[Federal Register Volume 68, Number 207 (Monday, October 27, 2003)]
[Proposed Rules]
[Pages 61178-61181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27035]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 031017264-3264-01; I.D. 100103C]
RIN 0648-AR48


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Referendum Procedures for a 
Potential Gulf of Mexico Red Snapper Individual Fishing Quota Program

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS issues this proposed rule to provide potential 
participants information about the schedule, procedures, and 
eligibility requirements for participating in referendums to determine 
whether an individual fishing quota (IFQ) program for the Gulf of 
Mexico commercial red snapper fishery should be prepared and, if so, 
whether it subsequently should be submitted to the Secretary of 
Commerce (Secretary) for review. The intended effect of this proposed 
rule is to implement the referendums consistent with the requirements 
of the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act).

DATES: Comments must be received no later than 5 p.m., eastern time, on 
November 12, 2003.

ADDRESSES: Written comments on the proposed rule must be sent to Phil 
Steele, Southeast Regional Office, NMFS, 9721 Executive Center Drive 
N., St. Petersburg, FL 33702. Comments also may be sent via fax to 727-
570-5583. Comments will not be accepted if submitted via e-mail or 
Internet.
    Copies of supporting documentation for this proposed rule, which 
includes a regulatory impact review (RIR) and a Regulatory Flexibility 
Act Analysis (RFAA), are available from NMFS at the address above.

FOR FURTHER INFORMATION CONTACT: Phil Steele, telephone: 727-570-5305, 
fax: 727-570-5583, e-mail:  [email protected].

SUPPLEMENTARY INFORMATION: The reef fish fishery in the exclusive 
economic zone (EEZ) of the Gulf of Mexico is managed under the Fishery 
Management Plan for the Reef Fish Resources of the Gulf of Mexico 
(FMP). The FMP was prepared by the Gulf of Mexico Fishery Management 
Council (Council) and is implemented under the authority of the 
Magnuson-Stevens Act by regulations at 50 CFR part 622.

Background

    During the early to mid-1990s, the Council began development of an 
IFQ program for the commercial red snapper fishery in the Gulf of 
Mexico. Development of this program involved extensive interaction with 
the fishing industry, other stakeholders, and the public through 
numerous workshops, public hearings, and Council meetings. The program 
was approved by NMFS and scheduled for implementation in 1996. However, 
Congressional action in late 1995 prohibited implementation of any new 
IFQ programs in any U.S. fishery before October 2000. Subsequent 
Congressional actions incorporated this prohibition and related 
provisions into the 1996 amendments to the Magnuson-Stevens Act and 
ultimately extended the prohibition until October 1, 2002.

[[Page 61179]]

    Under Sec.  407(c) of the Magnuson-Stevens Act, the Council is now 
authorized to prepare and submit a plan amendment and regulations to 
implement an IFQ program for the commercial red snapper fishery under 
certain conditions. First, the preparation of such a plan amendment and 
implementing regulations must be approved in a referendum. If the 
referendum is approved by a majority of the votes cast, the Council 
would be responsible for preparing any such plan amendment and 
regulations through the normal Council and rulemaking processes that 
would involve extensive opportunities for industry and public review 
and input at various Council meetings and public hearings and during 
public comment periods on the plan amendment and regulations. Second, 
the submission of the plan amendment and regulations to the Secretary 
for review, approval/disapproval, and implementation must be approved 
in a subsequent referendum. Both referendums must be conducted in 
accordance with Sec.  407(c)(2) of the Magnuson-Stevens Act. Section 
407(c)(2) of the Magnuson-Stevens Act also specifies that, ``Prior to 
each referendum, the Secretary, in consultation with the Council, 
shall: (A) Identify and notify all such persons holding permits with 
red snapper endorsements and all such vessel captains; and (B) make 
available to all such persons and vessel captains information about the 
schedule, procedures, and eligibility requirements for the referendum 
and the proposed individual fishing quota program.''

