20134 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[Docket No. 090206140–9191–01] 

RIN 0648–AX39 

Fisheries of the Caribbean, Gulf of 

Mexico, and South Atlantic; Reef Fish 

Fishery of the Gulf of Mexico; 

Amendment 29 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: NMFS issues this proposed 

rule to implement Amendment 29 to the 

Fishery Management Plan for Reef Fish 

Resources of the Gulf of Mexico (FMP), 

as prepared and submitted by the Gulf 

of Mexico Fishery Management Council 

(Council). This proposed rule would 

implement a multi-species individual 

fishing quota (IFQ) program for the 

grouper and tilefish component of the 

commercial sector of the reef fish 

fishery in the Gulf of Mexico exclusive 

economic zone (Gulf EEZ). In addition, 

the proposed rule would allow permit 

consolidation and dual classifications to 

the shallow water and deepwater 

management units for speckled hind 

and warsaw grouper and would modify 

some provisions of the Gulf red snapper 

IFQ program for consistency with this 

proposed rule. The proposed rule is 

intended to reduce effort in the grouper 

and tilefish component of the Gulf reef 

fish fishery. 

DATES: Written comments on this 

proposed rule must be received no later 

than 5:00 p.m., eastern time, on June 15, 

2009. 

ADDRESSES: You may submit comments, 

identified by RIN 0648–AX39, by any 

one of the following methods: 

• Electronic Submissions: Submit all 

electronic public comments via the 

Federal eRulemaking Portal http:// 

www.regulations.gov 

• Mail: Susan Gerhart, Southeast 

Regional Office, NMFS, 263 13th 

Avenue South, St. Petersburg, FL 33701 

Instructions: All comments received 

are a part of the public record and will 

generally be posted to http:// 

www.regulations.gov without change. 

All Personal Identifying Information (for 

example, name, address, etc.) 

voluntarily submitted by the commenter 

may be publicly accessible. Do not 

submit Confidential Business 

Information or otherwise sensitive or 

protected information. 

To submit comments through the 

Federal e-Rulemaking Portal: http:// 

www.regulations.gov, enter ‘‘NOAA– 

NMFS–2008–0223’’ in the keyword 

search, then select ‘‘Send a Comment or 

Submission.’’ NMFS will accept 

anonymous comments (enter N/A in the 

required fields, if you wish to remain 

anonymous). You may submit 

attachments to electronic comments in 

Microsoft Word, Excel, WordPerfect, or 

Adobe PDF file formats only. 

Copies of Amendment 29, which 

includes a draft environmental impact 

statement (DEIS), an initial regulatory 

flexibility analysis (IRFA), and a 

regulatory impact review (RIR) may be 

obtained from the Gulf of Mexico 

Fishery Management Council, 2203 

North Lois Avenue, Suite 1100, Tampa, 

FL 33607; telephone 813–348–1630; fax 

813–348–1711; e-mail 

gulfcouncil@gulfcouncil.org; or may be 

downloaded from the Council’s website 

at http://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, 

Southeast Regional Office, NMFS, and 

to David Rostker, OMB, by e-mail at 

DavidlRostker@omb.eop.gov, or by fax 

to 202–395–7285. 

FOR FURTHER INFORMATION CONTACT: 

Susan Gerhart, telephone: 727–824– 

5305, fax: 727–824–5308. 

SUPPLEMENTARY INFORMATION: The reef 

fish fishery of the Gulf of Mexico is 

managed under the FMP. The FMP was 

prepared by the Council and is 

implemented through regulations at 50 

CFR part 622 under the authority of the 

Magnuson-Stevens Fishery 

Conservation and Management Act 

(Magnuson-Stevens Act). 

Background 

Current regulatory measures used to 

manage the commercial grouper and 

tilefish component of the reef fish 

fishery in the Gulf EEZ include a license 

limitation system, quotas, trip limits, 

minimum size limits, area and gear 

restrictions, and seasonal closures. 

Nonetheless, the commercial grouper 

and tilefish component has become 

overcapitalized, which has resulted in 

increasingly restrictive commercial 

regulations. One result of these 

restrictions is intensifying derby 

conditions, under which fishermen race 

to harvest as many fish as possible 

before the quota is reached. The 

intensification of derby conditions has 

led, in recent years, to early-season 

closures of the fisheries. Under the 

current management structure, the 

commercial grouper and tilefish 

component is expected to continue to 

have higher than necessary levels of 

capital investment, increased operating 

costs, increased likelihood of shortened 

seasons, reduced safety at-sea, wide 

fluctuations in grouper and tilefish 

supply, and depressed ex-vessel prices. 

Permit Consolidation 

Permit consolidation would allow the 

owner of multiple Gulf of Mexico reef 

fish commercial vessel permits to 

consolidate some or all of such permits 

into one. The consolidated permit 

would have a catch history equal to the 

sum of the catch histories associated 

with the individual permits; the other 

permits involved in the consolidation 

would be permanently eliminated. The 

permits to be consolidated would have 

to be valid and not expired, and would 

have to be issued under the same name. 

This action could contribute to a faster 

reduction in the number of permits and 

ease permit renewal requirements. 

Fishermen would benefit by having to 

maintain and pay for fewer permits 

while still retaining their total landings 

history. 

Establishment of an IFQ Program for 

Groupers and Tilefishes 

The Council chose a multi-species 

IFQ program for all groupers, except 

Goliath grouper and Nassau grouper, 

and all tilefish species managed in the 

Gulf EEZ as the preferred alternative for 

effort management. The MagnusonStevens Act stipulates the Council may 

not submit, and the Secretary of 

Commerce may not approve, an IFQ 

program that has not first been approved 

by a majority of voters in a referendum. 

To be eligible to vote in the Gulf of 

Mexico grouper and tilefish IFQ 

referendum, an individual needed to 

possess an active or renewable Gulf reef 

fish vessel permit with combined 

average annual grouper and tilefish 

landings of at least 8,000 lb (3,629 kg) 

during 1999–2004 (with the allowance 

of dropping one year). Referendum 

ballots were mailed on December 5, 

2008, to 301 eligible voters. Ballots were 

due to NOAA Fisheries Service by 4:30 

p.m. on January 5, 2009. A total of 274 

ballots were returned with a vote of 220 

to 50 in favor of the IFQ program (four 

returned ballots were declared invalid). 

To implement an IFQ program, 

several design features would need to be 

specified. This proposed rule contains 

many of these design elements, as well 

as major requirements for limited access 

privilege programs listed in the 

Magnuson-Stevens Act. 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20135 

Scope and Duration of the IFQ program 

The provisions of the IFQ program 

would apply to Gulf grouper and tilefish 

species in or from the Gulf EEZ and for 

a fisher or dealer in the IFQ program, 

these provisions would apply to Gulf 

groupers and tilefishes regardless of 

where harvested or possessed. The 

species include deepwater groupers 

(DWG), i.e., yellowedge grouper, misty 

grouper, warsaw grouper, snowy 

grouper, speckled hind, plus scamp 

under certain circumstances; red 

grouper, gag, and other shallow water 

groupers (other SWG) including black 

grouper, scamp, yellowfin grouper, rock 

hind, red hind, yellowmouth grouper, 

plus warsaw grouper and speckled hind 

under certain circumstances; and 

tilefishes (goldface tilefish, blackline 

tilefish, anchor tilefish, blueline tilefish, 

and tilefish). 

The IFQ program would remain in 

effect until it is modified or terminated 

by an FMP amendment; however, the 

Council would evaluate the program 

every 5 years. 

IFQ Shares and Allocation 

An IFQ share is the percentage of the 

commercial quota or allowance for a 

species or species group issued to each 

eligible participant based on landings 

data. The five share categories are DWG, 

gag, red grouper, other SWG, and 

tilefish. Allocation is the actual 

poundage (gutted weight) in each share 

category that an IFQ shareholder is 

given the opportunity to land during 

each fishing year. The allocation issued 

to each IFQ shareholder would be 

calculated by multiplying their share 

times the annual commercial quota or 

allowance for each category. Annual 

allocation expires at the end of each 

year. 

Multi-use Allocation 

At the beginning of each fishing year, 

4 percent of each participant’s initial 

red grouper shares and 8 percent of each 

participant’s initial gag shares would be 

converted to multi-use allocation. Multiuse allocation could be used to possess, 

land, or sell red groupers and gag under 

certain conditions. Red grouper multiuse allocation could only be used for 

red groupers after an IFQ account 

holder’s entire red grouper allocation 

has been landed and sold, or 

transferred, and could be used for gag 

only after both gag and gag multi-use 

allocation have been landed and sold, or 

transferred. Gag multi-use allocation 

could only be used for gag after an IFQ 

account holder’s entire gag allocation 

has been landed and sold, or 

transferred, and could be used for red 

groupers only after both red grouper and 

red grouper multi-use allocation have 

been landed and sold, or transferred. 

Warsaw Grouper, Speckled Hind, and 

Scamp Classification 

Warsaw grouper and speckled hind 

are currently considered DWG species. 

Amendment 29 proposes also including 

these species as SWG under certain 

circumstances. For the purposes of the 

grouper and tilefish IFQ program, once 

an IFQ account holder’s DWG allocation 

has been landed and sold, or 

transferred, or if an IFQ account holder 

has no DWG allocation, then other SWG 

allocation could be used to land and sell 

warsaw grouper and speckled hind. 

Scamp is considered a SWG species 

and a DWG under certain 

circumstances. For the purposes of the 

grouper and tilefish IFQ program, once 

an IFQ account holder’s other SWG 

allocation has been landed and sold, or 

transferred, or if an IFQ account holder 

has no SWG allocation, then DWG 

allocation could be used to land and sell 

scamp. 

Initial IFQ Share Eligibility and Share 

Calculation 

To be eligible to receive initial IFQ 

shares, a person would need to possess 

a valid (active or renewable) Gulf reef 

fish commercial vessel permit as of 

October 1, 2009. The calculation of 

initial shares by the RA would be based 

on the highest average annual landings 

associated with each permit during the 

best 5 out of 6 years for each share 

category, during the applicable landings 

period, 1999 through 2004. If a 

participant wishes to exclude a different 

year of landings history than was 

chosen by the RA, the participant would 

submit that information to the RA 

postmarked no later than December 1, 

2009. 

All landings associated with a valid 

Gulf reef fish commercial vessel permit 

for the applicable landings period 

would be attributed to the current 

owner, including landings reported by a 

person who held the permit prior to the 

current owner. Only legal landings 

reported in compliance with applicable 

state and Federal regulations would be 

accepted. Each participant’s initial share 

in each category would be calculated by 

dividing his/her highest average annual 

landings by the sum of the highest 

average annual landings of all 

participants during the applicable 

landings period. Initial shares 

distributed in the gag and other SWG 

share categories would be based on 

landings that have been adjusted for gag 

and black grouper misidentification. 

Initial shares in each share category 

would not be issued in units less than 

the percentage equivalent to 1 lb (.45 kg) 

of the grouper or tilefish species, based 

on that share category’s quota or 

allowance. 

Appeals Process 

The only items subject to appeal 

under this IFQ program would be initial 

eligibility for shares based on ownership 

of a reef fish commercial vessel permit, 

the accuracy of the amount of landings, 

correct assignment of landings to the 

permit owner, and correct assignment of 

gag versus black grouper landings. 

Appeals would have to be submitted to 

the RA postmarked no later than April 

1, 2010, and would have to contain 

documentation supporting the appeal. 

The RA would review, evaluate, and 

render final decisions on appeals. 

Hardship arguments would not be 

considered. 

Appeals regarding landings data for 

1999 through 2004 would be based on 

NMFS’ logbook records. If NMFS’ 

logbooks were not available, the RA 

could use state landings records or data 

that were submitted in compliance with 

applicable Federal and state regulations, 

on or before December 31, 2006. This 

date was chosen because it is 2 years 

after the end of the qualifying period for 

the IFQ program, and 2 years is the 

maximum amount of time from 

purchase or renewal of a permit until 

further action must be taken to prevent 

termination of the permit. Prior to initial 

distribution of shares, the RA would 

reserve 3–percent of IFQ shares to be 

used to resolve appeals. Any portion of 

the 3–percent share reserve remaining 

after the appeals process was completed 

would be proportionately distributed 

back to the initial recipients as soon as 

possible that year. If resolution of 

appeals requires more than 3–percent of 

shares, the shares of all initial IFQ 

shareholders would be reduced 

proportionately to accommodate the 

required shares in excess of the reserve. 

Adjustments in Commercial Quota and 

Allocation 

The Council periodically adjusts 

commercial quotas when they change 

the total allowable catch or the sector 

allocation in response to new data and 

information. If quotas are adjusted, then 

adjustments in IFQ allocation would be 

based on the percentage of the quota 

each IFQ shareholder possessed at the 

time of the adjustment. 

Redistribution of Shares Resulting from 

Permit Revocation 

If an IFQ shareholder’s reef fish 

commercial vessel permit has been 

permanently revoked, at the beginning 

20136 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

of the next fishing year the RA would 

redistribute the shares held by that 

shareholder proportionately among 

remaining shareholders based upon the 

amount of shares each held just prior to 

the redistribution. Shares would not be 

distributed in such a way as to violate 

any share cap. 

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 shares and 

allocation for the new fishing year. The 

share values would be updated to 

include any share transfers and 

redistribution of shares. Allocation 

amounts would reflect any change in 

IFQ shares, any change in the annual 

commercial quota or allowance, and any 

debits incurred as a result of overages 

during the previous fishing year (see 

below). 

Electronic System Requirements, 

Account Setup, and Information 

The administrative functions 

associated with this IFQ program, such 

as account setup, landing transactions, 

and transfers, are designed to be 

accomplished online; therefore, all 

participants would need access to a 

computer and the Internet to participate. 

Assistance with online functions would 

be available from IFQ Customer Service, 

1–866–425–7627, Monday through 

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

eastern time.On or about October 1, 

2009, the RA would mail an information 

package to eligible IFQ participants. The 

package would include historical 

landings, initial shares and allocation, 

information for accessing the online IFQ 

system and establishing an online 

account, and general instructions 

related to online transaction procedures 

and requirements. Anyone who is 

eligible to participate in the IFQ 

program, but who does not receive 

initial shares, may contact IFQ 

Customer Service to obtain information 

necessary to set up the required IFQ 

online account. 

IFQ Vessel Accounts 

An IFQ vessel account would be 

required for a person aboard a vessel to 

land grouper or tilefish species. Before 

a landing notification for the vessel was 

submitted, the vessel account associated 

with that vessel would need to have 

enough allocation in the appropriate 

share categories for the fish on board. A 

person who has established an IFQ 

account online would establish a vessel 

account through that IFQ account for 

each vessel. Each vessel account would 

have a unique personal identification 

number (PIN) to be used during landing 

transactions. Only one vessel account 

could be established per vessel, but 

multiple vessel accounts could be 

established under each IFQ account. No 

fee would be charged to set-up a vessel 

account. The vessel account would 

remain valid as long as the vessel permit 

remained valid and the vessel owner 

was in compliance with all Gulf reef 

fish and IFQ reporting requirements, 

had paid all IFQ fees, and was not 

subject to sanctions. The vessel account 

could not be transferred to another 

vessel. 

Vessel accounts could only hold 

allocation for use in landing and selling 

IFQ species. Vessel accounts could not 

hold shares. Allocation could be 

transferred into a vessel account from 

any IFQ account; however, allocation 

could only be transferred out of a vessel 

account to the IFQ account under which 

it was established. This restriction is 

intended to ensure that an IFQ account 

holder maintains control of the 

allocation in his/her account. 

IFQ Share/Allocation Transferability 

During the first 5 years of the IFQ 

program, shares or allocation could only 

be transferred to a person with a valid 

Gulf reef fish commercial vessel permit. 

After 5 years, shares and allocation 

could be transferred to any U.S. citizen 

or permanent resident alien. However, a 

valid reef fish commercial vessel permit 

would still be required to fish for Gulf 

groupers and tilefishes under the IFQ 

program. 

