Reef Fish Fishery of the Gulf of Mexico; Amendment 8

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Part 641

[Docket No. 950810206-5268-03; I.D. 071395A]

RIN 0648-AG29

Reef Fish Fishery of the Gulf of Mexico; Amendment 8

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA), Commerce.

ACTION: Final rule.

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SUMMARY: NMFS issues this final rule to implement certain provisions of

Amendment 8 to the Fishery Management Plan for the Reef Fish Fishery of

the Gulf of Mexico (FMP). Amendment 8 initiates a limited entry program

for the commercial red snapper sector of the reef fish fishery in the

Gulf of Mexico. Initial participants in the limited entry program will

receive shares of the commercial quota of red snapper based on

specified criteria. The percentage shares of the commercial quota

equate to individual transferable quotas (ITQs). In addition, NMFS

clarifies the regulations regarding commercial permit requirements, and

informs the public of the approval by the Office of Management and

Budget (OMB) of the collection-of-information requirements contained in

this rule and publishes the OMB control numbers for those collections.

The intended effect of this rule is to manage the commercial red

snapper sector of the reef fish fishery to preserve its long-term

economic viability.

EFFECTIVE DATE: April 1, 1996; except that the amendments to 15 CFR

part 902 and 50 CFR 641.2, 641.7(s), 641.24(g), and the additions 50

CFR 641.7(ee) and 641.10 heading and paragraph (c), are effective

November 24, 1995.

ADDRESSES: Requests for copies of the final regulatory flexibility

analysis (FRFA) should be sent to Robert Sadler, Southeast Regional

Office, NMFS, 9721 Executive Center Drive N., St. Petersburg, FL 33702.

Comments regarding the collection-of-information requirements

contained in this rule should be sent to Edward E. Burgess, Southeast

Regional Office, NMFS, 9721 Executive Center Drive N., St. Petersburg,

FL 33702, and to the Office of Information and Regulatory Affairs, OMB,

Washington, DC 20503 (Attention: NOAA Desk Officer).

FOR FURTHER INFORMATION CONTACT: Robert Sadler, 813-570-5305.

SUPPLEMENTARY INFORMATION: The reef fish fishery of the Gulf of Mexico

is managed under the FMP. The FMP was prepared by the Gulf of Mexico

Fishery Management Council (Council) and is implemented through

regulations at 50 CFR part 641 under the authority of the Magnuson

Fishery Conservation and Management Act (Magnuson Act).

Based on a preliminary evaluation of Amendment 8 at the beginning

of formal agency review, NMFS disapproved three of its measures after

determining that they were inconsistent with the provisions of the

Magnuson Act and other applicable law. NMFS published a proposed rule

to implement the remaining measures of Amendment 8 and to clarify

existing regulations regarding commercial permit requirements (60 FR

44825, August 29, 1995). The rationale for the remaining measures of

Amendment 8 and for the clarification of existing regulations, as well

as the reasons for the disapproval of the three Amendment 8 measures at

the beginning of formal agency review, are contained in the preamble of

the proposed rule and are not repeated here. On October 13, 1995, NMFS

approved the remaining measures of Amendment 8; this final rule

implements those approved measures.

Comments and Responses

A minority report signed by three Council members was submitted

with Amendment 8. In addition, written comments during the comment

period were received from 34 entities, including individual

representatives of four commercial seafood associations (fishing

associations), two state government agencies, and 28 members of the

public. Seventeen of the comments supported the proposed rule and/or

Amendment 8, including 12 from persons holding red snapper endorsements

on their reef fish vessel permits. Sixteen of the comments opposed the

proposed rule and/or Amendment 8, including three from endorsement

holders. Three of the

[[Page 61201]]

comments opposing the proposed rule were identical in content. Specific

responses follow each comment, and are separated by general category.

Information Used in Amendment 8

Comment: The minority report claimed that an ITQ program is

unnecessary, because the fishery conditions that the program proposes

to correct do not actually exist. The report argues that both

recreational and commercial user groups have concluded that the

scientific stock assessment is flawed, because it is based on allegedly

erroneous information and that the stock is in the best condition they

can recall in their fishing experience. The report also stated that the

authors have no confidence in the reliability of the recreational

landings data collected under the Marine Recreational Fishery

Statistical Survey.

Response: The NMFS stock assessment has undergone extensive peer

review and was found by the Southeast Fisheries Science Center (Center)

to be based on the best available scientific information. The Center

also reviewed Amendment 8 and concluded that the amendment is based on

the best available scientific information. The stock assessment does

indicate some recovery of the red snapper stock condition during the

period under Federal management; however, the assessment also indicates

that the stock is still overfished and that continuing harvest

restrictions are required for the FMP's long-term stock rebuilding

program.

NMFS agrees, however, with the need to continually update the stock

assessment database used in formulating management decisions.

Appropriate updates to the database will be made as data become

available.

Comment: A fishing association representative noted that the

Council's Scientific and Statistical Committee (SSC) previously had

voted for no new regulatory actions (i.e., discontinuance of the

current red snapper permit endorsement program at the end of 1995 and

no ITQ program beginning in 1996) based on the lack of a feasibility

study at that time. The commenter questioned the need for an ITQ

program after noting the SSC position. The commenter did acknowledge

that the SSC had subsequently concluded that sufficient evaluation had

been completed for the Council to select one of the identified

management program alternatives (i.e., ITQs, license limitations, or no

new regulatory action).

Response: NMFS does not dispute the comment, but notes that the SSC

vote for no regulatory action was based on an earlier version of

Amendment 8.

Comment: The minority report and one commenter stated that the

erroneous information created an unfair and inequitable commercial/

recreational allocation ratio of 51/49 for red snapper. These

commenters also objected to the FMP's provision that requires closure

of the annual commercial fishery for the rest of the fishing year once

the annual commercial quota is projected to be met, while potentially

allowing recreational fishermen to exceed their allocation. The

commenters claim that this penalizes the commercial sector to the

benefit of the recreational sector and stated that Amendment 8 would

continue this inequitable distribution of the allocation, particularly

when the stock is recovered and total allowable catch (TAC) may safely

be increased.

Response: The FMP provides for a commercial/recreational allocation

ratio of 51/49 for red snapper, and has a requirement that the

commercial sector be closed for the remainder of the year once the

annual commercial quota is met or is projected to be met. These

measures were found to be fair and equitable and consistent with the

national standards based on the best available information, as

originally set forth in Amendment 1. These provisions are not modified

under Amendment 8 or its implementing regulations. Changes to either

the allocation ratio or closure provision, therefore, are not actions

within the scope of Amendment 8 and would require an additional FMP

amendment.

Comment: One of the commenters stated that Amendment 8 violates

National Standard 2, since NMFS did not use available social

assessments, and the Council and NMFS did not adequately consider the

``human factor,'' or social and economic effects.

Response: NMFS does not agree. The Council conducted extensive

analyses and used all available data sources in developing Amendment 8,

including the most current landings data, economic, social, and

biological information. Amendment 8 includes a social impact

assessment, and also references extensive Council deliberations on

avoiding social impacts.

