50012 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

FOR FURTHER INFORMATION CONTACT For 

clarification of content, contact Ms. 

Cecelia Davis, Procurement Analyst, at 

(202) 219–0202. The TTY Federal Relay 

Number for further information is 1–

800–877–8973. For information 

pertaining to status or publication 

schedules, contact the FAR Secretariat 

at (202) 501–4755. Please cite FAR case 

2005–041. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The internet protocol is one of the 

primary mechanisms that define how 

and where information moves across 

networks, e.g., voice, video, and text. 

Currently Internet Protocol Version 4 

(IPv4) is the industry standard used and 

has about 4.3 billion address spaces. 

Key characteristics of IPv6 are designed 

to significantly increase internet address 

space, promote flexibility and 

functionality, and enhance security. 

Agencies can reduce costly upgrades 

and the complexity of transitioning to 

IPv6 by proactively integrating IPv6 

requirements into Federal contracts. 

On August 2, 2005, OMB issued a 

memo (Memorandum M–05–22, 

Transition Planning for Internet 

Protocol Version 6 (IPv6)) giving 

guidance to agencies to transition from 

IPv4 to IPv6, and required agencies to 

implement full use of IPv6 in network 

backbones by June 2008. OMB further 

requires, to the maximum extent 

practicable, all new IT procurements 

include IPv6 capable products and 

systems. Any exceptions to the use of 

IPv6 will require advance written 

approval from the agency CIO. 

This rule proposes amending the FAR 

by—

1. Adding a new paragraph (A)(2) in 

FAR 7.105 (b)(4)(ii) to ensure agency 

planners comply with the Internet 

Protocol Version 6 (IPv6) capability 

requirements as a part of acquisition 

planning; 

2. Adding paragraph (e) to FAR 

12.202 to state that requirements 

documents for information technology 

shall include Internet Protocol Version 

6 (IPv6) capable products and services; 

and 

3. Adding paragraph (e) to FAR 

39.101 to state when acquiring 

information technology, agencies shall 

include the appropriate requirements 

for Internet Protocol Version 6 (IPv6) 

capable products and services, and for 

agencies to establish procedures for 

granting exceptions. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

The Councils do not expect this 

proposed rule to have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because IPv6 

requires use of commercially available 

products, and no new standards or 

testing is required. An Initial Regulatory 

Flexibility Analysis has, therefore, not 

been performed. We invite comments 

from small businesses and other 

interested parties. The Councils will 

consider comments from small entities 

concerning the affected FAR Parts 7, 12, 

and 39 in accordance with 5 U.S.C. 610. 

Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 601, et seq. (FAR case 2005–041), 

in correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the proposed changes 

to the FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. 3501, et 

seq. 

List of Subjects in 48 CFR Parts 7, 12, 

and 39 

Government procurement. 

Dated: August 16, 2006. 

Ralph De Stefano, 

Director, Contract Policy Division. 

Therefore, DoD, GSA, and NASA 

propose amending 48 CFR parts 7, 12, 

and 39 as set forth below: 

1. The authority citation for 48 CFR 

parts 7, 12, and 39 continues to read as 

follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 7—ACQUISITION PLANNING 

2. Amend section 7.105 by revising 

paragraph (b)(4)(ii)(A) to read as 

follows: 

7.105 Contents of written acquisition 

plans. 

* * * * * 

(b) * * * 

(4) * * * 

(ii) * * * 

(A) For information technology 

acquisitions—

(1) How the capital planning and 

investment control requirements of 40 

U.S.C. 11312 and OMB Circular A–130 

will be met (see 7.103(t) and Part 39); 

and 

(2) How the acquisition will comply 

with the Internet Protocol Version 6 

(IPv6) capability requirements as 

outlined in OMB Memorandum M–05–

22, Transition Planning for Internet 

Protocol Version 6 (IPv6), and 

additional requirements for IPv6 at 

http://www.cio.gov. 

* * * * * 

PART 12—ACQUISITION OF 

COMMERCIAL ITEMS 

3. Amend section 12.202 by adding 

paragraph (e) to read as follows: 

12.202 Market research and description of 

agency need. 

* * * * * 

(e) Requirements documents for 

information technology solutions must 

include Internet Protocol Version 6 

(IPv6) capability as outlined in the OMB 

Memorandum M–05–22, Transition 

Planning for Internet Protocol Version 6 

(IPv6), and additional requirements for 

IPv6 at http://www.whitehouse.gov/ 

omb/memoranda/fy2005/m05-22.pdf. 

PART 39—ACQUISITION OF 

INFORMATION TECHNOLOGY 

4. Amend section 39.101 by adding 

paragraph (e) to read as follows: 

39.101 Policy. 

* * * * * 

(e) In acquiring information 

technology solutions, agencies must 

include the appropriate Internet 

Protocol Version 6 (IPv6) capability 

requirements as outlined in the OMB 

Memorandum M–05–22, Transition 

Planning for Internet Protocol Version 6 

(IPv6). Agencies must establish 

procedures for exceptions. 

[FR Doc. 06–7126 Filed 8–23–06; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[Docket No. 060731206–6206–01; I.D. 

072806A] 

RIN 0648–AS67 

Fisheries of the Caribbean, Gulf of 

Mexico, and South Atlantic; Reef Fish 

Fishery of the Gulf of Mexico; 

Amendment 26 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 


rmajette on PROD1PC67 with PROPOSALS
Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 50013 

SUMMARY: NMFS issues this proposed 

rule that would implement Amendment 

26 to the Fishery Management Plan for 

the Reef Fish Fishery of the Gulf of 

Mexico (FMP). Amendment 26 would 

establish an individual fishing quota 

(IFQ) program for the commercial red 

snapper sector of the reef fish fishery in 

the Gulf of Mexico. Initial participants 

in the IFQ program would receive 

percentage shares of the commercial 

quota of red snapper based on specified 

historical landings criteria. The 

percentage shares of the commercial 

quota would equate to annual IFQ 

allocations. Both shares and IFQ 

allocations would be transferable. The 

intended effect of this rule is to manage 

the commercial red snapper sector of 

the reef fish fishery to preserve its longterm economic viability and to achieve 

optimum yield from the fishery. 

DATES: Written comments must be 

received on or before September 28, 

2006. 

ADDRESSES: You may submit comments 

on the proposed rule by any of the 

following methods: 

• E-mail: 0648- 

AS67.Proposed@noaa.gov. Include in 

the subject line the following document 

identifier: 0648-AS67. 

• Federal e-Rulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Phil Steele, Southeast 

Regional Office, NMFS, 263 13th 

Avenue South, St. Petersburg, FL 33701. 

• Fax: 727–824–5308; Attention: Phil 

Steele. 

Copies of Amendment 26, which 

includes a supplemental environmental 

impact statement (SEIS), a regulatory 

impact review (RIR), and an initial 

regulatory flexibility analysis (IRFA), 

may be obtained from the Gulf of 

Mexico Fishery Management Council, 

2203 N. Lois Avenue, Suite 1100, 

Tampa, FL 33607; telephone: 813–348–

1630; fax: 813–348–1711; e-mail: 

gulfcouncil@gulfcouncil.org. In 

addition, copies of the final SEIS, a 

revised RIR, and a revised IRFA, 

prepared by NMFS are also available 

from the Council at the address above. 

Copies of all of these documents may 

also be downloaded from the Council’s 

website at www.gulfcouncil.org. 

Comments regarding the burden-hour 

estimates or other aspects of the 

collection-of-information requirements 

contained in this proposed rule may be 

submitted in writing to Jason Rueter at 

the Southeast Regional Office address 

(above) and to David Rostker, Office of 

Management and Budget (OMB), by email at DavidlRostker@omb.eop.gov, or 

by fax to 202–395–7285. 

FOR FURTHER INFORMATION CONTACT: Phil 

Steele, telephone 727–824–5305; fax 

727–824–5308; e-mail 

Phil.Steele@noaa.gov. 

SUPPLEMENTARY INFORMATION: The reef 

fish fishery of the Gulf of Mexico is 

managed under the FMP. The FMP was 

prepared by the Gulf of Mexico Fishery 

Management Council (Council) and is 

implemented through regulations at 50 

CFR part 622 under the authority of the 

Magnuson-Stevens Act. 

Background 

A red snapper individual transferable 

quota (ITQ) program, proposed in 

Amendment 8 to the FMP and approved 

by NMFS in 1995, was never 

implemented because of action taken 

through the 1996 Sustainable Fisheries 

Act to place a moratorium on the 

development or implementation of new 

ITQ programs until October 1, 2000. The 

Council and commercial fishermen 

remained concerned about the 

continuing problems associated with 

overcapacity in the fishery and the 

adverse impacts associated with the 

derby fishery, i.e., the competitive race 

for available fish. This proposed rule 

would implement an IFQ program to 

address these issues. 

IFQ Program 

Scope 

The provisions of this IFQ program 

would 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 endorsement or for a person 

with a Gulf red snapper IFQ dealer 

endorsement, these provisions would 

apply to Gulf red snapper regardless of 

where harvested or possessed. 

Duration 

The IFQ program would remain in 

effect until it is modified or terminated; 

however, the program would be 

evaluated by the Council every 5 years. 

Electronic System Requirements, 

Account Setup, and Information 

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 would have to have access to 

a computer and Internet access and set 

up an appropriate IFQ online account to 

participate. Assistance with online 

functions would be 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. 

