[Federal Register Volume 72, Number 241 (Monday, December 17, 2007)]
[Proposed Rules]
[Pages 71315-71344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24254]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 071130780-7564-01]
RIN 0648-AU32


Fisheries of the Northeastern United States; Atlantic Sea Scallop 
Fishery; Amendment 11

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

ACTION: Proposed rule; request for comments.

-----------------------------------------------------------------------

SUMMARY: NMFS proposes regulations to implement measures in Amendment 
11 to the Atlantic Sea Scallop Fishery Management Plan (FMP). Amendment 
11 was developed by the New England Fishery Management Council 
(Council) to control the capacity of the open access general category 
fleet. Amendment 11 would establish a new management program for the 
general category fishery, including a limited access program with 
individual fishing quotas (IFQs) for qualified general category 
vessels, a specific allocation for general category fisheries, and 
other measures to improve management of the general category scallop 
fishery.

DATES: Public comments must be received no later than 5 p.m., eastern 
standard time, on January 31, 2008.

ADDRESSES: A final supplemental environmental impact statement (FSEIS) 
was prepared for Amendment 11 that describes the proposed action and 
other considered alternatives and provides a thorough analysis of the 
impacts of the proposed measures and alternatives. Copies of Amendment 
11, the FSEIS, and the Initial Regulatory Flexibility Analysis (IRFA), 
are available on request from Paul J. Howard, Executive Director, New 
England Fishery Management Council (Council), 50 Water Street, 
Newburyport, MA 01950. These documents are also available online at 
http://www.nefmc.org.
    You may submit comments, identified by 0648-AU32, by any one of the 
following methods:
     Electronic Submissions: Submit all electronic public 
comments via the Federal eRulemaking Portal http://www.regulations.gov
     Fax: (978) 281-9135, Attn: Peter Christopher
     Mail: Patricia A. Kurkul, Regional Administrator, NMFS, 
Northeast Regional Office, One Blackburn Drive, Gloucester, MA 01930. 
Mark the outside of the envelope, ``Comments on Scallop Amendment 11 
Proposed Rule.''
    Instructions: All comments received are a part of the public record 
and will generally be posted to http://www.regulations.gov without 
change. All personal identifying information (for example, name, 
address, etc.) voluntarily submitted by the commenter may be publicly 
accessible. Do not submit confidential business information or 
otherwise sensitive or protected information. NMFS will accept 
anonymous comments. Attachments to electronic comments will be accepted 
in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only.
    Written comments regarding the burden-hour estimate or other 
aspects of the collection-of-information requirement contained in this 
proposed rule should be submitted to the Regional Administrator at the 
address above and by e-mail to [email protected], or fax to 
202-395-7285.

FOR FURTHER INFORMATION CONTACT: Peter Christopher, Fishery Policy 
Analyst, phone 978-281-9288, fax 978-281-9135.

SUPPLEMENTARY INFORMATION:

Background

    The general category scallop fishery is currently an open access 
fishery that allows any vessel to fish for up to 400 lb (181.44 kg) of 
Atlantic sea scallops (scallops), provided the vessel has been issued a 
general category or limited access scallop permit. This open access 
fishery was established in 1994 by Amendment 4 to the FMP (Amendment 4) 
to allow vessels fishing in non-scallop fisheries to catch scallops as 
incidental catch, and to allow a small-scale scallop fishery to 
continue outside of the limited access and effort control programs 
aimed at the large-scale scallop fishery. Over time, the overall 
participation in the general category fishery has increased. In 1994, 
there were 1,992 general category permits issued. By 2005 that number 
had increased to 2,950. In 1994, there were 181 general category 
vessels that landed scallops, while in 2005 there were over 600.
    Out of concern about the level of fishing effort and harvest from 
the general category scallop fleet, the Council recommended that a 
Federal Register notice should be published to notify the public that 
the Council would consider limiting entry to the general category 
scallop fishery as of a specified control date. NMFS subsequently 
established the control date of November 1, 2004. In January 2006, the 
Council began the development of Amendment 11 to evaluate alternatives 
for a limited access program and other measures for general category 
vessels. The Council held 35 meetings open to the public on Amendment 
11 between January 2006 and June 2007. After considering a wide range 
of issues, alternatives, and public input, the Council adopted a draft 
supplemental environmental impact statement (DSEIS) for Amendment 11 on 
April 11, 2007. Following the close of the public comment period on 
June 18, 2007, the Council adopted Amendment 11 on June 20, 2007.
    Amendment 11 would establish criteria and authority for determining 
the percentage of scallop catch allocated to the general category fleet 
and would establish the IFQ program. However, these specific allocation 
amounts have been being developed by the Council as part of Framework 
19 to the FMP (Framework 19) which will establish scallop fishery 
management measures for the 2008 and 2009 fishing years. After 
proposing the allowable levels of fishing based on updated survey 
information and fishing mortality targets, the total allowable catches 
(TACs) described below would be specified through a separate rulemaking 
for Framework 19. Framework 19 also would specify management measures 
for the 2008 and 2009 fishing years that would be recommended if 
Amendment 11 is not approved.
    A Notice of Availability (NOA) for Amendment 11 was published on 
November 30, 2007. The comment period on the NOA ends on January 29, 
2008.

