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


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Part 622

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


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

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

ACTION:  Final rule.

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

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

[[Page 44733]]


ADDRESSES:  Copies of the Final Environmental Impact Statement (FEIS), 
Final Regulatory Flexibility Analysis (FRFA), and Record of Decision 
(ROD) may be obtained from Susan Gerhart, Southeast Regional Office, 
NMFS 263 13th Avenue South, St. Petersburg, FL 33701; telephone 727-
824-5305; fax 727-824-5308.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to Susan Gerhart, Southeast Regional 
Office, NMFS, and by e-mail to <a href="/cdn-cgi/l/email-protection#1d597c6b7479424f726e6976786f5d72707f3378726d337a726b"><span class="__cf_email__" data-cfemail="b3f7d2c5dad7ece1dcc0c7d8d6c1f3dcded19dd6dcc39dd4dcc5">[email protected]</span></a>, or by fax to 
202-395-7285.

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

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

Comments and Responses

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

[[Page 44734]]

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

[[Page 44735]]

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

[[Page 44736]]

Classification

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

[[Page 44737]]

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

[[Page 44738]]

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

[[Page 44739]]

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

[[Page 44740]]

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

[[Page 44741]]

of related rules for which an agency is required to prepare a FRFA, the 
agency shall publish one or more guides to assist small entities in 
complying with the rule, and shall designate such publications as 
``small entity compliance guides.'' As part of the rulemaking process, 
NMFS prepared a fishery bulletin, which also serves as a small entity 
compliance guide. The fishery bulletin will be sent to all vessel 
permit holders for the Gulf Reef Fish fishery.
    This final rule contains collection-of-information requirements 
subject to the Paperwork Reduction Act (PRA) and which have been 
approved by OMB under control number 0648-0587. The collections and the 
associated estimated average public reporting burden per response are 
provided in the following table.

------------------------------------------------------------------------
                                                        ESTIMATED BURDEN
               COLLECTION  REQUIREMENT                    PER RESPONSE
------------------------------------------------------------------------
Dealer Account Activation                                     5 minutes
------------------------------------------------------------------------
Dealer Transaction Report                                     7 minutes
------------------------------------------------------------------------
Shareholder Account Activation                                5 minutes
------------------------------------------------------------------------
Fisherman Account Activation                                 10 minutes
------------------------------------------------------------------------
Active Vessels Report                                        10 minutes
------------------------------------------------------------------------
Approval of Landing Location                                  5 minutes
------------------------------------------------------------------------
Notification of Landing Time                                  3 minutes
------------------------------------------------------------------------
Transfer of Share                                            15 minutes
------------------------------------------------------------------------
Transfer of Allocation                                        5 minutes
------------------------------------------------------------------------
Permit Consolidation                                         10 minutes
------------------------------------------------------------------------

    These estimates of the public reporting burden includes the time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collections of information. Send comments regarding these burden 
estimates or any other aspect of this data collection, including 
suggestions for reducing the burden, to NMFS (see ADDRESSES) and by e-
mail to <a href="/cdn-cgi/l/email-protection#155174637c714a477a66617e7067557a78773b707a653b727a63"><span class="__cf_email__" data-cfemail="327653445b566d605d4146595740725d5f501c575d421c555d44">[email protected]</span></a>, or fax to 202-395-7285.
    Notwithstanding any other provision of law, no person is required 
to respond to, nor shall a person be subject to a penalty for failure 
to comply with, a collection of information subject to the requirements 
of the PRA unless that collection of information displays a currently 
valid OMB control number.

List of Subjects

15 CFR Part 902

    Reporting and recordkeeping requirements.

50 CFR Part 622

    Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping 
requirements, Virgin Islands.

    Dated: August 26, 2009.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

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

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

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

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

0
2. In Sec.  902.1, paragraph (b), under ``50 CFR'', the entry 
``622.20'' is added in numerical order to read as follows:


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

    (b) * * *

------------------------------------------------------------------------
                                                            Current OMB
                                                          control number
                                                                the
  CFR part or section where the information collection      information
                 requirement is located                    (All numbers
                                                            begin with
                                                              0648-)
------------------------------------------------------------------------
                                * * * * *
50 CFR
                                * * * * *
622.20..................................................           -0587
                                * * * * *
------------------------------------------------------------------------

50 CFR Chapter VI

PART 622--FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC

0
3. The authority citation for part 622 continues to read as follows:

    Authority: 16 U.S.C. 1801 et seq.

0
4. In Sec.  622.1, paragraph (b), Table 1, the entry for FMP for the 
Reef Fish Resources of the Gulf of Mexico, and footnote 5 are revised, 
and footnote 6 is added to read as follows:


Sec.  622.1  Purpose and scope.

* * * * *
    (b) * * *

                                    Table 1--FMPs Implemented Under Part 622
----------------------------------------------------------------------------------------------------------------
                                                        Responsible fishery
                    FMP title                          management council(s)             Geographical area
----------------------------------------------------------------------------------------------------------------
                                                  * * * * * * *
FMP for the Reef Fish Resources of the Gulf of                             GMFMC                   Gulf.\1,5,6\
 Mexico.........................................
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
\1\ Regulated area includes adjoining state waters for purposes of data collection and quota monitoring.
\5\ Regulated area includes adjoining state waters for Gulf red snapper harvested or possessed by a person
  aboard a vessel for which a Gulf red snapper IFQ vessel account has been established or possessed by a dealer
  with a Gulf IFQ dealer endorsement.
\6\ Regulated area includes adjoining state waters for Gulf groupers and tilefishes harvested or possessed by a
  person aboard a vessel for which an IFQ vessel account for Gulf groupers and tilefishes has been established
  or possessed by a dealer with a Gulf IFQ dealer endorsement.


0
5. In Sec.  622.2, the definitions of ``Deep-water grouper (DWG)'' and 
``Shallow-water grouper (SWG)'' are revised to read as follows:


Sec.  622.2  Definitions and acronyms.

* * * * *
    Deep-water grouper (DWG) means yellowedge grouper, misty grouper, 
warsaw grouper, snowy grouper, and speckled hind. In addition, for the 
purposes of the IFQ program for Gulf groupers and tilefishes in Sec.  
622.20,

[[Page 44742]]

scamp are also included as DWG as specified in Sec.  622.20(b)(2)(vi).
* * * * *
    Shallow-water grouper (SWG) means gag, red grouper, black grouper, 
scamp, yellowfin grouper, rock hind, red hind, and yellowmouth grouper. 
In addition, for the purposes of the IFQ program for Gulf groupers and 
tilefishes in Sec.  622.20, speckled hind and warsaw grouper are also 
included as SWG as specified in Sec.  622.20(b)(2)(v).
* * * * *

0
6. In Sec.  622.4, paragraphs (a)(2)(v), (a)(2)(ix), and (a)(4)(ii) are 
revised, and a new sentence is added after the third sentence in 
paragraph (i) to read as follows:


Sec.  622.4  Permits and fees.