Both share and allocation transfers 

would be accomplished online via the 

IFQ website. The online system would 

verify the information entered and, if 

the information was not accepted, the 

online system would send an electronic 

message explaining the reason(s). Once 

the transaction is complete, the online 

system would send a transfer approval 

code to both the transferor and 

transferee confirming the transaction. 

An IFQ shareholder who is subject to a 

sanction would be prohibited from 

initiating a share transfer. If a transferor 

is subject to a pending sanction, he/she 

would be required to disclose in writing 

any pending sanction at the time of the 

transfer of shares or allocation. No 

transfers would be allowed that violate 

the share or allocation caps. 

For share transfers, approval would be 

required from both the transferor and 

transferee. If the information from the 

transferor was accepted, the online 

system would send an electronic 

message of the pending transfer to the 

transferee. The transferee would 

approve the share transfer by electronic 

signature. If the transferee approved the 

share transfer, the online system would 

send a transfer approval code to both 

the transferor and transferee confirming 

the transaction. The minimum share 

amount that could be transferred would 

be 0.000001 percent. 

Transfer of shares and associated 

allocation are independent; to transfer 

both shares and allocation, the 

transferor must complete both a share 

transfer and an allocation transfer. At 

the beginning of the year after a share 

transfer, allocation would automatically 

be issued to the current shareholder. 

Share transfers would be permanent, 

and would remain in effect until 

subsequently transferred. Allocation 

transfers would be valid only for the 

remainder of the current fishing year; 

allocation transfers would not carry over 

to the next fishing year. 

Red grouper multi-use allocation 

could only be transferred after all of an 

IFQ account holder’s red grouper 

allocation had been landed and sold, or 

transferred. Gag multi-use allocation 

could only be transferred after all an 

IFQ account holder’s gag allocation had 

been landed and sold, or transferred. 

All electronic IFQ transactions would 

have to be completed by December 31 

at 6 p.m. eastern time each year. 

Electronic functions would resume on 

January 1 at 6 a.m. eastern time the 

following fishing year. 

IFQ Share and Allocation Caps 

The Magnuson-Stevens Act requires 

an IFQ program to prevent any entity 

from obtaining an excessive share of the 

total limited access privileges in the 

program. To accomplish this, both share 

and allocation caps would be 

established. No person, including a 

corporation or other entity, could 

individually or collectively hold IFQ 

shares in any share category greater than 

the maximum share initially issued to a 

person at the beginning of the IFQ 

program, as of the date appeals are 

resolved and shares are adjusted 

accordingly. Further, no person could 

individually or collectively hold, 

cumulatively during any fishing year, 

allocation in excess of the total 

allocation cap. The total allocation cap 

would be the sum of the allocations 

associated with the share caps for each 

share category. The allocation cap 

would be calculated annually based on 

the current quota or allowance 

associated with each share category. 

An individual’s total IFQ shares/ 

allocation would be determined by 

adding the IFQ shares/allocation held 

independently by the individual and the 

applicable IFQ shares/allocation from 

any corporation in which the individual 

has ownership. Those applicable 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20137 

corporate IFQ shares/allocation would 

be calculated by multiplying the IFQ 

shares/allocation owned by the 

corporation times the percent of 

ownership the individual has in the 

corporation. During initial 

implementation of the IFQ program, a 

corporation would provide the identity 

of the shareholders of the corporation 

and their percent of ownership in the 

corporation to NMFS. This information 

would be updated within 30 days of 

when changes occur. This information 

would also be required any time a reef 

fish vessel permit is renewed or 

transferred. 

Dealer Requirements 

On or about October 1, 2009, the RA 

would mail information pertinent to the 

IFQ program to each dealer with a valid 

Gulf reef fish dealer permit. A dealer, or 

a person aboard a vessel with an IFQ 

account wishing to sell groupers and 

tilefishes directly to an entity other than 

a dealer, would need an IFQ dealer 

endorsement to receive groupers and 

tilefishes from the Gulf EEZ. An IFQ 

dealer endorsement could be 

downloaded from the NMFS IFQ 

website. If a dealer did not have an IFQ 

online account, they could contact IFQ 

Customer Service. No fee would be 

charged for obtaining this endorsement. 

The endorsement would remain valid as 

long as the reef fish dealer permit 

remained valid and the dealer was in 

compliance with all Gulf reef fish and 

IFQ reporting requirements, had paid all 

IFQ fees, and was not subject to any 

sanctions. The endorsement could not 

be transferred. 

Electronic Reporting of IFQ Landing 

Transactions 

The dealer would be responsible for 

completing a landing transaction report 

for each landing and sale of groupers 

and tilefishes through his/her IFQ 

account. The landing transaction would 

be completed at the time of sale. The 

fisherman would validate the dealer 

transaction report by entering the 

unique PIN for the vessel account when 

the transaction report was submitted. 

After the dealer submitted the report 

and NMFS verified the information, the 

online system would send a transaction 

approval code to the dealer and the 

allocation holder. This approval code 

would be necessary to verify the 

transaction was legal and the vessel 

account had the correct amount of 

grouper and tilefish allocation. The 

dealer endorsement would have to 

accompany any fish from the landing 

location through possession by a dealer. 

Fish could not be transported on land 

by any means without a transaction 

approval code and a copy of the dealer 

endorsement. 

If a discrepancy regarding the landing 

transaction report was discovered after 

approval, the dealer or vessel account 

holder (or his or her authorized agent) 

could initiate a landing transaction 

correction form to correct the landing 

transaction. This form would be 

available via the IFQ website. Both 

parties would validate the landing 

correction form by entering their 

respective PINs. The dealer would then 

print out the form, both parties would 

sign it, and the form would be mailed 

to NMFS. The form would need to be 

received by NMFS no later than 15 days 

after the date of the initial landing 

transaction. 

Limited Landings Overage Allowance 

A person on board a vessel with an 

IFQ vessel account landing the IFQ 

shareholder’s only remaining allocation 

could legally exceed, by up to 10 

percent, the amount of the allocation 

remaining on that last fishing trip. 

Under current interpretation of the 

Council’s intent, allocation from all 

share categories must be exhausted to 

use the overage, and the overage would 

be allowed only one time per fishing 

year for each shareholder. Another 

interpretation of the Council’s intent 

would be to allow the use of the 10 

percent overage once per year for each 

category. In that case, a person on board 

a vessel with an IFQ vessel account 

landing the IFQ shareholder’s only 

remaining allocation in a share category 

could legally exceed, by up to 10 

percent, the amount of the allocation 

remaining in that share category on that 

fishing trip. The Council will be asked 

to clarify their intention on this issue at 

their April 2009 meeting. NMFS is 

specifically seeking comment from the 

public on which approach best serves 

the objectives of the overage provision. 

If additional allocation is purchased 

after a shareholder uses his overage 

privilege, no additional overage would 

be allowed. Overages would be 

deducted from the next year’s allocation 

associated with the shareholder’s IFQ 

share. Share transfers would not be 

allowed that would reduce the 

shareholder’s IFQ shares lower than the 

amount needed to pay back the overage. 

A person who only possessed allocation 

and no IFQ shares would not be allowed 

an overage. That person might not 

receive allocation in the following year 

and therefore, could not pay back the 

overage. 

Cost Recovery 

The Magnuson-Stevens Act requires 

the Secretary of Commerce to establish 

a fee to assist in recovering the actual 

costs directly related to managing and 

enforcing an IFQ program. This fee may 

not exceed 3 percent of the ex-vessel 

value of fish harvested under the IFQ 

program. Cost recovery fees must be in 

addition to any other fees charged under 

the Magnuson-Stevens Act and must be 

deposited in the Limited Access System 

Administration Fund. Initially, the fee 

for the Gulf of Mexico grouper and 

tilefish IFQ would be 3 percent of the 

actual ex-vessel value of groupers and 

tilefishes landed under the IFQ program 

as documented in each landings 

transaction report. NMFS is currently 

analyzing the expected costs for the first 

year to determine if the 3–percent fee is 

appropriate. The RA would review the 

cost recovery fee annually to determine 

if an adjustment is warranted. If the RA 

determined that a fee adjustment is 

warranted, the RA would publish a 

notification of the fee adjustment in the 

Federal Register. 

The participant whose allocation is 

used for a grouper or tilefish landing 

would be responsible for paying the 

associated IFQ cost recovery fees. The 

IFQ dealer who receives the fish would 

be responsible for collecting the fee 

from the participant and submitting the 

fee to NMFS using pay.gov via the IFQ 

system. The fee would be due at the end 

of each calendar-year quarter, but no 

later than 30 days after the end of each 

calendar-year quarter. Authorized 

payment methods would be credit card, 

debit card, or automated clearing house 

(ACH), or by check if the RA has 

determined that the geographical area or 

individual(s) is affected by catastrophic 

conditions. Fees not received by the 

deadline would be considered 

delinquent. Failure to resolve payment 

of delinquent fees could result in 

suspension of the IFQ endorsement 

which would prevent a dealer from 

completing any IFQ landing 

transactions. Continued failure to 

resolve payment could result in 

submission of the matter to appropriate 

authorities for resolution. 

Measures to Enhance Enforceability 

Fishermen participating in the IFQ 

program would be required to offload 

their grouper and tilefish landings to 

permitted IFQ dealers only between 6 

a.m. and 6 p.m., local time. For the 

purpose of this program, landing means 

to arrive at a dock, berth, beach, seawall, 

or ramp. Any person landing groupers 

or tilefishes would be required to notify 

NMFS 3 to 12 hours in advance of 

landing. The landing notification would 

include the time and location of 

landing, the name and address of the 

dealer where the fish would be received, 

20138 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

the vessel identification number (Coast 

Guard registration number or state 

registration number), and the estimated 

pounds (gutted weight) of fish to be 

landed in each share category. The 

fisherman could supply this notification 

by calling NMFS at 1–866–425–7627, by 

completing and submitting the 

notification form provided through the 

VMS unit, or by accessing the webbased form available on the IFQ website. 

The vessel account associated with the 

vessel landing groupers or tilefishes 

must have sufficient allocation in the 

appropriate share category or categories 

(except for any overage allowed on the 

last fishing trip) from the time of the 

landing notification through landing. 

Possession of IFQ groupers or 

tilefishes from the time of transfer from 

a vessel through possession by a dealer 

would be prohibited unless 

accompanied by a transaction approval 

code verifying a legal transaction of the 

amount of IFQ groupers or tilefishes in 

possession and a copy of the dealer 

endorsement. This requirement also 

applies to IFQ fish possessed on a vessel 

that is trailered for transport to a dealer. 

If groupers or tilefishes are offloaded to 

a vehicle for transportation to a dealer 

or are on a vessel that is trailered for 

transport to a dealer, on-site capability 

to accurately weigh the fish and to 

connect electronically to the online IFQ 

system to complete the transaction and 

obtain the transaction approval code 

would be required. At-sea or dockside 

vessel-to-vessel transfers of fish would 

be prohibited. 

Approved Landing Locations 

NMFS’ Office for Law Enforcement 

would have to approve landing 

locations prior to landing or offloading 

groupers and tilefishes at these sites. 

Proposed landing locations could be 

submitted online via the IFQ website or 

by calling IFQ Customer Service at any 

time. However, new landing locations 

would be approved only at the end of 

each calendar-year quarter. To have a 

landing location approved by the end of 

the calendar-year quarter, it would have 

to be submitted at least 45 days before 

the end of the calendar-year quarter. 

Landing locations would have to be 

publicly accessible by land and water, 

and they must have a street address. If 

a particular landing location has no 

street address on record, global 

positioning system (GPS) coordinates 

for an identifiable geographic location 

must be provided. Other criteria could 

also be applied. 

Paper-based reporting during 

catastrophic conditions 

The RA would provide paper-based 

components for basic required functions 

of the IFQ program as a backup only 

during catastrophic conditions. The RA 

would determine when catastrophic 

conditions exist, the duration of the 

catastrophic conditions, and which 

participants or geographic areas are 

affected by the catastrophic conditions. 

The RA would provide timely notice to 

affected participants 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. No paperbased mechanism for transfers of shares 

or allocation would be available. 

Assistance in complying with the 

requirements of the paper-based system 

would be available via IFQ Customer 

Service, Monday through Friday 

between 8 a.m. and 4:30 p.m. eastern 

time. 

Changes in the Red Snapper IFQ 

Program 

Several changes to the red snapper 

IFQ program would be made to align 

that program with the grouper and 

tilefish IFQ program. One change would 

be the requirement for an IFQ vessel 

account for a person aboard a vessel to 

land red snapper. Before a landing 

notification for the vessel was 

submitted, the vessel account associated 

with that vessel would need to have 

enough allocation for the fish on board. 

To improve enforceability of the IFQ 

program, the estimated pounds (gutted 

weight) of red snapper on board would 

be included in the landing notification. 

A person who has established an IFQ 

account online would establish a vessel 

account through that IFQ account for 

each vessel. Only one vessel account 

could be established per vessel, but 

multiple vessel accounts could be 

established under each IFQ account. No 

fee would be charged to set-up an IFQ 

vessel account. The vessel account 

would remain valid as long as the reef 

fish vessel permit remained valid and 

the vessel owner was in compliance 

with all Gulf reef fish and IFQ reporting 

requirements, had paid all IFQ fees, and 

was not subject to sanctions. The vessel 

account could not be transferred to 

another vessel. 

The requirement for vessel accounts 

would eliminate the need for IFQ vessel 

endorsements; therefore the vessel 

endorsement requirement would be 

eliminated from the red snapper IFQ 

program. 

Changes in the Red Snapper IFQ 

Program Relating to Dealer 

Requirements 

Currently, no method exists to correct 

errors to landing transactions. Through 

this rule, if a discrepancy regarding the 

landing transaction report was 

discovered after approval, the dealer or 

vessel account holder (or his or her 

authorized agent) could initiate a 

landing transaction correction form to 

correct the landing transaction. This 

form would be available via the IFQ 

website. Both parties would validate the 

landing correction form by entering 

their respective PINs. The dealer would 

then print out the form, both parties 

would sign it, and the form would be 

mailed to NMFS. The form would need 

to be received by NMFS no later than 15 

days after the date of the initial landing 

transaction. 

Two items would be eliminated to 

ease the administrative burden 

associated with dealer requirements. 

The first would be the annual ex-vessel 

value report because the information in 

the report is readily available on the IFQ 

website. The second would be the 

notice of annulment sent on or about the 

61st day after the end of each calendaryear quarter for a dealer whose cost 

recovery fee payment remains 

delinquent. This notice did not 

accompany any new action on the part 

of NMFS to curtail the dealer’s 

activities, and so is unnecessary. 

Changes to Share Transfer Process for 

the Red Snapper IFQ Program 

Currently share transfers can only be 

accomplished by submitting a form 

signed by both the transferor and 

transferee to NMFS. With the proposed 

regulatory change, both share and 

allocation transfers would be 

accomplished online via the IFQ 

website. Approval would be required 

from both the transferor and transferee. 

If the information from the transferor 

was accepted, the online system would 

send an electronic message of the 

pending transfer to the transferee. The 

transferee would approve the share 

transfer by electronic signature. If the 

transferee approved the share transfer, 

the online system would send a transfer 

approval code to both the transferor and 

transferee confirming the transaction. 

An IFQ shareholder who is subject to 

a sanction is prohibited from initiating 

a share transfer. If a transferor is subject 

to a pending sanction, he/she would be 

required to disclose in writing the 

existence of any pending sanction at the 

time of the transfer to the prospective 

transferee. The minimum share amount 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20139 

that could be transferred would be 

0.0001 percent. 

Changes to Approval of Landing 

Locations for the Red Snapper IFQ 

Program 

Currently, an IFQ participant can 

enter any location during the landing 

notification, and approval is only 

needed to place the location on the 

drop-down menu. This proposed rule 

would require landing locations be 

approved by NMFS’ Office for Law 

Enforcement prior to landing or 

offloading at these sites. Proposed 

landing locations could be submitted 

via the IFQ website or by calling IFQ 

Customer Service at any time. However, 

new landing locations would be 

approved only at the end of each 

calendar-year quarter. To have a landing 

location approved by the end of the 

calendar-year quarter, it would need to 

be submitted at least 45 days before the 

end of the calendar-year quarter. 