Proposed Measures

    The proposed regulations are based on the description of the 
measures in Amendment 11. NMFS has noted several instances where it has 
interpreted the language in Amendment 11 to account for any missing 
details in the Council's description of the proposed measures. NMFS 
seeks comments on all of the measures in Amendment 11, particularly the 
noted instances.

[[Page 71316]]

Limited Access Program for the General Category Fishery

    Amendment 11 would require vessels to be issued a limited access 
general category (LAGC) scallop permit in order to land scallops under 
general category rules. All general category permits would be limited 
access, requiring that a vessel owner submit an application 
demonstrating that the vessel is eligible for the permit. The current 
general category permits (1A- non VMS, and 1B- VMS permits) would be 
replaced with three types of LAGC scallop permits: IFQ LAGC scallop 
permit (IFQ scallop permit); Northern Gulf of Maine (NGOM) LAGC scallop 
permit (NGOM scallop permit); and incidental catch LAGC scallop permit 
(Incidental scallop permit).
    A vessel would be eligible to be issued an IFQ scallop permit if 
the owner could document landings of at least 1,000 lb (454 kg) of 
scallop meats, as verified by NMFS records or documented through dealer 
receipts, in any fishing year between March 1, 2000, and November 1, 
2004, and issuance of a general category scallop permit to the vessel 
during the fishing year in which the landings were made.
    The owner of a vessel who cannot qualify for an IFQ scallop permit, 
or who elects not to apply for an IFQ scallop permit, could instead be 
issued a NGOM scallop permit. The NGOM scallop permit would allow the 
vessel to fish in the NGOM exclusively, defined as the waters north of 
42[deg] 20' N. Lat. A vessel would qualify for the NGOM scallop permit 
if it had been issued a valid general category scallop permit as of 
November 1, 2004. There would be no landings eligibility criteria. 
Vessels issued this permit would be subject to additional restrictions 
outlined in the description of the NGOM Scallop Management Area below.
    A vessel would qualify for an Incidental scallop permit if it had 
been issued a valid general category scallop permit as of November 1, 
2004. There would be no landings eligibility criteria. This provision 
is intended to allow an incidental level of scallop catch for vessels 
that meet the permit eligibility, but not the landings criteria. This 
permit would allow such vessels to possess and land up to 40 lb (18.14 
kg) of scallops per trip, and is intended to allow landing of 
incidental scallop catch. Some vessels that could qualify for an IFQ 
scallop permit may opt for the Incidental scallop permit because it 
permits vessels to land an incidental catch of scallops on an unlimited 
number of trips. In drafting the proposed rule, NMFS presumed that the 
limited access permit restrictions specified below apply to all three 
types of LAGC scallop permit, unless specifically excluded in Amendment 
11.

Initial Application for a LAGC Scallop Permit

    A vessel owner would be required to submit an initial application 
for a LAGC scallop permit or confirmation of permit history within 90 
days of the effective date of the final regulations. The Council 
recommended the shorter than usual application period to expedite the 
transition to the IFQ program. The IFQ program cannot be implemented 
until all IFQ permits are issued because the number of vessels and the 
contribution factors for all qualified IFQ scallop vessels will be used 
to determine each vessel's IFQ share of the TAC allocated to IFQ 
scallop vessels (see ``IFQs for Limited Access General Category Scallop 
Vessels'' below).