* * * * *
    (a) * * *
    (2) * * *
    (v) Gulf reef fish. For a person aboard a vessel to be eligible for 
exemption from the bag limits, to fish under a quota, as specified in 
Sec.  622.42(a)(1), or to sell Gulf reef fish in or from the Gulf EEZ, 
a commercial vessel permit for Gulf reef fish must have been issued to 
the vessel and must be on board. If Federal regulations for Gulf reef 
fish in subparts A, B, or C of this part are more restrictive than 
state regulations, a person aboard a vessel for which a commercial 
vessel permit for Gulf reef fish has been issued must comply with such 
Federal regulations regardless of where the fish are harvested. See 
paragraph (a)(2)(ix) of this section regarding an IFQ vessel account 
required to fish for, possess, or land Gulf red snapper or Gulf 
groupers and tilefishes. To obtain or renew a commercial vessel permit 
for Gulf reef fish, more than 50 percent of the applicant's earned 
income must have been derived from commercial fishing (i.e., harvest 
and first sale of fish) or from charter fishing during either of the 2 
calendar years preceding the application. See paragraph (m) of this 
section regarding a limited access system for commercial vessel permits 
for Gulf reef fish and limited exceptions to the earned income 
requirement for a permit.
    (A) Option to consolidate commercial vessel permits for Gulf reef 
fish. A person who has been issued multiple commercial vessel permits 
for Gulf reef fish and wants to consolidate some or all of those 
permits, and the landings histories associated with those permits, into 
one permit must submit a completed permit consolidation application to 
the RA. The permits consolidated must be valid, non-expired permits and 
must be issued to the same entity. The application form and 
instructions are available online at sero.nmfs.noaa.gov. After 
consolidation, such a person would have a single permit, and the 
permits that were consolidated into that permit will be permanently 
terminated.
    (B) [Reserved]
* * * * *
    (ix) Gulf IFQ vessel accounts. For a person aboard a vessel, for 
which a commercial vessel permit for Gulf reef fish has been issued, to 
fish for, possess, or land Gulf red snapper or Gulf groupers (including 
DWG and SWG, as specified in Sec.  622.20(a)) or tilefishes (including 
goldface tilefish, blackline tilefish, anchor tilefish, blueline 
tilefish, and tilefish), regardless of where harvested or possessed, a 
Gulf IFQ vessel account for the applicable species or species groups 
must have been established. As a condition of the IFQ vessel account, a 
person aboard such vessel must comply with the requirements of Sec.  
622.16 when fishing for red snapper or Sec.  622.20 when fishing for 
groupers or tilefishes regardless of where the fish are harvested or 
possessed. An owner of a vessel with a commercial vessel permit for 
Gulf reef fish, who has established an IFQ account for the applicable 
species, as specified in Sec.  622.16(a)(3)(i) or Sec.  
622.20(a)(3)(i), online via the NMFS IFQ website 
ifq.sero.nmfs.noaa.gov, may establish a vessel account through that IFQ 
account for that permitted vessel. If such owner does not have an 
online IFQ account, the owner must first contact IFQ Customer Service 
at 1-866-425-7627 to obtain information necessary to access the IFQ 
website and establish an online IFQ account. There is no fee to set-up 
an IFQ account or a vessel account. Only one vessel account may be 
established per vessel under each IFQ program. An owner with multiple 
vessels may establish multiple vessel accounts under each IFQ account. 
The purpose of the vessel account is to hold IFQ allocation that is 
required to land the applicable IFQ species. A vessel account must hold 
sufficient IFQ allocation in the appropriate share category, at least 
equal to the pounds in gutted weight of the red snapper or groupers and 
tilefishes on board, from the time of advance notice of landing through 
landing (except for any overage allowed as specified in Sec.  
622.16(c)(1)(ii) for red snapper and Sec.  622.20(c)(1)(ii) for 
groupers and tilefishes). The vessel account remains valid as long as 
the vessel permit remains valid; the vessel has not been sold or 
transferred; and the vessel owner is in compliance with all Gulf reef 
fish and IFQ reporting requirements, has paid all applicable IFQ fees, 
and is not subject to sanctions under 15 CFR part 904. The vessel 
account is not transferable to another vessel. The provisions of this 
paragraph do not apply to fishing for or possession of Gulf groupers 
and tilefishes under the bag limit specified in Sec.  622.39 (b)(1)(ii) 
or Gulf red snapper under the bag limit specified in Sec.  622.39 
(b)(1)(iii). See Sec.  622.16 regarding other provisions pertinent to 
the Gulf red snapper IFQ system and Sec.  622.20 regarding other 
provisions pertinent to the IFQ system for Gulf groupers and 
tilefishes.
* * * * *
    (4) * * *
    (ii) Gulf IFQ dealer endorsements. In addition to the requirement 
for a dealer permit for Gulf reef fish as specified in paragraph 
(a)(4)(i) of this section, for a dealer to receive red snapper subject 
to the Gulf red snapper IFQ program, as specified in Sec.  
622.16(a)(1), or groupers and tilefishes subject to the IFQ program for 
Gulf groupers and tilefishes, as specified in Sec.  622.20(a)(1), or 
for a person aboard a vessel with a Gulf IFQ vessel account to sell 
such red snapper or groupers and tilefishes directly to an entity other 
than a dealer, such persons must also have a Gulf IFQ dealer 
endorsement. A dealer with a Gulf reef fish permit can download a Gulf 
IFQ dealer endorsement from the NMFS IFQ website at 
ifq.sero.nmfs.noaa.gov. If such persons do not have an IFQ online 
account, they must first contact IFQ Customer Service at 1-866-425-7627 
to obtain information necessary to access the IFQ website and establish 
an IFQ online account. There is no fee for obtaining this endorsement. 
The endorsement remains valid as long as the Gulf reef fish dealer 
permit remains valid and the dealer is in compliance with all Gulf reef 
fish and IFQ reporting requirements, has paid all IFQ fees required 
under paragraph (c)(2) of this section, and is not subject to any 
sanctions under 15 CFR part 904. The endorsement is not transferable. 
See Sec.  622.16 regarding other provisions pertinent to the Gulf red 
snapper IFQ system and Sec.  622.20 regarding other provisions 
pertinent to the IFQ system for Gulf groupers and tilefishes.
* * * * *
    (i) Display. * * * A Gulf IFQ dealer endorsement must accompany 
each vehicle that is used to pick up Gulf IFQ red snapper and/or Gulf 
IFQ groupers and tilefishes. * * *
* * * * *

0
7. In Sec.  622.7, paragraphs (gg) and (hh) are revised to read as 
follows:

[[Page 44743]]

Sec.  622.7  Prohibitions.

* * * * *
    (gg) Fail to comply with any provision related to the Gulf red 
snapper IFQ program as specified in Sec.  622.16, or the IFQ program 
for Gulf groupers and tilefishes as specified in Sec.  622.20.
    (hh) Falsify any information required to be submitted regarding the 
Gulf red snapper IFQ program as specified in Sec.  622.16, or the IFQ 
program for Gulf groupers and tilefishes as specified in Sec.  622.20.
* * * * *

0
8. In Sec.  622.16, revise the fifth and sixth sentences in the 
introductory text of paragraph (a), and revise paragraphs (a)(1) and 
(c) to read as follows:


Sec.  622.16  Gulf red snapper individual fishing quota (IFQ) program.

