PR 0648-AS67 published 08/24/2006

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

FOR FURTHER INFORMATION CONTACT For
clarification of content, contact Ms.
Cecelia Davis, Procurement Analyst, at
(202) 219–0202. The TTY Federal Relay
Number for further information is 1–
800–877–8973. For information
pertaining to status or publication
schedules, contact the FAR Secretariat
at (202) 501–4755. Please cite FAR case
2005–041.
SUPPLEMENTARY INFORMATION:

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A. Background
The internet protocol is one of the
primary mechanisms that define how
and where information moves across
networks, e.g., voice, video, and text.
Currently Internet Protocol Version 4
(IPv4) is the industry standard used and
has about 4.3 billion address spaces.
Key characteristics of IPv6 are designed
to significantly increase internet address
space, promote flexibility and
functionality, and enhance security.
Agencies can reduce costly upgrades
and the complexity of transitioning to
IPv6 by proactively integrating IPv6
requirements into Federal contracts.
On August 2, 2005, OMB issued a
memo (Memorandum M–05–22,
Transition Planning for Internet
Protocol Version 6 (IPv6)) giving
guidance to agencies to transition from
IPv4 to IPv6, and required agencies to
implement full use of IPv6 in network
backbones by June 2008. OMB further
requires, to the maximum extent
practicable, all new IT procurements
include IPv6 capable products and
systems. Any exceptions to the use of
IPv6 will require advance written
approval from the agency CIO.
This rule proposes amending the FAR
by—
1. Adding a new paragraph (A)(2) in
FAR 7.105 (b)(4)(ii) to ensure agency
planners comply with the Internet
Protocol Version 6 (IPv6) capability
requirements as a part of acquisition
planning;
2. Adding paragraph (e) to FAR
12.202 to state that requirements
documents for information technology
shall include Internet Protocol Version
6 (IPv6) capable products and services;
and
3. Adding paragraph (e) to FAR
39.101 to state when acquiring
information technology, agencies shall
include the appropriate requirements
for Internet Protocol Version 6 (IPv6)
capable products and services, and for
agencies to establish procedures for
granting exceptions.
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This

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rule is not a major rule under 5 U.S.C.
804.
B. Regulatory Flexibility Act
The Councils do not expect this
proposed rule to have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601, et seq., because IPv6
requires use of commercially available
products, and no new standards or
testing is required. An Initial Regulatory
Flexibility Analysis has, therefore, not
been performed. We invite comments
from small businesses and other
interested parties. The Councils will
consider comments from small entities
concerning the affected FAR Parts 7, 12,
and 39 in accordance with 5 U.S.C. 610.
Interested parties must submit such
comments separately and should cite 5
U.S.C. 601, et seq. (FAR case 2005–041),
in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the proposed changes
to the FAR do not impose information
collection requirements that require the
approval of the Office of Management
and Budget under 44 U.S.C. 3501, et
seq.
List of Subjects in 48 CFR Parts 7, 12,
and 39
Government procurement.
Dated: August 16, 2006.
Ralph De Stefano,
Director, Contract Policy Division.

Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 7, 12,
and 39 as set forth below:
1. The authority citation for 48 CFR
parts 7, 12, and 39 continues to read as
follows:

(IPv6) capability requirements as
outlined in OMB Memorandum M–05–
22, Transition Planning for Internet
Protocol Version 6 (IPv6), and
additional requirements for IPv6 at
http://www.cio.gov.
*
*
*
*
*
PART 12—ACQUISITION OF
COMMERCIAL ITEMS
3. Amend section 12.202 by adding
paragraph (e) to read as follows:
12.202 Market research and description of
agency need.

*

*
*
*
*
(e) Requirements documents for
information technology solutions must
include Internet Protocol Version 6
(IPv6) capability as outlined in the OMB
Memorandum M–05–22, Transition
Planning for Internet Protocol Version 6
(IPv6), and additional requirements for
IPv6 at http://www.whitehouse.gov/
omb/memoranda/fy2005/m05-22.pdf.
PART 39—ACQUISITION OF
INFORMATION TECHNOLOGY
4. Amend section 39.101 by adding
paragraph (e) to read as follows:
39.101

Policy.

*

*
*
*
*
(e) In acquiring information
technology solutions, agencies must
include the appropriate Internet
Protocol Version 6 (IPv6) capability
requirements as outlined in the OMB
Memorandum M–05–22, Transition
Planning for Internet Protocol Version 6
(IPv6). Agencies must establish
procedures for exceptions.
[FR Doc. 06–7126 Filed 8–23–06; 8:45 am]
BILLING CODE 6820–EP–S

Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).

DEPARTMENT OF COMMERCE

PART 7—ACQUISITION PLANNING

National Oceanic and Atmospheric
Administration

2. Amend section 7.105 by revising
paragraph (b)(4)(ii)(A) to read as
follows:

50 CFR Part 622

7.105 Contents of written acquisition
plans.

*

*
*
*
*
(b) * * *
(4) * * *
(ii) * * *
(A) For information technology
acquisitions—
(1) How the capital planning and
investment control requirements of 40
U.S.C. 11312 and OMB Circular A–130
will be met (see 7.103(t) and Part 39);
and
(2) How the acquisition will comply
with the Internet Protocol Version 6

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[Docket No. 060731206–6206–01; I.D.
072806A]
RIN 0648–AS67

Fisheries of the Caribbean, Gulf of
Mexico, and South Atlantic; Reef Fish
Fishery of the Gulf of Mexico;
Amendment 26
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comments.
AGENCY:

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Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules
SUMMARY: NMFS issues this proposed
rule that would implement Amendment
26 to the Fishery Management Plan for
the Reef Fish Fishery of the Gulf of
Mexico (FMP). Amendment 26 would
establish an individual fishing quota
(IFQ) program for the commercial red
snapper sector of the reef fish fishery in
the Gulf of Mexico. Initial participants
in the IFQ program would receive
percentage shares of the commercial
quota of red snapper based on specified
historical landings criteria. The
percentage shares of the commercial
quota would equate to annual IFQ
allocations. Both shares and IFQ
allocations would be transferable. The
intended effect of this rule is to manage
the commercial red snapper sector of
the reef fish fishery to preserve its longterm economic viability and to achieve
optimum yield from the fishery.
DATES: Written comments must be
received on or before September 28,
2006.

You may submit comments
on the proposed rule by any of the
following methods:
• E-mail: [email protected]. Include in
the subject line the following document
identifier: 0648-AS67.
• Federal e-Rulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Phil Steele, Southeast
Regional Office, NMFS, 263 13th
Avenue South, St. Petersburg, FL 33701.
• Fax: 727–824–5308; Attention: Phil
Steele.
Copies of Amendment 26, which
includes a supplemental environmental
impact statement (SEIS), a regulatory
impact review (RIR), and an initial
regulatory flexibility analysis (IRFA),
may be obtained from the Gulf of
Mexico Fishery Management Council,
2203 N. Lois Avenue, Suite 1100,
Tampa, FL 33607; telephone: 813–348–
1630; fax: 813–348–1711; e-mail:
[email protected]. In
addition, copies of the final SEIS, a
revised RIR, and a revised IRFA,
prepared by NMFS are also available
from the Council at the address above.
Copies of all of these documents may
also be downloaded from the Council’s
website at www.gulfcouncil.org.
Comments regarding the burden-hour
estimates or other aspects of the
collection-of-information requirements
contained in this proposed rule may be
submitted in writing to Jason Rueter at
the Southeast Regional Office address
(above) and to David Rostker, Office of
Management and Budget (OMB), by email at [email protected], or
by fax to 202–395–7285.

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ADDRESSES:

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Phil
Steele, telephone 727–824–5305; fax
727–824–5308; e-mail
[email protected].

FOR FURTHER INFORMATION CONTACT:

The reef
fish fishery of the Gulf of Mexico is
managed under the FMP. The FMP was
prepared by the Gulf of Mexico Fishery
Management Council (Council) and is
implemented through regulations at 50
CFR part 622 under the authority of the
Magnuson-Stevens Act.

SUPPLEMENTARY INFORMATION:

Background
A red snapper individual transferable
quota (ITQ) program, proposed in
Amendment 8 to the FMP and approved
by NMFS in 1995, was never
implemented because of action taken
through the 1996 Sustainable Fisheries
Act to place a moratorium on the
development or implementation of new
ITQ programs until October 1, 2000. The
Council and commercial fishermen
remained concerned about the
continuing problems associated with
overcapacity in the fishery and the
adverse impacts associated with the
derby fishery, i.e., the competitive race
for available fish. This proposed rule
would implement an IFQ program to
address these issues.
IFQ Program
Scope
The provisions of this IFQ program
would apply to Gulf red snapper in or
from the Gulf EEZ and, for a person
aboard a vessel with a Gulf red snapper
IFQ vessel endorsement or for a person
with a Gulf red snapper IFQ dealer
endorsement, these provisions would
apply to Gulf red snapper regardless of
where harvested or possessed.
Duration
The IFQ program would remain in
effect until it is modified or terminated;
however, the program would be
evaluated by the Council every 5 years.
Electronic System Requirements,
Account Setup, and Information
The administrative functions
associated with this IFQ program, e.g.,
registration and account setup, landing
transactions, and transfers, are designed
to be accomplished online; therefore, a
participant would have to have access to
a computer and Internet access and set
up an appropriate IFQ online account to
participate. Assistance with online
functions would be available from IFQ
Customer Service by calling 1–866–425–
7627 Monday through Friday between 8
a.m. and 4:30 p.m. eastern time.
The IFQ program would provide for
use of paper-based components for basic

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required functions as a backup only
during catastrophic conditions. The
Regional Administrator, Southeast
Region, NMFS, (RA) would determine
when catastrophic conditions exist, the
duration of the catastrophic conditions,
and which participants or geographic
areas are deemed affected by the
catastrophic conditions. The RA would
provide timely notice to affected
participants via publication of
notification in the Federal Register,
NOAA weather radio, fishery bulletins,
and other appropriate means and would
authorize the affected participants’ use
of paper-based components for the
duration of the catastrophic conditions.
NMFS would provide each IFQ dealer
the necessary paper forms. The paper
forms would also be available from the
RA. The program functions available to
participants or geographic areas deemed
affected by catastrophic conditions
would be limited under the paper-based
system. There would be no mechanism
for transfers of IFQ shares or allocation
under the paper-based system in effect
during catastrophic conditions.
Assistance in complying with the
requirements of the paper-based system
would be available via IFQ Customer
Service 1–866–425–7627 Monday
through Friday between 8 a.m. and 4:30
p.m. eastern time.
As soon as possible after publication
of the final rule that would implement
Amendment 26, the RA would mail an
IFQ information package to eligible IFQ
participants. The package would
include information for accessing the
online IFQ system at
ifq.sero.nmfs.noaa.gov and establishing
an online account, general instructions
related to online transaction procedures
and requirements, and where
appropriate, information regarding
historical landings and initial IFQ
shares and allocation.
IFQ Shares and Allocation
An IFQ share is the percentage of the
commercial quota of red snapper
proportioned to each eligible person
based on specified landings data. An
IFQ allocation is the actual poundage of
red snapper, measured in gutted weight,
each IFQ shareholder is ensured the
opportunity to land during a given
fishing year. The allocation granted each
IFQ shareholder would be derived by
multiplying their IFQ share times the
annual red snapper commercial quota.
A person would be required to have an
annual allocation or portion thereof, to
harvest, possess, or sell red snapper.
IFQ shares and annual allocations can
be transferred separately or together to
other eligible persons.