Comment: The minority report also stated that the ITQ program is

based on the NMFS concept that such a program will improve the economic

conditions of the industry.

Response: The Council selected ITQs as the preferred option,

principally because it should result in the largest increase in net

economic benefits, achieve optimum yield (OY), and address many of the

major problems in the fishery. In particular, the approved measures of

the Amendment 8 ITQ program are expected to resolve the problems of a

harvest capability that is larger than necessary to produce the

commercial quota in an economically efficient manner. The ITQ program

also is expected to resolve the problems associated with the derby

fishery, including depressed prices, fishing in dangerous weather

conditions, and increased total costs of production. In approving

Amendment 8, NMFS agreed with the Council's rationale and objectives

for the ITQ program.

Historical Captains

Comment: A representative of a commercial fishing association

expressed concern regarding historical captains being included as

initial shareholders. The commenter recommended that only persons who

qualified for red snapper permit endorsements should be initial

recipients of ITQ shares and noted that vessel owners provide the

vessels and have the principal legal responsibility for their

operation.

Response: Initial shareholders in the ITQ system include vessel

owners or operators, depending on whose earned income qualified for the

reef fish permit, and historical captains. The Council concluded that

the unique status of historical captains as independent contractors who

operated vessels under share agreements warranted their inclusion as

initial shareholders. Unlike earned income qualifying operators,

however, the initial share of a historical captain is divided with the

vessel owner, based on the terms of the share agreement. NMFS finds no

basis for disapproval of the Council's allocation of initial shares to

historical captains.

Additional Issues Related to National Standards

Comment: The minority report and three of the commenters claimed

that the ITQ system was unfair and inequitable because initially

entitled fishery participants would be allocated excessive shares or

because allocated shares would not be issued to all historical

participants or in appropriate allocation ratios. One of the commenters

stated that the ITQ system was unfair and inequitable, but did not

provide specific rationale as the basis for this comment.

Response: Amendment 8 addresses the allocation issues raised by

these comments. For example, Amendment 8 lists the factors that the

Council took into account in establishing the ITQ system to limit

access to the fishery and to achieve optimum yield (OY)

[[Page 61202]]

including: Present participation in the fishery; historical fishing

practices in, and dependence on, the fishery; the economics of the

fishery; the capability of fishing vessels used in the fishery to

engage in other fisheries; and the cultural and social framework

relevant to the fishery.

The ITQ system provides for issuance of initial shares that more

closely track the actual harvest during the qualifying years than the

current endorsement system. For example, the endorsement provisions

established a trip limit of 2,000 lb (907 kg) for fishermen with

endorsements on their permits (i.e., caught at least 5,000 lb (2,268

kg) in any 2 of the 3 years between 1990-1992). Vessels without an

endorsement were limited to a 200 lb (91 kg) trip limit. In effect, the

endorsement system provided only two levels of harvest based on

applicants meeting a minimum threshold. Persons who landed

substantively more than the threshold were not provided a larger trip

limit than those who landed only 5,000 lb (2,268 kg). This system

resulted in inequities, as stated in several of the comments.

In contrast, the initial ITQ shares to be issued under Amendment 8

will correspond to the actual harvests accepted by NMFS under Amendment

9 during the qualifying period for shares. Moreover, the overall

benefits of the ITQ system to the economic integrity of the fishery are

expected to accrue over time. For example, the allowance for ITQ share

transfers to any U.S. citizen or permanent resident alien starting

October 1, 1997, will provide access to those ineligible for an initial

share. This should result in significantly increased flexibility

regarding who may participate in the fishery.

Amendment 8 explicitly reflects the requirements of NMFS'

Guidelines for Fishery Management Plans; Subpart B--National Standards

(National Standard Guidelines) regarding the application of National

Standard 4 (allocation of fishing privileges) (see 50 CFR

602.14(c)(3)(i)). Specifically, Amendment 8 states that to be ``fair

and equitable,'' an allocation should be rationally connected with the

achievement of OY or with the furtherance of an FMP objective;

otherwise, the inherent advantaging of one group to the detriment of

another would be without adequate justification. Also, Amendment 8

indicates that an allocation of fishing privileges may impose hardship

on one group if this hardship is outweighed by the total benefits

received by another group. Although the ITQ program will not prevent

any person who is a U.S. citizen or permanent resident alien from

entering the red snapper fishery, those persons who receive an initial

allocation of harvesting privileges (initial shares) will have a

competitive advantage over subsequent participants by not having to pay

for those privileges. Any such competitive advantage would be

constrained by the mandatory 4-year evaluation period, which the

Council believes was necessary to minimize windfall profit and

speculation.

According to the National Standard Guidelines, an allocation of

fishing privileges must be designed to avoid creating conditions that

foster the acquisition by any person of an inordinate share of fishing

privileges or control by buyers and sellers that would not otherwise

exist (see 50 CFR 602.14(c)(3)(iii)). Although the National Standard

Guidelines do not specifically define an ``excessive share,'' they

imply conditions of monopoly or oligopoly. The Council does not believe

that a monopoly will occur and expects that owners/operators will

remain the dominant entities in the fishery. Therefore, the Council

recommended no limit on ownership of ITQ shares. It is anticipated that

this will not lead to overall market control of the fishery. Also, the

Council can recommend, and NMFS approve and implement, a different

allocation scheme by FMP amendment at any time if it meets the

requirements of the Magnuson Fishery Conservation and Management Act

and other applicable law.

NMFS acknowledges the Amendment 8 discussion of these allocation

issues and agrees with the Council that the ITQ program is consistent

with National Standard 4 requirements that allocations of fishing

privileges be fair and equitable and be carried out in such manner that

no particular individual, corporation, or other entity acquires an

excessive share.

Effects of ITQ System on Red Snapper Resource Status

Comment: The minority report states that the ITQ system does not

promote conservation. One commenter opposed the ITQ system indicating

that it may contribute to overfishing. Another commenter stated that he

would benefit from a relatively high ITQ share, but that he opposed the

ITQ system because possible unlawful and unreported landings (landings

without ITQ coupons) would result in exceeding the red snapper annual

quota because these landings would go unrecorded. He argued that these

circumstances would cause overfishing of the red snapper resource and

undermine the long-term rebuilding of this overfished species.

Response: NMFS disagrees with these comments. The current red

snapper management program provision for an automatic commercial

fishery closure once the commercial quota is met was intended to ensure

that the quota is not exceeded, thereby ensuring the recovery of the

overfished red snapper resource under its rebuilding program. However,

red snapper discarded during closed fishery periods are not counted

against the commercial quota; some of these closed fishery periods have

been considerably long such as the one that occurred after the April

15, 1995, fishery closure. Since the ITQ program is expected to

minimize closed fishery periods, it should correspondingly reduce

unaccounted for incidental catch mortality of red snapper. Reducing the

magnitude of this fishing morality during fishery closures is expected

to allow a larger proportion of the red snapper harvested to be

retained and counted against the commercial quota that occurs

currently. Accordingly, the ITQ program should both reduce the total

fishing mortality of red snapper as well as provide a more accurate

estimate of it. The slower-paced fishery that is anticipated under the

ITQ program will be easier for NMFS to monitor, particularly with fewer

fishermen operating over a longer season. Also, ITQ program

participants will have an interest in ensuring the continued viability

of the fishery and the ITQ program, and are expected to assist in

reported illegal activities or under-reporting. Overall, these ITQ

program results should significantly enhance conservation benefits.

