[Federal Register Volume 70, Number 136 (Monday, July 18, 2005)]
[Rules and Regulations]
[Pages 41161-41163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14092]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 050408096-5182-02; I.D. 033105A]
RIN 0648-AS69


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Gulf Reef Fish Limited Access 
System

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 Amendment 24 to the 
Fishery Management Plan (FMP) for the Reef Fish Resources of the Gulf 
of Mexico (Amendment 24) prepared by the Gulf of Mexico Fishery 
Management Council (Council). This final rule establishes a limited 
access system for the commercial reef fish fishery in the Gulf of 
Mexico by capping participation at the current level. The intended 
effect of this final rule is to provide economic and social stability 
in the fishery by preventing speculative entry into the fishery.

DATES: This final rule is effective August 17, 2005.

ADDRESSES: Copies of the Regulatory Impact Review (RIR) and Final 
Regulatory Flexibility Analyses (FRFA) are available from Peter Hood, 
NMFS, Southeast Regional Office, 263 13th Avenue South, St. Petersburg, 
FL 33701; telephone 727-824-5305; fax 727-824-5308; e-mail 
[email protected].

FOR FURTHER INFORMATION CONTACT: Peter Hood, telephone: 727-824-5305; 
fax: 727-824-5308; 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 FMP. The 
FMP was prepared by the Council and is implemented under the authority 
of the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act) by regulations at 50 CFR part 622.
    On April 6, 2005, NMFS published a notice of availability of 
Amendment 24 and requested public comment on that amendment (70 FR 
17401). On April 25, 2005, NMFS published the proposed rule to 
implement Amendment 24 and requested public comment (70 FR

[[Page 41162]]

21170). NMFS received no comments on Amendment 24 or the associated 
proposed rule. NMFS approved Amendment 24 on July 5, 2005. The 
rationale for the measures in Amendment 24 is provided in the amendment 
and in the preamble to the proposed rule and is not repeated here. This 
final rule is implemented with no changes from the proposed rule.

Classification

    The Administrator, Southeast Region, NMFS, has determined Amendment 
24 is necessary for the conservation and management of the Gulf reef 
fish fishery and is consistent with the Magnuson-Stevens Act and other 
applicable laws.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    NMFS prepared a FRFA. The FRFA incorporates the initial regulatory 
flexibility analysis (IRFA) and a summary of the analyses completed to 
support the action. No public comments were received on the IRFA or the 
economic impacts of the rule. Therefore, no changes were made in the 
final rule as a result of such comments. A summary of the FRFA follows.
    This final rule will establish a limited access system for the 
commercial reef fish fishery in the Gulf of Mexico. The purpose of the 
rule is to provide stability in the Gulf of Mexico commercial reef fish 
fishery as part of the strategy to achieve optimum yield (OY) and 
maximize the overall benefits to the Nation provided by the fishery. 
The Magnuson-Stevens Act provides the statutory basis for the final 
rule. No duplicative, overlapping, or conflicting Federal rules have 
been identified.
    An estimated 1,161 vessels were permitted to fish commercially for 
Gulf reef fish in 2003, down from 1,718 in 1993, and 61 percent to 74 
percent had logbook-reported landings from 1993 through 2003. The 
median annual gross revenue from all logbook-reported sales of finfish 
by these vessels ranged from approximately $12,000 to $23,000 during 
this period. The median percentage of gross revenues attributable to 
Gulf reef fish ranged from 95 percent to 98 percent. Although 
participation in the fishery has declined since 1993, this decline has 
been voluntary and presumed attributable to economic conditions in the 
fishery and fishing in general and not due to regulatory requirements. 
Although access has been limited in this fishery since 1992, transfer 
of permits is not restricted, and those seeking to enter the fishery 
can purchase a permit from a permit holder. Such transfers do occur: 
253 of the 1,175 valid permits as of February 6, 2004, were permits 
that had been transferred at some time since 1998. Thus, entry into the 
fishery occurs, as evidenced by the transfer of 253 existing permits to 
vessels new to the fishery.
    The final rule will affect all current participants in the fishery 
and all entities that may be interested in entering the fishery. 
Although the number of current participants is known, no estimate of 
the number of prospective participants can be provided, although it is 
not expected to be substantial due to a decline in total participation 
in the fishery even though permit transfer and entry opportunities are 
available.
    The final rule will not change current reporting, record-keeping, 
and other compliance requirements under the FMP. These requirements 
include qualification criteria for the commercial vessel permit and 
logbook landing reports. All of the information elements required for 
these processes are standard elements essential to the successful 
operation of a fishing business and should, therefore, already be 
collected and maintained as standard operating practice by the 
business. The requirements do not require professional skills. Because 
these compliance requirements are unchanged under this rule, the 
requirements are not deemed to be onerous.
    One general class of small business entities will be directly 
affected by the final rule, commercial fishing vessels. The Small 
Business Administration defines a small business that engages in 
commercial fishing as a firm that is independently owned and operated, 
is not dominant in its field of operation, and has annual receipts up 
to $3.5 million per year. Based on the revenue profiles provided above, 
all commercial entities operating in the Gulf reef fish fishery are 
considered small entities.
    The final rule will apply to all entities that operate in the Gulf 
of Mexico commercial reef fish fishery and those entities interested in 
or seeking to enter the fishery. The rule will, therefore, 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? All the vessel operations affected by the proposed rule 
are considered small entities, so 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? The final 
rule will continue the limited access system in the fishery. 
Continuation of this system would be expected to increase profitability 
for the entities remaining in the fishery if participation continues to 
decline, as has occurred since 1993. Should the decline in 
participation cease, profits would be expected to continue at current 
levels. Should the fishery revert to open access, participation would 
be expected to increase, and average profit per participant would be 
expected to decline, possibly to the point of elimination of all 
profits from this fishery.
    The final rule will continue the requirement to have a vessel 
permit in order to participate in the commercial reef fish fishery. The 
cost of the permit is $50, and renewal is required every other year 
(the permit is automatically renewed the second year). Because this is 
a current requirement, there would be no additional impacts on 
participant profits as a result of this requirement.
    Three alternatives were considered to the final rule. The status 
quo alternative would allow the fishery to revert to open access. Open 
access conditions would be expected to lead to an increase in the 
number of permitted vessels, or, at least, slow the rate of decline in 
participation that has occurred. Any increase in the number of 
permitted vessels landing Gulf reef fish would lead to an expected 
decrease in producer surplus from that in 2003, estimated at $404,500 
to $647,200.
    The remaining two alternatives would continue the current 
moratorium on issuing new Gulf reef fish permits for 5 years and 10 
years, respectively, compared to the final rule which would continue 
the moratorium indefinitely. Thus, the fishery would continue as a 
limited access fishery under each alternative. It is impossible to 
distinguish these alternatives empirically in terms of fishery behavior 
using available data. However, it is reasonable to assume that 
fishermen believe that regardless of the duration of the program 
specified, a precedent for indefinite use of private market mechanisms 
to allow entry into the fishery has been established, given the history 
of successfully functioning private markets for vessel permits. Thus, 
the outcomes of these three alternatives are expected to be 
functionally equivalent. As stated previously, under the current 
limited access program, the fishery is estimated to have generated 
$404,500 to $647,200 in producer surplus in 2003. Assuming the increase