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Adjustments in Commercial Quota and
Allocation
The Council periodically reviews and
adjusts the commercial quota for Gulf
red snapper in response to new data and
information, which generally take the
form of new or updated red snapper
stock assessments. As the quota is
adjusted, shareholder’s IFQ allocations
would be proportionately adjusted
based on the IFQ share each shareholder
has at the time of the adjustment.
Special Procedure for Initial Calculation
of 2007 IFQ Allocations
Because of uncertainty regarding the
2007 commercial quota for Gulf red
snapper and the timing of its
implementation and to avoid the
possibility of having to revoke some
proportion of initial allocation if the
quota was subsequently reduced, the RA
may initially calculate the 2007 IFQ
allocations based on a proxy
commercial quota. If a commercial
quota adjustment for Gulf red snapper
has not been submitted for review by
the Secretary of Commerce in time for
calculation of 2007 IFQ allocations, the
RA would initially calculate 2007
allocations based on a proxy
commercial quota of 2.55 million lb
(1.16 million kg). Alternatively, if a
commercial quota adjustment for Gulf
red snapper has been submitted for
review by the Secretary of Commerce in
time to allow calculation of 2007
allocations, the RA would base 2007
IFQ allocations on the proposed quota.
Under either scenario, as soon as the
actual 2007 commercial quota is final,
but no later than July 1, 2007, the RA
would adjust the 2007 IFQ allocations,
as necessary, consistent with the actual
quota.

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IFQ Share Eligibility and Share
Calculation
Eligibility for initial issuance of IFQ
shares would be restricted to persons
who own a Class 1 or Class 2 license as
of the date of publication of the final
rule implementing Amendment 26. An
owner of a license is defined as the
person who actually controls transfer of
the Class 1 or Class 2 license and is
listed as the qualifier on the face of the
license. NMFS would calculate initial
IFQ shares based on the highest average
annual landings of Gulf red snapper
associated with each shareholder’s
current Class 1 or Class 2 license(s)
during the applicable landings history
unless the shareholder selects other
years of landings consistent with the
applicable landing history. For a Class
1 license holder whose license was not
issued based on historical captain

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status, the 10 consecutive years between
1990 and 2004 with the highest average
landings would be used. For a Class 1
license holder whose license was issued
on the basis of historical captain status,
all years of landings data from 1998
through 2004 would be used. For a Class
2 license holder, the 5 years between
1998 and 2004 with the highest average
landings would be used.
All landings associated with a current
Class 1 or Class 2 license for the
applicable landings history, including
those reported by a person who held the
license prior to the current license
owner, would be attributed to the
current license owner. Only legal
landings reported in compliance with
applicable state and Federal regulations
would be accepted. Each shareholder’s
initial IFQ share would be derived by
dividing the shareholder’s highest
average annual landings during the
applicable landings history by the sum
of the highest average annual landings
of all shareholders during the respective
applicable landings histories. Initial IFQ
shares would not be issued in
denominations of less than 0.0001
percent.
Appeals Process
The only items subject to appeal
under this IFQ system would be initial
eligibility for IFQ shares based on
ownership of a Class 1 or Class 2
license, the accuracy of the amount of
landings, and correct assignment of
landings to the license owner. The RA
would review, evaluate, and render final
decisions on appeals. Appeals would
have to be submitted to the RA
postmarked no later than 90 days after
the effective date of the final regulations
implementing the IFQ program and
would have to contain documentation
supporting the basis for appeal.
Hardship arguments would not be
considered. Landings data from 1990
through 1992 would not be subject to
appeal. Landings records appeals for
1993–2004 would be based on NMFS
logbook data. If NMFS logbooks are not
available; state landings records or data
submitted on or before June 30, 2005,
could be used. During the first year of
the IFQ program only, the RA initially
would reserve a 3–percent IFQ share,
prior to initial distribution of shares, to
be used to resolve appeals. Any portion
of the 3–percent share reserve remaining
after the appeals process has been
completed would be proportionately
distributed back to the initial recipients
as soon as possible that year. If
resolution of appeals requires more than
a 3–percent share, the shares of all
initial shareholders would be reduced
proportionately to accommodate the

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required shares in excess of the 3–
percent reserve.
IFQ Share Cap—NMFS Solicits Public
Comment
To prevent any entity from obtaining
excessive shares under this IFQ
program, as mandated by National
Standard 4 of the Magnuson–Stevens
Act, a share cap would be established.
No person would be allowed to own at
any time IFQ shares exceeding the
maximum share initially issued to any
person for the 2007 fishing year, as of
the date appeals are resolved and shares
are adjusted accordingly. NMFS
estimates this would cap ownership of
shares at approximately 8 percent of
total shares. If an ownership cap is too
high, market power may become too
consolidated and produce an unduly
anti–competitive market. However,
setting the limit too low can also have
adverse effects on the price of fish. This
can happen in cases where it is less
costly overall for fewer entities to each
catch more fish than it is for lots of
entities to each catch smaller amounts
of fish.
Aside from considerations of
controlling the undue consolidation of
market power and maintaining a fair
level of competition, Section 303(b)(6)
of the Magnuson-Stevens Act requires
consideration of several factors in
establishing a limited access program
such as the red snapper IFQ program.
Those factors include, but are not
limited to: present participation in the
fishery, historical fishing practices in,
and dependence on, the fishery; the
economics of the fishery; and the
cultural and social framework relevant
to the fishery and any affected fishing
communities. Although the
approximately 8 percent cap may not
result in consolidation that rises to the
level of presenting an undue
concentration of market power or
chilled competition, a higher cap could
result in levels of consolidation
producing effects that are problematic
under the Magnuson-Stevens Act.
Examples would include potentially
eliminating numerous small-scale
historical participants, adversely
affecting the social and cultural
framework of the fishery by adversely
affecting working conditions and wages
for crew, and potentially adversely
affecting prices.
NMFS is seeking comments on
whether the proposed cap of
approximately 8 percent is appropriate.
According to the‘‘Horizontal Merger
Guidelines’’ (Guidelines) issued jointly
by the Department of Justice and the
Federal Trade Commission (http://
www.usdoj.gov/atr/public/guidelines/

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

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hmg.pdf, see especially pp 15–17), even
under conservative assumptions a limit
of 10 percent (or possibly higher under
less restrictive assumptions) would be
unlikely to have adverse competitive
effects. Accordingly, NMFS seeks
specific comments on the
appropriateness and magnitude of the
proposed ownership cap.
Permit and IFQ Endorsement
Requirements
For a person aboard a vessel, for
which a commercial vessel permit for
Gulf reef fish has been issued, to fish
for, possess, or land Gulf red snapper,
regardless of where harvested or
possessed, a Gulf red snapper IFQ vessel
endorsement would have to be issued to
the vessel and be on board, and such
person would have to hold or be
assigned sufficient IFQ allocation to
account for all red snapper on board or
landed. As a condition of the IFQ vessel
endorsement, a person aboard such
vessel would have to comply with the
requirements of the IFQ program
regardless of where red snapper are
harvested or possessed.
All dealers who purchase red snapper
from an IFQ share/allocation holder
would be required to possess a valid
Federal dealer permit for Gulf reef fish
and a red snapper IFQ dealer
endorsement without which possessing,
transporting, selling, purchasing, or
processing red snapper would be
prohibited.
The red snapper IFQ vessel
endorsement and red snapper IFQ
dealer endorsement would be available
for download from the IFQ website,
ifq.sero.nmfs.noaa.gov, at no cost to
those individuals who possess a valid
Gulf reef fish permit or a valid Gulf reef
fish dealer permit, respectively, and
request the endorsements. If such
individuals do not have an IFQ online
account, they would have to first
contact IFQ Customer Service at 1–866–
425–7627 to obtain information
necessary to access the IFQ website and
establish an IFQ online account. The red
snapper IFQ vessel endorsement and
dealer endorsement would remain valid
as long as the individual possesses a
valid Gulf reef fish permit or reef fish
dealer permit, respectively, abides by all
reporting and cost recovery
requirements of the IFQ program, and is
not subject to sanctions under 15 CFR
part 904. The IFQ vessel endorsement
and the dealer endorsement are not
transferable.
Fleet Management and Assignment of
Allocation
An IFQ shareholder or IFQ allocation
holder who owns more than one vessel

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with a valid Gulf reef fish vessel permit
and a valid Gulf red snapper IFQ vessel
endorsement may assign IFQ allocation
to a person aboard such vessel and
provide that person the IFQ account
information necessary to conduct
landing transactions. This assignment of
allocation, which does not constitute a
transfer or sale of allocation, can be
accomplished by the shareholder or
allocation holder online via the IFQ
website.
Electronic Reporting of IFQ
Transactions
IFQ share and allocation transactions
would be tracked using an online
accounting system developed by NMFS,
in which the IFQ share/allocation
holder, IFQ dealer, and appropriate
NOAA personnel would participate.
The IFQ share/allocation holder and
IFQ dealer accounts would record IFQ
share/allocation transactions into the
online system using unique user ID
numbers and personal identification
numbers (PIN) issued to them by NMFS.
Transaction approval codes obtained
from NMFS via the online accounting
system would be required for the
following transactions: (1) share
transfers; (2) allocation transfers; and (3)
landings/sales transactions. The
transaction approval code would verify
the IFQ share/allocation holders
involved in the transaction are eligible
participants and, in the case of
landings/sale, have sufficient allocation
to conduct the sales transaction.
Data managed through the online
accounting system would include, but
not be limited to:
1. The identities and certificate
numbers of IFQ share holders and their
associated vessel ID numbers;
2. The identities of persons and
corporations holding and fishing IFQ
allocations and their associated vessel
ID numbers;
3. The dates, times, and types of IFQ
share and allocation transactions;
4. The identities and locations of IFQ
dealerships;
5. The dates, times, and places of
landing/sales transactions;
6. The identities of the dealers and
fishermen conducting landing/sales
transactions;
7. The price of red snapper recorded
during each landing/sales transaction;
and
8. The biological data recorded during
each landing/sales transaction.
Landings/Sale Transactions
At the time of landing/sale of IFQ red
snapper, the dealer would be
responsible for initiating transactions in
the online accounting system. The

