquiring and removing two dams on the
Penobscot River and building a fish ladder. That\'s not in our \'09
request, but those funds, we moved to the Open Rivers Initiative and up
into the Atlantic salmon Section 6 activities, not specifically for the
dams, but for Atlantic salmon activities in general.

We also have restorations in the President\'s request, about \$40
million. What had happened in \'08, as we were going forward, is both
the House and the Senate, we had good marks from the House and the
Senate and essentially fully funded our request, plus then they added on
their earmarks. And as negotiations with the White House went on and on
and the President stuck to his guns and said no increases, our number
kept going down in total, but the earmarks stayed about the same. So
they took all the funds from our priority programs. So for example, we
had money that we had requested for LAPPs that didn\'t get in \'08. We
had other things for stock assessments that didn\'t get in there. So
these are trying to restore that back to our original request.

Then we had some significant decreases. Pacific Salmon Coastal Recovery
Fund. It\'s been between \$60 and \$90 million over the last few years;
66 last year. Given the guidance that we got within the administration
to be able to hit our priorities and fund Magnuson‑ Stevens, we had to
cut that. In addition, we have the reduction that I explained on the ‑‑
and that was about 35 million, or 30 million. We have the reduction in
Penobscot River restoration activities. That was 10 million. And then
some smaller reductions in our Columbia River buyout work where we\'re
reducing the amount on an annual basis, but hopefully we\'ll be able to
continue that work for a longer period of time. So that makes up our
request and the priorities that we have.\*\*

MR. DEWEY: Gary, what was the Pacific salmon reduction? What was the
bottom line?

MR. REISNER: Thirty‑two million. Okay. So it went down to \$35 million.
And then we had ‑‑ there was some money in our PAC account, which is our
procurement acquisition construction account, of 2 million. In fact, all
of these increases that we have here are in our operating account. We
have a number of accounts, but essentially the biggest one is called
operations, research and facilities. And that\'s our operating account.
And all of these increases are associated with putting money into our
operations. Pacific salmon coastal recovery fund is a separate account,
so that\'s gone down.

MR. BILLY: Erika?

MS. FELLER: Gary?

MR. REISNER: Yes?

MS. FELLER: In addition to what\'s in Atlantic salmon, were other funds
requested for Section 6 operation of states activities?

MR. REISNER: Not specifically. We were going to use some of the money
that we have in our base for endangered species. But no, we didn\'t have
any increases over and above ‑‑ about \$1 million that we\'ve been
spending on Section 6 activities.

Any other questions on this? I only have a couple more slides here, so
I\'m trying to save you time.

This is just a summary of our activities. You saw the pie chart before.
We have protected resources. We have fisheries management, enforcement
and habitat, conservation and then the other activities. And I said
that\'s the ORF. That\'s our operations, research and facilities line.
That\'s our major operating account.

We also, it looks funny to see this other discretionary account minus 76
million. There\'s another account that we have that\'s actually ‑‑ that
minus 76 offsets increases that we have in the other mandatory accounts.
We have an account that\'s called the "Promote and develop fisheries of
the U.S." ‑‑ it\'s a real long name, but it\'s essentially a promote and
develop account. It\'s automatically funded with a portion of the excise
taxes we collect on imports, tariffs that we collect on imports. What
remains in the fund is to be used for SK,\[Saltonstall-Kennedy program\]
but what Congress has done over the years, and frankly we\'ve continued
it in the administrations request, is ultimately in order not to do it,
we have to find it, is we take money out of that account and transfer it
into the ORF operating budget. And it reduces our budget authority that
we\'re requesting from the Hill. It\'s essentially financing our
operations.

Any remainder that\'s left in the promote and develop goes to the
Saltonstall‑Kennedy Grant Program. In the past, essentially they\'ve
transferred the whole amount. This past year we\'ve had about, I think,
four or five million in there. In fact, we ran a competition on grants
for that for the first time in many years. I think we\'re going to try
to do it again this year, assuming that Congress leaves it alone and
doesn\'t up the amount of offsets that they want to take out of it.

I\'m not going to go through all of these. Again, we have increases in
protected resources that I talked about. Magnuson‑ Stevens increases. We
have an additional amount, a little amount, a million dollars for
enforcement activities related to IUU enforcement and almost a million
dollars for additional observer coverage. I think that\'s primarily
going to be used to pilot some observer activities in fisheries that
don\'t have observers to see whether in fact we may need more observer
coverage in those fisheries.

We have in habitat conservation, it looks like it\'s going down, and it
is in large part because of the Penobscot River reduction of 10 million.
But that\'s offset by the 5 million below or 5 million we\'re requesting
for Open Rivers. And then we have another 1.5 million for deep coral
work, and that\'s related also to Magnuson‑Stevens re‑authorization.

As you can see, if you look at what\'s in the House and the Senate, in
fact the House has their numbers about 34 million above our request and
it\'s about 90 million above the enacted level, but they fully funded
our MSRA request, as did the Senate. The House has provided about 10
million additional for protected species, primarily in earmarks for monk
seals and Hawaiian sea turtles.

So as you go through here, you look, oh, well heck, you know, the House
and the Senate this year actually have almost fully funded our request
and then added additional earmarks on top of that. And so if we were to
get either of them, I think we\'d be in pretty good shape. And it\'s a
little frustrating in fact because we\'d finally gotten two good
budgets. Generally, the House is substantially less than the Senate and
sometimes below our request. This year that\'s not the case, however, we
can\'t act on them because we\'re under a CR. So that\'s a little bit of
a tease to see this, and I can tell you it frustrates many of our
employees, particularly in the field who don\'t understand the nuances
of Congressional actions, and a number of our partners who think, oh,
they see this and it\'s going to be available.

And that leads me to the last thing I wanted to talk about is the
continuing resolution. Because right now we\'re operating under a
continuing resolution, and the way a continuing resolution operates, if
you look at the \'08 level, we have to operate at the \'08 level, but we
can\'t spend more during the CR period than we spent last year during
that same time. Okay. So it\'s a seasonal rate. Okay? And so every year
you\'re under ‑‑ because we were under a CR last year and we were under
a CR the year before that.

Now it\'s not really a big deal if the CR only lasts a couple of months
or it goes into December, but when it flops over into the second
quarter, it really creates problems for us and for most of the people
that work with us. And in fact, if you read the language in CRs, they
say you need to minimize your spending so as not to preempt the
prerogatives of Congress. All right? Because they want to come in at the
end of the day and move things around. So let\'s say you have a grant
line, like the Councils, for examples; that\'s all grants, and you spend
it in the first quarter and they come back and want to change that,
you\'ve already spent it. You\'ve usurped their prerogatives. So in fact
we don\'t do grants in the first quarter, until the very end of the
first quarter, anyway. We\'ll look to see if there\'s any additional
funds. And in particular, the Councils are a special animal because they
only get funding from us and they operate on a January‑to‑January basis.
So generally, late in December we\'ll try to find money from the various
accounts that haven\'t spent it under the CR and put a grant out and
give them essentially one‑quarter funding to carry them through the
second quarter.

So CRs are very frustrating for me and, I can tell you, for our
employees. They say, oh, we\'ve got all these increases. Why can\'t we
just spend the money? We know it\'s going to be there. Well, the risk
is, like last year, where our mark was good, the request was good, the
House mark was good, the Senate mark was good, but at the end of the day
when they came in and finally negotiated a number, our actual enacted
level went down substantially and the only thing that sustained it were
the earmarks because they funded the earmarks out of our base request.
So it\'s a risky time for us to be spending money. We are trying to put
some extra money on Magnuson‑Stevens activities. I\'ve talked to people
in NOAA, DoC, OMB. The problem we have is the deadlines for 2010 and
2011 don\'t go away just because we\'re under a CR. Any of the increases
that we have in here were to get us started earlier in the process that
we can. We\'re delayed six months this year to get some of this money to
do some of the assessments and the ACL work, well we\'re only a year
away from the requirements here and we\'re likely to miss our mark on
that. We\'re not saying we will, but there\'s that potential.

MR. DiLERNIA: Gary, on the quarters, when you were describing the
funding that you put to the Councils, you\'re saying your budget year is
different than your calendar year, isn\'t it?

MR. REISNER: That\'s correct, but ‑‑

MR. DiLERNIA: That starts when, the budget the year starts ‑‑

MR. REISNER: Our budget year starts ‑‑

MR. DiLERNIA: October 1?

MR. REISNER: ‑‑ normally October 1, yes.

MR. DiLERNIA: Right.

MR. REISNER: Unless we\'re under a CR.

MR. DiLERNIA: So, in January you\'re starting your second quarter?

MR. REISNER: We\'re starting our second quarter in January. The Councils
operate on a January‑to‑January grant.

MR. DiLERNIA: Right.

MR. REISNER: All right? They only get funding from us. So by the end of
December, they\'re running pretty low on cash.

MR. DiLERNIA: Okay.

MR. REISNER: Okay? And so we try to get them money at least by the end
of December so that as they roll into January they have some cash. You
know, I don\'t know whether it was hyperbole or crying wolf, but there
were a couple of Councils last year that were talking of furloughs and
layoffs. I\'m not sure that would have happened. And every year so far
we\'ve been able to cobble together enough money to give them
essentially a quarter of their annual grant amount to carry them
through.

MR. BILLY: Gary, was there any indication that Congress will deal with
any of the budget bills during the lame duck session?

MR. REISNER: I was going to talk about that. There has been no talk that
I\'ve heard or no serious talk about addressing the \'09 CR. That seems
to be right now off the table. The discussion right now relates to a
stimulus package. In fact, the other day I asked my folks to look and
see what everybody\'s saying. Pelosi and Hoyer are saying that if they
can\'t get a commitment from Bush and the Senate and the Republicans to
allow a stimulus and some loans for the auto industry to go forward,
they may not come back into session. The Senate is going to come back in
session because they bring in their new members, and they had already
planned to come back. But on the House side, it\'s all talk about a
stimulus package.

In the Senate, you know, Senator Byrd has stepped down from the
Appropriations Committee and the younger individual, Senator Inouye is
taking over. It\'s unclear to me how we will fare in either the House or
Senate next year. I think this administration may have focus on
restoring some reductions in environmental activities, but frankly my
fear is those will be high profile environmental issues at EPA and
Interior, and ocean issues might not rise up to the surface. I don\'t
know that that will happen or not. I worry doubt that.

MR. BILLY: One more question. There\'s precedent in the past for a new
administration to toss out an existing pending budget, set of budget
bills, and start fresh. Is there any indication the new administration
is considering that?

MR. REISNER: Well, there are two things. I think given that Congress was
‑‑ and the last Congress was still Democratic controlled and now you
have a Democratic president, I don\'t think they\'re going to start at
zero. However, with all the problems, and I\'m talking \'09 now, that
are facing the Congress when they come back, and the President, there\'s
a possibility that they will just come back and say we\'re going to ‑‑
for \'09, we\'re going to do a full year CR, which essentially is they
take the \'08 number and straight line it. Now that\'s problematic for
us because we have some serious increases that we need to put to
Magnuson‑Stevens. Now there are some earmarks that we might be able to
redirect, although I can tell you that that\'s pretty tough, and we get
a lot of pressure.

Jim?

VICE CHAIR BALSIGER: Well, I think this is exactly what a risk
discussion needs to get to, because this committee is for NOAA, it\'s
not for NMFS. So if we\'re straight lined, as you put it, from \'08 to
this year, and this committee has any ideas as to whether NMFS should
get a little bit more or satellite should get a little bit more as we
straight line it, this is a NOAA committee. So I think that\'s the point
we need to get to see if there\'s any philosophy or advice that should
go to I guess Bill Brennan on continuing NMFS budget as opposed to
exactly continuing all of the line office budgets.

MR. REISNER: Yes, and I mentioned some of our increase is 30 million for
Magnuson‑ Stevens, say, well, if you look at the satellite request,
we\'re talking a couple 100 million in shortfalls that may happen if
we\'re straight lined in NOAA. So there\'s going to be pressure on any
funding, and it\'s conceivable we could come out of a CR, a long‑ term
CR with less money because within the CR process NOAA itself can
reallocate funds to the priorities that they think are most critical.

MR. BILLY: Is this an example of the kind of thing that we ought to ‑‑
once we sort of develop a position, if in fact we feel strongly about
some of these priorities in the budget, pending budget, that ought to be
brought up in the context of talking with the transition team? Or is
there another avenue to pursue this kind of thing? Should we meet with
the current acting administrator of NOAA? Should we do both?

MR. REISNER: You know, if the transition team members, and you may know
more than I, I haven\'t seen a list of who the transition team is going
to be for the Department of Commerce yet or NOAA, for that matter, but
you can certainly educate them and talk to them to what you think are
your priorities and the why. You can\'t lobby inside the government,
inside the Executive Branch. You can say that. But, you know, I
wouldn\'t say it\'s lobbying. I would say you\'re giving them ‑‑ here\'s
an informed discussion about what will happen. The thing about, and I
don\'t mean this cavalierly, hurricanes are important, but if we get a
bad forecast on a hurricane, it has significant impacts, but nobody\'s
going to get sued. Our problem is that our mandates are such that if we
don\'t meet them, we will get sued. All right? So if we don\'t meet our
Magnuson‑Stevens requirements, setting ACLs and accountability measures,
we will be sued. And then the courts will start directing how we\'re
supposed to do things. Or other constituents, whether they be industry
or environmentalists, on protected species, whether it be MMPA or ESA,
if we don\'t address the interactions with fisheries and other
activities appropriately, we will get sued, and the courts will tell us
how to do it. And it can have significant impacts.

So I worry about that a lot, that we don\'t have the luxury of just sort
of being close enough. We either have to get over the hurdle or we\'re
going to get sued.

MR. BILLY: Larry?

MR. SIMPSON: Thank you, Mr. Chairman. First I want to ‑‑ quick story.
When you were talking about younger and aging Congress and so forth,
John Graves told me personally one time that back when the balance was
real delicate between the Republicans and the Democrats, the most
important person in the Senate was the Senate physician. That was back
when Strom Thurmond was there.

But the comment about ‑‑ the serious comment about your statement
initially, and it relates to what Jim was saying. He said, you kept
talking about our priorities, the Agency\'s priorities. That becomes
abundantly apparent and extremely focused and important when you get to
see all this. Then it should be more about not your priorities, but our
priorities. Because you do have other constituencies besides just the
Councils. Then you have other responsibilities than just the Councils.
And I\'ve said this and stated this in testimony, you know, the
Councils\' activities of management and ACLs and all that\'s important,
but there is an inverted pyramid of all discussions that comes down to a
single inverted pyramid point. And that\'s data. If you don\'t do the
data, close shop, let\'s go home.

So and when you talk about, and I saw some numbers that I\'m not
particular happy with in regards to some of these things, but when you
talk about your priorities, it should be more about our priorities. And
that\'s my point.

MR. BILLY: Randy?

MR. CATES: Thank you, Chairman. Several meetings of ours, I don\'t know
if it was in New York or Florida, we had a long discussion about our
responsibility as an organization and who we advise. And this is exactly
why I think at that time I was saying our bylaws state we shall advise
the Secretary of Commerce. This is coming to be very important. We need
to get ‑‑ open that door and just be able to work together. Otherwise,
we\'re talking to the wrong people. So I guess my question goes back to,
you know, where are we at with that? Have we made any progress?

MR. BILLY: We briefed the NOAA leadership. For example, on the 2020
document, it\'s been forwarded to the Secretary\'s office. But I think
the answer to your question is no, not directly.

MR. CATES: To follow up on that, I would think we have an opportunity
coming up with the new administration to basically our handbook and say
‑‑ it says we shall do this and maybe we would get a fresh start.

MR. BILLY: Mark?

DR. HOLLIDAY: Yes, just a reminder, in terms of progress, there\'s
nothing in the charter that prohibits you from talking directly to the
Secretary of Commerce. It\'s only based on historical precedent how
you\'ve chosen to advise administrations in the past. So you don\'t need
permission or new authority to go talk directly to the NOAA
administrator, or the deputy secretary of Commerce, or the Secretary of
Commerce himself or herself. There is no new authority necessary. It\'s
just simply how you\'ve chosen to exercise your responsibilities in the
past. And so I think Randy\'s comment is, perhaps this is a break point
with a new administration and the transition teams finding out it is
that you want to advise, but you don\'t need any further permission to
do that. It\'s just a matter of the mechanics of getting in line to talk
to these people and whether they\'re willing and able to do that in a
timely fashion.

MR. BILLY: This Jim and then that Jim.

VICE CHAIR BALSIGER: This Jim? I think Mark is right, but this is
probably a time when you ‑‑ the flexibility inherent to what Mark said
is important because we don\'t know how the new administration will
work. And the new Secretary of Commerce may be interested in fisheries
and that\'s where the decisions are made, in which case we want to have
the ability to go there. Or more than likely, it will be the way it has
been before, the Secretary of Commerce will defer almost all of that
stuff to NOAA. And so then you want to be able to talk to NOAA. So I
think keeping the flexible approach here is probably appropriate.

MR. BILLY: Mr. Gilmore?

MR. GILMORE: I guess in that line I was, you know, sort of what\'s the
timing on this? When does the CR expire? When will we get a sense of
whether they will do an omnibus?

MR. REISNER: The CR is due to expire March 6th. So Congress can act any
time before that to enact the full year budget, or a long‑term CR, which
essentially is a full year budget. If they are not going to take it up
in this lame duck session, then I think you\'re looking at pretty close
to the beginning of March before we are going to see anything. Because
they\'re going to have to come back. They will have new members. The
administration will also be putting together and abbreviated 2010
request. All right? Because they will have to start working on that. So
it\'s going to be a full schedule when they come back. Okay?

MR. BILLY: Randy and then Tony.

MR. CATES: We have in the budget main factor ability? We do get that
meeting request? How do we do that?

DR. HOLLIDAY: Yes.

MR. BILLY: Tony?

MR. DiLERNIA: Yes, Gary, when you negotiate your budget with the
Congressional staff, you\'re working with the staffers from the ‑‑ which
subcommittee?

MR. REISNER: It\'s primarily the House and the Senate Appropriations
Subcommittee for Commerce, Justice, Science. Okay?

MR. DiLERNIA: CJS. Okay.

MR. REISNER: And so each of those have a majority clerk, a minority
clerk and then, at least on the majority side, generally there\'s a few
analysts. So we have an analyst on the House side that deals with NOAA
and we have an analyst on the ‑‑ well, actually we don\'t have one right
now.

MR. DiLERNIA: NOAA or NMFS?

MR. REISNER: Deals with NOAA, not NMFS. Just like at OMB, OMB\'s a
little different, there are two analysts, one that deals with the wet
side, which is essentially living marine resources, oceans, NOS and
fish. And then an analyst who deals with the dry side, which is the
satellites and weather service finances.

MR. BILLY: Heather?

MS. McCARTY: Gary, what is the status of \'08 earmarks that are in your
continuing resolution picture? What happens with those?

MR. REISNER: By definition, under a CR there are no earmarks. In fact,
there are no lines. So, if we\'re under a CR, there are actually none of
these protected resources, fishery management, enforcement. We have
flexibility to establish priorities within the amounts that are
ultimately appropriated and given to us. On the other hand, there\'s no
number for National Marine Fisheries Service, so there\'s no 828 there
at the bottom. All right? There\'s just one big number for our operating
account and our operating account, or financial net, includes all the
other line offices. So it includes weather service, it includes NOS and
all the operations. So there are no earmarks. Now, that\'s ‑‑
theoretically that\'s the case. In fact, when we\'ve been under other
long‑term CRs, we have had trouble not funding some earmarks. But we
have been able to work with the recipients and exert a little more
pressure than we would have otherwise as to the day you should be doing
stuff that is supportive of our work.

There is a distinction between a short‑term CR, which is the one that
goes to March 6th, and a long‑term CR, which is essentially a full‑year
appropriation. In a short‑term CR, again, we can\'t preempt the
prerogatives of Congress, so you can\'t start new programs and you
can\'t end existing programs. Now you can minimize funding them to the
degree you can, but you can\'t really stop them. If there\'s a long‑term
CR, then that sort of goes away. And again, you don\'t have any line
items. But you certainly have informal guidance on what you are supposed
to be doing.

VICE CHAIR BALSIGER: So, Gary, on that, you can\'t start or end a
program, is a program equivalent to an earmark?

MR. REISNER: Earmarks would be considered programs except to the extent
that they are grant programs, because we can\'t issue grants.\*\*

VICE CHAIR BALSIGER: And so if we have earmarks funding, you know, the
Alaska Eskimo Whaling Commission, would they get funded by a grant, even
though you can\'t end that program or that earmark, you can\'t fund it
because we can\'t issue grants?\*\*

MR. REISNER: That\'s correct. Now if things go into the ‑‑ well, what\'s
the word? We will get guidance on that in a ‑‑ so that\'s a good
example. So let\'s say we get a full‑year CR and there\'s really no
guidance on what we would do. Then we could fund that. Or at the risk of
alienating important people, we could decide not to fund that. Okay? And
that\'s where the where the problems multiply. And when we had this
issue in, I think it was 2007; we had a full‑year CR. All right? A
number of our longstanding earmarks, we reduced the amount of money that
went to those earmarks, and for those that we continued, we required the
recipients to document how they were going to meet our mission
requirements, our strategic plan to get that funding.

MR. BILLY: Randy, one more and then I think we\'re going to have to wrap
this up.

MR. CATES: Gary, do you have ‑‑ or I don\'t know if you\'re planning on
having any kind of talk about your loan programs within the afternoon.

MR. REISNER: I\'m going to talk ‑‑ I think tomorrow there\'s a
discussion in the afternoon on infrastructure activities and I\'m going
to go through the loan program and capital construction then.

MR. BILLY: Okay. Yes?

MR. JONER: Could I ask a question? Are we going to have more discussion
on this later, kind of a statement from you?

MR. BILLY: Well, I was going to make #‑ a couple of observations. One is
I would like to suggest that you find a way through Mark to keep the
Committee informed of the status of this area. We can decide how to do
it, the frequency and what it is you\'re able to share.

MR. REISNER: This area being?

MR. BILLY: The budget.

MR. REISNER: The budget in general?

MR. BILLY: Yes, continuing resolutions. And particularly if there is a
trend towards a certain outcome or any new developments.

And then my second point is that we might, as a committee, want to think
about the timing of your next meeting. I know we have talked about the
possibility of having it a little earlier than June, maybe even March of
April, but if this expires in early March, we might want to start
thinking now while we are here about maybe even earlier than that, both
tied into our interests regarding the transition and in particular if
there\'s something we want to accomplish regarding the budget process.
So I\'m just laying that on the table. We can talk some more about it
later.

Any other comments on this? Randy?

MR. CATES: Well, I think if we\'re going to do something, we need to do
it a lot sooner than that, maybe not as a committee, but maybe as a one
or two‑person thing. I think that\'s what we need to think about this.
Because if we wait until then, it\'s too late.

MR. BILLY: Okay. You all set?

MR. REISNER: Yes.

MR. BILLY: Okay. Thank you very much.

Let\'s take about a 15‑minute break.

(Whereupon, the above‑entitled matter went off the record at 10:14 a.m.
and resumed at 10:28 a.m.)

MR. BILLY: Okay. I think we should get started again.

The next item on our agenda is an update briefing on ecolabeling. And
Mark Holliday is going to provide the briefing.

So, Mark, the floor is yours.

DR. HOLLIDAY: Thank you, Tom. You all have in your folders an annotated
agenda for this item. It\'s a one‑pager describing what the purpose is
for this agenda item.

I\'m here this morning to provide you an update on your recommendation
from the July MAFAC meeting that you made to NOAA Fisheries for seafood
certification and the public education and information effort associated
with ecolabeling.

For those of you who have been on the Committee, you recall back at our
December meeting Florida you met and responded to a request from NOAA
Fisheries that MAFAC give an opinion and evaluate and recommend what the
role the U.S. Government should have in the area of ecolabeling and
certification of seafood as sustainability. What should be the
Government\'s function and role, responsibility? Should there be a
federal ecolabel out there in addition to a third party or private
sector labels for sustainability?

So we started off in December with a presentation, laid some of the
framework and groundwork, defining terms, what was an ecolabel, what
some of the current third‑party issues were. We laid out for you what
the current position of the NOAA Fisheries Service was with respect to
these third‑party labels\-- that we neither supported nor endorsed them
and that for our purposes the standards for sustainability were the 10
national standards contained in the Magnuson‑Stevens Act. Those were our
statutory responsibilities to implement policies and regulations
governing the sustainability of fisheries.

But we wanted your opinion and your input on whether or not, given
changing circumstances in the environment, there was a need for
additional roles where the Federal Government could be involved with in
the certification and labeling effort.

And so you asked us to come back and provide more information at the
July meeting. In the interim FAO has continued its ongoing efforts on
sustainability and ecolabeling. They had another workshop in March of
this year where they conducted for that meeting an inventory of many of
the private and third‑party labels ranging from things like the aquarium
cards, the seafood cards, red, yellow, green species, all the way
through to the formal Marine Stewardship Council sustainability
certification processes. So we\'ve provided that information back to
you. And at the July meeting we continued to have a discussion about the
relative merits pros and cons, the issues. We had some presentations
from John Connelly who serves on the board of MSC, who is also a MAFAC
member, on the consumer response to certification and whether or not
it\'s having an impact, making a difference into people\'s seafood
choices derived from the use of a label on a product.

We also had as one of the public speakers at the meeting, Kitty Simonds
from the Western Pacific Fishery Management Council who presented an
assessment of the Hawaii Longline Fishery and their self‑certification
according to the FAO guidelines for sustainable fisheries, and she
presented an idea that the Agency should be involved in federal
ecolabeling.

So this is all context to where we have been. Following was the motion
passed and adopted by MAFAC that\'s in italics. Again, if you can\'t
read it, it\'s in your handouts in your folder. "NOAA should provide a
plan to provide a mark and/or other acknowledgement for use on or with
domestic fishery products that are sustainable managed in accordance
with U.S. national standards. Further that NOAA make a substantial
effort to improve public education efforts through FishWatch and other
means regarding the status of U.S. fish and shellfish stocks and the
health benefits of consuming them." So this is a mouthful, but this was
the negotiated outcome of your deliberations at the July meeting.

So this was the recommendation from MAFAC coming back to NOAA Fisheries,
and discussed at our NOAA Fisheries Service Leadership Council meeting
in August. The leadership Council is the directors of all of our
laboratory, our fishery science centers, our regional offices; remember
the map from yesterday? All of those facilities have a principal
director, as well as the office directors and the front office director
at HQ ‑‑ direct reports to Jim, so that\'s our board. Our board of
directors is called the Leadership Council.

So we met hearing that and in response to our original question about
what our role should be. And after debating the merits and the pros and
cons, this is what our leadership came back with. We had two
recommendations that they agreed to and endorsed, the first being that
it was recommended that the Leadership Council not endorse the creation
of a specific federal ecolabel. And two, "It is recommended that NOAA
Fisheries focus its resources instead on expanding and approving efforts
to communicate and acknowledge the status of sustainability of U.S.
fisheries in accordance with U.S. national standards. Further, that NOAA
Fisheries should make a substantial effort to improve public education
efforts through FishWatch," again mimicking the second half of the
recommendation from the MAFAC motion.

"The scope of these efforts should include domestic production and wild
and aquaculture stocks subject to federal stewardship." So it is making
clear that it was not just the wild harvest, but also standards from
sustainability from those fisheries, those living resources raised
through aquaculture facilities.

So as a result, the two actions coming out of that in terms of direction
to carry out those things, the first was an action to amend ‑‑ and PDS
is an acronym for our policy directive system. And before I finish my
remarks today, I want to make sure people know where to find that. The
policy directive system is a web site containing an inventory of all the
NMFS policies and procedures and guidance that governs the Agency. So we
have a system of policy records that helps direct staff and carry out
our mission over time.

So the Leadership Council asked or passed to amend this policy directive
that we already have for certification on ecolabeling within 90 days to
issue some procedural guidance governing the Agency\'s response when we
get requests. If you remember in July we had this question about when we
are being requested to issue a statement on the sustainability of a
fishery, whether it comes from an industry, from the government or the
public, what do we do with that?

So it\'s not an ecolabel. It\'s not a physical label that\'s put on a
product. But people are asking since you are managing fisheries through
the Regional Council systems, and you manage them in accordance with
national standards, can you issue some sort of statement or
certification that this fishery is being managed sustainably? And so the
action was to come up with a procedural directive and the criteria of
how we would determine that, including a definition of sustainability
for purposes of this directive. And again, our context is the 10
national standards of Fisheries Conservation and Management Act. I\'ll
go through that in a little more detail in a moment.

The other action to take was the second one here. "Develop, approve and
initiate within 120 days a multi‑year, agency‑wide sustainability
communications and marketing strategy that focuses on the positive
accomplishments of the U.S. domestic fishery stewardship highlighting
successes and obtaining the sustainability standards associated with
MSRA. Again, the context going back to our 10 national standards of
Fisheries Management.

So those were the consequences subsequent to our July MAFAC meeting at
the NOAA Fisheries leadership level.

And included on the web site is a draft of a modification of our policy
directive system and it\'s sort of in a fake red line here. The red text
is changes to our existing policy. The black text is the policy as it
was currently written. And so I included this in the briefing paper
background advance materials looking for your comment and feedback on
this. It\'s very brief. It\'s about two pages. Again, the policy is
being amended. We have an existing policy that clarified our roles and
responsibilities with respect to these private sector labels. Now we\'re
trying to answer the question "Well, what happens when we get asked to
issue some statement of sustainability by, again, the industry
themselves about the fishery that they are working or from the public at
large?" Are we going to have some measure of whether or not or a fishery
is sustainable. And this is our first step of working in that direction.