[[Page 41163]]

in producer surplus mirrors that of fleet contraction exhibited 
recently (1.15 percent), the resultant estimates of producer surplus 
are approximately $450,000 to $720,000 by 2010, and $484,000 to 
$775,000 by 2015. Each alternative would also continue to provide for 
market-based compensation for vessels that exit the fishery, and the 
permit market would continue to provide an economically rational basis 
for regulating the entry of vessels into the commercial Gulf reef fish 
fishery and allocating access to fishery resources among competing 
users in the commercial fisheries.
    Although the final rule would imply a more permanent system than 
the alternatives, the system established under any alternative could be 
suspended at any time through appropriate regulatory action. Adopting 
an indefinite duration, however, eliminates the need for action at 
specific intervals to continue the system, thereby eliminating the 
costs associated with the additional regulatory process. The 
administrative and development cost of the current action is estimated 
to be $200,000. This cost includes all administrative costs associated 
with development, review, and implementation of this rule, including 
Council meetings, public hearings, travel, staff, and printing. 
Further, the final rule may better address the Council's purpose of 
providing stability in the commercial and recreational fisheries for 
Gulf reef fish, preventing speculative entry into the commercial 
fisheries, and achieving OY. The status quo alternative would not 
achieve the Council's objectives.
    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' As part of this rulemaking process, NMFS prepared a fishery 
bulletin, which also serves as a small entity compliance guide. The 
fishery bulletin will be sent to all vessel permit holders for the Gulf 
reef fish fishery.

List of Subjects in 50 CFR Part 622

    Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping 
requirements, Virgin Islands.

    Dated: July 13, 2005.
John Oliver
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 622 is amended as 
follows:

PART 622--FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC

0
1. The authority citation for part 622 continues to read as follows:

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

0
2. In Sec.  622.4, revise the last sentence of paragraph (a)(2)(v) and 
paragraph (m) introductory text to read as follows:


Sec.  622.4  Permits and fees.

    (a) * * *
    (2) * * *
    (v) * * * See paragraph (m) of this section regarding a limited 
access system for commercial vessel permits for Gulf reef fish and 
limited exceptions to the earned income requirement for a permit.
* * * * *
    (m) Limited access system for commercial vessel permits for Gulf 
reef fish.
* * * * *
[FR Doc. 05-14092 Filed 7-15-05; 8:45 am]
BILLING CODE 3510-22-S