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fisherman would validate the
transaction online by entering his
unique PIN number at the point of
transaction submittal. The information
required to be recorded in the online
accounting system for each landing/sale
transaction at the point of sale would
include, but not be limited to:
1. The date and time of landing/sale;
2. The weight of red snapper
purchased;
3. The share/allocation holder
account number from which the catch
should be debited;
4. The ID number of the vessel used
to harvest the fish;
5. The IFQ endorsement number of
the authorized dealer;
6. The PIN numbers of both the dealer
and fishermen; and
7. The actual ex-vessel unit price of
the red snapper.
Limited Landings Overage Allowance
On the last fishing trip of the fishing
year permitted by the shareholder’s
annual allocation, a shareholder would
be permitted to land up to 10 percent
more than the remaining allocation,
without purchasing additional
allocation. Any such overages would be
deducted from the next year’s allocation
associated with the shareholder’s IFQ
share.
This carryover provision would not
apply to a person who only possesses
IFQ allocation and no IFQ shares
because there would be no reliable
mechanism for compensating for the
overage in the following fishing year.
Such a person would not be permitted
to land any red snapper in excess of his/
her current allocation.
Cost Recovery
Section 304(d)(2)(A) of the MagnusonStevens Act requires the Secretary of
Commerce to establish a fee to assist in
recovering the actual costs directly
related to the management and
enforcement of any IFQ program.
Currently, such a fee may not exceed 3
percent of the ex-vessel value of fish
harvested under any such program, and
must be collected at either the time of
landing, filing of a landing report, or
sale of such fish during a fishing season
or in the last quarter of the calendar year
in which the fish is harvested. Fees
collected must be in addition to any
other fees charged under the MagnusonStevens Act and must be deposited in
the Limited Access System
Administration Fund (LASAF)
established under Section 305(h)(5)(B)
of the Magnuson-Stevens Act. Initially,
the fee would be 3 percent of the actual
ex-vessel value of Gulf red snapper
landed under the IFQ program, as

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documented at the time of sale in each
landings transaction report. The RA
would review the cost recovery fee
annually to determine if a downward
adjustment is warranted. Factors
considered in the review would include
the catch subject to the IFQ cost
recovery, projected ex-vessel value of
the catch, costs directly related to the
management and enforcement of the
IFQ program, the projected IFQ balance
in the LASAF, and expected nonpayment of fee liabilities. If the RA
determines that a fee adjustment is
warranted, the RA would publish a
notification of the fee adjustment in the
Federal Register.
The IFQ shareholder or allocation
holder whose IFQ allocation is debited
for a Gulf red snapper landing would be
responsible for paying the associated
IFQ cost recovery fees. The IFQ dealer
who receives such landing would be
responsible for collecting the applicable
fee from the shareholder/allocation
holder and submitting the applicable fee
to NMFS using pay.gov via the IFQ
system no later than 30 days after the
end of each calendar-year quarter;
however, fees may be submitted at any
time before that deadline. Authorized
payment methods would be credit card,
debit card, or automated clearing house
(ACH). Payment by check would be
authorized only if the RA has
determined that the geographical area or
an individual(s) is affected by
catastrophic conditions. Fees not
received by the deadline would be
considered delinquent and would be
resolved through the fee reconciliation
process as specified in § 622.16(c)(2)(iv)
of this proposed rule. Failure to resolve
payment of delinquent fees may result
in annulment of the applicable IFQ
permit and/or IFQ endorsement and
submission of the matter to appropriate
authorities for resolution.

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IFQ Share/Allocation Transferability
During the first 5 years of the IFQ
program, IFQ shares or allocations could
only be transferred to a person with a
valid commercial vessel permit for Gulf
reef fish; thereafter, shares and
allocations could be transferred to U.S.
citizens and permanent resident aliens.
Share Transfer Transactions
IFQ share transfers would require
NMFS’ approval of a share transfer
application. The person transferring the
share would be responsible for initiating
the transfer request by using the online
red snapper IFQ website at
ifq.sero.nmfs.noaa.gov. Following the
instructions provided on the website,
the transferor would be required to enter
pertinent information regarding the

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transfer request including, but not
limited to:
1. The name, address, and certificate
number of the individual or corporation
transferring the IFQ share;
2. The identity of the purchaser or
transferee;
3. The amount of the IFQ share being
transferred; and
4. The monetary value of the transfer.
If the information is accepted, the
online system would send the transferor
an initial transaction approval code and
make an application for share transfer
available for downloading and printing.
The transferor and transferee would be
required to complete the application,
have their signatures notarized, and
mail the signed application to the RA at
least 30 days prior to the date on which
the applicant desires to have the transfer
effective. Share transfers would be
prohibited during December of each
year to allow NMFS the time necessary
for end-of-year program management;
therefore, any signed application would
have to be received by the RA prior to
December 1. If the RA approves the
application for transfer, the online
system would send the transferor and
transferee an electronic message
acknowledging the approval; a transfer
would be effective upon receipt of the
message. The adjusted shares resulting
from a transfer could be viewed online
by each shareholder. If the RA does not
approve the transfer application, the RA
would return the application to the
transferor with an explanation and
instructions for correcting any
deficiencies.
Allocation Transfer Transactions
Unlike share transfers which require a
notarized application for transfer,
allocation transfers could be
accomplished online via the red
snapper IFQ website. An allocation
holder could initiate an allocation
transfer by logging on to the red snapper
IFQ website at ifq.sero.nmfs.noaa.gov,
and entering the required information
including, but not be limited to:
1. The name, address, and share
certificate number (if applicable) of the
individual or corporation transferring
the IFQ allocation;
2. The identity of the eligible
purchaser or transferee;
3. The amount of the IFQ allocation
being transferred; and
4. The monetary value of the transfer.
An allocation transfer would be valid
only for the remainder of the fishing
year in which it occurs; it would not
carry over to the subsequent fishing
year. Transfer of allocation is not
prohibited during December. Any

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allocation that is unused at the end of
the fishing year would be void.
Redistribution of Shares Resulting from
Permanent Permit or Endorsement
Revocation
If a shareholder’s commercial vessel
permit for Gulf reef fish or Gulf red
snapper IFQ vessel endorsement has
been permanently revoked under
provisions of 15 CFR part 904, the RA
would redistribute the IFQ shares held
by that shareholder proportionately
among remaining shareholders based
upon the amount of shares each held
just prior to the redistribution. During
December of each year, the RA would
determine the amount of revoked
shares, if any, to be redistributed, and
the shares would be distributed at the
beginning of the subsequent fishing
year.
Annual Recalculation and Notification
of IFQ Shares and Allocation
On or about January 1 each year, IFQ
shareholders would be notified, via the
IFQ website, of their IFQ share and
allocation for the upcoming fishing year.
These updated share values would
reflect the results of applicable share
transfers and any redistribution of
shares resulting from permanent
revocation of applicable permits or
endorsements under 15 CFR part 904.
Allocation is calculated by multiplying
IFQ share times the annual red snapper
commercial quota. Updated allocation
values would reflect any change in IFQ
share, any change in the annual
commercial quota for Gulf red snapper,
and any debits required as a result of
prior fishing year overages. IFQ
participants would be able to monitor
the status of their shares and allocation
throughout the year via the IFQ website.
Measures to Enhance Enforceability
The following measures are proposed
to enhance enforceability of the IFQ
program. Fishermen participating in the
IFQ program would be required to
offload their red snapper landings to
permitted IFQ dealers and only between
6 a.m. and 6 p.m. daily. Any person
landing IFQ red snapper would be
required to notify NMFS’ Office of Law
Enforcement by calling 1–866–425–
7627, at least 3 hours in advance of
landing and specify the time and
location of landing and the name and
address of the dealer where the fish
would be received. Possession of IFQ
red snapper from the time of transfer
from a vessel through possession by a
dealer would be prohibited unless the
IFQ red snapper are accompanied by a
transaction approval code verifying a
legal transaction of the amount of IFQ

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red snapper in possession. For red
snapper offloaded to a truck for
transportation to a dealer, this would
require on-site capability to accurately
weigh the fish and to connect
electronically to the online IFQ system
to complete the transaction and obtain
the transaction approval code. At-sea or
dockside vessel-to-vessel transfers of
fish on board IFQ vessels would be
prohibited.
Changes Proposed by NMFS
In this proposed rule, NMFS has
clarified the distinction between IFQ
shareholders and IFQ allocation
holders, and more clearly distinguished
the roles and responsibilities of these
two IFQ participant types. This
clarification was necessary for proper
implementation of the IFQ program.
NMFS has also determined that it is
not necessary to prohibit transfer of
allocation during December as
Amendment 26 proposed. Allocation is
only valid for a given fishing year; does
not carry over to the subsequent year;
and, thus, does not affect agency
calculations and implementation for the
following year. Therefore, consistent
with the Council’s intent to maximize
flexibility among eligible participants,
NMFS has modified the proposed rule
to only prohibit transfer of IFQ shares
during December of each year.
In addition, NMFS has structured the
proposed rule to require an IFQ vessel
endorsement rather than an IFQ
endorsement issued to an individual as
discussed by the Council. The primary
purpose of the endorsement
requirement is to enhance
enforceability. NMFS has determined
that a vessel endorsement would
provide the necessary enforceability; be
less restrictive for participants; and be
consistent with endorsement provisions
in current regulations for other fisheries
in the Southeast Region.
NMFS also has clarified in this
proposed rule that the IFQ allocation
holder specified in the landing
transaction report is responsible for
payment of the applicable cost recovery
fee, not necessarily the shareholder. In
some cases, the shareholder may also be
the allocation holder, but in other cases,
the shareholder may have transferred
allocation to a non-shareholder. In all
cases, the allocation holder is ultimately
responsible for payment of the fee.
Finally, this proposed rule does not
include the vessel monitoring system
(VMS) requirement for vessels with a
Gulf reef fish vessel permit that was
proposed in Amendment 26.
Amendment 26 acknowledged that a
comparable VMS requirement was
proposed in Amendment 18A to the