The most salient parts of this gives the background. So we have a
statement, our existing policy objective, the first black. It\'s our
policy, has been since 2005, to neither endorse nor participate directly
or indirectly in the private sector certification of fisheries. So
we\'re not trying to be in competition or endorsing one private sector
or one advocacy group\'s version of sustainability versus another.
We\'re sticking to the statutory responsibilities.

And then we are saying that in response to this request we are
proposing; again, this is a draft, to issue a statement that says we
will respond to requests from industry, government or public for a
statement certifying a sustainable managed fishery in appropriate
circumstances. And what are those circumstances? That\'s where we begin
to drill down.

There\'s a lot of words here. Maybe it\'s too much to try to digest by
looking at it on the screen. And I\'m not looking for complete comments
during my remarks, but this is being given to you and over the course of
the next four weeks or so you can individually look at it and send
specific feedback to us. But as a group, I wanted to make you aware of
the most significant parts of it. And it basically comes down to for
those species for which we have direct responsibility for. So as a
federal agency, we have statutory responsibility for these federal
species. Those are the ones that we\'re going to be proposing to issue
this statement of whether or not it\'s sustainable to be based on
conformance with the definition or criteria for sustainably managed as
described further on in the document. That determination would be made
for a specific calendar year because circumstances in a fishery change
over time. And so it would be for a given time period, proposing that as
a calendar year.

And one of the basic premises that the stock should not be determined to
be sustainable if overfishing is occurring or the stock is in an
overfished condition for the year in question. And so this is sort of a
baseline criteria for sustainability.

But for those fisheries that are managed by a Regional Council, this is
where we have the directives that are already ‑‑ the Magnuson Act
directs us directly by giving us these criteria and standards for that
under the national standards.

What about stocks in which we are not just the sole responsible party,
but we manage them jointly with others? So under item 1‑C, we talk about
these circumstances. If it\'s exclusively a state‑managed fishery,
we\'re not going to opine on somebody else\'s ability to offer a
certification of sustainability if it\'s solely state‑managed. Same
thing if there\'s an international fishery for which we\'re not a party
to or not directly involved in the management, we\'re not going to put
our statement out there. But for those where we are partners, where we
have collateral or collaborative participation in the management of that
through a Regional Fishery Management Organization, for example, that we
would be willing to issue some certification whether or not that fishery
was sustainably managed as long as that Regional Fishery Management
Organization or this joint entity had a substantial equivalent
sustainability standards to the Magnuson Act\'s 10 national standards.
So we\'re trying to rely on this baseline of statutory basis, statutory
authority for sustainability and that\'s the reference point or that\'s
the benchmark against we would issue some statement of sustainability.

So there\'s a lot of words here, but the bottom line is we\'re going to
be proposing to develop these criteria in our proposed definition of
what is a sustainable managed fishery, is one where fishing activities
do not cause or lead to undesirable changes in biological and economic
productivity, biological diversity or ecosystem structure and function
from one generation to the next. And this is not original. This is taken
from the FAO guidelines, not on ecolabeling, but on the fishery
management practices. The exact title is, \"The Code of Conduct for
Responsible Fishing.\" That\'s the definition of a sustainable fishery
and the U.S. is party to that code of conduct and has endorsed it. And
so rather than try to reinvent the wheel, are we adopting that.

And then our next step as we proceed to think about this would be to
marry up this definition with the standards and criteria that are in the
Magnuson Act to provide some guidance to ourselves about how to make
these determinations over the long haul for those domestic fisheries and
jointly‑management fisheries that we\'re involved with.

So sort of recapping, we have come full circle now in the course of the
last 10 months or so from asking the question what do you think about
the idea of an ecolabel? We\'ve assessed the pros and cons. There are
some good points. There are some bad points. There are some financial
implications. There are some legal implications, some authority,
limitations on that to the point where we want to provide people with
factual information about what\'s going on with the fisheries, but we
don\'t want to get into a competition with other people who have
different judgments and other agendas for promoting a particular view of
sustainability or what that means. So we\'re going to fall back on our
statutory requirements in Magnuson and look at it on a case‑by‑case
basis to make these certifications. And the certification could be as
simple as a statement made coincident with an annual report on the stock
assessment. There could be a column that says these fisheries or these
stocks are sustainably managed according to these criteria. It could
take any number of different forms. There\'s no one ‑‑ I think it\'s
less important to worry about the specific form it takes, because we\'re
not going to have a ecolabel, but we are going to have a clear
transparent process with criteria that would be available to determine
whether or not it\'s meeting those standards.

So that\'s where this has come and that\'s where we stand right now. And
I\'ll turn it back to Tom for questions and comments.

MR. BILLY: Heather?

MS. McCARTY: I\'m still trying to read this whole thing on‑line here.
Does it talk about aquaculture stock as well as wildstock? I can\'t see
that and I don\'t have it all here.

DR. HOLLIDAY: The policy statement doesn\'t go into the separate
criteria for aquaculture. There will be what we call a procedural
directive. That\'s referenced in here that additional guidance will be
issued in the form of these procedures and criteria and instructions.
And that\'s where we have the differentiation between aquaculture and
wild harvest.

MR. BILLY: Just one point of clarification. This first decision, it
seems like the wording ought to be \"the Leadership Council does not
endorse the creation of.\" This says that it is recommended that they
don\'t, but it doesn\'t ‑‑

DR. HOLLIDAY: Well, this was the motion. The wording that was lifted was
this was recommended.

MR. BILLY: And so they ‑‑

DR. HOLLIDAY: And the motion was voted on and it passed.

MR. BILLY: Okay. The Leadership Council does not endorse the creation of
a federal ecolabel.

VICE CHAIR BALSIGER: Of course that Leadership Council isn\'t MAFAC.

MR. BILLY: Fair enough. Yes.

Okay. Who else had a question? Dave?

MR. WALLACE: Mark, I guess a quick statement. MSC started off by trying
to get fisheries to go along with voluntarily going through their
certification program and a number of groups balked at that for a number
of reasons, but the primary one was the financial burden that it places
on the industry to prove that their sustainable. And in the United
States fisheries who are not overfished and overfishing is not occurring
is, by the Magnuson‑Stevens Act, supposed to be sustainable in the long
term.

My firm worked on one, MSC thought that ‑‑ and I\'m sorry, John Connelly
is not here, because it would ‑‑ I was hoping that he would be here for
this discussion. MSC then changed their tactic. They went to the big
buyers, whether they be Wal‑Mart of Cisco or any of the big
distributors, and then got a commitment out of them that they would
require it. Now that\'s a very clever way to do it because then they
mandate it through the back door. So one of my clients asked me to help
and then he just literally ran out of money and couldn\'t do it. And so
he is going to be penalized for having a sustainable fishery which is in
the EEZ of the United States and with no international implications and
no state implications. And it seemed to be perfectly reasonable to me
and to a number of other people that the Federal Government, through the
Council system, should say this fishery is not overfished. This fishery
is not being overfished. Overfishing is not occurring. It has been on
this path for a long period of time. We don\'t have protected species
problems. We don\'t have EFH problems. We don\'t have bycatch problems.
Through the same thing that FAO and MSC go through, we actually go
through all that now and it seemed to be perfectly reasonable like
Norway and other countries where they said, \"Under our way of managing
fisheries this is a sustainable fishery and so we deem it sustainable at
least in the short term.\" Because they all have time frames.

And so what this decision has really done is put the small well‑managed
fisheries in an economic ‑‑ it\'s created an economic pressure for them
that they won\'t be able to overcome. And so I guess I\'m disappointed
in the decision.

DR. HOLLIDAY: Well, I followed your logic up to the last statement.
Because I think everything you said is the system is what we\'re doing.
We\'re not issuing an ecolabel. We\'re not issuing a decal that\'s going
to be on a product. And we\'re not going to have NOAA responsible for
the chain of custody of that product through the marketplace to enforce
that label\'s integrity. But we are going to say that these fisheries
that are managed by this federal process are in accordance with these
standards and they are sustainable.

So this has been discussed at length in our deliberations here at MAFAC
and at the different components of seafood certification and the
ecolabel itself and seafood certification. So all of those things that
you said, that\'s what this policy will do. It will endorse fisheries
that are managed in accordance with federal statute that abide by these
different criteria that dedicate environmental and ecological
consequences and are not getting in an overfished condition, that
overfishing is not occurring. All of those things will be as part of
this certification of a sustainably managed fishery.

MR. WALLACE: May I follow up? You know, I guess the question then is is
the Agency willing to go out and literally educate one way or the other
the buyers of this so that then they say, well, this is not an MSC or
another third‑party rating group, but we we\'re going to accept this?
Because just by saying, you know, it\'s out there on our FishWatch, you
know. This was a hard sell by MSC and ‑‑

DR. HOLLIDAY: Right. Yes, and I think the second component of the
recommendation in terms of promoting and being more proactive in
education, I mean, some of these decisions are buyer‑to‑buyer decisions.
And so if you want to enter into that market and the buyer of that
product is putting a condition for MSC labeling or something else, those
are decisions that we can\'t enter into. But we can say that, you know,
if you\'re interested in knowing what a sustainable fishery is, within
the United States, the statute has laid out for us what those criteria
and standards are. And we\'re going to be actively promoting
identification of those fisheries that are fulfilling those standards
and requirements and using that information and that second component of
these actions. This multi‑year sustainability communications and
marketing strategy that\'s focusing on delivering that information. At
that point, that\'s our competition with MSC or any of these other
third‑party sectoral sustainability ‑‑.

MR. BILLY: Okay. Randy and then Chris.

MR. CATES: Thank you, Mr. Chairman.

Mark, I\'m reminded of a couple thoughts on this. One is, managing a
fishery is really complicated. And I know this is a tough, tough issue
for your office and your agency and you personally. I have a question,
but I\'m going to ask our board, is this the best we can do? And I
don\'t think we\'re going to have all the answers today. I think this is
a subject that\'s vitally important for our fisheries and for this
committee.

Having said that, what I\'ve gone through and read so far, if a fishery
such as the Hawaii Longline Association that meets the standards and can
obtain the simple letter of certification, how can they use that? Can
they make their own label? Put it on their mark and say we are NOAA
certified? Can they use NOAA\'s label? What do you foresee how they\'re
going to utilize that information? Because what we\'re dealing with is
the example that was just brought to you. It is blackmail in many
aspects from the private sector saying going to the buyers, use our mark
for negotiating with the buyers. It\'s occurring right now. All you have
to do is re‑brief these efforts.

So the fisherman are really looking to the Agency and to us for
leadership here. How can we prevent this extortion, taxation, however
you want to call it? Because that\'s what we\'re really talking about.
That would be my question. How can we use this certification?

DR. HOLLIDAY: Right. And I think there\'s ‑‑ of the example that you
gave how it could be used. I think any example is legitimate in terms of
promoting this endorsement short of saying there\'s a NOAA label that\'s
going to be associated with a product because that raises these
concerns. And we talked about this in July, about the chain of custody
and even Kitty admitted that\'s another ball game if you\'re going to
try to certify an individual piece of product with a NOAA logo. That
chain of custody and the cost associated with the enforcement of that
and the integrity of that is something that we\'re not prepared to
undertake.

Now the chain of custody for the private sector is paid for by the
customer, I mean, by the business. So now \[if a federal ecolabel was
created\] we\'re asking for that unfunded burden to be placed on the
government, and we\'re not prepared to take an unfunded mandate and I
don\'t think it\'s necessarily the largest part of the issue. Because as
we discussed, the greatest supply of our domestic consumption is not
from these fisheries that we\'re talking about, that we have a federal
certification. Two‑thirds to three‑quarters of our supply is imported
product that we\'re not in charge of managing. Some part of our domestic
supply is managed by a state and not by the Federal Government where we
couldn\'t, we wouldn\'t want to pass judgment on whether a state\'s
criteria for internal water management meets the Magnuson Act. That\'s
not within our authority to do.

Coming down to a small part of that total chain of supply, that would
actually be covered currently by this policy. So the large part of it is
promoting what is a sustainable fishery from the Federal Government\'s
perspective under our responsibilities and under our statutes. And
making that widely known, widely available and putting that information
into outreach and education efforts in the marketplace for consumers,
for buyers and anybody else who\'s willing to have an open mind about
what the factual and statutory basis of our fishery management process
in the U.S. is all about.

MR. BILLY: To follow up on that a little bit, if a firm, a fisherman, a
company or industry association wrote to the Agency and asked whether
this particular fishery is sustainably managed, the Agency then would
respond back under this new ‑‑

DR. HOLLIDAY: Our policy is saying that\'s a legitimate responsibility
and a role, but in practice I don\'t think the Agency\'s going to be
waiting for letters to come in.

MR. BILLY: They\'re not?

DR. HOLLIDAY: The second part here is saying we are going to take a very
proactive approach to developing that information and promoting that,
disseminating that in advance.

MR. BILLY: Fair enough. But also a firm or an industry association can
have a letter in hand that they take to a buyer to say, but look, this
is sustainable. We qualify, whatever, however all that works out. So
that option would be available to the private sector using what you\'re
prepared to ‑‑

DR. HOLLIDAY: The information would be available to anybody who had need
or want for that information. Sure.

MR. BILLY: Okay. Short of a mark on the package?

MR. CATES: To follow up on that, from my perspective we\'re sort of
getting that from a fisherman\'s point of view? I mean, if you have that
letter, that\'s a start. The best of the thing overall would be to have
a label and I think industry can fund it, should fund it. I don\'t think
it should be a subsidized thing. That label is what we really need to
get to counter the other label. And so I guess where it stands day, I go
back to Hawaii and say we can apply for this pass, but then we go to
make our label. I think at the very least it would be nice to see a
no‑label sustainable fishery. So we\'re kind of there, but we\'re not
there yet.

DR. HOLLIDAY: I understand, and we did go through the pros and cons of
going all the way forward with a federal label. We looked at the
statutory authorities and we looked at the financial implications of
doing that and we did indeed stop short of ‑‑ if you remember the
difference between the seafood certification and the labeling component
of this topic, we\'re going to seafood certification, but we\'re not
going to the ‑‑

MR. BILLY: I\'m going to move on. Chris?

MR. DORSETT: I\'m curious about your discussions regarding agency
resources necessary to respond to industry requests. For something like
in overfished or Pacific overfishing you have the FSSI. I mean, you can
easily make a determination there, but when you look at the sustainably
managed definition you bring in factors such as bycatch and TACs on
habitat, protected species interactions, etcetera. It seems to me
they\'d have to analyze each fishery on a case‑by‑case basis to
determine if you\'re going to issue some kind of statement of
sustainability. And that seems to me to sort of be pretty
resource‑intensive and you need to work out what level of bycatch is
acceptable, what level of habitat impacts are acceptable, etcetera. So I
just want to get a better sense of how that process might work out and
the resources that might have ‑‑

DR. HOLLIDAY: Right. Well, I think there are two. The reference to
resources and the existing policy that you bring up had to do with the
impact on the Agency as a result of MSC certification, being asked to
provide special research, conduct special research, to conduct special
analyses as part of the certification process for this third party. And
so terms and conditions for maintaining that label over time for MSC
certification, we were being asked to develop research agendas that were
supportive of the private sector\'s criteria, for what was important in
the area of data collection and analysis and research. And so we\'re
trying to put a lid on that happening and that was the reference in
there originally.

But to your point about is this resource neutral, I mean if we\'re going
to be certifying these fisheries, it goes to our discussion yesterday
about ecosystem approaches to management. I think we have to have this
score card of these different criteria across ‑‑ you know,
sustainability first and foremost in Magnuson is about overfishing and
overfished states. But through the rest of the national standards on
bycatch, ecological considerations, all of these things are factors that
are going to be considered in determining whether or not this fishery
meets this measure of sustainability. And so I think we\'re doing these
things. We have research projects. We have litigation projects. We have
tradeoffs between habitat loss and protections. And so this is something
that\'s not going to be revenue neutral, but it\'s not going to require
lots of new revenue, lots of new funds. We\'re trying to integrate the
information that we have about these different fisheries and we\'re
managing that and making judgments based on that.

MR. BILLY: I have ‑‑

DR. HOLLIDAY: I\'m sorry. Again, we talked about these integrated
ecosystem assessments yesterday, these IEAs, and that\'s part of where
we\'re trying to move into capturing this information for those and make
these judgments.

MR. BILLY: I have on the list now Bill, Heather and Larry and then I
think I\'m going to shut it off. We can decide tomorrow if we want to
continue having this item on the agenda for our next meeting and
continue to pay attention to how this is developing, and perhaps
consider further advice to NOAA Fisheries as appropriate.

Bill?

MR. DEWEY: Okay. Mark, I was looking for some clarification on the
Leadership Council\'s second recommendation on the outreach and
education efforts. It says that the scope of the efforts would include
domestic production of wild and aquaculture stocks subject to federal
stewardship. And specifically that subject to federal stewardship on ‑‑
you know, from a shellfish industry standpoint, obviously we\'re not,
you know, under federal management, or at least a lot of us. [So, we\'ve
got this new nationwide 48 permit that\'s going through consultation and
the services and does that constitute federal stewardship, am I to look
to being able to participate in this through that?]{.mark}

DR. HOLLIDAY: I don\'t know the answer to that. I think the premise that
we started with was we don\'t want to set ourselves up in making
judgments about things that we don\'t have authority. And so we were
trying to be very careful about using federal responsibilities, federal
authorities. And so although we have consultative roles in providing
input on permits that are issued by other people, it was neither a
primary responsibility of ours ‑‑ it was a little ‑‑ we didn\'t want to
be in a position of trying to impose our judgment on other people\'s
standards and, you know, primarily responsibilities. But specifically,
to your question, I\'m not sure how that would work out.

MR. DEWEY: I can assure you we\'d like some clarification on that.

MR. BILLY: Heather?

MS. McCARTY: On the question that Bill just asked, what I was referring
to. The second point is the Leadership Council says, you know, subject
to federal stewardship, but the statement here that you\'re proposing
doesn\'t really address anything other than those stocks managed by
NMFS. So I think there is a little bit of a disconnect there and it
needs to be further explained. That\'s not really a question; that\'s
just a comment.

DR. HOLLIDAY: If I could just direct you to that quickly. If you are
anticipating that there would be a federal responsibility of
legislation, you have to look to the past in setting up criteria and
standards, you want to be aware or sensitive to that when developing
this policy.

MS. McCARTY: Then I have another. You were talking about funding earlier
for different parts of this program. Do you anticipate that additional
funding will be necessary for the marketing/information aspect of this,
or do you think you\'ve got sufficient funding in your current
marketing/information program to do what you\'re proposing to do?

DR. HOLLIDAY: Well, I think Alan in the communications department ‑‑
this program that\'s under Alan\'s office in sustainable fishery, is the
responsible party for this. I don\'t want to speak for them, but I think
the consensus that we\'ve all said is that we want to do more than what
we\'re currently doing. So if we can do more with the same amount of
funds that we have ‑‑ there are probably some efficiencies that we could
get a little bit more out of the money that we have, but if we really
are talking about national campaigns or, you know, education, K through
12, or other areas where you really make a dent in people\'s association
with a sustainable fishery is, I think there are implications on the ‑‑
resource implications with that second recommendation. And again, it
depends how rigorous a program or vigorous program do you want. We
haven\'t spelled that out, so I don\'t think we have a price tag
associated with it.

MR. BILLY: Larry?

MR. SIMPSON: Thank you, Mr. Chairman.

Thank you, Mark, and the Agency. I think this is a good start. I think
this is good work to address an issue that is important. And I just want
to commend you for the actions and the future actions that will occur.

I need a little clarification. In the circumstance of the non‑federally
managed species and in the circumstance where there is a cooperative
effort with regional management bodies, and I\'m assuming the Commission
would be a regional management body?

DR. HOLLIDAY: Sure.

MR. SIMPSON: Okay. And would you have cooperative data collection
activities and you have a fishery that\'s occurring both in state waters
and in federal waters, the actual fishery, and you have stock
assessments and SEDAR assessments, these type of fisheries can be
certified by the National Marine Fisheries Service, NOAA Fisheries. Is
that the case?

DR. HOLLIDAY: I think it comes down to if we do have shared management
‑‑

MR. SIMPSON: Shared management meaning data collection, SEDAR, fisheries
in both state and federal waters and association with Regional Fisheries
Management bodies?

DR. HOLLIDAY: Yes, I think it comes back down to the statutes ‑‑ we have
that statutory authority to enter into joint management and I don\'t
want to split hairs here, but I think that\'s an important ‑‑ I
understand what your point is about data collection and it\'s a joint
effort to ensure that we\'re using the best scientific information, but
I don\'t think we have the authority to say that if it\'s truly a
fishery that\'s managed under state authority; in other words, the state
is the one that is issuing regulations and carrying out the principles
of that state law, that the Federal Government would be issuing a
statement that that state is doing something sustainable or not.

MR. SIMPSON: It\'s not so much the state as the fishery. It\'s either
sustainable or it\'s not. And I need a clear ‑‑ maybe not now, but at
some point, I need a clear direction as are you going to be able to make
a pontification on whether the fishery is sustainable or not based on
these ‑‑ you mention that there was a way with regional management and
cooperative ‑‑

DR. HOLLIDAY: Right. I think it hinges again on ‑‑ believe me, Larry,
this is a work in progress.

MR. SIMPSON: Okay.

DR. HOLLIDAY: I don\'t think I have the answers ‑‑

MR. SIMPSON: Okay.

DR. HOLLIDAY: ‑‑ to every permutation, but I believe I understand the
direction that you\'re going in. I think we have to be crystal clear
about what is inside this area of "pontification" and what\'s outside.

MR. SIMPSON: Okay. I\'ll talk to you later.

MR. BILLY: Okay. Mark, anything else? I have one final question related
to this document.

DR. HOLLIDAY: Yes?

MR. BILLY: I thought I understood you to say that you are planning to
make that available to us with a comment period.

DR. HOLLIDAY: It was posted in advance of the meeting, so it\'s on the
web site.

MR. BILLY: Oh, it is? Oh, okay. All right.

DR. HOLLIDAY: And I said at the outset that if you have individual
comments in addition to any consensus comments that have been made ‑‑
didn\'t come out of the meeting particularly, but if you have individual
comments that I could get in the next three to four weeks, that would be
the most highly useful period.

MR. BILLY: Okay. So I encourage the members to take advantage of that
opportunity.

MS. McCARTY: You said we were going to have another discussion about
this later on in the agenda?

MR. BILLY: No, but we could when we talk about agenda items for the next
meeting, we could decide to exclude this item on the agenda once more as
this continues to unfold and be informed and perhaps takes the other
decisions or whatever.

VICE CHAIR BALSIGER: Yes. And Mark said this, as he said, it\'s a work
in progress. So and it says draft up there in big letters. So we may or
may not decide ultimately that we should have a letter that\'s sent out,
you know, which is something Randy was looking for. Maybe we\'ll say
it\'s enough. It\'s on the web. Print it off. Things like that. So I
think you probably want to ‑‑ whether it comes up at the meeting itself
or whether you just want to be able to read it in the comments.

MR. BILLY: Yes?

MS. McCARTY: With that in mind, I would ‑‑ since this is something we
asked for specifically in going through this process, [maybe we ought to
have a time towards the end of the meeting where we decide on what we
might want to say collectively. That would be my preference on this
agenda item.]{.mark}

MR. BILLY: Is that the sense of the Committee? Yes? Yes? Okay. All
right. We\'ll do that.

Okay? All right, we\'ll make a note, we\'ll do that. Okay? All right.
Let\'s go on then. The next item is to update and other information on
the status of the Vision 2020 paper, as well as the transition report.
So, let me first call on Tony to share with us where things stand
regarding the 2020 paper. We talked about two areas. One was the
recognition of the need to update the paper as appropriate. And the
second related to insuring its broad circulation, getting it in the
appropriate hands.

So, Tony, the floor is yours.

MR. DiLERNIA: Thank you, Mr. Chairman.

Just an update on the actions that have occurred in relationship with
2020 since our last meeting. In September the report was formally
delivered to Mary Glackin over at NOAA and the decision to deliver to
Mary Glackin was because she is the senior civil person, civil servant
there, though she will not change in leadership. Whereas all the
political appointees will change with the next administration, Mary will
remain. And she\'s also in charge or responsible for developing the
transition and coordinating the transition for NOAA. And so we felt that
we had already delivered it to Dr. Balsiger at the July meeting, and so
there was a need to go beyond that. And rather than go through the
Secretary or to the admiral or all those who were rotating out, we felt
it would be best to go to Ms. Glackin.

And so we delivered it to her. I participated via conference telephone
call from New York. Chairman, Dr. Billy was there joined with Dr.
Holliday. I\'m not sure who else may have been there from NMFS. And we
had a very lively discussion. I was impressed she read it. First of all,
she complimented us for keeping it down to the number of pages that we
did. She was happy that it was as condensed as it was because she was
able to find the time to read it. And judging by the questions that she
asked, it was very clear that she had read the report.

One of her concerns was how fully the report was vetted prior to our
publishing the final recommendations. And we reviewed with her the
process that we had taken to develop the report from the initial charge
from Dr. Hogarth to develop the report through the various steps that we
took in developing the recommendations to the posting of the draft
report on the website to publicizing the report in a number of fisheries
magazines. We made sure that we got it out to the Councils. We asked for
recommendations after we publicized it, we distributed it, we took the
recommendations, we reviewed the recommendations and developed the final
report. She was satisfied that we had fully vetted the report and she
was very happy to accept it.

Since then, the staff has done a fabulous job of producing two
documents, which are in your folders at your spots and they\'re also
available on line.

One is a two‑page document which does a wonderful job ‑‑ really, Dr.
Holliday, thank you very much. You\'ve done a great job with this
document in summarizing the 28 pages into two pages.

So we have this document. And secondly, they took the time to develop a
PowerPoint presentation, which is also at your place. There we go. This
is the first two‑pager. And the PowerPoint that we can use when we brief
individuals on the report itself.

What we\'d like to do, take a few minutes to kind of go through the
PowerPoint very quickly now that they\'re in front of you, and just to
go through it very quickly and then to ‑‑ I\'d like to have a little bit
of a discussion regarding where do we go with the report at this point?
And secondly, the Committee has already agreed that the Vision 2020 is a
living document, one that would be revisited on a regular basis and
updated. And so the Committee should perhaps begin to develop a policy
regarding the document and how often it should be revisited or where it
should be updated.

I guess this briefing is especially important for our new members. For
the veterans here, we know this document. Myself, my next meeting will
be my last meeting, and then someone else will have to take over
ownership of the document and the process.

Mark, can I ask you to just go through the PowerPoint very quickly for
us, please?

MR. HOLLIDAY: You want me to walk it through?

MR. DiLERNIA: Yes.

MR. HOLLIDAY: Yes, I was just going to help put the slides together.

MR. DiLERNIA: Oh, no, I\'m good.

MR. HOLLIDAY: So this was designed to introduce the topic of this
briefing paper to a wide audience. It wasn\'t targeted for any
particular constituency. I think the notion was we wanted to give ‑‑ so
the context of why this group was involved in developing some future
looking vision, the objectives of the report, the findings and
recommendations in a tidy fashion.

So a little bit of background about MAFAC itself, what the Committee is
organized to do. The objective for the document itself and this was a
quote from Dr. Hogarth\'s original email to MAFAC creating clear,
simple, non‑jargon language, the stakeholders\' consensus, desire to
reach a state of domestic and international fisheries. The organization
of the report. You remember we looked at trends, we projected what we
saw as future trends that would impact stewardship of fisheries. Based
on those trends and their impacts, we\'d look at what some of our
conclusions or findings would be and then what would we say about that,
what would we recommend that NOAA, the Department, Congress do to
prepare and respond to those findings and trends.

Some of these were summarized into specific impacts on fishing, some
were on aquaculture. We had different categories, different themes
throughout the document. So we tried to highlight some of the more
important summary issues that were influencing this. Future trends in
seafood demand, population growth, competition for resources,
recreational sector, the growth of that, the demand on science, the
demand on analysis to help support that stewardship mission.
International. It was not just a domestic issue, whether it\'s
international fisheries or international choices on pollution, habitat,
long‑term climate issues. All of these things that were driving
policy‑making in the area of fisheries management.

Some of our findings about domestic production, both in terms of the
ability to supply it and concerns in the public about the quality and
the labeling of seafood. Very strong emphasis on the future role of
aquaculture and being ‑‑ demand for seafood and its economic importance
to the organization.

Some of the tools that MAFAC anticipated working to help meet these
future trends and demands, including LAPP programs, as well as, you
know, the context of fishery sectors and coastal communities. We\'re
going to talk about coastal infrastructure tomorrow, and again, as an
example of what we meant by that.

Some of our findings. Some of these obviously seem self‑evident to those
around the table, but we\'re trying to tell the story to ‑‑ designed the
PowerPoint for a broad audience. And then getting down to the 24
recommendations that were contained in the PowerPoint with examples that
the 20 people who did the report itself in the appendix. And where they
could find the report and give a little bit of self‑promotion for MAFAC
for developing and championing this idea, delivering this strategy.

MR. DiLERNIA: Thank you, Mark.

MR. HOLLIDAY: Fourteen slides. Pretty quick.