The IFQ program would provide for 

use of paper-based components for basic 

required functions as a backup only 

during catastrophic conditions. The 

Regional Administrator, Southeast 

Region, NMFS, (RA) would 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 would 

provide timely notice to affected 

participants via publication of 

notification in the Federal Register, 

NOAA weather radio, fishery bulletins, 

and other appropriate means and would 

authorize the affected participants’ use 

of paper-based components for the 

duration of the catastrophic conditions. 

NMFS would provide each IFQ dealer 

the necessary paper forms. The paper 

forms would also be available from the 

RA. The program functions available to 

participants or geographic areas deemed 

affected by catastrophic conditions 

would be limited under the paper-based 

system. There would 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 

would be available via IFQ Customer 

Service 1–866–425–7627 Monday 

through Friday between 8 a.m. and 4:30 

p.m. eastern time. 

As soon as possible after publication 

of the final rule that would implement 

Amendment 26, the RA would mail an 

IFQ information package to eligible IFQ 

participants. The package would 

include information for accessing the 

online IFQ system at 

ifq.sero.nmfs.noaa.gov and establishing 

an online account, general instructions 

related to online transaction procedures 

and requirements, and where 

appropriate, information regarding 

historical landings and initial IFQ 

shares and allocation. 

IFQ Shares and Allocation 

An IFQ share is the percentage of the 

commercial quota of red snapper 

proportioned to each eligible person 

based on specified landings data. An 

IFQ allocation is the actual poundage of 

red snapper, measured in gutted weight, 

each IFQ shareholder is ensured the 

opportunity to land during a given 

fishing year. The allocation granted each 

IFQ shareholder would be derived by 

multiplying their IFQ share times the 

annual red snapper commercial quota. 

A person would be required to have an 

annual allocation or portion thereof, to 

harvest, possess, or sell red snapper. 

IFQ shares and annual allocations can 

be transferred separately or together to 

other eligible persons. 


rmajette on PROD1PC67 with PROPOSALS
50014 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

Adjustments in Commercial Quota and 

Allocation 

The Council periodically reviews and 

adjusts the commercial quota for Gulf 

red snapper in response to new data and 

information, which generally take the 

form of new or updated red snapper 

stock assessments. As the quota is 

adjusted, shareholder’s IFQ allocations 

would be proportionately adjusted 

based on the IFQ share each shareholder 

has at the time of the adjustment. 

Special Procedure for Initial Calculation 

of 2007 IFQ Allocations 

Because of uncertainty regarding the 

2007 commercial quota for Gulf red 

snapper and the timing of its 

implementation and to avoid the 

possibility of having to revoke some 

proportion of initial allocation if the 

quota was subsequently reduced, the RA 

may initially calculate the 2007 IFQ 

allocations based on a proxy 

commercial quota. If a commercial 

quota adjustment for Gulf red snapper 

has not been submitted for review by 

the Secretary of Commerce in time for 

calculation of 2007 IFQ allocations, the 

RA would initially calculate 2007 

allocations based on a proxy 

commercial quota of 2.55 million lb 

(1.16 million kg). Alternatively, if a 

commercial quota adjustment for Gulf 

red snapper has been submitted for 

review by the Secretary of Commerce in 

time to allow calculation of 2007 

allocations, the RA would base 2007 

IFQ allocations on the proposed quota. 

Under either scenario, as soon as the 

actual 2007 commercial quota is final, 

but no later than July 1, 2007, the RA 

would adjust the 2007 IFQ allocations, 

as necessary, consistent with the actual 

quota. 

IFQ Share Eligibility and Share 

Calculation 

Eligibility for initial issuance of IFQ 

shares would be restricted to persons 

who own a Class 1 or Class 2 license as 

of the date of publication of the final 

rule implementing Amendment 26. An 

owner of a license is defined as the 

person who actually controls transfer of 

the Class 1 or Class 2 license and is 

listed as the qualifier on the face of the 

license. NMFS would calculate initial 

IFQ shares based on the highest average 

annual landings of Gulf red snapper 

associated with each shareholder’s 

current Class 1 or Class 2 license(s) 

during the applicable landings history 

unless the shareholder selects other 

years of landings consistent with the 

applicable landing history. For a Class 

1 license holder whose license was not 

issued based on historical captain 

status, the 10 consecutive years between 

1990 and 2004 with the highest average 

landings would be used. For a Class 1 

license holder whose license was issued 

on the basis of historical captain status, 

all years of landings data from 1998 

through 2004 would be used. For a Class 

2 license holder, the 5 years between 

1998 and 2004 with the highest average 

landings would be used. 

All landings associated with a current 

Class 1 or Class 2 license for the 

applicable landings history, including 

those reported by a person who held the 

license prior to the current license 

owner, would be attributed to the 

current license owner. Only legal 

landings reported in compliance with 

applicable state and Federal regulations 

would be accepted. Each shareholder’s 

initial IFQ share would be 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 IFQ 

shares would not be issued in 

denominations of less than 0.0001 

percent. 

Appeals Process 

The only items subject to appeal 

under this IFQ system would be initial 

eligibility for IFQ shares based on 

ownership of a Class 1 or Class 2 

license, the accuracy of the amount of 

landings, and correct assignment of 

landings to the license owner. The RA 

would review, evaluate, and render final 

decisions on appeals. Appeals would 

have to be submitted to the RA 

postmarked no later than 90 days after 

the effective date of the final regulations 

implementing the IFQ program and 

would have to contain documentation 

supporting the basis for appeal. 

Hardship arguments would not be 

considered. Landings data from 1990 

through 1992 would not be subject to 

appeal. Landings records appeals for 

1993–2004 would be based on NMFS 

logbook data. If NMFS logbooks are not 

available; state landings records or data 

submitted on or before June 30, 2005, 

could be used. During the first year of 

the IFQ program only, the RA initially 

would reserve a 3–percent IFQ share, 

prior to initial distribution of shares, to 

be used to resolve appeals. Any portion 

of the 3–percent share reserve remaining 

after the appeals process has been 

completed would be proportionately 

distributed back to the initial recipients 

as soon as possible that year. If 

resolution of appeals requires more than 

a 3–percent share, the shares of all 

initial shareholders would be reduced 

proportionately to accommodate the 

required shares in excess of the 3–

percent reserve. 

IFQ Share Cap—NMFS Solicits Public 

Comment 

To prevent any entity from obtaining 

excessive shares under this IFQ 

program, as mandated by National 

Standard 4 of the Magnuson–Stevens 

Act, a share cap would be established. 

No person would be allowed to own at 

any time IFQ shares exceeding the 

maximum share initially issued to any 

person for the 2007 fishing year, as of 

the date appeals are resolved and shares 

are adjusted accordingly. NMFS 

estimates this would cap ownership of 

shares at approximately 8 percent of 

total shares. If an ownership cap is too 

high, market power may become too 

consolidated and produce an unduly 

anti–competitive market. However, 

setting the limit too low can also have 

adverse effects on the price of fish. This 

can happen in cases where it is less 

costly overall for fewer entities to each 

catch more fish than it is for lots of 

entities to each catch smaller amounts 

of fish. 

Aside from considerations of 

controlling the undue consolidation of 

market power and maintaining a fair 

level of competition, Section 303(b)(6) 

of the Magnuson-Stevens Act requires 

consideration of several factors in 

establishing a limited access program 

such as the red snapper IFQ program. 

Those factors include, but are not 

limited to: present participation in the 

fishery, historical fishing practices in, 

and dependence on, the fishery; the 

economics of the fishery; and the 

cultural and social framework relevant 

to the fishery and any affected fishing 

communities. Although the 

approximately 8 percent cap may not 

result in consolidation that rises to the 

level of presenting an undue 

concentration of market power or 

chilled competition, a higher cap could 

result in levels of consolidation 

producing effects that are problematic 

under the Magnuson-Stevens Act. 

Examples would include potentially 

eliminating numerous small-scale 

historical participants, adversely 

affecting the social and cultural 

framework of the fishery by adversely 

affecting working conditions and wages 

for crew, and potentially adversely 

affecting prices. 

NMFS is seeking comments on 

whether the proposed cap of 

approximately 8 percent is appropriate. 

According to the‘‘Horizontal Merger 

Guidelines’’ (Guidelines) issued jointly 

by the Department of Justice and the 

Federal Trade Commission (http:// 

www.usdoj.gov/atr/public/guidelines/ 


rmajette on PROD1PC67 with PROPOSALS
Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 50015 

hmg.pdf, see especially pp 15–17), even 

under conservative assumptions a limit 

of 10 percent (or possibly higher under 

less restrictive assumptions) would be 

unlikely to have adverse competitive 

effects. Accordingly, NMFS seeks 

specific comments on the 

appropriateness and magnitude of the 

proposed ownership cap. 

Permit and IFQ Endorsement 

Requirements 

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, 

regardless of where harvested or 

possessed, a Gulf red snapper IFQ vessel 

endorsement would have to be issued to 

the vessel and be on board, and such 

person would have to hold or be 

assigned sufficient IFQ allocation to 

account for all red snapper on board or 

landed. As a condition of the IFQ vessel 

endorsement, a person aboard such 

vessel would have to comply with the 

requirements of the IFQ program 

regardless of where red snapper are 

harvested or possessed. 