Limited Access Vessel Permit Provisions

    Amendment 11 would establish measures to govern future transactions 
related to limited access vessels, such as purchases, sales, or 
reconstruction. These measures would apply to all LAGC scallop vessels. 
Except as noted, the provisions proposed in this amendment are 
consistent with those that govern most of the other Northeast region 
limited access fisheries; there are some differences in the limited 
access program for American lobster.
1. Initial Eligibility
    Initial eligibility for an LAGC scallop permit would have to be 
established during the first year after the implementation of Amendment 
11. A vessel owner would be required to submit an application for an 
LAGC scallop permit or CPH within 90 days of the effective date of the 
final regulations.
2. Landings History
    Amendment 11 specifies landings and permit history criteria that a 
vessel would have to meet to qualify for LAGC permits. It also 
specifies that an IFQ scallop vessel would be allocated IFQ based on 
its best year of scallop landings and the number of fishing years 
active during the qualification period of March 1, 2000, through 
November 1, 2004. Amendment 11 specifies that qualifying landings would 
have to be from the same scallop fishing year (March 1 through February 
28/29) that a vessel was issued a general category scallop permit 
during the qualification period. Therefore, this proposed rule requires 
that, for any landings to be used in determining eligibility, best year 
of fishing, years active, and the resulting contribution factor, the 
vessel must have been issued a general category scallop permit in the 
fishing year the landings were made.
    The best year of scallop landings would be the scallop fishing year 
during the qualification period with the highest amount of scallop 
meats landed, provided the vessel was issued a general category scallop 
permit. Years active would be the number of scallop fishing years 
during the qualification period that the vessel landed at least 1lb 
(0.45 kg) of scallops provided the vessel was issued a general category 
scallop permit. In-shell scallop landings would be converted to meat-
weight using the formula of 8.33 lb (3.78 kg) of scallop meats for each 
U.S. bushel of in-shell scallops, for qualification purposes.
    NMFS landings data from dealer reports would be used to determine a 
vessel's eligibility for an IFQ scallop permit, a qualified IFQ scallop 
vessel's best year of scallop landings, and years active in the general 
category scallop fishery. The NMFS permit database would be used to 
determine permit criteria eligibility for all LAGC scallop permits. 
Applicants would be allowed to dispute the denial of an LAGC permit, or 
contribution factor (based on best year and years active), through the 
eligibility appeals process described below.
3. Confirmation of Permit History (CPH)
    A person who does not currently own a fishing vessel, but who has 
owned a qualifying vessel that has sunk, or been destroyed, or 
transferred to another person, would be required to apply for and 
receive a CPH if the fishing and permit history of such vessel has been 
retained lawfully by the applicant. Such an application would have to 
be made within 90 days of the effective date of the final regulations 
for Amendment 11. The CPH provides a benefit to a vessel owner by 
securing limited access eligibility through a registration system when 
the individual does not currently own a vessel. To be eligible to 
obtain a CPH, the applicant would have to show that the qualifying 
vessel meets the eligibility requirements for the applicable LAGC 
permit, and that all other permit restrictions described below are 
satisfied. Issuance of a valid CPH would preserve the eligibility of 
the applicant to apply for an LAGC permit for a replacement vessel 
based on the qualifying LAGC scallop vessel's fishing and permit 
history at a subsequent time. A CPH would have to be applied for in 
order for the applicant to preserve the LAGC scallop permit eligibility 
of the qualifying vessel.

[[Page 71317]]

Vessel owners who were issued a CPH could obtain a vessel permit for a 
replacement vessel based upon the previous vessel's history that would 
utilize the CPH. IFQ associated with a CPH would count toward a vessel 
owner's overall ownership of IFQ, and would be restricted under the 5-
percent ownership cap.
4. Permit Transfers
    An LAGC scallop permit and fishery history would be presumed to 
transfer with a vessel at the time it is bought, sold, or otherwise 
transferred from one owner to another, unless it is retained through a 
written agreement signed by both parties in the vessel sale or 
transfer.
5. Permit Splitting
    Amendment 11 adopts the permit splitting provision currently in 
effect for other limited access fisheries in the region. Therefore, an 
LAGC scallop permit may not be issued to a vessel if the vessel's 
permit or fishing history has been used to qualify another vessel for a 
limited access permit. This means all limited access permits, including 
LAGC scallop permits, must be transferred as a package when a vessel is 
replaced or sold. However, Amendment 11 explicitly states that the 
permit-splitting provision would not apply to the transfer/sale of 
general category scallop fishing history prior to the implementation of 
Amendment 11, if any limited access permits were issued to the subject 
vessel. Thus, vessel owners who sold vessels with limited access 
permits and retained the general category scallop fishing history with 
the intention of qualifying a different vessel for the LAGC scallop 
permit would be allowed to do so under Amendment 11. This differs from 
the current permit splitting provisions of other limited access fishery 
regulations, and specifically the Atlantic herring limited access 
permit splitting provision recently implemented under Amendment 1 to 
the Atlantic Herring FMP. A vessel with an existing limited access 
scallop permit (i.e., full-time, part-time, or occasional) that also 
qualifies for an LAGC scallop permit could not split the LAGC scallop 
permit from the existing limited access scallop permit.
6. Qualification Restriction
    Consistent with previous limited access programs, no more than one 
vessel would be able to qualify, at any one time, for a limited access 
permit or CPH based on that or another vessel's fishing and permit 
history, unless more than one owner has independently established 
fishing and permit history on the vessel during the qualification 
period and has either retained the fishing and permit history, as 
specified above, or owns the vessel at the time of initial application 
under Amendment 11. If more than one vessel owner claimed eligibility 
for a limited access permit or CPH, based on a vessel's single fishing 
and permit history, the NMFS Regional Administrator would determine who 
is entitled to qualify for the permit or CPH.
7. Appeal of Permit Denial
    Amendment 11 specifies an appeals process for applicants who have 
been denied an LAGC scallop permit. Such applicants would be able to 
appeal in writing to the Regional Administrator within 30 days of the 
denial, and any such appeal would have to be based on the grounds that 
the information used by the Regional Administrator was incorrect.
    The appeals process would allow an opportunity for a hearing before 
a hearing officer designated by the Regional Administrator. The owner 
of a vessel denied an LAGC scallop permit could fish for scallops under 
the applicable general category scallop regulations, provided that the 
denial has been appealed, the appeal is pending, and the vessel has on 
board a letter from the Regional Administrator authorizing the vessel 
to fish under the LAGC scallop permit category. The Regional 
Administrator would issue such a letter for the pendency of any appeal. 
If the appeal was ultimately denied, the Regional Administrator would 
send a notice of final denial to the vessel owner; and the authorizing 
letter would become invalid 5 days after receipt of the notice of 
denial, but no longer than 10 days after the date that the denial 
letter is sent.
8. Vessel Upgrades
    A vessel issued an LAGC scallop permit would not be limited by 
vessel size upgrade restrictions if the owner wished to modify or 
replace the vessel. However, if that vessel has also been issued 
limited access permits under Sec.  648.4 that have upgrade restrictions 
(i.e., all other limited access permits issued in accordance with Sec.  
648.4), the upgrade restrictions for that fishery would apply to any 
modification or replacement, unless the permit with the restrictions 
were permanently relinquished as specified under ``voluntary 
relinquishment of eligibility,'' below.
9. Vessel Baselines
    A vessel's baseline refers to those specifications (length overall, 
gross registered tonnage net tonnage, and horsepower) from which any 
future vessel size change is measured. Because there are no vessel size 
upgrade restrictions, a vessel issued an LAGC scallop permit would not 
have baseline size and horsepower specifications. However, if that 
vessel has also been issued limited access permits under Sec.  648.4 
that have upgrade restrictions, any size change would be restricted by 
those baseline specification requirements, unless those permits were 
permanently relinquished as specified in ``Voluntary relinquishment of 
eligibility'' below.
10. Vessel Replacements
    The term vessel replacement (vessel replacement), in general, 
refers to replacing an existing limited access vessel with another 
vessel. This rule would require that the same entity must own both the 
LAGC scallop vessel (or fishing history) that is being replaced, and 
the replacement vessel. Unlimited upgrades of vessel size and 
horsepower through a vessel replacement would be allowed, unless the 
vessel to be replaced is restricted on upgrades because it has been 
issued other limited access permits pursuant to Sec.  648.4.
11. Ownership Cap
    A vessel issued an IFQ scallop permit could not be allocated more 
than 2 percent of the TAC allocated to the fleet of vessels issued IFQ 
scallop permits. In addition, an individual could not have ownership 
interest in more than 5 percent of the TAC allocated to the fleet of 
vessels issued IFQ scallop permits. The only exceptions to these 
ownership cap provisions are if a vessel's initial contribution factor 
results in the ownership of more than 2 percent of the overall TAC 
initially upon initial application for the IFQ scallop permit, or if 
the vessel owner owns more than 5 percent of the overall TAC initially 
upon initial application for the IFQ scallop permits. This restriction 
would not apply to existing limited access scallop vessels that also 
have been issued an IFQ scallop permit since such vessels are already 
subject to the 5-percent ownership cap for limited access permits and 
because such vessels would not be permitted to transfer IFQ between 
vessels.
12. Voluntary Relinquishment of Eligibility
    A vessel owner could voluntarily exit the LAGC fishery by 
permanently relinquishing the permit. In some