Purpose of This Proposed Rule and the Referendums

    NMFS, in accordance with the provisions of Sec.  407(c) of the 
Magnuson-Stevens Act, will conduct referendums to determine, based on 
the majority vote of eligible voters, whether a plan amendment and 
regulations to implement an IFQ program for the Gulf of Mexico 
commercial red snapper fishery should be prepared and, if so, whether 
any subsequently prepared plan amendment and implementing regulations 
should be submitted to the Secretary for review, approval/disapproval, 
and implementation. The primary purpose of this proposed rule is to 
notify potential participants in the referendums, and members of the 
public, of the procedures, schedule, and eligibility requirements that 
NMFS would use in conducting the referendums. The procedures and 
eligibility criteria used for purposes of conducting the referendums 
have no bearing on the procedures and eligibility requirements that 
might be applied in any future IFQ program that may be developed by the 
Council. The provisions of any proposed IFQ program would be developed 
independently by the Council through the normal plan amendment and 
rulemaking processes that would involve extensive opportunities for 
public review and comment during Council meetings, public hearings, and 
public comment on any proposed rule. There is no relation between 
eligibility to vote in the referendums, as described in this proposed 
rule, and any eligibility regarding a subsequent IFQ program.

Referendum Processes

Who Would Be Eligible To Vote in the Referendums?

    Section 407(c)(2) of the Magnuson-Stevens Act establishes criteria 
regarding eligibility of persons to vote in the referendums. Those 
criteria are subject to various interpretations. After careful 
consideration of those criteria and the practicality and fairness of 
several possible interpretations, NMFS has determined that the 
following persons would be eligible to vote in the referendums.
    (I) For the initial referendum:
    (A) A person who according to NMFS permit records has continuously 
held their Gulf red snapper endorsement/Class I license from September 
1, 1996, through the date of publication in the Federal Register of the 
final rule implementing these referendum procedures;
    (B) In the case of a Class 1 license that has been transferred 
through sale since September 1, 1996, the person who according to NMFS' 
permit records holds such Class 1 license as of the date of publication 
in the Federal Register of the final rule implementing these referendum 
procedures;
    (C) In the case of a Class 1 license that has been transferred 
through lease since September 1, 1996, both the final lessor and final 
lessee as of the date of publication in the Federal Register of the 
final rule implementing these referendum procedures, as determined by 
NMFS' permit records; and
    (D) A vessel captain who harvested red snapper under a red snapper 
endorsement in each red snapper commercial fishing season occurring 
between January 1, 1993, and September 1, 1996.
    (II) For the second referendum:
    (A) A person who according to NMFS permit records has continuously 
held their Gulf red snapper endorsement/Class I license from September 
1, 1996, through the date of publication in the Federal Register of a 
subsequent notice announcing the second referendum;
    (B) In the case of a Class 1 license that has been transferred 
through sale since September 1, 1996, the person that according to 
NMFS' permit records holds such Class 1 license as of the date of 
publication in the Federal Register of a subsequent notice announcing 
the second referendum;
    (C) In the case of a Class 1 license that has been transferred 
through lease since September 1, 1996, both the final lessor and final 
lessee as of the date of publication in the Federal Register of a 
subsequent notice announcing the second referendum, as determined by 
NMFS' permit records; and
    (D) A vessel captain who harvested red snapper under a red snapper 
endorsement in each red snapper commercial fishing season occurring 
between January 1, 1993, and September 1, 1996.
    A person who was simultaneously the holder of an endorsement/Class 
1 license and a vessel captain operating under that endorsement/Class 1 
license would not be granted dual eligibility. Such person may only 
receive eligibility under one of the eligibility criteria.
    NMFS will have sufficient information in the Southeast Regional 
Office fisheries permit database to identify those persons eligible to 
vote in the referendums based on their having held a red snapper 
endorsement/Class 1 license during the required periods. However, NMFS 
did not have sufficient information to identify vessel captains whose 
eligibility would be based on the harvest of red snapper under a red 
snapper endorsement in each red snapper commercial fishing season 
occurring between January 1, 1993, and September 1, 1996. To obtain 
that information, NMFS prepared and distributed a fishery bulletin that 
described the general referendum procedures and provided a 20-day 
period (ending August 18, 2003) for submittal of detailed information 
by those vessel captains. That fishery bulletin was widely distributed 
to all Gulf reef fish permitees, including dealers, and to major 
fishing organizations, state fisheries directors, and others. 
Information received from that solicitation would be used to identify 
vessel captains whose eligibility to vote in the referendums is based 
on the red snapper harvest criterion.