All dealers who purchase red snapper 

from an IFQ share/allocation holder 

would be required to possess a valid 

Federal dealer permit for Gulf reef fish 

and a red snapper IFQ dealer 

endorsement without which possessing, 

transporting, selling, purchasing, or 

processing red snapper would be 

prohibited. 

The red snapper IFQ vessel 

endorsement and red snapper IFQ 

dealer endorsement would be available 

for download from the IFQ website, 

ifq.sero.nmfs.noaa.gov, at no cost to 

those individuals who possess a valid 

Gulf reef fish permit or a valid Gulf reef 

fish dealer permit, respectively, and 

request the endorsements. If such 

individuals do not have an IFQ online 

account, they would have to 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. The red 

snapper IFQ vessel endorsement and 

dealer endorsement would remain valid 

as long as the individual possesses a 

valid Gulf reef fish permit or reef fish 

dealer permit, respectively, abides by all 

reporting and cost recovery 

requirements of the IFQ program, and is 

not subject to sanctions under 15 CFR 

part 904. The IFQ vessel endorsement 

and the dealer endorsement are not 

transferable. 

Fleet Management and Assignment of 

Allocation 

An IFQ shareholder or IFQ allocation 

holder who owns more than one vessel 

with a valid Gulf reef fish vessel permit 

and a valid Gulf red snapper IFQ vessel 

endorsement may assign IFQ allocation 

to a person aboard such vessel and 

provide that person the IFQ account 

information necessary to conduct 

landing transactions. This assignment of 

allocation, which does not constitute a 

transfer or sale of allocation, can be 

accomplished by the shareholder or 

allocation holder online via the IFQ 

website. 

Electronic Reporting of IFQ 

Transactions 

IFQ share and allocation transactions 

would be tracked using an online 

accounting system developed by NMFS, 

in which the IFQ share/allocation 

holder, IFQ dealer, and appropriate 

NOAA personnel would participate. 

The IFQ share/allocation holder and 

IFQ dealer accounts would record IFQ 

share/allocation transactions into the 

online system using unique user ID 

numbers and personal identification 

numbers (PIN) issued to them by NMFS. 

Transaction approval codes obtained 

from NMFS via the online accounting 

system would be required for the 

following transactions: (1) share 

transfers; (2) allocation transfers; and (3) 

landings/sales transactions. The 

transaction approval code would verify 

the IFQ share/allocation holders 

involved in the transaction are eligible 

participants and, in the case of 

landings/sale, have sufficient allocation 

to conduct the sales transaction. 

Data managed through the online 

accounting system would include, but 

not be limited to: 

1. The identities and certificate 

numbers of IFQ share holders and their 

associated vessel ID numbers; 

2. The identities of persons and 

corporations holding and fishing IFQ 

allocations and their associated vessel 

ID numbers; 

3. The dates, times, and types of IFQ 

share and allocation transactions; 

4. The identities and locations of IFQ 

dealerships; 

5. The dates, times, and places of 

landing/sales transactions; 

6. The identities of the dealers and 

fishermen conducting landing/sales 

transactions; 

7. The price of red snapper recorded 

during each landing/sales transaction; 

and 

8. The biological data recorded during 

each landing/sales transaction. 

Landings/Sale Transactions 

At the time of landing/sale of IFQ red 

snapper, the dealer would be 

responsible for initiating transactions in 

the online accounting system. The 

fisherman would validate the 

transaction online by entering his 

unique PIN number at the point of 

transaction submittal. The information 

required to be recorded in the online 

accounting system for each landing/sale 

transaction at the point of sale would 

include, but not be limited to: 

1. The date and time of landing/sale; 

2. The weight of red snapper 

purchased; 

3. The share/allocation holder 

account number from which the catch 

should be debited; 

4. The ID number of the vessel used 

to harvest the fish; 

5. The IFQ endorsement number of 

the authorized dealer; 

6. The PIN numbers of both the dealer 

and fishermen; and 

7. The actual ex-vessel unit price of 

the red snapper. 

Limited Landings Overage Allowance 

On the last fishing trip of the fishing 

year permitted by the shareholder’s 

annual allocation, a shareholder would 

be permitted to land up to 10 percent 

more than the remaining allocation, 

without purchasing additional 

allocation. Any such overages would be 

deducted from the next year’s allocation 

associated with the shareholder’s IFQ 

share. 

This carryover provision would not 

apply to a person who only possesses 

IFQ allocation and no IFQ shares 

because there would be no reliable 

mechanism for compensating for the 

overage in the following fishing year. 

Such a person would not be permitted 

to land any red snapper in excess of his/ 

her current allocation. 

Cost Recovery 

Section 304(d)(2)(A) of the MagnusonStevens Act requires the Secretary of 

Commerce to establish a fee to assist in 

recovering the actual costs directly 

related to the management and 

enforcement of any IFQ program. 

Currently, such a fee may not exceed 3 

percent of the ex-vessel value of fish 

harvested under any such program, and 

must be collected at either the time of 

landing, filing of a landing report, or 

sale of such fish during a fishing season 

or in the last quarter of the calendar year 

in which the fish is harvested. Fees 

collected must be in addition to any 

other fees charged under the MagnusonStevens Act and must be deposited in 

the Limited Access System 

Administration Fund (LASAF) 

established under Section 305(h)(5)(B) 

of the Magnuson-Stevens Act. Initially, 

the fee would be 3 percent of the actual 

ex-vessel value of Gulf red snapper 

landed under the IFQ program, as 


rmajette on PROD1PC67 with PROPOSALS
50016 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

documented at the time of sale in each 

landings transaction report. The RA 

would review the cost recovery fee 

annually to determine if a downward 

adjustment is warranted. Factors 

considered in the review would 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 nonpayment of fee liabilities. If the RA 

determines that a fee adjustment is 

warranted, the RA would publish a 

notification of the fee adjustment in the 

Federal Register. 

The IFQ shareholder or allocation 

holder whose IFQ allocation is debited 

for a Gulf red snapper landing would be 

responsible for paying the associated 

IFQ cost recovery fees. The IFQ dealer 

who receives such landing would be 

responsible for collecting the applicable 

fee from the shareholder/allocation 

holder and submitting the applicable fee 

to NMFS using pay.gov via the IFQ 

system no later than 30 days after the 

end of each calendar-year quarter; 

however, fees may be submitted at any 

time before that deadline. Authorized 

payment methods would be credit card, 

debit card, or automated clearing house 

(ACH). Payment by check would be 

authorized only if the RA has 

determined that the geographical area or 

an individual(s) is affected by 

catastrophic conditions. Fees not 

received by the deadline would be 

considered delinquent and would be 

resolved through the fee reconciliation 

process as specified in § 622.16(c)(2)(iv) 

of this proposed rule. Failure to resolve 

payment of delinquent fees may result 

in annulment of the applicable IFQ 

permit and/or IFQ endorsement and 

submission of the matter to appropriate 

authorities for resolution. 

IFQ Share/Allocation Transferability 

During the first 5 years of the IFQ 

program, IFQ shares or allocations could 

only be transferred to a person with a 

valid commercial vessel permit for Gulf 

reef fish; thereafter, shares and 

allocations could be transferred to U.S. 

citizens and permanent resident aliens. 

Share Transfer Transactions 

IFQ share transfers would require 

NMFS’ approval of a share transfer 

application. The person transferring the 

share would be responsible for initiating 

the transfer request by using the online 

red snapper IFQ website at 

ifq.sero.nmfs.noaa.gov. Following the 

instructions provided on the website, 

the transferor would be required to enter 

pertinent information regarding the 

transfer request including, but not 

limited to: 

1. The name, address, and certificate 

number of the individual or corporation 

transferring the IFQ share; 

2. The identity of the purchaser or 

transferee; 

3. The amount of the IFQ share being 

transferred; and 

4. The monetary value of the transfer. 

If the information is accepted, the 

online system would send the transferor 

an initial transaction approval code and 

make an application for share transfer 

available for downloading and printing. 

The transferor and transferee would be 

required to complete the application, 

have their signatures notarized, and 

mail the signed application to the RA at 

least 30 days prior to the date on which 

the applicant desires to have the transfer 

effective. Share transfers would be 

prohibited during December of each 

year to allow NMFS the time necessary 

for end-of-year program management; 

therefore, any signed application would 

have to be received by the RA prior to 

December 1. If the RA approves the 

application for transfer, the online 

system would send the transferor and 

transferee an electronic message 

acknowledging the approval; a transfer 

would be effective upon receipt of the 

message. The adjusted shares resulting 

from a transfer could be viewed online 

by each shareholder. If the RA does not 

approve the transfer application, the RA 

would return the application to the 

transferor with an explanation and 

instructions for correcting any 

deficiencies. 

Allocation Transfer Transactions 

Unlike share transfers which require a 

notarized application for transfer, 

allocation transfers could be 

accomplished online via the red 

snapper IFQ website. An allocation 

holder could initiate an allocation 

transfer by logging on to the red snapper 

IFQ website at ifq.sero.nmfs.noaa.gov, 

and entering the required information 

including, but not be limited to: 

1. The name, address, and share 

certificate number (if applicable) of the 

individual or corporation transferring 

the IFQ allocation; 

2. The identity of the eligible 

purchaser or transferee; 

3. The amount of the IFQ allocation 

being transferred; and 

4. The monetary value of the transfer. 

An allocation transfer would be valid 

only for the remainder of the fishing 

year in which it occurs; it would not 

carry over to the subsequent fishing 

year. Transfer of allocation is not 

prohibited during December. Any 

allocation that is unused at the end of 

the fishing year would be void. 