[[Page 71318]]

circumstances, it could allow vessel owners to choose between different 
permits with different restrictions without being bound by the more 
restrictive requirement (e.g., lobster permit holders may choose to 
relinquish their other Northeast Region limited access permits to avoid 
being subject to the reporting requirements associated with those other 
permits). If a vessel's LAGC scallop permit or CPH is voluntarily 
relinquished to the Regional Administrator, no LAGC scallop permit 
could ever be reissued or renewed based on that vessel's permit and 
fishing history.
13. Permit Renewals and CPH Issuance
    A vessel owner must maintain the limited access permit status for 
an eligible vessel by renewing the permits on an annual basis or 
applying for issuance of a CPH. All LAGC scallop permits must be issued 
on an annual basis by the last day of the fishing year for which the 
permit is required, unless a CPH has been issued. However, as a 
condition of the permit, the vessel may not fish for, catch, possess, 
or land, in or from Federal or state waters, any species of fish 
authorized by the permit, unless and until the permit has been issued 
or renewed in any fishing year, or the permit either has been 
voluntarily relinquished or otherwise forfeited, revoked, or 
transferred from the vessel. A complete application for such permits 
must be received no later than 30 days before the last day of each 
fishing year. A CPH does not need to be renewed annually. Once a CPH 
has been issued to an individual who has retained the LAGC scallop 
permit and fishing history of a vessel, it remains valid until it is 
replaced by a vessel permit through the vessel replacement process.
    A vessel's LAGC scallop permit history would be cancelled due to 
the failure to renew, in which case, no LAGC scallop permit could ever 
be reissued or renewed based on that vessel's permit and fishing 
history.
    Amendment 11 would implement a cost recovery program, with the 
payment procedures and details to be established in Framework 19. Under 
the IFQ program, vessels would be required to pay up to 3 percent of 
their revenue from scallop landings to offset the cost of managing, 
enforcing, and implementing the IFQ program, as required by the 
Magnuson-Stevens Act. Failure to pay cost recovery fees by the 
specified due date would result in NMFS action invalidating the IFQ 
scallop permit. If the invalidation of the IFQ scallop permit due to 
failure to pay for cost recovery fees is not resolved in the course of 
the applicable fishing year, no IFQ scallop permit could ever be 
reissued or renewed based on that vessel's permit and fishing history.