    (a) * * * See Sec.  622.4(a)(2)(ix) regarding a requirement for a 
vessel landing red snapper subject to this IFQ program to have a Gulf 
red snapper IFQ vessel account. See Sec.  622.4(a)(4)(ii) regarding a 
requirement for a Gulf IFQ dealer endorsement. * * *
    (1) Scope. The provisions of this section apply to Gulf red snapper 
in or from the Gulf EEZ and, for a person aboard a vessel with a Gulf 
red snapper IFQ vessel account as required by Sec.  622.4(a)(2)(ix) or 
for a person with a Gulf IFQ dealer endorsement as required by Sec.  
622.4(a)(4)(ii), these provisions apply to Gulf red snapper regardless 
of where harvested or possessed.
* * * * *
    (c) IFQ operations and requirements--(1) IFQ Landing and 
transaction requirements. (i) Gulf red snapper subject to this IFQ 
program can only be possessed or landed by a vessel with a Gulf red 
snapper IFQ vessel account with allocation at least equal to the pounds 
of red snapper on board, except as provided in paragraph (c)(1)(ii) of 
this section. Such red snapper can only be received by a dealer with a 
Gulf IFQ dealer endorsement.
    (ii) A person on board a vessel with an IFQ vessel account landing 
the shareholder's only remaining allocation, can legally exceed, by up 
to 10 percent, the shareholder's allocation remaining on that last 
fishing trip of the fishing year, i.e., a one-time per fishing year 
overage. Any such overage will be deducted from the shareholder's 
applicable allocation for the subsequent fishing year. From the time of 
the overage until January 1 of the subsequent fishing year, the IFQ 
shareholder must retain sufficient shares to account for the allocation 
that will be deducted the subsequent fishing year. Share transfers that 
would violate this requirement will be prohibited.
    (iii) The dealer is responsible for completing a landing 
transaction report for each landing and sale of Gulf red snapper via 
the IFQ website at ifq.sero.nmfs.noaa.gov at the time of the 
transaction in accordance with reporting form and instructions provided 
on the website. This report includes, but is not limited to, date, 
time, and location of transaction; weight and actual ex-vessel value of 
red snapper landed and sold; and information necessary to identify the 
fisherman, vessel, and dealer involved in the transaction. The 
fisherman must validate the dealer transaction report by entering his 
unique PIN number when the transaction report is submitted. After the 
dealer submits the report and the information has been verified, the 
website will send a transaction approval code to the dealer and the 
allocation holder.
    (iv) If there is a discrepancy regarding the landing transaction 
report after approval, the dealer or vessel account holder (or his or 
her authorized agent) may initiate a landing transaction correction 
form to correct the landing transaction. This form is available via the 
IFQ website at ifq.sero.nmfs.noaa.gov. Both parties must validate the 
landing correction form by entering their respective PIN numbers, i.e. 
vessel account PIN or dealer account PIN. The dealer must then print 
out the form, both parties must sign it, and the form must be mailed to 
NMFS. The form must be received by NMFS no later than 15 days after the 
date of the initial landing transaction.
    (2) IFQ cost recovery fees. As required by section 304(d)(2)(A)(i) 
of the Magnuson-Stevens Act, the RA will collect a fee to recover the 
actual costs directly related to the management and enforcement of the 
Gulf red snapper IFQ program. The fee cannot exceed 3 percent of the 
ex-vessel value of Gulf red snapper landed under the IFQ program. Such 
fees will be deposited in the Limited Access System Administration Fund 
(LASAF). Initially, the fee will be 3 percent of the actual ex-vessel 
value of Gulf red snapper landed under the IFQ program, as documented 
in each landings transaction report. The RA will review the cost 
recovery fee annually to determine if adjustment is warranted. Factors 
considered in the review include the catch subject to the IFQ cost 
recovery, projected ex-vessel value of the catch, costs directly 
related to the management and enforcement of the IFQ program, the 
projected IFQ balance in the LASAF, and expected non-payment of fee 
liabilities. If the RA determines that a fee adjustment is warranted, 
the RA will publish a notification of the fee adjustment in the Federal 
Register.
    (i) Payment responsibility. The IFQ allocation holder specified in 
the documented red snapper IFQ landing transaction report is 
responsible for payment of the applicable cost recovery fees.
    (ii) Collection and submission responsibility. A dealer who 
receives Gulf red snapper subject to the IFQ program is responsible for 
collecting the applicable cost recovery fee for each IFQ landing from 
the IFQ allocation holder specified in the IFQ landing transaction 
report. Such dealer is responsible for submitting all applicable cost 
recovery fees to NMFS on a quarterly basis. The fees are due and must 
be submitted, using pay.gov via the IFQ system at the end of each 
calendar-year quarter, but no later than 30 days after the end of each 
calendar-year quarter. Fees not received by the deadline are 
delinquent.
    (iii) Fee payment procedure. For each IFQ dealer, the IFQ system 
will post, on individual message boards, an end-of-quarter statement of 
cost recovery fees that are due. The dealer is responsible for 
submitting the cost recovery fee payments using pay.gov via the IFQ 
system. Authorized payments methods are credit card, debit card, or 
automated clearing house (ACH). Payment by check will be authorized 
only if the RA has determined that the geographical area or an 
individual(s) is affected by catastrophic conditions.
    (iv) Fee reconciliation process--delinquent fees. The following 
procedures apply to an IFQ dealer whose cost recovery fees are 
delinquent.
    (A) On or about the 31st day after the end of each calendar-year 
quarter, the RA will send the dealer an electronic message via the IFQ 
website and official notice via mail indicating the applicable fees are 
delinquent, and the dealer's IFQ account has been suspended pending 
payment of the applicable fees.
    (B) On or about the 91st day after the end of each calendar-year 
quarter, the RA will refer any delinquent IFQ dealer cost recovery fees 
to the appropriate authorities for collection of payment.
    (3) Measures to enhance IFQ program enforceability--(i) Advance 
notice of landing. For the purpose of this paragraph, landing means to 
arrive at a dock, berth, beach, seawall, or ramp. The owner or operator 
of a vessel landing IFQ red snapper is responsible for ensuring that 
NMFS is contacted at least 3 hours, but no more than 12 hours, in 
advance of landing to report

[[Page 44744]]