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FMP. Amendment 26 stated that the
VMS requirement in Amendment 26
would be unnecessary if Amendment
18A was approved by NMFS. NMFS has
approved Amendment 18A and the
associated VMS requirement; therefore,
this proposed rule would not implement
any additional VMS requirement.
Classification
At this time, NMFS has not
determined that Amendment 26 is
consistent with the Magnuson-Stevens
Act and other applicable laws. NMFS,
in making that determination, will take
into account the data, views, and
comments received during the comment
periods on Amendment 26 and this
proposed rule.
This proposed rule has been
determined to be not significant for
purposes of Executive Order 12866.
NMFS prepared a final supplemental
environmental impact statement (FSEIS)
for this amendment; a notice of
availability was published on August 2,
2006 (71 FR 43706).
NMFS prepared an IRFA, as required
by section 603 of the Regulatory
Flexibility Act, for this proposed rule.
The IRFA describes the economic
impact this proposed rule, if adopted,
would have on small entities. A
description of the action, why it is being
considered, and the legal basis for this
action are contained at the beginning of
this section in the preamble and in the
SUMMARY section of the preamble. A
copy of the full analysis is available
from the Council (see ADDRESSES). A
summary of the IRFA follows.
The Magnuson-Stevens Act provides
the statutory basis for the proposed rule.
The proposed rule will establish an IFQ
program for the commercial red snapper
fishery in the Gulf. Specifics for this IFQ
program include the following: (1) no
limit on the duration of the program, but
a program evaluation is required every
5 years; (2) maximum IFQ share
ownership equal to the maximum
percentage issued to any initial
recipient of IFQ shares; (3) restriction on
initial eligibility only to owners of Class
1 or Class 2 license holders; (4)
proportionate allocation of initial IFQ
shares based on average annual landings
for 10 consecutive years during 1990–
2004 for Class 1, all years of landings
during 1998–2004 for Class 1 historical
captains, and any 5 years during 1998–
2004 for Class 2; (5) establishment of an
appeals process and a set-aside of a 3–
percent IFQ share to resolve appeals; (6)
restriction on transfers of IFQ shares/
allocations only to those with a valid
commercial reef fish permit during the
first 5 years and to U.S. citizens and
permanent resident aliens thereafter; (7)

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proportionate allocation of commercial
quota adjustments based on percentage
of IFQ share holdings at the time of the
adjustment and phased-in issuance of
IFQ allocations for the 2007 season; and,
(8) provision for IFQ cost recovery fees
to be paid by IFQ allocation holders
who land IFQ red snapper but collected
and submitted to NMFS by registered
IFQ dealers.
The main objectives of the proposed
rule are to address the excess capacity
and derby problems in the commercial
red snapper fishery. The proposed rule
would generally impact two types of
businesses in the Gulf reef fish fishery,
namely, commercial fishing vessels
(including recreational for-hire vessels
with commercial reef fish permits) and
fish dealers.
At present, the Gulf of Mexico (GOM)
commercial reef fish permits are under
a limited access program. Commercial
reef fish permits are renewable every
year subject to the condition the
applicant meets the income
requirement. Also, the commercial red
snapper fishery is presently under a
two-tier license limitation program. A
Class 1 license entitles the holder a trip
limit of 2,000 lb (907.2 kg) of red
snapper while a Class 2 license entitles
the holder a lower trip limit of 200 lb
(90.7 kg). Each type of license is allowed
only one trip per day. The proposed IFQ
program would replace this two-tier
license limitation system in the
commercial red snapper fishery, but the
limited access program for commercial
reef fish permits remains unchanged.
No duplicative, overlapping, or
conflicting Federal rules have been
identified.
There are 1,118 active commercial
reef fish permits and 91 others that are
currently expired but may be renewed
within a year. Thus, a total of 1,209
vessels may be considered to comprise
the universe of commercial harvest
operations in the GOM reef fish fishery.
Of the 1,209 commercial permittees, 136
entities hold red snapper Class 1
licenses and 628 entities hold red
snapper Class 2 licenses. Of the 136
Class 1 licenses, seven have been issued
on the basis of the historical captain
criterion. All original owners of Class 1
historical captain licenses have sold
their licenses. Reported average annual
gross receipts (in 2004 dollars) of
commercial reef fish vessels in the GOM
range from $24,095 for low-volume
vertical line vessels to $116,989 for
high-volume longline vessels which
primarily target grouper. The
corresponding annual net incomes range
from $4,479 for low-volume vertical line
vessels to $28,466 for high-volume
vertical line vessels. Permit records

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indicate there are 17 Class 1 fleet
operations owning a total of 58 licenses.
In 2004, the top three fleet operations
landed a total of 987,532 lb (447,937 kg)
of red snapper, or an average of 329,177
lb (149,312 kg) per fleet operation. At
the 2004 average red snapper ex-vessel
price of $2.83 per pound, the average
pounds landed convert to ex-vessel
revenues of $931,571. No fleet
information is available for Class 2
licenses, but it is reasonable under the
circumstances to assume that if ever a
Class 2 fleet operation exists, it would
generate much less revenues than its
Class 1 counterparts.
There currently exists a permitting
requirement for dealers to buy or sell
reef fish, including red snapper, caught
in the GOM. This permitting
requirement remains under the
proposed IFQ program, but in addition
a red snapper endorsement would be
required of dealers to buy or sell red
snapper. Based on the permits file, there
are 227 dealers possessing permits to
buy and sell reef fish species. However,
based on logbook records, there are 154
reef fish dealers actively buying and
selling red snapper. It is possible,
though, that some of the 227 dealers
may be handling red snapper in one
year but not in another. Dealers in
Florida purchased about $1.8 million of
red snapper, followed by dealers in
Louisiana with purchases of $1.4
million and dealers in Texas with
purchases of $1.3 million. Dealers in
Mississippi purchased $174,000 worth
of red snappers and those in Alabama,
$88,000. These dealers may hold
multiple types of permits, and because
we do not know 100 percent of the
business revenues, it is not possible to
determine what percentage of their
business comes from buying and selling
red snapper.
Average employment information per
reef fish dealer in the GOM is unknown.
Although dealers and processors are not
synonymous entities, a recent study
reported total employment for reef fish
processors in the Southeast at
approximately 700 individuals, both
part and full time. NMFS assumes all
processors must be dealers, yet a dealer
need not be a processor. Further,
processing is a much more labor
intensive operation than dealing.
Therefore, given the employment
estimate for the processing sector, it is
likely the average dealer employment
would be low.
The Small Business Administration
(SBA) defines a business as a small
business if it is independently owned
and operated and not dominant in its
field of operation, and if it has annual
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the case of commercial harvesting
entities or $6.5 million in the case of
for-hire entities, or if it has fewer than
500 employees in the case of fish
processors, or fewer than 100 employees
in the case of fish dealers. Based on the
gross revenue and employment profiles
presented above, all permitted
commercial reef fish vessels (including
fleet operations) and reef fish dealers
affected by the proposed regulations
may be classified as small entities.
The proposed rule would introduce
additional reporting and record-keeping
requirements involving the tracking of
IFQ shares and the corresponding red
snapper landings. An electronic
reporting system is the planned
approach to track IFQ shares and
corresponding red snapper landings.
The reporting burden would mainly fall
on the dealers. An IFQ dealer
endorsement would be required of any
dealer purchasing red snapper. The IFQ
dealer endorsement would be issued at
no cost to those individuals who
possess a valid GOM reef fish dealer
permit and request the endorsement.
Although the current GOM reef fish
dealer permit must be renewed annually
at a cost of $50 for the initial permit
($12.50 for each additional permit), the
IFQ dealer endorsement would remain
valid as long as the individual possesses
a valid GOM reef fish dealer permit,
abides by all reporting and cost recovery
requirements of the IFQ program, and is
not subject to sanctions under 15 CFR
part 904. As an integral part of the
electronic monitoring system, an IFQ
dealer would be required to have access
to computers and the Internet for
inputting, among other data, pounds
and value of red snapper purchased by
the dealer from an IFQ shareholder. If a
dealer does not have current access to
computers and the Internet, he or she
may have to expend approximately
$1,500 for computer equipment and
accessories (one-time cost) and $300
annual cost for Internet access. Dealers
would need some basic computer and
Internet skills to input information for
all red snapper purchases into the IFQ
electronic reporting system. Dealers also
have to remit to NMFS on a quarterly
basis, the cost recovery fees equivalent
to 3 percent of the actual ex-vessel value
of red snapper purchased from IFQ
shareholders/allocation holders.
Although IFQ allocation holders pay
this fee, it is the responsibility of dealers
to collect and remit these fees to NMFS.
In addition to this quarterly remittance,
dealers would be required to submit to
NMFS a year-end report summarizing
all transactions involving the purchase
of red snapper. There is currently no

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available information to determine how
many of the 227 reef fish dealers or of
the current 154 red snapper dealers
have the necessary electronic capability
to participate in the IFQ program.
However, demonstration of this
capability would be necessary for IFQ
program participation by any dealer.
IFQ shareholders/allocation holders
also have to use the electronic reporting
system to report transfer/assignment of
shares and allocation as well as to
monitor their outstanding IFQ shares
and allocations. Similar skills and
equipment needs for dealers also apply
to IFQ shareholders/allocation holders.
There would be 95 IFQ shareholders
based on Class 1 license qualification
and as many as 482 IFQ shareholders
based on Class 2 license qualification.
Over time under the IFQ program, the
number of IFQ shareholders is expected
to decline.
The 764 vessels (136 Class 1 licenses
plus 628 Class 2 licenses) that have
Class 1 or Class 2 licenses comprise 64
percent of all vessels with GOM
commercial reef fish permits. Also, at
least 154, or 68 percent, of the 227
permitted reef fish dealers would be
affected. Therefore, the proposed rule
would affect a substantial number of
small entities.
Because all affected vessel and dealer
operations are small entities, the
proposed rule would not result in
disproportionate impacts where small
entities are placed at a significant
competitive disadvantage to large
entities. Some vessel operations are
relatively larger than others. In
particular, 17 fleet operations account
for as much as 40 percent of the entire
commercial quota for red snapper.
These 17 fleet operations and another 78
single vessel operations would initially
receive about 90 percent of IFQ shares.
The other 482 smaller operations would
receive the rest of the IFQ shares. And
146 Class 2 vessel operations would
likely not receive any initial IFQ shares,
because they have no landings history
during the qualifying period of 1998–
2004 for these licenses.
The proposed rule has varying effects
on the profitability of the affected vessel
operations. Most likely, it has minimal
effects on the profits of the 146 Class 2
vessel operations that have no red
snapper landings. These vessels would
mainly lose their relatively low-cost
entry into the red snapper fishery
should the need arise. Under the
proposed rule, they would have to buy
shares/allocations even if they intend to
fish only on a limited basis. Some of the
482 Class 2 vessel operations that may
have increasingly relied on red snapper
to supplement their overall harvests