MR. DiLERNIA: That\'s great. Fourteen slides is pretty quick and that\'s
the whole idea behind the report actually is to get out of the weeds and
to get up a little bit higher and just give an overview, to direct
general policy rather than get mucked up in some of the details.

So the question now becomes there\'s a couple of items that have to be
decided, Mr. Chairman. Number one, where does the MAFAC Committee
recommend that we go with the document? Number one. And number two, what
type of process should we follow in updating or revising this document?
So those are the two questions that I think should be decided by the
Committee and I don\'t know if anyone has any recommendations. I don\'t
want to install my ‑‑ or just inject my opinion right away if some of
the committee members have any ideas regarding this.

MR. BILLY: The status of the document is that it has been accepted by
NOAA, correct?

MR. DiLERNIA: Yes.

MR. BILLY: So the question of what\'s done with it, we can make
recommendations, but it would be NOAA that would follow through? For
example, [if we thought it was important that we put one in the hands of
all of the new members of Congress, that\'s something the Committee
could recommend and NOAA would follow up on?]{.mark} As an example,
distribution of it in other venues? But my point really is we recommend
and it would be up to NOAA to follow through to them, if they agree.

MR. DiLERNIA: Well, our responsibility is to advise the Secretary. So my
recommendation would be that [once we know who the new NOAA
administrator is going to be is to request a meeting with that
individual, to brief that individual on the document.]{.mark} Perhaps
not to the Secretary\'s level, but I would go with the new NOAA
administrator. And yes, I would also recommend that it be distributed to
the members of Congress. But I would recommend that yourself or some
representative of the Committee meet with the new NOAA administrator
regarding the report.

MR. BILLY: Okay. Other comments? Are there other ways in which we want
the document to be made available? Has it in fact been given to the
various trade magazines?

MR. DiLERNIA: The original document was publicized in National
Fisherman. It was also ‑‑ the existence of the draft document was
distributed to all the Councils, commissions.

MR. BILLY: Yes.

MR. DiLERNIA: We requested that comments be sent in. Those comments were
sent in and were reviewed, and were considered in the preparation of the
final document.

MR. BILLY: Okay.

MR. DiLERNIA: I would, if I may also, once the NOAA administrator is
briefed, then I would [recommend a briefing to the appropriate staff
members on the Hill subcommittees affecting NOAA and whomever is
responsible for oversight on those subcommittees.]{.mark} I think it
would be useful to the Agency for the Committee to sit with the staff
members of the subcommittees and I think it\'s a very positive document
and I think that in the briefing that would result from this document to
staff members, we would be able to present a very positive image of NOAA
during that briefing.

MR. BILLY: Okay. All right. Randy?

MR. CATES: I think Tony said everything I was going to say, but I would
just add two things. One, we send it up, but [we also take it to our
constituents and send it down, as far as down as the individual fishing
groups, not must Councils, because it gets buried in the Councils many
times.]{.mark}

The other question I would have, and it really comes back to a budgeting
issue, if we\'re going to start working to become more relevant, somehow
we need to find out how we\'re going to fund ourselves, the ability to
take it to Congressional staff members and how do we do that? Not only
who does it, but financially how are we going to be able to do that?

MR. BILLY: Okay. Yes, Tony?

MR. DiLERNIA: Well, we\'re fortunate that our ‑‑ if you\'re going to a
Hill briefing, we\'re fortunate that our current chairman lives right in
the area. It\'s a subway ride, it\'s a Metro ride away. For me it\'s an
Amtrak ride away. So the expense of doing that in a face‑to‑face
briefing is not that expensive with regard to the overall budget going
across to the Committee. Once you go beyond that, then perhaps then were
additional expenses, but it isn\'t that much, and keep IT in the D.C.
area.

MR. BILLY: Heather?

MS. McCARTY: Maybe we should just have a motion on this to sort of wrap
it up.

MR. BILLY: Okay.

MS. McCARTY: If you think that\'s appropriate.

MR. BILLY: Yes, I think that\'s very appropriate.

MS. McCARTY: [Well, I move that MAFAC recommend that the Vision 2020
document be presented to the new NOAA administrator, be given to the
members of Congress, and that the staff on the appropriate subcommittees
be briefed at the appropriate time by the appropriate people.]{.mark}

MR. DiLERNIA: Second.

MR. BILLY: Okay.

MR. CATES: We need to add Secretary of Commerce, who we work for.

MR. BILLY: Okay.

MS. McCARTY: And if possible, Secretary of Commerce.

MR. DiLERNIA: Second.

MR. BILLY: So, any other discussion?

MR. JONER: I just wonder if we need to have a little more active
presentation to the Councils. Have you seen this at our Council at all?
It might be on the table with 10,000 other handouts, you know?

MS. LOWMAN: Oh, yes. I mean, they mentioned it and ‑‑

MR. JONER: Yes, so maybe just a short 15‑ minute presentation given by
MAFAC members at each of the Councils, because you have a pretty good
audience there, you know, the industry, and then you can follow up. I
mean, reading this, you know, we\'re really looking forward. I\'m
impressed. I\'m happy to be here.

MR. BILLY: I\'m glad.

MR. JONER: Yes, I think, you know, putting something down on the table
where some bored participant at the meeting is going to read it is a lot
different than getting up there and talking about it. And it wouldn\'t
take ‑‑ it wouldn\'t cost anything. We are all depending on it.

MR. BILLY: Jim?

VICE CHAIR BALSIGER: My comment was going to be similar, except to
Congress. You know, I think rather than making 100 and 450 copies ‑‑ I
don\'t know how many Congressmen, and sending them all to them, when
there\'s an opportunity to bring it and hand it to them, and obviously
they aren\'t going to make that many trips, but when you know you\'re
going to have a trip, give it to them and hit a highlighter to it and
say here\'s something we did. It\'s way better than just having it
mailed to them and sitting on their desk.

MR. CATES: Hey, Jim, I have a question. When we go to D.C., like how we
did with the aquaculture field, we presented it to the staffers. Can we
do the same thing in this format where we put the word out and have them
come to a central location somewhere and you present to all the
staffers?

VICE CHAIR BALSIGER: Well, I think the answer is yes, but it\'s not
always that easily done because not everyone would be interested in it.
And so we have legislative affairs people that know what interests are
and what topics are coming up and stuff like that. So probably utilizing
that would be better.

MR. BILLY: Vince?

MR. O\'SHEA: On the Congress thing, I\'m a little confused about that,
about what we would really be saying, because this group is supposed to
advise the Secretary of Commerce and NOAA, which is the Executive Branch
of Government. I\'m not really sure what signal going to Congress is. I
mean, maybe it\'s just the sentence from the Agency saying we like this
advice that we got and we intend to go forward. But it seems to me
symbolically you\'re trying to ‑‑ you know, it could be read as putting
pressure on you guys to take the advice because Congress is ‑‑ now
we\'re going to get Congress to get on board with this. But maybe
that\'s a minor consideration. But it just seems weird, giving advice to
the Agency. Wouldn\'t it be up to the Agency to share that with
Congress?

VICE CHAIR BALSIGER: I think probably it\'s up to the Agency, but I know
that other people talk to Congressmen all the time on various issues.
And if you just happen to be on MAFAC and have this along, saying
here\'s something that we discussed; you might want to look at it, or
something, is my advice. But maybe we could ask Gary if I\'m stepping ‑‑
that\'s what I would do.

MR. REISNER: Well, I think Vince makes a good point to the degree that
if we have taken the advice and we agree with it, then I think we can
share it ourselves or have other envoys share it. But yes, I do think
that we have to implicitly say or explicitly say we support the findings
and recommendations.

MR. BILLY: Okay. Bill?

MR. DEWEY: Well, I would just like to support Heather\'s suggestion that
we try to incorporate into this doing formal presentations to the
Councils. I mean, we have a nice brief PowerPoint that has been
developed and I think it would be a great tool to bring it forward to
the Councils.

Relative to Congressional visits, you know, the shellfish growers make
an annual trip and make their rounds, and I think it would be a great
document for me to be handing out. I\'m just saying, this is a citizens
stakeholder group. It advises the Secretary of Commerce and, you know,
just so you\'re informed, these are some recommendations we\'re going
forward with.

MR. BILLY: And that it has been accepted by NOAA Fisheries.

Heather?

MS. McCARTY: Mr. Chairman, I guess listening to the conversation here, I
think that some of these things are best done by committee members to
have the House discuss. But the point is being made that going to
Congress is probably not our job on behalf of the staff and that rather
the recommendation that we\'re making in the motion would be passed onto
NOAA, NMFS to do those kinds of briefings if and when appropriate
themselves rather than the members of this committee. Maybe just a
clarification in the motion, a kind of amended clarification.

MR. BILLY: Okay. Any other comments? Yes, Mark?

MR. HOLLIDAY: To Heather\'s comment, I don\'t necessarily think it\'s an
either/or. I think if NOAA were to schedule a briefing with the Hill on
a MAFAC product, it would be nice to have somebody from MAFAC along to
jointly do this. And so I don\'t think it\'s MAFAC going up to the Hill
by themselves, or the ‑‑ Jim\'s suggestion is a good one, if you\'re
there anyway and you want to talk about it, but I think this idea of, if
NOAA really embraces the recommendations and we want to organize some
briefing, it would be good to have a representative from the Committee
along to represent the Committee\'s interests as well. So it\'s seen as
a stronger message than either one of us doing it separately.

MR. BILLY: Dorothy?

MS. LOWMAN: We talked in another meeting that maybe when we schedule the
spring meeting that it would be in Washington, D.C. and there might be
some opportunities for even a subgroup or that a person ‑‑ particularly
key people in your particular Congressional areas to, you know, stop in
and make the point.

MR. BILLY: Yes. Tony?

MR. DiLERNIA: There\'s often been a sub or undercurrent amongst the
Committee about how this Committee could become more relevant. We\'ve
heard that, let\'s face it. Our primary responsibility is the Agency; I
recognize that, and that\'s the number one person we talk to. But when
you speak to staff, you are making yourself more relevant also. And so
as long as you speak to staff in such a way that it\'s done in the
fashion that promotes our primary client; the Agency, then we both
elevate the Agency and you elevate the stature of your committee.

MR. BILLY: Okay. Steve?

MR. MURAWSKI: I just to make one comment on this document. It\'s already
having an impact. One of the things that we\'ve done for the transition
to the next administration is to write a series of internal transition
documents and we\'ve done one on oceans and marine life. And the
recommendations that are coming out of this study actually were pulled
in with transition document, you know, verbatim. And so they\'re there.

To Tony\'s point, if I could, it\'s a very good point and it\'s very
critical right now because a number of the people who traditionally have
focused on fisheries‑ related issues are Congressman Saxton and
Congressman Gilchrist, they\'re gone, right? So we need to start
cultivating new faces. You know, who\'s going to care about this? And I
think this gets your foot in the door. You know, this is, instead of
just coming here with your hat in hand, you\'ve got 11:39:16 So, you
know, particularly identifying those people that are interested, the
constituency, that want to do something. I think the time is now.
Obviously, I can\'t lobby either. But that\'s the real world. Losing a
couple of those faces has been very difficult.

MR. SIMPSON: If I may, Mr. Chairman, it\'s been a long slide downhill
for fishermen with people who want to champion your cause. And then
those two or three, and then there\'s half a dozen of others. It\'s
something we all need to do. This is important, guys, the legislators,
and pay attention to it.

MR. BILLY: I think we would benefit from taking a little bit of time to
get a resolution in writing ‑‑

MS. McCARTY: I\'ll do that.

MR. BILLY: ‑‑ that takes account of the comments that have been made and
then come back to it either later today or tomorrow.

So if that\'s acceptable to the Committee and to ‑‑

MS. McCARTY: I\'ll write it up.

MR. DiLERNIA: Table the motion.

MR. BILLY: Okay. All those in favor?

ALL: Aye.

MR. BILLY: Opposed? Tabled.

Yes?

MR. FLETCHER: Let me ask another question that really wasn\'t part of
the motion, and that was this is a living document and it needs to be
revisited again. I just, as a suggestion, think that we\'ll be seeing
changes on a regular basis, but not enough to where you\'ve got to
revisit this every year. But perhaps say every five years might be an
appropriate time frame and then have it as a more or less long‑term
standing agenda item for the Committee to come back and update it and
make it relevant as the future ‑‑

MR. BILLY: Yes, and this also speaks to one of the objectives in the
annotated agenda, which raises the question about what the Committee
would like to receive regarding the 24 recommendations. And the thought
that occurs to me is the idea of the Agency identifying someone that
would ‑‑ kind of like what was done with Magnuson‑Stevens \# would
annually sort of report on the progress that\'s been made on the 24
recommendations. And as we monitor the progress, we can consider whether
we need to step back and modify or strengthen the report in some
particular manner.

Yes, Tony?

MR. DiLERNIA: Yes, with Bob\'s comment, Fletcher\'s comment and
yourself, I agree with you we should ‑‑ I\'m not sure a year is ‑‑ every
year to look at it, because it\'s supposed to be a long‑term vision and
to look at it on a yearly basis, I\'m not so sure ‑‑ well, the longest
of journeys is made with the first step. So perhaps it should be on a
yearly basis. But it took us three years to write 28 pages. It took us
three years. So, five years from now it might be really ancient history.
I\'m not sure.

So I\'m undecided. I myself am undecided. I just know that for us to
develop a document takes a very long time. We wait the five years. You
know, you and I are short‑timers. I think we need to maintain an
institutional memory regarding the document, you know, its development
and its continued growth. So, while perhaps a year is too short a time,
I think five years is too long a time.

MR. BILLY: Yes, Cathy?

MS. FOY: My thought is that this document is specifically pertinent to
that transition time. So maybe if we timed it on an election cycle, four
years is not a whole lot shorter, or shorter than five, but as long as
we\'ve got access to newly‑elected officials ‑‑

MR. BILLY: Yes. There\'s a reelection of the House in two years and then
there\'s the president in four years.

Dave?

MR. WALLACE: I agree, but I think that four years is too much and I
really expect dramatic changes in the next two years, partly from what
Steve said, you know, we\'re going to lose two of the key people in the
House and we\'re going to lose a key person in the Senate, Senator
Stevens. And then we\'re going to have an administration that we know
where they\'re going to get some of their advice, and hopefully they see
our document and they accept that as advice, but there you\'re getting
advice from a number of different sources. And I think that two years
from now we need to go look at what they\'ve done and then modify this
document to address their issues.

MR. BILLY: Okay. Would you make that in the form of a motion?

MR. WALLACE: I so move. The motion is I suggest, I recommend that we in
fact review and modify as necessary our 2020 document in two years.

MR. BILLY: Or on a two‑year cycle?

MR. WALLACE: I don\'t know. And I don\'t think that we need to do a ‑‑
we could then ‑‑ once we review it, then decide how much longer we need.

MR. BILLY: We have a motion. Is there a second?

MR. RAFTICAN: Second.

MR. BILLY: Any further discussion? All those in favor say aye.

ALL: Aye.

MR. BILLY: Opposed? Okay.

Tony, is there anything else?

MR. DiLERNIA: That\'s all at this time, Mr. Chairman. Thank you. I will
not be here tomorrow, so perhaps we can revisit the motion that was
tabled by the end of today.

MS. McCARTY: I\'ll do it this afternoon.

MR. DiLERNIA: Thank you, Heather.

MR. BILLY: Okay.

MR. DiLERNIA: Thank you, sir.

MR. BILLY: Okay. Any other point on 2020?

Okay. I\'d like to move on then and ask Jim Gilmore to brief us on the
status of our transition paper and any other discussion we ought to have
regarding it.

MR. GILMORE: Well, I think we can be brief about this. We walked through
the memorandum yesterday. The Committee has agreed to the document,
forwarded it onto NOAA where it resides, as does the Declaration of
Independence, in some hallowed case, I\'m sure, in the Commerce
Department.

As I think ‑‑

MR. BILLY: That\'s the fisheries independence, yes.

MR. GILMORE: And so I think the issue for discussion is our target
audience on this. You know, it\'s really not the outgoing folks who are
there, but the incoming folks and I guess my recommendation would be
that we would seek to have a sit‑down with the incoming Under‑Secretary
and walk through these issues.

Building on Gary\'s comments today, we do have a couple of the budget
items highlighted in here on stock assessment work and LAPP development,
so we can roll in those issues that were identified earlier this
morning.

And so I guess, you know, my suggestion would be that we just ask the
incoming Under‑ Secretary to meet with representatives of MAFAC so we
can formally hand them the document and walk through these issues.

MR. BILLY: Okay. Dorothy?

MS. LOWMAN: Well, I think there might be an earlier opportunity if we
can get with the transition team and, you know, provide them with some
of these ideas, too.

MR. BILLY: Jim?

VICE CHAIR BALSIGER: Did we talk about that yesterday, or was that a
different meeting? Maybe that was in Fort Lauderdale. But I think
Dorothy is exactly on. You know, last time when Admiral Lautenbacher
didn\'t get appointed for almost a year, I don\'t think. And so, I do
think that we should be flexible as a group and take ‑‑ if there\'s an
opportunity when transition people come in who would be willing to meet
with MAFAC people, we should do that and not wait for a NOAA administer
or a fisheries assistant ‑‑ what am I ‑‑ the AA, or others. The earliest
opportunity.

MR. BILLY: Larry?

MR. SIMPSON: Just reinforcing that, I just got an email where the
Environmental Defense Fund is recommending stuff to the transition team.
And I just got it a few minutes ago.

MS. LOWMAN: Yes, they just put a big report.

MR. SIMPSON: I think MAFAC and the people who are knowledgeable about
the issues ‑‑

VICE CHAIR BALSIGER: Our chief scientist, since that came out, has
constructed and excellent four or five‑paragraph response to it, which I
don\'t know that you have time to hear it, but it\'s very good,
actually.

MR. BILLY: So the Committee then understands that NOAA Fisheries will
inform us when and if there\'s an opportunity to meet with the
transition team and we\'ll follow up and use the material we\'ve
prepared for that purpose?

VICE CHAIR BALSIGER: I think that\'s reasonable. But I think flexibility
is the key here. They may not even come to see me, you know? We just
don\'t know what they will do, so we\'re standing by and got our skates
on.

MR. BILLY: Okay. Does that sound like an acceptable arrangement?

Yes, Heather?

MS. McCARTY: We should also give them a 2020 document.

MR. BILLY: That would be included, yes. Together, yes. That\'s the way
we\'d forward it, including the 2020 document.

MS. McCARTY: Okay.

MR. BILLY: To NOAA leadership.

Any other comments on this?

Yes, Erika?

MS. FELLER: Well, I mean, I might be just splitting hairs, but I guess I
kind of wonder if the Committee should, you know, be reaching out and
requesting an opportunity to meet with the transition people. I\'m kind
of struck by what Dr. Balsiger just said, that they may not even talk to
him. I mean, you know, I sort of feel like we\'ve got something to
communicate to people and that there should be some kind of letter or
communication from this Committee to that group that\'s submitted for
charter.

MR. BILLY: Yes. Dorothy?

MS. LOWMAN: To that extent, I actually did email yesterday one of the
members of the transition team at Commerce and said, hey, do you have a
sense of, you know, how we might approach this? And I got an email back
saying that Monica Medina was going to be the NOAA lead and it wasn\'t
going to be public until Friday. And it gave me her email and said, you
know, maybe you want to send her an email on Friday. But, you know, that
might be something you might want to do.

MR. BILLY: Okay. We can do that. It\'s going to get clearer in just a
few days and then I think we can communicate a strategy. I like your
idea. I don\'t know if that\'s what they want. They may signal
face‑to‑face, they may signal in writing. I\'ve had experience over a
long time where you don\'t know and you want to be as responsive as you
can. And so, the suggestion of staying loose and kind of figuring out
the best way. So, we don\'t want to miss the opportunity. It\'s just how
we do it.

MR. GILMORE: In addition, just to kind of get into that gray area, you
know, so we\'re here to make recommendations to the Under‑ Secretary.
And, you know, the transition team kind of is an interim
Under‑Secretary, so I mean, is there a problem with us writing a letter
to a transition team and saying we\'ve prepared several documents that
are relevant to the transition and we request a meeting with the
transition team?

VICE CHAIR BALSIGER: Our brain trust is over there. I can\'t read your
body language, so ‑‑

MR. BILLY: Okay. So is that the desire of the Committee, that we write a
letter and at the appropriate time offer our documents and request a
face‑to‑face to answer any questions they might have?

I see a lot of heads shaking yes, so we\'ll take that approach. I don\'t
think we need a motion on that. We\'ll just do that. Okay?

All right. Anything else, Jim? Okay.

MR. DiLERNIA: Tom?

MR. BILLY: Yes? Sorry.

MR. DEWEY: No, I just had a question. We were offered the opportunity to
comment on the administration\'s transition documents, or NOAA\'s
transition documents. And I was just wondering if we\'d be able to get a
copy of the final versions that went forward.

DR. HOLLIDAY: Yes.

MR. BILLY: Okay. So, Mark, you\'ll follow up on that?

DR. HOLLIDAY: Yes.

MR. BILLY: I think it was said yesterday that they\'re incorporating our
comments or responding to them as they go through it. That was underway,
so I think getting a copy of the final version would be very useful. It
would also inform us in terms of what differences may exist between what
we\'ve prepared and what NOAA\'s providing the transition team.

Okay. Any other business? Okay.

MR. JONER: When are we going to take up the discussion on the budget
situation, just kind of I guess the aerial reconnaissance versus the
boots on the ground? Satellites versus politicians.

MR. BILLY: I was going to meet with Jim and Mark and figure out when we
can fit that into the agenda sometime tomorrow.

MR. JONER: Okay.

MR. BILLY: And I\'ll let you know, you know, this afternoon.

MR. JONER: No, I just wondered if we were doing it today or tomorrow.

MR. BILLY: Okay. Mark, you have any announcements?

DR. HOLLIDAY: No, I don\'t have any announcements, but I would encourage
us to try to get back from lunch on time today, because we have some
outside speakers coming in and we\'d like to show them that we\'re
well‑run and managed.

MR. BILLY: Okay.

MR. DiLERNIA: To that point, Junior\'s was great, but it took a long
time to get there.

MR. BILLY: And Deanie\'s is fast.

All right.

(Whereupon, the above‑entitled matter went off the record at 11:56 a.m.
and resumed at 1:00 p.m.)

A‑F‑T‑E‑R‑N‑O‑O‑N S‑E‑S‑S‑I‑O‑N

1:10 p.m.

MR. BILLY: All right. We\'re going to get started again.

The next set of presentations focus on LAPPs in the Gulf of Mexico. And
again, I\'d like to remind you that while we\'re going to focus in on
the Gulf of Mexico, which is really good because it\'s sort of going
from the policy now to the actual implementation and how it applies in a
given set of circumstances.

We want to, as a committee, think nationally as well in terms of what
we\'re hearing this afternoon and how it might impact things nationally.
So, I just wanted to remind all of you of that.

DR. HOLLIDAY: Just a point of information, we have four speakers and
then we have an hour set aside for discussion, any recommendations or
building consensus on something with respect to the topics. So there\'s
plenty of time, because we want to make sure we allow the speakers to
get through their material. So this block runs from 1:00 until 3:00 on
the agenda. So I just wanted to be clear how we were organizing
ourselves with the four speakers and a block of item for the Committee
to consider that.

MR. BILLY: So four speakers with approximately an hour and then another
hour for discussion. Okay?

So the first presenter is Phil Steele, the Assistant Regional
Administrator for Sustainable Fisheries here in this region.

So, Phil, the floor is yours.

MR. STEELE: Thank you, Mr. Chairman. Tough crowd here today. I should
have got you all early this morning.

My presentation today is going to focus on two LAPPs activities in the
Gulf of Mexico, one on the red snapper IFQ which is underway and ongoing
now, and another one on a potential LAPPs that we are looking at for our
grouper/tilefish fisheries in the Gulf.

As a little side bar and having a discussion with Dr. Murawski at lunch,
it\'s interesting how the names of these programs have changed over the
years. When I first became involved with them, they were ITQs and then
they went to IFQs, then they went to DAPPs and LAPPs and now they\'re
catch share fisheries.

Regardless of what you call them, I think the body of evidence out here
is mounting that these programs have worked fairly well for some of the
larger fisheries in the United States, in Alaska, sablefish fisheries,
so forth and so on, to increase profitability, to help with some of the
over‑capitalization, some of the market flux. Whether or not these
systems are going to work entirely for some of our more depressed stocks
or not, the ones that are undergoing overfishing or are overfished, I
think the book\'s still out on them. They certainly have a possibility.

As Larry said yesterday, most things in the Gulf of Mexico that are
contentious are red. Whether that be red grouper or red tide, and red
tide being the biological entity and also the University of Alabama\'s
football team. LSU is good. Certainly red snapper.

What I\'ll do with you a little bit here today is take you through the
red snapper IFQ program, kind of give you a little idea of what the
fishery looks like, why we did what we did, what we\'ve accomplished so
far, some of what we\'ve learned and some of the challenges that we have
in the future.

Red snapper fishery in the Gulf of Mexico is predominantly a hook and
line fishery, bandit gear. You can see how the effort is kind of
dispersed. Historically, the commercial red snapper fishery has been
basically a Western Gulf fishery and still is predominantly today.
We\'ve seen increased catches in the Eastern Gulf of Mexico off the West
Coast of Florida, which is a good thing. A lot of people say there\'s
more red snapper out there, there\'s so many out there they can\'t get
to the grouper. Why don\'t we give them more? How come this is? We got
to understand that under the recovery program, that\'s the way it\'s
supposed to be. The stock is supposed to be recovering. Just to give you
a little idea here, too. And also some of the catch in Western Florida,
some of these guys may be fishing other areas in Latin America. There\'s
no doubt that the stock of red snapper in the Eastern Gulf is
increasing.

Red snapper status. This is kind of doom and gloom. Look at how the
spawning stock has bottomed out. See how it\'s decreased over the years.
It\'s down to around two and three percent of where it should be. See
that little blue line. That\'s a little encouraging. We\'ll know a
little bit better at our 2009 stock assessment really how this fishery
stands, but everything I\'ve been hearing, the stock is rebounding in
most areas, even off the West Coast of Florida ‑‑ I mean, the East Coast
of Florida, which is kind of interesting.

The Regulations pre‑IFQ. We did everything to this fishery but drill
holes in the bottom of the boat to keep the guys from fishing. We had
short mini‑seasons, we had class 1 and class 2 license, we had a spring
and a fall quota. We had these 10‑day little mini‑ seasons where you
could go out February through September, October and fish for nine days.
It has a size limit and a trip limit. Two‑thousand‑pound trip limits and
a 200‑pound trip limit.

We\'ve done a lot to this fishery, and as you can see, it didn\'t really
work too well. The fishery, all the reasons for an IFQ, it was
over‑capitalized, the race for fish was on all the time. We went over
the quotas a lot, many years, probably nine out of the past 17, not a
lot, but we went over it. Short fishing seasons. Terrible safety at sea
problems. We lost a number of boats since I\'ve been in NMFS, not
necessarily the fishermen\'s boats have gone done, but fishing that Gulf
of Mexico in the winter time is a tough time to do it. Market gluts and
also a high bycatch and discard mortality rates. Everything is
associated with the fishery. Here\'s what we had. I\'m showing those
short seasons. During the late \'90s, the average fishing season for red
snapper in the Gulf was reduced to 90 out of 365. Now it\'s 365 days a
year.

Quota management, that big blip in \'96 was when we increased the quota,
actually for the whole fishery to 9.12 million pounds. In hindsight that
probably was not one of our better moves. But be that as it may, you see
some of the quota overages we had. Nine out of 17 years and we kind of
mimic the same kind of thing in recreational fisheries.

The red snapper fishery is divided 51‑49 percent, respectively,
commercial/rec for the red snapper fishery. Quota is down quite a bit.
We\'ve almost cut it in half under the rebuilding plan.

The IFQ history. An interesting time line. Look at 1995 to 2007. It took
us 12 years to get any limited access privilege to go into this fishery,
although we were ready to push the button in 1996 until Congress put the
moratorium on the fishery itself. Soon after the moratorium ended, we
started working with the red snapper ad hoc committee, a group of
fishermen all around the Gulf of Mexico and developed a profile. We did
the first referendum. We did amendment 26, which is the red snapper IFQ,
and the second referendum, which both of them were overwhelmingly passed
by almost 90 percent of the fishermen. And then in January 2007, by God,
we got it implemented. People started fishing. A lot of people didn\'t
think we could do it.

Key components of this thing. Initially those class 1 and class 2 red
snapper fisheries I talked to earlier, they were the only ones who were
eligible to get initial shares. Their shares were based on two criteria.
The class 1 guys who\'ve been around a long time, have a long landings
history, got the ten best years. The class 2 guys only came in the
beginning about 1998, got probably five best years. And an ownership
cap. The ownership cap was established as that person held the highest
IFQ share at the time of the implementation of the IFQ process. And the
appeals process also as we normally do. Hardships were not considered.
Things that were subject to appeal were your landings records and
whether or not you actually had the permit at the time it was
implemented. And of course a program review every five years, which is
still required.

We allow transfers the first five years only between reef fish permit
holders. The AO and the Council thought that this fishery should for the
first five years go to those people who had the vested interest in
historical landings data, the people that had gone out and created the
fishery. Their the ones that should benefit from the IFQ for the first
five years. After the first five years are up, anybody can come get
these shares.