Limited Access Scallop Vessels Fishing Under General Category Rules

    A vessel issued one of the existing limited access scallop permits 
(i.e., a full-time, part-time, or occasional scallop permit) may also 
be eligible to be issued a LAGC scallop permit if it meets the 
qualification criteria described above. Such a vessel would be allowed 
to fish under general category regulations when not fishing under the 
scallop DAS or Area Access programs. Existing limited access scallop 
vessels were not required to be issued a general category scallop 
permit. Therefore, to be issued an Incidental or NGOM scallop permit, 
the limited access vessel would have to have been issued a valid 
limited access scallop permit as of November 1, 2004. To be issued the 
IFQ scallop permit, an existing limited access scallop vessel would 
have to have been issued a valid limited access scallop permit during 
the period March 1, 2000, through November 1, 2004, and have documented 
landings of at least 1,000 lb (454 kg) of scallop meats when not 
fishing under the DAS or Area Access programs, as verified by NMFS 
records or documentation through dealer receipts. A limited access 
scallop vessel that does not qualify for a LAGC scallop permit could 
not fish for, possess, or retain scallops when not fishing under the 
scallop DAS and Area Access programs. Limited access scallop vessels 
that also qualify for an IFQ scallop permit would not be permitted to 
transfer IFQ. Therefore, the general category maximum allocation 
restriction or the maximum percentage ownership restriction for general 
category TAC would not apply. The limited access general category 
permit and IFQ scallop permit could not be split from the limited 
access scallop permit.

Allocation of the Total Annual Projected Scallop Catch to the General 
Category Fishery under the IFQ Program

    Once the IFQ program is implemented, 5 percent of the total 
projected annual scallop catch would be allocated to vessels with IFQ 
scallop permits. This would be calculated by taking the total projected 
annual scallop catch, then deducting estimated catch by incidental 
catch general category vessels and the total allowable catch (TAC) in 
the NGOM. Five percent of the resultant catch would then be allocated 
to the IFQ scallop fishery. IFQs for IFQ scallop vessels would be 
derived from the 5-percent TAC allocation. The 5-percent allocation 
would not apply to current limited access vessels that also have IFQ 
scallop permits. Limited access scallop vessels with IFQ scallop 
permits would be allocated 0.5 percent of the total projected annual 
scallop catch after deduction of incidental catch and the NGOM TAC. 
IFQs for these vessels would be derived from the 0.5-percent TAC 
allocation. The remaining 94.5 percent of the total projected annual 
scallop catch, after deduction of incidental catch and the NGOM TAC, 
would be allocated for harvest by the current limited access scallop 
fishery.

IFQs for Limited Access General Category Scallop Vessels

    A vessel issued an IFQ scallop permit would be allocated a 
percentage of the TAC allocated to the IFQ scallop fishery based on the 
vessel's ``contribution factor.'' The contribution factor for each 
vessel would be determined by multiplying a vessel's best fishing year 
of landings during the March 1, 2000, through November 1, 2004, 
qualification period by an index factor based on the number of years 
the vessel was active in the scallop fishery during the qualification 
period. A vessel would be determined to be active in the scallop 
fishery if it landed at least 1 lb (0.45 kg) of scallops. The index 
factors for varying levels of participation during the qualification 
period are: 0.75 for 1year; 0.875 for 2 years; 1.0 for 3 years; 1.125 
for 4 years; and 1.25 for 5 years. The index factor is intended to 
provide more weight in calculating the allocation for vessels that have 
been participating in the general category fishery for a longer period 
of time. A vessel's contribution percentage will be determined by 
dividing its contribution factor by the sum of the contribution factors 
of all vessels issued a limited access general category scallop permit. 
A vessel's IFQ would be determined by multiplying the TAC for IFQ 
scallop vessels by the vessel's contribution percentage. IFQ would be 
issued to owners of CPHs since that vessel's contibution would be 
included in the determination of IFQs as described below. IFQ 
associated with CPHs would be transferable.
    The following is an example of how a vessel's IFQ would be 
determined using hypothetical values: A vessel landed 48,550 lb (22,023 
kg) of scallops in its best year, and was active in the general 
category scallop fishery for 5 years. The vessel's contribution factor 
would be equal to 48,550 lb (22,023 kg)*1.25 = 60,687 lb (27,527 kg). 
For this example, the highest total scallop landings is assumed to be 
3.8 million lb (1,724 mt), and the number of qualifying vessels is 
assumed to be 380. The sum

[[Page 71319]]

of the contribution factors for limited access general category scallop 
vessels is assumed to be 4.18 million lb (1,896 mt). The contribution 
percentage of the above vessel would therefore be 1.45 percent (60,687 
lb (27,527 kg) / 4.18 million lb (1,896 mt) = 1.45 percent). The 
vessel's IFQ would be the vessel's contribution percentage (1.45 
percent) multiplied by the TAC allocated to all IFQ scallop vessels. 
Assuming a TAC equal to 2.5 million lb (1,134 mt), the vessel's IFQ 
would be 36,250 lb (16,443 kg) (1.45 percent x 2.5 million lb (1,134 
mt)).
    The IFQ program cannot be implemented until all IFQ scallop permits 
and CPHs have been issued because the calculation of the IFQ shares 
requires the contribution factors for all qualified IFQ scallop vessels 
to be totaled. However, eligibility, best year, and the contribution 
factor for each vessel would be determined upon initial application for 
a limited access general category scallop permit. This issue is 
discussed under the ``Measures for the transition period to IFQ'' 
description below.