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may receive small IFQ shares. They
would either have to buy more shares/
allocations to continue fishing for red
snapper or sell their shares. Either way,
their overall profits may decline, at least
initially, although in selling their IFQ
shares they would receive some
remuneration. The 136 Class 1 vessel
operations and some Class 2 vessel
operations that have relatively large red
snapper landings are expected to benefit
most from the IFQ program. As
discussed in the RIR, an IFQ system is
expected to improve the profitability of
these vessels. This improvement would
generally take time, since fishermen
would have to adjust their operations in
order to achieve the most profitable
position. Such adjustment may involve
consolidation of multiple vessel
operations to lower costs, scheduling of
harvests to take advantage of market and
weather conditions, negotiation with
purchasers to strike a long-term deal at
relatively stable prices, or some other
arrangements that take advantage of a
relatively certain share of a season’s
quota at the start of the season. Some
entities may be successful in making
adjustments while others may not. For
those that cannot, there is always the
option to sell their shares. They may
leave the red snapper fishery, but would
receive some remuneration for doing so.
The extent to which the IFQ
monitoring system, including the
collection and remittance of the cost
recovery fees, would affect dealers’
profitability cannot be determined at
this time. For the relatively established
dealers, the monetary cost requirement
under an electronic monitoring system
is probably small, especially if they
already have computer systems in place.
Smaller operations, however, may
totally stay out of the red snapper
fishery. On top of the cost the dealer
defrays to collect and remit cost
recovery fees, participating dealers are
also exposed to possibilities of
temporarily or permanently losing their
red snapper business in the event there
are problems with their collection and/
or remittance of the full amount of cost
recovery fees. To mitigate this potential
adverse impact, dealers are granted a 30day grace period from the end of the
quarter to reconcile their cost recovery
fee accounts. Arrears in cost recovery
fees not settled within the 30-day grace
period would lead to suspension of the
dealer red snapper endorsement. In this
eventuality, dealers are granted another
30 days to settle their accounts before
their dealer endorsement is annulled.
Note, however, that payment of arrears
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endorsement within a certain period of
time.
This amendment considered several
alternatives to the proposed rule. An
alternative to the IFQ program is the
current limited access and license
limitation system. Under this system,
overcapacity and derby effects have
substantially constrained the
profitability of the commercial harvest
industry. The proposed IFQ program is
expected to effectively address these
major issues/problems in the fishery. To
partly cushion the impacts of
unintended IFQ allocation overruns that
may result in penalties, IFQ
shareholders are allowed to land up to
10 percent more than their remaining
allocations for the fishing year’s last
fishing trip without having to purchase
additional allocation. However, any
overages would be deducted from the
next year’s allocation associated with
their IFQ shares.
There are two other alternatives with
respect to the duration of the IFQ
program. One specifies no duration
while the other imposes a term limit on
the program. The former has similar
effects as the proposed rule, but it does
not contain a mandatory evaluation of
the program every 5 years. A sunset
provision, as in the latter alternative,
offers a lower likelihood for the IFQ
program to achieve its intended
objectives. Also, it would introduce
uncertainties into the program due to
potential changes in the ‘‘rules of the
game.’’
With respect to an ownership cap,
two other alternatives have been
considered. One places no cap on
ownership of IFQ shares while the other
places a cap ranging from 2 to 15
percent of the commercial quota. The
first alternative provides a fertile ground
for consolidation of IFQ shares, but it
can also lead to concentration of
ownership to a select few at the expense
of eliminating historically small-scale
operations in the fishery. The second
alternative may be too liberal (e.g., 15
percent) as to lead to over-consolidation
or too restrictive (e.g., 2 percent) as to
penalize the more efficient operations.
Two other alternatives have been
considered on the issue of initially
eligible persons. The first one does not
specify persons eligible to receive initial
IFQ shares, and, thus, does not provide
guidance for initially allocating IFQ
shares. The second restricts initial
eligibility to Class 1 license holders.
This is too restrictive as to disallow at
least 482 Class 2 license holders from
continued participation in the fishery at
the start of the IFQ program.
Regarding allocating initial IFQ
shares, two other alternatives have been

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50019

considered. The first does not specify a
methodology for allocating initial IFQ
shares, and, thus, does not provide
guidance for allocating IFQ shares to
eligible participants. The second
allocates initial IFQ shares equally
among all eligible participants. This
alternative would penalize the
highliners and reward the small-scale
operations in the fishery. There are
more participants who would benefit
from this alternative, but the magnitude
of adverse impacts on at least 136
operations would be relatively large.
Regarding the appeals process, three
other alternatives have been considered.
The first does not establish an appeals
process, and, thus, would not provide
fishermen an avenue to contest landings
information used by NMFS to determine
their IFQ shares. The second establishes
an appeals board composed of state
directors/designees who would advise
the RA on appeals. The third establishes
an advisory panel composed of IFQ
shareholders. The proposed rule is
simple and more straightforward than
any of the alternatives that establish an
appeals board.
There are five other alternatives
regarding the transfer of IFQ shares/
allocations. The first provides no limit
on transfer; the second limits transfers
only to those with valid commercial reef
fish permits; the third limits transfers
only to IFQ shareholders; the fourth
allows transfers to U.S. citizens and
permanent resident aliens; and, the fifth
limits transfers only to IFQ shareholders
during the first five years of the IFQ
program and those with valid
commercial reef fish permits thereafter.
With the exception of the first
alternative, all others would tend to
limit the price an IFQ seller gets, so the
resulting IFQ prices would not capture
the true value of the resource. In
addition, such limitations would
constrain the entry of potentially more
efficient producers. The proposed rule
would be less restrictive than these
alternatives but still would be more
restrictive than the first alternative that
does not impose limits on transfer.
However, the proposed rule addresses
concerns relative to the preservation of
the historical and current participation
in the fishery.
On the issue of allocating adjustments
in the commercial quota, three other
alternatives have been considered. The
first does not specify a method for
allocating adjustments, so it does not
provide adequate guidance for
allocating quota changes. The second
would allocate quota changes equally
among IFQ share holders, and the third
would allocate quota changes equally
for 50 percent of the change and

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proportionately for the other 50 percent.
The second alternative would provide
smaller operations larger benefits with
quota increases and also larger losses
with quota decreases. The third
alternative would favor smaller
operations at the expense of larger
operations. One should note, however,
that both large and small vessel
operations have been considered small
entities for SBA purposes.
The proposed rule regarding a cost
recovery fee is intended to abide by the
§ 304(d)(2)(A) provision of the
Magnuson-Stevens Act. One other
alternative considered in this respect is
not to impose a fee, which would not be
in compliance with the noted provision.
Another alternative considered is
similar to the proposed rule, except that
collection and submission of fees reside
on the IFQ holders and not on the
dealers. Under this alternative and the
proposed rule, a small entity bears the
cost of collecting and remitting the fees.
The proposed rule, however, affords a
better accounting control for the
government. Copies of the RIR and IRFA
are available (see ADDRESSES).
This proposed rule contains
collection-of-information requirements
subject to the Paperwork Reduction Act
(PRA). The collection-of-information
requirements and associated public
reporting burdens, in minutes, are as
follows: (1) Dealer account activation--5;
(2) Dealer transaction report--7; (3)
Shareholder account activation--5; (4)
Allocation holder account activation-10; (5) Advance notification of landing-3; (6) Transfer of share--15; and (7)
Transfer of allocation--5. These
requirements have been submitted to
OMB for approval. These estimates of
the public reporting burdens include the
time for reviewing instructions,
searching existing data sources,
gathering and maintaining the data
needed, and completing and reviewing
the collections of information. Public
comment is sought regarding: Whether
these proposed collections of
information are necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
the accuracy of the burden estimates;
ways to enhance the quality, utility, and
clarity of the information to be
collected; and ways to minimize the
burden of the collections of information,
including through the use of automated
collection techniques or other forms of
information technology. Send comments
regarding the burden estimates or any
other aspect of the collection-ofinformation requirements, including
suggestions for reducing the burden, to
NMFS and to OMB (see ADDRESSES).

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Notwithstanding any other provision
of law, no person is required to respond
to, nor shall a person be subject to a
penalty for failure to comply with, a
collection of information subject to the
requirements of the PRA, unless that
collection of information displays a
currently valid OMB control number.

TABLE 1—FMPS IMPLEMENTED UNDER
PART 622—Continued
FMP title
*

*

Responsible fishery management
council(s)
*

Geographical
area

*

*

List of Subjects in 50 CFR Part 622
5 Regulated area includes adjoining state
waters for Gulf red snapper harvested or possessed by a person aboard a vessel with a
Gulf red snapper IFQ vessel endorsement or
possessed by a dealer with a Gulf red snapper IFQ dealer endorsement.

Fisheries, Fishing, Puerto Rico,
Reporting and recordkeeping
requirements, Virgin Islands.
Dated: August 18, 2006.
Samuel D. Rauch III,
Deputy Assistant Administrator for
Regulatory Programs, National Marine
Fisheries Service.

3. In § 622.2, definitions of ‘‘Actual
ex-vessel value’’ and ‘‘IFQ’’ are added in
alphabetical order to read as follows:
§ 622.2

For the reasons set out in the
preamble, 50 CFR part 622 is proposed
to be amended as follows:
PART 622—FISHERIES OF THE
CARIBBEAN, GULF, AND SOUTH
ATLANTIC
1. The authority citation for part 622
continues to read as follows:
Authority: 16 U.S.C. 1801 et seq.

2. In § 622.1, revise paragraph (a) and
the first sentence in paragraph (b), and
Table 1 entry ‘‘FMP for the Reef Fish
Resources of the Gulf of Mexico’’, and
add footnote 5 to read as follows:
§ 622.1

Purpose and scope.