Redistribution of Shares Resulting from 

Permanent Permit or Endorsement 

Revocation 

If a shareholder’s commercial vessel 

permit for Gulf reef fish or Gulf red 

snapper IFQ vessel endorsement has 

been permanently revoked under 

provisions of 15 CFR part 904, the RA 

would redistribute the IFQ shares held 

by that shareholder proportionately 

among remaining shareholders based 

upon the amount of shares each held 

just prior to the redistribution. During 

December of each year, the RA would 

determine the amount of revoked 

shares, if any, to be redistributed, and 

the shares would be distributed at the 

beginning of the subsequent fishing 

year. 

Annual Recalculation and Notification 

of IFQ Shares and Allocation 

On or about January 1 each year, IFQ 

shareholders would be notified, via the 

IFQ website, of their IFQ share and 

allocation for the upcoming fishing year. 

These updated share values would 

reflect the results of applicable share 

transfers and any redistribution of 

shares resulting from permanent 

revocation of applicable permits or 

endorsements under 15 CFR part 904. 

Allocation is calculated by multiplying 

IFQ share times the annual red snapper 

commercial quota. Updated allocation 

values would 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. IFQ 

participants would be able to monitor 

the status of their shares and allocation 

throughout the year via the IFQ website. 

Measures to Enhance Enforceability 

The following measures are proposed 

to enhance enforceability of the IFQ 

program. Fishermen participating in the 

IFQ program would be required to 

offload their red snapper landings to 

permitted IFQ dealers and only between 

6 a.m. and 6 p.m. daily. Any person 

landing IFQ red snapper would be 

required to notify NMFS’ Office of Law 

Enforcement by calling 1–866–425–

7627, at least 3 hours in advance of 

landing and specify the time and 

location of landing and the name and 

address of the dealer where the fish 

would be received. Possession of IFQ 

red snapper from the time of transfer 

from a vessel through possession by a 

dealer would be prohibited unless the 

IFQ red snapper are accompanied by a 

transaction approval code verifying a 

legal transaction of the amount of IFQ 


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red snapper in possession. For red 

snapper offloaded to a truck for 

transportation to a dealer, this would 

require 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. At-sea or 

dockside vessel-to-vessel transfers of 

fish on board IFQ vessels would be 

prohibited. 

Changes Proposed by NMFS 

In this proposed rule, NMFS has 

clarified the distinction between IFQ 

shareholders and IFQ allocation 

holders, and more clearly distinguished 

the roles and responsibilities of these 

two IFQ participant types. This 

clarification was necessary for proper 

implementation of the IFQ program. 

NMFS has also determined that it is 

not necessary to prohibit transfer of 

allocation during December as 

Amendment 26 proposed. Allocation is 

only valid for a given fishing year; does 

not carry over to the subsequent year; 

and, thus, does not affect agency 

calculations and implementation for the 

following year. Therefore, consistent 

with the Council’s intent to maximize 

flexibility among eligible participants, 

NMFS has modified the proposed rule 

to only prohibit transfer of IFQ shares 

during December of each year. 

In addition, NMFS has structured the 

proposed rule to require an IFQ vessel 

endorsement rather than an IFQ 

endorsement issued to an individual as 

discussed by the Council. The primary 

purpose of the endorsement 

requirement is to enhance 

enforceability. NMFS has determined 

that a vessel endorsement would 

provide the necessary enforceability; be 

less restrictive for participants; and be 

consistent with endorsement provisions 

in current regulations for other fisheries 

in the Southeast Region. 

NMFS also has clarified in this 

proposed rule that the IFQ allocation 

holder specified in the landing 

transaction report is responsible for 

payment of the applicable cost recovery 

fee, not necessarily the shareholder. In 

some cases, the shareholder may also be 

the allocation holder, but in other cases, 

the shareholder may have transferred 

allocation to a non-shareholder. In all 

cases, the allocation holder is ultimately 

responsible for payment of the fee. 

Finally, this proposed rule does not 

include the vessel monitoring system 

(VMS) requirement for vessels with a 

Gulf reef fish vessel permit that was 

proposed in Amendment 26. 

Amendment 26 acknowledged that a 

comparable VMS requirement was 

proposed in Amendment 18A to the 

FMP. Amendment 26 stated that the 

VMS requirement in Amendment 26 

would be unnecessary if Amendment 

18A was approved by NMFS. NMFS has 

approved Amendment 18A and the 

associated VMS requirement; therefore, 

this proposed rule would not implement 

any additional VMS requirement. 

Classification 

At this time, NMFS has not 

determined that Amendment 26 is 

consistent with the Magnuson-Stevens 

Act and other applicable laws. NMFS, 

in making that determination, will take 

into account the data, views, and 

comments received during the comment 

periods on Amendment 26 and this 

proposed rule. 

This proposed rule has been 

determined to be not significant for 

purposes of Executive Order 12866. 

NMFS prepared a final supplemental 

environmental impact statement (FSEIS) 

for this amendment; a notice of 

availability was published on August 2, 

2006 (71 FR 43706). 

NMFS prepared an IRFA, as required 

by section 603 of the Regulatory 

Flexibility Act, for this proposed rule. 

The IRFA describes the economic 

impact this proposed rule, if adopted, 

would have on small entities. A 

description of the action, why it is being 

considered, and the legal basis for this 

action are contained at the beginning of 

this section in the preamble and in the 

SUMMARY section of the preamble. A 

copy of the full analysis is available 

from the Council (see ADDRESSES). A 

summary of the IRFA follows. 

The Magnuson-Stevens Act provides 

the statutory basis for the proposed rule. 

The proposed rule will establish an IFQ 

program for the commercial red snapper 

fishery in the Gulf. Specifics for this IFQ 

program include the following: (1) no 

limit on the duration of the program, but 

a program evaluation is required every 

5 years; (2) maximum IFQ share 

ownership equal to the maximum 

percentage issued to any initial 

recipient of IFQ shares; (3) restriction on 

initial eligibility only to owners of Class 

1 or Class 2 license holders; (4) 

proportionate allocation of initial IFQ 

shares based on average annual landings 

for 10 consecutive years during 1990–

2004 for Class 1, all years of landings 

during 1998–2004 for Class 1 historical 

captains, and any 5 years during 1998–

2004 for Class 2; (5) establishment of an 

appeals process and a set-aside of a 3–

percent IFQ share to resolve appeals; (6) 

restriction on transfers of IFQ shares/ 

allocations only to those with a valid 

commercial reef fish permit during the 

first 5 years and to U.S. citizens and 

permanent resident aliens thereafter; (7) 

proportionate allocation of commercial 

quota adjustments based on percentage 

of IFQ share holdings at the time of the 

adjustment and phased-in issuance of 

IFQ allocations for the 2007 season; and, 

(8) provision for IFQ cost recovery fees 

to be paid by IFQ allocation holders 

who land IFQ red snapper but collected 

and submitted to NMFS by registered 

IFQ dealers. 

The main objectives of the proposed 

rule are to address the excess capacity 

and derby problems in the commercial 

red snapper fishery. The proposed rule 

would generally impact two types of 

businesses in the Gulf reef fish fishery, 

namely, commercial fishing vessels 

(including recreational for-hire vessels 

with commercial reef fish permits) and 

fish dealers. 

At present, the Gulf of Mexico (GOM) 

commercial reef fish permits are under 

a limited access program. Commercial 

reef fish permits are renewable every 

year subject to the condition the 

applicant meets the income 

requirement. Also, the commercial red 

snapper fishery is presently under a 

two-tier license limitation program. A 

Class 1 license entitles the holder a trip 

limit of 2,000 lb (907.2 kg) of red 

snapper while a Class 2 license entitles 

the holder a lower trip limit of 200 lb 

(90.7 kg). Each type of license is allowed 

only one trip per day. The proposed IFQ 

program would replace this two-tier 

license limitation system in the 

commercial red snapper fishery, but the 

limited access program for commercial 

reef fish permits remains unchanged. 

No duplicative, overlapping, or 

conflicting Federal rules have been 

identified. 

There are 1,118 active commercial 

reef fish permits and 91 others that are 

currently expired but may be renewed 

within a year. Thus, a total of 1,209 

vessels may be considered to comprise 

the universe of commercial harvest 

operations in the GOM reef fish fishery. 

Of the 1,209 commercial permittees, 136 

entities hold red snapper Class 1 

licenses and 628 entities hold red 

snapper Class 2 licenses. Of the 136 

Class 1 licenses, seven have been issued 

on the basis of the historical captain 

criterion. All original owners of Class 1 

historical captain licenses have sold 

their licenses. Reported average annual 

gross receipts (in 2004 dollars) of 

commercial reef fish vessels in the GOM 

range from $24,095 for low-volume 

vertical line vessels to $116,989 for 

high-volume longline vessels which 

primarily target grouper. The 

corresponding annual net incomes range 

from $4,479 for low-volume vertical line 

vessels to $28,466 for high-volume 

vertical line vessels. Permit records 


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indicate there are 17 Class 1 fleet 

operations owning a total of 58 licenses. 