IFQ Transfers

    IFQ scallop vessel and CPH owners would be allowed to transfer IFQ 
on a temporary or permanent basis. A temporary IFQ transfer (or lease) 
would allow one IFQ scallop vessel to combine IFQs to increase fishing 
opportunity for a single fishing year. A permanent IFQ transfer would 
permanently move the IFQ from one vessel to another. Since a permanent 
IFQ transfer would require the vessel to transfer the IFQ scallop 
permit (and any other permits) to the transferee, the transferring 
vessel would not be eligible to enter into an agreement to transfer IFQ 
back to the vessel, unless the vessel replaced another IFQ scallop 
vessel. Each IFQ allocation would have to be transferred in full before 
it is utilized, and a vessel that used IFQ in a fishing year could not 
transfer its IFQ during that fishing year. An IFQ transfer would not be 
approved if it would result in the receiving IFQ scallop vessel having 
a share of more than 2 percent of the total TAC allocation to the IFQ 
fishery. IFQ transfers would not be permitted for existing limited 
access scallop vessels that also have been issued an IFQ scallop 
permit.

IFQ Cost Recovery

    The Magnuson-Stevens Act requires any IFQ program to include a cost 
recovery program, whereby NMFS would collect up to 3 percent of ex-
vessel value of landed product to cover actual costs directly related 
to enforcement and management of an IFQ program. The authority and 
procedures for collection of cost recovery fees would be established in 
this rule. Further details of the cost recovery program will be 
proposed in Framework 19, in which TACs would be established for LAGC 
scallop vessels. As recommended in Amendment 11, the IFQs would be 
rounded up to the nearest 10-lb unit. The cost recovery fee for an IFQ 
that was temporarily transferred to another IFQ scallop vessel would be 
the responsibility of the owner of the transferring IFQ scallop vessel, 
not the owner of the receiving IFQ scallop vessel.

Measures for the Transition Period to IFQ

    Amendment 11 recognizes that it would take between 12 to 24 months 
to determine the universe of qualified vessels that would be issued an 
IFQ scallop permit. The time is necessary to accommodate applicants who 
pursue permits through the appeals process. As a result, it would not 
be possible to implement an IFQ program at the same time that NMFS is 
in the process of determining eligibility and contribution factors. 
Recognizing the problem, Amendment 11 specifies measures for a 
transition period. The transition measures include a quarterly TAC 
equal to 10 percent of the total projected scallop catch. Vessels that 
qualify for an IFQ scallop permit and vessels under appeal for an IFQ 
scallop permit would be authorized to fish for scallops, subject to the 
quarterly TAC, with all landings counted toward the TAC. When the TAC 
is projected to be attained, the general category fishery would close 
for the remainder of the quarter. Any underage or overage of the first 
quarter would be applied to the third quarter, and any underage or 
overage of the second quarter would be applied to the fourth quarter. 
The quarterly TACs for the 2008 fishing year, beginning March 1, 2008, 
will be specified in Framework 19. A quarterly TAC is proposed rather 
than an annual TAC due to concerns about derby fishing. This quarterly 
distribution of TAC is intended to reduce the negative effects of a 
race to take the TAC. The 10-percent allocation would result in a TAC 
that would be consistent with recent projections for scallop mortality 
from the general category fishery and would account for additional 
effort expected from vessels under the appeals process.

Mechanism to Allow Voluntary Sectors in the General Category Fishery

    The proposed action includes a mechanism to allow the owners of IFQ 
scallop vessels to form voluntary sectors that would manage their own 
fishing activity as a group. This rule outlines the procedures that 
would be used to form a sector, and the sector program requirements. 
The sector provision includes: Restrictions on participation; 
definition and requirements for operations plans; specifications for 
the review, approval, and revocation process; allocation of TAC to 
sectors; sector share determination; restrictions on sector membership 
changes; restrictions on interaction between sectors; monitoring and 
enforcement provisions for sectors; a prohibition on trading of 
allocation between sectors; restrictions on vessel movement between 
sectors; a 20-percent maximum total allocation for a single sector. The 
400-lb (181.44-kg) possession limit would be maintained for vessels in 
a sector. The formation of sectors is intended to provide greater 
flexibility for participants and create outcomes that are more socially 
and economically relevant for fishing groups within the biological 
limitations of the fishery (TACs). The 20-percent cap on a sector's 
share of the IFQ is intended to prevent one sector from controlling an 
excessive percentage of the general category allocation. Unlike the 
sector program for the Northeast multispecies fishery, Amendment 11 
would not allow sectors to be exempt from any scallop regulations, 
except that participating vessels would not be restricted by their 
IFQs.