Industry Opinions on Amendment 8

Comment: Two representatives of fishing associations noted that

most public comments at the Council meetings opposed ITQs. One of these

commenters noted the various votes of the Council's Red Snapper and

Reef Fish Advisory Panels against ITQs. The minority report and one

fishing association representative stated that the majority of the red

snapper industry opposes Amendment 8. They argued that approval of

Amendment 8 and its implementing rule is inconsistent with what they

perceive to be NMFS' policy that no proposed ITQ program would be

implemented over industry objections.

Response: NMFS disagrees with these comments and believes that a

majority of the fishing industry participants supports the ITQ program.

As with any controversial action, some commenters opposed Amendment 8.

However, the ITQ system appears to be supported by a majority of the

fishery participants as providing for better red snapper fishery

[[Page 61203]]

management including ensuring more reliable monitoring of catches with

regards to quotas, avoiding increasingly short fishing seasons and low

ex-vessel prices, and improving the enforceability of the management

measures. Public commenters that expressed an opinion at area hearings

held by the Council in December 1994 supported, in general, the ITQ

program (23 in favor, 19 opposed). A stronger majority opinion (15 in

favor, 9 opposed) was evidenced at the hearings by commenters who hold

a red snapper endorsement on their reef fish vessel permit and who have

caught the bulk of the commercial harvest since 1993, when the

endorsement provisions were implemented. More recent indications of

industry views on the Amendment 8 ITQ program were reflected in the

public comments received on the proposed rule that supported the

program by a slight margin (17-16), with a much larger margin of

support (12 to 3) among commenters with a red snapper endorsement on

their reef fish vessel permit. Public support for the ITQ program is

expected to increase as more participants become familiar with it and

with the benefits to the fishery expected to result from its

implementation. Those benefits are expected to accrue over time.

Finally, NMFS has not issued a policy regarding the approval and

implementation of limited entry programs, including ITQ systems, except

for guidance to the Regional Fishery Management Councils contained in

the National Standard Guidelines at 50 CFR part 602 regarding the

consistency of management measures assigning fishing privileges with

National Standard 4. However, NMFS has indicated to the Councils that

it is their responsibility to develop and recommend controlled access

systems only if there is considerable support from the industries

involved. NMFS believes that the controlled access system under

Amendment 8 does have this considerable support from the affected

industries.

Enforcement Issues

Comment: The minority report and five of the comments cited

enforcement concerns. These comments stated that, with current NMFS

enforcement capability and recent budget cuts, the ITQ system would be

unenforceable.

Response: NMFS does not agree that the ITQ program will be

unenforceable. First, NMFS anticipates cooperation from all the Gulf

coastal states who have indicated that they will implement regulations

for their waters consistent with those in the exclusive economic zone.

Specifically, Texas and Florida provided comments in support of

Amendment 8 and indicated a capability to enact compatible regulations

in waters under their jurisdiction. Alabama, Louisiana, and Mississippi

provided similar comments that were received after the end of the

comment period, but before NMFS took final action to approve the

remaining measures of Amendment 8. Thus, in making its decision to

approve and implement the remaining measures of Amendment 8, NMFS

obtained reasonable assurance from all the affected states that they

will be able to issue compatible state regulations effective on or

about the time that Amendment 8 is fully implemented (April 1, 1996).

This cooperation will greatly enhance enforcement of the regulations.

NMFS also has committed the resources for additional Federal

enforcement agents.

Second, the Council and NMFS believe that the ITQ system will be

more self-policing than the current management system (permit

endorsements with trip limits) because ITQ holders will have a vested

interest in seeing that all red snapper landings conform with the ITQ

program requirements. ITQ shares will have a value to the holder

proportionate to the size of the total commercial quota. Fishermen who

hold ITQ shares will have a greater incentive to report to enforcement

officials (NMFS Enforcement, the Coast Guard, or state enforcement

agencies) any illegal/unreported landings outside the ITQ program

(e.g., landings without use of ITQ share coupons), since such landings

would eventually result in adverse effects on the stock condition with

the likely result of quota reductions.

Comment: Two of the commenters indicated that fishermen may

illegally sell red snapper to restaurants without using their ITQ

shares, thus allowing them to catch large quantities of red snapper

outside of the ITQ program.

Response: NMFS acknowledges that illegal activity is possible with

or without ITQs. Nevertheless, NMFS has determined that such activity

can be kept to a minimum with compatible state regulations, which will

greatly increase the probability of any fisherman being detected

landing fish illegally and thereby risking his/her right to participate

in the ITQ program.

Comment: One of the commenters stated that ITQ shareholders have an

interest in helping the ITQ system succeed and, therefore, may report

violations and keep enforcement costs down. That commenter stated that

the additional requirement of ITQ coupons should help enforcement

officers to detect chronic violators.

Response: NMFS agrees.

Use of Qualifying Years (1990-92)

Comment: Another commenter stated that the qualifying years (1990-

92) were atypical of his historic dependence on the fishery, as he

stopped fishing due to the derby fishery during that time.

Response: The collection of past landings data under Amendment 9

covers all red snapper landings information for the period when data

were readily available (i.e., 1990 through 1992). Data were not readily

available before 1990, and the vessel permit endorsement provisions,

including trip limits, were implemented in 1993. As a result, the years

1990-92 constitute the best available qualifying period for determining

eligibility for the ITQ system. The Council, after extensive

deliberations and consideration of longer qualifying periods,

determined that the 1990-92 period was the most appropriate for

determining historical dependence on the fishery. No reliable

information or data were provided at Council-held public hearings or

during NMFS-held comment periods on Amendment 8 and the proposed rule

that convinced the Council or NMFS that this qualifying period was

unfair or inappropriate. Based on these considerations, NMFS agreed

with the Council's decision about the qualifying period in approving

certain measures of both Amendments 8 and 9.

Comment: One of the commenters stated that the Amendment 8 proposed

rule is inconsistent with the National Standards because it denies

access to the red snapper fishery by those who did not have red snapper

catches during the years 1990-92; those fishermen will not receive an

initial allocation.

Response: The rationale for selecting the 1990-92 qualifying period

was discussed above. Regarding access to the red snapper resource, a

major feature of the ITQ program is allowance of new entrants to

participate by buying existing ITQ shares. Hence, the program allows

wider participation than the permit endorsement system it will replace.

The choice of the eligibility period (1990-92) to determine access

also is consistent with the Council's established control date for the

fishery. The published notice of the control date stated that anyone

entering the Gulf of Mexico commercial reef fish fishery after November

7, 1989, could not be assured of future access to the reef fish fishery

if a management regime were developed and implemented that

[[Page 61204]]

limited the number of participants in the fishery.