the time and location of landing, estimated red snapper landings in 
pounds gutted weight, vessel identification number (Coast Guard 
registration number or state registration number), and the name and 
address of the IFQ dealer where the red snapper are to be received. The 
vessel landing red snapper must have sufficient IFQ allocation in the 
IFQ vessel account, at least equal to the pounds in gutted weight of 
red snapper on board (except for any overage up to the 10 percent 
allowed on the last fishing trip) from the time of the advance notice 
of landing through landing. Authorized methods for contacting NMFS and 
submitting the report include calling NMFS Office for Law Enforcement 
at 1-866-425-7627, completing and submitting to NMFS the notification 
form provided through the VMS unit, or providing the required 
information to NMFS through the web-based form available on the IFQ 
website at ifq.sero.nmfs.noaa.gov. As new technology becomes available, 
NMFS will add other authorized methods for complying with the advance 
notification requirement, via appropriate rulemaking. Failure to comply 
with this advance notice of landing requirement is unlawful and will 
preclude authorization to complete the landing transaction report 
required in paragraph (c)(1)(iii) of this section and, thus, will 
preclude issuance of the required transaction approval code.
    (ii) Time restriction on offloading. IFQ red snapper may be 
offloaded only between 6 a.m. and 6 p.m., local time.
    (iii) Restrictions on transfer of IFQ red snapper. At-sea or 
dockside transfer of IFQ red snapper from one vessel to another vessel 
is prohibited.
    (iv) Requirement for transaction approval code. If IFQ red snapper 
are offloaded to a vehicle for transportation to a dealer or are on a 
vessel that is trailered for transport to a dealer, on-site capability 
to accurately weigh the fish and to connect electronically to the 
online IFQ system to complete the transaction and obtain the 
transaction approval code is required. After a landing transaction has 
been completed, a transaction approval code verifying a legal 
transaction of the amount of IFQ red snapper in possession and a copy 
of the dealer endorsement must accompany any IFQ red snapper from the 
landing location through possession by a dealer. This requirement also 
applies to IFQ red snapper possessed on a vessel that is trailered for 
transport to a dealer.
    (v) Approved landing locations. Landing locations must be approved 
by NMFS Office for Law Enforcement prior to landing or offloading at 
these sites. Proposed landing locations may be submitted online via the 
IFQ website at ifq.sero.nmfs.noaa.gov, or by calling IFQ Customer 
Service at 1-866-425-7627, at any time, however, new landing locations 
will be approved only at the end of each calendar-year quarter. To have 
a landing location approved by the end of the calendar-year quarter, it 
must be submitted at least 45 days before the end of the calendar-year 
quarter. NMFS will evaluate the proposed sites based on, but not 
limited to, the following criteria:
    (A) Landing locations must be publicly accessible by land and 
water, and
    (B) they must have a street address. If there is no street address 
on record for a particular landing location, global positioning system 
(GPS) coordinates for an identifiable geographic location must be 
provided.
    (4) Transfer of IFQ shares and allocation. Until January 1, 2012, 
IFQ shares and allocations can be transferred only to a person who 
holds a valid commercial vessel permit for Gulf reef fish; thereafter, 
IFQ shares and allocations can be transferred to any U.S. citizen or 
permanent resident alien. However, a valid commercial permit for Gulf 
reef fish, a Gulf red snapper IFQ vessel account, and Gulf red snapper 
IFQ allocation are required to possess (at and after the time of the 
advance notice of landing), land or sell Gulf red snapper subject to 
this IFQ program.
    (i) Share transfers. Share transfers are permanent, i.e., they 
remain in effect until subsequently transferred. Transfer of shares 
will result in the corresponding allocation being automatically 
transferred to the person receiving the transferred share beginning 
with the fishing year following the year the transfer occurred. 
However, within the fishing year the share transfer occurs, transfer of 
shares and associated allocation are independent--unless the associated 
allocation is transferred separately, it remains with the transferor 
for the duration of that fishing year. A share transfer transaction 
that remains in pending status, i.e., has not been completed and 
verified with a transaction approval code, after 30 days from the date 
the shareholder initiated the transfer will be cancelled, and the 
pending shares will be re-credited to the shareholder who initiated the 
transfer.
    (ii) Share transfer procedures. Share transfers must be 
accomplished online via the IFQ website. An IFQ shareholder must 
initiate a share transfer request by logging onto the IFQ website at 
ifq.sero.nmfs.noaa.gov. Following the instructions provided on the 
website, the shareholder must enter pertinent information regarding the 
transfer request including, but not limited to, amount of shares to be 
transferred, which must be a minimum of 0.0001 percent; name of the 
eligible transferee; and the value of the transferred shares. An IFQ 
shareholder who is subject to a sanction under 15 CFR part 904 is 
prohibited from initiating a share transfer. An IFQ shareholder who is 
subject to a pending sanction under 15 CFR part 904 must disclose in 
writing to the prospective transferee the existence of any pending 
sanction at the time of the transfer. For the first 5 years this IFQ 
program is in effect, an eligible transferee is a person who has a 
valid commercial vessel permit for Gulf reef fish; is in compliance 
with all reporting requirements for the Gulf reef fish fishery and the 
red snapper IFQ program; is not subject to sanctions under 15 CFR part 
904; and who would not be in violation of the share cap as specified in 
paragraph (c)(6) of this section. Thereafter, share transferee 
eligibility will be extended to include U.S. citizens and permanent 
resident aliens who are otherwise in compliance with the provisions of 
this section. The online system will verify the transfer information 
entered. If the information is not accepted, the online system will 
send the shareholder an electronic message explaining the reason(s) why 
the transfer request can not be completed. If the information is 
accepted, the online system will send the transferee an electronic 
message of the pending transfer. The transferee must approve the share 
transfer by electronic signature. If the transferee approves the share 
transfer, the online system will send a transaction approval code to 
both the transferor and transferee confirming the transaction. All 
share transfers must be completed and the transaction approval code 
received prior to December 31 at 6 p.m. eastern time each year.
    (iii) Allocation transfers. An allocation transfer is valid only 
for the remainder of the fishing year in which it occurs; it does not 
carry over to the subsequent fishing year. Any allocation that is 
unused at the end of the fishing year is void. Allocation may be 
transferred to a vessel account from any IFQ account. Allocation held 
in a vessel account, however, may only be transferred back to the IFQ 
account through which the vessel account was established.
    (iv) Allocation transfer procedures. Allocation transfers must be 
accomplished online via the IFQ website. An IFQ account holder must 
initiate an allocation transfer by logging

[[Page 44745]]

onto the IFQ website at ifq.sero.nmfs.noaa.gov, entering the required 
information, including but not limited to, name of an eligible 
transferee and amount of IFQ allocation to be transferred and price, 
and submitting the transfer electronically. An IFQ allocation holder 
who is subject to a sanction under 15 CFR part 904 is prohibited from 
initiating an allocation transfer. An IFQ allocation holder who is 
subject to a pending sanction under 15 CFR part 904 must disclose in 
writing to the prospective transferee the existence of any pending 
sanction at the time of the transfer. If the transfer is approved, the 
online system will provide a transaction approval code to the 
transferor and transferee confirming the transaction.
    (5) Restricted transactions during the 12-hour online maintenance 
window. All electronic IFQ transactions must be completed by December 
31 at 6 p.m. eastern time each year. Electronic IFQ functions will 
resume again on January 1 at 6 a.m. eastern time the following fishing 
year. The remaining 6 hours prior to the end of the fishing year, and 
the 6 hours at the beginning of the next fishing year, are necessary to 
provide NMFS time to reconcile IFQ accounts, adjust allocations for the 
upcoming year if the commercial quotas for Gulf red snapper have 
changed, and update shares and allocations for the upcoming fishing 
year. No electronic IFQ transactions will be available during these 12 
hours. An advance notice of landing may still be submitted during the 
12-hour maintenance window by calling IFQ Customer Service at 1-866-
425-7627.
    (6) IFQ share cap. No person, including a corporation or other 
entity, may individually or collectively hold IFQ shares in excess of 
6.0203 percent of the total shares. For the purposes of considering the 
share cap, a corporation's total IFQ share is determined by adding the 
applicable IFQ shares held by the corporation and any other IFQ shares 
held by a corporation(s) owned by the original corporation prorated 
based on the level of ownership. An individual's total IFQ share is 
determined by adding the applicable IFQ shares held by the individual 
and the applicable IFQ shares equivalent to the corporate share the 
individual holds in a corporation. Initially, a corporation must 
provide the RA the identity of the shareholders of the corporation and 
their percent of shares in the corporation, and provide updated 
information to the RA within 30 days of when changes occur. This 
information must also be provided to the RA any time a commercial 
vessel permit for Gulf reef fish is renewed or transferred.
    (7) Redistribution of shares resulting from permanent permit or 
endorsement revocation. If a shareholder's commercial vessel permit for 
Gulf reef fish has been permanently revoked under provisions of 15 CFR 
part 904, the RA will redistribute the IFQ shares held by that 
shareholder proportionately among remaining shareholders (subject to 
cap restrictions) based upon the amount of shares each held just prior 
to the redistribution. During December of each year, the RA will 
determine the amount of revoked shares, if any, to be redistributed, 
and the shares will be distributed at the beginning of the subsequent 
fishing year.
    (8) Annual recalculation and notification of IFQ shares and 
allocation. On or about January 1 each year, IFQ shareholders will be 
notified, via the IFQ website at ifq.sero.nmfs.noaa.gov, of their IFQ 
share and allocation for the upcoming fishing year. These updated share 
values will reflect the results of applicable share transfers and any 
redistribution of shares (subject to cap restrictions) resulting from 
permanent revocation of applicable permits under 15 CFR part 904. 
Allocation is calculated by multiplying IFQ share times the annual red 
snapper commercial quota. Updated allocation values will reflect any 
change in IFQ share, any change in the annual commercial quota for Gulf 
red snapper, and any debits required as a result of prior fishing year 
overages as specified in paragraph (c)(1)(ii) of this section. IFQ 
participants can monitor the status of their shares and allocation 
throughout the year via the IFQ website.

0
9. Section 622.20 is added to subpart B to read as follows:


Sec.  622.20  Individual fishing quota (IFQ) program for Gulf groupers 
and tilefishes.