How Would Votes Be Weighted?

    Section 407(c)(2) of the Magnuson-Stevens Act requires that NMFS 
develop a formula to weight votes based on the proportional harvests 
under each

[[Page 61180]]

eligible endorsement and by each eligible captain during the period 
January 1, 1993, and September 1, 1996. NMFS would obtain applicable 
red snapper landings data from the Southeast Fisheries Science Center 
reef fish logbook database. Information from NMFS' Southeast Regional 
Office permit database would be used to assign total applicable 
landings to each eligible voter (red snapper endorsement/Class 1 
license holder, lessee/lessor, or vessel captain).
    The weighting procedure is complicated somewhat by requirements to 
protect the confidentiality of landings data, when the applicable 
landings history involves landings by different entities. To address 
confidentiality concerns, NMFS would establish a series of categories 
(ranges) of red snapper landings, e.g., 1,000-1,500 lb (454-680 kg); 
1501-2000 lb (681-907 kg); etc.. Each eligible voter's total landings 
during the period January 1, 1993, and September 1, 1996, would be 
attributed to the appropriate category. The overall average landings 
attributed to each category would be determined. That average number of 
pounds would be the vote weighting factor, i.e., one vote for each such 
pound, for each eligible voter whose landings fall within that 
category. For example, if the overall average number of pounds 
attributed to the 1,000-1,500-lb (454-689-kg) category is 1,328 lb (602 
kg), each eligible voter within that category would receive 1328 votes.

How Would the Vote Be Conducted?

    On or about November 1, 2003, NMFS would mail each eligible voter a 
ballot that would specify the number of votes (weighting) that that 
voter is assigned. NMFS would mail the ballots and associated 
explanatory information, via certified mail return receipt requested, 
to the address of record indicated in NMFS' permit database for 
endorsement/Class I license holders and, for vessel captains, to the 
address provided to NMFS by the captains during the prior information 
solicitation that ended August 18, 2003. All votes assigned to an 
eligible voter must be cast for the same decision, i.e., either all to 
approve or all to disapprove the applicable referendum question. The 
ballot must be signed by the eligible voter. Ballots must be mailed to 
Phil Steele, Southeast Regional Office, NMFS, 9721 Executive Center 
Drive N., St. Petersburg, FL 33702. Ballots for the initial referendum 
must be received at that address by 4:30 p.m., eastern time, December 
15, 2003; ballots received after that deadline would not be considered 
in determining the outcome of the initial referendum. Although it would 
not be required, voters may want to consider submitting their ballots 
by registered mail.

How Would the Outcome of the Referendums Be Determined?

    Vote counting would be conducted by NMFS. Approval or disapproval 
of the referendums would be determined by a majority of the votes cast. 
NMFS would prepare a fishery bulletin announcing the results of each 
referendum that is conducted and would distribute the bulletin to all 
Gulf reef fish permitees, including dealers, and to other interested 
parties. The results would also be posted on NMFS' Southeast Regional 
Office's website at http://caldera.sero.nmfs.gov.

What Would Happen After the Initial Referendum?