NGOM Scallop Management Area

    The NGOM scallop management area would be waters north of 
42[deg]20' N. Lat. The NGOM scallop management area would be managed 
separately, because the Council concluded that it has unique 
characteristics such as smaller vessels and sporadic fishable resource. 
The NGOM scallop management area would establish scallop fishing 
controls appropriate for the fishery while protecting the resource in 
the area from overharvest, if and when scallops are present in the 
area. Measures include the separate NGOM general category scallop 
permit and qualification criteria; a TAC based on historical landings 
from Federal waters in the NGOM; a possession limit of 200 lb (90.72 
kg) of scallops per trip, with one trip per calendar day allowed; a 
provision that an IFQ vessel fishing in the NGOM scallop management 
area would have scallop landings deducted from its IFQ

[[Page 71320]]

and the NGOM scallop management area TAC; and a prohibition on 
possession of scallops by any vessel, once the NGOM scallop management 
area TAC is harvested. Amendment 11 does not include specific 
restrictions for vessels fishing under scallop DAS in the NGOM, except 
that such vessels could not continue fishing in the NGOM once the TAC 
for the area has been reached.

Monitoring

    All LAGC scallop vessels would be required to install and operate a 
VMS unit and would be required to declare a general category trip or 
other fishing activity code, as appropriate. In addition, IFQ and NGOM 
scallop vessels would be required report scallop landings through VMS. 
This provision would improve monitoring of an IFQ program by requiring 
vessels to report their catch, approximate time of landing, and port of 
landing before crossing the VMS demarcation line in order to enhance 
enforcement of the IFQ program and NGOM scallop fishery. The report 
submitted through VMS would include the VTR serial number, amount of 
scallops on-board, the port of landing, and the approximate time of 
arrival in port. This monitoring requirement would enable NMFS to 
monitor the TAC and IFQs on a more real-time basis.

Change Issuance Date of General Category Permit

    The issuance date of general category permits would be changed from 
May 1 to March 1 of each year to be consistent with the scallop fishing 
year. Synchronizing the issuance of general category scallop permits 
with the scallop fishing year would make this permit consistent with 
the existing limited access scallop permit issuance date.

Other Measures

    This action would clarify that vessels that are fishing under a 
Northeast multispecies or monkfish DAS would not be restricted to the 
144-ft (43.9-m) net sweep restriction at Sec.  648.52 that currently 
specifies that a vessel using a net with a sweep greater than 144 ft 
(43.9 m) cannot fish for, possess, retain, or land more than 40 lb 
(18.14 kg) of shucked or 5 bu (1.76 hL) of in-shell scallops. The 
Council recommended this change because the 144-ft (43.9-m) restriction 
was not intended to apply to vessels fishing for other species that 
would have an incidental catch of scallops, provided the vessel is 
issued the appropriate LAGC scallop permit.
    Amendment 11 proposes to allow an IFQ scallop vessel to possess up 
to 100 bu (35.24 hL) of in-shell scallops seaward of the VMS 
demarcation line only. Once shoreward of the VMS demarcation line, a 
vessel could possess only 50 bu (17.62 hL) of in-shell scallops. This 
measure is proposed because scallop vessel owners and operators 
testified that it often takes more than 50 bu (17.62 hL) of in-shell 
scallops to yield 400 lb (181.44 kg) of scallop meats. NMFS notes that 
similar increases were not specified by the Council for the NGOM 
possession limits of 200 lb (90.72 kg) of shucked or 25 bu (8.8 hL) in-
shell scallops or the 40 lb (18.14 kg) of shucked or 5 bu (1.76 hL) of 
in-shell scallops. However, given the rationale for the increased 
possession limit, it would be inconsistent to apply the increased 
possession limit for only one LAGC scallop permit category or declared 
fishing activity. Therefore, this proposed rule specifies that vessels 
fishing for scallops up to 200 lb (90.72 kg) or 25 bu (8.80 hL), or up 
to 40 lb (18.14 kg) or 5 bu (1.76 hL), could possess up to 50 bu (17.62 
hL) or 10 bu (3.52 hL), respectively, seaward of the VMS Demarcation 
Line.
    Finally, this proposed rule would clarify the ownership cap 
restriction on current limited access vessels specified at Sec.  
648.4(a)(2)(i)(M). The ownership cap restriction was implemented 
through Amendment 4 (59 FR 2757, January 19, 1994). Currently, the 
regulation states that an individual may not own, or have an ownership 
interest in, more than 5 percent of limited access scallop vessels. The 
provision in Amendment 4 is as follows: ``No entity or individual may 
have ownership interest in more than 5 percent of the total number of 
scallop permits issued at implementation and through the appeal 
process.'' However, the current regulations are not clear whether this 
cap applies to CPHs. Provisions for CPH were implemented in 1995 (60 FR 
62224, December 5, 1995), after the 5-percent cap provision in 
Amendment 4 was implemented. The current regulation does not mention 
CPHs, which represent sunken or destroyed vessels, or vessels that were 
sold without fishing and permit history, that are eligible for limited 
access scallop permits. In terms of future ownership, a CPH is 
equivalent to a limited access permit. Since it is clear that the 
Council intended the ownership cap to restrict an owner to having an 
ownership interest in no more than 5 percent of all limited access 
scallop permits, this proposed rule would clarify that an individual 
cannot own more than 5 percent of the limited access permit 
eligibilities in the form of a limited access permit or CPH. This 
clarification would make the regulations consistent with the Council's 
original intent under Amendment 4.
    Public comments are solicited on Amendment 11 and its incorporated 
documents through the end of the comment period, January 29, 2008, 
stated in the NOA for Amendment 11 (72 FR 67691, November 30, 2007). 
Public comments on this proposed rule must be received by January 29, 
2008, the end of the comment period specified in the NOA for Amendment 
11, to be considered in the approval/disapproval decision on the 
amendment. All comments received by January 29, 2008, whether 
specifically directed to Amendment 11 or the proposed rule, will be 
considered in the approval/disapproval decision on Amendment 11. 
Comments received after that date will not be considered in the 
decision to approve or disapprove Amendment 11, but will be responded 
to in the final rule.