    (a) General. This section establishes an IFQ program for the 
commercial components of the Gulf reef fish fishery for groupers 
(including DWG, red grouper, gag, and other SWG) and tilefishes 
(including goldface tilefish, blackline tilefish, anchor tilefish, 
blueline tilefish, and tilefish). For the purposes of this IFQ program, 
DWG includes yellowedge grouper, misty grouper, warsaw grouper, snowy 
grouper, and speckled hind, and scamp, but only as specified in 
paragraph (b)(2)(vi) of this section. For the purposes of this IFQ 
program, other SWG includes black grouper, scamp, yellowfin grouper, 
rock hind, red hind, and yellowmouth grouper, and warsaw grouper and 
speckled hind, but only as specified in paragraph (b)(2)(v) of this 
section. Under the IFQ program, the RA initially will assign eligible 
participants IFQ shares, in five share categories. These IFQ shares are 
equivalent to a percentage of the annual commercial quotas for DWG, red 
grouper, gag, and tilefishes, and the annual commercial catch allowance 
(meaning the SWG quota minus gag and red grouper) for other SWG 
species, based on their applicable historical landings. Shares 
determine the amount of IFQ allocation for Gulf groupers and 
tilefishes, in pounds gutted weight, a shareholder is initially 
authorized to possess, land, or sell in a given calendar year. Shares 
and annual IFQ allocation are transferable. See Sec.  622.4(a)(2)(ix) 
regarding a requirement for a vessel landing groupers or tilefishes 
subject to this IFQ program to have an IFQ vessel account for Gulf 
groupers and tilefishes. See Sec.  622.4(a)(4)(ii) regarding a 
requirement for a Gulf IFQ dealer endorsement. Details regarding 
eligibility, applicable landings history, account setup and transaction 
requirements, constraints on transferability, and other provisions of 
this IFQ system are provided in the following paragraphs of this 
section.
    (1) Scope. The provisions of this section apply to Gulf groupers 
and tilefishes in or from the Gulf EEZ and, for a person aboard a 
vessel with an IFQ vessel account for Gulf groupers and tilefishes as 
required by Sec.  622.4(a)(2)(ix) or for a person with a Gulf IFQ 
dealer endorsement as required by Sec.  622.4(a)(4)(ii), these 
provisions apply to Gulf groupers and tilefishes regardless of where 
harvested or possessed.
    (2) Duration. The IFQ program established by this section will 
remain in effect until it is modified or terminated; however, the 
program will be evaluated by the Gulf of Mexico Fishery Management 
Council every 5 years.
    (3) Electronic system requirements. (i) The administrative 
functions associated with this IFQ program, e.g., registration and 
account setup, landing transactions, and transfers, are designed to be 
accomplished online; therefore, a participant must have access to a 
computer and Internet access and must set up an appropriate IFQ online 
account to participate. The computer must have browser software 
installed, e.g. Internet Explorer, Netscape, Mozilla Firefox; as well 
as the software Adobe Flash Player version 9.0 or greater, which may be 
downloaded from the Internet for free. Assistance with online functions 
is available from IFQ Customer Service by calling 1-866-425-7627 Monday 
through Friday between 8 a.m. and 4:30 p.m. eastern time.

[[Page 44746]]

    (ii) The RA will mail initial shareholders and dealers with Gulf 
reef fish dealer permits information and instructions pertinent to 
setting up an IFQ online account. Other eligible persons who desire to 
become IFQ participants by purchasing IFQ shares or allocation or by 
obtaining a Gulf IFQ dealer endorsement must first contact IFQ Customer 
Service at 1-866-425-7627 to obtain information necessary to set up the 
required IFQ online account. Each IFQ participant must monitor his/her 
online account and all associated messages and comply with all IFQ 
online reporting requirements.
    (iii) During catastrophic conditions only, the IFQ program provides 
for use of paper-based components for basic required functions as a 
backup. The RA will determine when catastrophic conditions exist, the 
duration of the catastrophic conditions, and which participants or 
geographic areas are deemed affected by the catastrophic conditions. 
The RA will provide timely notice to affected participants via 
publication of notification in the Federal Register, NOAA weather 
radio, fishery bulletins, and other appropriate means and will 
authorize the affected participants' use of paper-based components for 
the duration of the catastrophic conditions. NMFS will provide each IFQ 
dealer the necessary paper forms, sequentially coded, and instructions 
for submission of the forms to the RA. The paper forms will also be 
available from the RA. The program functions available to participants 
or geographic areas deemed affected by catastrophic conditions will be 
limited under the paper-based system. There will be no mechanism for 
transfers of IFQ shares or allocation under the paper-based system in 
effect during catastrophic conditions. Assistance in complying with the 
requirements of the paper-based system will be available via IFQ 
Customer Service 1-866-425-7627 Monday through Friday between 8 a.m. 
and 4:30 p.m. eastern time.
    (b) Procedures for initial implementation--(1) Determination of 
eligibility for initial IFQ shares. To be eligible as an initial IFQ 
shareholder a person must posses a valid commercial Gulf reef fish 
permit as of October 1, 2009. NMFS' permit records are the sole basis 
for determining eligibility for the IFQ program for Gulf groupers and 
tilefishes based on permit history. No more than one initial 
eligibility will be granted based upon a given commercial vessel permit 
for Gulf reef fish.
    (2) Calculation of initial IFQ shares and allocation--(i) IFQ 
shares. The RA will calculate initial IFQ shares based on the highest 
average annual landings of Gulf groupers and tilefishes, in each of 
five share categories, associated with each shareholder's current 
commercial vessel permit for Gulf reef fish during the applicable 
landings history. The five share categories are gag, red grouper, DWG, 
other SWG, and tilefishes. The applicable landings history for reef 
fish permit holders with grouper or tilefish landings includes landings 
data from 1999 through 2004 with the allowance for dropping one year. 
All grouper and tilefish landings associated with a current reef fish 
permit for the applicable landings history, including those reported by 
a person(s) who held the license prior to the current license owner, 
will be attributed to the current license owner. Only legal landings 
reported in compliance with applicable state and Federal regulations 
will be accepted. For each share category, each shareholder's initial 
share is derived by dividing the shareholder's highest average annual 
landings during the applicable landings history by the sum of the 
highest average annual landings of all shareholders during the 
respective applicable landings histories. Initial shares distributed in 
the gag share category and the other SWG share category will be based 
on landings that have been adjusted for gag and/or black grouper 
misidentification. Initial IFQ shares will not be issued in units less 
than the percentage equivalent to 1.0 lb (0.45 kg) of the grouper or 
tilefish species, in each share category, based on that share 
category's quota or catch allowance.
    (ii) Initial share set-aside to accommodate resolution of appeals. 
During the first year of implementation of this IFQ program only, for 
each share category, the RA will reserve a 3-percent IFQ share prior to 
the initial distribution of shares, to accommodate resolution of 
appeals, if necessary. Any portion of the 3-percent share set-aside for 
each share category remaining after the appeals process is completed 
will be distributed as soon as possible among initial shareholders in 
direct proportion to the percentage share each was initially allocated. 
If resolution of appeals requires more than a 3-percent share set-aside 
for a share category, the shares of all initial shareholders, for that 
share category, would be reduced accordingly in direct proportion to 
the percentage share each was initially allocated.
    (iii) IFQ allocation. IFQ allocation is the amount of Gulf groupers 
and tilefishes, in pounds gutted weight, an IFQ shareholder or 
allocation holder is authorized to possess, land, or sell during a 
given fishing year. IFQ allocation for the five respective share 
categories is derived at the beginning of each year by multiplying a 
shareholder's IFQ share times the annual commercial quota for gag, red 
grouper, DWG, and tilefishes; and times the annual commercial catch 
allowance for other SWG.
    (iv) Red grouper and gag multi-use allocation--(A) Red grouper 
multi-use allocation. At the beginning of each fishing year, 4 percent 
of each shareholder's initial red grouper allocation will be converted 
to red grouper multi-use allocation. Red grouper multi-use allocation 
may be used to possess, land, or sell either red grouper or gag under 
certain conditions. Red grouper multi-use allocation may be used to 
possess, land, or sell red grouper only after an IFQ account holder's 
(shareholder or allocation holder's) red grouper allocation has been 
landed and sold, or transferred; and to possess, land, or sell gag, 
only after both gag and gag multi-use allocation have been landed and 
sold, or transferred.
    (B) Gag multi-use allocation. At the beginning of each fishing 
year, 8 percent of each shareholder's initial gag allocation will be 
converted to gag multi-use allocation. Gag multi-use allocation may be 
used to possess, land, or sell either gag or red grouper under certain 
conditions. Gag multi-use allocation may be used to possess, land, or 
sell gag only after an IFQ account holder's gag allocation has been 
landed and sold, or transferred; and possess, land or sell red grouper, 
only after both red grouper and red grouper multi-use allocation have 
been landed and sold, or transferred. Multi-use allocation transfer 
procedures and restrictions are specified in paragraph (c)(4)(iv) of 
this section.
    (v) Warsaw grouper and speckled hind classification. Warsaw grouper 
and speckled hind are considered DWG species and under certain 
circumstances SWG species. For the purposes of the IFQ program for Gulf 
groupers and tilefishes, once all of an IFQ account holder's DWG 
allocation has been landed and sold, or transferred, or if an IFQ 
account holder has no DWG allocation, then other SWG allocation may be 
used to land and sell warsaw grouper and speckled hind.
    (vi) Scamp classification. Scamp is considered a SWG species and 
under certain circumstances a DWG. For the purposes of the IFQ program 
for Gulf groupers and tilefishes, once all of an IFQ account holder's 
other SWG allocation has been landed and sold, or transferred, or if an 
IFQ account holder has no SWG allocation, then DWG allocation may be 
used to land and sell scamp.