Landing locations would have to be 

publicly accessible by land and water, 

and would have to have a street address. 

If a particular landing location has no 

street address on record, global 

positioning system (GPS) coordinates 

for an identifiable geographic location 

would have to be provided. Other 

criteria could also be applied. 

Availability of Amendment 29 

Additional background and rational 

for the measures discussed above are 

contained in Amendment 29. The 

availability of Amendment 29 was 

announced in the Federal Register on 

April 8, 2009 (74 FR 15911). Written 

comments on Amendment 29 must be 

received by June 8, 2009. All comments 

received on Amendment 29 or on this 

proposed rule during their respective 

comment periods will be addressed in 

the preamble of the final rule. 

Classification 

Pursuant to section 304(b)(1)(A) of the 

Magnuson-Stevens Act, the NMFS 

Assistant Administrator has determined 

that this proposed rule is consistent 

with Amendment 29, other provisions 

of the Magnuson-Stevens Act, and other 

applicable law, subject to further 

consideration after public comment. 

This proposed rule has been 

determined to be not significant for 

purposes of Executive Order 12866. 

NMFS prepared a Draft 

Environmental Impact Statement (DEIS) 

for this amendment. A notice of 

availability for the DEIS was published 

on July 3, 2008 (73 FR 38204). 

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 objectives of, and 

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. 

This proposed rule would implement 

an IFQ program in the commercial 

grouper and tilefish fisheries; allow a 

single owner of multiple commercial 

reef fish permits to consolidate his (her) 

permits into one, with the consolidated 

permit having a catch history equal to 

the sum of the catch histories associated 

with the individual permits; maintain 

the current composition of the multispecies DWG unit and revise the SWG 

unit to include speckled hind and 

warsaw grouper; restrict initial 

eligibility to valid commercial reef fish 

permit holders; distribute initial IFQ 

shares proportionately among eligible 

participants based on the average 

annual landings from logbooks 

associated with their current permit(s) 

during the time period 1999 through 

2004 with an allowance for excluding 

one year; establish IFQ share types as 

follows: red grouper, gag, other SWG, 

DWG, and tilefish shares; convert 4 

percent of each IFQ participant’s red 

grouper individual species share into 

multi-use red grouper allocation valid 

for harvesting red or gag groupers, and 

convert 8 percent of each IFQ 

participant’s gag grouper individual 

species share into multi-use gag grouper 

allocation valid for harvesting gag or red 

groupers; allow transfers of IFQ shares 

or allocations only to commercial reef 

fish permit holders during the first five 

years of the IFQ program and all U.S. 

citizens and permanent resident aliens 

thereafter; set a cap on any one person’s 

ownership of IFQ shares to no more 

than the maximum percentage issued to 

the recipient of the largest shares at the 

time of the initial apportionment of IFQ 

shares, with the cap(s) calculated as 

separate caps for each type of share; set 

a total allocation cap calculated as the 

sum of the maximum allocations 

associated with the share caps for each 

individual share category; allocate 

adjustments in the commercial quota 

proportionately among eligible IFQ 

shareholders based on their respective 

shareholdings at the time of the 

adjustments; let the RA review, 

evaluate, and render final decision on 

appeals, without consideration of 

hardship arguments; set aside 3 percent 

of the current commercial quota or 

allowance to resolve appeals, with any 

remaining amount proportionately 

distributed back to initial IFQ 

shareholders after the appeals process 

has been terminated; impose an IFQ cost 

recovery fee based on actual ex-vessel 

value at the time of sale of fish, with the 

payment of the fee being the 

responsibility of the recognized IFQ 

shareholder and collection/remittance 

of the fee being the responsibility of the 

dealer; and establish certified landing 

sites for all IFQ programs in the 

commercial reef fish fisheries, with the 

sites selected by fishermen but certified 

by NMFS Office of Law Enforcement. 

The Magnuson-Stevens Act provides 

the statutory basis for the proposed rule. 

No duplicative, overlapping, or 

conflicting Federal rules have been 

identified. 

This proposed rule would introduce 

new or additional reporting, recordkeeping and other compliance 

requirements. Details of these 

requirements would be spelled out 

before implementation of the program. 

A summary of the general requirements 

of the grouper and tilefish IFQ program 

follows. 

An IFQ dealer endorsement would be 

required of any dealer purchasing 

groupers or tilefishes subject to this IFQ 

program. The IFQ dealer endorsement 

would be issued at no cost to those 

individuals who possess a valid reef fish 

dealer permit and request the 

endorsement. Although the current reef 

fish dealer permit must be renewed 

annually at a cost of $60 for the initial 

permit ($12.60 for each additional 

permit), the IFQ dealer endorsement 

would remain valid as long as the 

individual possesses a valid Gulf reef 

fish dealer permit and abides by all 

reporting and cost recovery 

requirements of the IFQ program. This 

requirement would affect all 159 

existing dealers (as of November 2008) 

of groupers or tilefishes. 

An electronic reporting system would 

serve as the main vehicle for tracking 

IFQ activities. The electronic nature of 

the reporting system would render the 

reporting of most IFQ activities 

practically on a real time basis. For 

example, to effect a sale of grouper or 

tilefish landings, the purchasing dealer 

would have to log into the electronic 

reporting system and enter all the 

required information about the grouper 

or tilefish sale. The required 

information includes, but is not limited 

to, the name of the dealer and that of the 

fisherman, identification number of the 

harvesting vessel, and the pounds and 

ex-vessel values of groupers and 

tilefishes. Electronic validation of the 

20140 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

dealer-supplied information by the 

selling fisherman is necessary to 

complete the sale. Also, transfer of IFQ 

allocations and shares would have to be 

effected and recorded through the 

electronic reporting system. Holders of 

IFQ allocations could also access the 

system to check on the outstanding IFQ 

allocations remaining in their account/ 

possession. In this connection, an IFQ 

shareholder account, IFQ vessel 

account, and IFQ dealer account would 

have to be established with NMFS. 

There would be no charge to 

establishing any of these accounts. 

By the very nature of the reporting 

system, IFQ dealers would be required 

to have access to computers and the 

Internet. If a dealer does not have 

current access to computers and the 

Internet, he/she may have to expend 

approximately $1,500 for computer 

equipment (one-time cost) and $300 

annual cost for Internet access. Dealers 

would need some basic computer and 

Internet skills to input information for 

all grouper and tilefish purchases into 

the IFQ electronic reporting system. 

Dealers also would have to remit to 

NMFS, on a quarterly basis, the cost 

recovery fees initially set at 3 percent of 

the ex-vessel value of groupers and 

tilefishes purchased from IFQ share/ 

allocation holders. Although IFQ share/ 

allocation holders would have to pay 

this fee, it would be the responsibility 

of dealers to collect and remit these fees 

to NMFS. Dealers would be required to 

remit fees electronically by automatic 

clearing house (ACH), debit card or 

credit card. There is currently no 

available information to determine how 

many of the 159 grouper or tilefish 

dealers have the necessary electronic 

capability to participate in the IFQ 

program. However, demonstration of 

this capability would be necessary for 

IFQ program participation. Those 

dealers currently participating in the red 

snapper IFQ program would generally 

meet most, if not all, of the requirements 

under the electronic reporting system. 

Holders of IFQ shares and allocations 

would need to have access to computers 

and the Internet to effect allocation 

transfers through the electronic 

reporting system. These persons would 

then be subject to the same cost and 

skill requirements as dealers. It is very 

likely that most individuals have access 

to computers and the Internet. It should 

also be pointed out that in the case of 

reporting a sale of groupers or tilefishes 

to a dealer, all the fisherman would 

have to do is to validate the sale using 

the dealer’s computer. This requirement 

would affect all those who would 

initially qualify for, or those who would 

decide to participate in, the grouper and 

tilefish IFQ program. 

One other compliance issue under the 

IFQ system would involve landing and 

offloading of IFQ groupers or tilefishes. 

The owner or operator of a vessel 

landing IFQ groupers or tilefishes would 

have to provide NMFS an advance 

landing notification at least 3 hours but 

no more than 12 hours before arriving 

at a dock, berth, beach, seawall, or 

ramp. In addition, offloading of IFQ 

groupers or tilefishes would be allowed 

only between 6 a.m. and 6 p.m.. 

This proposed rule would be expected 

to directly affect vessels that operate in 

the Gulf of Mexico commercial reef fish 

fishery and reef fish dealers or 

processors. The Small Business 

Administration (SBA) has established 

size criteria for all major industry 

sectors in the U.S. including fish 

harvesters, fish processors, and fish 

dealers. A business involved in fish 

harvesting is classified as a small 

business if it is independently owned 

and operated, is not dominant in its 

field of operation (including its 

affiliates), and has combined annual 

receipts not in excess of $4.0 million 

(NAICS code 114111, finfish fishing) for 

all affiliated operations worldwide. For 

seafood processors and dealers, rather 

than a receipts threshold, the SBA uses 

an employee threshold of 500 or fewer 

persons on a full-time, part-time, 

temporary, or other basis, at all affiliated 

operations for a seafood processor and 

100 or fewer persons for a seafood 

dealer. 

A total of 1,209 vessels is assumed to 

comprise the universe of commercial 

harvest operations in the Gulf reef fish 

fishery. This total includes vessels with 

active or renewable permits. An 

examination of permits in conjunction 

with logbook information revealed, 

however, that 1,028 permits (as of 

November 2008) would have some 

records of landings during the Council’s 

chosen period of 1999–2004 for 

purposes of determining initial 

apportionment of IFQ shares. 

Whereas there is a one to one 

correspondence between permits and 

vessels, the total number of vessels 

actually harvesting reef fish, or groupers 

or tilefishes, may be lower or higher 

than the number of permits. Some 

vessels may remain inactive in the reef 

fish fishery during the entire year, so 

there would be fewer vessels than 

permits. Because a permit can be 

transferred from one vessel to another 

during the year, the number of vessels 

harvesting any of the species in this 

amendment during the year may exceed 

the number of permits. This distinction 

is important when using logbook 

information to count vessels. 

For the period 1993–2006, an average 

of 1,123 vessels harvested at least 1 

pound (0.45 kg) of reef fish, 993 vessels 

harvested any groupers or tilefishes, 765 

vessels harvested red groupers, 591 

vessels harvested gag, 977 vessels 

harvested shallow water groupers 

(SWG), 376 vessels harvested deepwater 

groupers (DWG), and 212 vessels 

harvested tilefishes. For the period 

1999–2004, an average of 1,075 vessels 

harvested at least 1 pound (0.45 kg) of 

reef fish, 968 vessels harvested any 

groupers or tilefishes, 767 vessels 

harvested red groupers, 655 vessels 

harvested gag, 958 vessels harvested 

SWG, 368 vessels harvested DWG, and 

193 vessels harvested tilefishes. 

Vessels harvesting reef fish in general 

and groupers or tilefishes in particular 

use a variety of gear. Some vessels use 

only one gear type while others use 

multiple gear types; thus, classification 

of vessels by gear type is not 

straightforward for some vessels. For the 

period 1993–2006, an average of 805 

vessels harvested groupers or tilefishes 

using vertical lines, 171 vessels 

harvested groupers or tilefishes using 

longlines, and 162 vessels harvested 

groupers or tilefishes using other gear 

types (diving, trap, unclassified). For the 

period 1999–2004, an average of 790 

vessels harvested groupers or tilefishes 

using vertical lines, 167 vessels 

harvested groupers or tilefishes using 

longlines, and 148 vessels harvested 

groupers or tilefishes using other gear 

types (diving, trap, unclassified). 

Collection of information regarding 

vessel operating costs was only initiated 

in mid–2005 and is anticipated to 

provide trip cost and return information 

once these data are processed and 

analyzed. Information from this survey 

was used in estimating overall economic 

effects on the commercial sector of an 

IFQ system in the fishery. This was 

possible as the evaluation was 

conducted on a trip basis. However, 

vessel-level gross and net revenues 

could not be readily derived using the 

same trip-based information. For our 

current purpose, we use cost and return 

information derived from an earlier 

survey of commercial reef fish 

fishermen in the Gulf of Mexico. Highvolume vertical line vessels in the 

northern Gulf grossed an average of 

approximately $110,000 (2005 dollars) 

and those in the eastern Gulf grossed 

approximately $68,000. Their respective 

net revenues were approximately $28 

thousand and $24,000. Low-volume 

vertical line vessels in the northern Gulf 

grossed approximately $24,000 and 

those in the eastern Gulf grossed 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20141 

approximately $25,000. Their respective 

net revenues were approximately $7,000 

and $4,000. High-volume longline 

vessels grossed approximately $117,000 

while low-volume longline vessels 

grossed $88,000. Their respective net 

revenues were approximately $25,000 

and $15,000. High-volume fish traps 

(fish traps have been banned since 

February 2007) grossed approximately 

$93,000 while their low-volume 

counterparts grossed approximately 

$86,000. Their respective net revenues 

were approximately $19,000 and 

$21,000. 

A definitive calculation of which 

commercial entities would be 

considered large entities and small 

entities cannot be made using average 

income information. However, based on 

those data and the permit data showing 

the number of permits each person/ 

entity owns, it appears that all of the 

commercial reef fish fleet would be 

considered small entities. The 

maximum number of permits reported 

to be owned by the same person/entity 

was six, additional permits (and 

revenues associated with those permits) 

may be linked through affiliation rules. 

Affiliation links cannot be made using 

permit data. If one entity held six 

permits and was a high-volume bottom 

longline gear vessel, they would be 

estimated to generate about $700,000 in 

annual revenue. That estimate is well 

below the $4 million threshold set by 

the SBA for defining a large entity. 

Also affected by the measures in this 

amendment are fish dealers, particularly 

those who receive gag and red groupers 

from harvesting vessels. Currently, a 

Federal permit is required for a fish 

dealer to receive reef fish from 

commercial vessels. As of November 

2008, there were 159 active permits for 

dealers buying and selling reef fish 

species; but since the reef fish dealer 

permitting system in the Gulf is an open 

access program, the number of dealers 

can vary from year to year. As part of 

the commercial reef fish logbook 

program, reporting vessels identify the 

dealers who receive their landed fish. 

Commercial reef fish vessels with 

Federal permits are required to sell their 

harvest only to permitted dealers. For 

the period 2004–2007, these dealers 

handled an average of 10.8 million lb 

(4.9 million kg) of groupers and 

tilefishes valued at $25.4 million. These 

dealer transactions were distributed as 

follows: Florida, with 10 million lb (4.5 

million kg) worth $23.5 million; 

Alabama and Mississippi, with 102,000 

lb (46,266 kg) worth $222 thousand; 

Louisiana, with 270,000 lb (122,476 kg) 

worth $592 thousand: and, Texas, with 

434,000 lb (196,859 kg) worth $1.03 

million. The rest of transactions were 

handled by dealers outside of the Gulf. 

Average employment information per 

reef fish dealer is unknown. It is 

estimated that total employment for reef 

fish processors in the Southeast at 

approximately 700 individuals, both 

part and full time. It is assumed all 

processors must be dealers, yet a dealer 

need not be a processor. Further, 

processing is a much more labor 

intensive exercise than dealing. 

Therefore, given the employment 

estimate for the processing sector, it is 

assumed that the average dealer’s 

number of employees would not surpass 

the SBA employment benchmark. 

Based on the gross revenue and 

employment profiles presented above, 

all permitted commercial reef fish 

vessels and fish dealers directly affected 

by the proposed rule may be classified 

as small entities. 

Because all entities that are expected 

to be affected by the proposed rule are 

considered small entities, the issue of 

disproportional impacts on small and 

large entities does not arise. Although 

some vessel operations are larger than 

others, they nevertheless fall within the 

definition of small entities. 

The various measures in this 

proposed rule have varying effects on 

small entities. Adoption of an IFQ 

program for the grouper and tilefish 

fishery has been estimated to result in 

variable cost savings to the fishing 

industry of $2.23 to $3.24 million per 

year. There would also be some 

unknown reductions in fixed costs. In 

addition, there would result possible 

increases in revenues as improved 

product quality would command higher 

prices. 