(a) The purpose of this part is to
implement the FMPs prepared under
the Magnuson-Stevens Act by the
CFMC, GMFMC, and/or SAFMC listed
in Table 1 of this section.
(b) This part governs conservation and
management of species included in the
FMPs in or from the Caribbean, Gulf,
Mid-Atlantic, South Atlantic, or
Atlantic EEZ, unless otherwise
specified, as indicated in Table 1 of this
section. * * *

TABLE 1—FMPS IMPLEMENTED UNDER
PART 622
FMP title
*

*

FMP for
the Reef
Fish Resources
of the
Gulf of
Mexico

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Responsible fishery management
council(s)
*

*

GMFMC

Fmt 4702

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Geographical
area
*

Gulf.1,5

Definitions and acronyms.

*

*
*
*
*
Actual ex-vessel value means the total
monetary sale amount a fisherman
receives for IFQ landings from a
registered IFQ dealer.
*
*
*
*
*
IFQ means individual fishing quota.
*
*
*
*
*
4. Section 622.4 is amended by:
A. Adding introductory text to the
section.
B. Adding a new sentence after the
first sentence of paragraph (a)(2)(v).
C. Revising paragraphs (a)(2)(ix),
(a)(4), the first sentence of paragraph (d),
paragraph (g)(1), and the first sentence
of paragraph (h)(1).
D. Removing and reserving paragraph
(p).
The additions and revisions read as
follows:
§ 622.4

Permits and fees.

Paragraphs (p)(1) through (3) and
(p)(5) through (6) of this section will no
longer be in effect as of January 1, 2007,
and paragraph (p)(4) of this section will
no longer be in effect as of [DATE OF
PUBLICATION OF THE FINAL RULE].
(a) * * *
(2) * * *
(v) * * * See paragraph (a)(2)(ix) of
this section regarding an additional IFQ
vessel endorsement required to fish for,
possess, or land Gulf red snapper. * * *
*
*
*
*
*
(ix) Gulf red snapper IFQ vessel
endorsement. For a person aboard a
vessel, for which a commercial vessel
permit for Gulf reef fish has been issued,
to fish for, possess, or land Gulf red
snapper, regardless of where harvested
or possessed, a Gulf red snapper IFQ
vessel endorsement must have been
issued to the vessel and must be on
board. As a condition of the IFQ vessel
endorsement issued under this

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paragraph (a)(2)(ix), a person aboard
such vessel must comply with the
requirements of § 622.16 regardless of
where red snapper are harvested or
possessed. An owner of a vessel with a
commercial vessel permit for Gulf reef
fish can download an IFQ vessel
endorsement from the NMFS IFQ
website at ifq.sero.nmfs.noaa.gov. If
such owner does not have an IFQ online
account, the owner must first contact
IFQ Customer Service at 1–866–425–
7627 to obtain information necessary to
access the IFQ website and establish an
IFQ online account. There is no fee for
obtaining this endorsement. The vessel
endorsement remains valid as long as
the vessel permit remains valid and the
vessel owner is in compliance with all
Gulf reef fish and Gulf red snapper IFQ
reporting requirements, has paid all IFQ
fees required under paragraph (c)(2) of
this section, and is not subject to
sanctions under 15 CFR part 904. The
endorsement is not transferable. See
§ 622.16 regarding other provisions
pertinent to the Gulf red snapper IFQ
system.
*
*
*
*
*
(4) Dealer permits, endorsements, and
conditions —(i) Permits. For a dealer to
receive Gulf reef fish, golden crab
harvested from the South Atlantic EEZ,
South Atlantic snapper-grouper, rock
shrimp harvested from the South
Atlantic EEZ, dolphin or wahoo
harvested from the Atlantic EEZ, or
wreckfish, a dealer permit for Gulf reef
fish, golden crab, South Atlantic
snapper-grouper, rock shrimp, Atlantic
dolphin and wahoo, or wreckfish,
respectively, must be issued to the
dealer.
(ii) Gulf red snapper IFQ dealer
endorsement. In addition to the
requirement for a dealer permit for Gulf
reef fish as specified in paragraph
(a)(4)(i) of this section, for a dealer to
receive Gulf red snapper subject to the
Gulf red snapper IFQ program, as
specified in § 622.16(a)(1), or for a
person aboard a vessel with a Gulf red
snapper IFQ vessel endorsement to sell
such red snapper directly to an entity
other than a dealer, such persons must
also have a Gulf red snapper IFQ dealer
endorsement. A dealer with a Gulf reef
fish dealer permit can download a Gulf
red snapper IFQ dealer endorsement
from the NMFS IFQ website at
ifq.sero.nmfs.noaa.gov. If such persons
do not have an IFQ online account, they
must first contact IFQ Customer Service
at 1–866–425–7627 to obtain
information necessary to access the IFQ
website and establish an IFQ online
account. There is no fee for obtaining
this endorsement. The endorsement

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remains valid as long as the Gulf reef
fish dealer permit remains valid and the
dealer is in compliance with all Gulf
reef fish and Gulf red snapper IFQ
reporting requirements, has paid all IFQ
fees required under paragraph (c)(2) of
this section, and is not subject to
sanctions under 15 CFR part 904. The
endorsement is not transferable. See
§ 622.16 regarding other provisions
pertinent to the Gulf red snapper IFQ
system.
(iii) State license and facility
requirements. To obtain a dealer permit
or endorsement, the applicant must
have a valid state wholesaler’s license in
the state(s) where the dealer operates, if
required by such state(s), and must have
a physical facility at a fixed location in
such state(s).
*
*
*
*
*
(d) * * * Unless specified otherwise,
a fee is charged for each application for
a permit, license, or endorsement
submitted under this section, for each
request for transfer or replacement of
such permit, license, or endorsement,
and for each fish trap or sea bass pot
identification tag required under
§ 622.6(b)(1)(i)(B). * * *
*
*
*
*
*
(g) * * *
(1) Vessel permits, licenses, and
endorsements and dealer permits. A
vessel permit, license, or endorsement
or a dealer permit or endorsement
issued under this section is not
transferable or assignable, except as
provided in paragraph (m) of this
section for a commercial vessel permit
for Gulf reef fish, in paragraph (n) of this
section for a fish trap endorsement, in
paragraph (o) of this section for a king
mackerel gillnet permit, in paragraph (q)
of this section for a commercial vessel
permit for king mackerel, in paragraph
(r) of this section for a charter vessel/
headboat permit for Gulf coastal
migratory pelagic fish or Gulf reef fish,
in paragraph (s) of this section for a
commercial vessel moratorium permit
for Gulf shrimp, in § 622.17(c) for a
commercial vessel permit for golden
crab, in § 622.18(e) for a commercial
vessel permit for South Atlantic
snapper-grouper, or in § 622.19(e) for a
commercial vessel permit for South
Atlantic rock shrimp. A person who
acquires a vessel or dealership who
desires to conduct activities for which a
permit, license, or endorsement is
required must apply for a permit,
license, or endorsement in accordance
with the provisions of this section and
other applicable sections of this part. If
the acquired vessel or dealership is
currently permitted, the application
must be accompanied by the original

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50021

permit and a copy of a signed bill of sale
or equivalent acquisition papers. In
those cases where a permit, license, or
endorsement is transferable, the seller
must sign the back of the permit,
license, or endorsement and have the
signed transfer document notarized.
*
*
*
*
*
(h) * * *
(1) * * * Unless specified otherwise,
a vessel owner or dealer who has been
issued a permit, license, or endorsement
under this section must renew such
permit, license, or endorsement on an
annual basis.
*
*
*
*
*
5. In § 622.7, paragraphs (gg) and (hh)
are added to read as follows:
§ 622.7

Prohibitions.

*

*
*
*
*
(gg) Fail to comply with any provision
related to the Gulf red snapper IFQ
program as specified in § 622.16.
(hh) Falsify any information required
to be submitted regarding the Gulf red
snapper IFQ program as specified in
§ 622.16.
6. The stay of § 622.16 is lifted and
the section is revised to read as follows:
§ 622.16 Gulf red snapper individual
fishing quota (IFQ) program.

(a) General. This section establishes
an IFQ program for the commercial
fishery for Gulf red snapper. Under the
IFQ program, the RA initially will
assign eligible participants IFQ shares
equivalent to a percentage of the annual
commercial red snapper quota, based on
their applicable historical landings.
Shares determine the amount of Gulf
red snapper IFQ allocation, in pounds
gutted weight, a shareholder is initially
authorized to possess, land, or sell in a
given calendar year. Shares and annual
IFQ allocation are transferable. See
§ 622.4(a)(2)(ix) regarding a requirement
for a vessel landing red snapper subject
to this IFQ program to have a Gulf red
snapper IFQ vessel endorsement. See
§ 622.4(a)(4)(ii) regarding a requirement
for a Gulf red snapper IFQ dealer
endorsement. Details regarding
eligibility, applicable landings history,
account setup and transaction
requirements, constraints on
transferability, and other provisions of
this IFQ system are provided in the
following paragraphs of this section.
(1) Scope. The provisions of this
section apply to Gulf red snapper in or
from the Gulf EEZ and, for a person
aboard a vessel with a Gulf red snapper
IFQ vessel endorsement as required by
§ 622.4(a)(2)(ix) or for a person with a
Gulf red snapper IFQ dealer
endorsement as required by
§ 622.4(a)(4)(ii), these provisions apply

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to Gulf red snapper regardless of where
harvested or possessed.
(2) Duration. The IFQ program
established by this section will remain
in effect until it is modified or
terminated; however, the program will
be evaluated by the Gulf of Mexico
Fishery Management Council every 5
years.
(3) Electronic system requirements. (i)
The administrative functions associated
with this IFQ program, e.g., registration
and account setup, landing transactions,
and transfers, are designed to be
accomplished online; therefore, a
participant must have access to a
computer and Internet access and must
set up an appropriate IFQ online
account to participate. Assistance with
online functions is available from IFQ
Customer Service by calling 1–866–425–
7627 Monday through Friday between 8
a.m. and 4:30 p.m. eastern time.
(ii) The RA will mail initial
shareholders and dealers with Gulf reef
fish dealer permits information and
instructions pertinent to setting up an
IFQ online account. Other eligible
persons who desire to become IFQ
participants by purchasing IFQ shares or
allocation or by obtaining a Gulf red
snapper IFQ dealer endorsement must
first contact IFQ Customer Service at 1–
866–425–7627 to obtain information
necessary to set up the required IFQ
online account. Each IFQ participant
must monitor his/her online account
and all associated messages and comply
with all IFQ online reporting
requirements.
(iii) During catastrophic conditions
only, the IFQ program provides for use
of paper-based components for basic
required functions as a backup. The RA
will determine when catastrophic
conditions exist, the duration of the
catastrophic conditions, and which
participants or geographic areas are
deemed affected by the catastrophic
conditions. The RA will provide timely
notice to affected participants via
publication of notification in the
Federal Register, NOAA weather radio,
fishery bulletins, and other appropriate
means and will authorize the affected
participants’ use of paper-based
components for the duration of the
catastrophic conditions. NMFS will
provide each IFQ dealer the necessary
paper forms, sequentially coded, and
instructions for submission of the forms
to the RA. The paper forms will also be
available from the RA. The program
functions available to participants or
geographic areas deemed affected by
catastrophic conditions will be limited
under the paper-based system. There
will be no mechanism for transfers of
IFQ shares or allocation under the