[[Page 44747]]

    (3) Shareholder notification regarding landings history, initial 
determination of IFQ shares and allocations, and IFQ account setup 
information. (i) On or about October 1, 2009, the RA will mail each 
Gulf reef fish commercial vessel permittee with grouper and tilefish 
landings history during the qualifying years, information pertinent to 
the IFQ program. This information will include--
    (A) Gulf grouper and tilefish landings associated with the Gulf 
reef fish commercial vessel permit during each year of the applicable 
landings history;
    (B) The highest average annual grouper and tilefish landings, in 
each of the five share categories, based on the permittee's best 5 out 
of 6 years of applicable landings history;
    (C) The permittee's initial IFQ share, in each of the five share 
categories, based on the highest average annual landings associated 
with the permittee's best 5 out of 6 years of applicable landings 
history;
    (D) The initial IFQ allocation, in each of the five share 
categories, as well as their total IFQ allocation;
    (E) Instructions for appeals;
    (F) General instructions regarding procedures related to the IFQ 
online system, including how to set up an online account; and
    (G) A user identification number; and a personal identification 
number (PIN) that will be provided in a subsequent letter.
    (ii) The RA will provide this information, via certified mail 
return receipt requested, to the permittee's address of record as 
listed in NMFS' permit files. A permittee who does not receive such 
notification from the RA, must contact the RA by November 1, 2009, to 
clarify eligibility status and landings and initial share information.
    (iii) The initial share information provided by the RA is based on 
the highest average annual landings during the best 5 out of 6 years 
associated with the permittee's applicable landings history for each 
share category; however, a permittee may select to exclude a different 
year of landings history than was chosen, consistent with the 
permittee's applicable landings history, for the calculation of the 
initial IFQ share. The permittee must submit that information to the RA 
postmarked no later than December 1, 2009. If alternative years, 
consistent with the applicable landings history, are selected, revised 
information regarding shares and allocations will be posted on the 
online IFQ accounts no later than January 1, 2010. A permittee who 
disagrees with the landings or eligibility information provided by the 
RA may appeal the RA's initial determinations.
    (4) Procedure for appealing IFQ eligibility and/or landings 
information. The only items subject to appeal under this IFQ system are 
initial eligibility for IFQ shares based on ownership of a reef fish 
permit, the accuracy of the amount of landings, correct assignment of 
landings to the permittee, and correct assignment of gag versus black 
grouper landings. Appeals based on hardship factors will not be 
considered. Appeals must be submitted to the RA postmarked no later 
than April 1, 2010, and must contain documentation supporting the basis 
for the appeal. The RA will review all appeals, render final decisions 
on the appeals, and advise the appellant of the final decision.
    (i) Eligibility appeals. NMFS' records of reef fish permits are the 
sole basis for determining ownership of such permits. A person who 
believes he/she meets the permit eligibility criteria based on 
ownership of a vessel under a different name, as may have occurred when 
ownership has changed from individual to corporate or vice versa, must 
document his/her continuity of ownership.
    (ii) Landings appeals. Appeals regarding landings data for 1999 
through 2004 will be based on NMFS' logbook records. If NMFS' logbooks 
are not available, the RA may use state landings records or data that 
were submitted in compliance with applicable Federal and state 
regulations, on or before December 31, 2006.
    (5) Dealer notification and IFQ account setup information. On or 
about October 1, 2009, the RA will mail each dealer with a valid Gulf 
reef fish dealer permit information pertinent to the IFQ program. Any 
such dealer is eligible to receive a Gulf IFQ dealer endorsement, which 
can be downloaded from the IFQ website at ifq.sero.nmfs.noaa.gov once 
an IFQ account has been established. The information package will 
include general information about the IFQ program and instructions for 
accessing the IFQ website and establishing an IFQ dealer account.
    (c) IFQ operations and requirements--(1) IFQ Landing and 
transaction requirements. (i) Gulf groupers and tilefishes subject to 
this IFQ program can only be possessed or landed by a vessel with a IFQ 
vessel account for Gulf groupers and tilefishes. Such groupers and 
tilefishes can only be received by a dealer with a Gulf IFQ dealer 
endorsement. The vessel landing groupers or tilefishes must have 
sufficient IFQ allocation in the IFQ vessel account, at least equal to 
the pounds in gutted weight of grouper or tilefish species to be 
landed, from the time of advance notice of landing through landing, 
except as provided in paragraph (c)(1)(ii) of this section.
    (ii) A person on board a vessel with an IFQ vessel account landing 
the shareholder's only remaining allocation from among any of the 
grouper or tilefish share categories, can legally exceed, by up to 10 
percent, the shareholder's allocation remaining on that last fishing 
trip of the fishing year, i.e. a one-time per fishing year overage. Any 
such overage will be deducted from the shareholder's applicable 
allocation for the subsequent fishing year. From the time of the 
overage until January 1 of the subsequent fishing year, the IFQ 
shareholder must retain sufficient shares to account for the allocation 
that will be deducted the subsequent fishing year. Share transfers that 
would violate this requirement will be prohibited.
    (iii) The dealer is responsible for completing a landing 
transaction report for each landing and sale of Gulf groupers and 
tilefishes via the IFQ website at ifq.sero.nmfs.noaa.gov at the time of 
the transaction in accordance with reporting form and instructions 
provided on the website. This report includes, but is not limited to, 
date, time, and location of transaction; weight and actual ex-vessel 
value of groupers and tilefishes landed and sold; and information 
necessary to identify the fisherman, vessel, and dealer involved in the 
transaction. The fisherman must validate the dealer transaction report 
by entering the unique PIN number for the vessel account when the 
transaction report is submitted. After the dealer submits the report 
and the information has been verified by NMFS, the online system will 
send a transaction approval code to the dealer and the allocation 
holder.
    (iv) If there is a discrepancy regarding the landing transaction 
report after approval, the dealer or vessel account holder (or his or 
her authorized agent) may initiate a landing transaction correction 
form to correct the landing transaction. This form is available via the 
IFQ website at ifq.sero.nmfs.noaa.gov. Both parties must validate the 
landing correction form by entering their respective PIN numbers, i.e. 
vessel account PIN or dealer account PIN. The dealer must then print 
out the form, both parties must sign it, and the form must be mailed to 
NMFS. The form must be received by NMFS no later than 15 days after the 
date of the initial landing transaction.
    (2) IFQ cost recovery fees. As required by section 304(d)(2)(A)(i) 
of the Magnuson-Stevens Act, the RA will