Permit stacking would allow owners 

to consolidate their multiple permits 

into one with corresponding 

consolidation of landings history for all 

permits. This may be expected to 

accelerate the reduction in the number 

of permits, resulting in cost savings to 

permit owners and in administrative 

cost reductions. 

Dual classification of both speckled 

hind and warsaw grouper into SWG and 

DWG would tend to reduce discards of 

both species and allow fishermen to 

keep more of these two species they 

catch. Also, this has been estimated to 

increase revenues of fishermen by 

$450,000. 

Restricting the number of participants 

eligible to receive initial IFQ shares to 

commercial permit holders only would 

prevent over-extended distribution of 

IFQ shares while allowing active 

participants in the fishery to 

immediately benefit from the 

implementation of the grouper and 

tilefish IFQ program. This limitation 

would also tend to speed up the process 

of consolidation in the fishery, a result 

that would allow participants to reap 

the gains from an IFQ program over a 

relatively short time. 

Initial apportionment of IFQ shares 

based on landings history for the years 

1999–2004, with allowance to drop one 

year, would provide a higher likelihood 

that active participants in the fishery 

would be allotted IFQ shares in 

accordance with the extent of their 

participation in the fishery. This would 

tend to preserve the historical landings 

status of eligible participants, so the 

initial impacts on their profits would be 

at least not be diminished. As the IFQ 

program progresses, their profits may be 

expected to increase whether or not they 

choose to fish their IFQs or lease or sell 

them to others. 

By defining IFQ shares on a speciesspecific basis, the eventual true value of 

each species may be generated. This 

option, however, could result in more 

discards of some species and complicate 

balancing of catch and quota as well as 

the monitoring of the IFQ program. It 

thus needs to be complemented by 

flexibility measures to assist IFQ 

participants in balancing their catch and 

quota holdings. The provision for multiuse allocations would introduce certain 

flexibility as IFQ participants would 

have some leeways in balancing their 

catch and quota holdings. 

The transferability aspect of IFQ 

shares/allocation provides the 

mechanism to allow the IFQ program to 

generate greater efficiency and higher 

profitability in the fishery. As such, the 

lesser the limitations on transferability 

the better the system would be. The 

proposed rule would limit transfers only 

to reef fish permit holders the first five 

years of the program and to a broader 

pool of participants thereafter. While 

the five-year limitation would unlikely 

bring about cost increases, it would not 

allow proper pricing of IFQ shares. This 

condition, however, may be necessary to 

allow IFQ holders to get familiar with 

the IFQ program before they engage in 

transfers outside of the limited pool of 

eligible IFQ transfer recipients. 

Establishing a cap on IFQ share 

holdings is consistent with the 

Magnuson-Stevens Act provision to 

prevent the acquisition of excessive 

shares in the IFQ program. The 

proposed rule to set the share cap to the 

maximum assigned to a participant 

during initial apportionment would 

allow every participant to at least 

maintain their existing scale of 

operation. Costs of operation and 

possibly revenues may be expected to 

remain the same. Over time, all 

20142 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

participants, except the highest one, 

would be able to increase their scale of 

operation they deem most profitable to 

them. The highest holders, however, 

and presumably the current more 

efficient producers would not have the 

same opportunity as the others. 

The same reasoning as stated in the 

preceding paragraph for a share cap 

would also apply to the proposed rule 

to establish a cap on IFQ allocation 

holdings. In addition, the established 

cap on IFQ allocations could possibly 

close the loophole allowing some 

participants to circumvent the 

established cap on IFQ share holdings 

by entering into a long-term contract 

with other participants. 

Quotas change periodically, so there 

is a need to address this in the IFQ 

program. The proposed rule would 

allocate quota adjustments, increases or 

decreases, in proportion to a 

participant’s IFQ share ownership at the 

time of quota adjustments. This may not 

allocate quota adjustments as efficiently 

as an auction alternative, but it appears 

to be the least costly and least 

disruptive option. 

The establishment of an appeals 

process affords participants the 

opportunity to correct any mistakes in 

the initial allocation of IFQ shares. This 

could result in more costs to 

participants and the administering 

agency, but such costs are expected to 

be relatively small especially when seen 

against the potential benefits it would 

generate. The added provision to set 

aside 3 percent of the quota to settle 

appeals would prevent the possibility of 

taking back some allocations already 

distributed to participants. 

The cost recovery fee feature of the 

IFQ program (a requirement under the 

Magnuson-Stevens Act) would 

undoubtedly impose additional cost on 

fishing participants both in terms of 

reductions in revenue and increases in 

costs (particularly on dealers) to comply 

with the collection and remittance of 

the fees to NMFS. A 3–percent cost 

recovery fee based on total revenues 

could translate into larger reductions in 

profits, particularly for small fishing 

operations. 

Certified landing sites where 

fishermen are obligated to land their 

IFQ catches may increase the cost of 

fishing operations. This could happen if 

for some reasons, such as weather 

conditions and fishing opportunities, 

fishermen may have to travel far if the 

nearest landing site is not certified. This 

could, however, enhance the 

enforcement of IFQ rules which may 

help ensure that benefits from the 

program are not impaired. 

It is expected that the combined 

effects of the proposed rule would result 

in significant changes to the profitability 

status of fishing operations in the 

grouper and tilefish fishery. This is 

especially true over the long run when 

significant benefits, both in terms of 

revenue increases and cost decreases, 

may be expected to accrue. The net 

economic effects on dealers cannot be 

readily ascertained. 

Several alternatives were considered 

by the Council in their deliberation of 

the various measures in this 

amendment. For purposes of the 

succeeding discussion, each of the 

Council’s preferred alternatives is 

termed proposed action. 

Three alternatives, including no 

action, were considered for 

establishment of an IFQ program. The 

first alternative (no action) to the 

proposed action would maintain the 

incentives to overcapitalize the fishery 

and to promote derby fishing. Such 

conditions may be expected to result in 

increased operating costs, increased 

likelihood of shortened seasons, 

reduced at-sea safety, wide fluctuations 

in domestic grouper and tilefish supply, 

and depressed ex-vessel prices for 

groupers and tilefishes. The other 

alternative to the proposed action, 

establishment of an endorsement 

system, would have short-term 

effectiveness in addressing 

overcapitalization and derby fishing by 

reducing the number of participants. 

Over the long run, remaining 

participants may be expected to increase 

their effort either through vessel, crew, 

and equipment upgrades or via 

additional or longer fishing trips. 

The only alternative to the proposed 

action of consolidating multiple 

commercial reef fish permits is the no 

action alternative. This alternative 

would not accelerate the reduction in 

the number of permits, thus forgoing the 

benefits from permit stacking due to 

cost savings by permit owners and 

reductions in administrative costs. 

Four alternatives, including no action, 

were considered regarding the species 

composition of DWG and SWG. The first 

alternative (no action) to the proposed 

action would maintain the composition 

of the SWG and DWG management 

units. This alternative would neither 

reduce the discards of speckled hind or 

warsaw grouper nor grant flexibility to 

IFQ participants. The second alternative 

to the proposed action would classify 

speckled hind as both SWG and DWG 

while the third alternative to the 

proposed action would classify warsaw 

grouper as both SWG and DWG. These 

two alternatives would reduce discards 

and add flexibility to IFQ participants 

but only with respect to either speckled 

hind or warsaw grouper but not both as 

in the proposed action. 

Four alternatives, including no action, 

were considered for initial eligibility in 

the IFQ program. The first alternative 

(no action) to the proposed action 

would not specify initial eligibility 

requirements for IFQ share allocation, 

and thus is deemed to provide 

insufficient guidance in initially 

allocating IFQ shares. The other 

alternatives to the proposed action 

would include more entities for initial 

distribution of IFQ shares: a) 

commercial reef fish permit holders and 

reef fish captains and crew, b) 

commercial reef fish permit holders and 

permitted dealers, and c) commercial 

reef fish permit holders, reef fish 

captains and crew, and permitted 

dealers. These other alternatives to the 

proposed action would complicate the 

determination of initial IFQ holders, 

slow down the eventual consolidation 

of fishing operations in the fishery, and 

lessen the likelihood of maintaining 

viable fishing operations. 

Four alternatives, including no action, 

were considered for the initial 

apportionment of IFQ shares. The first 

alternative (no action) to the proposed 

action would not provide any guidance 

in initially apportioning IFQ shares. The 

second alternative to the proposed 

action would proportionately allocate 

IFQ shares based on average annual 

landings during 1999–2004. This 

alternative is less flexible than the 

proposed action where eligible 

participants could drop one year in 

calculating annual average landings. 

The third alternative to the proposed 

action would initially distribute IFQ 

shares through an auction. This 

alternative may be deemed best in 

generating the most appropriate value 

for IFQ shares at the start of the 

program. However, this alternative 

offers some possibility that some 

historical yet active participants in the 

fishery would not receive any IFQ share 

or receive only few shares that would 

not make their fishing operations viable. 

Four alternatives, including no action, 

were considered for IFQ share 

definitions. The first alternative (no 

action) to the proposed action would 

not establish IFQ shares and is therefore 

not a viable alternative under an IFQ 

system. The second alternative to the 

proposed action would establish a 

single IFQ share for the combined 

groupers and tilefishes. While this 

alternative would tend to minimize 

transaction costs and eliminate the need 

to trade shares to balance catch and 

quota holdings, it would limit the 

effectiveness of species-specific 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20143 

management measures and complicate 

the future establishment of annual catch 

limits required by the MagnusonStevens Act. The third alternative to the 

proposed action would establish 

separate IFQ shares for the deep water 

grouper complex, the shallow water 

grouper complex, and tilefish. As with 

the second alternative, this particular 

alternative would limit the effectiveness 

of species-specific management 

measures and complicate the future 

establishment of annual catch limits 

required by the Magnuson-Stevens Act. 

Three alternatives, including no 

action, were considered for multi-use 

allocation and trip limits. The first 

alternative (no action) to the proposed 

action would not establish multi-use 

IFQ shares or trip allowances and thus, 

would not contribute to catch and quota 

balancing under the IFQ program. The 

second alternative to the proposed 

action would establish a trip allowance 

granting IFQ participants the flexibility 

to land red or gag for which the IFQ 

participant has no allocation by using 

allocation from the other species (i.e., 

red or gag). This alternative would not 

cap the amount of multi-use allocation 

and would be associated with a higher 

likelihood of exceeding allowable 

harvest levels. 

Three alternatives, including no 

action, were considered for transfer 

eligibility requirements. The first 

alternative (no action) to the proposed 

action would make any U.S. citizen or 

permanent resident alien eligible for 

IFQ share or allocation transfer. Among 

the alternatives, this one would 

immediately allow the largest pool of 

IFQ share/allocation recipients, thereby 

providing the best mechanism for 

eliciting the highest value of an IFQ 

share or allocation. The difference 

between this alternative and the 

proposed action is the provision in the 

latter that transfers be allowed only 

among holders of commercial reef fish 

permits during the first 5 years of the 

IFQ program. Over the long-run, then, 

the two alternatives would have the 

same economic effects. The proposed 

action reflects the Council’s intent to 

provide enough time for current fishery 

participants to be familiar with the 

nature of the IFQ system, particularly 

with respect to proper valuation of IFQ 

shares/allocations, before opening up 

the market to a broader pool of 

participants. The second alternative to 

the proposed action would limit transfer 

eligibility only to commercial reef fish 

permit holders. This alternative was not 

chosen, because it would constrain the 

process of valuing IFQ shares/ 

allocations over a long time. 

Three alternatives, including no 

action, were considered for caps on IFQ 

share ownership. The first alternative 

(no action) to the proposed action 

would not impose any cap on IFQ share 

ownership. Although this alternative 

offers the best environment for 

individual fishing operations to 

determine their most profitable scale of 

operations, this was not chosen because 

it also offers the highest probability for 

an individual fishing operation or very 

few fishing operations to obtain 

‘‘excessive share’’ which the MagnusonStevens Act disallows. The second 

alternative to the proposed action would 

impose an IFQ share cap of 5 percent, 

10 percent, or 15 percent of either the 

total grouper and tilefish shares or each 

type of species-specific shares. Part of 

this second alternative is the provision 

for grandfathering in those with initial 

percent shares higher than the chosen 

ownership cap. Although this 

alternative appears to balance the 

concern over excessive share and that of 

constraining the operations of the most 

efficient producers, this was not chosen 

because it would appear to impose 

arbitrary levels of maximum share 

ownership. The issue of grandfathering 

in those with initial share above the 

maximum would also limit the ability of 

some producers to compete in the open 

market against those grandfathered in. 

Part of the rationale for the proposed 

action was to achieve consistency with 

similar provision in the red snapper IFQ 

program, and this would not be 

achieved under the two alternatives to 

the proposed action. A sub-option under 

the proposed action which would 

impose a cap on total grouper and 

tilefish IFQ shares but not on each type 

of IFQ share was not chosen, because it 

could result in some entities obtaining 

excessive shares of certain species. 

Three alternatives, including no 

action, were considered for caps on IFQ 

allocation ownership. The first 

alternative (no action) to the proposed 

action would not limit the amount of 

IFQ allocation to be owned by any 

entity each year. Although this 

alternative would provide the best 

economic environment relative to the 

holding of IFQ allocations, it would 

afford some entities the opportunity to 

circumvent the provision on IFQ share 

cap by entering into long-term 

arrangements with IFQ share/allocation 

holders. The second alternative to the 

proposed action would impose an 

allocation cap of an additional 1 

percent, 2 percent, or 5 percent above 

the percent cap on IFQ share ownership. 

This alternative was not chosen because 

of the potential complication it would 

add to the monitoring and enforcement 

of share ownership cap. 

Three alternatives, including no 

action, were considered for adjustments 

in annual allocations of commercial 

TAC. The first alternative (no action) to 

the proposed action would not specify 

the allocation mechanism of any 

changes in commercial TAC. This 

alternative was not chosen because it 

would require the Council to address 

allocation issue every time the 

commercial quota is adjusted and thus 

would impose additional administrative 

costs. This could also delay the 

determination of each entity’s allocation 

at the start of the fishing season which 

could be disruptive to the affected 

entity’s fishing operations. The second 

alternative to the proposed action would 

allocate adjustments in the commercial 

quota via an auction system. This 

alternative was not chosen because it 

could complicate and thus increase the 

cost of allocating quota adjustments. 

Moreover, it could raise equity concerns 

if the winners were new entrants who 

did not share the cost of managing the 

fishery. 

Four alternatives, including no action, 

were considered regarding the appeals 

process. The proposed action consists of 

two alternatives. One pertains to the 

establishment and structure of an 

appeals process and the other to the 

provision of a commercial quota setaside to resolve appeals. The first 

alternative (no action) to the proposed 

action on appeals process would not 

provide a formal, in-house means of 

addressing disputes particularly 

regarding initial IFQ share allocation 

and so was not chosen by the Council. 

The second alternative to the proposed 

action on appeals process would 

establish a special board composed of 

state directors/designees who will 

review, evaluate, and make individual 

recommendations to the NMFS RA on 

appeals. This alternative was not chosen 

because it would merely add layers to 

the appeals process that would tend to 

increase the administrative costs. 

Besides, this alternative would mainly 

provide board members’ advice to the 

RA on appeals matters. The 3–percent 

quota set-aside is based on a similar 

percent level chosen for the red snapper 

IFQ program that sufficiently 

accommodated all appeals. 