Now still to fish these shares, actually go out and catch the fish, you
still got to have a commercial reef fish permit. Say I wanted to buy and
sell some to somebody, I didn\'t have it, I could still sell these
shares to anybody who wanted to come get them. In fishing, you got to
have a commercial reef fish permit.

We got a three percent cost recovery fee, which let me tell you, comes
nowhere of paying the cost of this fishery. A thousand of hours of staff
time. I kind of think the fishery is probably going, including law
enforcement, a couple million dollars a year at least. Last year\'s 2000
cost recovery was about \$300,000. This year we\'re kind of on the same
mark. Again, you got to remember that cost recovery is based on
exponential price. We\'re not saying there\'s any illegal activities
going on out there, but I did see some IFQs here, saying some pounds of
fish, it was sold for pennies, which I know is probably not the way it
is, but be that as it may.

Quota adjustments is another thing we allow. The quota goes up and down,
we adjust the proportion, the proportion of shares with the fishermen
according to how much they got initially.

One of the best things I liked about this system, in talking about first
designing it, I wanted to get away from paper. Paper is just too slow.
We wanted real time data. So I figured the best way to do this is to go
the Internet route. That\'s what we did, just set up an Internet‑based
system where fishermen come into the dock that day, go to the dealer.
It\'s all set up on the computer. Punch in their codes. They get an
approval code. They punch in amount caught, what they paid, what the
cost recovery is of all those into our system. Real time data every day.
If this did nothing else, it brought a lot of fishermen and a lot of
dealers in the Gulf of Mexico into the 21st Century, because they had to
buy a computer. But this is the best way we found out and the system is
working quite well.

Law enforcement. This system was based around a lot of the implications
in the system are based around law enforcement. Dockside law enforcement
is one system that we wanted. So we have vessel monitoring systems in
all our red fish boats right now. We also have, like I just told you, an
electronic accounting system. One thing that helps our law enforcement
officers out there also, before you land your fish, you got to call in,
let them know you\'re coming so they can be at the dock to inspect your
catch, if they want to. And we got some restrictions on off‑loading
between 6:00 a.m. and 6:00 p.m. on a daily basis.

By the way, a lot of these things that I\'m showing you now, we\'re
hoping to transition over to the grouper IFQ, almost exactly so we can
use the same system.

Success in this thing, you can see we\'ve had, even with some kind of, I
thought, low number, we saw a definite increase in price, definite
increase in quality of this fish. And we have the red snapper on the
market. You can go find red snapper from the Gulf of Mexico any time of
year just about now, which is really something to see. So it\'s working.

A little bit here. Reduction and directed bycatch. I\'d like to say that
the IFQ system was definitely responsible for reducing bycatch. See what
it was, when we had a 15‑ inch size limit, but what we did with this
system also when we implemented the IFQ, is that we reduced the minimum
size so we reduced the amount of bycatch. Prior to it, landings to
discards were one, landings to discards here with the IFQ system,
primarily because of the reduction in minimum size, is almost
quadrupled. We have very limited observer data on this and I\'m hoping
that the 2008 season will see a little bit more reduction, get a clearer
pictures that\'s not shadowed so much by the decrease in the minimum
size.

Successes. We caught almost a whole part of the quota. There were some
people who did not fish their quota all, so they lost money. Why they
did, who knows, but they did it. We had a year‑round season, greater
price stability. And we had some consolidation of shares, which is all
the big things that you look to see in an IFQ program.

Ongoing challenges. Our quota is down to 2.55 million, because we\'re in
a rebuilding plan. Hopefully, when the 2009 stock assessment comes out,
we\'ll see a little bit more increase in the stock and maybe the quota
will go up a little bit.

Limits. Availability of share allocations. This has been a problem. A
lot of the shares went to the big players on the West Coast in the
Western Gulf. A lot of the Eastern Gulf guys who fish grouper didn\'t
get these shares. And there are winners and losers in every IFQ, but
I\'m hoping that increased our discard for red snapper. But I\'m hoping
once the grouper IFQ programs comes on, these people will get together
and start trading shares off and make this less of a problem.

Lessons learned. We kind of put this program together with bubble gum
and baling wire. I mean, I got people from all over. We had to get an IT
component, a law enforcement component, an SF component, the lawyers of
course, and the AP. For anybody, if you\'re thinking about doing this,
get your AP up and running early. That\'s what we did with the grouper.
Get the fishermen that are out there to help you design the system. That
way it\'ll make it easier and more palatable to everybody.

Time and implementation is important. If you\'re going to implement in
2010, you\'d best be working on your system real hard right now, which
is what we\'re doing, for the grouper thing. And you need to plan for a
long time for implementation, just for the electronics and the technical
part of this thing. You\'re going to think you\'re going to implement an
IFQ program in four months, it ain\'t going to happen, just from an IT
perspective.

And you need to outreach. One thing before we implemented the red
snapper IFQ program, I went up to the Alaska region and received their
opinion from there, and one of the things they told me, they said the
best thing, the most important thing you need to do about this program
is have a lot of outreach, getting out to the fishermen, telling them
how it works, what to expect. We did that. It made the transition a
little bit easier.

Okay. Onto to grouper/tilefish. Same kind of stuff I\'m going to go over
with you. This program is not implemented yet. We have a final rule for
the referendum, which we will conduct December the 1st with those
fishermen who are entitled to vote in the referendum. We\'ll be
conducting that in December. If in fact the referendum is approved, we
will go back to the Council with the referendum results. I\'m hoping
later than sooner. At that time they can vote to submit amendment 29 to
the Reef Fish Plan, which is the IFQ to the Secretary of Commerce, for
review and approval. And then we got about eight or nine or ten months
to get all the regulatory actions done, plus get the system up and
running. So it\'s going to be a pretty tight time line.

The grouper/tilefish fishery. Quite a large fishery; almost 11 million
pounds versus a little over two‑and‑a‑half million pounds of red
snapper. Eight shallow water species, five deep and five tilefish.

Status of these stocks. You can see the red grouper stock assessment is
rebuilt. The problem I\'m a little concerned with out there is they
can\'t catch their quota. I wonder why that is? Gag is also undergoing
overfishing. We\'re not sure of the overfished status quite yet. And
remaining species, we don\'t have a clue, especially like in deep
waters. We\'ve never had a stock assessment done on the status at all,
so it\'s kind of hard tell what the status is.

Little different fishery here. As you can see, the majority of the
shallow water grouper occurs off the West Florida shelf. By and far, 98
percent of the shallow water grouper are caught off the West Coast of
Florida. Deep water grouper a little bit different. It\'s kind of spread
out a little bit. Again, the majority of these grouper species are
caught off that hard rock substrate off of this Florida shelf. We do
have a deep water grouper and tilefish fishery in the Western Gulf of
Mexico with the Central Gulf catching a smaller proportion.

MR. CATES: What\'s your definition of deep water? How deep?

MR. STEELE: Six‑hundred feet or more. That\'s pretty deep for these guys
for the Gulf.

Current regulations. Same kind of stuff. We got moratoriums. There\'s no
additional reef fish permits being issued. We have quotas on these guys.
Trip limits of 6,000 pounds trying to slow down the rate for fish.
We\'ve done a lot to these guys. We have seasonal area restrictions that
cover some of our spawning aggregations. Gear restrictions. Can\'t use
long lines inside of certain areas, things like this. Size limits,
closed areas, all the tool box that you\'d normally associate with
trying to regulate a fishery.

This is just some of our closures. You get an idea why we need to deal
with these races to fish. Shallow water grouper fishery is ‑‑ which
includes red, gag and black, our main fisheries. Last couple of years
they haven\'t been coming close to catching their quota. Deep water
grouper, you can see it\'s getting shorter and shorter every year. It\'s
a very attractive product, especially for the northern markets, but I
think people think ‑‑ and, Mark, you can help me with this ‑‑ they think
that deep water flesh, is it better for you and whatever. Anyway,
they\'re getting top price for these things and this fishery is getting
shut down sooner and sooner every year. And then tilefish is another
one. You can see we\'ve had closure in the tilefish every year. So one
thing, one reason why we need an IFQ.

Again, the same reasons going on in the grouper fishery is with red
snapper. We\'ve got derby fishing that\'s going on out there. We want to
reduce the capitalization for this fishery. There\'s probably a thousand
boats out there, a thousand reef fish permits, not all of them are
fishermen. There\'s a lot of boats out there. We want to lengthen the
fishing season and lower operating costs, all the other things that we
did for red snapper, to keep this product on the market year‑round. We
import a lot of grouper, too.

Key elements of this thing. It would be basically the same as the red
snapper. We figured if it isn\'t broke, you know, don\'t fix it. The
referendum as mandated by Magnuson, we\'ll be conducting that next
month. All active commercial reef fish permits holders are eligible for
this thing in the program. The transfer is going to be the same. The
first five years the commercial reef fish permit holders only. After
five years, U.S. citizens and so forth.

The landings data here is a little bit shorter. It\'s only from 1999 to
2004. That was upon the recommendations of the AP.

Key elements. The same kind of stuff. There would be a cap on
ownerships.

Appeals process. We use our same web‑based online reporting system. We
have a little bit different situation here. We call it multi‑ use
allocation. Without going into too much detail of this thing, which I\'m
not quite sure I understand all of it myself, as evidenced by this map,
I think that\'s it, what basically we\'re doing is that we\'re making
allowances for bycatch. So these are our major grouper species. Say if
you go out, what we\'ll do when we finally get this done, is that
you\'ll have X amount of shares for red grouper or for gag grouper, for
black grouper, whatever. So when you go out and catch a lot of red, once
you\'ve done all that, you can transfer some of your allocations
basically from one species to the other. If you get on a bite of red and
you don\'t have much of that, you can take your gag allocation. It\'s
basically to try and reduce bycatch and get these fish in the docks and
count towards your quota. It\'s kind of complicated, but according to my
LAPPs person, it will work.

This is just a problem we had with gag and black. We\'ve had to adjust
some of the quota shares because gag and black are very similar and some
of these fishermen can\'t tell the difference, or we can\'t tell the
difference.

Time lines. I said here\'s how it\'s gone. In February, we got our first
AP meeting. Three years later in the winter we\'re going to conduct a
referendum. We hope the Council takes final action on this thing and
hold me to that time line right there, or find me a new job.

Questions. If you\'ve got any questions, don\'t ask me. I\'ve got a new
LAPPs data management branch. The guy that heads it up is Andy
Strelcheck. Probably knows more about IFQs than anyone else in this ‑‑
around except for maybe Martin. If you got any, let me know. And that\'s
about it.

Questions?

MR. BILLY: Okay. Bob?

MR. FLETCHER: I have a couple. First, after the five years when any U.S.
citizen can purchase quota, can they also buy a reef fish permit so they
can fish the quota?

MR. STEELE: There is the moratorium on issuance of reef fish permits,
but you can buy a permit, if you can find them. They\'re going for about
\$25,000 or \$30,000.

MR. FLETCHER: Well, in order to be able to fish you got to have both the
quota and the permit and you got to buy both of them, or whatever.

The other question is, what kind of a reaction to all of this has there
been from the recreational fishing community?

MR. SIMPSON: Take it away.

MR. STEELE: Yes. Okay. Well, a lot of people ‑‑ I won\'t say a lot of
people, there is a segment of our fishing society who view IFQs as
giving away of a public resource, and they don\'t like that, in general.
And there\'s been quite a bit of opposition from certain sectors in
recreational fishing. But again, there are certain segments of the
recreational for‑hire fishery who are looking at the possibility of
integrating IFQs into their systems. So it\'s kind of a mixed bag, and
it changes over time. There has been opposition to IFQs in general from
a lot of folks, because they think you\'re giving away a public resource
and why by God should you have those fish and we don\'t? That\'s not
going to change.

MR. BILLY: Okay. Martin?

MR. FISHER: It\'s just a point of clarification. Could you flip back to
that slide that talked about when it changes after the five years? Can
you turn to that one? Because I was under the impression that the
program comes up for review, but it wasn\'t a mandatory release of the
‑‑

MR. STEELE: No. Wrong.

MR. FISHER: That\'s wrong?

MR. STEELE: It\'s after five years. That\'s the way it stands now and
that\'s the alternative. It will be reviewed. I mean, Magnuson mandates
that.

MR. FISHER: Right.

MR. STEELE: But that\'s the preferred alternative now.

MR. FISHER: Okay.

MR. STEELE: It\'s just exactly like the red snapper was. And the AP
wanted that. I mean, there were some people on the AP who wanted to be
able to sell these shares to anybody. You know, because I mean, it\'s a
market‑based system, so maybe Joe Blow would give me more money than
Mike Murphy would.

MR. FISHER: So it\'s preferred alternative at the Council level?

MR. STEELE: Yes, this is what\'s in the document now.

MR. FISHER: Okay.

MR. STEELE: I mean, again, the document has not been submitted for
Secretarial review and the Council has not taken final action on it.

MR. FISHER: Right.

MR. STEELE: So until that happens, but that is what\'s been analyzed and
reviewed, yes.

MR. FISHER: Okay. Thank you.

MR. BILLY: Any other questions?

Cathy?

MS. FOY: Do you have shareholders combining resources to use one or two
boats and fish their quota together?

MR. STEELE: Absolutely it happens. It does happen. It\'s been kind of a
problem with the red snapper IFQ program. But the way we set it up, when
you hit the dock we wanted you to have the amount of fish that ‑‑ the
amount of allocation in your count that you had landed, so it\'s a law
enforcement thing. We\'ve had it where some people have come in ‑‑ the
IFQ systems allow this, where for some people would come in and say
\"I\'m fishing,\" and I come in and I go to use their allocation.
That\'s not what we wanted.

But to answer your question directly, we have had a ‑‑ there will be ‑‑
like some of these processors out there have four or five boats, and it
made it easy just to collapse their account and do one big account where
you could use any of your five boats to fish. So it has happened. And
we\'ve had some consolidation with some of the ‑‑ like I showed you in
the update, maybe 40 or 50 of the accounts out there. Some of these
accounts were real small. I mean, some of these odd guys only got one or
two pounds. I mean, but we had to give it to them. That\'s just what the
law says. And a lot of those accounts have been consolidated, and there
have been a number of fishermen who either bought other allocations from
other fishermen or they\'ve collapsed their own accounts. It does
happen, yes.

MS. FOY: And are you getting your three percent cut every time some of
those shares change hands, allegedly?

MR. STEELE: Allegedly. Like I say, law enforcement is pretty hot on
these guys. I mean, they\'ve done a really good job through your joint
enforcement agreements across the Gulf of Mexico. We\'ve spent millions
on this. This was the whole part of the red snapper IFQ program, because
there was so much illegal ‑‑ well, there was some illegal activity out
there, where a lot of fish were sold under the table. And now what
you\'ve got is that you\'ve got a fishing industry that realizes if
you\'re cheating me, you\'re taking money out of my pocket, and that
ain\'t going to happen. So they\'re pretty much onto it. But all the
concern is, and I\'ve got this red snapper IFQ report that we did for
2007; if any of you all want a copy of that, it\'s online, and you look
at some of the range of where the prices are paid, and you\'ll see ten
cents a pound, twenty cents a pound. Red snapper is not that cheap for
the most part, so that three percent, I expect we probably got, I don\'t
know, two‑ thirds or a‑half of what we should have gotten. And it\'s not
illegal to sell red snapper for 50 cents a pound, although I think law
enforcement may have some views on collusion about that, but it\'s only
hurting the fishermen.

MR. BILLY: Vince?

MR. O\'SHEA: Thank you, Mr. Chairman.

Phil, it\'s a great a presentation, a lot of information here. Thank you
very much.

I\'m interested in the interface on your electronic reporting when the
boat comes in. Presumably, you get two inputs. One is what the boat said
they\'re unloading and selling and then from the dealer to sort of
verify that. Can you briefly describe how that happens?

MR. STEELE: Sure.

MR. O\'SHEA: Is that the right assumption?

MR. STEELE: Yes, I appreciate it.

MR. O\'SHEA: You don\'t get just one guy reporting?

MR. STEELE: No, what happens at ‑‑ okay. I\'m out fishing. First of all,
I call law enforcement three hours out and say, \"Hey, I\'m coming in.\"
And we\'re actually changing this a little bit now, so you\'re going to
call me three hours out and you\'re coming in and you tell me how many
pounds you got on board where the counts come out of. But anyway, the
fisherman comes into the dock and they can\'t transport these fish, by
the way, on a truck or anything. You can come to the dock and pull up to
the fish house, but if you transport this fish in a truck, you got to
have an approval for it, which means you got to call us and get all this
stuff. Fisherman comes in, unloads his fish. He comes up to the
fisherman and they pull up this screen right here. He\'s got his own
user ID and PIN number. They both have the little screen there. Enter,
you know, X amount of fish. I paid this amount of pounds. It
automatically calculates the ‑‑ it takes ‑‑ it\'s just like your PIN
number on your bank account. It deducts that amount from your shares. It
tells you how much you owe the Federal Government and then it all goes
into one big system.

If you don\'t pay, then your account, after a quarter, your account gets
suspended and you get a real nasty letter from me saying pay up or ‑‑

MR. O\'SHEA: Yes, but tell me about the deal. I mean, so what\'s to keep
the guy from saying I only weigh in at ten pounds?

MR. STEELE: Nothing. Except law enforcement. Fishermen, like I say,
they\'re pretty much ‑‑

MR. O\'SHEA: So there isn\'t a similar parallel reporting from the
dealer saying he bought 10 pounds from the guy?

MR. STEELE: I mean, the guy can come in and say, yes, if he had 100
pounds and said, well ‑‑ you don\'t say 10 pounds, that\'s why we call
law enforcement. Every landed transaction, we got ‑‑ law enforcement can
be there and they\'ll be right there. But, you know ‑‑

MR. SIMPSON: Collusion can\'t happen? The two have to work together for
the one ticket.

MR. STEELE: Yes.

MR. SIMPSON: They both have to sign, in essence?

MR. STEELE: They acknowledge it and all this stuff. And once this is all
done and entered, get an approval code. We check automatically to make
sure you have that much allocation. It\'s all done automatically.

MR. SIMPSON: Thank you.

MR. BILLY: Okay. Cathy?

MS. FOY: Thank you, Mr. Chairman.

Phil, is there any effort on the part of NOAA to get catch‑per unit
effort data or locations of catch data with this?

MR. STEELE: Absolutely. The VMS, what\'s good about this, and we\'re
working on it a little bit now. We haven\'t done a lot, but we know we
want to do this. We\'ve got VMS data and we\'ve got catch locations, and
we can develop some data and we hope to have this information available
to the science centers in the next five or so. We haven\'t completed
that, but that was one of the ideas I want to get the information on
that. Locations, times, areas, the whole schmeer.

MR. BILLY: Okay. Dorothy?

MS. LOWMAN: So you have VMS, but do you have observers or any kind of
at‑sea monitoring?

MR. STEELE: Yes, it\'s not ‑‑ I think I\'m going to ask Steve or# it\'s
like one percent.

MS. LOWMAN: So, would you have any sense if you\'re having some at‑sea
discards, because you don\'t have the quota to cover it, so you just ‑‑

MR. STEELE: I\'m sure we do, but we have limited observers out there.
That\'s where that information I showed you earlier on discards came
from. The discard rate has gone done considerably, but that first year
it would probably give an increase in the size, where this year I think
we\'ll get a better handle on what our real discard rates are.

MS. LOWMAN: So you think one percent will give you accurate information
there?

MR. STEELE: Commercially?

MS. LOWMAN: Yes.

MR. STEELE: I\'d like to have 100 percent authority given by the
industry.

MR. BILLY: Martin?

MR. FISHER: I have a question and a clarification for you, Vince, if I
may. Can I start with that?

This is actually the participants\' page. There\'s a dealer page that
looks similar to this. I\'m a dealer. I\'m very integrated, so I\'m all
three. So if I\'m buying fish from my own boat, for instance, I go to my
dealer page. I put in the pounds, fisherman\'s ID, then push enter. Then
it goes to where the fisherman has to put in his PIN. So the amount of
fish that I\'m buying is verified by the fisherman.

And my question for you is, sir; and by the way, I think you did an
absolute fine job and you really gave us the full picture.

MR. FISHER: You really did. You did a great job, Phil. Thank you.

How many other fish in the Gulf region are coming up for IFQ in your
estimation?

MR. STEELE: Well, let\'s get through this one first. I mean, that\'s 13
species there with grouper and tilefish.

The possibilities of an IFQ? Oh, we\'ve got mackerel for sure. There\'s
other, I guess called \"minor reef fish species.\"

MR. FISHER: Amberjack?

MR. STEELE: Yes, amberjack, things like that. We got to reach a point of
diminishing return on these things. I mean, IFQ are certainly a great
system, but you know, after a while, they\'re expensive.

MR. FISHER: Yes, but now that you have the infrastructure put together
because of the red snapper, the cost of bringing grouper online will be,
you know, minimal comparatively to the red snapper.\*\*

MR. STEELE: Oh, absolutely.

MR. FISHER: And the more species you add in, the bigger the return gets
for the cost to cover.

MR. STEELE: Well anyway, to answer your question, mackerel, which is
certainly our ‑‑ you know, it\'s an 8‑10‑12 million pound fishery, that
would certainly be one. I mean, who knows? I mean, shrimp fishery down
the road and these other minor species, amberjack, things like these
species.

MR. FISHER: And where do you see the potential for the charter boat/head
boat and/or recreational fishery?

MR. STEELE: There is a group out there who would like to see IFQs in the
charter/head boat fishery. Whether or not that happens, or the
recreational fishery, I don\'t know.

MR. BILLY: I want to have us move on. But before I do, Jim is going to
be leaving, and so I wanted to give him an opportunity to say a few
words before he leaves us.

VICE CHAIR BALSIGER: Yes, sir. Thanks, Mr. Chairman.

Steve and I are heading off to D.C., where we\'re going to discuss
program plans for all of NOAA, all the different line offices tomorrow,
so it\'s a fairly interesting meeting, which I am looking forward to
engaging in. But I appreciate the attendance here of everyone.
Everyone\'s contributing, and as I said when we started, this is a group
that we\'re looking to for our high‑level policy decisions. We got the
Councils for the regulations in every fishery.

So I think when you see stuff like Phil\'s presenting here, I think the
questions are good because it clarifies stuff. But try to keep in mind,
we\'re looking at how IFQs work for the country as a whole as opposed to
solving Phil\'s exact problem down there. But that\'s kind of the level
we\'re looking at.

But this is a good group of people and I enjoyed being with you, so
thanks very much for taking time and doing that, and I\'ll see you
whenever you decide to have one on the spring, I guess. And if you\'re
through Silver Spring, look me up if you can. And I\'m serious about
that. I travel some, but if you\'re there, if you can stop in and see
what\'s going on, it would help me to know what you\'re thinking, and
there may some opportunities for figuring out how to make contacts. One
of our key things I think is trying to develop some personal
relationships with senators and Congressmen who\'d be willing to take
sort of the fishery agenda on as their personal things. So thanks.

MR. BILLY: Okay. Thanks a lot.

MR. JONER: I want to say I really appreciate getting your weekly
reports, and I\'m impressed with your discipline to do it every week,
when you\'re on the road so much.

VICE CHAIR BALSIGER: Well, I have to confess that ‑‑

MR. JONER: Well, you want to save this for later?

VICE CHAIR BALSIGER: But I don\'t do it all by myself.

MR. JONER: I realize that.

VICE CHAIR BALSIGER: But thanks.

MR. BILLY: Steve, you want to say anything, or no? No? Okay.

All right. Thanks.

Okay. We\'re going to move on now.

VICE CHAIR BALSIGER: Excuse me. Sam Rauch is of course one of the
deputies, and he\'s going to be taking over, but we also have Pete Jones
here from the corner offices and Gary Reisner for the 14th floor and
Alan Risenhoover, who\'s spoken to you before. So we won\'t miss
anything.

MR. BILLY: Yes, safe trip home.

All right. Next we\'re going to hear from Robert Gill. He\'s both a
commercial fisherman and a member of the Gulf Council.

MR. GILL: Thank you, Mr. Chairman, and thank you all for letting me be
here.

First of all, let me correct the title. I\'m not a commercial fisherman.
I don\'t have any of those skills whatsoever. I leave that to you to do
it recreationally and Martin and Bill Tucher. I couldn\'t catch a fish
if my life depended on it. But I am a fishmonger, so I have a fish house
and I deal with fish, but I can\'t catch one.

I\'m going to cut a lot of this short because Phil covered a lot of it.
I\'m going to try and give you my perspective of some of these things
from the Council perspective, and maybe to a minor extent from the fish
house dealer perspective. And some of this is duplicative, but I\'m
trying to put it in a different context.

One of the interesting aspects in these IFQs, in the red snapper, as I
understand it, and I was not part of the process that went through that
in the Council; by the time I got there it was implementation time, was
that there was broad support for the IFQ. And that includes the
recreational and charter boat, and industry and NGOs.

And, Phil, correct? That\'s my understanding.

Now we didn\'t have that in the second one. I\'ll talk about that more
later. But it was generally supported all the way around, first time
around.

In terms of the twenty‑two‑and‑a‑half months experience you\'ve had, the
reaction from industry, the major shareholders are very high on it. As
Phil alluded to, the minor shareholders on the West Coat of Florida,
they\'re not and I\'ll talk about that a little bit more. And other than
minor tweaks, I think it\'s remarkable that it\'s done as well as it
has, given that they had a 45 percent reduction in TAC in the first year
of operation. So from the standpoint of industry reaction, it\'s been
very good. And as Phil may have mentioned, we have stock assessment in
red snapper end of next year, so there\'s possible TAC mods that may
come in and play a part there as well.

In terms of the grouper IFQ, as Phil mentioned, it\'s almost identical
to red snapper except for the multi‑use allocations. Everything else is
roughly the same. But my comment is that on that first five years where
it\'s reef fish permit holders only in terms of transferability, I think
that\'s a very good thing to let the system settle out to find the bugs,
the law of unintended consequences, the little tweaks on the VMS and the
landings. All these things that we haven\'t got done precisely, it
allows us time to get it settled out before it goes open to any U.S.
citizen or resident alien.

One of the differences, as Phil mentioned during the comment period, on
the grouper IFQ is there\'s been strong opposition by the rec and
charter boat sectors. I don\'t fully understand why the difference.
There\'s been a lot of arguments made and some of them are, in my view,
specious, but they\'ve come out very strongly about it. So there\'s been
some effort to derail, if you will, amendment 29 in terms of approval if
the referendum goes through. But the referendum, two arguments that Phil
did make. One is that there\'s concern by the rec sector, at least
that\'s what\'s been stated, that the allocation gets fixed if IFQ goes
through, which is not true. But there\'s a concern at least on the
recreational sector side that the allocation will never change once an
IFQ system is in effect, because one of the things about IFQs is if you
change the system substantially, then you\'ll have to redo the
referendum. But the prevailing view is that if there\'s any allocation
change, assuming it\'s relatively minor, it\'s no different than a TAC
change and changes the quota.

In terms of process consideration, strangely enough I agree with Phil. I
think the AP approach is exactly the way to go, because you want to get
the industry involved and you want to get them working on it. And we
largely, on the Council side, followed most of the recommendations; not
all, but mostly, so they did a lot of work and thinking about it
themselves and how they wanted it. And that\'s how we ultimately went in
the end result.

The other comment I\'d make relative to the process is that as you know
the Gulf of Mexico and New England have to have the referendum, and I
generally view this as a negative thing as implanted there politically
to inhibit IFQs. My view is the exact opposite. I think it\'s a good
thing. It forces industry to get together and deal with the issue, and
if you will, sell it. So we get a lot more involvement and Phil is one
of those that was involved early on in terms of getting around to
industry, being involved in the process and trying to convince fellow
fishermen that it\'s a good system. And I think that\'s good. So, it
takes a little bit longer and I guess it adds a little bit expense, but
in the end result it gets more involvement and I think more involvement,
by whatever sector, is good.

I would agree also with Phil that education is a big issue, and I
didn\'t realize that he\'d done the elastic trick, but just for example
the difference that we have in the referendum of what a substantial
fishermen is versus substantial participant, whether they could vote in
the referendum and whether they qualify for IFQ, et cetera. A lot of
misunderstanding, even to this day, on that very issue. So education is
a big, big part of it.

In terms of where we go from here, I believe that the Gulf Council is
favorably disposed towards IFQs. The vote for the referendum was
thirteen to three on the grouper IFQ. And that included all the state
directors. So my sense is that from a Council perspective there has been
support for IFQs, which to me suggests that ‑‑ as the question I guess
from Martin came that, yes, there will be future avenues and whatever
seems appropriate to fit.

I see some issues‑‑ and I\'m not really predisposed to one side or the
other‑‑ but I see some issues that in my mind anyway are yet unsettled
in the IFQ system, and I\'d like to share a couple of those with you.
One of which is the red snapper rise on the West Coast of Florida. It
seems to me that IFQs are fundamentally predicated on a relatively
stable and quasi‑static, if you will, not a strongly dynamic fishery.
It\'s not doing ups and downs in any fashion. Well, in the case of red
snapper, we had this rise of red snapper on the West Coast of Florida
that\'s relatively recent. It was there years ago, but disappeared and
now it\'s coming back. And meanwhile, we have the IFQ system come along,
and it didn\'t account for a rise in snapper on the West Coast of
Florida, so consequently all the fishermen that fish the West Coast,
which was grouper, didn\'t get much in the way of red snapper shares.
And ultimately that all gets evened out on the market forces, but
initially on the red snapper side, not many shares available, couldn\'t
come to agreements. Perhaps it was price, you know, maybe the guy that
had them wanted more than the guy who wanted them was willing to pay. In
any event, what we\'ve had is a discard problem, regulatory discard in
the sense that they had no shares, couldn\'t get any, and had to throw
them over in order to get to the grouper. So, that\'s a problem that
hopefully will be addressed here in our stock assessment 2009, but it\'s
going to be a difficult one because then you have to figure out how
these guys get shares outside the market or let the market it takes its
place, which so far has been fairly slow to move.