In 2004, the top three fleet operations 

landed a total of 987,532 lb (447,937 kg) 

of red snapper, or an average of 329,177 

lb (149,312 kg) per fleet operation. At 

the 2004 average red snapper ex-vessel 

price of $2.83 per pound, the average 

pounds landed convert to ex-vessel 

revenues of $931,571. No fleet 

information is available for Class 2 

licenses, but it is reasonable under the 

circumstances to assume that if ever a 

Class 2 fleet operation exists, it would 

generate much less revenues than its 

Class 1 counterparts. 

There currently exists a permitting 

requirement for dealers to buy or sell 

reef fish, including red snapper, caught 

in the GOM. This permitting 

requirement remains under the 

proposed IFQ program, but in addition 

a red snapper endorsement would be 

required of dealers to buy or sell red 

snapper. Based on the permits file, there 

are 227 dealers possessing permits to 

buy and sell reef fish species. However, 

based on logbook records, there are 154 

reef fish dealers actively buying and 

selling red snapper. It is possible, 

though, that some of the 227 dealers 

may be handling red snapper in one 

year but not in another. Dealers in 

Florida purchased about $1.8 million of 

red snapper, followed by dealers in 

Louisiana with purchases of $1.4 

million and dealers in Texas with 

purchases of $1.3 million. Dealers in 

Mississippi purchased $174,000 worth 

of red snappers and those in Alabama, 

$88,000. These dealers may hold 

multiple types of permits, and because 

we do not know 100 percent of the 

business revenues, it is not possible to 

determine what percentage of their 

business comes from buying and selling 

red snapper. 

Average employment information per 

reef fish dealer in the GOM is unknown. 

Although dealers and processors are not 

synonymous entities, a recent study 

reported total employment for reef fish 

processors in the Southeast at 

approximately 700 individuals, both 

part and full time. NMFS assumes all 

processors must be dealers, yet a dealer 

need not be a processor. Further, 

processing is a much more labor 

intensive operation than dealing. 

Therefore, given the employment 

estimate for the processing sector, it is 

likely the average dealer employment 

would be low. 

The Small Business Administration 

(SBA) defines a business as a small 

business if it is independently owned 

and operated and not dominant in its 

field of operation, and if it has annual 

receipts not in excess of $4.0 million in 

the case of commercial harvesting 

entities or $6.5 million in the case of 

for-hire entities, or if it has fewer than 

500 employees in the case of fish 

processors, or fewer than 100 employees 

in the case of fish dealers. Based on the 

gross revenue and employment profiles 

presented above, all permitted 

commercial reef fish vessels (including 

fleet operations) and reef fish dealers 

affected by the proposed regulations 

may be classified as small entities. 

The proposed rule would introduce 

additional reporting and record-keeping 

requirements involving the tracking of 

IFQ shares and the corresponding red 

snapper landings. An electronic 

reporting system is the planned 

approach to track IFQ shares and 

corresponding red snapper landings. 

The reporting burden would mainly fall 

on the dealers. An IFQ dealer 

endorsement would be required of any 

dealer purchasing red snapper. The IFQ 

dealer endorsement would be issued at 

no cost to those individuals who 

possess a valid GOM reef fish dealer 

permit and request the endorsement. 

Although the current GOM reef fish 

dealer permit must be renewed annually 

at a cost of $50 for the initial permit 

($12.50 for each additional permit), the 

IFQ dealer endorsement would remain 

valid as long as the individual possesses 

a valid GOM reef fish dealer permit, 

abides by all reporting and cost recovery 

requirements of the IFQ program, and is 

not subject to sanctions under 15 CFR 

part 904. As an integral part of the 

electronic monitoring system, an IFQ 

dealer would be required to have access 

to computers and the Internet for 

inputting, among other data, pounds 

and value of red snapper purchased by 

the dealer from an IFQ shareholder. If a 

dealer does not have current access to 

computers and the Internet, he or she 

may have to expend approximately 

$1,500 for computer equipment and 

accessories (one-time cost) and $300 

annual cost for Internet access. Dealers 

would need some basic computer and 

Internet skills to input information for 

all red snapper purchases into the IFQ 

electronic reporting system. Dealers also 

have to remit to NMFS on a quarterly 

basis, the cost recovery fees equivalent 

to 3 percent of the actual ex-vessel value 

of red snapper purchased from IFQ 

shareholders/allocation holders. 

Although IFQ allocation holders pay 

this fee, it is the responsibility of dealers 

to collect and remit these fees to NMFS. 

In addition to this quarterly remittance, 

dealers would be required to submit to 

NMFS a year-end report summarizing 

all transactions involving the purchase 

of red snapper. There is currently no 

available information to determine how 

many of the 227 reef fish dealers or of 

the current 154 red snapper dealers 

have the necessary electronic capability 

to participate in the IFQ program. 

However, demonstration of this 

capability would be necessary for IFQ 

program participation by any dealer. 

IFQ shareholders/allocation holders 

also have to use the electronic reporting 

system to report transfer/assignment of 

shares and allocation as well as to 

monitor their outstanding IFQ shares 

and allocations. Similar skills and 

equipment needs for dealers also apply 

to IFQ shareholders/allocation holders. 

There would be 95 IFQ shareholders 

based on Class 1 license qualification 

and as many as 482 IFQ shareholders 

based on Class 2 license qualification. 

Over time under the IFQ program, the 

number of IFQ shareholders is expected 

to decline. 

The 764 vessels (136 Class 1 licenses 

plus 628 Class 2 licenses) that have 

Class 1 or Class 2 licenses comprise 64 

percent of all vessels with GOM 

commercial reef fish permits. Also, at 

least 154, or 68 percent, of the 227 

permitted reef fish dealers would be 

affected. Therefore, the proposed rule 

would affect a substantial number of 

small entities. 

Because all affected vessel and dealer 

operations are small entities, the 

proposed rule would not result in 

disproportionate impacts where small 

entities are placed at a significant 

competitive disadvantage to large 

entities. Some vessel operations are 

relatively larger than others. In 

particular, 17 fleet operations account 

for as much as 40 percent of the entire 

commercial quota for red snapper. 

These 17 fleet operations and another 78 

single vessel operations would initially 

receive about 90 percent of IFQ shares. 

The other 482 smaller operations would 

receive the rest of the IFQ shares. And 

146 Class 2 vessel operations would 

likely not receive any initial IFQ shares, 

because they have no landings history 

during the qualifying period of 1998–

2004 for these licenses. 

The proposed rule has varying effects 

on the profitability of the affected vessel 

operations. Most likely, it has minimal 

effects on the profits of the 146 Class 2 

vessel operations that have no red 

snapper landings. These vessels would 

mainly lose their relatively low-cost 

entry into the red snapper fishery 

should the need arise. Under the 

proposed rule, they would have to buy 

shares/allocations even if they intend to 

fish only on a limited basis. Some of the 

482 Class 2 vessel operations that may 

have increasingly relied on red snapper 

to supplement their overall harvests 


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may receive small IFQ shares. They 

would either have to buy more shares/ 

allocations to continue fishing for red 

snapper or sell their shares. Either way, 

their overall profits may decline, at least 

initially, although in selling their IFQ 

shares they would receive some 

remuneration. The 136 Class 1 vessel 

operations and some Class 2 vessel 

operations that have relatively large red 

snapper landings are expected to benefit 

most from the IFQ program. As 

discussed in the RIR, an IFQ system is 

expected to improve the profitability of 

these vessels. This improvement would 

generally take time, since fishermen 

would have to adjust their operations in 

order to achieve the most profitable 

position. Such adjustment may involve 

consolidation of multiple vessel 

operations to lower costs, scheduling of 

harvests to take advantage of market and 

weather conditions, negotiation with 

purchasers to strike a long-term deal at 

relatively stable prices, or some other 

arrangements that take advantage of a 

relatively certain share of a season’s 

quota at the start of the season. Some 

entities may be successful in making 

adjustments while others may not. For 

those that cannot, there is always the 

option to sell their shares. They may 

leave the red snapper fishery, but would 

receive some remuneration for doing so. 

The extent to which the IFQ 

monitoring system, including the 

collection and remittance of the cost 

recovery fees, would affect dealers’

profitability cannot be determined at 

this time. For the relatively established 

dealers, the monetary cost requirement 

under an electronic monitoring system 

is probably small, especially if they 

already have computer systems in place. 

Smaller operations, however, may 

totally stay out of the red snapper 

fishery. On top of the cost the dealer 

defrays to collect and remit cost 

recovery fees, participating dealers are 

also exposed to possibilities of 

temporarily or permanently losing their 

red snapper business in the event there 

are problems with their collection and/ 

or remittance of the full amount of cost 

recovery fees. To mitigate this potential 

adverse impact, dealers are granted a 30- 

day grace period from the end of the 

quarter to reconcile their cost recovery 

fee accounts. Arrears in cost recovery 

fees not settled within the 30-day grace 

period would lead to suspension of the 

dealer red snapper endorsement. In this 

eventuality, dealers are granted another 

30 days to settle their accounts before 

their dealer endorsement is annulled. 

Note, however, that payment of arrears 

is sufficient to reinstate the dealer 

endorsement within a certain period of 

time. 