Three alternatives, including no 

action, were considered for a cost 

recovery plan. The first alternative (no 

action) to the proposed action would 

not impose a cost recovery fee. This 

would not be consistent with provisions 

of the Magnuson-Stevens Act. The 

second alternative to the proposed 

action would require each IFQ 

20144 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

registered buyer who purchased IFQ 

groupers or tilefishes to submit an IFQ 

Buyer report either on a quarterly or 

annual basis. This alternative was 

deemed to mainly impose additional 

costs with relatively small economic or 

social benefits. Under the proposed 

action, several sub-options were also 

considered but rejected. The first of 

such sub-options would calculate the 

recovery fee based on standard, as 

opposed to actual, ex-vessel value. The 

second sub-option would impose the 

responsibility of collecting and 

remitting the fees on the IFQ 

shareholders. The third sub-option 

would require the remittance of 

collected fees on a monthly basis. The 

rationale for their rejection was that 

being inconsistent with corresponding 

provisions in the red snapper IFQ 

system would add complication to the 

cost recovery plan and add costs to both 

the participants and NMFS. 

Three alternatives, including no 

action, were considered for certifying 

landing sites. The first alternative (no 

action) to the proposed action would 

not establish certified landing sites for 

IFQ programs in the commercial reef 

fish fisheries, thus providing no 

additional means to improve 

enforcement of the grouper and tilefish 

IFQ program. The second alternative to 

the proposed action would require that 

landing sites be certified by the Office 

of Law Enforcement in order for IFQ 

fishermen to use the VMS units as an 

option for reporting landing 

notifications. This was deemed 

unnecessary for monitoring and 

enforcing the grouper and tilefish IFQ 

program. Under the proposed action, a 

sub-option providing for the selection of 

certified landing sites by the Council 

and NMFS, based on industry 

recommendations and resource 

availability was not adopted. This suboption was deemed more restrictive 

than the proposed action in identifying 

landing sites for certification purposes. 

In addition to the above, Amendment 

29 also explicitly considered six other 

issues for which the Council chose the 

no action alternatives. These issues are: 

(1) definition of ‘‘substantial 

participants’’ for the IFQ program; (2) 

‘‘use it or lose it’’ policy for IFQ shares; 

(3) IFQ guaranteed loan program; (4) 

minimum threshold landings for the 

endorsement system; (5) qualifying 

years for the endorsement system; and, 

(6) incidental catch provision under the 

endorsement system. 

Seven alternatives, including no 

action, were considered for the 

definition of substantial participants. 

The various alternatives would include 

varying entities as substantial 

participants in the fishery. The first 

alternative (no action) would not 

impose an all-encompassing number of 

eligible entities for the transfer of IFQ 

shares/allocations; the second would 

include only commercial reef fish 

permit holders; the third would include 

commercial reef fish permit holders and 

reef fish captains and crew; the fourth 

would include commercial reef fish 

permit holders and permitted reef fish 

dealers; the fifth would include 

commercial reef fish permit holders, 

permitted reef fish dealers, and reef fish 

captains and crew; the sixth would 

include commercial reef fish permit 

holders considered substantial 

participants for purposes of the 

referendum; and, the seventh would 

include commercial reef fish permit 

holders, reef fish captains and crew, and 

others who provide services in the reef 

fish fishery, such as restaurant owners 

and fish house employees. All these 

alternatives, except no action, would 

limit the number of entities eligible for 

the transfer of IFQ shares and annual 

allocations so as to eventually affect the 

appropriate pricing of shares, 

allocations, and ultimately the fish 

resource. 

Three alternatives, including no 

action, were considered for the ‘‘use it 

or lose it’’ policy for IFQ shares. The 

first alternative (no action) would not 

require any minimum landings for an 

IFQ share to remain valid; the second 

would provide for the revocation and 

subsequent redistribution among the 

remaining shareholders of IFQ share 

certificates that remain inactive (less 

than 30–percent utilization) for 3 years; 

the third is similar to the second, except 

that it defines inactivity as less than 50– 

percent utilization of allotted IFQ 

shares. All these alternatives, except no 

action, would tend to unduly penalize 

those experiencing problems with their 

equipment, labor, or health. Although, 

the alternatives, other than no action, 

would address permanent disability. In 

addition, they would mainly increase 

monitoring costs without necessarily 

providing any tangible economic or 

social benefits. 

Three alternatives, including no 

action, were considered for the IFQ loan 

program. The first alternative (no action) 

would not establish a guaranteed loan 

program under the IFQ system; the 

second would set aside 15 percent of the 

cost recovery fees to establish a 

guaranteed loan program; and, the third 

would set aside 25 percent of the cost 

recovery fees to establish a guaranteed 

loan program. Establishing a guaranteed 

loan program under the second or third 

alternative would use up part of the cost 

recovery fees as well as divert NMFS 

resources that could otherwise be 

devoted to effectively administer the 

grouper and tilefish IFQ program. 

Three sets of alternatives were 

considered for the endorsement system. 

Three alternatives, including no action, 

were considered for minimum threshold 

landings for endorsements; three 

alternatives, including no action, were 

considered for qualifying years for 

endorsement eligibility; and, three 

alternatives, including no action, were 

considered for incidental catch 

provision under the endorsement 

system. Opting for the no action 

alternatives follows from the Council’s 

decision to reject the endorsement 

system as an effort management 

approach in favor of the IFQ program. 

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 Paperwork 

Reduction Act (PRA) unless that 

collection of information displays a 

currently valid Office of Management 

and Budget (OMB) control number. 

This proposed rule contains 

collection-of-information requirements 

subject to the PRA. The collections and 

the associated estimated average public 

reporting burden per response are 

provided in the following table. 

COLLECTION 

REQUIREMENT 

ESTIMATED 

BURDEN PER 

RESPONSE 

Dealer Account Activation 5 minutes 

Dealer Transaction Report 7 minutes 

Shareholder Account Activation 5 minutes 

Fisherman Account Activation 10 minutes 

Active Vessels Report 10 minutes 

Approval of Landing Location 5 minutes 

Notification of Landing 

Time 

3 minutes 

Transfer of Share 15 minutes 

Transfer of Allocation 5 minutes 

Permit Consolidation 10 minutes 

These requirements have been 

submitted to OMB for approval. These 

estimates of the public reporting burden 

includes the time for reviewing 

instructions, searching existing data 

sources, gathering and maintaining the 

data needed, and completing and 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20145 

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 collection 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). 

List of Subjects in 50 CFR Part 622 

Fisheries, Fishing, Puerto Rico, 

Reporting and recordkeeping 

requirements, Virgin Islands. 

Dated: April 21, 2009. 

John Oliver, 

Deputy Assistant Administrator for 

Operations, 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, paragraph (b), Table 1, 

the entry for FMP for the Reef Fish 

Resources of the Gulf of Mexico, and 

footnote 5 are revised, and footnote 6 is 

added to read as follows: 

§ 622.1 Purpose and scope. 

* * * * * 

(b) * * * 

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.1,5,6

TABLE 1—FMPS IMPLEMENTED UNDER

PART 622—Continued 

FMP title 

Responsible 

fishery management 

council(s) 

Geographical 

area 

*****

1 Regulated area includes adjoining state 

waters for purposes of data collection and 

quota monitoring. 

*****

5 Regulated area includes adjoining state 

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

a Gulf red snapper IFQ vessel account has 

been established or possessed by a dealer 

with a Gulf IFQ dealer endorsement. 6 Regulated area includes adjoining state 

waters for Gulf groupers and tilefishes harvested or possessed by a person aboard a 

vessel for which an IFQ vessel account for 

Gulf groupers and tilefishes has been established or possessed by a dealer with a Gulf 

IFQ dealer endorsement. 

3. In § 622.2, the definitions of ‘‘Deepwater groupers (DWG)’’ and ‘‘Shallowwater groupers (SWG)’’ are added to 

read as follows: 

§ 622.2 Definitions and acronyms. 

* * * * * 

Deep-water groupers (DWG) means 

yellowedge grouper, misty grouper, 

warsaw grouper, snowy grouper, and 

speckled hind. In addition, for the 

purposes of the IFQ program for Gulf 

groupers and tilefishes in § 622.20, 

scamp are also included as DWG as 

specified in § 622.20(b)(2)(vi). 

* * * * * 

Shallow-water groupers (SWG) means 

gag, red grouper, black grouper, scamp, 

yellowfin grouper, rock hind, red hind, 

and yellowmouth grouper. In addition, 

for the purposes of the IFQ program for 

Gulf groupers and tilefishes in § 622.20, 

speckled hind and warsaw grouper are 

also included as SWG as specified in 

§ 622.20(b)(2)(v). 

* * * * * 

4. In § 622.4, paragraphs (a)(2)(v), 

(a)(2)(ix), and (a)(4)(ii) are revised, and 

a new sentence is added after the third 

sentence in paragraph (i) to read as 

follows: 

§ 622.4 Permits and fees. 

* * * * * 

(a) * * * 

(2) * * * 

(v) Gulf reef fish. For a person aboard 

a vessel to be eligible for exemption 

from the bag limits, to fish under a 

quota, as specified in § 622.42(a)(1), or 

to sell Gulf reef fish in or from the Gulf 

EEZ, a commercial vessel permit for 

Gulf reef fish must have been issued to 

the vessel and must be on board. If 

Federal regulations for Gulf reef fish in 

subparts A, B, or C of this part are more 

restrictive than state regulations, a 

person aboard a vessel for which a 

commercial vessel permit for Gulf reef 

fish has been issued must comply with 

such Federal regulations regardless of 

where the fish are harvested. See 

paragraph (a)(2)(ix) of this section 

regarding an IFQ vessel account 

required to fish for, possess, or land 

Gulf red snapper or Gulf groupers and 

tilefishes. To obtain or renew a 

commercial vessel permit for Gulf reef 

fish, more than 50 percent of the 

applicant’s earned income must have 

been derived from commercial fishing 

(i.e., harvest and first sale of fish) or 

from charter fishing during either of the 

2 calendar years preceding the 

application. See paragraph (m) of this 

section regarding a limited access 

system for commercial vessel permits 

for Gulf reef fish and limited exceptions 

to the earned income requirement for a 

permit. 

(A) Option to consolidate commercial 

vessel permits for Gulf reef fish. A 

person who has been issued multiple 

commercial vessel permits for Gulf reef 

fish and wants to consolidate some or 

all of those permits, and the landings 

histories associated with those permits, 

into one permit must submit a 

completed permit consolidation 

application to the RA. The permits 

consolidated must be valid, non-expired 

permits and must be issued to the same 

entity. The application form and 

instructions are available online at 

sero.nmfs.noaa.gov. After consolidation, 

such a person would have a single 

permit, and the permits that were 

consolidated into that permit will be 

permanently terminated. 

(B) [Reserved] 

* * * * * 

(ix) Gulf IFQ vessel accounts. For a 

person aboard a vessel, for which a 

commercial vessel permit for Gulf reef 

fish has been issued, to fish for, possess, 

or land Gulf red snapper or Gulf 

groupers (including DWG and SWG, as 

specified in § 622.20(a)) or tilefishes 

(including goldface tilefish, blackline 

tilefish, anchor tilefish, blueline tilefish, 

and tilefish), regardless of where 

harvested or possessed, a Gulf IFQ 

vessel account for the applicable species 

or species groups must have been 

established. As a condition of the IFQ 

vessel account, a person aboard such 

vessel must comply with the 

requirements of § 622.16 when fishing 

for red snapper or § 622.20 when fishing 

for groupers or tilefishes regardless of 

where the fish are harvested or 

20146 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

possessed. An owner of a vessel with a 

commercial vessel permit for Gulf reef 

fish, who has established an IFQ 

account for the applicable species, as 

specified in § 622.16(a)(3)(i) or 

§ 622.20(a)(3)(i), online via the NMFS 

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

establish a vessel account through that 

IFQ account for that permitted vessel. If 

such owner does not have an online IFQ 

account, the owner must first contact 

IFQ Customer Service at 1–866–425– 

7627 to obtain information necessary to 

access the IFQ website and establish an 

online IFQ account. There is no fee to 

set-up an IFQ account or a vessel 

account. Only one vessel account may 

be established per vessel under each 

IFQ program. An owner with multiple 

vessels may establish multiple vessel 

accounts under each IFQ account. The 

purpose of the vessel account is to hold 

IFQ allocation that is required to land 

the applicable IFQ species. A vessel 

account must hold sufficient IFQ 

allocation in the appropriate share 

category, at least equal to the pounds in 

gutted weight of the red snapper or 

groupers and tilefishes on board, from 

the time of advance notice of landing 

through landing (except for any overage 

allowed as specified in § 622.16(c)(1)(ii) 

for red snapper and § 622.20(c)(1)(ii) for 

groupers and tilefishes). The vessel 

account remains valid as long as the 

vessel permit remains valid; the vessel 

has not been sold or transferred; and the 

vessel owner is in compliance with all 

Gulf reef fish and IFQ reporting 

requirements, has paid all applicable 

IFQ fees, and is not subject to sanctions 

under 15 CFR part 904. The vessel 

account is not transferable to another 

vessel. The provisions of this paragraph 

do not apply to fishing for or possession 

of Gulf groupers and tilefishes under the 

bag limit specified in § 622.39 (b)(1)(ii) 

or Gulf red snapper under the bag limit 

specified in § 622.39 (b)(1)(iii). See 

§ 622.16 regarding other provisions 

pertinent to the Gulf red snapper IFQ 

system and § 622.20 regarding other 

provisions pertinent to the IFQ system 

for Gulf groupers and tilefishes. 

* * * * * 

(4) * * * 

(ii) Gulf IFQ dealer endorsements. In 

addition to the requirement for a dealer 

permit for Gulf reef fish as specified in 

paragraph (a)(4)(i) of this section, for a 

dealer to receive red snapper subject to 

the Gulf red snapper IFQ program, as 

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

and tilefishes subject to the IFQ program 

for Gulf groupers and tilefishes, as 

specified in § 622.20(a)(1), or for a 

person aboard a vessel with a Gulf IFQ 

vessel account to sell such red snapper 

or groupers and tilefishes directly to an 

entity other than a dealer, such persons 

must also have a Gulf IFQ dealer 

endorsement. A dealer with a Gulf reef 

fish permit can download a Gulf IFQ 

dealer endorsement from the NMFS IFQ 

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

such persons do not have an IFQ online 

account, they must first contact IFQ 

Customer Service at 1–866–425–7627 to 

obtain information necessary to access 

the IFQ website and establish an IFQ 

online account. There is no fee for 

obtaining this endorsement. The 

endorsement remains valid as long as 

the Gulf reef fish dealer permit remains 

valid and the dealer is in compliance 

with all Gulf reef fish and IFQ reporting 

requirements, has paid all IFQ fees 

required under paragraph (c)(2) of this 

section, and is not subject to any 

sanctions under 15 CFR part 904. The 

endorsement is not transferable. See 

§ 622.16 regarding other provisions 

pertinent to the Gulf red snapper IFQ 

system and § 622.20 regarding other 

provisions pertinent to the IFQ system 

for Gulf groupers and tilefishes. 

* * * * * 

(i) Display. * * * A Gulf IFQ dealer 

endorsement must accompany each 

vehicle that is used to pick up Gulf IFQ 

red snapper and/or Gulf IFQ groupers 

and tilefishes. * * * 

* * * * * 

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

are revised 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, or the 

IFQ program for Gulf groupers and 

tilefishes as specified in § 622.20. 

(hh) Falsify any information required 

to be submitted regarding the Gulf red 

snapper IFQ program as specified in 

§ 622.16, or the IFQ program for Gulf 

groupers and tilefishes as specified in 

§ 622.20. 

* * * * * 

6. In § 622.16, revise the fifth and 

sixth sentences in the introductory text 

of paragraph (a), and revise paragraphs 

(a)(1) and (c) to read as follows: 

§ 622.16 Gulf red snapper individual 

fishing quota (IFQ) program. 

(a) * * * 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 

account. See § 622.4(a)(4)(ii) regarding a 

requirement for a Gulf IFQ dealer 

endorsement. * * * 

(1) Scope. The provisions of this 

section apply to Gulf red snapper in or 

from the Gulf EEZ and, for a person 

aboard a vessel with a Gulf red snapper 

IFQ vessel account as required by 

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

Gulf IFQ dealer endorsement as 

required by § 622.4(a)(4)(ii), these 

provisions apply to Gulf red snapper 

regardless of where harvested or 

possessed. 