    NMFS would present the results of the initial referendum at the 
January 13-16, 2004, Council meeting in San Antonio, TX. If the initial 
referendum fails, the Council cannot proceed with preparation of a plan 
amendment and regulations to implement an IFQ program for the 
commercial red snapper fishery in the Gulf of Mexico. If the initial 
referendum is approved, the Council would be authorized, if it so 
decides, to proceed with development of a plan amendment and 
regulations to implement an IFQ program for the commercial red snapper 
fishery in the Gulf of Mexico. The proposed IFQ program would be 
developed through the normal Council and rulemaking processes that 
would involve extensive opportunities for industry and public review 
and input at various Council meetings and public hearings and during 
public comment periods on the plan amendment and regulations. The plan 
amendment and regulations could only by submitted to the Secretary for 
review, approval/disapproval, and implementation if in a second 
referendum approval of the submission was passed by a majority of the 
votes cast by the eligible voters as described in this proposed rule. 
NMFS would announce any required second referendum by publishing a 
notice in the Federal Register that would provide all pertinent 
information regarding the referendum. Any second referendum would be 
conducted in conformance with Sec.  407(c)(2) of the Magnuson-Stevens 
Act and the provisions outlined in this proposed rule.

Background Information About a Potential IFQ Program

    In anticipation of the October 2002 expiration of the Congressional 
moratorium on development of IFQ programs, some members of the 
commercial red snapper fishery requested that the Council develop an 
IFQ profile for the fishery. Based on that request, the Council 
convened an Ad Hoc Red Snapper Advisory Panel (AHRSAP), comprised of 
participants in the commercial red snapper fishery and other 
individuals knowledgeable about the fishery and/or IFQ programs, to 
develop a profile. This profile, later referred to as an Individual 
Transferable Quota (ITQ) Options Paper for the Problems Identified in 
the Gulf of Mexico Red Snapper Fishery, provides background information 
about historical management of the red snapper fishery, problems in the 
fishery, management goals, and issues and management alternatives 
associated with a potential IFQ/ITQ program. The profile addresses such 
issues as: ITQ units of measurement (percentage of quota or pounds of 
red snapper); duration of ITQ rights; set-aside for non-ITQ catches 
under current commercial quota; actions to be taken if the quota 
increases or decreases; types of ITQ share certificates; initial 
allocation of ITQ shares and annual coupons (including eligibility, 
apportionment, transferability of landings histories, etc.); possible 
controls on ownership and transfer of ITQ shares; whether to include a 
``use it or lose it'' provision; disposition of unused or sanctioned 
ITQ shares and coupons; possible landings restrictions; monitoring of 
ITQ share certificates and annual coupons; quota tracking; an appeals 
process; and size limit changes.
    This profile represents an outline of an IFQ program as envisioned 
by the AHRSAP, with input from the Council--it does not reflect any 
final decisions by the Council regarding the structure of a proposed 
IFQ program for the red snapper commercial fishery. The Council may 
consider the options in the profile, and perhaps a variety of other 
options, if it chooses to pursue development of an IFQ program for the 
fishery. However, for purposes of the initial referendum, the Council 
intentionally refrained from adopting the profile. Any subsequent 
development of a proposed IFQ program for the red snapper commercial 
fishery would be conducted through the normal Council and Federal 
rulemaking processes that ensure numerous opportunities for review and 
comment by industry participants and members of the public.

[[Page 61181]]