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paper-based system in effect during
catastrophic conditions. Assistance in
complying with the requirements of the
paper-based system will be available via
IFQ Customer Service 1–866–425–7627
Monday through Friday between 8 a.m.
and 4:30 p.m. eastern time.
(b) Procedures for initial
implementation—(1) Determination of
eligibility for initial IFQ shares. To be
eligible as an initial IFQ shareholder a
person must own a Class 1 or Class 2
Gulf red snapper license as of the date
of publication of the final rule
implementing this IFQ system. For the
purposes of this paragraph, an owner of
a license is defined as the person who
controls transfer of the license and is
listed as the qualifier on the face of the
license. NMFS’ permit records are the
sole basis for determining eligibility
based on Class 1 or Class 2 license
history. No more than one initial
eligibility will be granted based upon a
given Class 1 or Class 2 license.
(2) Calculation of initial IFQ shares
and allocation—(i) IFQ shares. The RA
will calculate initial IFQ shares based
on the highest average annual landings
of Gulf red snapper associated with each
shareholder’s current Class 1 or Class 2
license during the applicable landings
history. The applicable landings history
for a Class 1 license owner whose
license was not issued based on
historical captain status includes any 10
consecutive years of landings data from
1990 through 2004; for a Class 1 license
owner whose license was issued on the
basis of historical captain status, all
years of landings data from 1998
through 2004; and for a Class 2 license
holder, any 5 years of landings data
from 1998 through 2004. All landings
associated with a current Class 1 or
Class 2 license for the applicable
landings history, including those
reported by a person who held the
license prior to the current license
owner, will be attributed to the current
license owner. Only legal landings
reported in compliance with applicable
state and Federal regulations will be
accepted. Each shareholder’s initial
share is derived by dividing the
shareholder’s highest average annual
landings during the applicable landings
history by the sum of the highest
average annual landings of all
shareholders during the respective
applicable landings histories. Initial IFQ
shares will not be issued in
denominations of less than 0.0001
percent.
(ii) Initial share set-aside to
accommodate resolution of appeals.
During the first year of implementation
of this IFQ program only, the RA will
reserve a 3–percent IFQ share, prior to

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the initial distribution of shares, to
accommodate resolution of appeals, if
necessary. Any portion of the 3–percent
share remaining after the appeals
process is completed will be distributed
as soon as possible among initial
shareholders in direct proportion to the
percentage share each was initially
allocated. If resolution of appeals
requires more than a 3–percent share,
the shares of all initial shareholders
would be reduced accordingly in direct
proportion to the percentage share each
was initially allocated.
(iii) IFQ allocation. IFQ allocation is
the amount of Gulf red snapper, in
pounds gutted weight, an IFQ
shareholder or allocation holder is
authorized to possess, land, or sell
during a given fishing year. IFQ
allocation is derived at the beginning of
each year by multiplying a shareholder’s
IFQ share times the annual commercial
quota for Gulf red snapper.
(iv) Special procedure for initial
calculation of 2007 IFQ allocations.
Because of uncertainty regarding the
2007 commercial quota for Gulf red
snapper and the timing of its
implementation and to avoid the
possibility of having to revoke some
proportion of initial allocation if the
quota was subsequently reduced, the RA
may initially calculate the 2007 IFQ
allocations based on a proxy
commercial quota. If a commercial
quota adjustment for Gulf red snapper
has not been submitted for review by
the Secretary of Commerce in time for
calculation of 2007 IFQ allocations, the
RA will initially calculate 2007
allocations based on a proxy
commercial quota of 2.55 million lb
(1.16 million kg). Alternatively, if a
commercial quota adjustment for Gulf
red snapper has been submitted for
review by the Secretary of Commerce in
time to allow calculation of 2007
allocations, the RA will base 2007 IFQ
allocations on the proposed quota.
Under either scenario, as soon as the
actual 2007 commercial quota is final,
but no later than July 1, 2007, the RA
will adjust the 2007 IFQ allocations, as
necessary, consistent with the actual
quota.
(3) Shareholder notification regarding
landings history, initial determination of
IFQ shares and allocations, and IFQ
account setup information. (i) As soon
as possible after the date of publication
of the final rule implementing this IFQ
program, the RA will mail each Class 1
or Class 2 red snapper license owner
information pertinent to the IFQ
program. This information will
include—
(A) Gulf red snapper landings
associated with the owner’s license

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during each year of the applicable
landings history;
(B) The highest average annual red
snapper landings based on the owner’s
applicable landings history;
(C) The owner’s initial IFQ share
based on the highest average annual
landings associated with the owner’s
applicable landings history;
(D) The initial IFQ allocation;
(E) Instructions for appeals;
(F) General instructions regarding
procedures related to the IFQ online
system, including how to set up an
online account; and
(G) A user identification number—the
personal identification number (PIN)
will be provided in a subsequent letter.
(ii) The RA will provide this
information, via certified mail return
receipt requested, to the license owner’s
address of record as listed in NMFS’
permit files. A license owner who does
not receive such notification from the
RA within 30 days after the date of
publication of the final rule
implementing this IFQ system must
contact the RA to clarify eligibility
status and landings and initial share
information.
(iii) The initial share information
provided by the RA is based on the
highest average landings associated with
the owner’s applicable landings history;
however, a license owner may select a
different set of years of landings,
consistent with the owner’s applicable
landings history, for the calculation of
the initial IFQ share. The license owner
must submit that information to the RA
postmarked no later than 30 days after
the date of publication of the final rule
implementing this IFQ system. If
alternative years, consistent with the
applicable landings history, are
selected, revised information regarding
shares and allocations will be posted on
the online IFQ accounts no later than
January 1, 2007. A license owner who
disagrees with the landings or eligibility
information provided by the RA may
appeal the RA’s initial determinations.
(4) Procedure for appealing IFQ
eligibility and/or landings information.
The only items subject to appeal under
this IFQ system are initial eligibility for
IFQ shares based on ownership of a
Class 1 or Class 2 license, the accuracy
of the amount of landings, and correct
assignment of landings to the license
owner. Appeals based on hardship
factors will not be considered. Appeals
must be submitted to the RA
postmarked no later than 90 days after
the effective date of the final rule
implementing this IFQ system and must
contain documentation supporting the
basis for the appeal. The RA will review
all appeals, render final decisions on the

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appeals, and advise the appellant of the
final decision.
(i) Eligibility appeals. NMFS’ records
of Class 1 and Class 2 licenses are the
sole basis for determining ownership of
such licenses. A person who believes
he/she meets the permit eligibility
criteria based on ownership of a vessel
under a different name, as may have
occurred when ownership has changed
from individual to corporate or vice
versa, must document his/her
continuity of ownership.
(ii) Landings appeals. Landings data
for 1990 through 1992 are not subject to
appeal. Appeals regarding landings data
for 1993 through 2004 will be based
solely on NMFS’ logbook records. If
NMFS’ logbooks are not available, state
landings records or data that were
submitted in compliance with
applicable Federal and state regulations,
on or before June 30, 2005, can be used.
(5) Dealer notification and IFQ
account setup information. As soon as
possible after the date of publication of
the final rule implementing this IFQ
program, the RA will mail each dealer
with a valid Gulf reef fish dealer permit
information pertinent to the IFQ
program. Any such dealer is eligible to
receive a red snapper IFQ dealer
endorsement which can be downloaded
from the IFQ website
atifq.sero.nmfs.noaa.gov once an IFQ
account has been established. The
information package will include
general information about the IFQ
program and instructions for accessing
the IFQ website and establishing an IFQ
dealer account.
(c) IFQ operations and requirements—
(1) IFQ Landing and transaction
requirements. (i) Gulf red snapper
subject to this IFQ program can only be
possessed or landed by a vessel with a
Gulf red snapper IFQ vessel
endorsement. Such red snapper can
only be received by a dealer with a Gulf
red snapper IFQ dealer endorsement.
The person landing the red snapper
must hold or be assigned IFQ allocation
at least equal to the pounds of red
snapper landed, except as provided in
paragraph (c)(1)(ii) of this section.
(ii) An IFQ shareholder or his agent or
employee assigned to land the
shareholder’s allocation can legally
exceed, by up to 10 percent, the
shareholder’s allocation remaining on
the last fishing trip of the fishing year.
Any such overage will be deducted from
the shareholder’s allocation for the
subsequent fishing year.
(iii) The dealer is responsible for
completing a landing transaction report
for each landing and sale of Gulf red
snapper via the IFQ website at
ifq.sero.nmfs.noaa.gov at the time of the

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50023

transaction in accordance with reporting
form and instructions provided on the
website. This report includes, but is not
limited to, date, time, and location of
transaction; weight and actual ex-vessel
value of red snapper landed and sold;
and information necessary to identify
the fisherman, vessel, and dealer
involved in the transaction. The
fisherman must validate the dealer
transaction report by entering his
unique PIN number when the
transaction report is submitted. After
the dealer submits the report and the
information has been verified, the
website will send a transaction approval
code to the dealer and the allocation
holder.
(2) IFQ cost recovery fees. As required
by section 304(d)(2)(A)(i) of the
Magnuson-Stevens Act, the RA will
collect a fee to recover the actual costs
directly related to the management and
enforcement of the Gulf red snapper IFQ
program. The fee cannot exceed 3
percent of the ex-vessel value of Gulf
red snapper landed under the IFQ
program. Such fees will be deposited in
the Limited Access System
Administration Fund (LASAF). Initially,
the fee will be 3 percent of the actual
ex-vessel value of Gulf red snapper
landed under the IFQ program, as
documented in each landings
transaction report. The RA will review
the cost recovery fee annually to
determine if adjustment is warranted.
Factors considered in the review
include the catch subject to the IFQ cost
recovery, projected ex-vessel value of
the catch, costs directly related to the
management and enforcement of the
IFQ program, the projected IFQ balance
in the LASAF, and expected nonpayment of fee liabilities. If the RA
determines that a fee adjustment is
warranted, the RA will publish a
notification of the fee adjustment in the
Federal Register.
(i) Payment responsibility. The IFQ
allocation holder specified in the
documented red snapper IFQ landing
transaction report is responsible for
payment of the applicable cost recovery
fees.
(ii) Collection and submission
responsibility. A dealer who receives
Gulf red snapper subject to the IFQ
program is responsible for collecting the
applicable cost recovery fee for each IFQ
landing from the IFQ allocation holder
specified in the IFQ landing transaction
report. Such dealer is responsible for
submitting all applicable cost recovery
fees to NMFS on a quarterly basis. The
fees are due and must be submitted,
using pay.gov via the IFQ system, no
later than 30 days after the end of each
calendar-year quarter; however, fees