This amendment considered several 

alternatives to the proposed rule. An 

alternative to the IFQ program is the 

current limited access and license 

limitation system. Under this system, 

overcapacity and derby effects have 

substantially constrained the 

profitability of the commercial harvest 

industry. The proposed IFQ program is 

expected to effectively address these 

major issues/problems in the fishery. To 

partly cushion the impacts of 

unintended IFQ allocation overruns that 

may result in penalties, IFQ 

shareholders are allowed to land up to 

10 percent more than their remaining 

allocations for the fishing year’s last 

fishing trip without having to purchase 

additional allocation. However, any 

overages would be deducted from the 

next year’s allocation associated with 

their IFQ shares. 

There are two other alternatives with 

respect to the duration of the IFQ 

program. One specifies no duration 

while the other imposes a term limit on 

the program. The former has similar 

effects as the proposed rule, but it does 

not contain a mandatory evaluation of 

the program every 5 years. A sunset 

provision, as in the latter alternative, 

offers a lower likelihood for the IFQ 

program to achieve its intended 

objectives. Also, it would introduce 

uncertainties into the program due to 

potential changes in the ‘‘rules of the 

game.’’

With respect to an ownership cap, 

two other alternatives have been 

considered. One places no cap on 

ownership of IFQ shares while the other 

places a cap ranging from 2 to 15 

percent of the commercial quota. The 

first alternative provides a fertile ground 

for consolidation of IFQ shares, but it 

can also lead to concentration of 

ownership to a select few at the expense 

of eliminating historically small-scale 

operations in the fishery. The second 

alternative may be too liberal (e.g., 15 

percent) as to lead to over-consolidation 

or too restrictive (e.g., 2 percent) as to 

penalize the more efficient operations. 

Two other alternatives have been 

considered on the issue of initially 

eligible persons. The first one does not 

specify persons eligible to receive initial 

IFQ shares, and, thus, does not provide 

guidance for initially allocating IFQ 

shares. The second restricts initial 

eligibility to Class 1 license holders. 

This is too restrictive as to disallow at 

least 482 Class 2 license holders from 

continued participation in the fishery at 

the start of the IFQ program. 

Regarding allocating initial IFQ 

shares, two other alternatives have been 

considered. The first does not specify a 

methodology for allocating initial IFQ 

shares, and, thus, does not provide 

guidance for allocating IFQ shares to 

eligible participants. The second 

allocates initial IFQ shares equally 

among all eligible participants. This 

alternative would penalize the 

highliners and reward the small-scale 

operations in the fishery. There are 

more participants who would benefit 

from this alternative, but the magnitude 

of adverse impacts on at least 136 

operations would be relatively large. 

Regarding the appeals process, three 

other alternatives have been considered. 

The first does not establish an appeals 

process, and, thus, would not provide 

fishermen an avenue to contest landings 

information used by NMFS to determine 

their IFQ shares. The second establishes 

an appeals board composed of state 

directors/designees who would advise 

the RA on appeals. The third establishes 

an advisory panel composed of IFQ 

shareholders. The proposed rule is 

simple and more straightforward than 

any of the alternatives that establish an 

appeals board. 

There are five other alternatives 

regarding the transfer of IFQ shares/ 

allocations. The first provides no limit 

on transfer; the second limits transfers 

only to those with valid commercial reef 

fish permits; the third limits transfers 

only to IFQ shareholders; the fourth 

allows transfers to U.S. citizens and 

permanent resident aliens; and, the fifth 

limits transfers only to IFQ shareholders 

during the first five years of the IFQ 

program and those with valid 

commercial reef fish permits thereafter. 

With the exception of the first 

alternative, all others would tend to 

limit the price an IFQ seller gets, so the 

resulting IFQ prices would not capture 

the true value of the resource. In 

addition, such limitations would 

constrain the entry of potentially more 

efficient producers. The proposed rule 

would be less restrictive than these 

alternatives but still would be more 

restrictive than the first alternative that 

does not impose limits on transfer. 

However, the proposed rule addresses 

concerns relative to the preservation of 

the historical and current participation 

in the fishery. 

On the issue of allocating adjustments 

in the commercial quota, three other 

alternatives have been considered. The 

first does not specify a method for 

allocating adjustments, so it does not 

provide adequate guidance for 

allocating quota changes. The second 

would allocate quota changes equally 

among IFQ share holders, and the third 

would allocate quota changes equally 

for 50 percent of the change and 


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proportionately for the other 50 percent. 

The second alternative would provide 

smaller operations larger benefits with 

quota increases and also larger losses 

with quota decreases. The third 

alternative would favor smaller 

operations at the expense of larger 

operations. One should note, however, 

that both large and small vessel 

operations have been considered small 

entities for SBA purposes. 

The proposed rule regarding a cost 

recovery fee is intended to abide by the 

§ 304(d)(2)(A) provision of the 

Magnuson-Stevens Act. One other 

alternative considered in this respect is 

not to impose a fee, which would not be 

in compliance with the noted provision. 

Another alternative considered is 

similar to the proposed rule, except that 

collection and submission of fees reside 

on the IFQ holders and not on the 

dealers. Under this alternative and the 

proposed rule, a small entity bears the 

cost of collecting and remitting the fees. 

The proposed rule, however, affords a 

better accounting control for the 

government. Copies of the RIR and IRFA 

are available (see ADDRESSES). 

This proposed rule contains 

collection-of-information requirements 

subject to the Paperwork Reduction Act 

(PRA). The collection-of-information 

requirements and associated public 

reporting burdens, in minutes, are as 

follows: (1) Dealer account activation--5; 

(2) Dealer transaction report--7; (3) 

Shareholder account activation--5; (4) 

Allocation holder account activation-- 

10; (5) Advance notification of landing- 

-3; (6) Transfer of share--15; and (7) 

Transfer of allocation--5. These 

requirements have been submitted to 

OMB for approval. These estimates of 

the public reporting burdens include the 

time for reviewing instructions, 

searching existing data sources, 

gathering and maintaining the data 

needed, and completing and reviewing 

the collections of information. Public 

comment is sought regarding: Whether 

these proposed collections of 

information are necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

the accuracy of the burden estimates; 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and ways to minimize the 

burden of the collections of information, 

including through the use of automated 

collection techniques or other forms of 

information technology. Send comments 

regarding the burden estimates or any 

other aspect of the collection-ofinformation requirements, including 

suggestions for reducing the burden, to 

NMFS and to OMB (see ADDRESSES). 

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 in 50 CFR Part 622 

Fisheries, Fishing, Puerto Rico, 

Reporting and recordkeeping 

requirements, Virgin Islands. 

Dated: August 18, 2006. 

Samuel D. Rauch III, 

Deputy Assistant Administrator for 

Regulatory Programs, National Marine 

Fisheries Service. 

For the reasons set out in the 

preamble, 50 CFR part 622 is proposed 

to be amended as follows: 

PART 622—FISHERIES OF THE 

CARIBBEAN, GULF, AND SOUTH 

ATLANTIC 

1. The authority citation for part 622 

continues to read as follows: 

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

2. In § 622.1, revise paragraph (a) and 

the first sentence in paragraph (b), and 

Table 1 entry ‘‘FMP for the Reef Fish 

Resources of the Gulf of Mexico’’, and 

add footnote 5 to read as follows: 

§ 622.1 Purpose and scope. 

(a) The purpose of this part is to 

implement the FMPs prepared under 

the Magnuson-Stevens Act by the 

CFMC, GMFMC, and/or SAFMC listed 

in Table 1 of this section. 

(b) This part governs conservation and 

management of species included in the 

FMPs in or from the Caribbean, Gulf, 

Mid-Atlantic, South Atlantic, or 

Atlantic EEZ, unless otherwise 

specified, as indicated in Table 1 of this 

section. * * * 

TABLE 1—FMPS IMPLEMENTED UNDER

PART 622 

FMP title 

Responsible fishery management 

council(s) 

Geographical 

area 

*****

FMP for 

the Reef 

Fish Resources 

of the 

Gulf of 

Mexico 

GMFMC Gulf.1,5

TABLE 1—FMPS IMPLEMENTED UNDER

PART 622—Continued 

FMP title 

Responsible fishery management 

council(s) 

Geographical 

area 

*****

5 Regulated area includes adjoining state 

waters for Gulf red snapper harvested or possessed by a person aboard a vessel with a 

Gulf red snapper IFQ vessel endorsement or 

possessed by a dealer with a Gulf red snapper IFQ dealer endorsement. 

3. In § 622.2, definitions of ‘‘Actual 

ex-vessel value’’ and ‘‘IFQ’’ are added in 

alphabetical order to read as follows: 

§ 622.2 Definitions and acronyms. 

* * * * * 

Actual ex-vessel value means the total 

monetary sale amount a fisherman 

receives for IFQ landings from a 

registered IFQ dealer. 

* * * * * 

IFQ means individual fishing quota. 

* * * * * 

4. Section 622.4 is amended by: 

A. Adding introductory text to the 

section. 

B. Adding a new sentence after the 

first sentence of paragraph (a)(2)(v). 

C. Revising paragraphs (a)(2)(ix), 

(a)(4), the first sentence of paragraph (d), 

paragraph (g)(1), and the first sentence 

of paragraph (h)(1). 

D. Removing and reserving paragraph 

(p). 

The additions and revisions read as 

follows: 

§ 622.4 Permits and fees. 