Another one is, in my opinion, is new entrants, and there may some
disagreements with this, but currently both IFQs, new entrants get in by
buying in. And that works fine up to a point, I suspect, but and how the
sablefish fisheries can be so darn successful that it\'s very difficult
to do so. So in one sense the more successful you are, the higher the
price goes and the bigger the barrier for new entrants. And British
Columbia, they recognize that as a problem in their IFQ fisheries, but
they haven\'t addressed it, nor are they discussing it. And Alaska has
some issues with new entrants as well. So, that\'s one of those things
that I\'m not sure has settled out.

Similarly, in terms of leasing, in Alaska most of their IFQs, if I\'m
not mistaken, require an owner on board requirement for the IFQ share.
In the Gulf, we\'re not doing that, so there may be some migration to
leasing as these owners of boats get older, and that may or may not be
the way everybody thinks it ought to go. So that has a potential for
reconsideration.

Finally, owner share issues. I\'ve talked about the market forces. And
red snapper\'s been very inelastic, and ultimately it ought to ease out,
but at least initially there wasn\'t much flexibility, much movement on
the market force of voter shares, so share availability was constrained
and hence the fellows on the West Coast of Florida had difficulty
getting any.

Another issue that may arise is neither IFQ system has a use it or lose
it provision. So if somebody has voter share, they don\'t have to use
it; they could just sit on it. And that may be the way it goes down the
road, but the vote we had on amendment 29 was split even. In fact, Tom
made the deciding vote and we don\'t have it there. So it seems to me
that there\'s considerable difference on the Council in terms of whether
that\'s appropriate or inappropriate.

And I guess that\'s all that I was trying to fill the holes in on
Phil\'s conversation. Questions?

MR. BILLY: Any questions?

Yes, Bob?

MR. FLETCHER: The Pacific Council just adopted an IQ for ground fish
last week, and one of the big controversies there had to do with
processor shares. Was that an issue in either of your IQ systems?

MR. GILL: No, that has not been an issue and think part of the reason
for that is size. We don\'t have processors of that kind of magnitude.
Our fisheries are a lot smaller. So we have not ‑‑ for example, on the
grouper we didn\'t even discuss that as an option.

MR. BILLY: Other questions? No?

MR. GILL: Thank you.

MR. BILLY: Okay. Thanks a lot.

Oh, sorry, Dorothy.

MS. LOWMAN: Well, I mean, I\'m curious in both of these, because
there\'s a provision in the IFQ, in the Magnuson Act about ‑‑ it says
something about to hold, acquire and use IFQs you need to have a
substantial participation in that fishery. And in our one that we just
passed, too, anyone can own. And I just sort of wonder, and I guess
you\'ve already probably gone through the review on that and that\'s
okay. But it just seemed like a little bit of a disconnect to allow
anyone in the country to own it, and then have this element in the
provisions. And so this might be more directed towards Sam than you.

MR. RAUCH: Well, I was going to direct it towards to Phil who is ‑‑ his
program.

MR. STEELE: Well, it\'s kind of a long convoluted history on this thing.
Initially under the red snapper, the fishermen wanted the fish to stay
in the fishery, because they thought that they had a vested interest in
things and so they allowed that. But again, after five years you can
come and buy some shares. But again, the overriding element in this
thing is that to fish those shares, you got to have a reef fish permit.
Okay?

Now under grouper, because of the new language in the Magnuson,
substantially fished or substantial participants, they looked at a lot
of different things, but they said, you know, just because you don\'t
have a reef fish permit, you can still sign you new allocations because
you ran a fish house, you ran a boat and motor shop. So you can buy the
shares. It\'s still kind of convoluted, but the fact of the matter is
that permit is still there. To fish in this fishery, you got to have
that permit. You can own shares, you\'re a substantial participant,
we\'ll assign you shares, but you just can\'t fish on it.

MS. LOWMAN: So I guess to follow up and in the snapper after five years,
anyone in the U.S. can ‑‑ I could buy shares? And the same with grouper.
So that wasn\'t the conflict in that thing that says to hold, acquire or
use?

MR. STEELE: That wasn\'t in existence for the red snapper, but it was
with grouper. So they took a little bit broader view of this thing that
we could assign new shares to other people. We didn\'t have to do that
on the red snapper. But it\'s still ‑‑ I mean, I\'m not sure what it ‑‑
well, I guess it does do some good. You can make a living selling those
or renting those allocations out, like they do in red snapper or
grouper. You just can\'t fish without that permit until that permit
requirement goes away, which I don\'t see it doing. That to me is like
the Magnuson‑‑ that, you know, you can do all this other stuff, but you
still go to have that permit.

MR. BILLY: Yes, I think we\'ll move on. Next we have Bill Tucker, who I
understand is a commercial fisherman, and is going to share his views on
LAPPs.

MR. TUCKER: How you all doing? My name is Bill Tucker. I\'m a commercial
fisherman out of Clearwater, Florida. I fish with electric reels and
then the reef fish fisher‑‑all groupers, some snappers, some amberjacks,
a few mackerel, but primarily a grouper fisherman. I\'ve been doing it
since 1985. I serve on the Gulf Council\'s Reef Fish Advisory Panel and
the Red Snapper Ad Hoc IFQ Advisory Panel. I serve on that helping to
develop that plan. And I serve on the Grouper IFQ Advisory Panel.

In the beginning I was reluctantly curious about IFQs years ago, and I
was really quite suspicious of them. I\'ve actually come to become an
advocate of IFQs. I can tell you that there are two things that did help
me from a fisherman\'s perspective on IFQs. And the first one is getting
over the envy factor, the people having fishery resources allocated for
their use. And I find that this is pretty widespread in the fishery,
that one guy gets 100,000 pounds and I get 20,000 pounds and there seems
to be this natural envy that comes up. And when you feel that way,
you\'re really blinded to any type of objectivity. So when you can get
to the point where you say, \"Listen, as long as I can do what I\'ve
been doing, what difference does it make what this guy\'s doing?\" And
then you start to open your mind to the opportunities ahead of you. And
when you do that, then I think you can begin to look at the fishery
instead of a fisherman\'s point of view in white foods, but you tend to
look at them more as a manager.

So I guess my little presentation is going to start with a rough
overview of reef fish, and I\'ll talk about the grouper fishery a little
bit, I\'ll talk about the snapper fishery, and then I\'ll try to
intersperse with some positions and positives and negatives, maybe some
recommendations.

I\'m going to use my fisherman\'s PowerPoint here. So if the Gulf of
Mexico is like this with Florida, the snapper fishery seems to be
concentrated up in here. And then the shallow water grouper fishery
seems to be up in here. The deep water grouper fishery ‑‑ it looks like
a big Venn diagram and everything over‑ crosses. So, anyway, now we got
a black pen.

Anyway, so your snappers are up here‑‑ but snappers, this is their
primary range, but they also bleed down here in Florida, this being
Florida. And your shallow water groupers kind of bleed over into the
snapper fishery a little bit, and your deep water kind of bleeds into
both of them.

So when Phil was talking about class 1 and class 2 permits, the class 1
permits had a 2,000 pound trip limit. That was mostly the guys up here
in the Northern Gulf. The guys that got a class 2 red snapper permit
were mostly on the West Florida shelf and we call them mostly is
by‑catch. Of course the deep water grouper, they probably got ‑‑ some of
them had class 1 permits and some of them probably had class 2 permits.
My percentage was .00151 percent, and I think that gave me something
like 351 pounds.

And how we talk about ‑‑ there are terminologies in the grouper
fisheries. You have your shares, and that\'s a percentage. And then you
have your ‑‑ this will be your quota. So your shares multiplied by your
quota gives you your annual allocation. So when I talk about allocation,
or I forget to leave the annual part on it‑‑ but the allocation is what
we get issued per year. So mine is .00151 percent times the two‑and‑a‑
half million pounds is about 351 pounds. I\'ve bought and sold a bunch
of allocation from fishermen and I know most of the class 1 permit
holders who had a lot of allocation, and I\'ve purchased that for
myself, used it as by‑catch and I\'ve also purchased it on behalf kind
of as a broker for other fishermen. And that\'s been a big help.

As Phil was saying, you know, there is a shortage of it. They cut the
TAC on red grouper, or red snapper. They cut it by 45 percent. So the
guys that were used to making their living catching snappers were
basically cut in half. So they\'re using everything they\'ve got and
don\'t have enough. So it\'s really no wonder that the available
allocation for us down here to deal with your bycatches is a shortage.

Now, you know, I laid all this stuff out and I tried to organize it, but
I\'m obviously not following it. It\'s been difficult to get, but if you
compare what we have now, I\'ve got enough to cover all my red snapper
by‑catch. I don\'t have a problem. My red snapper by‑ catch has gone
from quite a bit down to zero because I purchased it. Because there\'s
not much, supply and demand comes into effect and the price of it\'s
pretty high. So snapper\'s running about four‑and‑a‑quarter, four‑fifty
a pound. We\'ve been paying between two‑fifty and three bucks a pound
for the allocation. Well, there\'s a lot of resistance of people paying
that kind of money, you know, to catch a fish that they used to catch
for nothing. But their memory kind of fades them somewhat because if you
go back to the old system, it was only open for 80 or 90 days. So most
of these, they were throwing the fish back anyway. And because they
resist purchasing the allocation, they don\'t make any money. They\'re
wasting fish.

So it makes sense, even if you pay three bucks a pound for the
allocation, I mean, you\'re standing there on your boat, you\'ve got a
red snapper in your hand. And it\'s a \$4 a pound fish. It\'s ten
pounds. It\'s a \$40 bill standing in your hand. So, you know, and I
don\'t mind spending 20 bucks to keep 20 bucks. You\'re spending 20
bucks to keep 10 bucks. It\'s still a 30 percent return on your money to
the boat. You\'re not wasting it. And it comes in and it pays for fuel
and it adds to our revenues. We\'ve got it there anyway. So that\'s a
little bit of insight there.

So anyway, for snapper we\'ve got directed snapper fishermen and
by‑catch snapper fishermen. For grouper, we\'ve got directed grouper
fishermen and by‑catch grouper fishermen. So when I talk about by‑catch
fishermen, that\'s what I\'m talking about.

The grouper fishery, it\'s a fully‑developed fishery. It\'s split up
between shallow and deep water groupers, roughly based on depth, but
it\'s defined by species. And there are some crossover species like
scamp, but that\'s covered. We also have tilefish and tilefish are also
included in the grouper IFQ coming up.

We\'ve had commercial quotas for deep water grouper. We\'ve got
commercial quota for all the shallow water groupers put together. We\'ve
got a commercial quota for red grouper, and this coming year we\'re
going to have a commercial quota for gag grouper. What has happened in
the past is when you hit any one of these commercial quotas the season
shuts down. And commercial quota for deep water groupers has been met
each of the last several years and that fishery closes. Of course when
the fishermen that are in a directed fishery for on species, when that
closes, they shift effort into some other fishery, and an effort into
that.

All of this stuff Phil covered. We\'ve got about 1,000 permits in the
fishery. I think there\'s about 300 of them catching about 90 percent of
the fish. We have a lot of latent permits in the fishery. When we get a
good year class of fish, this latent effort kind of comes to fruition
and we end up with more quota closures.

We certainly have overcapacity in the fleet. And really, one of the most
important things from a fisherman\'s point of view is having a
year‑round season. I mean, I\'ve said it before that when tourists come
to Florida and they\'re looking for ‑‑ from any state, they\'re looking
for fresh local seafood. When the season\'s closed, it\'s basically a
sign that the fishery is mismanaged, or something\'s wrong. You know,
when they can come down to Florida and consistently get grouper on the
menu, that\'s a good sign. It\'s good for fishermen, because the
fishermen are in the marketplace. We\'re actually competing in the
marketplace. When our seasons are closed, we\'re out of the market.
Okay? We\'re in a really poor competitive situation because all the
competition from overseas comes in and the import dealers come in and
they say to the customers, you know, \"Look, Mr. Restaurant Owner, you
know, these guys have proven that they don\'t have a reliable supply in
the marketplace. We\'re going to come in and we\'ll provide you a
reliable supply.\"

So, you know, it\'s crucial that ‑‑ year‑round seasons are one of the
things we\'re trying to solve with these IFQs.

In the grouper fishery, the Council initiated a control date for
landings associated with IFQ allocation. We had a couple of closed
seasons then they implemented this control date. During this time the
grouper industry went to Congressman Young of Tampa, or at least our
local Congressman to secure some Congressional funding for a buyout. The
Council later developed amendment 29, and the objective was to reduce
overcapacity and rationalize effort in the grouper fishery. Amendment 29
considered days at sea, limited entry, permanent endorsements, buyout,
status quo and IFQs. And the IFQs were selected as the management tool
most likely to reduce overcapacity and rationalize effort.

Since then the Council put together an AP and the AP and the Council
together developed a grouper IFQ plan. That\'s going to go to referendum
here in a couple weeks, and if all goes well should be implemented by
January 2010. Okay. That\'s an overview of the grouper.

Now with red snapper, it was overfished, the fleet was overcapitalized,
there\'s heavy recreational participation in both the grouper fishery
and the red snapper fishery. Years ago the Council developed an IFQ for
the red snapper fishery. Magnuson put a moratorium on it and put a stop
to that. And then since then they did limited entry and endorsements in
class 1 and class 2 permits. We had quota closures. They tried
everything; none of it worked. The more they did‑‑ like Phil said, they
did everything but drill holes in the bottom of the boat. That\'s about
right.

When they went to the endorsement and the class 1 and class 2 permits
that implemented trip limits, it\'s almost like it changed the
psychology of the fishery, because you were limited to 2,000 pounds,
there were only certain people that could catch the 2,000 pounds, and it
was go out and get it and come back. And it kind of became a race to see
who could get the most, 2,000 pounds at a time. And it spawned this
derby, and it just resulted in really short seasons and we could never
satisfy the marketplace. We couldn\'t stretch it out, and because we
were flooding the market on these little 10‑day openings, all the fish
were coming at one time and the price would just go in the dump. And,
you know, when the price went down, the fisherman\'s only response is,
\"Well, I\'ve got to go catch more.\" So they\'d go catch more and
they\'d further flood the market and further drive the price down, and
it was just a complete catastrophe.

On the size limit, red snapper had a size limit, and the size limit‑‑
because of that, we had high discard rates and high discard mortality.
We had quota closures. They were throwing a lot of fish back. And this
discard‑‑ another interesting thing: the directed snapper fishermen were
throwing back so many fish, and they were talking about almost a river
of fish flowing away behind the boat. And it was during this period that
it seems to me that the porpoises learned how to eat these fish going
back down, and then I guess they got a real good taste for it, because
after a while they started eating them on the way up. And it\'s really
become a problem. So we kind of trained them with some bad behavior.

During the closures the snapper boats would migrate to other fisheries,
shifting it to other places.

So anyway, the Magnuson Act‑‑ the MSA moratorium or IFQs expired. The
Council developed a red snapper IFQ, and largely it\'s been very
successful.

Now as far as, let\'s see, unexpected events. Because the timing of the
implementation of the IFQ came at the same time with the 45 percent
reduction in the TAC, there were a lot of fishermen out there that said,
\"See, I told you so. Now I\'m catching half of what I was catching
before; it\'s all the fault of the IFQs.\" So there\'s been a lot of
dock talk and trashing the IFQ. Our problems are all from the IFQ. But
the truth of the matter is, is that a reduction in opportunity to catch
fish is because of the reduction in TAC. It\'s really got nothing at all
to do with the IFQ. I get tired of making that argument, but I\'d
figured I\'d make it here in case some of you hadn\'t heard it.

MR. DiLERNIA: How has your price changed? What\'s been the change in
price?

MR. TUCKER: Change in price?

MR. DiLERNIA: Yes.

MR. TUCKER: The price has gone up. Price has gone up, or at least
stabilized. We don\'t have these huge swings. It\'s been pretty steady.

MR. DiLERNIA: So your landings are down, but your price is up?

MR. TUCKER: Landings are down, price is up. I\'m making more money on
red snapper now than I ever have. But I\'m a by‑catch fisherman. And I
think most of the other guys, even the directed fishery, are making more
money.

Let\'s see. I talked about the allocation available for by catch is a
little bit scarce. Again, the function of a reduction in the TAC.

Let\'s see, and as far as predicted changes, yes, the prices have
stabilized. The fleet is somewhat consolidated. It\'s been a voluntarily
consolidation. Nobody got kicked out of the fishery with limited entry
or endorsement programs where they didn\'t meet a certain catch
threshold to qualify. So I got 351 pounds. I\'m in. You know, I\'m
buying allocation. I\'m trying to expand it.

Also, there\'s‑‑ consolidation happened in red snapper prior to the
implementation as well as after the implementation. People saw it
coming, they purchased permits with catch history and, you know, tried
to preposition themselves for the IFQ.

Bycatch fisheries purchased allocation. I have done that.

As far as the reduction in discard mortality, and Phil talked about
that, yes, the reduction in the size limit has had a major effect on
reducing discard mortality. But, it\'s the IFQ that has allowed that to
happen without driving it derby. So what I mean is that if we had gone‑‑
if we had reduced the size limit prior to IFQ, with the catch‑ability of
those small fish so high, we would have caught that quota very quickly.
So it\'s the IFQ that allows the reduction in the size limit not to
result in a derby fishery.

Again, a year‑round fishery is very important. With the IFQ, the
fishermen are timing their trips with the weather and market conditions.
Supply finally has become somewhat of a function of demand.

Lessons learned. Let\'s see. Control dates. Control date was real
important. Our Council has a history of reneging on control dates or
going back on them. Anyway, the control dates are important. We had a
control date, and we came in really pretty soon behind it and we started
an advisory panel, and we\'ve been developing this plan shortly after we
had the control date. There were a lot of people who were hedging
against that. The control date is in primarily to discourage people from
adding effort to the fishery. And with the Council\'s history of not
following their control dates or changing them, a lot of people just
hedged against them. They entered the fishery, they invested money, they
threw that heads‑up to the wind, hoping that the Council would, you
know, change their control date and now they\'d be in. Fortunately, the
Council did stick to it this time. I think they\'ve set a good example.
And my suggestion would be that when you set a control date, plan on
coming in pretty quick and developing your IFQ, looking at it to
determine whether that\'s something you want to do. Otherwise, people
are going to hedge against it.

Let\'s see. A couple things I\'ve noticed is it looks like from what
I\'ve seen, the IFQ appeals to people who have a long term vision in the
fishery. People who have a long term vision are trying to buy shares and
allocation. Because they\'re expensive, because you have to amortize it
over, you know, five to seven years, this purchase, it\'s a big chunk of
change to invest in it. Shares particularly, they\'re very expensive.
You need to have a long‑term vision. So consequently, the people who
have a long‑term vision are the buyers, and the people that don\'t have
that tend to be the sellers. They want to get out. They want to take
their asset and they want to sell it and move on. That works out okay.

MR. BILLY: Okay.

MR. TUCKER: Transferability in IFQs are very important. That\'s really
the linchpin that makes the whole thing work. If it weren\'t for people
being able to transfer ‑‑ my being able to purchase allocation from
somebody else, the system just wouldn\'t work.

Also as the fee consolidates, there\'s fewer boats, there\'s fewer
fishing opportunities. And as a result of that, it tends to
professionalize the fleet. The jobs that are available tend to go to the
most qualified and a lot of the ‑‑ it tends to clean up the docks quite
a bit.

MS. FOY: You just touched on the‑‑

MR. BILLY: Hold on.

MS. FOY: Has there been any new blood able to buy into your fleet, or
can crew members ever afford to move up and become boat captain and
share‑owners?

MR. TUCKER: Well, my crew member has moved up to captain, and he\'s
running the boat, and he\'s buying and selling allocation. Actually,
buying and using allocation. I know I have another guy that worked on my
boat for a while, worked on a buddy\'s boat, and he has since gone and
purchased a grouper boat in advance of the IFQ.

MS. FOY: So you think that trend will continue where the fishermen will
continue to actually be owning the stock, run the boats?

MR. TUCKER: Well, I don\'t know about owning the stock, because I don\'t
think we really do. I think we own the permits and the permits are ‑‑

MS. FOY: Well, it\'s the quota. The fishermen are going to be the ones
that actually ‑‑

MR. TUCKER: Well, you know, I hope so. I mean, all we are is truck
drivers. We own a boat. We own boats. We go out and catch fish. We bring
it back. It\'s a resource. I mean, it belongs to you every bit as much
as it belongs to me. And if you don\'t fish and catch your fish to eat,
and you eat fish, then chances are if you\'re eating wild Gulf of Mexico
seafood, you\'ve got it all through a commercial fishing boat. So
that\'s all we do, is we go catch the fish and bring it back to the
marketplace. So the commercial allocation, I really think is a misnomer.
I think it should be called the consumer allocation because that\'s
where it\'s going. The recreational sector has demonized us quite a bit,
almost as if we\'re people that don\'t have to fish under the
recreational bag line. So they\'ve mis‑characterized the commercial
fisherman. You know, I think that there\'s certainly a place for
recreational fishing and commercial fishing, and I think that because
there\'s ‑‑ I think the division does make sense.

MS. FOY: But you do feel that the demographics are not going to change
and your fishery will continue to have a ‑‑

MR. TUCKER: The demographics in the fishery ‑‑ well, they will change,
because you\'re consolidated.

MS. FOY: Well, no, I ‑‑

MR. BILLY: Okay.

MS. FOY: Let me preface this. I was a crew member in Alaska, and I
always had the feeling that if I stuck with it long enough, I could move
up through the fishery to be an owner, the quota owner. So do you still
feel like that\'s the case?

MR. GILL: I do. And when you look at red snapper and you look at ‑‑
prior to IFQs, we had these class 2 permits which the higher trip limit
permits, and they were going for \$50,000 to \$70,000 just for the
permit. So there was a barrier to entry in the red snapper fishery prior
to the implementation of IFQs, very similar to what we have with IFQs.
So I think that as you\'re in fisheries, particularly ones that are
meeting the quota, and particularly ones that you\'re targeting a fish
that\'s as dumb to a hook as the red snapper are, and those things will
‑‑ I mean, they\'ll eat a bear, so when you have fish that are easy to
catch like that, catch‑ability is high and they\'re high‑dollar fish,
and again it tends to fit the price of a permit up. Whether the permit
is, you know, a relatively open access permit or whether it\'s limited
to a percentage of the allocation. So yes, I think there are ways. But
yes, you know, any time it has value or it\'s more expensive, it\'s a
higher barrier to entry. I think one of the ways that you can do that is
to structure your IFQs so that you can collateralize the share and where
a bank will actually lend money on it, and that way it levels the
playing field so that you could go to the bank and if I had cash and you
didn\'t, you could go to the bank and have an equal shot at it as I do.

MR. BILLY: Okay. Have you covered your essential points? Because there
are several people now in the queue to ask you questions.

MR. TUCKER: Yes, I have a couple more things, recommendations, and
that\'s what you want to hear?

MR. BILLY: Yes.

MR. TUCKER: Cross‑sector trading between recreational and commercial, if
you\'re looking at that, I would say only do it if it\'s a two‑ way
street, otherwise you\'re just bleeding it off from one sector into
another.

And I would also recommend anybody developing these to read that book
"Sharing the fish" by the National Research Council ‑‑ what is it ‑‑
national ‑‑ yes, something like that. That\'s a good book.

And again, the shares themselves, I think it\'s a consumer allocation as
far as being open to any American, you know, I would like to see that
stay in the commercial sector so that it can go to the consumer. So,
I\'ll wind it up there.

MR. BILLY: Okay. Hold on. Stay up there a second.

Martin?

MR. FISHER: Oh, I was teasing.

MR. BILLY: Okay.

Heather?

MS. McCARTY: Yes, thanks, Mr. Chairman.

I had a question about something I think you said about the grouper
program, which is a long ways back, but I didn\'t want to interrupt you.
Did you say that there was overcapacity in that fishery ‑‑

MR. TUCKER: Yes.

MS. McCARTY: ‑‑ and latent permits?

MR. GILL: Latent permits, yes.

MS. McCARTY: You did? And then you said that reduction by buyouts was a
part of the list of choices for the red snapper?

MR. TUCKER: Yes, we consider buyouts in the grouper IFQ ‑‑ in amendment
29. The purpose of amendment 29 was to reduce overcapacity and
rationalize effort. And the alternatives for which we chose to
accomplish those goals included a buyout.

MS. McCARTY: Was amendment 29 the grouper or the red snapper?

MR. TUCKER: Snapper was 26; grouper\'s 29.

MS. McCARTY: So you did have a buyout ‑‑ you did not?

MR. TUCKER: We considered it.

MS. McCARTY: You considered it, but you didn\'t do it?

MR. TUCKER: We rejected it.

MS. McCARTY: And why?

MR. TUCKER: We\'d had some previous experience with an industry‑funded
buyout that was not widely accepted and questioned by a lot of people.
And the first phase of the industry‑initiated buyout was limited entry
that essentially kicked out the bottom, I think it was 30 or 40 or 50
percent of the participants. It kicked them out with limited entry. So
we had a very foul taste in our mouth about that. And we didn\'t think
it was going to really work, because what are you buying? I mean, when
you buy somebody out, what are you buying out? In the industry buyout,
people were selling out based upon their catch history, and then
everybody that was left in the fishery had to pay it back with five
percent of their gross revenues for 35 years. So we knew what we were
buying when we were buying catch history. What were we getting? We were
getting people off the water, but we weren\'t getting any catch history.
We paying for catch history, but we weren\'t getting it.

So if you\'re paying to buy catch history out of the fishery, we ought
to be getting what we pay for. And if you\'re doing that, why don\'t you
just have an IFQ program? You don\'t have to mandate that anybody leaves
and you essentially have a voluntary buyout within the fishery with an
IFQ.

MS. McCARTY: So are people are okay with the fact that there\'s latent
permits that just show up when there\'s a higher allocation to that
fishery, that\'s an okay deal with people?

MR. TUCKER: Well, that\'s the way it\'s been and we really haven\'t been
‑‑ and over the years, we\'ve stayed within the quotas. But as some of
that effort has expanded and we\'ve hit these quotas, and when these
good year passes come through a couple years in a row, we hit them hard
and we had closed seasons, a lot of the guys behind the totem pole said,
\"Oh, we got a problem on the low end. Let\'s cut them off.\" Well, you
know, we came with the IFQ. We said, listen, we don\'t have to cut
anybody off. Everybody can participate. Look at the catch history. If
these small producers are catching, you know, have a history of catching
it, let them maintain that percentage. And the guys at the top end, let
them maintain that percentage. So it doesn\'t matter. Everybody
maintains a percentage.

The nice thing is that you allocate the reductions in harvest and
reductions in TAC. You allocate it proportionately among the fleet.
Otherwise, it\'s a race, so I can catch everything I caught last year in
a reduced TAC and you, if you don\'t hustle, aren\'t going to catch
anything because I\'m going to catch them before you do. So the
incentives are all wrong in that type of system. So yes, the latent
effort is a problem in an open system, an open access system. Basically,
it is a problem.

MS. McCARTY: Okay. Thank you.

MR. TUCKER: This is how we address it.

MR. BILLY: Okay. Thanks.

Cathy, did you ‑‑

MS. FOY: No.

MR. BILLY: Okay. Bob?

MR. FLETCHER: Yes, I appreciated your comments. Good perspective for us
to hear.

I was curious, how big is your boat? How much fish do you carry? And
under the IFQ system, do you see the opportunity to pursue other
fisheries kind of at the same time? You run a trip for snapper and
grouper and then go fish something else so that you can even augment
your annual revenues?

MR. TUCKER: Well, I have a 40‑foot boat. We run seven to ten‑day trips.
We average between 2,000 and 3,000 pounds a trip. About 65 percent of my
catch is red grouper. I don\'t know, probably 30 percent of it\'s gag
grouper and some snapper.

What do I see in the future? I\'d like to be able to continue what
we\'ve been doing. I\'d like to catch more fish. I\'d like to see the
catch per unit effort come up. I\'d like to be able to use my grouper
shares, my grouper annual allocation as a bargaining chip in my
negotiations to purchase snapper allocation. Because right now if you
got snapper, if we both have reef fish permits and you have red snapper
shares and I want red snapper shares to address my snapper by‑catch, I
need to talk to you. But because you have a reef fish permit and red
snapper shares, and we don\'t have a grouper IFQ, but you don\'t need
anything from me to deal with your grouper bycatch. So in an IFQ system,
you\'re going to ‑‑ you know, if you don\'t have a lot of grouper
allocation, you\'re going to need to talk to somebody like me for my
grouper allocation and I\'m going to need to talk to somebody like you
for your snapper allocation. And now all of a sudden, you know, we\'re
kind of on the same page or we can work together a little bit better
from my point of view.

MR. FLETCHER: And other fisheries, do you fish other ones besides
grouper and snapper?

MR. TUCKER: A little bit of amberjack. We catch a few mackerels. But
primarily we\'re engaged in the reef fish fishery.

MR. FLETCHER: Okay.

MR. BILLY: Thank you. Martin?