* * * * * 

(c) IFQ operations and requirements— 

(1) IFQ Landing and transaction 

requirements. (i) Gulf red snapper 

subject to this IFQ program can only be 

possessed or landed by a vessel with a 

Gulf red snapper IFQ vessel account 

with allocation at least equal to the 

pounds of red snapper on board, except 

as provided in paragraph (c)(1)(ii) of this 

section. Such red snapper can only be 

received by a dealer with a Gulf IFQ 

dealer endorsement. 

(ii) A person on board a vessel with 

an IFQ vessel account landing the 

shareholder’s only remaining allocation, 

can legally exceed, by up to 10 percent, 

the shareholder’s allocation remaining 

on that last fishing trip of the fishing 

year, i.e., a one-time per fishing year 

overage. Any such overage will be 

deducted from the shareholder’s 

applicable allocation for the subsequent 

fishing year. From the time of the 

overage until January 1 of the 

subsequent fishing year, the IFQ 

shareholder must retain sufficient 

shares to account for the allocation that 

will be deducted the subsequent fishing 

year. Share transfers that would violate 

this requirement will be prohibited. 

(iii) The dealer is responsible for 

completing a landing transaction report 

for each landing and sale of Gulf red 

snapper via the IFQ website at 

ifq.sero.nmfs.noaa.gov at the time of the 

transaction in accordance with reporting 

form and instructions provided on the 

website. This report includes, but is not 

limited to, date, time, and location of 

transaction; weight and actual ex-vessel 

value of red snapper landed and sold; 

and information necessary to identify 

the fisherman, vessel, and dealer 

involved in the transaction. The 

fisherman must validate the dealer 

transaction report by entering his 

unique PIN number when the 

transaction report is submitted. After 

the dealer submits the report and the 

information has been verified, the 

website will send a transaction approval 

code to the dealer and the allocation 

holder. 

(iv) If there is a discrepancy regarding 

the landing transaction report after 

approval, the dealer or vessel account 

holder (or his or her authorized agent) 

may initiate a landing transaction 

correction form to correct the landing 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20147 

transaction. This form is available via 

the IFQ website at 

ifq.sero.nmfs.noaa.gov. Both parties 

must validate the landing correction 

form by entering their respective PIN 

numbers, i.e. vessel account PIN or 

dealer account PIN. The dealer must 

then print out the form, both parties 

must sign it, and the form must be 

mailed to NMFS. The form must be 

received by NMFS no later than 15 days 

after the date of the initial landing 

transaction. 

(2) IFQ cost recovery fees. As required 

by section 304(d)(2)(A)(i) of the 

Magnuson-Stevens Act, the RA will 

collect a fee to recover the actual costs 

directly related to the management and 

enforcement of the Gulf red snapper IFQ 

program. The fee cannot exceed 3 

percent of the ex-vessel value of Gulf 

red snapper landed under the IFQ 

program. Such fees will be deposited in 

the Limited Access System 

Administration Fund (LASAF). Initially, 

the fee will be 3 percent of the actual 

ex-vessel value of Gulf red snapper 

landed under the IFQ program, as 

documented in each landings 

transaction report. The RA will review 

the cost recovery fee annually to 

determine if adjustment is warranted. 

Factors considered in the review 

include the catch subject to the IFQ cost 

recovery, projected ex-vessel value of 

the catch, costs directly related to the 

management and enforcement of the 

IFQ program, the projected IFQ balance 

in the LASAF, and expected 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 at the 

end of each calendar-year quarter, but 

no later than 30 days after the end of 

each calendar-year quarter. Fees not 

received by the deadline are delinquent. 

(iii) Fee payment procedure. For each 

IFQ dealer, the IFQ system will post, on 

individual message boards, an end-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, and the dealer’s IFQ 

account has been suspended pending 

payment of the applicable fees. 

(B) On or about the 91st day after the 

end of each calendar-year quarter, the 

RA will refer any delinquent IFQ dealer 

cost recovery fees to the appropriate 

authorities for collection of payment. 

(3) Measures to enhance IFQ program 

enforceability—(i) Advance notice of 

landing. For the purpose of this 

paragraph, landing means to arrive at a 

dock, berth, beach, seawall, or ramp. 

The owner or operator of a vessel 

landing IFQ red snapper is responsible 

for ensuring that NMFS is contacted at 

least 3 hours, but no more than 12 

hours, in advance of landing to report 

the time and location of landing, 

estimated red snapper landings in 

pounds gutted weight, vessel 

identification number (Coast Guard 

registration number or state registration 

number), and the name and address of 

the IFQ dealer where the red snapper 

are to be received. The vessel landing 

red snapper must have sufficient IFQ 

allocation in the IFQ vessel account, at 

least equal to the pounds in gutted 

weight of red snapper on board (except 

for any overage up to the 10 percent 

allowed on the last fishing trip) from the 

time of the advance notice of landing 

through landing. Authorized methods 

for contacting NMFS and submitting the 

report include calling NMFS Office for 

Law Enforcement at 1–866–425–7627, 

completing and submitting to NMFS the 

notification form provided through the 

VMS unit, or providing the required 

information to NMFS through the webbased form available on the IFQ website 

at ifq.sero.nmfs.noaa.gov. As new 

technology becomes available, NMFS 

will add other authorized methods for 

complying with the advance notification 

requirement, via appropriate 

rulemaking. Failure to comply with this 

advance notice of landing requirement 

is unlawful and will preclude 

authorization to complete the landing 

transaction report required in paragraph 

(c)(1)(iii) of this section and, thus, will 

preclude issuance of the required 

transaction approval code. 

(ii) Time restriction on offloading. IFQ 

red snapper may be offloaded only 

between 6 a.m. and 6 p.m., local time. 

(iii) Restrictions on transfer of IFQ red 

snapper. At-sea or dockside transfer of 

IFQ red snapper from one vessel to 

another vessel is prohibited. 

(iv) Requirement for transaction 

approval code. If IFQ red snapper are 

offloaded to a vehicle for transportation 

to a dealer or are on a vessel that is 

trailered for transport to a dealer, on-site 

capability to accurately weigh the fish 

and to connect electronically to the 

online IFQ system to complete the 

transaction and obtain the transaction 

approval code is required. After a 

landing transaction has been completed, 

a transaction approval code verifying a 

legal transaction of the amount of IFQ 

red snapper in possession and a copy of 

the dealer endorsement must 

accompany any IFQ red snapper from 

the landing location through possession 

by a dealer. This requirement also 

applies to IFQ red snapper possessed on 

a vessel that is trailered for transport to 

a dealer. 

(v) Approved landing locations. 

Landing locations must be approved by 

NMFS Office for Law Enforcement prior 

to landing or offloading at these sites. 

Proposed landing locations may be 

submitted online via the IFQ website at 

ifq.sero.nmfs.noaa.gov, or by calling IFQ 

Customer Service at 1–866–425–7627, at 

any time, however, new landing 

locations will be approved only at the 

end of each calendar-year quarter. To 

have a landing location approved by the 

end of the calendar-year quarter, it must 

be submitted at least 45 days before the 

end of the calendar-year quarter. NMFS 

will evaluate the proposed sites based 

on, but not limited to, the following 

criteria: 

(A) Landing locations must be 

publicly accessible by land and water, 

and 

(B) They must have a street address. 

If there is no street address on record for 

a particular landing location, global 

positioning system (GPS) coordinates 

for an identifiable geographic location 

must be provided. 

(4) Transfer of IFQ shares and 

allocation. Until January 1, 2012, IFQ 

shares and allocations can be transferred 

only to a person who holds a valid 

commercial vessel permit for Gulf reef 

fish; thereafter, IFQ shares and 

allocations can be transferred to any 

U.S. citizen or permanent resident alien. 

20148 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

However, a valid commercial permit for 

Gulf reef fish, a Gulf red snapper IFQ 

vessel account, and Gulf red snapper 

IFQ allocation are required to possess 

(at and after the time of the advance 

notice of landing), land or sell Gulf red 

snapper subject to this IFQ program. 

(i) Share transfers. Share transfers are 

permanent, i.e., they remain in effect 

until subsequently transferred. Transfer 

of shares will result in the 

corresponding allocation being 

automatically transferred to the person 

receiving the transferred share 

beginning with the fishing year 

following the year the transfer occurred. 

However, within the fishing year the 

share transfer occurs, transfer of shares 

and associated allocation are 

independent--unless the associated 

allocation is transferred separately, it 

remains with the transferor for the 

duration of that fishing year. A share 

transfer transaction that remains in 

pending status, i.e., has not been 

completed and verified with a 

transaction approval code, after 30 days 

from the date the shareholder initiated 

the transfer will be cancelled, and the 

pending shares will be re-credited to the 

shareholder who initiated the transfer. 

(ii) Share transfer procedures. Share 

transfers must be accomplished online 

via the IFQ website. An IFQ shareholder 

must initiate a share transfer request by 

logging onto the IFQ website at 

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

instructions provided on the website, 

the shareholder must enter pertinent 

information regarding the transfer 

request including, but not limited to, 

amount of shares to be transferred, 

which must be a minimum of 0.0001 

percent; name of the eligible transferee; 

and the value of the transferred shares. 

An IFQ shareholder who is subject to a 

sanction under 15 CFR part 904 is 

prohibited from initiating a share 

transfer. An IFQ shareholder who is 

subject to a pending sanction under 15 

CFR part 904 must disclose in writing 

to the prospective transferee the 

existence of any pending sanction at the 

time of the transfer. For the first 5 years 

this IFQ program is in effect, an eligible 

transferee is a person who has a valid 

commercial vessel permit for Gulf reef 

fish; is in compliance with all reporting 

requirements for the Gulf reef fish 

fishery and the red snapper IFQ 

program; is not subject to sanctions 

under 15 CFR part 904; and who would 

not be in violation of the share cap as 

specified in paragraph (c)(6) of this 

section. Thereafter, share transferee 

eligibility will be extended to include 

U.S. citizens and permanent resident 

aliens who are otherwise in compliance 

with the provisions of this section. The 

online system will verify the transfer 

information entered. If the information 

is not accepted, the online system will 

send the shareholder an electronic 

message explaining the reason(s) why 

the transfer request can not be 

completed. If the information is 

accepted, the online system will send 

the transferee an electronic message of 

the pending transfer. The transferee 

must approve the share transfer by 

electronic signature. If the transferee 

approves the share transfer, the online 

system will send a transaction approval 

code to both the transferor and 

transferee confirming the transaction. 

All share transfers must be completed 

and the transaction approval code 

received prior to December 31 at 6 p.m. 

eastern time each year. 

(iii) Allocation transfers. An 

allocation transfer is valid only for the 

remainder of the fishing year in which 

it occurs; it does not carry over to the 

subsequent fishing year. Any allocation 

that is unused at the end of the fishing 

year is void. Allocation may be 

transferred to a vessel account from any 

IFQ account. Allocation held in a vessel 

account, however, may only be 

transferred back to the IFQ account 

through which the vessel account was 

established. 

(iv) Allocation transfer procedures. 

Allocation transfers must be 

accomplished online via the IFQ 

website. An IFQ account holder must 

initiate an allocation transfer by logging 

onto the IFQ website at 

ifq.sero.nmfs.noaa.gov, entering the 

required information, including but not 

limited to, name of an eligible transferee 

and amount of IFQ allocation to be 

transferred and price, and submitting 

the transfer electronically. An IFQ 

allocation holder who is subject to a 

sanction under 15 CFR part 904 is 

prohibited from initiating an allocation 

transfer. An IFQ allocation holder who 

is subject to a pending sanction under 

15 CFR part 904 must disclose in 

writing to the prospective transferee the 

existence of any pending sanction at the 

time of the transfer. If the transfer is 

approved, the online system will 

provide a transaction approval code to 

the transferor and transferee confirming 

the transaction. 

(5) Restricted transactions during the 

12-hour online maintenance window. 

All electronic IFQ transactions must be 

completed by December 31 at 6 p.m. 

eastern time each year. Electronic IFQ 

functions will resume again on January 

1 at 6 a.m. eastern time the following 

fishing year. The remaining 6 hours 

prior to the end of the fishing year, and 

the 6 hours at the beginning of the next 

fishing year, are necessary to provide 

NMFS time to reconcile IFQ accounts, 

adjust allocations for the upcoming year 

if the commercial quotas for Gulf red 

snapper have changed, and update 

shares and allocations for the upcoming 

fishing year. No electronic IFQ 

transactions will be available during 

these 12 hours. An advance notice of 

landing may still be submitted during 

the 12-hour maintenance window by 

calling IFQ Customer Service at 1–866– 

425–7627. 

(6) IFQ share cap. No person, 

including a corporation or other entity, 

may individually or collectively hold 

IFQ shares in excess of 6.0203 percent 

of the total shares. For the purposes of 

considering the share cap, a 

corporation’s total IFQ share is 

determined by adding the applicable 

IFQ shares held by the corporation and 

any other IFQ shares held by a 

corporation(s) owned by the original 

corporation prorated based on the level 

of ownership. An individual’s total IFQ 

share is determined by adding the 

applicable IFQ shares held by the 

individual and the applicable IFQ 

shares equivalent to the corporate share 

the individual holds in a corporation. 

Initially, a corporation must provide the 

RA the identity of the shareholders of 

the corporation and their percent of 

shares in the corporation, and provide 

updated information to the RA within 

30 days of when changes occur. This 

information must also be provided to 

the RA any time a commercial vessel 

permit for Gulf reef fish is renewed or 

transferred. 

(7) Redistribution of shares resulting 

from permanent permit or endorsement 

revocation. If a shareholder’s 

commercial vessel permit for Gulf reef 

fish has been permanently revoked 

under provisions of 15 CFR part 904, the 

RA will redistribute the IFQ shares held 

by that shareholder proportionately 

among remaining shareholders (subject 

to cap restrictions) based upon the 

amount of shares each held just prior to 

the redistribution. During December of 

each year, the RA will determine the 

amount of revoked shares, if any, to be 

redistributed, and the shares will be 

distributed at the beginning of the 

subsequent fishing year. 

(8) Annual recalculation and 

notification of IFQ shares and 

allocation. On or about January 1 each 

year, IFQ shareholders will be notified, 

via the IFQ website at 

ifq.sero.nmfs.noaa.gov, of their IFQ 

share and allocation for the upcoming 

fishing year. These updated share values 

will reflect the results of applicable 

share transfers and any redistribution of 

shares (subject to cap restrictions) 

resulting from permanent revocation of 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20149 

applicable permits under 15 CFR part 

904. Allocation is calculated by 

multiplying IFQ share times the annual 

red snapper commercial quota. Updated 

allocation values will reflect any change 

in IFQ share, any change in the annual 

commercial quota for Gulf red snapper, 

and any debits required as a result of 

prior fishing year overages as specified 

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

IFQ participants can monitor the status 

of their shares and allocation 

throughout the year via the IFQ website. 

7. Section 622.20 is added to subpart 

B to read as follows: 

§ 622.20 Individual fishing quota (IFQ) 

program for Gulf groupers and tilefishes. 

(a) General. This section establishes 

an IFQ program for the commercial 

components of the Gulf reef fish fishery 

for groupers (including DWG, red 

grouper, gag, and other SWG) and 

tilefishes (including goldface tilefish, 

blackline tilefish, anchor tilefish, 

blueline tilefish, and tilefish). For the 

purposes of this IFQ program, DWG 

includes yellowedge grouper, misty 

grouper, warsaw grouper, snowy 

grouper, and speckled hind, and scamp, 

but only as specified in paragraph 

(b)(2)(vi) of this section. For the 

purposes of this IFQ program, other 

SWG includes black grouper, scamp, 

yellowfin grouper, rock hind, red hind, 

and yellowmouth grouper, and warsaw 

grouper and speckled hind, but only as 

specified in paragraph (b)(2)(v) of this 

section. Under the IFQ program, the RA 

initially will assign eligible participants 

IFQ shares, in five share categories. 