Paragraphs (p)(1) through (3) and 

(p)(5) through (6) of this section will no 

longer be in effect as of January 1, 2007, 

and paragraph (p)(4) of this section will 

no longer be in effect as of [DATE OF 

PUBLICATION OF THE FINAL RULE]. 

(a) * * * 

(2) * * * 

(v) * * * See paragraph (a)(2)(ix) of 

this section regarding an additional IFQ 

vessel endorsement required to fish for, 

possess, or land Gulf red snapper. * * * 

* * * * * 

(ix) Gulf red snapper IFQ vessel 

endorsement. 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, regardless of where harvested 

or possessed, a Gulf red snapper IFQ 

vessel endorsement must have been 

issued to the vessel and must be on 

board. As a condition of the IFQ vessel 

endorsement issued under this 


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paragraph (a)(2)(ix), a person aboard 

such vessel must comply with the 

requirements of § 622.16 regardless of 

where red snapper are harvested or 

possessed. An owner of a vessel with a 

commercial vessel permit for Gulf reef 

fish can download an IFQ vessel 

endorsement from the NMFS IFQ 

website at ifq.sero.nmfs.noaa.gov. If 

such owner does not have an IFQ online 

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 

IFQ online account. There is no fee for 

obtaining this endorsement. The vessel 

endorsement remains valid as long as 

the vessel permit remains valid and the 

vessel owner is in compliance with all 

Gulf reef fish and Gulf red snapper IFQ 

reporting requirements, has paid all IFQ 

fees required under paragraph (c)(2) of 

this section, and is not subject to 

sanctions under 15 CFR part 904. The 

endorsement is not transferable. See 

§ 622.16 regarding other provisions 

pertinent to the Gulf red snapper IFQ 

system. 

* * * * * 

(4) Dealer permits, endorsements, and 

conditions —(i) Permits. For a dealer to 

receive Gulf reef fish, golden crab 

harvested from the South Atlantic EEZ, 

South Atlantic snapper-grouper, rock 

shrimp harvested from the South 

Atlantic EEZ, dolphin or wahoo 

harvested from the Atlantic EEZ, or 

wreckfish, a dealer permit for Gulf reef 

fish, golden crab, South Atlantic 

snapper-grouper, rock shrimp, Atlantic 

dolphin and wahoo, or wreckfish, 

respectively, must be issued to the 

dealer. 

(ii) Gulf red snapper IFQ dealer 

endorsement. 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 Gulf red snapper subject to the 

Gulf red snapper IFQ program, as 

specified in § 622.16(a)(1), or for a 

person aboard a vessel with a Gulf red 

snapper IFQ vessel endorsement to sell 

such red snapper directly to an entity 

other than a dealer, such persons must 

also have a Gulf red snapper IFQ dealer 

endorsement. A dealer with a Gulf reef 

fish dealer permit can download a Gulf 

red snapper 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 Gulf red snapper IFQ 

reporting requirements, has paid all IFQ 

fees required under paragraph (c)(2) of 

this section, and is not subject to 

sanctions under 15 CFR part 904. The 

endorsement is not transferable. See 

§ 622.16 regarding other provisions 

pertinent to the Gulf red snapper IFQ 

system. 

(iii) State license and facility 

requirements. To obtain a dealer permit 

or endorsement, the applicant must 

have a valid state wholesaler’s license in 

the state(s) where the dealer operates, if 

required by such state(s), and must have 

a physical facility at a fixed location in 

such state(s). 

* * * * * 

(d) * * * Unless specified otherwise, 

a fee is charged for each application for 

a permit, license, or endorsement 

submitted under this section, for each 

request for transfer or replacement of 

such permit, license, or endorsement, 

and for each fish trap or sea bass pot 

identification tag required under 

§ 622.6(b)(1)(i)(B). * * * 

* * * * * 

(g) * * * 

(1) Vessel permits, licenses, and 

endorsements and dealer permits. A 

vessel permit, license, or endorsement 

or a dealer permit or endorsement 

issued under this section is not 

transferable or assignable, except as 

provided in paragraph (m) of this 

section for a commercial vessel permit 

for Gulf reef fish, in paragraph (n) of this 

section for a fish trap endorsement, in 

paragraph (o) of this section for a king 

mackerel gillnet permit, in paragraph (q) 

of this section for a commercial vessel 

permit for king mackerel, in paragraph 

(r) of this section for a charter vessel/ 

headboat permit for Gulf coastal 

migratory pelagic fish or Gulf reef fish, 

in paragraph (s) of this section for a 

commercial vessel moratorium permit 

for Gulf shrimp, in § 622.17(c) for a 

commercial vessel permit for golden 

crab, in § 622.18(e) for a commercial 

vessel permit for South Atlantic 

snapper-grouper, or in § 622.19(e) for a 

commercial vessel permit for South 

Atlantic rock shrimp. A person who 

acquires a vessel or dealership who 

desires to conduct activities for which a 

permit, license, or endorsement is 

required must apply for a permit, 

license, or endorsement in accordance 

with the provisions of this section and 

other applicable sections of this part. If 

the acquired vessel or dealership is 

currently permitted, the application 

must be accompanied by the original 

permit and a copy of a signed bill of sale 

or equivalent acquisition papers. In 

those cases where a permit, license, or 

endorsement is transferable, the seller 

must sign the back of the permit, 

license, or endorsement and have the 

signed transfer document notarized. 

* * * * * 

(h) * * * 

(1) * * * Unless specified otherwise, 

a vessel owner or dealer who has been 

issued a permit, license, or endorsement 

under this section must renew such 

permit, license, or endorsement on an 

annual basis. 

* * * * * 

5. In § 622.7, paragraphs (gg) and (hh) 

are added to read as follows: 

§ 622.7 Prohibitions. 

* * * * * 

(gg) Fail to comply with any provision 

related to the Gulf red snapper IFQ 

program as specified in § 622.16. 

(hh) Falsify any information required 

to be submitted regarding the Gulf red 

snapper IFQ program as specified in 

§ 622.16. 

6. The stay of § 622.16 is lifted and 

the section is revised to read as follows: 

§ 622.16 Gulf red snapper individual 

fishing quota (IFQ) program. 

(a) General. This section establishes 

an IFQ program for the commercial 

fishery for Gulf red snapper. Under the 

IFQ program, the RA initially will 

assign eligible participants IFQ shares 

equivalent to a percentage of the annual 

commercial red snapper quota, based on 

their applicable historical landings. 

Shares determine the amount of Gulf 

red snapper IFQ allocation, 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 

§ 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 endorsement. See 

§ 622.4(a)(4)(ii) regarding a requirement 

for a Gulf red snapper 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 red snapper in or 

from the Gulf EEZ and, for a person 

aboard a vessel with a Gulf red snapper 

IFQ vessel endorsement as required by 

§ 622.4(a)(2)(ix) or for a person with a 

Gulf red snapper IFQ dealer 

endorsement as required by 

§ 622.4(a)(4)(ii), these provisions apply 


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to Gulf red snapper 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. 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. 

(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 red 

snapper 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 own a Class 1 or Class 2 

Gulf red snapper license as of the date 

of publication of the final rule 

implementing this IFQ system. For the 

purposes of this paragraph, an owner of 

a license is defined as the person who 

controls transfer of the license and is 

listed as the qualifier on the face of the 

license. NMFS’ permit records are the 

sole basis for determining eligibility 

based on Class 1 or Class 2 license 

history. No more than one initial 

eligibility will be granted based upon a 

given Class 1 or Class 2 license. 

(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 red snapper associated with each 

shareholder’s current Class 1 or Class 2 

license during the applicable landings 

history. The applicable landings history 

for a Class 1 license owner whose 

license was not issued based on 

historical captain status includes any 10 

consecutive years of landings data from 

1990 through 2004; for a Class 1 license 

owner whose license was issued on the 

basis of historical captain status, all 

years of landings data from 1998 

through 2004; and for a Class 2 license 

holder, any 5 years of landings data 

from 1998 through 2004. All landings 

associated with a current Class 1 or 

Class 2 license for the applicable 

landings history, including those 

reported by a person 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. 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 IFQ 

shares will not be issued in 

denominations of less than 0.0001 

percent. 

(ii) Initial share set-aside to 

accommodate resolution of appeals. 

During the first year of implementation 

of this IFQ program only, 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 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, 

the shares of all initial shareholders 

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 red snapper, in 

pounds gutted weight, an IFQ 

shareholder or allocation holder is 

authorized to possess, land, or sell 

during a given fishing year. IFQ 

allocation is derived at the beginning of 

each year by multiplying a shareholder’s 

IFQ share times the annual commercial 

quota for Gulf red snapper. 

(iv) Special procedure for initial 

calculation of 2007 IFQ allocations. 

Because of uncertainty regarding the 

2007 commercial quota for Gulf red 

snapper and the timing of its 

implementation and to avoid the 

possibility of having to revoke some 

proportion of initial allocation if the 

quota was subsequently reduced, the RA 

may initially calculate the 2007 IFQ 

allocations based on a proxy 

commercial quota. If a commercial 

quota adjustment for Gulf red snapper 

has not been submitted for review by 

the Secretary of Commerce in time for 

calculation of 2007 IFQ allocations, the 

RA will initially calculate 2007 

allocations based on a proxy 

commercial quota of 2.55 million lb 

(1.16 million kg). Alternatively, if a 

commercial quota adjustment for Gulf 

red snapper has been submitted for 

review by the Secretary of Commerce in 

time to allow calculation of 2007 

allocations, the RA will base 2007 IFQ 

allocations on the proposed quota. 