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may be submitted at any time before
that deadline. Fees not received by the
deadline are delinquent.
(iii) Fee payment procedure. For each
IFQ dealer, the IFQ system will post, on
individual message boards, an end-ofquarter statement of cost recovery fees
that are due. The dealer is responsible
for submitting the cost recovery fee
payments using pay.gov via the IFQ
system. Authorized payments methods
are credit card, debit card, or automated
clearing house (ACH). Payment by
check will be authorized only if the RA
has determined that the geographical
area or an individual(s) is affected by
catastrophic conditions.
(iv) Fee reconciliation process—
delinquent fees. The following
procedures apply to an IFQ dealer
whose cost recovery fees are delinquent.
(A) On or about the 31st day after the
end of each calendar-year quarter, the
RA will send the dealer an electronic
message via the IFQ website and official
notice via mail indicating the applicable
fees are delinquent; the dealer’s IFQ
account has been suspended pending
payment of the applicable fees; and
notice of intent to annul the dealer’s IFQ
endorsement.
(B) On or about the 61st day after the
end of each calendar-year quarter, the
RA will mail to a dealer whose cost
recovery fee payment remains
delinquent, official notice documenting
the dealer’s IFQ endorsement has been
annulled.
(C) On or about the 91st day after the
end of each calendar-year quarter, the
RA will refer any delinquent IFQ dealer
cost recovery fees to the appropriate
authorities for collection of payment.
(v) Annual IFQ dealer ex-vessel value
report. The IFQ online system will
generate an annual IFQ Dealer Ex-Vessel
Value Report for each IFQ dealer. The
report will include quarterly and annual
information regarding the amount and
value of IFQ red snapper received by the
dealer, the associated cost recovery fees,
and the status of those fees. The dealer’s
acceptance of this report constitutes
compliance with the annual dealer IFQ
reporting requirement.
(3) Measures to enhance IFQ program
enforceability—(i) Advance notice of
landing. The owner or operator of a
vessel landing IFQ red snapper is
responsible for calling NMFS Office of
Law Enforcement at 1–866–425–7627 at
least 3 hours in advance of landing to
report the time and location of landing
and the name and address of the IFQ
dealer where the red snapper are to be
received.
(ii) Time restriction on landing and
offloading. IFQ red snapper may be

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landed and offloaded only between 6
a.m. and 6 p.m., local time.
(iii) Restrictions on transfer of IFQ red
snapper. At-sea or dockside transfer of
IFQ red snapper from one vessel to
another vessel is prohibited.
(iv) Requirement for transaction
approval code. Possession of IFQ red
snapper from the time of transfer from
a vessel through possession by a dealer
is prohibited unless the IFQ red snapper
are accompanied by a transaction
approval code verifying a legal
transaction of the amount of IFQ red
snapper in possession.
(4) Transfer of IFQ shares and
allocation. Through the date 5 years
after the effective date of the final rule
implementing this IFQ program, IFQ
shares and allocations can be transferred
only to a person who holds a valid
commercial vessel permit for Gulf reef
fish; thereafter, IFQ shares and
allocations can be transferred to any
U.S. citizen or permanent resident alien.
However, a valid commercial permit for
Gulf reef fish, a Gulf red snapper IFQ
vessel endorsement, and Gulf red
snapper IFQ allocation are required to
possess, land or sell Gulf red snapper
subject to this IFQ program.
(i) Share transfers. Share transfers are
permanent, i.e., they remain in effect
until subsequently transferred. Transfer
of shares will result in the
corresponding allocation being
automatically transferred to the person
receiving the transferred share
beginning with the fishing year
following the year the transfer occurred.
However, within the fishing year the
share transfer occurs, transfer of shares
and associated allocation are
independent--unless the associated
allocation is transferred separately, it
remains with the transferor for the
duration of that fishing year. A share
transfer transaction that remains in
pending status, i.e., has not been
completed and verified with a
transaction approval code, after 30 days
from the date the shareholder initiated
the transfer will be cancelled, and the
pending shares will be re-credited to the
shareholder who initiated the transfer.
(ii) Share transfer procedures. A
shareholder must initiate the request for
the RA to transfer IFQ shares by using
the online Gulf red snapper IFQ website
at ifq.sero.nmfs.noaa.gov. Following the
instructions provided on the website,
the shareholder must enter pertinent
information regarding the transfer
request including, but not limited to,
amount of shares to be transferred,
which must be a minimum of 0.0001
percent; name of the eligible transferee;
and the value of the transferred shares.
For the first 5 years this IFQ program is

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in effect, an eligible transferee is a
person who has a valid commercial
vessel permit for Gulf reef fish; is in
compliance with all reporting
requirements for the Gulf reef fish
fishery and the red snapper IFQ
program; is not subject to sanctions
under 15 CFR part 904; and who would
not be in violation of the share cap as
specified in paragraph (c)(6) of this
section. Thereafter, share transferee
eligibility will be extended to include
U.S. citizens and permanent resident
aliens who are otherwise in compliance
with the provisions of this section.
NMFS will evaluate and verify the
information entered. If the information
is not accepted, NMFS will send the
shareholder an electronic message
explaining the reason(s). If the
information is accepted, NMFS will
send the shareholder an initial
transaction approval code and make an
application for share transfer available
for downloading and printing. The
shareholder and eligible transferee must
complete the application, have their
signatures notarized, and mail the
signed application to the RA at least 30
days prior to the date on which the
applicant desires to have the transfer
effective. The signed application must
be received by the RA prior to December
1. See paragraph (c)(4)(v) of this section
regarding a prohibition on transfer
during December of each year. If the RA
approves the application for transfer,
the online system will send the
shareholder and the transferee an
electronic message acknowledging the
approval; a transfer is effective upon
receipt of the message. The adjusted
shares resulting from a transfer may be
viewed online by each shareholder. If
the RA does not approve the transfer
application, the RA will return the
application to the shareholder with an
explanation and instructions for
correcting any deficiencies.
(iii) Allocation transfers. An
allocation transfer is valid only for the
remainder of the fishing year in which
it occurs; it does not carry over to the
subsequent fishing year. Any allocation
that is unused at the end of the fishing
year is void.
(iv) Allocation transfer procedures.
Unlike share transfers which require a
notarized application for transfer,
allocation transfers can be accomplished
online via the red snapper IFQ website.
An IFQ allocation holder can initiate an
allocation transfer by logging on to the
red snapper IFQ website at
ifq.sero.nmfs.noaa.gov, entering the
required information, including but not
limited to, name of an eligible transferee
and amount of IFQ allocation to be
transferred and price, and submitting

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the transfer electronically. If the transfer
is approved, the website will provide a
transaction approval code to the
transferor and transferee confirming the
transaction.
(v) Prohibition of transfer of shares
during December each year. No IFQ
shares may be transferred during
December of each year. This period is
necessary to provide the RA sufficient
time to reconcile IFQ accounts, adjust
allocations for the upcoming year if the
commercial quota for Gulf red snapper
has changed, and update shares and
allocations for the upcoming fishing
year.
(5) Fleet management and assignment
of IFQ allocation. An IFQ shareholder or
IFQ allocation holder who owns more
than one vessel with a valid Gulf reef
fish vessel permit and a valid Gulf red
snapper IFQ vessel endorsement may
assign IFQ allocation to a person aboard
such vessel and provide that person the
IFQ account information necessary to
conduct landing transactions.
(6) IFQ share cap. No person,
including a corporation or other entity,
may individually or collectively hold
IFQ shares in excess of the maximum
share initially issued to a person for the
2007 fishing year, as of the date appeals
are resolved and shares are adjusted
accordingly. For the purposes of
considering the share cap, a

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corporation’s total IFQ share is defined
as the sum of the IFQ shares held by the
corporation and the IFQ shares held by
individual shareholders of the
corporation. A corporation must
identify the shareholders of the
corporation and their percent of shares
in the corporation.
(7) Redistribution of shares resulting
from permanent permit or endorsement
revocation. If a shareholder’s
commercial vessel permit for Gulf reef
fish or Gulf red snapper IFQ vessel
endorsement has been permanently
revoked under provisions of 15 CFR part
904, the RA will redistribute the IFQ
shares held by that shareholder
proportionately among remaining
shareholders based upon the amount of
shares each held just prior to the
redistribution. During December of each
year, the RA will determine the amount
of revoked shares, if any, to be
redistributed, and the shares will be
distributed at the beginning of the
subsequent fishing year.
(8) Annual recalculation and
notification of IFQ shares and
allocation. On or about January 1 each
year, IFQ shareholders will be notified,
via the IFQ website at
ifq.sero.nmfs.noaa.gov, of their IFQ
share and allocation for the upcoming
fishing year. These updated share values
will reflect the results of applicable

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share transfers and any redistribution of
shares resulting from permanent
revocation of applicable permits or
endorsements under 15 CFR part 904.
Allocation is calculated by multiplying
IFQ share times the annual red snapper
commercial quota. Updated allocation
values will reflect any change in IFQ
share, any change in the annual
commercial quota for Gulf red snapper,
and any debits required as a result of
prior fishing year overages as specified
in paragraph (c)(1)(ii) of this section.
IFQ participants can monitor the status
of their shares and allocation
throughout the year via the IFQ website.
§ 622.34 [Amended]
7. In § 622.34, paragraph (l) is
removed and reserved.
8. In § 622.42, paragraph (a)(1)(i) is
revised to read as follows.
§ 622.42

Quotas.

*

*
*
*
*
(a) * * *
(1) * * *
(i) Red snapper—4.65 million lb (2.11
million kg), round weight.
*
*
*
*
*
§ 622.44 [Amended]
9. In § 622.44, paragraph (d) is
removed and reserved.
[FR Doc. 06–7122 Filed 8–23–06; 8:45 am]
BILLING CODE 3510–22–S

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