These IFQ shares are equivalent to a 

percentage of the annual commercial 

quotas for DWG, red grouper, gag, and 

tilefishes, and the annual commercial 

catch allowance (meaning the SWG 

quota minus gag and red grouper) for 

other SWG species, based on their 

applicable historical landings. Shares 

determine the amount of IFQ allocation 

for Gulf groupers and tilefishes, in 

pounds gutted weight, a shareholder is 

initially authorized to possess, land, or 

sell in a given calendar year. Shares and 

annual IFQ allocation are transferable. 

See § 622.4(a)(2)(ix) regarding a 

requirement for a vessel landing 

groupers or tilefishes subject to this IFQ 

program to have an IFQ vessel account 

for Gulf groupers and tilefishes. See 

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

for a Gulf IFQ dealer endorsement. 

Details regarding eligibility, applicable 

landings history, account setup and 

transaction requirements, constraints on 

transferability, and other provisions of 

this IFQ system are provided in the 

following paragraphs of this section. 

(1) Scope. The provisions of this 

section apply to Gulf groupers and 

tilefishes in or from the Gulf EEZ and, 

for a person aboard a vessel with an IFQ 

vessel account for Gulf groupers and 

tilefishes as required by § 622.4(a)(2)(ix) 

or for a person with a Gulf IFQ dealer 

endorsement as required by 

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

to Gulf groupers and tilefishes 

regardless of where harvested or 

possessed. 

(2) Duration. The IFQ program 

established by this section will remain 

in effect until it is modified or 

terminated; however, the program will 

be evaluated by the Gulf of Mexico 

Fishery Management Council every 5 

years. 

(3) Electronic system requirements. (i) 

The administrative functions associated 

with this IFQ program, e.g., registration 

and account setup, landing transactions, 

and transfers, are designed to be 

accomplished online; therefore, a 

participant must have access to a 

computer and Internet access and must 

set up an appropriate IFQ online 

account to participate. The computer 

must have browser software installed, 

e.g. Internet Explorer, Netscape, Mozilla 

Firefox; as well as the software Adobe 

Flash Player version 9.0 or greater, 

which may be downloaded from the 

Internet for free. Assistance with online 

functions is available from IFQ 

Customer Service by calling 1–866–425– 

7627 Monday through Friday between 8 

a.m. and 4:30 p.m. eastern time. 

(ii) The RA will mail initial 

shareholders and dealers with Gulf reef 

fish dealer permits information and 

instructions pertinent to setting up an 

IFQ online account. Other eligible 

persons who desire to become IFQ 

participants by purchasing IFQ shares or 

allocation or by obtaining a Gulf IFQ 

dealer endorsement must first contact 

IFQ Customer Service at 1–866–425– 

7627 to obtain information necessary to 

set up the required IFQ online account. 

Each IFQ participant must monitor his/ 

her online account and all associated 

messages and comply with all IFQ 

online reporting requirements. 

(iii) During catastrophic conditions 

only, the IFQ program provides for use 

of paper-based components for basic 

required functions as a backup. The RA 

will determine when catastrophic 

conditions exist, the duration of the 

catastrophic conditions, and which 

participants or geographic areas are 

deemed affected by the catastrophic 

conditions. The RA will provide timely 

notice to affected participants via 

publication of notification in the 

Federal Register, NOAA weather radio, 

fishery bulletins, and other appropriate 

means and will authorize the affected 

participants’ use of paper-based 

components for the duration of the 

catastrophic conditions. NMFS will 

provide each IFQ dealer the necessary 

paper forms, sequentially coded, and 

instructions for submission of the forms 

to the RA. The paper forms will also be 

available from the RA. The program 

functions available to participants or 

geographic areas deemed affected by 

catastrophic conditions will be limited 

under the paper-based system. There 

will be no mechanism for transfers of 

IFQ shares or allocation under the 

paper-based system in effect during 

catastrophic conditions. Assistance in 

complying with the requirements of the 

paper-based system will be available via 

IFQ Customer Service 1–866–425–7627 

Monday through Friday between 8 a.m. 

and 4:30 p.m. eastern time. 

(b) Procedures for initial 

implementation—(1) Determination of 

eligibility for initial IFQ shares. To be 

eligible as an initial IFQ shareholder a 

person must posses a valid commercial 

Gulf reef fish permit as of October 1, 

2009. NMFS’ permit records are the sole 

basis for determining eligibility for the 

IFQ program for Gulf groupers and 

tilefishes based on permit history. No 

more than one initial eligibility will be 

granted based upon a given commercial 

vessel permit for Gulf reef fish. 

(2) Calculation of initial IFQ shares 

and allocation—(i) IFQ shares. The RA 

will calculate initial IFQ shares based 

on the highest average annual landings 

of Gulf groupers and tilefishes, in each 

of five share categories, associated with 

each shareholder’s current commercial 

vessel permit for Gulf reef fish during 

the applicable landings history. The five 

share categories are gag, red grouper, 

DWG, other SWG, and tilefishes. The 

applicable landings history for reef fish 

permit holders with grouper or tilefish 

landings includes landings data from 

1999 through 2004 with the allowance 

for dropping one year. All grouper and 

tilefish landings associated with a 

current reef fish permit for the 

applicable landings history, including 

those reported by a person(s) who held 

the license prior to the current license 

owner, will be attributed to the current 

license owner. Only legal landings 

reported in compliance with applicable 

state and Federal regulations will be 

accepted. For each share category, each 

shareholder’s initial share is derived by 

dividing the shareholder’s highest 

average annual landings during the 

applicable landings history by the sum 

of the highest average annual landings 

of all shareholders during the respective 

applicable landings histories. Initial 

shares distributed in the gag share 

20150 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

category and the other SWG share 

category will be based on landings that 

have been adjusted for gag and/or black 

grouper misidentification. Initial IFQ 

shares will not be issued in units less 

than the percentage equivalent to 1.0 lb 

(0.45 kg) of the grouper or tilefish 

species, in each share category, based on 

that share category’s quota or catch 

allowance. 

(ii) Initial share set-aside to 

accommodate resolution of appeals. 

During the first year of implementation 

of this IFQ program only, for each share 

category, the RA will reserve a 3– 

percent IFQ share prior to the initial 

distribution of shares, to accommodate 

resolution of appeals, if necessary. Any 

portion of the 3–percent share set-aside 

for each share category remaining after 

the appeals process is completed will be 

distributed as soon as possible among 

initial shareholders in direct proportion 

to the percentage share each was 

initially allocated. If resolution of 

appeals requires more than a 3–percent 

share set-aside for a share category, the 

shares of all initial shareholders, for that 

share category, would be reduced 

accordingly in direct proportion to the 

percentage share each was initially 

allocated. 

(iii) IFQ allocation. IFQ allocation is 

the amount of Gulf groupers and 

tilefishes, in pounds gutted weight, an 

IFQ shareholder or allocation holder is 

authorized to possess, land, or sell 

during a given fishing year. IFQ 

allocation for the five respective share 

categories is derived at the beginning of 

each year by multiplying a shareholder’s 

IFQ share times the annual commercial 

quota for gag, red grouper, DWG, and 

tilefishes; and times the annual 

commercial catch allowance for other 

SWG. 

(iv) Red grouper and gag multi-use 

allocation—(A) Red grouper multi-use 

allocation. At the beginning of each 

fishing year, 4 percent of each 

shareholder’s initial red grouper 

allocation will be converted to red 

grouper multi-use allocation. Red 

grouper multi-use allocation may be 

used to possess, land, or sell either red 

grouper or gag under certain conditions. 

Red grouper multi-use allocation may be 

used to possess, land, or sell red grouper 

only after an IFQ account holder’s 

(shareholder or allocation holder’s) red 

grouper allocation has been landed and 

sold, or transferred; and to possess, 

land, or sell gag, only after both gag and 

gag multi-use allocation have been 

landed and sold, or transferred. 

(B) Gag multi-use allocation. At the 

beginning of each fishing year, 8 percent 

of each shareholder’s initial gag 

allocation will be converted to gag 

multi-use allocation. Gag multi-use 

allocation may be used to possess, land, 

or sell either gag or red grouper under 

certain conditions. Gag multi-use 

allocation may be used to possess, land, 

or sell gag only after an IFQ account 

holder’s gag allocation has been landed 

and sold, or transferred; and possess, 

land or sell red grouper, only after both 

red grouper and red grouper multi-use 

allocation have been landed and sold, or 

transferred. Multi-use allocation transfer 

procedures and restrictions are specified 

in paragraph (c)(4)(iv) of this section. 

(v) Warsaw grouper and speckled 

hind classification. Warsaw grouper and 

speckled hind are considered DWG 

species and under certain circumstances 

SWG species. For the purposes of the 

IFQ program for Gulf groupers and 

tilefishes, once all of an IFQ account 

holder’s DWG allocation has been 

landed and sold, or transferred, or if an 

IFQ account holder has no DWG 

allocation, then other SWG allocation 

may be used to land and sell warsaw 

grouper and speckled hind. 

(vi) Scamp classification. Scamp is 

considered a SWG species and under 

certain circumstances a DWG. For the 

purposes of the IFQ program for Gulf 

groupers and tilefishes, once all of an 

IFQ account holder’s other SWG 

allocation has been landed and sold, or 

transferred, or if an IFQ account holder 

has no SWG allocation, then DWG 

allocation may be used to land and sell 

scamp. 

(3) Shareholder notification regarding 

landings history, initial determination of 

IFQ shares and allocations, and IFQ 

account setup information. (i) On or 

about October 1, 2009, the RA will mail 

each Gulf reef fish commercial vessel 

permittee with grouper and tilefish 

landings history during the qualifying 

years, information pertinent to the IFQ 

program. This information will 

include— 

(A) Gulf grouper and tilefish landings 

associated with the Gulf reef fish 

commercial vessel permit during each 

year of the applicable landings history; 

(B) The highest average annual 

grouper and tilefish landings, in each of 

the five share categories, based on the 

permittee’s best 5 out of 6 years of 

applicable landings history; 

(C) The permittee’s initial IFQ share, 

in each of the five share categories, 

based on the highest average annual 

landings associated with the permittee’s 

best 5 out of 6 years of applicable 

landings history; 

(D) The initial IFQ allocation, in each 

of the five share categories, as well as 

their total IFQ allocation; 

(E) Instructions for appeals; 

(F) General instructions regarding 

procedures related to the IFQ online 

system, including how to set up an 

online account; and 

(G) A user identification number; and 

a personal identification number (PIN) 

that will be provided in a subsequent 

letter. 

(ii) The RA will provide this 

information, via certified mail return 

receipt requested, to the permittee’s 

address of record as listed in NMFS’ 

permit files. A permittee who does not 

receive such notification from the RA, 

must contact the RA by November 1, 

2009, to clarify eligibility status and 

landings and initial share information. 

(iii) The initial share information 

provided by the RA is based on the 

highest average annual landings during 

the best 5 out of 6 years associated with 

the permittee’s applicable landings 

history for each share category; 

however, a permittee may select to 

exclude a different year of landings 

history than was chosen, consistent 

with the permittee’s applicable landings 

history, for the calculation of the initial 

IFQ share. The permittee must submit 

that information to the RA postmarked 

no later than December 1, 2009. If 

alternative years, consistent with the 

applicable landings history, are 

selected, revised information regarding 

shares and allocations will be posted on 

the online IFQ accounts no later than 

January 1, 2010. A permittee who 

disagrees with the landings or eligibility 

information provided by the RA may 

appeal the RA’s initial determinations. 

(4) Procedure for appealing IFQ 

eligibility and/or landings information. 

The only items subject to appeal under 

this IFQ system are initial eligibility for 

IFQ shares based on ownership of a reef 

fish permit, the accuracy of the amount 

of landings, correct assignment of 

landings to the permittee, and correct 

assignment of gag versus black grouper 

landings. Appeals based on hardship 

factors will not be considered. Appeals 

must be submitted to the RA 

postmarked no later than April 1, 2010, 

and must contain documentation 

supporting the basis for the appeal. The 

RA will review all appeals, render final 

decisions on the appeals, and advise the 

appellant of the final decision. 

(i) Eligibility appeals. NMFS’ records 

of reef fish permits are the sole basis for 

determining ownership of such permits. 

A person who believes he/she meets the 

permit eligibility criteria based on 

ownership of a vessel under a different 

name, as may have occurred when 

ownership has changed from individual 

to corporate or vice versa, must 

document his/her continuity of 

ownership. 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20151 

(ii) Landings appeals. Appeals 

regarding landings data for 1999 

through 2004 will be based on NMFS’ 

logbook records. If NMFS’ logbooks are 

not available, the RA may use state 

landings records or data that were 

submitted in compliance with 

applicable Federal and state regulations, 

on or before December 31, 2006. 

(5) Dealer notification and IFQ 

account setup information. On or about 

October 1, 2009, the RA will mail each 

dealer with a valid Gulf reef fish dealer 

permit information pertinent to the IFQ 

program. Any such dealer is eligible to 

receive a Gulf IFQ dealer endorsement, 

which can be downloaded from the IFQ 

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

an IFQ account has been established. 

The information package will include 

general information about the IFQ 

program and instructions for accessing 

the IFQ website and establishing an IFQ 

dealer account. 

(c) IFQ operations and requirements— 

(1) IFQ Landing and transaction 

requirements. (i) Gulf groupers and 

tilefishes subject to this IFQ program 

can only be possessed or landed by a 

vessel with a IFQ vessel account for 

Gulf groupers and tilefishes. Such 

groupers and tilefishes can only be 

received by a dealer with a Gulf IFQ 

dealer endorsement. The vessel landing 

groupers or tilefishes must have 

sufficient IFQ allocation in the IFQ 

vessel account, at least equal to the 

pounds in gutted weight of grouper or 

tilefish species to be landed, from the 

time of advance notice of landing 

through landing, except as provided in 

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

(ii) A person on board a vessel with 

an IFQ vessel account landing the 

shareholder’s only remaining allocation 

from among any of the grouper or 

tilefish share categories, can legally 

exceed, by up to 10 percent, the 

shareholder’s allocation remaining on 

that last fishing trip of the fishing year, 

i.e. a one-time per fishing year overage. 

Any such overage will be deducted from 

the shareholder’s applicable allocation 

for the subsequent fishing year. From 

the time of the overage until January 1 

of the subsequent fishing year, the IFQ 

shareholder must retain sufficient 

shares to account for the allocation that 

will be deducted the subsequent fishing 

year. Share transfers that would violate 

this requirement will be prohibited. 

(iii) The dealer is responsible for 

completing a landing transaction report 

for each landing and sale of Gulf 

groupers and tilefishes via the IFQ 

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

time of the transaction in accordance 

with reporting form and instructions 

provided on the website. This report 

includes, but is not limited to, date, 

time, and location of transaction; weight 

and actual ex-vessel value of groupers 

and tilefishes landed and sold; and 

information necessary to identify the 

fisherman, vessel, and dealer involved 

in the transaction. The fisherman must 

validate the dealer transaction report by 

entering the unique PIN number for the 

vessel account when the transaction 

report is submitted. After the dealer 

submits the report and the information 

has been verified by NMFS, the online 

system will send a transaction approval 

code to the dealer and the allocation 

holder. 

(iv) If there is a discrepancy regarding 

the landing transaction report after 

approval, the dealer or vessel account 

holder (or his or her authorized agent) 

may initiate a landing transaction 

correction form to correct the landing 

transaction. This form is available via 

the IFQ website at 

ifq.sero.nmfs.noaa.gov. Both parties 

must validate the landing correction 

form by entering their respective PIN 

numbers, i.e. vessel account PIN or 

dealer account PIN. The dealer must 

then print out the form, both parties 

must sign it, and the form must be 

mailed to NMFS. The form must be 

received by NMFS no later than 15 days 

after the date of the initial landing 

transaction. 

(2) IFQ cost recovery fees. As required 

by section 304(d)(2)(A)(i) of the 

Magnuson-Stevens Act, the RA will 

collect a fee to recover the actual costs 

directly related to the management and 

enforcement of the IFQ program for Gulf 

groupers and tilefishes. The fee cannot 

exceed 3 percent of the ex-vessel value 

of Gulf groupers and tilefishes landed 

under the IFQ program. Such fees will 

be deposited in the Limited Access 

System Administration Fund (LASAF). 