Under either scenario, as soon as the 

actual 2007 commercial quota is final, 

but no later than July 1, 2007, the RA 

will adjust the 2007 IFQ allocations, as 

necessary, consistent with the actual 

quota. 

(3) Shareholder notification regarding 

landings history, initial determination of 

IFQ shares and allocations, and IFQ 

account setup information. (i) As soon 

as possible after the date of publication 

of the final rule implementing this IFQ 

program, the RA will mail each Class 1 

or Class 2 red snapper license owner 

information pertinent to the IFQ 

program. This information will 

include—

(A) Gulf red snapper landings 

associated with the owner’s license 


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Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 50023 

during each year of the applicable 

landings history; 

(B) The highest average annual red 

snapper landings based on the owner’s 

applicable landings history; 

(C) The owner’s initial IFQ share 

based on the highest average annual 

landings associated with the owner’s 

applicable landings history; 

(D) The initial 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—the 

personal identification number (PIN) 

will be provided in a subsequent letter. 

(ii) The RA will provide this 

information, via certified mail return 

receipt requested, to the license owner’s 

address of record as listed in NMFS’

permit files. A license owner who does 

not receive such notification from the 

RA within 30 days after the date of 

publication of the final rule 

implementing this IFQ system must 

contact the RA 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 landings associated with 

the owner’s applicable landings history; 

however, a license owner may select a 

different set of years of landings, 

consistent with the owner’s applicable 

landings history, for the calculation of 

the initial IFQ share. The license owner 

must submit that information to the RA 

postmarked no later than 30 days after 

the date of publication of the final rule 

implementing this IFQ system. 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, 2007. A license owner 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 

Class 1 or Class 2 license, the accuracy 

of the amount of landings, and correct 

assignment of landings to the license 

owner. Appeals based on hardship 

factors will not be considered. Appeals 

must be submitted to the RA 

postmarked no later than 90 days after 

the effective date of the final rule 

implementing this IFQ system 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 Class 1 and Class 2 licenses are the 

sole basis for determining ownership of 

such licenses. 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. Landings data 

for 1990 through 1992 are not subject to 

appeal. Appeals regarding landings data 

for 1993 through 2004 will be based 

solely on NMFS’ logbook records. If 

NMFS’ logbooks are not available, state 

landings records or data that were 

submitted in compliance with 

applicable Federal and state regulations, 

on or before June 30, 2005, can be used. 

(5) Dealer notification and IFQ 

account setup information. As soon as 

possible after the date of publication of 

the final rule implementing this IFQ 

program, 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 red snapper IFQ dealer 

endorsement which can be downloaded 

from the IFQ website 

atifq.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 red snapper 

subject to this IFQ program can only be 

possessed or landed by a vessel with a 

Gulf red snapper IFQ vessel 

endorsement. Such red snapper can 

only be received by a dealer with a Gulf 

red snapper IFQ dealer endorsement. 

The person landing the red snapper 

must hold or be assigned IFQ allocation 

at least equal to the pounds of red 

snapper landed, except as provided in 

paragraph (c)(1)(ii) of this section. 

(ii) An IFQ shareholder or his agent or 

employee assigned to land the 

shareholder’s allocation can legally 

exceed, by up to 10 percent, the 

shareholder’s allocation remaining on 

the last fishing trip of the fishing year. 

Any such overage will be deducted from 

the shareholder’s allocation for the 

subsequent fishing year. 

(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. 

(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 nonpayment 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, no 

later than 30 days after the end of each 

calendar-year quarter; however, fees 


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50024 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

may be submitted at any time before 

that deadline. 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-ofquarter 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; the dealer’s IFQ 

account has been suspended pending 

payment of the applicable fees; and 

notice of intent to annul the dealer’s IFQ 

endorsement. 

(B) On or about the 61st day after the 

end of each calendar-year quarter, the 

RA will mail to a dealer whose cost 

recovery fee payment remains 

delinquent, official notice documenting 

the dealer’s IFQ endorsement has been 

annulled. 

(C) 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. 

(v) Annual IFQ dealer ex-vessel value 

report. The IFQ online system will 

generate an annual IFQ Dealer Ex-Vessel 

Value Report for each IFQ dealer. The 

report will include quarterly and annual 

information regarding the amount and 

value of IFQ red snapper received by the 

dealer, the associated cost recovery fees, 

and the status of those fees. The dealer’s 

acceptance of this report constitutes 

compliance with the annual dealer IFQ 

reporting requirement. 

(3) Measures to enhance IFQ program 

enforceability—(i) Advance notice of 

landing. The owner or operator of a 

vessel landing IFQ red snapper is 

responsible for calling NMFS Office of 

Law Enforcement at 1–866–425–7627 at 

least 3 hours in advance of landing to 

report the time and location of landing 

and the name and address of the IFQ 

dealer where the red snapper are to be 

received. 

(ii) Time restriction on landing and 

offloading. IFQ red snapper may be 

landed and 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. Possession of IFQ red 

snapper from the time of transfer from 

a vessel through possession by a dealer 

is prohibited unless the IFQ red snapper 

are accompanied by a transaction 

approval code verifying a legal 

transaction of the amount of IFQ red 

snapper in possession. 

(4) Transfer of IFQ shares and 

allocation. Through the date 5 years 

after the effective date of the final rule 

implementing this IFQ program, 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 endorsement, and Gulf red 

snapper IFQ allocation are required to 

possess, 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. A 

shareholder must initiate the request for 

the RA to transfer IFQ shares by using 

the online Gulf red snapper 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. 

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. 

NMFS will evaluate and verify the 

information entered. If the information 

is not accepted, NMFS will send the 

shareholder an electronic message 

explaining the reason(s). If the 

information is accepted, NMFS will 

send the shareholder an initial 

transaction approval code and make an 

application for share transfer available 

for downloading and printing. The 

shareholder and eligible transferee must 

complete the application, have their 

signatures notarized, and mail the 

signed application to the RA at least 30 

days prior to the date on which the 

applicant desires to have the transfer 

effective. The signed application must 

be received by the RA prior to December 

1. See paragraph (c)(4)(v) of this section 

regarding a prohibition on transfer 

during December of each year. If the RA 

approves the application for transfer, 

the online system will send the 

shareholder and the transferee an 

electronic message acknowledging the 

approval; a transfer is effective upon 

receipt of the message. The adjusted 

shares resulting from a transfer may be 

viewed online by each shareholder. If 

the RA does not approve the transfer 

application, the RA will return the 

application to the shareholder with an 

explanation and instructions for 

correcting any deficiencies. 

(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. 

(iv) Allocation transfer procedures. 

Unlike share transfers which require a 

notarized application for transfer, 

allocation transfers can be accomplished 

online via the red snapper IFQ website. 

An IFQ allocation holder can initiate an 

allocation transfer by logging on to the 

red snapper 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 


rmajette on PROD1PC67 with PROPOSALS
Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 50025 

the transfer electronically. If the transfer 

is approved, the website will provide a 

transaction approval code to the 

transferor and transferee confirming the 

transaction. 

(v) Prohibition of transfer of shares 

during December each year. No IFQ 

shares may be transferred during 

December of each year. This period is 

necessary to provide the RA sufficient 

time to reconcile IFQ accounts, adjust 

allocations for the upcoming year if the 

commercial quota for Gulf red snapper 

has changed, and update shares and 

allocations for the upcoming fishing 

year. 

(5) Fleet management and assignment 

of IFQ allocation. An IFQ shareholder or 

IFQ allocation holder who owns more 

than one vessel with a valid Gulf reef 

fish vessel permit and a valid Gulf red 

snapper IFQ vessel endorsement may 

assign IFQ allocation to a person aboard 

such vessel and provide that person the 

IFQ account information necessary to 

conduct landing transactions. 

(6) IFQ share cap. No person, 

including a corporation or other entity, 

may individually or collectively hold 

IFQ shares in excess of the maximum 

share initially issued to a person for the 

2007 fishing year, as of the date appeals 

are resolved and shares are adjusted 

accordingly. For the purposes of 

considering the share cap, a 

corporation’s total IFQ share is defined 

as the sum of the IFQ shares held by the 

corporation and the IFQ shares held by 

individual shareholders of the 

corporation. A corporation must 

identify the shareholders of the 

corporation and their percent of shares 

in the corporation. 

(7) Redistribution of shares resulting 

from permanent permit or endorsement 

revocation. If a shareholder’s 

commercial vessel permit for Gulf reef 

fish or Gulf red snapper IFQ vessel 

endorsement 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 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 resulting from permanent 

revocation of applicable permits or 

endorsements 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. 

§ 622.34 [Amended] 

7. In § 622.34, paragraph (l) is 

removed and reserved. 

8. In § 622.42, paragraph (a)(1)(i) is 

revised to read as follows. 

§ 622.42 Quotas. 

* * * * * 

(a) * * * 

(1) * * * 

(i) Red snapper—4.65 million lb (2.11 

million kg), round weight. 

* * * * * 

§ 622.44 [Amended] 

9. In § 622.44, paragraph (d) is 

removed and reserved. 

[FR Doc. 06–7122 Filed 8–23–06; 8:45 am] 

BILLING CODE 3510–22–S 


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