Comment: One of the commenters requested that NMFS further review

all landings data submitted for the ITQ program-qualifying period.

Response: NMFS does not agree that the additional review of

qualifying landings data, as requested by the commenter, is necessary.

The red snapper landings data for the 1990-92 qualifying period

submitted to NMFS by the cutoff date (established under Amendment 9)

were carefully reviewed by NMFS before being accepted as a basis for

calculating individual percentage shares of the commercial quota.

Persons submitting data showing landings during the 1990-92 eligibility

period were given an opportunity to review NMFS' landings figures.

Finally, Amendment 8 establishes a Council advisory panel to consider

written requests from persons who contest their tentative allocations

of shares or determinations of historical captain status.

Congressional Action and User Fees

Comment: The minority report and two fishing association

representatives stated that Amendment 8 should not be approved because

it would be ``in defiance of the Congressional mandate to develop

appropriate guidelines for ITQs.'' The minority report also stated that

Amendment 8 should not be approved, since the user fee schedule

currently being considered in a proposed amendment to the Magnuson Act

is unknown. According to the minority report, the user fee issue would

have a bearing on industry's evaluation of the effects of the proposed

rule.

Response: NMFS acknowledges the possibility that an amendment to

the Magnuson Act or other Congressional action could affect

continuation of the ITQ system under Amendment 8. NMFS also

acknowledges the potential importance of user fees to persons involved

in fishery business decisions. However, what final action Congress will

take in amending the Magnuson Act regarding the establishment of ITQ

programs or the application of user fees in fisheries management is

unknown. Until such time as the Magnuson Act is amended, it authorizes

the development and implementation of ITQ programs for fisheries under

Federal management.

Costs of Implementing the ITQ System

Comment: Four of the commenters, including a representative of a

fishing association, complained about the high costs of implementing

and enforcing the ITQ system. One comment indicated that costs should

be one of the factors considered before implementing ITQs.

Response: The regulatory impact review (RIR) prepared by the

Council estimates that Amendment 8 will increase annual administration

and enforcement costs on a continuing basis between $659,000 and

$1,749,000, depending on the level of law enforcement efforts. However,

it further indicates that annual benefits include increased revenues of

$2.5 to $4.1 million and a decrease in the total cost of harvesting.

While the RIR clearly points out that costs of the ITQ system are

higher than for other management systems considered, the ITQ system

should provide the largest increase in net economic benefits to the

fishery of any of the management options for red snapper considered by

the Council.

Duration of Implementing Regulations

Comment: One of the commenters supported the ITQ system and the 4-

year evaluation period, noting that an evaluation might give the

Council an opportunity to develop a more comprehensive ITQ system after

the 4-year period. Another commenter supported the ITQ system and a 4-

year evaluation as a flexible approach that will benefit the fishery in

terms of achieving the goals of Amendment 8. That commenter stated that

4 years was an appropriate time period for monitoring and evaluation,

without imposing an unnecessarily long time period that encourages

windfall profits.

Response: NMFS agrees with these comments and has approved the

Council's proposed measure to evaluate the ITQ system no later than 4

years after initial implementation.

Comment: The minority report stated that the proposed 4-year

evaluation period would preclude the industry from making business

decisions. One of the commenters stated that the time limitation

creates uncertainty in the ITQ system. Another commenter stated that

the mandatory evaluation is not needed, because the Council already has

the authority to evaluate the ITQ system and make changes as

appropriate. Another commenter expressed a preference for an indefinite

duration for the ITQ program.

Response: The 4-year evaluation period was selected by the Council

after consideration of various time periods. The Council was aware of

the potential that fewer economic benefits might result from having an

ITQ program with a fixed time period compared to a system of indefinite

duration, but decided that a 4-year evaluation period was necessary to

minimize windfall profits and speculation while still allowing a

sufficiently long period to test the effectiveness of the program.

NMFS agrees with the Council's decision to select a 4-year ITQ

program period with an evaluation of its effectiveness at that time.

This approach will allow the Council and NMFS to terminate the program

at that time if it does not produce the expected benefits. The

mandatory evaluation, while unavoidably creating a degree of

uncertainty in the industry, is needed in order that the Council may

identify and propose necessary changes to the ITQ program for achieving

the greatest possible level of benefits.

Comment: One of the commenters also objected to treating fish as

private property, and stated that the ITQ program is a bad idea and

should not be approved.

Response: NMFS disagrees. The ITQ system will remain in effect for

4 years from the date the system is implemented, while the

effectiveness of the system is monitored and evaluated. Based on the

evaluation, the system will be modified, or terminated. This temporary

harvest privilege is not a transfer of the resource, but a revocable

license to take a specified amount of the resource. There are no

private property rights to wild fish before they have been reduced to

one's possession.

Comment: One commenter suggested that each permit holder be issued

transferable ITQ coupons in an allotted percentage based on their

previous records of red snapper landings, and be given 1 year to use

their coupons.

Response: This suggestion is already provided for by the provisions

of the ITQ program. The Regional Director will provide each shareholder

with ITQ coupons in various denominations on an annual basis, the total

of which equals his or her ITQ share.

Comment: Two of the commenters responded to the request in the

proposed rule for specific comments on the possibility of a quota

overrun if the states do not enact compatible regulations. Those two

comments indicated that each state should enact specific compatible

regulations for waters under their jurisdiction, since large quantities

of landings are made from state waters off Texas and Louisiana.

Response: NMFS shares the concerns expressed by these comments

about the adverse effects of a quota overrun and a fishery closure

before all ITQ coupons are used, if compatible state regulations are

not enacted to prevent catch by non-permitted vessels in state waters.

As noted above, NMFS has received reasonable assurance that all Gulf

coastal states will enact or have in place

[[Page 61205]]

in a timely manner regulations to require that vessels landing red

snapper possess a Federal permit, no matter where the red snapper are

harvested or possessed. This should preclude any non-ITQ harvest.

Comment: One of the commenters suggested that a rule allowing

permitted vessels without ITQ shares to sell red snapper harvested in

state waters would encourage violations of the ITQ program.

Response: NMFS agrees. The implementing regulations specify that

red snapper in or from the EEZ, or on board a permitted reef fish

vessel, may not be possessed without sufficient ITQ coupons on board.

One of the permit conditions is that permitted vessels comply with the

ITQ provisions, no matter where the red snapper are harvested or

possessed. This would minimize violations, since the states have

provided assurance that they will require that red snapper landings be

from federally permitted vessels only.

A federally permitted reef fish dealer would be allowed to receive

red snapper only from a permitted vessel with ITQ coupons on board,

regardless of where the red snapper were harvested. These provisions

are intended to encourage effective monitoring and enforcement of the

ITQ system.

Comment: One of the commenters questioned the meaning of

``excessive effort capacity'' in the proposed rule. Another commenter

indicated that the ITQ system would force him to discharge two or three

of his three to four employees from his vessel. The ITQ system,

therefore, would be economically disadvantageous, particularly in areas

with high unemployment and when fishermen are ineligible for

unemployment benefits.