MR. FISHER: I don\'t know if this is the right time ‑‑

MR. TUCKER: It\'s probably not.

MR. FISHER: We discussed yesterday, or it\'s on the agenda that we have
60 minutes of discussion, and I\'d like to offer something to the
Committee on the national level of what we might be able to propose to
this or as a recommendation to ensure that future IFQs work smoothly and
implementation, and the prosecution of them is to the full benefit of
the fishermen that fish and the consumer. And I think those present here
would really help with that, if this is indeed what we ‑‑

MR. BILLY: Okay. Let me come right back to, there are a couple more
people on the list and then we\'ll hear what you recommend.

Erika?

MS. FELLER: Did you find that after the IFQ went into place there were
fewer fishermen in the fishery? Did that have any kind of impact shore
side? You know, are there the same number of ports out there, you know,
with the processors who are receiving fish, or did effort tend to
consolidate in some communities and others ‑‑

MR. TUCKER: Yes, I think there is some of that. Of course I\'m on the
West Coast of Florida and so my perspective is really kind of isolated
there. I have heard that there has been some consolidation, and that
some of the boats are going to a different fish house. Of course the
storms have played an impact on that too and, you know, decimated a
bunch of structure along the Gulf Coast, and that\'s got something to do
with it. So how much is infrastructure and how much is consolidation? I
really don\'t know. I imagine it\'s some of each. I\'m sure there\'s
more to that answer, but I forget it.

MS. FELLER: Did that question come up at all during the debate over the
IFQ?

MR. TUCKER: Well no, I think we knew that it was going to consolidate
and that\'s the idea. It really hasn\'t consolidated all that much. I
think because a lot of people, you know, that have ‑‑ that were given
these small allocations, you know, five pounds, a hundred pounds,
three‑hundred pounds, and we use that for our by‑catch. So we want to
build that. So, you know, I mean, I wouldn\'t want to see it
consolidate, you know, too much less. I wouldn\'t want to see those
permits or those IFQ accounts vanish because these guys that are fishing
for groupers and amberjacks, you know, really need to get some
allocation. They need to have an account in which to put it.

I would say that, you know, I hear this discussion about sea lords and a
guy that has red snapper allocation, and you know, and I hear a lot of
people, \"Oh, he\'s a sea lord, he\'s no good. He\'s this, that and the
other.\" Well, that guy, you know, that sea lord is probably the guy
I\'m buying my red snapper allocation from to deal with my by‑catch, so
I think he\'s a saint. And, you know, and that\'s fine. You know, the
fact that he gets some remuneration, you know, for sitting at the dock
is fine. Because he\'s off the water, he\'s not impacting the resource.
I\'m on the water and I\'m impacting the resource whether I keep them or
throw them back. But if I keep them, I\'m not throwing them back dead.
And if I keep them, I\'m counting them. If he\'s at the house in his
rocker, he\'s not on the water impacting the resource. And so far, it
looks like it\'s been pretty good because snappers are coming back
gangbusters and, you know, I hope we can see this in the grouper fishery
when we get the grouper IFQ in, because it\'s a beautiful thing in the
snapper fishery because the fish are really coming back strong.

MR. BILLY: Okay. Tom?

MR. RAFTICAN: Yes, a couple of things. Phil was showing graphs on ‑‑ and
some of the fisheries aren\'t coming back and really look like they
weren\'t ‑‑ some were responding, but not all were responding.

MR. TUCKER: You mean the one with the blue line that came down and then
went back up?

MR. RAFTICAN: Yes, there were three or four lines. One line came back
up, the rest ran pretty consistent. One of the things you said before
and kind of alluded to it right now is the river of \[dead discarded\]
fish behind the boat. Does this system cause part of that, or is there a
way that you can alter the system that we don\'t have to face the river
of fish behind the boat?

MR. TUCKER: This fixed that. It has fixed that system, because the fish
that were behind the boat were the regulatory discards that were less
than 15 inches. That was the size limit. We had that in the old system.
There was a 15‑inch size limit. So anything over 15 inches went back.
And because it comes up from depth, it embolizes. So it\'s holding gas.
And when it goes over the side, if it\'s not properly vented or it
can\'t swim down, it just drifts off. That\'s what we had. It was the
reduction in the size limit that let us keep those fish instead of
wasting them and throwing them back. We got them on the boat and we can
keep them.

But we did the size limit after the IFQ. Had we reduced the size limit
prior to the IFQ, what would have happened is all those fish would have
come to the dock, they would have counted against the quota, then the
quota would have been closed in a month or two months. Then the rest of
the year, we\'d be encountering those fish in our fishing activities and
we\'d be throwing them over the rest of the year instead. So the IFQ has
allowed us to reduce the size limit on very catchable fish without
causing a derby. If we\'d reduced it earlier, everybody would have raced
to catch them and they would have kept everything that came over the
rail over 13 inches. Do you follow me?

MR. RAFTICAN: Yes.

MR. TUCKER: So we have filled the quota and then as we were targeting
groupers, the red snapper season would have been closed. So every red
snapper we caught in the grouper fishery, it would go over the side
instead. So you\'re just squeezing the balloon. You know, you squeeze it
here and it all ends up over here. In the IFQ system, we don\'t throw
the 13‑inch fish back. We keep them and we count them because they\'re
easy to catch. You know, if we race out and catch them, we\'d burn up
our individual allocations and then we\'re off the water. So we stay
within the quota and the incentive is to stretch the harvest out over
the full year. Am I missing something here? You\'re following me?

MR. RAFTICAN: Yes.

MR. TUCKER: I might not be explaining it very well. It\'s what allows
the reduction, the reduced size limit not to result in a derby.

MR. RAFTICAN: Do you still see the way we\'re doing in your grouper
fishery?

MR. TUCKER: No, we don\'t have that in the grouper fishery. It\'s a
different fishery. The grouper don\'t aggregate the way the red snappers
do. Snappers you can drop down and you catch an awful lot of them in one
spot. Groupers, and they use multiple hook rigs on the snapper. They
might use a 30‑hook rig dropping down and they bring up 30 of them at a
time. In the grouper fishery, we\'re using one or two hooks. So while we
do have undersized fish, you know, if we drop down and catch, you know,
four or five undersized fish in a stop, we get up and move. We drive
away from it. That\'s in the vertical line fishery.

In the longline fishery it\'s a little bit different because they\'re
stringing out a 1,000 hooks at a time. So if they string in with a bunch
of small fish, they do bring them up. But they\'re not coming ‑‑ you
know, a lot of longliners.

MR. BILLY: Tony?

MR. DiLERNIA: Pass. Thanks.

MR. BILLY: Okay. We\'ve got one more presentation. Alan Risenhoover is
going to say a little bit about plans and funding. So the question is,
should we do that and then come to your recommendation? Why don\'t we go
ahead and get that done and then ‑‑

MR. RISENHOOVER: Yes, and I\'m going to be hopefully painfully quick.

Okay. So I\'m going to be real quick, because I think the discussion
that was going on on the specifics is really important. So you don\'t
want the guy from headquarters to come kill that. But that\'s partially
my job. And but what really strikes me is kind of how far we\'ve come.
You know, in the mid‑\'90s or the early \'90s when I started working
with the Fisheries Service, you know, IFQs were kind of the anathema.
Nobody wanted that. It was awful. The Congressional moratorium in \'96
and it continued through the appropriation bill. So I think we\'ve
really come a long way here on those. And then we\'ve got these pretty
much developing everywhere.

So what I\'m going to do is to try and bring this up a level and talk
about around the country and some of the things the Agency is doing to
try and stimulate these programs.

A little bit of DC speak here. Drivers for LAPPs. You\'ll notice none of
these up here are what we\'ve been talking about. We\'re now getting
drivers from the fishermen. We want these to make sense for a variety of
reasons that Bob and Phil have talked about here of why these are a good
things. But in the budget world, we have drivers. Right? Gary loves
drivers.

So here are the drivers we use. The main one I\'m going to talk about is
the goal to double the number of these programs. And the initial problem
we have is a definitional one. We started out saying we were going to
double the number of LAPPs. Well, then Congress passed a bill and they
defined LAPPs and it wasn\'t quite what we were counting. So we may be
backing up a little and call them dedicated access programs or
market‑based programs, or something just to kind of try and keep the
counting going.

So one thing we want to look at is what kind of what is the value of
these? And so a year or so ago we got a group together and looked at the
value at the time on how much these fisheries are worth to try and start
quantifying how much of the U.S. fisheries are under a LAPP or a
dedicated access program management. The numbers here are from 2007. We
were at about 700 million. By the end of 2008, we\'ll be a little bit
above that. I\'ve got some individual numbers, if you want to see that.

But looking at the programs over the horizon that are coming, we think
we\'re going to be up to about 850 to 900 million ex vessel value on
fisheries caught under LAPP programs. If you think of the current about
4 billion ex vessel value of the U.S. fisheries, we\'re up to about
one‑fifth. And we did it on value because it\'s kind of a Department of
Commerce thing, right? Value? And if you start doing it on things like
landings and pounds, you\'ve got some very low value fisheries with high
poundage. And the Alaskan pollock \[volume\] kind of dwarfs everything.
So value we thought was a good way to look at this.

And then the bottom bullet here is kind of what we\'ve been hearing
about, and it\'s good to hear kind of the real world examples of how
this is to help fishermen from both Phil and Bob. And, you know, I think
Phil said the value of snapper went up 15 percent. So, you know, if we
come back in a year or two and look retroactively at this, you know,
maybe we\'re already up to a billion. Maybe we\'re at more of a quarter
or even more on value. So that\'s part of the drivers and the
requirements that we try to say this is why we\'re trying to do this.
Look at the value the nation is getting from these programs, as well as
a steady supply, higher quality fish product.

So funding is a big deal because we\'ve mentioned that for these
programs there\'s a three percent cost recovery on the value of the fish
landed. That doesn\'t really cover the costs of these programs, or it
may not cover the cost of these programs. The other problem is you
don\'t get that three percent until you\'ve implemented it. So these
are, as you can attest, I\'m sure, very detailed hard‑to‑develop
analysis‑driven, got‑to‑get‑the‑infrastructure‑in. So how do you get
these programs started when they\'re so expensive? So what we\'ve done
is over the last few years we\'ve built up a budget request that now
totals \$6 million in \'09 to get these programs developed. So if we can
get an \'09 budget that funds the full \$6 million, we\'ll allocate that
out to our field units to help them and help the Councils develop these
programs around the country.

Now that \$6 million, the plan with it is to kind of roll it over time.
So if you\'ve got the grouper program being developed in the Gulf, they
would get some money until it\'s implemented. Then the three percent
kicks in and helps them fund that. I can now move that funding to a
different region and have another one develop.

So part of the problem we\'ve seen is, one, getting the money, and then,
two, getting that rolling to go, because sometimes three percent that
they\'re collecting doesn\'t cover it. So in \'07, we got a million of
that 6 million total. Last year, \'08, we got 1.2 million of it and our
budget request is for an additional 4.8. Four‑point‑eight plus
one‑point‑two equals the six.

So this relates to our goal where we set a goal within the
administration to double the number of these programs by 2010. That
became kind of our performance measure and the driver and everything. We
talked to OMB or the department budget people. It was like this is our
goal, we got to meet it and it costs money. Since we didn\'t get the
full amount the last couple years, we\'ve pushed our performance measure
back. We said, okay, you didn\'t give us the money. We\'re not going to
have 16 in place by 2010. It\'s going to be 16 in place by 2011.

And then I think this is probably the final one I\'ll show. These are
the programs we have right now. There\'s the original eight we started
with in 2006 that were implemented. We\'ve added three in 2007. We added
one in 2008. And then for the purposes of tracking to get to our 16,
we\'ve added these four others, which you can see up there. Tilefish.
The Gulf of Mexico grouper we\'re counting on being in place by 2011.
Comes in by 2012, that\'s good. The West Coast trawl IQ program is on
there. There\'s also a couple that are developing that may be in place
by 2011. I have had it put up there. One is the general category sea
scallops. The Atlantic sea scallop general category IFQ has been
approved. So there\'s at least 17 or 18 that I think we can reasonably
get to by 2011.

So that\'s kind of where we are. And again our budget is pending. Under
the CR, it\'s unclear whether we\'re going to be at the 1.2 million
level, or depending on how the budget works out this year, if we\'ll
have the full 6 million.

So I\'m going to stop there. I\'ve got a few more slides that are the
individual values of these fisheries, but I think that\'s probably good.

MR. BILLY: Okay. Martin?

MR. FISHER: Mr. Chairman, thank you.

Alan, how many of these are actually in development?

MR. RISENHOOVER: All through 2008. We\'ve got 12 implemented.

MR. FISHER: Okay.

MR. RISENHOOVER: And we\'ve made it not just when they\'re approved,
actual implementation. So we\'ve got 12 ready right now.

MR. FISHER: All right. And how many of the other four ‑‑

MR. RISENHOOVER: There\'s four or five. Are all ‑‑

MR. FISHER: Like grouper\'s in play. Are there others in play?

MR. RISENHOOVER: All of them are in play.

MR. FISHER: They\'re all in play.

MR. RISENHOOVER: And like I said, the Atlantic sea scallop has already
been approved. I don\'t know why it\'s up there. So part of this is also
trying to keep track of it.

MR. FISHER: And how many more do you anticipate after that?

MR. RISENHOOVER: We kind of worked with our region to look out. I mean,
there are 20, 22 or so that are at different formative levels people are
talking about.

MR. FISHER: Thank you.

MR. RISENHOOVER: But these are the ones that are actually in play that
we\'ve seen being worked on. And like No. 16 there, the West Coast trawl
IQ, they approved it, or the Council approved it last week. It still has
to go through Secretary.

MR. BILLY: Is that 20 or 22 additional on top of this list?

MR. RISENHOOVER: No, total.

MR. BILLY: Total? Okay.

MR. RISENHOOVER: So we\'re at 16, but there\'s anywhere from six to
eight more that are starting to be developed.

MR. BILLY: All right. Okay. Tony, did you have your hand up?

MR. DiLERNIA: No.

MR. BILLY: Okay. Bill?

MR. DEWEY: Alan, I understand that these are expenses that get set up,
but what I\'m not clear on is whether that three percent cost recovery
is adequate to cover the cost.

MR. RISENHOOVER: Right. And that\'s going to vary by each of them. I can
give you some examples. Surf clam and ocean quahog, we don\'t collect
fees in right now. So the Council is trying to get that up and running.
That\'s about a \$750,000 program. Because of that fishery, it should be
able to cover it. Georgia\'s Bank cod hook and sector, because of the
new Magnuson Act definition, they aren\'t actually LAPPs, so they don\'t
qualify for the three percent cost recovery. So that\'s another bit of
an issue, as these programs develop, if they are designated as LAPPs,
then cost recovery occurs. If they aren\'t, they can still be a broader
market base.

The big one is the Pacific halibut and sablefish fishery. It\'s cost
recovery, instead of doing the full three percent, they charge about
probably two percent.

MR. REISNER: Yes, around two percent. But that one\'s ‑‑

MR. RISENHOOVER: So that one is covered.

MR. REISNER: ‑‑ covered, but some of the ones in the Gulf where the
actual revenues are relatively low, we probably won\'t cover the full
cost of administering it, but from a societal perspective the rents that
are generated in the fishery itself are more than enough to cover the
administrative costs.

MR. RISENHOOVER: So here\'s, you know, the 2006 estimated value of the
fisheries. So like for example, South Atlantic wreck fish, because GAO
came in and did a study and said the cost of that program is like
\$2,500 a year for it\'s collected cost. Well no, it was actually
\$7,000. We probably couldn\'t collect \$7,000 for 7,000. We\'d have to
spend 15,000 to collect it. So, you know, there\'s a little foot
dragging going on. But you can see that the Bering Sea pollock
cooperatives are very big. The halibut, sablefish are very big.

The ones that are coming on. Red snapper is a nine to ten million dollar
fishery. There is some concern on whether that\'s enough to cost recover
everything that\'s been done. So we do look for other appropriations to
help us cover those.

MR. BILLY: Okay. Heather?

MS. McCARTY: Yes, thank you, Mr. Chairman. I just wanted to point out
the Alaska rockfish‑pollock program. It\'s got a five‑year term.

MR. RISENHOOVER: But we\'re counting. I say close off at OMB and ask for
more money. Because, you know, it\'s that performance and results. You
set out your performance, you show results, the money rains down.

MR. BILLY: Bob?

MR. FLETCHER: Yes, thank you. Alan, I was curious, you\'ve done enough
on this and we\'ve worked through the details on enough of these LAPP
programs. So are you going to begin to develop some generalized view of
what might be of value in any future programs and are you kind of
planning putting something out so that you can build the future programs
based on the lessons from the ones that are already in place?

MR. RISENHOOVER: I think we do have something out and it\'s that LAPP
technical guidance that Mark and Lee Anderson worked on. Goes through a
lot of that. It doesn\'t tell you exactly how to do an IFQ or a LAPP
program, but if you\'re going to, here are the considerations, here are
some positive things, negative things, range of things the individual
Councils look at.

MR. FLETCHER: And where is that available?

MR. RISENHOOVER: It\'s on the web.

DR. HOLLIDAY: It\'s on the web and we can have copies.

MR. RISENHOOVER: Yes, so Mark and Lee Anderson have done a good job on
that. And then a I mentioned I think this morning, we\'re also looking,
do we need some more specific LAPP guidance that\'s of a more regulatory
type to say you must do this if you\'re Council and you must consider
that if you\'re a Council, and we\'re still up in the air on that.

MR. BILLY: Eric?

MR. SCHWAAB: Actually my question was similar to Bob\'s, but maybe more
specifically, Alan, you know, some of the technologies or techniques
that have been developed, are you actively working to sort of transfer
them from place to place? And I\'m thinking with things like the
monitoring system with the red snapper that may be sort of applicable?

MR. RISENHOOVER: Right, and Phil mentioned that a little bit. Since
we\'ve had the experience in Alaska, we have some experience in the
Northeast, now we\'ve got a lot of experience in the Gulf, we don\'t
have a formal kind of technology exchange program. We\'ve talked about,
you know, we want kind of a central LAPP database sort of. But again,
the fisheries are so diverse and the programs are developed from the
bottom up. I don\'t know that we\'ll get there. But as Phil mentioned,
you know, we\'ve traded staff between Alaska and the Southeast. Some
folks who were in the Northwest a couple of months ago to talk to them.
We\'ve had a few trips up to the Northeast for more technology exchange
and staff idea exchange on how these are developed.

Phil, anything you want to add to that?

MR. STEELE: No.

MR. RISENHOOVER: So it\'s not a formal centralized program, but we do
try and share the info around.

MR. BILLY: Okay. Larry?

MR. SIMPSON: To that point, you know, establishing it and it seems to be
a good system, it\'s an accountable system, et cetera, et cetera. But it
is a dual system. It exists in the states in the trip ticket program. So
the fishermen are having to do it, having to fill out two forms. What
we\'re working now to try to sophisticate it to merge those into one. So
I mean you\'ve got to establish a program, but then there\'s other
things, nuances that are emerging and so we only have to do it one time.
That\'s just one example.

MR. RISENHOOVER: And just as a final thing, I don\'t know if there are
more questions, just random thoughts, you know, our goal was to double
the number by 2011 now. I think we\'re going to pretty certain to make
that, but just to mention this ‑‑ I think Larry mentioned the EDF report
that came out today, recommends that we get to a 50 percent of the
fisheries in the U.S. have catch share programs by, I think it was 2012.
Something like that. So, you know, we\'ve been searching, what do we do
as our goal beyond 2011. That seems like a fairly high standard to have
that many or at least analyze whether that many should have it, because
we\'ve always said, you know, those are right for some fisheries and
maybe not right for others. And that\'s what the Councils need to look
at.

MR. BILLY: Okay. Thank you.

Back to you, Martin? You had an idea on a recommendation?

MR. FISHER: Well, it\'s more of a discussion and sort of a fleshing out.
Since I\'m deeply involved in reef fishing in the Gulf, I\'ve gotten to
experience on all three levels what it means to be under this IFQ. And
plus I was on the AP that developed the program, and one of the things
we struggled most with in the AP was the [definition of substantial
participant and substantially fished. And I think the Council struggled
with those two definitions as well. And it would be nice that if MAFAC
thought so, that we could ask NOAA to give guidance to the Councils of
what the parameters might be for those definitions.]{.mark} Those words
come out of MSRA, I believe, and there was no definition attached to
them. And it would be a much smoother process for the people involved if
there was some kind of a parameter for those two ideas.

And also, in [terms of implementation of the IFQ, the thing that makes
it work for everybody is flexibility]{.mark}. And unfortunately the IFQ
we\'re under now in red snapper and the one that we propose for grouper
doesn\'t include enough flexibility for the fisherman to optimize his
business plan. And particularly that comes into [banking of
allocation.]{.mark} And I can\'t really figure out the biological reason
why if you\'re allowed to catch 1,000 pounds a year and you only catch
500 why you can\'t add that onto your account for next year. It just
doesn\'t make biological sense to me. And it would be of great benefit
to everybody if we were allowed to have more flexibility without being
penalized either by a reduction in share or whatever. And there [has to
be a better interface between the way the electronic reporting and
enforcement works and what happens at the dock.]{.mark} And I\'m not
sure if that\'s outside the purview of the committee, but there are some
guideline issues here that would benefit anybody that\'s coming up in
the future.

MR. BILLY: Alan?

MR. RISENHOOVER: Well, on the first part of that I think yes, we are
considering some guidelines and substantial participation is one of
those things we\'ve talked about. Can we come up with a definition for
the Councils around the country without ordering one too much and not
enough in another? We need to get a good policy out on cost recovery
program so the Councils can think about it as well. And as the Council
develops, you know, how many bells, whistles do you put on this before
you\'re spending more than you recover. Well on that one, I think
that\'s something the Agency\'s definitely going about.

On the flexibility on the specific program, I think probably Mark\'s may
talk a little bit about that. But to me, just off the top of my head,
that seems like more of a Council decision sort of thing that each
individual Council, each individual fishery would have to work out. I
don\'t know that we would come up, the Agency would call up and say
you\'ve got to have so much flexibility of certain characteristics.

MR. BILLY: Do you think ‑‑

MR. RISENHOOVER: And maybe the fishermen as well, now that fisheries ‑‑

MR. FISHER: Well, it seems like many members of the Committee are
concerned about cost recovery. And perhaps there\'s something that can
be done there. What\'s happened in red snapper is the rent of the
allocation is up to three dollars a pound. And many of the people that
are going fishing don\'t own the allocation. It\'s the owner of the boat
that owns the allocation and he leases his boat out or he instructs his
crew to go catch the fish. So what\'s happening is the owner buys the
allocation for three bucks, the boat goes fishing, the boat gets two
dollars and what gets put down on that piece of paper and put through
the computer is two dollars or less a pound. So the program is suffering
through ‑‑ it\'s not direct fraud, but one can say it\'s right there on
the border line. So maybe NMFS could ‑‑

MR. DiLERNIA: I have a question. Go ahead and finish and then I have a
question.

MR. FISHER: Well, I\'m just suggesting that [maybe NMFS could create a
benchmark for the cost recovery fee that is the market price no matter
what the sale price is.]{.mark} Something like that.

MR. RISENHOOVER: Right.

MR. FLETCHER: Alan, we can\'t hear you.

MR. RISENHOOVER: When I was talking cost recovery, I was talking a lot
about what should those fees go for, because take grouper for example
now, the Agency is investing in that. We can capture what the Agency is
investing in that and then to increment above it is due to the IFQ is
what the cost recovery would be applied on. You\'re taking that to a
different way of how we recover costs from the individual program based
on whatever arrangement to make sure we\'re capturing the true cost or
the true three percent of whatever the ‑‑

MR. FISHER: The true ‑‑ yes, exactly. And maybe there should be a three
percent surcharge on the transfer of allocations as well, because that
would certainly generate for ‑‑ you know, especially in the deficient
scenario like you have with grouper

MR. RISENHOOVER: And those are all things I think the Council can sort
of work on. And so the Agency, you know, we can talk about how the
Councils could or might use that, but it\'s not a requirement of the
Act.

MR. BILLY: Martin, it sounds like a lot of things ‑‑

MR. FLETCHER: It sure does.

MR. BILLY: And we\'ve run up on our coffee break. Let\'s take our break
now and be back in about 15 minutes.

(Whereupon, the above‑entitled matter went off the record at 3:04 p.m.
and resumed at 3:21 p.m.)

MR. BILLY: In our continuing interests in the area of aquaculture, we
decided to take advantage of our presence here down in the Gulf to learn
a little more about some specific efforts that are underway here and be
informed by that in terms of how that might impact our thinking on a
national basis. So before we get into it, I\'d like to invite Sam Rauch
to introduce himself and also to introduce the speakers that will be
covering this subject.

MR. RAUCH: All right. I\'m Sam Rauch. I\'m sitting in for Jim Balsiger
for the rest of this meeting. I\'m his deputy, the deputy assistant
administrator for regulatory affairs. I don\'t know whether Jim
indicated he had been called back to D.C., so I\'m filling in. And for
those of you I don\'t know, that\'s who I am.

We\'ve got three speakers in this particular portion of the panel.
We\'ve got Tom McIlwain, who many of you already know, who\'s the
chairman of the Gulf Council and is going to talk about the Gulf
Amendment which is under consideration still. And then we\'ve got Peter
Smith who will be talking about a pilot aquaculture program to provide
industry perspective. And then following up is Michael Rubino from the
aquaculture program. And we\'ll try to get through the speakers quickly
so we can get to the overall discussion.

With that, Tom?

DR. McILWAIN: Thank you. Can you all hear me back there? I\'m having
trouble with my voice. But let me just say that I\'m happy to be here at
MAFAC. I did a tour on this committee back in the \'80s, early \'80s.
Jim Gilmore was a young child at that time.

But no, it is good to be here and, one, I\'m happy to be able to talk
about aquaculture.

The Gulf of Mexico Fishery Management Council is in the process of
actually developing an FMP, or fishery management plan. It started out
as an amendment. We were looking at amending all of our fishery
management plans and to somehow allow aquaculture here in the Gulf of
species that are managed by the Council in the Gulf waters and it\'s
evolved into a fishery management plan for a lot of different reasons.
And I think it\'s a much cleaner way to go about it, rather than trying
to amend all the plans. To get a plan amendment through, it\'s, you
know, a couple of years nowadays and so this is a more expedient and a
more holistic way to go about it. And obviously the purpose is to
maximize the benefits to the nation by establishing a regional
permitting process to manage the development of environmentally sound
aquaculture industry in the Gulf of Mexico EEZ.

And there are some reasons for that. One, there\'s continued increased
interest in trying to do this in the Gulf of Mexico. We kept hoping that
the national legislature would go through and set up a framework. That
hasn\'t happened, so we\'re moving forward with this program. General
counsel has told us that aquaculture is considered fishing under
Magnuson, so it gives us authority to do that. There\'s always a
continuing growing demand and we\'ve got a \$9 billion treasury deficit
in fishery.

And what will the process? It will create opportunities for people to
get into the aquaculture industry should they desire. It sets up an
environmentally sound sustainable industry or the parameters to affect
that. It maximizes benefits of U.S. coastal resources for local,
regional and national economies and assists NMFS and the Council in
better achieving required objectives including optimizing yield and
reducing fishing mortality on our wildstocks.

The other benefits. It will allow the yield to be optimized at a level
above those achieved solely by wild stocks. I guess the best example of
that on a worldwide basis would be salmon. What\'s cultured and on the
market today is certainly much larger than what could ever have been
achieved harvesting wildstocks and helps reduce fishing mortality on
Council managed stocks. Maybe take some of the pressure off of those
stocks.

What we\'ve done is set up a regional permitting process, and this is
again set up to create economic opportunities in aquaculture. In our
fishery management plan there are 10 management actions in there with a
range of alternatives within each action and we have selected preferred
alternatives that hopefully the Council will take final action at its
January meeting. At this previous meeting in November, we reviewed again
all of the public input. The actual comment period ended on October the
27th. We were able to get a summary of the substantial comments and so
we\'ve tried to address that. We\'ve got the NMPS regional office, the
national office and our staff at the Council office in Tampa all going
through and trying to make sure that we have accomplished all of the
public comment in that document so that hopefully we can take final
action and move it forward for Secretarial review.

And our primary goal is to increase MSY and OY federal fisheries in the
Gulf. And this would be consistent with the goals and objectives of the
Magnuson Act by supplementing the wild harvest caught species with
cultured product.

And we\'ll quickly run through the management actions that we\'ve
considered and that were included in the document. I won\'t go into
great detail. At the end of the thing, I\'ll give you a web site that
you can go to and download the whole document. I have to tell you, at
this point it\'s about 400‑plus pages long. It\'s considerably grown
over the last several years. We\'ve actually been working on this, I
think, going on six years now. So it\'s not a knee‑jerk reaction to
something that started yesterday.

But it actually will permit requirements eligibility and
transferability. You will have to have a NOAA Fisheries permit to
operate an allowable aquaculture system in the Gulf of Mexico. It will
allow you to harvest wild brood stock of an allowable aquaculture
species native to the Gulf of Mexico for aquaculture and also land
allowable culture species in U.S. ports. Such things today should you
look at red drum, it\'s illegal to have red drum in an EEZ, but if
you\'re going to culture it, you would have to have some mechanism to
permit it. Cobia is another one that\'s being cultured. There are
minimum size limits. If you took a boat load of fingerlings out there,
you\'re in violation of the rules and regulations that are in place
today. So there\'s a need and this sets up a framework for doing that.
And then of course same thing is to move them back from their culture
system back on shore should you choose to harvest a fish that would meet
the minimum regulatory limits under the rules we operate under now.