[[Page 44748]]

collect a fee to recover the actual costs directly related to the 
management and enforcement of the IFQ program for Gulf groupers and 
tilefishes. The fee cannot exceed 3 percent of the ex-vessel value of 
Gulf groupers and tilefishes landed under the IFQ program. Such fees 
will be deposited in the Limited Access System Administration Fund 
(LASAF). Initially, the fee will be 3 percent of the actual ex-vessel 
value of Gulf groupers and tilefishes landed under the IFQ program, as 
documented in each landings transaction report. The RA will review the 
cost recovery fee annually to determine if adjustment is warranted. 
Factors considered in the review include the catch subject to the IFQ 
cost recovery, projected ex-vessel value of the catch, costs directly 
related to the management and enforcement of the IFQ program, the 
projected IFQ balance in the LASAF, and expected non-payment of fee 
liabilities. If the RA determines that a fee adjustment is warranted, 
the RA will publish a notification of the fee adjustment in the Federal 
Register.
    (i) Payment responsibility. The IFQ account holder specified in the 
documented IFQ landing transaction report for Gulf groupers and 
tilefishes is responsible for payment of the applicable cost recovery 
fees.
    (ii) Collection and submission responsibility. A dealer who 
receives Gulf groupers or tilefishes subject to the IFQ program is 
responsible for collecting the applicable cost recovery fee for each 
IFQ landing from the IFQ account holder specified in the IFQ landing 
transaction report. Such dealer is responsible for submitting all 
applicable cost recovery fees to NMFS on a quarterly basis. The fees 
are due and must be submitted, using pay.gov via the IFQ system, at the 
end of each calendar-year quarter, but no later than 30 days after the 
end of each calendar-year quarter. Fees not received by the deadline 
are delinquent.
    (iii) Fee payment procedure. For each IFQ dealer, the IFQ system 
will post, in individual IFQ dealer accounts, an end-of-quarter 
statement of cost recovery fees that are due. The dealer is responsible 
for submitting the cost recovery fee payments using pay.gov via the IFQ 
system. Authorized payment methods are credit card, debit card, or 
automated clearing house (ACH). Payment by check will be authorized 
only if the RA has determined that the geographical area or an 
individual(s) is affected by catastrophic conditions.
    (iv) Fee reconciliation process--delinquent fees. The following 
procedures apply to an IFQ dealer whose cost recovery fees are 
delinquent.
    (A) On or about the 31\st\ day after the end of each calendar-year 
quarter, the RA will send the dealer an electronic message via the IFQ 
website and official notice via mail indicating the applicable fees are 
delinquent, and the dealer's IFQ account has been suspended pending 
payment of the applicable fees.
    (B) On or about the 91\st\ day after the end of each calendar-year 
quarter, the RA will refer any delinquent IFQ dealer cost recovery fees 
to the appropriate authorities for collection of payment.
    (3) Measures to enhance IFQ program enforceability--(i) Advance 
notice of landing. For the purpose of this paragraph, landing means to 
arrive at a dock, berth, beach, seawall, or ramp. The owner or operator 
of a vessel landing IFQ groupers or tilefishes is responsible for 
ensuring that NMFS is contacted at least 3 hours, but no more than 12 
hours, in advance of landing to report the time and location of 
landing, estimated grouper and tilefish landings in pounds gutted 
weight for each share category (gag, red grouper, DWG, other SWG, 
tilefishes), vessel identification number (Coast Guard registration 
number or state registration number), and the name and address of the 
IFQ dealer where the groupers or tilefishes are to be received. The 
vessel landing groupers or tilefishes must have sufficient IFQ 
allocation in the IFQ vessel account, and in the appropriate share 
category or categories, at least equal to the pounds in gutted weight 
of all groupers and tilefishes on board (except for any overage up to 
the 10 percent allowed on the last fishing trip) from the time of the 
advance notice of landing through landing. Authorized methods for 
contacting NMFS and submitting the report include calling NMFS at 1-
866-425-7627, completing and submitting to NMFS the notification form 
provided through the VMS unit, or providing the required information to 
NMFS through the web-based form available on the IFQ website at 
ifq.sero.nmfs.noaa.gov. As new technology becomes available, NMFS will 
add other authorized methods for complying with the advance 
notification requirement, via appropriate rulemaking. Failure to comply 
with this advance notice of landing requirement is unlawful and will 
preclude authorization to complete the landing transaction report 
required in paragraph (c)(1)(iii) of this section and, thus, will 
preclude issuance of the required transaction approval code.
    (ii) Time restriction on offloading. IFQ groupers and tilefishes 
may be offloaded only between 6 a.m. and 6 p.m., local time.
    (iii) Restrictions on transfer of IFQ groupers and tilefishes. At-
sea or dockside transfer of IFQ groupers or tilefishes from one vessel 
to another vessel is prohibited.
    (iv) Requirement for transaction approval code. If IFQ groupers or 
tilefishes are offloaded to a vehicle for transportation to a dealer or 
are on a vessel that is trailered for transport to a dealer, on-site 
capability to accurately weigh the fish and to connect electronically 
to the online IFQ system to complete the transaction and obtain the 
transaction approval code is required. After a landing transaction has 
been completed, a transaction approval code verifying a legal 
transaction of the amount of IFQ groupers and tilefishes in possession 
and a copy of the dealer endorsement must accompany any IFQ groupers 
and tilefishes from the landing location through possession by a 
dealer. This requirement also applies to IFQ groupers and tilefishes 
possessed on a vessel that is trailered for transport to a dealer.
    (v) Approved landing locations. Landing locations must be approved 
by NMFS Office for Law Enforcement prior to landing or offloading at 
these sites. Proposed landing locations may be submitted online via the 
IFQ website at ifq.sero.nmfs.noaa.gov, or by calling IFQ Customer 
Service at 1-866-425-7627, at any time, however, new landing locations 
will be approved only at the end of each calendar-year quarter. To have 
your landing location approved by the end of the calendar-year quarter, 
it must be submitted at least 45 days before the end of the calendar-
year quarter. NMFS will evaluate the proposed sites based on, but not 
limited to, the following criteria:
    (A) Landing locations must be publicly accessible by land and 
water, and
    (B) they must have a street address. If there is no street address 
on record for a particular landing location, global positioning system 
(GPS) coordinates for an identifiable geographic location must be 
provided.
    (4) Transfer of IFQ shares and allocation. Until January 1, 2015, 
IFQ shares and allocations can be transferred only to a person who 
holds a valid commercial vessel permit for Gulf reef fish; thereafter, 
IFQ shares and allocations can be transferred to any U.S. citizen or 
permanent resident alien. However, a valid commercial permit for Gulf 
reef fish, an IFQ vessel account for Gulf groupers and tilefishes, and 
IFQ allocation for Gulf groupers or tilefishes are required to possess 
(at and after the time of the advance notice of landing),