Response: The term ``excessive effort capacity'' indicates the

ability of red snapper fishermen to catch the annual quota in

increasingly shorter time periods, resulting in fewer net economic

benefits. Regarding the comment, NMFS acknowledges that some decrease

in employment is expected to result from a reduction of effort capacity

that optimizes net economic benefits of the fishery. While this may

disadvantage some sectors, as stated in the comment, the net benefits

to the entire fishery are increased.

Comments in Support of the Proposed Rule

Comment: Seventeen of the commenters supported the ITQ system.

Eleven supported the ITQ system because of problems with vessel crew

safety and the short season due to the endorsement system. Seven also

supported the ITQ system to avoid other problems associated with a

derby fishery, such as low ex-vessel prices, and one noted that the

commercial fishery is unable to achieve OY under the existing

endorsement provisions. That commenter opposed the views of the

minority report and urged NMFS to implement the ITQ system as soon as

possible.

Response: NMFS acknowledges these supportive comments and the

identified program benefits.

Additional Issues Outside the Scope of the Proposed Rule

Comment: One of the commenters suggested that sale of red snapper

harvested in state waters be counted against the recreational harvest,

not the commercial quota.

Response: This provision is not currently in the FMP or Amendment

8, and is outside the scope of the proposed rule.

Comment: Three commenters noted that an ITQ system would not help

the red snapper fishery, because imports comprise most of the total red

snapper market. Another stated that imports should be considered before

implementing ITQs.

Response: The Magnuson Act currently does not govern imported fish,

which may be legally landed in compliance with the Lacey Act and other

applicable Federal laws. Moreover, inclusion of imported red snapper in

the ITQ system is outside the scope of the proposed rule.

Comment: One of the comments requested consideration of a small

incidental catch of red snapper for boats operating out of Florida

ports.

Response: This requested action was not included in Amendment 8 or

the proposed rule and, therefore, is outside the scope of this rule.

Comment: One of the commenters stated that the penalty fee schedule

should be provided in the proposed rule.

Response: NOAA has made its Civil Administrative Penalty Schedule

available (59 FR 19160, April 22, 1994). That schedule is outside the

scope of the proposed rule and Amendment 8. The schedule, however, will

be revised as any additional regulations are implemented.

Comment: One of the commenters expressed no opinions on the

proposed rule but requested that hardship appeals be considered.

Response: The hardship appeals provisions proposed in Amendment 8

were disapproved by NMFS during its preliminary review of the amendment

for the reasons stated in the preamble of the proposed rule. These

provisions were not included in the proposed rule and, therefore, are

not included in the final rule. Therefore, this comment is considered

outside the scope of the proposed rule.

Comment: One of the commenters suggested that, instead of the ITQ

program, fishermen be allowed to fish 10 days a month.

Response: A split season was not included in Amendment 8 or the

proposed rule. Therefore, this comment is outside the scope of this

rule.

Changes From the Proposed Rule

Specific dates are added as follows: (1) In Sec. 641.10

introductory text, for the termination of the period during which NMFS

and the Council will evaluate the ITQ system; (2) in

Sec. 641.10(c)(2)(iv), for the submission of requests for transfers of

landings records; (3) in Sec. 641.10(c)(4)(iii), for the submission of

appeals; and (4) in Sec. 641.10(c)(5), for the initial restrictions

regarding transfers of shares.

In Sec. 641.10(a)(3), information is added as to how a person who

does not have an ITQ share may obtain a list of shareholders.

The ITQ coupon system is simplified and clarified as follows. Since

ITQ coupons will be used on board vessels rather than by individual

fishermen, references in the proposed rule to the ``Fisherman'' part of

coupons are changed to ``Vessel'' part. In Sec. 641.10(b)(3), when a

coupon is transferred, the name of the recipient and the signature of

the seller are no longer required. In lieu thereof, if the transfer is

by sale, the price paid for the coupon must be entered on the coupon.

To aid in monitoring the lawful use of coupons, Sec. 641.10(b)(5) is

revised to require entry on the ``Vessel'' part of each coupon of the

permit number of the dealer to whom red snapper are transferred.

Sections 641.10(b)(6) and (b)(7) are modified to clarify that, after

being landed, red snapper must be accompanied by appropriate amounts of

properly completed ``Fish House'' parts of ITQ coupons, even when such

red snapper are offloaded at a facility other than a dealer's; for

example, when offloaded to a dealer's truck. In Sec. 641.10(b)(7), the

requirement to enter the dealer's permit number on the ``Fish House''

part of a coupon is removed.

Classification

The Director, Southeast Region, NMFS, determined that Amendment 8

is necessary for the conservation and management of the reef fish

fishery of the Gulf of Mexico and that it is consistent with the

Magnuson Act and

[[Page 61206]]

other applicable laws, with the exception of those measures that were

disapproved at the beginning of formal agency review based on a

preliminary evaluation of Amendment 8. (See the proposed rule (60 FR

44825, August 29, 1995) for a discussion of the disapproved measures.)

This action has been determined to be not significant for purposes

of E.O. 12866.

The Council prepared an initial regulatory flexibility analysis

(IRFA) as part of its regulatory impact review of Amendment 8. The IRFA

described the impacts that the proposed rule would have on small

entities, if adopted. Those impacts were summarized in the proposed

rule. NMFS prepared an FRFA, which adopts the IRFA without substantive

change. A copy of the FRFA is available (see ADDRESSES).

Notwithstanding any other provision of law, no person is required

to respond to nor shall a person be subject to a penalty for failure to

comply with a collection of information subject to the requirements of

the Paperwork Reduction Act unless that collection of information

displays a currently valid OMB Control Number.

This rule contains a new, one-time collection of information and

three new continuing collections, namely: (1) The one-time submission

of a request for appeal of tentative share allocations and of

determinations of historical captain status; (2) the submission by

fishermen and dealers of ITQ coupons; (3) requests for transfer of ITQ

shares; and (4) monthly dealer reports when red snapper are received.

These collections of information have been approved by OMB under OMB

control numbers 0648-0297, 0648-0298, 0648-0299, and 0648-0301,

respectively. The public reporting burdens for these collections of

information are estimated to average 90, 0.5, 15, and 15 minutes per

response, respectively.

This rule requires permits for dealers who receive red snapper

harvested by permitted vessels from state waters adjoining the EEZ in

the Gulf of Mexico. Previously, dealer permits were required only for

those dealers receiving red snapper harvested in the EEZ. The

collection of information for dealer permit applications is currently

approved under OMB Control No. 0648-0205. The public reporting burden

for this collection was estimated at 5 minutes per response and is

unchanged by the revision.

This rule also involves the collection of information under

Amendment 9 of landings records during the period 1990 through 1992.

That collection is currently approved under OMB Control No. 0648-0281

and its public reporting burden is estimated at 2 hours per response.

Each of the above reporting burden estimates includes the time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collections of information. Send comments regarding any of these

reporting burden estimates, or any other aspects of the collections of

information, including suggestions for reducing the burdens, to NMFS

and OMB (see ADDRESSES).