We sell them only at the first point of sale. After that, they\'re in
the market. Eligibility for a permit is limited only to U.S. citizens
and permanent resident aliens and a Gulf of Mexico permit right now is
transferable. It\'s kind of similar like to what you\'ve heard under the
IFQ systems.

The application process proposes conditions that must be met in order
for an aquaculture operation to be permitted and these include things
such as an assurance bond, locating cages, pins, the siting of the
thing, maintaining genetic diversity. There\'s a great deal. We only
allow for brood stock to be taken from the area in which you\'re going
to be culturing these organisms. You can\'t use genetically‑altered
species or even Gulf stocks and you certainly can\'t bring in non‑
indigenous species.

Right now we\'re proposing that the permit be in effect for 10 years and
renewable in five‑ year increments. The reason for that is anything
short of that, we start looking at investment money and you got to have
some kind of payback period. Right now the Council will allow those
species that we manage in all of those and we\'ve exempted shrimp and
corals. There is no offshore aquaculture in shrimp and corals we already
allow to be aquacultured. And let me explain that a little bit.

Back 15 years ago, we had a huge industry here in the Gulf where divers
were going out on natural reefs, knocking a piece of coral off, bringing
it back, selling it in their shops. And they were really wreaking havoc
on the limited number of reefs we have here. So the Council amended a
coral management plan to allow for culture of what we call live rock.
You can site a space and lease that and bring out various kinds of rock,
put it on the bottom and allow it to naturally accumulate corals and
other organisms. You can go back and harvest that, take it to your shop
and then sell it.

The other thing, we have requested NOAA Fisheries to develop concurrent
rule making to allow aquaculture in highly‑migratory species. That\'s
primarily directed at tunas. We can NOAA Fishery Service the authority
to evaluate any proposed aquaculture system. That technology continues
to change and improve, and rather than assigning a system that might
work somewhere else, we\'d prefer to have each one of them evaluated on
a per‑unit basis. And this provides obviously a great amount of
flexibility.

Site requirements and conditions ‑‑ not establish specific areas where
marine aquaculture ‑‑ marine ‑‑ in their document. We actually define
areas that you can\'t put it in. And so, that\'s pretty extensive. There
are also some studies going on, actually going through Larry\'s office,
that looks at all of the natural reefs, hard bottoms, shipping fair
ways, location of oil rigs, goes on and on and on. So there are a lot of
areas that you obviously can\'t physically put one now. So we\'re trying
to define those so that we can look at sites. There\'s also the
potential conflict between existing fisheries. Such as with shrimp,
there should be trawlable ground. So only those things would be taken
into consideration in siting it.

You wouldn\'t want to site one. Unfortunately here in the Gulf, you can
go out 50 miles and still be at 50 or 60 feet of water, and that\'s not
really conducive to a good aquaculture operation.

Restricted access zones. It would create a zone around the aquaculture
facility that would be off limits to anybody other than those who are
permitted to be in there. That right now is a controversial issue.
Usually there are things that are probably going to aggregate fish
around there. So and then we\'re proposing that the zoning would be the
same size as that of the Corps of Engineers permit. Realizing that to
effect one of these operations, you have to have a Corps of Engineers
permit for the site. You have to have a NMFS permit to be able to do
this. You have to have an EPA discharge permit. So all of those have
other things attached to them that you\'ve got to meet other criteria.
We\'ve been criticized for not doing some of those things ourselves, but
NOAA doesn\'t have the authority legally to do that. We have to depend
on the Corps and EPA to do some of these things.

Record keeping and reporting. There\'s about a three‑page list, but it
includes, you know, the permits that you\'d have, the harvesting and
landing of cultured fish, reporting incidents of disease, escapement,
migratory birds and marine mammal entanglement, requiring an additional
man who will keep record keeping. Then we\'ve said because of Magnuson
we have set an MSY. We\'ve set that equal to OY and approximately is the
total yield harvested by all of the permitted aquaculture operations
annually but not to exceed 64 million pounds. The Gulf landings right
now for snapper are only 5 million pounds, 5.1. And no individual
corporation or other entity can produce more than 20 percent of that OY.

And then we\'ve set up some framework procedures that will set up
biological references points, MSY, OY and the management measures. And
we also are proposing to appoint an aquaculture advisory panel to meet
annually for evaluation of all of the activities that are going on. And
that panel would be made up of Council staff, NMFS biologists and social
scientists, the S&S committees from the Councils, socioeconomic panels,
state university and private scientists.

And then there are a number of appendices in the document and that
includes a list of all of our FMPs.

Exempting fishing permits. Right now that\'s the only way you can put a
cage in the water in the Gulf and I assume the rest of the country, is
to have an exempted fishing permit. It\'s only good for one year.
Nobody\'s going to fund anybody to do any kind of serious aquaculture
with a one‑year permit. I\'m not sure you could even get in the water
and into operation in one year. And then all of the other information
supporting the document.

And then I\'ll stop there and answer any questions.

MS. McCARTY: I have a couple questions. One is, do you anticipate that
all of these aquaculture operations will be beyond three miles? You
mentioned state permits as well as federal permits. Does that mean that
some of them are inside three miles, or no?

DR. McILWAIN: Well, they\'re in an EEZ.

MS. McCARTY: Okay.

DR. McILWAIN: Which is three miles off of Mississippi, Louisiana and
Alabama.

MS. McCARTY: Right.

DR. McILWAIN: And it\'s actually nine miles off the coast of Texas and
Florida.

MS. McCARTY: So the state permit issue comes into play regardless of the
fact that it\'s in the EEZ?

DR. McILWAIN: I didn\'t hear you.

MS. McCARTY: You mentioned state permits and I was wondering if that was
because some of these might be inside state waters, but you just said
no, so ‑‑

DR. McILWAIN: No, I think that the rationale is that most of these
operations are going to have to be supported from shore and hatcheries
and other things to support it ‑‑

MS. McCARTY: I see.

DR. McILWAIN: ‑‑ will have to be, you know, permitted through the
states, and all of the Gulf states have a mechanism to do that.

MS. McCARTY: I see. Okay. Then I have one other question, if I could.

You mention a cap of 64 million pounds. Do you have a provision in there
to change that upwards if necessary in the future? Is that going to be
reviewed and reconsidered?

DR. McILWAIN: Yes, that\'s part of the framework.

MS. McCARTY: Okay.

MR. BILLY: Okay. Randy?

MR. CATES: I have a couple items. I can just go down the list. I\'ll
offer you what little knowledge I have on this subject.

DR. McILWAIN: Oh, thank you.

MR. CATES: The first one I question is having a radio signal. I think
that\'s kind of a bad idea. If I understood you right, having a radio
signal in each cage, because in your area, I mean with all of those
hurricanes, you\'re going to have to be underwater. I can\'t imagine any
company investing in anything that\'s going to be on the surface. So
that\'s the first thing I\'d question.

Term of 10 years. That\'s really short. As someone that\'s invested his
own money, I would never have started on a 10‑year term and I don\'t
know any company that would ever consider that. So you can make your
plan, but really it\'s kind of ‑‑ California, they have an offshore
aquaculture plan but nobody\'s ever going to invest in it.

On section 12, I would caution about having NOAA or state ‑‑ because
this has happened in Hawaii, even consider doing siting where you said,
you elaborated which is better, of sitting, or it shouldn\'t be. Sitting
is a very tricky thing that\'s evolving. I had an opportunity to go to
Ireland where I went to a site where they put an operation in and I
could not believe how bad of a site it was. And basically the owner
said, well, the government did the siting for us. And he lost about \$8
million in one season. So I learned very quickly that we are learning
where to site these things and I\'ve never met any government official
that I would trust that has that knowledge. This is the lack of
experience.

Restrictions went ‑‑ about keeping other vessels out. I wouldn\'t go so
far as doing that. We, in Hawaii, our experience, that has been a
problem. I allow fishing around our site and we have a very good
coexistence in allowing to do that. The other farm that\'s sited in
Hawaii has gone the opposite way and tried to restrict and there\'s a
lot of conflict. I don\'t really see the need to do that. So that\'s
another offer of advice. Don\'t try and put a fence around out there,
because that is the open ocean and anybody that knows fishermen, they
don\'t take kindly to that.

Action 9 on the 20 percent. Each company can\'t produce more than 20
percent. I\'d be cautious about putting that in too, because what if
you\'re the only company? How do you ‑‑ or if you only have two
companies. There\'s not going to be a gold rush here. It\'s going to
take a lot to invest in this.

On action 10, your panel that you had. Really in balance to me, I don\'t
see industry listed there. Got to have industry. They\'re the ones that
are going to be out there doing the work, so when you create an advisory
panel, please make sure you include industry. That\'s going to be vital.

Real briefly, corals. I wouldn\'t rule that out. I think there is a lot
of opportunity that I\'m working on in Hawaii of restoring reefs using
our technology to do that. It\'s a new idea that NOAA\'s really kind of
coming to the table and getting interested in. You may want to rethink
that. It could be a good resource for you.

And finally, the only recommendation that I would have that\'s really
vital is as you draft this, focus on one thing and that is production
costs. When the company gets involved and they start getting all these
restrictions and the production costs may go up, that\'s where you\'re
going to have a problem. And what they end up doing, as my industry has
a history of, is elevate the prices to support the higher production
costs and rightly in terms in saying our product is better, commercial
fishery product, pay \$20 a pound because we\'re better, cleaner and
it\'s really wrong. And it\'s all related to production costs. So
whatever rules you set up, just keep in mind to try and make it where
production costs can be balanced and then you\'ll reduce conflict
between aquaculture and fisheries.

So with that, I\'ll ‑‑

DR. McILWAIN: Let me just say a couple things. On the corals, we do have
a plan in place where you can culture corals. So I think that\'s a
fisheries issue. There\'s another whole plan that\'s out there and
people have the opportunity to do that now. And the other thing I would
say would be I agree with you on the points that you brought up. I guess
the only I could say is this has been developed through the Council
process, and I don\'t know how familiar you are with the Council
process, but it\'s kind of like, you know, making sausage sometimes. You
really don\'t want to see that. But it is a public process. I think
it\'s a good progress. And a lot of the things that you brought up are
actually compromises to be able to hopefully move the document forward.
With the hope that it would be refined as a ‑‑ hopefully gets
implemented and we start working in it and develop the rules for
implementing that. You know, if I had my choice, the minimum permit
would be 20 years; I think that\'s a realistic number, and with 10‑year
renewals. And so I can respond to each of those, but that\'s an example
of what we have discussed. And it might be good to take a look at that.
I mean, I wish we would have had you there to testify on occasions.
Because you do have, you know, a good practical sense of what it takes
to do this.

MR. BILLY: Okay. Martin?

MR. FLETCHER: Thank you, Mr. Chairman.

Well first of all, thanks, Dr. McIlwain, for coming all this way to
present to us.

I\'m a little unclear about which regulatory agency would be in charge
of the infrastructure to support each company; in other words, the
hatcheries and the on‑shore sites. I mean, since they\'re going to be on
state land, how is that going to be federally regulated?

DR. McILWAIN: Well, I think the hatchery ‑‑ I\'ll use Mississippi, for
example. If I had a hatchery there producing fingerling cobia into the
Gulf, I would have to have an aquaculture permit from the State of
Mississippi to be able to do that.

MR. FLETCHER: Okay.

DR. McILWAIN: And so I would say it\'s probably much more restrictive
than this. I would say, on the other hand, most of you don\'t know me; I
came from a university background, a research ‑‑ actually been involved
in aquaculture I guess since about 1967. And our laboratory that I work
out of, part‑time, I might add, is ‑‑ you know, we\'re focused on one
thing and that\'s developing husbandry techniques for species that we
feel like can be profitably raised such as cobia and red snapper and
spotted sea trout, striped bass, other species. But it would be
regulated under the states, but to take that product and move it
offshore, you\'ve got to have a federal permit through them, so that
would be controlled by them.

MR. FLETCHER: But there wouldn\'t be any oversight on NOAA\'s part in
terms of genetics and processed food and ‑‑

DR. McILWAIN: Actually, you know, I tried to simplify this. There are a
lot of restrictions on where you can, you know, get the brood stock
from, the genetic component of those fish, etcetera. Yes, they do and
you have to declare that when you apply for a federal program, to be
able to utilize those fish under federal waters.

MR. BILLY: Tony?

MR. DiLERNIA: Thank you, Mr. Chairman.

Tom, Randy said it and you mentioned it, and I\'d like to bring it up
also, regarding the term of the permits. On more than one occasion I\'ve
been contacted in New York from bank\'s hedge fund managers, venture
capitalists considering putting money into aquaculture. And the number
one thing that they\'re afraid of is the shortness of the terms of the
permits. I guess you\'re looking at maybe five years before you first
even begin to see some kind of a profit and you\'re already applying for
renewals and who knows where ‑‑ change in administration, change in
regulations. But so that\'s been the major ‑‑ I haven\'t known a single
person who\'s been willing to put money into a project because of the
shortness of the terms. So 20 years I would think would be a minimum and
I would recommend that. Because, as Randy said, you\'ll be developing a
plan, but no one\'s going to want to go near it because it\'s a
non‑starter financially.

DR. McILWAIN: I would say to that, I wish you\'d have been there to
testify. No, you know, I\'m aware of that.

MR. CATES: Is it too late?

MR. DiLERNIA: Yes, that\'s ‑‑

MR. BILLY: Yes. January they\'re finalizing it. Six years in the making.

MR. DiLERNIA: It\'s a shame.

MR. BILLY: Okay. Bob?

MR. FLETCHER: Tom, thank you for coming and I recommend hot tea and
honey and brandy.

DR. McILWAIN: I\'ve tried it all and I don\'t know what it is. I\'ve got
some kind of allergy that\'s been going on for a long time.

MR. FLETCHER: Well, I just wanted to tell you we really appreciate
bringing this to us. And I\'m from the West Coast. We have a much bigger
problem than you do, I think, trying to develop this whole approach. But
in my mind the decision is, are we going to allow this to produce the
product that the nation demands or are we going to continue to allow the
importation of aquaculture product under very little control from
outside? And I think the answer is we\'ve got to do it and I think
you\'re doing it the right way, and I appreciate it.

DR. McILWAIN: Thank you. I agree with you. I think, you know, we\'re
getting product. We know some of it\'s adulterated; we don\'t know how
much. A lot of it, we don\'t know what it\'s totally adulterated with.
Tom can elaborate on that. But, you know, I guess a lot of it depends on
price. American consumer would focus on how cheap they can get it and
they\'re not really focused on the consequences of doing that. We had
the antibiotic scare with shrimp several years ago and, you know, there
are other examples of that. But who knows? Because we\'re not capable of
testing a lot of that product.

MR. BILLY: Yes, I think we\'re going to move on.

DR. McILWAIN: Okay. Thank you very much.

MR. BILLY: Thank you.

MR. SMITH: Thank you for inviting me. I\'m Peter Smith. I\'m with an
engineering firm that\'s headquartered here in New Orleans, Waldemar
Nelson & Company. I\'ll get into why I\'m presenting a presentation of
aquaculture in the Gulf of Mexico whenever I get into introducing the
players on our playing team.

But basically, we\'re a managing and planning effort to put together a
specific project in the Gulf of Mexico, a demonstration commercial
scales aquaculture project in the Gulf of Mexico.

This is the official title of the study we\'re doing. It\'s basically to
facilitate the development of offshore aquaculture in the Gulf. This is
what we\'re really doing. We\'re planning a specific commercial scale
project in the Gulf. By that, I mean we\'re going to determine what
species, where it\'s going to be, how much it\'s going to cost, what the
schedule is going to be and that kind of thing. We are funded through
the planning effort; that is, those fundings that are actually
implemented. So we\'re going to get to the end of our planning effort
and then try to seek ways to raise money and actually go offshore and do
the effort.

It\'s not a feasibility study on aquaculture in the Gulf of Mexico. Some
of you may know that our firm managed the preparation of a feasibility
study on Gulf offshore aquaculture about eight years ago that was
published. At that time, we became convinced that it was a feasible
thing to do from all kinds of areas of evaluation. We actually spent a
few years after that as an engineering firm trying to raise money to go
offshore and do it, and I\'ll get into a little bit of why that money
was not raised at the end of my presentation. But it\'s not necessarily
a feasibility study. It\'s a planning effort for a specific project.

Here are the components of the planning effort. Tom alluded to it, the
siting criteria and I think Randy mentioned that he\'s afraid of
government agencies trying to say where you can do it. Jeff Rester with
the Commission is working with us. Kind of as an aside, he\'s gotten
input from our technical team as to what considerations and criteria
should be going into site selection. I think it\'s moving more toward
areas to avoid as opposed to where areas to put aquaculture operations.
So I don\'t know that your concern about having the government site a
location for you is that ‑‑ I don\'t think it would happen in this case,
is what I\'m saying. And they\'re looking at, you know, areas to avoid
specifically and I think Tom alluded to shipping fair ways, dredge
material disposal sites, you know, those kinds of things, specific
ecologically sensitive areas. All those would be avoided.

But Jeff is also looking into, you know, optimum currents, optimum
salinities and all those will be factored into it. So I think it\'s more
areas to avoid as opposed to areas to actually site it.

Selection of appropriate fish species for the Gulf. We started out
looking at seven or eight species. Speckled trout, red snapper, red
drum, pompano, cobia and the like, an amberjack species. Our species
selection is evaluating all those. We\'ll be writing short white papers
evaluating each of those species on a number of different criteria.
Availability of fingerlings where they\'re commercially available,
whether you have to raise them yourself and the cost of acquiring them;
food conversion ratios for those species; adaptability to cage culture
and number of different criteria are going into each of those
evaluations. The thinking is that we\'ll end up with that committee
recommended two or three species that would be the best to start out
with in a commercial scale Gulf project.

Selection of host platform. We as an engineering company are doing that
part of it. We think that it would be very advisable to have because of
the distances offshore that you\'re likely going to be depending on
where you are. We think it would be very necessary for a successful
operation to have a stable platform to work from. And that means
necessarily oil and gas or other kinds of minerals extraction platform.
We\'ve designed a lot of those and worked with a lot of those different
companies and I\'ll tell you a little bit as to where we\'re headed with
that.

Selection of necessary supporting systems. You know, the feed systems,
the net system, the feed delivery storage systems. We\'ve got people
working on all those. We\'re costing all those. Going on a platform,
there\'s going to be a myriad of different kinds of costs. We need
electricity, we need sewage treatment, we need crews quarters. Our
vision would be that this platform would be continually manned with a
three or four‑person crew, probably working seven on/seven off, which is
customary in the Gulf of Mexico for oil and gas work. We\'re also
looking at risk management approaches, mainly insurance for both the
crop and liability. Obviously with people working offshore, there\'s a
lot of liability issues, so we\'re looking at insurance approaches to
that.

Defining measures of success for the planning demonstration scale
project. Those would be for production. And for your information, as
manager of the project, I\'ve defined the measure of success on the
production side. That\'s putting 100,000 fish into the market place at
the end of this, or 100,000‑‑plus. So my minimum size is putting 100,000
fish into the marketplace as a demonstration scale project. There would
also be measures of success defined on advancement of science and
technology as part of the demonstration project and also for, you know,
providing the least impact to the environment.

And then an outreach program. Actually this was added as we got into it,
because of the opposition that has come up for, you know, actually
opposing the aquaculture in the Gulf of Mexico. So we\'ve gotten more
involved in the outreach side of things. Working with LSU SEAGRANT
fairly recently; Michael was there, Tom was there, to bring together a
stakeholders group with some of the organizations that are opposing
aquaculture in the Gulf and trying to answer questions.

Here\'s our team. Gulf States Marine Fisheries Commission. As I said,
Jeff Rester is working with us. He\'s a member of the committee and
he\'s working on the siting evaluation. The next three, the USM and Gulf
Coast Research Laboratory, and the Mississippi, Alabama SEAGRANT and the
LSU SEAGRANT. All of those entities are providing expertise to the
planning team at no cost to the project. So at our last committee
meeting, I think we had 20 people sitting around the table providing
input.

Louisiana University\'s Marine Consortium in Cocodrie, that\'s a marine
research lab in Louisiana. It\'s made up of 13 different state
universities, I believe. Ed Chesney is a fishery biologist. He\'s the
chairman of the species selection committee working with us and he\'s
about to wrap up his work. Cargill, specifically Burris Feed out of
Franklinton, Louisiana, they\'re working with us on feed selections for
whatever species that are ultimately selected. They\'re also helping us
with costing out the feed storage and delivery systems. Daybrook
Fisheries, a Louisiana company, in Empire, South Plaquemines Parish.
They\'re one of the largest menhaden fisheries in the country and they
may actually end up, if this thing goes into actual implementation
offshore, they could likely be the operating entity to manage it.

LA Fish, Harlan Pearce, who is on the Seafood Promotion and Marketing
Board; I understand he\'s giving a presentation tomorrow, he\'s helping
us on the marketing side and also in the species selection. Aquaculture
Systems Technologies, they do a lot of work in the aquaculture systems,
mainly the research systems and they would advance that technology quite
a bit.

And then us, Waldemar Nelson & Company. The reason why we are involved,
frankly and to be honest, we don\'t know that much about aquaculture,
but we are pretty good project managers and we do a lot of engineering
work offshore. In fact, 70 percent of our work is for offshore oil and
gas companies and minerals extraction companies. We\'re about 350 people
in the company. We\'re headquartered in New Orleans. About 120 people in
an office in Houston, most of which are doing offshore oil and gas
engineering projects. So that\'s why we\'re involved in it, for the
knowledge of the offshore component.

What this thing is probably going to look like whenever it\'s proposed
in a planning effort, as I mentioned, it\'s going to be associated with
an existing platform and there\'s a lot of benefits to that,
particularly if you have to keep people offshore for extended periods of
time, which we think you should. We\'re looking at probably submersible
commercial scale cages. These cages that we\'re costing out now are
anywhere from 3,000 cubic meters up to 11,000 cubic meters. We may scale
back that high end some a little bit by increasing stocking density in
those cages.

Right now we\'re thinking there will be multiple cages in the
demonstration project, at least two, maybe three and multiple species.
And there will be varying grow‑out periods for those species. We\'re
going to spend some effort trying to pick at least one species that\'s
got a short grow‑out period with the intent of basically stocking the
cage after hurricane season and harvesting that cage before the next
hurricane season. So you\'re looking at probably a 10‑month max grow‑out
period for as least one of those species. We\'ll probably also have
another species or two that would go through a hurricane season and see
how the cages and everything responded. We don\'t want a hurricane to
come through, obviously, but if one does, we\'d see how they respond.
This area\'s seen enough hurricanes lately.

We expect the product to be placed in the commercial markets. As I
mentioned, and at least my view of a commercial ‑‑ or a success on that
end would be 100,000 fish. We\'ll probably end up stocking, at least in
the preliminary design, we\'ll probably put in something like
200,000‑plus fish into these two or three cages that we\'re thinking
about.

And there would be an extensive environmental monitoring program.
That\'s been one of the things that the opposition groups have been
brought up over and over, you know, water quality impacts and sediment
quality impacts associated with these. So there would be a pretty
extensive program to monitor this as it goes through the demonstration
program. LSU SEAGRANT is working on that with us. I don\'t know the
details yet, but as I said, it would certainly be water quality and
sediment quality evaluations.

Here\'s our proposed schedule for this. It\'s extremely optimistic, the
more I think about it. The first item is the only one that I can be
assured of, that we\'re going to submit our report probably next month,
about mid‑next month, and I don\'t know how long it\'s going to take its
way to work its way up to NOAA, but we assume that NOAA would get it
probably in the January time frame.

And this is where it gets tricky, the second bullet item, the funding. I
had kind of in the back of mind that this demonstration project, well
even whenever we started, was going to be a \$3‑\$5 million effort over
an offshore period of a year‑and‑a‑half or thereabouts. We\'re working
on the cost estimates now. They\'re all coming together. I haven\'t seen
anything that\'s going to sway me off of that yet. As to what\'s going
to sway me off of that number, I still think it\'s going to be a \$3‑\$5
million effort, at least at the scale we\'re looking at.

So best of all worlds, if we could get funding for that in three to six
months, obviously with, you know, my original thought was to have a
combination of federal‑state. We\'ve got three different states working
on this with us. We have a combination of federal and state monies put
into it and private monies put into it. We are talking with some private
investors. Actually we\'re talking to Chevron. That\'s the only oil
company we\'re talking to right now about provision of a platform.
We\'ve not approached them to put up any money yet. We\'ve got to get
past the hurdle of will you provide a platform to work from?

Chevron is interested, at least at the mid‑ management level, to work
with us. Their lawyers are not interested in working with us because of
all the issues that you can imagine, the liability concerns. It looks
like the way it would work is that if this goes forward and we work a
deal with Chevron, they would actually turn over a platform to the
operating company for a year‑and‑a‑half, if that\'s the period of time
that we need it to work offshore. And then the operating entity would be
responsible for all the liabilities for that period, but not for the
ultimate decommissioning which comes into ‑‑ you know, gets into
multiple millions of dollars to decommission a platform.

And then the oil company would reacquire at the end of that after all of
the nets are out of the water and brought back to shore. Chevron, if
that\'s who it is, they would reacquire it and they would decommission
it. They would pay to the tune of \$5 million to decommission that
platform, which they would have done anyway. So we\'ll have to work with
them to get the permission to extend the life of that platform out to do
this project and there\'s mechanisms in place to do that,
regulatory‑wise.

So anyway, the last three items there is an optimistic schedule. It\'s
all based on that second item. We think it necessary to put initial
stocking of cages, if we\'re in a Gulf project in a truly exposed area
after hurricane season, try to harvest as much as you can before the
next hurricane season, at least until you know how the cages and the
systems respond to significant storm events.

But if this all works out, you know, by the fourth quarter of 2010, we
could actually have fish in the marketplace. That\'s the ideal scenario.

I was also asked to give a little discussion on what I think are the
impediments to developing commercial scale operations in the Gulf. That
first item is successful demonstration required. Whenever we were trying
to raise money to go offshore and do it after we did the feasibility
study some eight years ago, and there were two things that were holding
us back after we bumped our head up against the wall for, you know,
probably 15 times talking to potential funders, a lot of them were ‑‑
that was the dot‑com craze. Everybody wanted to invest in high tech, so
this was obviously a risky operation and saying let me invest in high
tech companies. If I\'m going to be taking risk, let me do it on shore
at least.

And then other one, it would always come down to take me out to where I
can see one operating, preferably in the Gulf of Mexico. And then we\'ll
talk about giving you money for this. So that\'s why I think a
successful demonstration scale project ‑‑ and it\'s pretty significant
production numbers that I\'ve been talking about, would be required to
actually get the business going in the Gulf of Mexico. We all ‑‑ I
don\'t know about all of us, but a lot of us would like to see that get
started in the Gulf.

Permitting has been cited as an impediment with the aquaculture
amendment that Tom\'s talking about. Assuming that gets through in some
fashion or form, hopefully most of the permitting issues will go away.

And then the other thing which has surprised me a little bit was the
organized opposition to Gulf aquaculture that has come up in the last
year. I think it was mainly galvanized by the amendment going through
the process, got people thinking about it and the opposition is coming
from some unlikely areas, but it\'s coming. So there needs to be more
effort, to my mind, put into putting out news bulletins, press releases,
putting together a video on the pros and cons of aquaculture and getting
it out on public broadcasting stations, and that kind of thing, to
basically put the real truth out there to the general public.

So that\'s it. That\'s where we stand with it. If we get funded, we want
to go out and do it. We think it\'s a good venture. We think it\'s a
necessary venture to get out there. We all know the reasons why. So you
want me to field questions now, or at the end? Or how do you want do
this?

MR. BILLY: We can do a few questions right now.

MR. SMITH: Okay.

MR. BILLY: Martin?

MR. FISHER: Thanks so much for coming and thank you, Mr. Chairman.

MR. SMITH: Sure.

MR. FISHER: Just three short questions. What\'s your target weight for
fish and your X containment price per pound, and of the two to three
species that you think is going to wind up being and which are they?

MR. SMITH: All right. I\'ll kind of answer them in reverse order. We
just put together some spreadsheets on ‑‑ so we could size cages, so we
had to go through all those calculations that you just mentioned. If I
had to guess right now, I\'d say, if it\'s three, it would probably be
‑‑ the one thing I asked the species selection committee to do was to
give us one that\'s kind of a slam dunk. I don\'t want to ‑‑ you know,
very little R&D associated with it. We know we can acquire brood stock,
we can raise fingerlings, we can put it out there and we know how fast
they grow, and we know they got a place in the market. So my guess is
red drum would probably be such a species. My guess would also be that
the one that grows the fastest that I can think of is cobia, to get it
in that 10‑month window or shorter than 10‑month window, to get it up to
market size and put it in the market. Red drum would be about, you know,
two‑and‑a‑half pounds. Cobia would be 10 pounds, 12 pounds.

MR. FISHER: Ten pounds would be in a year?

MR. SMITH: Correct. They grow very fast.

MR. FISHER: Wow.

MR. SMITH: And then either a pompano or a snapper being a third species
would be the one that at least we\'re basing the net sizing and the feed
cost, the delivery system and cost for them. But, you know, that\'s only
me. That\'s not the selection committee telling us that.