Initially, the fee will be 3 percent of the 

actual ex-vessel value of Gulf groupers 

and tilefishes landed under the IFQ 

program, as documented in each 

landings transaction report. The RA will 

review the cost recovery fee annually to 

determine if adjustment is warranted. 

Factors considered in the review 

include the catch subject to the IFQ cost 

recovery, projected ex-vessel value of 

the catch, costs directly related to the 

management and enforcement of the 

IFQ program, the projected IFQ balance 

in the LASAF, and expected 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 

account holder specified in the 

documented IFQ landing transaction 

report for Gulf groupers and tilefishes is 

responsible for payment of the 

applicable cost recovery fees. 

(ii) Collection and submission 

responsibility. A dealer who receives 

Gulf groupers or tilefishes subject to the 

IFQ program is responsible for 

collecting the applicable cost recovery 

fee for each IFQ landing from the IFQ 

account holder specified in the IFQ 

landing transaction report. Such dealer 

is responsible for submitting all 

applicable cost recovery fees to NMFS 

on a quarterly basis. The fees are due 

and must be submitted, using pay.gov 

via the IFQ system, at the end of each 

calendar-year quarter, but no later than 

30 days after the end of each calendaryear quarter. Fees not received by the 

deadline are delinquent. 

(iii) Fee payment procedure. For each 

IFQ dealer, the IFQ system will post, in 

individual IFQ dealer accounts, an endof-quarter statement of cost recovery 

fees that are due. The dealer is 

responsible for submitting the cost 

recovery fee payments using pay.gov via 

the IFQ system. Authorized payment 

methods are credit card, debit card, or 

automated clearing house (ACH). 

Payment by check will be authorized 

only if the RA has determined that the 

geographical area or an individual(s) is 

affected by catastrophic conditions. 

(iv) Fee reconciliation process— 

delinquent fees. The following 

procedures apply to an IFQ dealer 

whose cost recovery fees are delinquent. 

(A) On or about the 31st day after the 

end of each calendar-year quarter, the 

RA will send the dealer an electronic 

message via the IFQ website and official 

notice via mail indicating the applicable 

fees are delinquent, and the dealer’s IFQ 

account has been suspended pending 

payment of the applicable fees. 

(B) On or about the 91st day after the 

end of each calendar-year quarter, the 

RA will refer any delinquent IFQ dealer 

cost recovery fees to the appropriate 

authorities for collection of payment. 

(3) Measures to enhance IFQ program 

enforceability—(i) Advance notice of 

landing. For the purpose of this 

paragraph, landing means to arrive at a 

dock, berth, beach, seawall, or ramp. 

The owner or operator of a vessel 

landing IFQ groupers or tilefishes is 

responsible for ensuring that NMFS is 

contacted at least 3 hours, but no more 

than 12 hours, in advance of landing to 

report the time and location of landing, 

estimated grouper and tilefish landings 

in pounds gutted weight for each share 

category (gag, red grouper, DWG, other 

SWG, tilefishes), vessel identification 

number (Coast Guard registration 

number or state registration number), 

and the name and address of the IFQ 

20152 Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 

dealer where the groupers or tilefishes 

are to be received. The vessel landing 

groupers or tilefishes must have 

sufficient IFQ allocation in the IFQ 

vessel account, and in the appropriate 

share category or categories, at least 

equal to the pounds in gutted weight of 

all groupers and tilefishes on board 

(except for any overage up to the 10 

percent allowed on the last fishing trip) 

from the time of the advance notice of 

landing through landing. Authorized 

methods for contacting NMFS and 

submitting the report include calling 

NMFS at 1–866–425–7627, completing 

and submitting to NMFS the notification 

form provided through the VMS unit, or 

providing the required information to 

NMFS through the web-based form 

available on the IFQ website at 

ifq.sero.nmfs.noaa.gov. As new 

technology becomes available, NMFS 

will add other authorized methods for 

complying with the advance notification 

requirement, via appropriate 

rulemaking. Failure to comply with this 

advance notice of landing requirement 

is unlawful and will preclude 

authorization to complete the landing 

transaction report required in paragraph 

(c)(1)(iii) of this section and, thus, will 

preclude issuance of the required 

transaction approval code. 

(ii) Time restriction on offloading. IFQ 

groupers and tilefishes may be offloaded 

only between 6 a.m. and 6 p.m., local 

time. 

(iii) Restrictions on transfer of IFQ 

groupers and tilefishes. At-sea or 

dockside transfer of IFQ groupers or 

tilefishes from one vessel to another 

vessel is prohibited. 

(iv) Requirement for transaction 

approval code. If IFQ groupers or 

tilefishes are offloaded to a vehicle for 

transportation to a dealer or are on a 

vessel that is trailered for transport to a 

dealer, on-site capability to accurately 

weigh the fish and to connect 

electronically to the online IFQ system 

to complete the transaction and obtain 

the transaction approval code is 

required. After a landing transaction has 

been completed, a transaction approval 

code verifying a legal transaction of the 

amount of IFQ groupers and tilefishes in 

possession and a copy of the dealer 

endorsement must accompany any IFQ 

groupers and tilefishes from the landing 

location through possession by a dealer. 

This requirement also applies to IFQ 

groupers and tilefishes possessed on a 

vessel that is trailered for transport to a 

dealer. 

(v) Approved landing locations. 

Landing locations must be approved by 

NMFS Office for Law Enforcement prior 

to landing or offloading at these sites. 

Proposed landing locations may be 

submitted online via the IFQ website at 

ifq.sero.nmfs.noaa.gov, or by calling IFQ 

Customer Service at 1–866–425–7627, at 

any time, however, new landing 

locations will be approved only at the 

end of each calendar-year quarter. To 

have your landing location approved by 

the end of the calendar-year quarter, it 

must be submitted at least 45 days 

before the end of the calendar-year 

quarter. NMFS will evaluate the 

proposed sites based on, but not limited 

to, the following criteria: 

(A) Landing locations must be 

publicly accessible by land and water, 

and 

(B) They must have a street address. 

If there is no street address on record for 

a particular landing location, global 

positioning system (GPS) coordinates 

for an identifiable geographic location 

must be provided. 

(4) Transfer of IFQ shares and 

allocation. Until January 1, 2015, IFQ 

shares and allocations can be transferred 

only to a person who holds a valid 

commercial vessel permit for Gulf reef 

fish; thereafter, IFQ shares and 

allocations can be transferred to any 

U.S. citizen or permanent resident alien. 

However, a valid commercial permit for 

Gulf reef fish, an IFQ vessel account for 

Gulf groupers and tilefishes, and IFQ 

allocation for Gulf groupers or tilefishes 

are required to possess (at and after the 

time of the advance notice of landing), 

land or sell Gulf groupers or tilefishes 

subject to this IFQ program. 

(i) Share transfers. Share transfers are 

permanent, i.e., they remain in effect 

until subsequently transferred. Transfer 

of shares will result in the 

corresponding allocation being 

automatically transferred to the person 

receiving the transferred share 

beginning with the fishing year 

following the year the transfer occurred. 

However, within the fishing year the 

share transfer occurs, transfer of shares 

and associated allocation are 

independent--unless the associated 

allocation is transferred separately, it 

remains with the transferor for the 

duration of that fishing year. A share 

transfer transaction that remains in 

pending status, i.e., has not been 

completed and verified with a 

transaction approval code, after 30 days 

from the date the shareholder initiated 

the transfer will be cancelled, and the 

pending shares will be re-credited to the 

shareholder who initiated the transfer. 

(ii) Share transfer procedures. Share 

transfers must be accomplished online 

via the IFQ website. An IFQ shareholder 

must initiate a share transfer request by 

logging onto the IFQ website at 

ifq.sero.nmfs.noaa.gov. An IFQ 

shareholder who is subject to a sanction 

under 15 CFR part 904 is prohibited 

from initiating a share transfer. An IFQ 

shareholder who is subject to a pending 

sanction under 15 CFR part 904 must 

disclose in writing to the prospective 

transferee the existence of any pending 

sanction at the time of the transfer. 

Following the instructions provided on 

the website, the shareholder must enter 

pertinent information regarding the 

transfer request including, but not 

limited to: amount of shares to be 

transferred, which must be a minimum 

of 0.000001 percent; name of the eligible 

transferee; and the value of the 

transferred shares. For the first 5 years 

this IFQ program is in effect, an eligible 

transferee is a person who has a valid 

commercial vessel permit for Gulf reef 

fish; is in compliance with all reporting 

requirements for the Gulf reef fish 

fishery and the IFQ program for Gulf 

groupers and tilefishes; is not subject to 

sanctions under 15 CFR part 904; and 

who would not be in violation of the 

share or allocation caps as specified in 

paragraph (c)(6) of this section. 

Thereafter, share transferee eligibility 

will be extended to include U.S. citizens 

and permanent resident aliens who are 

otherwise in compliance with the 

provisions of this section. The online 

system will verify the information 

entered. If the information is not 

accepted, the online system will send 

the shareholder an electronic message 

explaining the reason(s). If the 

information is accepted, the online 

system will send the transferee an 

electronic message of the pending 

transfer. The transferee must approve 

the share transfer by electronic 

signature. If the transferee approves the 

share transfer, the online system will 

send a transfer approval code to both 

the shareholder and transferee 

confirming the transaction. All share 

transfers must be completed and the 

transaction approval code received prior 

to December 31 at 6 p.m. eastern time 

each year. 

(iii) Allocation transfers. An 

allocation transfer is valid only for the 

remainder of the fishing year in which 

it occurs; it does not carry over to the 

subsequent fishing year. Any allocation 

that is unused at the end of the fishing 

year is void. Allocation may be 

transferred to a vessel account from any 

IFQ account. Allocation held in a vessel 

account, however, may only be 

transferred back to the IFQ account 

through which the vessel account was 

established. 

(iv) Allocation transfer procedures 

and restrictions—(A) Allocation transfer 

procedures. Allocation transfers must be 

accomplished online via the IFQ 

website. An IFQ account holder must 

Federal Register / Vol. 74, No. 82 / Thursday, April 30, 2009 / Proposed Rules 20153 

initiate an allocation transfer by logging 

onto the IFQ website at 

ifq.sero.nmfs.noaa.gov, entering the 

required information, including but not 

limited to, name of an eligible transferee 

and amount of IFQ allocation to be 

transferred and price, and submitting 

the transfer electronically. An IFQ 

allocation holder who is subject to a 

sanction under 15 CFR part 904 is 

prohibited from initiating an allocation 

transfer. An IFQ allocation holder who 

is subject to a pending sanction under 

15 CFR part 904 must disclose in 

writing to the prospective transferee the 

existence of any pending sanction at the 

time of the transfer. If the transfer is 

approved, the website will provide a 

transfer approval code to the transferor 

and transferee confirming the 

transaction. 

(B) Multi-use allocation transfer 

restrictions—(1) Red grouper multi-use 

allocation. Red grouper multi-use 

allocation may only be transferred after 

all an IFQ account holder’s red grouper 

allocation has been landed and sold, or 

transferred. 

(2) Gag multi-use allocation. Gag 

multi-use allocation may only be 

transferred after all an IFQ account 

holder’s gag allocation has been landed 

and sold, or transferred. 

(5) Restricted transactions during the 

12-hour online maintenance window. 

All electronic IFQ transactions must be 

completed by December 31 at 6 p.m. 

eastern time each year. Electronic IFQ 

functions will resume again on January 

1 at 6 a.m. eastern time the following 

fishing year. The remaining 6 hours 

prior to the end of the fishing year, and 

the 6 hours at the beginning of the next 

fishing year, are necessary to provide 

NMFS time to reconcile IFQ accounts, 

adjust allocations for the upcoming year 

if the commercial quotas or catch 

allowances for Gulf groupers or 

tilefishes have changed, and update 

shares and allocations for the upcoming 

fishing year. No electronic IFQ 

transactions will be available during 

these 12 hours. An advance notice of 

landing may still be submitted by 

calling IFQ Customer Service at 1–866– 

425–7627. 

(6) IFQ share and allocation caps. A 

corporation’s total IFQ share (or 

allocation) is determined by adding the 

applicable IFQ shares (or allocation) 

held by the corporation and any other 

IFQ shares (or allocation) held by a 

corporation(s) owned by the original 

corporation prorated based on the level 

of ownership. An individual’s total IFQ 

share is determined by adding the 

applicable IFQ shares held by the 

individual and the applicable IFQ 

shares equivalent to the corporate share 

the individual holds in a corporation. 

An individual’s total IFQ allocation is 

determined by adding the individual’s 

total allocation to the allocation derived 

from the IFQ shares equivalent to the 

corporate share the individual holds in 

a corporation. 

(i) IFQ share cap for each share 

category. No person, including a 

corporation or other entity, may 

individually or collectively hold IFQ 

shares in any share category (gag, red 

grouper, DWG, other SWG, or tilefishes) 

in excess of the maximum share initially 

issued for the applicable share category 

to any person at the beginning of the 

IFQ program, as of the date appeals are 

resolved and shares are adjusted 

accordingly. A corporation must 

provide to the RA the identity of the 

shareholders of the corporation and 

their percent of shares in the 

corporation, by December 1, 2009, for 

initial issuance of IFQ shares and 

allocation, and provide updated 

information to the RA within 30 days of 

when changes occur. This information 

must also be provided to the RA any 

time a commercial vessel permit for 

Gulf reef fish is renewed or transferred. 

(ii) Total allocation cap. No person, 

including a corporation or other entity, 

may individually or collectively hold, 

cumulatively during any fishing year, 

IFQ allocation in excess of the total 

allocation cap. The total allocation cap 

is the sum of the maximum allocations 

associated with the share caps for each 

individual share category and is 

calculated annually based on the 

applicable quotas or catch allowance 

associated with each share category. 

(7) Redistribution of shares resulting 

from permanent permit revocation. If a 

shareholder’s commercial vessel permit 

for Gulf reef fish has been permanently 

revoked under provisions of 15 CFR part 

904, the RA will redistribute the IFQ 

shares associated with the revoked 

permit proportionately among 

remaining shareholders (subject to cap 

restrictions) based upon the amount of 

shares each held just prior to the 

redistribution. During December of each 

year, the RA will determine the amount 

of revoked shares, if any, to be 

redistributed, and the shares will be 

distributed at the beginning of the 

subsequent fishing year. 

(8) Annual recalculation and 

notification of IFQ shares and 

allocation. On or about January 1 each 

year, IFQ shareholders will be notified, 

via the IFQ website at 

ifq.sero.nmfs.noaa.gov, of their IFQ 

shares and allocations, for each of the 

five share categories, for the upcoming 

fishing year. These updated share values 

will reflect the results of applicable 

share transfers and any redistribution of 

shares (subject to cap restrictions) 

resulting from permanent revocation of 

applicable permits under 15 CFR part 

904. Allocation, for each share category, 

is calculated by multiplying IFQ share 

for that category times the annual 

commercial quota or commercial catch 

allowance for that share category. 

Updated allocation values will reflect 

any change in IFQ share for each share 

category, any change in the annual 

commercial quota or commercial catch 

allowance for the applicable categories; 

and any debits required as a result of 

prior fishing year overages as specified 

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

IFQ participants can monitor the status 

of their shares and allocation 

throughout the year via the IFQ website. 

7. In § 622.42, paragraph (a)(1)(ii) and 

the first sentence of paragraph (a)(1)(iii) 

are revised to read as follows: 

§ 622.42 Quotas. 

* * * * * 

(a) * * * 

(1) * * * 

(ii) Deep-water groupers (DWG) 

combined -1.02 million lb (0.46 million 

kg), gutted weight, that is, eviscerated 

but otherwise whole. 

(iii) Shallow-water groupers (SWG) 

have a combined quota as specified in 

paragraph (a)(1)(iii)(A) of this 

section. * * * 

* * * * * 

§ 622.44 [Amended] 

7. In § 622.44, paragraph (g) is 

removed and reserved. 

[FR Doc. E9–9546 Filed 4–29–09; 8:45 am] 

BILLING CODE 3510–22–S