The publication of the OMB control numbers for approved collection-

of-information requirements at 15 CFR part 902 does not constitute a

substantive rule because it does not affect the activities of

fishermen. The correction of the definition of ``Science and Research

Director'' at 50 CFR 641.2, the addition of the prohibition at 50 CFR

641.7(s), which complements an existing requirement, and the

clarification of the permit requirements at 50 CFR 641.7(ee) and

641.24(g) do not constitute substantive rules because they do not

change existing requirements. Thus, pursuant to 5 U.S.C. 553(d), there

is no need to delay the effective date of these provisions. The

addition to the regulations at 50 CFR 641.10(c) contains administrative

procedures necessary for timely implementation of the ITQ system. Each

potential initial shareholder in the ITQ system was advised of these

procedures in the proposed rule and by letter dated September 14, 1995.

Delay in effectiveness of the administrative procedures would

unnecessarily delay commencement of the ITQ system. Accordingly, the

Assistant Administrator for Fisheries, NOAA, finds that, pursuant to 5

U.S.C. 553(d)(3), good cause exists to waive the 30-day delay in

effective date of 50 CFR 641.10(c). To allow time for the determination

of initial ITQ shares and for the distribution of ITQ coupons, NMFS

makes the provisions of this final rule requiring ITQ coupons for the

possession of red snapper in the commercial fishery effective on April

1, 1996.

List of Subjects

15 CFR Part 902

Reporting and recordkeeping requirements.

50 CFR Part 641

Fisheries, Fishing, Reporting and recordkeeping requirements.

Dated: November 22, 1995.

Nancy Foster,

Deputy Assistant Administrator for Fisheries, National Marine Fisheries

Service.

For the reasons set out in the preamble, 15 CFR part 902 and 50 CFR

part 641 are amended as follows:

15 CFR Chapter IX

PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE

PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS

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

follows:

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

2. In part 902, paragraph (b) table, effective November 24, 1995 in

the entries for 50 CFR in the right column, corresponding to entry

641.5 in the left column, the entry ``-0013 and -0016.'' is removed and

``-0013, -0016, and -0301.'' is added in its place; and in the left

column, in numerical order ``641.10'' is added, and in the right

column, in corresponding position, the entry ``-0297, -0298, and -

0299.'' is added.

50 CFR Chapter VI

PART 641--REEF FISH FISHERY OF THE GULF OF MEXICO

3. The authority citation for part 641 continues to read as

follows:

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

4. In Sec. 641.1, paragraph (b) is revised to read as follows:

Sec. 641.1 Purpose and scope.

* * * * *

(b) This part governs conservation and management of reef fish in

the Gulf of Mexico EEZ, except that Secs. 641.5 and 641.25 also apply

to reef fish from adjoining state waters and Sec. 641.4(a)(2) and (q)

also apply in the manner stated therein to red snapper from adjoining

state waters. The Gulf of Mexico EEZ extends from the U.S./Mexico

border to the intercouncil boundary between the South Atlantic and Gulf

of Mexico Fishery Management Councils, as specified at 50 CFR

601.11(c). ``EEZ'' in this part refers to the EEZ in the Gulf of

Mexico, unless the context clearly indicates otherwise.

5. In Sec. 641.2, effective November 24, 1995, the definition of

``Science and Research Director'' is revised to read as follows:

Sec. 641.2 Definitions.

* * * * *

Science and Research Director means the Science and Research

Director, Southeast Fisheries Science Center,

[[Page 61207]]

NMFS, 75 Virginia Beach Drive, Miami, FL 33149, telephone: 305-361-

5761; or a designee.

* * * * *

6. In Sec. 641.4, the first sentence of paragraph (a)(2) and the

third sentence of paragraph (i) are revised and paragraph (q) is added

to read as follows:

Sec. 641.4 Permits and fees.

(a) * * *

(2) * * * A dealer who receives from a fishing vessel reef fish

harvested from the EEZ, or red snapper from adjoining state waters

harvested by or possessed on board a vessel with a permit issued under

this section, must obtain an annual dealer permit. * * *

* * * * *

(i) * * * In addition, a copy of the dealer's permit must accompany

each vehicle that is used to pick up from a fishing vessel reef fish

harvested from the EEZ or red snapper from adjoining state waters

harvested by or possessed on board a vessel with a permit issued under

this section. * * *

* * * * *

(q) Permit conditions. (1) As a condition of a vessel permit issued

under this section, without regard to where red snapper are harvested

or possessed, a permitted vessel--

(i) Must comply with the red snapper individual transferable quota

requirements of Sec. 641.10(b).

(ii) May not transfer red snapper at sea or receive red snapper at

sea.

(iii) Must maintain red snapper with head and fins intact through

landing, and the exceptions to that requirement contained in

Sec. 641.21(b)(3) and (b)(4) do not apply to red snapper. Such red

snapper may be eviscerated, gilled, and scaled but must otherwise be

maintained in a whole condition.

(2) As a condition of a dealer permit issued under this section,

without regard to where red snapper are harvested or possessed, a

permitted dealer must comply with the red snapper individual

transferable quota requirements of Sec. 641.10(b).

7. In Sec. 641.5, paragraph (d)(3) is redesignated as paragraph

(d)(4), paragraph (d)(2) is revised, and paragraph (d)(3) is added to

read as follows:

Sec. 641.5 Recordkeeping and reporting.

* * * * *

(d) * * *

(2) In any month that a red snapper is received, a dealer must

report total poundage of red snapper received during the month, in

whole or eviscerated weight, the average monthly price paid for red

snapper by market size, and the proportion of total poundage landed by

each gear type. The ``Fish House'' parts of red snapper individual

transferable coupons, received during the month in accordance with

Sec. 641.10(b), must be submitted with the report to the Science and

Research Director postmarked not later than 5 days after the end of the

month.

(3) For reef fish other than red snapper, when requested by the

Science and Research Director, a dealer must provide the following

information from his/her record of reef fish received: Total poundage

of each species received during the requested period, average monthly

price paid for each species by market size, and proportion of total

poundage landed by each gear type.

* * * * *

8. In Sec. 641.7, effective November 24, 1995, paragraph (s) is

revised and paragraph (ee) is added; and, effective April 1, 1996,

paragraphs (g), (r), and (bb) are revised and paragraphs (ff) through

(kk) are added to read as follows:

Sec. 641.7 Prohibitions.

* * * * *

(g) Possess a finfish without its head and fins intact, as

specified in Sec. 641.21(b); or a red snapper without its head and fins

intact, as specified in Sec. 641.4(q)(1)(iii).

* * * * *

(r) Transfer reef fish at sea, as specified in Sec. 641.24(f); or

transfer or receive red snapper at sea, as specified in

Sec. 641.4(q)(1)(ii).

(s) Purchase, barter, trade, or sell, or attempt to purchase,

barter, trade, or sell, a reef fish--

(1) Harvested from the EEZ by a vessel that does not have a valid

Federal permit, or

(2) Possessed under the bag limits--as specified in Sec. 641.24(g).

* * * * *

(bb) Receive from a fishing vessel, by purchase, trade, or barter,

reef fish harvested from the EEZ, or red snapper from adjoining state

waters harvested by or possessed on board a vessel with a Federal

permit, without a dealer permit, as specified in Sec. 641.4(a)(2).