Classification

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration that this rule would not have a significant economic 
impact on a substantial number of small entities. The basis for this 
certification follows:
    The Magnuson-Stevens Act, as amended, provides the statutory basis 
for the proposed rule. The proposed rule would implement up to two 
referendums on a potential IFQ program for the commercial red snapper 
fishery in the Gulf of Mexico, consistent with the requirements of the 
Magnuson-Stevens Act. The primary purpose of this proposed rule is to 
notify potential participants in the referendums, and members of the 
public, of the procedures, schedule, and eligibility requirements that 
NMFS would use in conducting the referendums.
    One hundred and thirty-seven entities have been identified as 
having a vessel permit with a red snapper Class 1 License during the 
specified eligibility time frame and, therefore, qualify for 
participation in the referendums. Approximately 35 of these licenses 
are currently being fished on vessels operated by other entities 
through lease arrangements. An additional four vessel captains have 
been identified as referendum qualifiers. Although the number of Class 
1 Licenses and vessel captains is known with certainty, lease 
arrangements may be subject to cancellation prior to a referendum such 
that the total number of eligible entities due to lease arrangements is 
not known with certainty. Although new lease arrangements are also a 
possibility, such that the number of lease arrangements could increase 
from the current total, increased leasing is not expected since this 
would dilute the voting power of the Class 1 License holder, absent 
control over the subsequent vote by the lessee. Thus, it is expected 
that the number of lease qualifiers will decline by some unknown 
amount. Assuming, however, that all current qualifiers maintain their 
status, the total number of entities that qualify for participation in 
the referendum is 176. The total red snapper fishery is valued at 
approximately $10 million in ex-vessel revenue on an annual basis. 
Although participants in this fishery do not harvest red snapper 
exclusively, among those vessels that target red snapper (as determined 
by whether the revenues from red snapper on an individual trip were 
greater than the revenues from any other individual species), 
approximately 57 percent of annual revenues for these vessels came as 
red snapper sales. If all qualifiers target red snapper and all red 
snapper ex-vessel revenues are attributed to these participants, and 
assuming red snapper revenues equal 57 percent of total commercial 
revenues for these participants, the average ex-vessel revenue per 
entity is approximately $100,000 ([($10 million/0.57]/176). If 
evaluated over the number of Class 1 licenses (137), the appropriate 
average revenue is approximately $128,000. Although it is logical to 
assume that the qualifiers target red snapper, these estimates are 
biased high because all red snapper revenues cannot be attributed to 
either category of entities. Thus, the average ex-vessel revenue per 
entity is less than either figure.
    All referendum qualifiers that would be directly affected by the 
proposed rule are commercial fishing operations. The Small Business 
Administration defines a small business that engages in commercial 
fishing as a firm with receipts up to $3.5 million. Based on the 
revenue profile provided above, all commercial entities that would 
qualify for participation in the referendums are considered small 
entities. Because all qualifying entities would be affected by the 
proposed rule, it is concluded that the proposed rule would affect a 
substantial number of small entities.
    The outcome of ``significant economic impact'' can be ascertained 
by examining two issues: Disproportionality and profitability. The 
disproportionality question is, do the regulations place a substantial 
number of small entities at a significant competitive disadvantage to 
large entities? Because all the entities that would be affected by the 
proposed rule are considered small entities, the issue of 
disproportionality does not arise in the present case.
    The profitability question is, do the regulations significantly 
reduce profit for a substantial number of small entities? Since the 
proposed rule simply defines the procedures, schedule, and eligibility 
requirements that NMFS would use in conducting the referendums, there 
are no implementing regulations associated with the proposed rule and, 
therefore, there would be no direct effects on current fishery 
participation, effort, harvests, or other use of the resource. All 
current entities can continue to participate in the fishery in the 
manner in which they currently operate. Therefore, all current 
harvests, costs, and profits would remain unchanged. Any effects, 
adverse or otherwise, on small entities that participate in the fishery 
would only occur in the future, should an IFQ program be implemented. 
The likelihood of this occurring in either the near or distant future 
is unknown. Further, the resultant impacts of such a program are 
unknown because the specific program has not been designed. These 
impacts, however, would be determined should an IFQ program be 
proposed. Because the proposed rule would not directly affect fishery 
participation or harvest in any way, the rule would not reduce business 
profit for any fishery participants or related businesses. Profits are 
therefore not expected to be significantly reduced by the proposed 
rule. On this basis, the proposed rule may be adjudged not to have a 
significant economic impact on a substantial number of small entities.
    Accordingly, an initial regulatory flexibility analysis was not 
required or prepared. Copies of the RIR and Regulatory Flexibility Act 
Analysis are available (see ADDRESSES).

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

    Dated: October 22, 2003.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.
[FR Doc. 03-27035 Filed 10-24-03; 8:45 am]
BILLING CODE 3510-22-S