[[Page 44749]]

land or sell Gulf groupers or tilefishes subject to this IFQ program.
    (i) Share transfers. Share transfers are permanent, i.e., they 
remain in effect until subsequently transferred. Transfer of shares 
will result in the corresponding allocation being automatically 
transferred to the person receiving the transferred share beginning 
with the fishing year following the year the transfer occurred. 
However, within the fishing year the share transfer occurs, transfer of 
shares and associated allocation are independent--unless the associated 
allocation is transferred separately, it remains with the transferor 
for the duration of that fishing year. A share transfer transaction 
that remains in pending status, i.e., has not been completed and 
verified with a transaction approval code, after 30 days from the date 
the shareholder initiated the transfer will be cancelled, and the 
pending shares will be re-credited to the shareholder who initiated the 
transfer.
    (ii) Share transfer procedures. Share transfers must be 
accomplished online via the IFQ website. An IFQ shareholder must 
initiate a share transfer request by logging onto the IFQ website at 
ifq.sero.nmfs.noaa.gov. An IFQ shareholder who is subject to a sanction 
under 15 CFR part 904 is prohibited from initiating a share transfer. 
An IFQ shareholder who is subject to a pending sanction under 15 CFR 
part 904 must disclose in writing to the prospective transferee the 
existence of any pending sanction at the time of the transfer. 
Following the instructions provided on the website, the shareholder 
must enter pertinent information regarding the transfer request 
including, but not limited to: amount of shares to be transferred, 
which must be a minimum of 0.000001 percent; name of the eligible 
transferee; and the value of the transferred shares. For the first 5 
years this IFQ program is in effect, an eligible transferee is a person 
who has a valid commercial vessel permit for Gulf reef fish; is in 
compliance with all reporting requirements for the Gulf reef fish 
fishery and the IFQ program for Gulf groupers and tilefishes; is not 
subject to sanctions under 15 CFR part 904; and who would not be in 
violation of the share or allocation caps as specified in paragraph 
(c)(6) of this section. Thereafter, share transferee eligibility will 
be extended to include U.S. citizens and permanent resident aliens who 
are otherwise in compliance with the provisions of this section. The 
online system will verify the information entered. If the information 
is not accepted, the online system will send the shareholder an 
electronic message explaining the reason(s). If the information is 
accepted, the online system will send the transferee an electronic 
message of the pending transfer. The transferee must approve the share 
transfer by electronic signature. If the transferee approves the share 
transfer, the online system will send a transfer approval code to both 
the shareholder and transferee confirming the transaction. All share 
transfers must be completed and the transaction approval code received 
prior to December 31 at 6 p.m. eastern time each year.
    (iii) Allocation transfers. An allocation transfer is valid only 
for the remainder of the fishing year in which it occurs; it does not 
carry over to the subsequent fishing year. Any allocation that is 
unused at the end of the fishing year is void. Allocation may be 
transferred to a vessel account from any IFQ account. Allocation held 
in a vessel account, however, may only be transferred back to the IFQ 
account through which the vessel account was established.
    (iv) Allocation transfer procedures and restrictions--(A) 
Allocation transfer procedures. Allocation transfers must be 
accomplished online via the IFQ website. An IFQ account holder must 
initiate an allocation transfer by logging onto the IFQ website at 
ifq.sero.nmfs.noaa.gov, entering the required information, including 
but not limited to, name of an eligible transferee and amount of IFQ 
allocation to be transferred and price, and submitting the transfer 
electronically. An IFQ allocation holder who is subject to a sanction 
under 15 CFR part 904 is prohibited from initiating an allocation 
transfer. An IFQ allocation holder who is subject to a pending sanction 
under 15 CFR part 904 must disclose in writing to the prospective 
transferee the existence of any pending sanction at the time of the 
transfer. If the transfer is approved, the website will provide a 
transfer approval code to the transferor and transferee confirming the 
transaction.
    (B) Multi-use allocation transfer restrictions--(1) Red grouper 
multi-use allocation. Red grouper multi-use allocation may only be 
transferred after all an IFQ account holder's red grouper allocation 
has been landed and sold, or transferred.
    (2) Gag multi-use allocation. Gag multi-use allocation may only be 
transferred after all an IFQ account holder's gag allocation has been 
landed and sold, or transferred.
    (5) Restricted transactions during the 12-hour online maintenance 
window. All electronic IFQ transactions must be completed by December 
31 at 6 p.m. eastern time each year. Electronic IFQ functions will 
resume again on January 1 at 6 a.m. eastern time the following fishing 
year. The remaining 6 hours prior to the end of the fishing year, and 
the 6 hours at the beginning of the next fishing year, are necessary to 
provide NMFS time to reconcile IFQ accounts, adjust allocations for the 
upcoming year if the commercial quotas or catch allowances for Gulf 
groupers or tilefishes have changed, and update shares and allocations 
for the upcoming fishing year. No electronic IFQ transactions will be 
available during these 12 hours. An advance notice of landing may still 
be submitted by calling IFQ Customer Service at 1-866-425-7627.
    (6) IFQ share and allocation caps. A corporation's total IFQ share 
(or allocation) is determined by adding the applicable IFQ shares (or 
allocation) held by the corporation and any other IFQ shares (or 
allocation) held by a corporation(s) owned by the original corporation 
prorated based on the level of ownership. An individual's total IFQ 
share is determined by adding the applicable IFQ shares held by the 
individual and the applicable IFQ shares equivalent to the corporate 
share the individual holds in a corporation. An individual's total IFQ 
allocation is determined by adding the individual's total allocation to 
the allocation derived from the IFQ shares equivalent to the corporate 
share the individual holds in a corporation.
    (i) IFQ share cap for each share category. No person, including a 
corporation or other entity, may individually or collectively hold IFQ 
shares in any share category (gag, red grouper, DWG, other SWG, or 
tilefishes) in excess of the maximum share initially issued for the 
applicable share category to any person at the beginning of the IFQ 
program, as of the date appeals are resolved and shares are adjusted 
accordingly. A corporation must provide to the RA the identity of the 
shareholders of the corporation and their percent of shares in the 
corporation, by December 1, 2009, for initial issuance of IFQ shares 
and allocation, and provide updated information to the RA within 30 
days of when changes occur. This information must also be provided to 
the RA any time a commercial vessel permit for Gulf reef fish is 
renewed or transferred.
    (ii) Total allocation cap. No person, including a corporation or 
other entity, may individually or collectively hold, cumulatively 
during any fishing year, IFQ allocation in excess of the total 
allocation cap. The total allocation cap

[[Page 44750]]

is the sum of the maximum allocations associated with the share caps 
for each individual share category and is calculated annually based on 
the applicable quotas or catch allowance associated with each share 
category.
    (7) Redistribution of shares resulting from permanent permit 
revocation. If a shareholder's commercial vessel permit for Gulf reef 
fish has been permanently revoked under provisions of 15 CFR part 904, 
the RA will redistribute the IFQ shares associated with the revoked 
permit proportionately among remaining shareholders (subject to cap 
restrictions) based upon the amount of shares each held just prior to 
the redistribution. During December of each year, the RA will determine 
the amount of revoked shares, if any, to be redistributed, and the 
shares will be distributed at the beginning of the subsequent fishing 
year.
    (8) Annual recalculation and notification of IFQ shares and 
allocation. On or about January 1 each year, IFQ shareholders will be 
notified, via the IFQ website at ifq.sero.nmfs.noaa.gov, of their IFQ 
shares and allocations, for each of the five share categories, for the 
upcoming fishing year. These updated share values will reflect the 
results of applicable share transfers and any redistribution of shares 
(subject to cap restrictions) resulting from permanent revocation of 
applicable permits under 15 CFR part 904. Allocation, for each share 
category, is calculated by multiplying IFQ share for that category 
times the annual commercial quota or commercial catch allowance for 
that share category. Updated allocation values will reflect any change 
in IFQ share for each share category, any change in the annual 
commercial quota or commercial catch allowance for the applicable 
categories; and any debits required as a result of prior fishing year 
overages as specified in paragraph (c)(1)(ii) of this section. IFQ 
participants can monitor the status of their shares and allocation 
throughout the year via the IFQ website.

0
10. In Sec.  622.42, paragraph (a)(1)(ii) and the first sentence of 
paragraph (a)(1)(iii) introductory text are revised to read as follows:


Sec.  622.42  Quotas.

* * * * *
    (a) * * *
    (1) * * *
    (ii) Deep-water groupers (DWG) combined--1.02 million lb (0.46 
million kg), gutted weight, that is, eviscerated but otherwise whole.
    (iii) Shallow-water groupers (SWG) have a combined quota as 
specified in paragraph (a)(1)(iii)(A) of this section. * * *
* * * * *


Sec.  622.44  [Amended]

0
11. In Sec.  622.44, paragraph (g) is removed and reserved.

[FR Doc. E9-20954 Filed 8-28-09; 8:45 am]
BILLING CODE 3510-22-S


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