* * * * *

(ee) Falsify information required for administration of the

individual transferable quota (ITQ) system specified in Sec. 641.10.

(ff) Transfer an ITQ coupon by sale without the sale price

completed thereon, as specified in Sec. 641.10(b)(3).

(gg) Possess red snapper in or from the EEZ, or on board a

federally permitted vessel, in an amount exceeding the total of the ITQ

coupons on board or without the vessel permit on board, as specified in

Sec. 641.10(b)(4).

(hh) Fail to--

(1) Sign and date the ``Vessel'' part of ITQ coupons;

(2) Enter on the ``Vessel'' part the permit number of the dealer to

whom red snapper are transferred; or

(3) Submit such coupon parts with the logbook forms for that

fishing trip--as specified in Sec. 641.10(b)(5).

(ii) Transfer red snapper harvested from the EEZ, or possessed by a

permitted vessel, to a dealer who does not have a Federal permit, or

fail to give a dealer the ``Fish House'' part of ITQ coupons, as

specified in Sec. 641.10(b)(6).

(jj) As a permitted dealer--

(1) Receive red snapper from a vessel that does not have a reef

fish permit;

(2) Fail to receive the ``Fish House'' part of ITQ coupons in

denominations at least equal to the eviscerated weight of red snapper

received; or

(3) Fail to properly complete the ``Fish House'' parts of ITQ

coupons--as specified in Sec. 641.10(b)(7).

(kk) Fail to make ITQ coupons available to an authorized officer,

as specified in Sec. 641.10(b)(5) and (b)(7).

9. Effective November 24, 1995, Sec. 641.10 consisting of paragraph

(c) is added to subpart A; effective April 1, 1996, the introductory

text and paragraphs (a) and (b) are added to read as follows:

Sec. 641.10 Red snapper individual transferable quota (ITQ) system.

The ITQ system established by this section will remain in effect

through March 31, 2000, during which time NMFS and the Gulf of Mexico

Fishery Management Council (Council) will evaluate the effectiveness of

the system. Based on the evaluation, the system may be modified,

extended, or terminated.

(a) Percentage shares. (1) Initial percentage shares of the annual

commercial quota of red snapper are assigned to persons in accordance

with the procedure specified in Amendment 8 to the Fishery Management

Plan for the Reef Fish Fishery of the Gulf of Mexico (FMP) and in

paragraphs (c)(1) through (c)(4) of this section. Each person is

notified by the Regional Director of his or her initial percentage

shares. If additional shares become available to NMFS, such as by

forfeiture pursuant to subpart F of 15 CFR part 904 for rule

violations, such shares will be proportionately reissued to

shareholders based on their shares as of November 1, after the

additional shares become available. If NMFS is required to issue

additional shares, such as may

[[Page 61208]]

be required in the resolution of disputes, existing shares will be

proportionately reduced. This reduction of shares will be based on

shares as of November 1 after the required addition of shares.

(2) All or a portion of a person's percentage shares may be

transferred to another person who is a U.S. citizen or permanent

resident alien. (See paragraph (c)(5) of this section for restrictions

on the transfer of shares in the initial months under the ITQ system.)

Transfer of shares must be reported on a form available from the

Regional Director. The Regional Director will confirm, in writing, the

registration of each transfer. The effective date of each transfer is

the confirmation date provided by the Regional Director. The

confirmation of registration date will normally be not later than 3

working days after receipt of a properly completed transfer form.

However, reports of share transfers received by the Regional Director

from November 1 through December 31 will not be recorded or confirmed

until after January 1. A fee is charged for each transfer of percentage

shares. The amount of the fee is calculated in accordance with the

procedures of the NOAA Finance Handbook for determining the

administrative costs of each special product or service provided by

NOAA to non-Federal recipients. The fee may not exceed such costs and

is specified with each transfer form. The appropriate fee must

accompany each transfer form.

(3) On or about January 1 each year, the Regional Director will

provide each red snapper shareholder with a list of all red snapper

shareholders and their percentage shares, reflecting share transfers as

indicated on properly completed transfer forms received through October

31. Updated lists may be obtained at other times, and by persons who

are not red snapper shareholders, by written request to the Regional

Director.

(b) ITQs. (1) Annually, as soon after November 15 as the following

year's red snapper commercial quota is established, the Regional

Director will calculate each red snapper shareholder's ITQ in terms of

eviscerated weight. Each ITQ is the product of the red snapper

commercial quota, in whole weight, for the ensuing fishing year, the

factor for converting whole weight to eviscerated weight, and each red

snapper shareholder's percentage share, reflecting share transfers

reported on forms received by the Regional Director through October 31.

(2) The Regional Director will provide each red snapper shareholder

with ITQ coupons in various denominations, the total of which equals

his or her ITQ, and a copy of the calculations used in determining his

or her ITQ. Each coupon will be coded to indicate the initial

recipient.

(3) An ITQ coupon may be transferred. If the transfer is by sale,

the seller must enter the sale price on the coupon.

(4) Except when the red snapper bag limit applies, red snapper in

or from the EEZ or on board a vessel that has been issued a reef fish

permit under Sec. 641.4 may not be possessed in an amount, in

eviscerated weight, exceeding the total of ITQ coupons on board. (See

Sec. 641.24(a) for applicability of the bag limit.)

(5) Prior to termination of a trip, the operator's signature and

the date signed must be written in ink on the ``Vessel'' part of ITQ

coupons totaling at least the eviscerated weight of the red snapper on

board. An owner or operator of a vessel must separate the ``Vessel''

part of each such coupon, enter thereon the permit number of the dealer

to whom the red snapper are transferred, and submit the ``Vessel''

parts with the logbook forms for that fishing trip. An owner or

operator of a vessel must make available to an authorized officer all

ITQ coupons in his or her possession upon request.

(6) Red snapper harvested from the EEZ or possessed by a vessel

with a permit issued under Sec. 641.4 may be transferred only to a

dealer with a permit issued under Sec. 641.4. The ``Fish House'' part

of each ITQ coupon must be given to such dealer, or the agent or

employee of such dealer, in amounts totaling at least the eviscerated

weight of the red snapper transferred to that dealer.

(7) A dealer with a permit issued under Sec. 641.4 may receive red

snapper only from a vessel that has on board a reef fish permit issued

under Sec. 641.4. A dealer, or the agent or employee of a dealer, must

receive the ``Fish House'' part of ITQ coupons totaling at least the

eviscerated weight of the red snapper received. Immediately upon

receipt of red snapper, the dealer, or the agent or employee of the

dealer, must enter the permit number of the vessel received from and

date and sign each such ``Fish House'' part. The dealer must submit all

such parts as required by Sec. 641.5(d)(2). A dealer, agent, or

employee must make available to an authorized officer all ITQ coupons

in his or her possession upon request.