MR. FISHER: And if I may, what kind of food are you going to feed them
and where does it come from?

MR. SMITH: It\'s going to be a manufactured pellet. You know, Cargill
makes all kinds of it. They\'re on our team. David Burris who used to
own Burris Feed until Cargill bought them out, he has given me a feed a
number of that. I don\'t know what\'s in it. Obviously, it\'s gone some
fish meal and oils in it. Depends on the species as to, you know, how
much protein and how much other components he\'s got in it.

MR. FISHER: Thank you.

MR. SMITH: Sure.

MR. BILLY: Okay. Randy?

MR. CATES: Good luck.

MR. SMITH: Thank you.

MR. CATES: I have a couple of comments. 1999 I was part of the first
demonstration project similar to what you\'re trying to do.

MR. SMITH: In Hawaii?

MR. CATES: In Hawaii.

MR. SMITH: Okay.

MR. CATES: Three‑hundred‑thousand dollars was our budget and we grew
100,000 fish. We did a repeat of that a year later. Five‑ million
dollars is a lot of money to do a demonstration budget, I would say. I
would question whether NOAA would do that, because we have a lot of
information. We\'ve done this already. So if you do go forward, another
recommendation I would have would be go with what you know works. Try
not to reinvent the wheel.

MR. SMITH: In the way of systems or fish, or both?

MR. CATES: Everything.

MR. SMITH: Okay.

MR. CATES: Okay? As far as cages go, we don\'t have an 11,000 cubic
meter cage out there that\'s been even out there yet. It\'s kind of a
concept. We do have up to a 6,000 cubic meter cage and there\'s only one
cage so far that\'s been in an open ocean environment other than a new
one that\'s only 200 cubic meters. So very few options with what is out
there.

If I was investing my own money, which I have and am, I would have no
problem putting a cage in a hurricane area. We have had these systems in
hurricanes around the world, so proving that feasibility, we have all
this information already. Environmental monitoring, I hope you reach out
and find out what we have done already and not repeat, when you talk
about water quality. It\'s almost a non-issue now. So there\'s a lot of
information that you can draw upon and not repeat ‑‑

MR. SMITH: Well, a lot of the opposition to the Gulf aquaculture keeps
bringing that up. So I think we would have to some kind of monitoring
component as part of a demonstration.

MR. CATES: We have ‑‑

MR. SMITH: I understand that, yes.

MR. CATES: We have the data.

MR. SMITH: Right.

MR. CATES: And the Federal Government has spent millions on this
already.

And last thing I want to say is the species you mentioned, we know a lot
of those already. Some of the questions that were asked, I can just
recycle the information for you. Red drum is a pretty slow grower.
Feeds. There\'s only really a few formulas for feeds for marine species.
I could tell you what you would need to feed is probably going to be
almost identical to what I feed. Because there\'s just not that many
formulas out there.

MR. SMITH: Who do you buy your feed from?

MR. CATES: Scretting and Ziegler Feeds is the same formulas as Scretting
and the same formula as Nelson Brothers who is now owned by Scretting.

MR. SMITH: Yes.

MR. CATES: Yes, good luck.

MR. SMITH: Okay. Thank you.

MR. BILLY: Yes, I think we\'re going to go on.

So, Michael?

Thank you.

MR. RUBINO: I\'ll go through this quickly. I\'m sure you had lots of
other questions and so you can get your discussion going.

I was asked to provide sort of a perspective on this Gulf Amendment in
terms of national efforts and implementing a 10‑year plan.

Certainly, this whole offshore or going to federal waters has been both
an opportunity and a challenge. You know, a couple of days after the
last Council meeting, the local Times‑Picayune had an op‑ed entitled,
\"Fish Farms Aren\'t the Answer.\" I\'ll just read a little bit.

\"If the United States wasn\'t the most overfed and wasteful nation in
the first place, there wouldn\'t be a need to experiment with industrial
scale fish farms that would pollution to our dying Gulf, undermine the
integrity of the natural fish stock, and enrich a few trans‑national
companies at the expense of our local fishing communities.\" And it went
on in that vein.

A couple of days later, the Fort Myers Southwest Florida News‑Press ran
and op‑ed entitled, \"Fish Farming Plan Worth Taking a Shot.\"

And one of the paragraphs is, \"Maybe the best argument for fish farming
is socioeconomic, a way for the hard‑pressed commercial fishing industry
to use its boats, its fish processing facilities and its salty labor
force in a way that\'s locally profitable and less detrimental than
fishing to wild fisheries. I say let them try it. With oversight by
three federal agencies and thousands of environmentalists looking over
those shoulders, go farm.\"

So both ends of the spectrum. You as MAFAC several years ago realized
that, you know, even though this was an opportunity in terms of raising
the level of debate in this country about the role of aquaculture,
offshore is a technology for the future. It doesn\'t have a large
existing constituency screaming for getting it done right now. I mean,
there are some entrepreneurs and some others who want to do it, and some
research institutions.

Most of commercial marine aquaculture in this country is shellfish
farming and a resurgent salmon industry in Maine. The other big part of
aquaculture is the use of hatcheries for enhancements in restoration
aquaculture. Everything from salmon to white sea bass, to oysters, to
maybe king crab.

So the 10‑year plan takes a very broad view of what the agency should be
doing in marine aquaculture and we\'re starting to implement that. So I
didn\'t come here today to report on how we\'re implementing that. You
can go to your web site and get lots of updates about what we\'re doing.

But the first part of the 10‑year plan is to provide greater regulatory
certainty, both in terms of a more efficient process for permits in
state waters; shellfish or finfish and the federal rule therein, and
doing something about federal waters where we don\'t have a framework.
And there are a number of options, which you know. National legislation,
going through the Council process or some other way to coordinate the
various federal permits, yet to be invented.

National legislation didn\'t move this past year because it was an
election year. But I would say a year ago at a meeting chaired by Bill
Hogarth and Sam Rauch we worked out many of the issues between industry
and environmental groups over the details of national legislation. There
is a senate committee staff draft. It was not the federal proposal, but
they took the federal proposal, got a lot of input. The Senate staff has
drafted a national bill and it looks very similar to the California bill
in terms of components in it. At least around the table it had
agreements between all these various groups. So a lot of the hard work
has been done and I\'d like to see what the next administration, the
next Congress, whether there\'s the political will to move something,
but with exception of a few things like length of permit and how do you
define environmental liability, most of the other issues have been
addressed.

As Tom said, as a program, we have been working with the Southeast
regional office and with the Gulf Council in terms of putting together
from a technical perspective the plan, the rule and the environmental
impact statement for this Gulf Amendment. And lately there have been a
lot of very good comments that have come in from groups like Ocean
Conservancy, the State of Florida, EPA and others that we\'re trying to
make sure that we\'ve addressed these comments, have the proper
literature references and so on so that the plan is complete.

More broadly we\'ve also been doing a whole variety of things to address
social and economic and environmental concerns about marine aquaculture
in general, which I think would help advance either national legislation
or a Gulf Amendment, or the other parts of marine aquaculture. You know,
we manage research grants of various sorts that look at not large scale
demonstration projects because we don\'t have that kind of funding, but
certainly research projects all of which have an environmental
monitoring component and we are learning a lot of things from those.

The latest round of proposals is through the Saltonstall‑Kennedy or S‑K
Grant Program. I would say three‑quarters of the proposals that came in
over the past few weeks were for aquaculture. So we will be very busy
reviewing those projects over the next couple of months.

This past year we also published a study on the economics of offshore
aquaculture looking at both the micro; can you make any money at this,
and the macro; what\'s going on in terms of supply and demand trends,
what about the effects on fishing and so on. And that\'s on the web site
as well and I think it has some good discussion.

Peter mentioned one meeting here in New Orleans a few weeks ago where
commercial fishermen and recreational fishermen, environmental groups,
state agencies and others got around a table for a day in sort of an
encounter session facilitated to talk about all of the issues
surrounding offshore aquaculture.

Similar meetings were held in the past couple of months in California
posted by the Aquarium of the Pacific in Long Beach and in Oregon hosted
by the Hatfield Marine Science Center of Oregon State. Those were
two‑day meetings. Again all the issues out on the table.

The conclusion of all the meetings was we need pilot and demonstration
projects. We need things in the water that involve people that know how
to do it, coastal communities, fishing groups so they can see, touch,
feel and see how this works. Take some baby steps first before you go
larger. And so I think collectively we need to figure out, you know,
some kind of public/private partnership approach to these things.

There are some commercial operations that are ready to go if a permit
system was in place. That money has been going to Belize, the Dominican
Republic, the Bahamas, Mexico, Brazil, Venezuela, Costa Rica. Those are
the ones I know about. All U.S. money. All companies that would like to
set up shop here in the Gulf, or off San Diego, or some place else. So,
it\'s there.

So do you need pilot demonstration projects, or do you just need a
permit system in place and let the commercial sector do its thing? In
some ways maybe you need both, because you do need to involve coastal
communities. We do need to figure out a way to do this to benefit, you
know, existing working waterfronts, existing constituencies. You need
the local support to be able to make this work.

A number of possibilities. Hubbs‑Sea World has filed for permits from
the Corps of Engineers and EPA in the State of California to do a
three‑year commercial project five miles off San Diego in federal
waters. So that\'s in the works. There are a number of fishermen\'s
cooperatives and others doing mussel farming close to federal waters and
state waters from Maine down through Massachusetts looking at it. The
last three permit applications I think are off Martha\'s Vineyard.

You know, George Nardi is not here, one of your new Council members, but
he operates the first commercial cod operation. It\'s off Massachusetts.
It\'s in state waters, but conceivably in the future they have their eye
on federal waters. Randy can talk to the need in Hawaii to go to three
miles or beyond. I\'m not sure you\'re there yet, but that\'s a
possibility. Sablefish and other species in the Pacific Northwest, again
they\'ve got a lot of near shore sites but they may want to go to the
space of Juan de Fuca in federal waters.

There\'s also a lot of interest in what\'s called integrated
multitrophic aquaculture. We\'re funding a of couple projects through
the National Marine Aquaculture Initiative looking at finfish/shellfish
polyculture. We must have five or six proposals in the current round of
S‑K Grants looking at whether marine algae can combine with shellfish
and combine with finfish farming. It\'s an exciting new area where you
can use the different trophic levels and there\'s also some prophylactic
or sort of probiotic approaches. Somehow the finfish do better having
algae and mussels around them as well. Very interesting.

So that\'s just a very quick overview of sort of how this fits with
national efforts.

Questions?

MR. BILLY: Any questions? Randy?

MR. CATES: Mike, can you think of anything that we can do to move along
this whole thing at MAFAC?

MR. RUBINO: I think certainly as individuals we can. As MAFAC you had
this discussion earlier in terms of transition documents and the 2020
Vision, which have very strong statements in support of aquaculture. It
has strong statements in support of needing healthy commercial fisheries
and aquaculture working in a symbiotic relationship. You know, the more
you can get those documents out in some fashion and they become part of
the conversation. You know, other groups do a transition document, they
put it on their web site, they send it by email all over the country and
hold a press conference. I\'m not quite sure how MAFAC would do
something like that.

MR. BILLY: We were thinking more of like in a news release and trying,
you know, a way of getting an awful lot of hits on.

Dave?

MR. FISHER: The issue of environmental liability, is that the big
killer, or is that one of them?

MR. RUBINO: One of them.

MR. BILLY: That\'s one of them.

MR. RUBINO: The two key issues whether it\'s the Gulf Amendment or
national legislation would seem to be sticking points. Our length of
permit of 10 years versus 20 years seems to me that could be finessed
somehow. You could do 10 years with an almost automatic renewal for
another 10, or something like that.

Liability is something we don\'t require of any other user of the marine
environment other than oil and gas, and they have a history of it. And
the California Marine Aquaculture Bill has a clause in there that says
they\'re not just a bond that would cover of removing equipment and
restoring the benthic environment, but would also cover unforseen
environmental liabilities to be defined by the Secretary of Natural
Resources. So somebody\'s going to have to draw a box around that. I
think our approach has been, well we\'re not going to give a permit for
a project that we think is going to cause a problem in the first place.
Monitor it. If something happens, pull the plug. There are criminal and
civil penalty liabilities.

So if certain constituencies insist on environmental liability, and I
mean these constituencies I think would like to have environmental
liability for all the uses of the marine environment. They\'re just
starting with aquaculture because that\'s the current one that\'s there
at the moment. You\'d have to draw a box somehow around it. Otherwise,
how could a company ever do it?

MR. BILLY: Randy?

MR. CATES: On this issue, what little industry we do have in the U.S.,
we\'re very, very concerned about a bad bill being passed versus no
bill. And that\'s why it gets frustrating for us sometimes when we\'re
not part of the discussions on what the crafting of the bill or what
direction it\'s going.

The unlimited bond you\'re referring to in the short term of leases,
there\'s a couple other issues, but those are the two basic ones. If it
passes in that measure, I think you\'re going to see a resistance from
the industry are probably the ones that are going to try and kill the
bill. People hate hearing that, but if it\'s passed that measure, then
it just sets a precedent that the existing industry can\'t function. So
we\'re really watching that closely. Maine aquaculture is watching it as
well as ‑‑ we talk about it all the time, what\'s happening. You know,
we\'re trying to get the information. So it\'s very concerning.

MR. RUBINO: I think there\'s a question at your table?

MR. WALLACE: Similar to that, you know, what ‑‑ you\'re going to propose
to have the bill reintroduced in the next Congress. What\'s the chances
that we end up having so many poison pills added to the bill that we
wish it hadn\'t been moved forward? You know, I think that that\'s a
very real question. There could be a very real possibility they\'ll try
to do that.

MR. BILLY: I think the problem is that\'s all unknown. We\'re all
speculating about the new Congress and the new administration and it
remaining to be seen. So, you know, we\'re just going to have to work
our way forward and see how it sorts out and various interests will then
try to implement things depending.

MR. RUBINO: I think from my perspective and the perspective of the
aquaculture program, we\'ve done what you have asked us to do. We\'ve
put together a trial balloon in terms of legislation. You know, it has
three or four parts to it. It has a regulatory part for federal waters.
It\'s got a research part ‑‑ this is not just an offshore bill as
you\'ve heard me say before, for a research program for all the marine
aquaculture. The Senate committee draft has \$65 million penciled in for
research. That\'s, you know, an authorizing figure, not and appropriate
figure. There\'s a section in there that would institutionalize
aquaculture within NOAA and create and advisory committee, perhaps as an
appendage to MAFAC. And conceivably we also drafted language at the
Committee\'s request to look at economic incentive provisions using the
fishery finance program to make more loans to aquaculture.

So, you know, I think we can serve as a technical resource to you and
other constituencies and to the committees and Congress, but I think
there\'s plenty out there if people want to politically want to move
something to run with it.

MR. BILLY: Tom?

MR. RAFTICAN: Yes, thank you, Mr. Chairman.

I just see a couple of issues that really stand in the way of moving
forward here. The thing that impressed me a minute ago about when Peter
spoke is, Peter, you run a project management company. My guess is
you\'re doing this on spec. And if you\'re doing it on spec, you got to
see a good bright side out there, or, you know, people don\'t invest
money for the hell of it. So tell us about the upside instead of just
the downside.

MR. SMITH: Well, we\'re not really doing it on spec. We\'re getting
reimbursed, we\'re working under a grant. We\'re going to spend a lot
more in terms of money than we take in. But still, we\'re not covered in
‑‑

MR. RAFTICAN: Never mind.

MR. BILLY: Okay. Any other thoughts from the Committee?

MR. CATES: Is there any less commitment from NOAA? I mean, not NOAA,
Fisheries. Where does Fisheries stand on this?

MR. RAUCH: Well at the moment we are just as committed as we\'ve always
been. We have not heard from any of the transition people or the new
administration. Obviously, NOAA, there\'s going to be a new political
head of NOAA. There\'s going to be a new Commerce ‑‑ I don\'t know where
we\'ll go. NOAA Fisheries is very committed to this. We see this as the
way forward and are very supportive. But, frankly, I can\'t tell you
what we\'re going to have to think in February.

MR. BILLY: Okay.

MR. JONER: I guess if I could ask them, I know this has just been asked,
what do we do as a committee, but I\'ll guess I\'ll make that more
specific. What can we do as a committee to kind of put a stake in the
ground so when the new administration is in we say, well, this is where
we are?

MR. BILLY: Well, I think that\'s in the transition document, and in
Vision 2020.

MR. JONER: I guess I\'m looking at maybe something a little more
focused, like you know, we want to have a statement or something about
whether it\'s ‑‑ this project here is somewhere else. I\'m thinking out
loud. You know, I guess last night when we left the aquarium I fit the
description of the first article you read, the Times‑Picayune. I was an
overfed American after all those shrimp and grits. Now it\'s close to
dinner, I\'m hungry and I\'m in favor of the second one. And it\'s kind
of good to see that somebody out there is recognizing that this is
something that\'s good for the coastal communities that are struggling.
And why that connection hasn\'t been made and acted upon, I don\'t know.
I think that\'s where my rambling is focused.

MR. BILLY: Again, that is a feature of what we\'ve written and
highlighted, the coastal communities. But maybe a more proactive step is
a right timing to have the Committee write to the new secretary and the
under‑secretary restating our strong support for this area.

MR. JONER: I guess that\'s where I\'m ‑‑ rather than just wait for them
to read something, find something. We send it out. This is something
that needs to continue on.

MR. BILLY: We did get a very positive response from the current
Secretary and he hosted the National Summit and I thought that did a lot
of good and brought some real focus, and worked with the Hill in a
difficult year trying to pursue the legislation. So, you know, I think
it makes business sense. So whoever the new secretary is, as well as the
under‑secretary, we can reassert our continuing interest beyond what,
you know, through a letter and refer to the other document.

MR. JONER: I think that\'s where I was talking about putting forth.

MR. BILLY: Is there support for that? Is that something that we want to
plan to do?

MR. CATES: I think part of the discussion we might have later about
face‑to‑face, maybe that would be part of that package, because I think
that needs to happen. I think when that discussion comes up, I\'m
assuming we\'re going to try and do that sooner than later.

MR. BILLY: Okay. All right. There\'s one matter of pending business;
we\'re about at the bewitching hour here, but we have now a draft of a
recommendation to the Secretary and we\'re going to put it up on the
screen.

So, go ahead.

MS. McCARTY: I included the things that we talked about. There may be
other things that we might want to add at this point. But I just
included the ones we already talked about. I did not include the
elements that we talked about having to do with the transition paper,
which was a separate discussion, just to remind you. So we said a few
other things about that which were not in this motion or any of the
other motions that were accepted by the group.

DR. HOLLIDAY: Heather, can anybody not see it in the back? I can read it
out loud, if that would help, or you can move forward or ‑‑

MR. BILLY: I think we can see it.

DR. HOLLIDAY: You can see it fine?

MR. BILLY: Yes, yes.

DR. HOLLIDAY: Well enough. Okay. Was it just the five? Yes, there\'s
only five points.

One thing from my notes from earlier, you had ‑‑ I forget whose friendly
amendment it was, but talked about the Secretary briefing as opposed to
just a NOAA level briefing. So I don\'t know if that was intentional or
just an omission, but you did discuss that.

MS. McCARTY: Yes, I think I have that in the first one. Legal,
administrative and the Secretary.

MR. DiLERNIA: What does four mean then, new administration leadership. I
thought that was referring to the Secretary. To me I interpreted that as
the Secretary, or as close to the Secretary as you could get without
identifying, you know, the NOAA administrator is specifically cited, and
I agree with that, but I guess four was referring to the Secretary?

MS. McCARTY: Maybe it was, yes. Okay.

MR. DEWEY: I thought four was referencing the transition team.

MS. McCARTY: It was everybody. It was all of the above. I could have
used that as a ‑‑ the transition team and the new administration, no
matter how high up, as high up as we could go, really. It could be more
specific.

MR. DiLERNIA: It\'s soft enough that it gives you a latitude, I guess.

MR. BILLY: Okay.

MS. McCARTY: If you want to mention the Secretary specifically, you
could put it in either one of those statements.

MR. SCHWAAB: I would just suggest that we modify No. 4 to speak
specifically to transition, leadership and the incoming Secretary of
Commerce.

DR. HOLLIDAY: You\'re not going to ask me to publicly type are you?

MS. McCARTY: Now, can you do that over there?

DR. HOLLIDAY: Transition?

MS. McCARTY: Yes, that was meant to refer to the transition element that
we referred to in another place.

DR. HOLLIDAY: Erika, what was it that you ‑‑

MR. SCHWAAB: I mean, I would sort of word it as we\'re seeking, you
know, proactively meetings with transition leadership and the incoming
Secretary of Commerce with respect to the transition paper.

MS. McCARTY: Yes, I was trying not to mix the two. Talk it about it
separately, but it makes sense to put it together.

MR. SCHWAAB: Mix the two, the transition and the Secretary or the two
documents?

MS. McCARTY: The 2020 ‑‑ the two documents. Well, the two issues. The
disposition and the 2020 report and what we were going to do with that,
and then how we were going to deal with the whole transition issue. We
had two separate discussions. But I did include the transition one in
number 4 because we had talked about using the 2020 for that discussion
as well.

MR. BILLY: We used both documents, in other words.

MS. McCARTY: Yes. I believe that should be a separate one, myself.

MR. BILLY: This number 4, you mean?

MS. McCARTY: I do. I believe if you\'re going to start talking about #‑
because I think it ought to be a separate motion, that\'s all. I think
it ought to just be separate. We ought to say here\'s what we\'re going
to do in transition. Here\'s what we\'re going to do with Vision 2020.
It\'s two different things. I think somebody should make a motion that
says we\'re going to seek meetings with transition team leadership and
the new administration.

MR. DiLERNIA: Separate from this motion?

MS. McCARTY: Yes.

MR. DiLERNIA: So you have to pass this first.

MS. McCARTY: Yes.

MR. BILLY: Yes.

MR. DiLERNIA: Okay.

MS. McCARTY: That\'s what I think.

MR. SCHWAAB: And yet you address the transition paper in number 4?

MS. McCARTY: Yes, I included it because we said in this discussion that
we were going to also use the 2020 paper when we talk to the folks in
the transition area. That\'s why I included that.

MR. SCHWAAB: Ah.

MS. McCARTY: Because it was one of the things that we were going to do
with the 2020 paper.

MR. SCHWAAB: Okay.

MR. BILLY: So is there a ‑‑

MR. DiLERNIA: Second. She made the motion. You making the motion,
Heather?

MS. McCARTY: I make the motion.

MR. BILLY: Okay. Seconded. Any further discussion? All those in favor?

ALL: Aye.

MR. BILLY: Opposed. Okay. Thanks.

MR. SCHWAAB: Now there\'s a second motion, Mr. Chairman.

MR. BILLY: Thank you.

MR. SCHWAAB: [That we proactively seek meetings with transition
leadership and the incoming Secretary of Commerce to present the
transition paper and the recommendations on behalf of MAFAC.]{.mark} And
I guess I would invite input from NOAA as to what kind of a role you
think you should play in that.

MR. BILLY: Well, why don\'t we just say we will meet with them?
Proactively seek?

MR. SCHWAAB: The second point is whether it\'s a MAFAC thing or whether
it\'s a joint MAFAC and NOAA thing. That\'s the only thing I\'m
uncertain about.

MR. BILLY: Go ahead.

MR. RAUCH: This is the Secretary\'s committee. I certainly think it\'s
perfectly appropriate for this Committee to seek a hearing with the
Secretary.

MR. SCHWAAB: Okay.

MR. RAUCH: We can facilitate that. It becomes awkward if you direct us
to do things in transition. But facilitating your meeting with the
Secretary because you\'re the Secretary\'s own committee, I think
that\'s perfectly appropriate.

MR. SCHWAAB: And then is there an objection if we sought a meeting with
the transition leadership?

MR. RAUCH: They are representatives of the new Secretary.

MR. SCHWAAB: Okay. So we\'d just leave it as MAFAC seeking those ‑‑

MR. RAUCH: Right. And we can facilitate that.

MR. SCHWAAB: Okay.

MR. RAFTICAN: Second.

MR. BILLY: Okay. Does someone have this down?

Does everyone understand what we\'re considering?

MS. McCARTY: Yes.

MR. BILLY: Okay. All right. All those in favor?

ALL: Aye.

MR. BILLY: Opposed? [Okay.]{.mark}

MR. JONER: Mr. Chairman, I have a question. Are we going to talk about
how these things will be coordinated? Who\'s going to go? Or this just
something on an ad hoc when the chance arises. Do you want to wait, or
how do you do this? Do we say we\'re going to have a team ready to go,
or that a date comes and we send out an email and find out who\'s
available?

MR. BILLY: Yes, well ‑‑

MR. JONER: For example, even more specifically, the meeting with the
Councils? Are all the Councils covered here? So I guess if you\'re in a
Council\'s territory, you ‑‑

MR. DiLERNIA: The original thinking, and I\'d just offer that, I\'m not
saying that this how we should go, but the original thinking was when we
first were going to shop around the document that individual members of
MAFAC would make presentation to their individual Regional Fishery
Management Councils regarding the document. And that was the plan, but
then there wasn\'t enough budget to support the plan and there seemed to
be some resistance on the part of some members regarding reporting
within their own region. And so that plan was abandoned and defaulted to
we\'ll send it to the Councils and we\'ll distribute it and if they ask
for ‑‑ or, you know, we can go and see them. But I think what Steve is
recommending is a good idea, you know, that the Councils receive a
briefing and that it should be done by ‑‑ I mean, we all know our
individual regions and Councils.

MR. JONER: You know, Dorothy and I could cover the Pacific. Randy\'s
alone. I can go help him, you know?

MR. BILLY: Mark? How about you and I follow up on this and circulate an
email that will provide an opportunity for the members of this Committee
to volunteer to make the presentations? If we find we\'ve got a gap,
we\'ll figure out how to deal with it and cover that part of it. And in
terms of how the rest of it\'s going to happen, I think in talking to
Jim earlier, we\'ve got to keep it a little ad hoc right now, because we
don\'t know when all this is going to start to crystalize. So, our
intentions are clear. We\'re going to have to rely on the NOAA Fishery
leadership to coordinate with us and we\'ll let you know when and what
was the ‑‑ you know, I\'m not sure from what I heard earlier there\'s
going to be money to travel people, but maybe some of you will be coming
here for something else. You know, we just figure that out when the time
comes.

DR. HOLLIDAY: We did not discuss whether there were funds or not. There
was a question asked by Randy if funds would be available for somebody
to come and brief somebody and I said, an individual, I didn\'t think
that would be a problem. If you\'re talking about 21 members of the
Committee coming to do something, that\'s another \[full\] meeting. No.
But I didn\'t say that we couldn\'t support anything because of
financial reasons.

MR. BILLY: Oh, okay. Sorry, I just misunderstood.

MR. DiLERNIA: The original, we didn\'t want this going on the road.

MR. CATES: I have a question for the Committee, and that is if we\'re
talking about briefing potentially the new secretary, or whoever will
accept, in light of this morning\'s discussion on the budget problems, I
had asked maybe we need to try and get a brief with Senator Inouye, who
I think would be highly important. I think I can make that meeting
happen, and I would see that as a one or two‑person representative from
MAFAC doing that at the same time, try and get the Secretary of Commerce
and the Senator and say, look, we\'re facing a problem here that\'s
going to cost taxpayers some money. If we don\'t implement some of the
things that we talked about, we\'re going to get sued. That\'s going to
cost taxpayers.

MR. BILLY: And impact local communities and further exacerbate the trade
deficit.

MR. CATES: So if the Committee, if we decide we want to do that, let me
know and I\'ll try and make that happen, but then if we\'re going to be
on that schedule. And then the question is ‑‑

MR. BILLY: Jim?

MR. GILMORE: Sam, are we allowed to lobby Congress?

MR. RAUCH: Not as a group.

MR. GILMORE: As members as MAFAC?

MR. BILLY: Not as a group.

MR. RAUCH: Individually, you certainly are.

MR. GILMORE: Thank you. Well, briefing is not ‑‑

MR. RAUCH: Certainly if Congress requests a discussion on Vision 2020, I
think it would be appropriate for NOAA to bring a member of MAFAC to
discuss that. It\'s very conceivable that that could happen. I would be
cautious about lobbying for money as a group, but as an individual. Even
as a group, you could recommend that more money be appropriated. But
you\'re right making the recommendation to the Secretary.

MR. REISNER: To the degree that MAFAC goes ‑‑ I think either you as a
representative or the Secretary has to say \"Yes, that\'s a good idea or
not.\" And so it might go to the Secretary\'s advisory committee and not
an independent advisory committee.

MR. CATES: Yes, we need to be clear on this.

MR. RAUCH: Well, it\'s a lot easier if Congress asks us, which is
normally what ‑‑ you know, I assume that\'s what would happen here.

MR. DiLERNIA: And Inouye\'s going to write you a letter. Inouye\'s going
to write a letter for us.

MR. RAUCH: That\'s what I\'m assuming would happen and then I think it
would be appropriate for the Secretary to decide that the deliberations
of MAFAC be shared with Congress.

MR. CATES: I can make that ‑‑

MR. DiLERNIA: Write the letter.

MR. BILLY: Okay. Any other business?

Mark, anything else?

DR. HOLLIDAY: 8:30 tomorrow?

MR. BILLY: 8:30 start time. Okay? Thank you all very much. You worked
hard today.

(Whereupon, the above‑entitled matter was adjourned at 4:57 p.m., to
reconvene Friday, November 14, 2008 at 8:30 a.m.)