(c) Procedures for implementation--(1) Initial shareholders. The

following persons are initial shareholders in the red snapper ITQ

system:

(i) Either the owner or operator of a vessel with a valid permit on

August 29, 1995, provided such owner or operator had a landing of red

snapper during the period 1990 through 1992. If the earned income of an

operator was used to qualify for the permit that is valid on August 29,

1995, such operator is the initial shareholder rather than the owner.

In the case of an owner, the term ``person'' includes a corporation or

other legal entity; and

(ii) A historical captain. A historical captain means an operator

who--

(A) From November 6, 1989, through 1993, fished solely under verbal

or written share agreements with an owner, and such agreements provided

for the operator to be responsible for hiring the crew, who was paid

from the share under his or her control;

(B) Landed from that vessel at least 5,000 lb (2,268 kg) of red

snapper per year in 2 of the 3 years 1990, 1991, and 1992;

(C) Derived more than 50 percent of his or her earned income from

commercial fishing, that is, sale of the catch, in each of the years

1989 through 1993; and

(D) Landed red snapper prior to November 7, 1989.

(2) Initial shares. (i) Initial shares are apportioned to initial

shareholders based on each shareholder's average of the top 2 years'

landings in 1990, 1991, and 1992. However, no person who is an initial

shareholder under paragraph (c)(1) of this section will receive an

initial percentage share that will amount to less than 100 lb (45.36

kg), whole weight, of red snapper (90 lb (41 kg), eviscerated weight).

(ii) The percentage shares remaining after the minimum shares have

been calculated under paragraph (c)(2)(i) of this section are

apportioned based on each remaining shareholder's average of the top 2

years' landings in 1990, 1991, and 1992. In a case where a landing is

associated with an owner and a historical captain, such landing is

apportioned between the owner and historical captain in accordance with

the share agreement in effect at the time of the landing.

(iii) The determinations of landings of red snapper during the

period 1990 through 1992 and historical captain status are made in

accordance with the data collected under Amendment 9 to the FMP. Those

data identify each red snapper landing during the period 1990 through

1992. Each landing is associated with an owner and, when an operator's

earned income was used to qualify for the vessel permit at the time of

the landing, with such operator. Where appropriate, a landing is also

[[Page 61209]]

associated with a historical captain. However, a red snapper landings

record during that period that is associated solely with an owner may

be retained by that owner or transferred as follows:

(A) An owner of a vessel with a valid reef fish permit on August

29, 1995, who transferred a vessel permit to another vessel owned by

him or her will retain the red snapper landings record for the previous

vessel.

(B) An owner of a vessel with a valid reef fish permit on August

29, 1995, will retain the landings record of a permitted vessel if the

vessel had a change of ownership to another entity without a

substantive change in control of the vessel. It will be presumed that

there was no substantive change in control of a vessel if a successor

in interest received at least a 50 percent interest in the vessel as a

result of the change of ownership whether the change of ownership was--

(1) From a closely held corporation to its majority shareholder;

(2) From an individual who became the majority shareholder of a

closely held corporation receiving the vessel;

(3) Between closely held corporations with a common majority

shareholder; or

(4) From one to another of the following: Husband, wife, son,

daughter, brother, sister, mother, or father.

(C) In other cases of transfer of a permit through change of

ownership of a vessel, an owner of a vessel with a valid reef fish

permit on August 29, 1995, will receive credit for the landings record

of the vessel before his or her ownership only if there is a legally

binding agreement for transfer of the landings record.

(iv) Requests for transfers of landings records must be submitted

to the Regional Director and must be postmarked not later than December

14, 1995.The Regional Director may require documentation supporting

such request. After considering requests for transfers of landings

records, the Regional Director will advise each initial shareholder or

applicant of his or her tentative allocation of shares.

(3) Notification of status. The Regional Director will advise each

owner, operator, and historical captain for whom NMFS has a record of a

red snapper landing during the period 1990 through 1992, including

those who submitted such record under Amendment 9 to the FMP, of his or

her tentative status as an initial shareholder and the tentative

landings record that will be used to calculate his or her initial

share.

(4) Appeals. (i) A special advisory panel, appointed by the Council

to function as an appeals board, will consider written requests from

persons who contest their tentative status as an initial shareholder,

including historical captain status, or tentative landings record. In

addition to considering written requests, the board may allow personal

appearances by such persons before the board.

(ii) The panel is only empowered to consider disputed calculations

or determinations based on documentation submitted under Amendment 9 to

the FMP regarding landings of red snapper during the period 1990

through 1992, including transfers of such landings records, or

regarding historical captain status. In addition, the panel may

consider applications and documentation of landings not submitted under

Amendment 9 if, in the board's opinion, there is justification for the

late application and documentation. The board is not empowered to

consider an application from a person who believes he or she should be

eligible because of hardship or other factors.

(iii) A written request for consideration by the board must be

submitted to the Regional Director, postmarked not later than December

27, 1995, and must contain documentation supporting the allegations

that form the basis for the request.

(iv) The board will meet as necessary to consider each request that

is submitted in a timely manner. Members of the appeals board will

provide their individual recommendations for each appeal to the

Council, which will in turn submit its recommendation to the Regional

Director. The board and the Council will recommend whether the

eligibility criteria, specified in Amendment 8 to the FMP and

paragraphs (c)(1) and (c)(2) of this section, were correctly applied in

each case, based solely on the available record including documentation

submitted by the applicant. The Council will also base its

recommendation on the recommendations of the board. The Regional

Director will decide the appeal based on the above criteria and the

available record, including documentation submitted by the applicant

and the recommendation of the Council. The Regional Director will

notify the appellant of his decision and the reason therefor, in

writing, normally within 45 days of receiving the Council's

recommendation. The Regional Director's decision will constitute the

final administrative action by NMFS on an appeal.

(v) Upon completion of the appeal process, the Regional Director

will issue share certificates to initial shareholders. (5) Transfers of

shares. The following restrictions apply to the transfer of shares:

(i) The transfer of shares is prohibited through September 30,

1996.

(ii) From October 1, 1996, through September 30, 1997, shares may

be transferred only to other persons who are initial shareholders and

are U.S. citizens or permanent resident aliens.

10. In Sec. 641.24, effective November 24, 1995, paragraph (g) is

revised; and, effective April 1, 1996, paragraphs (a)(2) and (a)(3) are

redesignated as paragraphs (a)(3) and (a)(4), respectively, in newly

redesignated paragraph (a)(4), the reference to ``paragraph

(a)(2)(ii)(C)'' is revised to read ``paragraph (a)(1)(ii)(C)'', and

paragraph (a)(2) is added to read as follows:

Sec. 641.24 Bag and possession limits.

(a) * * *

(2) In addition, the bag limit for red snapper applies to a person

on board a vessel with a permit specified in Sec. 641.4 when that

vessel does not have ITQ coupons on board.

* * * * *

(g) Sale. A reef fish harvested in the EEZ by a vessel that does

not have a valid permit, as required by Sec. 641.4(a)(1), or possessed

under the bag limits specified in paragraph (b) of this section, may

not be purchased, bartered, traded, or sold, or attempted to be

purchased, bartered, traded, or sold.

[FR Doc. 95-29102 Filed 11-24-95; 12:10 am]

BILLING CODE 3510-22-F