Classification

    At this time, NMFS has not determined that the amendment this 
proposed rule would implement is consistent with the national standards 
of the Magnuson-Stevens Fishery Conservation and Management Act and 
other applicable laws. NMFS, in making that determination, will take 
into account the data, views, and comments received during the comment 
period.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Council prepared an FSEIS for Amendment 11; an NOA was 
published on October 19, 2007. The FSEIS describes the impacts of the 
proposed Amendment 11 measures on the environment. Since most of the 
measures would determine whether or not fishers can continue fishing 
for scallops, and at what level in the future, the majority of the 
impacts are social and economic. Although the impacts may be negative 
in the short term, particularly at an individual fisher level, the 
long-term benefits of a sustainable scallop fishery would be positive. 
Elimination of the open access fishery is expected to have positive 
impacts on the biological and physical environment.
    This proposed rule contains collection-of-information requirements 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). Public reporting burden for these collections of information are 
estimated to average as follows:
    1. Initial application for an IFQ scallop permit - 30 min per 
response;

[[Page 71321]]

    2. Initial application for an NGOM or Incidental scallop permit - 
15 min per response;
    3. Completion of ownership cap form for IFQ scallop vessel owners - 
5 min per response;
    4. Appeal for an LAGC scallop permit and IFQ scallop vessel 
contribution factor - 2 hr per response;
    5. Application for a vessel replacement or confirmation of permit 
history - 3 hr per response;
    6. Purchase and installation of a VMS unit for general category 
scallop vessels--2 hr per response;
    7. IFQ scallop vessel VMS trip notification requirements--2 min per 
response;
    8. NGOM scallop fishery VMS trip notification requirements--2 min 
per response;
    9. Incidental catch vessel VMS trip notification requirements--2 
min per response;
    10. Pre-landings VMS notification requirements--5 min per response;
    11. Application for an IFQ transfer--10 min per response;
    12. Electronic payment of cost recovery payment--2 hr per response;
    13. LAGC scallop fishery sector applications--150 hr per response; 
and
    14. Sector operations plans--100 hr per response.
    These estimates include the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection information.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to the 
Regional Administrator as specified in ADDRESSES above, and by e-mail 
to [email protected] or fax to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.
    An IRFA was prepared, as required by section 603 of the Regulatory 
Flexibility Act (RFA). The IRFA describes the economic impact this 
proposed rule, if adopted, would have on small entities, with data 
analyzed on a fishing year basis (March 1 through February 28/29). A 
description of the action, why it is being considered, and the legal 
basis for this action are contained at the beginning of this section of 
the preamble and in the SUMMARY. A summary of the IRFA follows:

Description and Estimate of Number of Small Entities to Which the Rule 
Would Apply

    The vessels in the Atlantic sea scallop fishery are considered 
small business entities because all of them grossed less than $4.5 
million according to the dealer's data for the 2004 and 2005 fishing 
years. Therefore, there are no differential impacts between large and 
small entities. According to this information, annual total revenue 
averaged about $940,065 per limited access vessel in 2004, and over $1 
million per limited access vessel in 2005. Total revenues per vessel, 
including revenues from species other than scallops, exceeded these 
amounts, but were less than $4.5 million per vessel. Average scallop 
revenue per general category vessel was $35,090 in 2004 and $88,702 in 
2005 fishing years. Average total revenue per general category vessel 
was higher, exceeding $240,000 in 2004 and 2005. According to the 
preliminary estimates, average revenues per vessel were lower in the 
first 11 months of 2006 for all permit categories, because of lower 
scallop landings and prices.
    The measures proposed in Amendment 11 would affect vessels with 
limited access scallop and general category permits. Section 4.4 
(Fishery-related businesses and communities) of the Amendment 11 
document provides extensive information on the number and size of 
vessels and small businesses that will be affected by the proposed 
regulations, by port and state. These affected entities are the owners 
of 318 vessels that were issued full-time permits in 2006, (including 
55 small-dredge and 14 scallop trawl permits); 32 part-time; and 1 
occasional limited access permit. In addition, 2,501 permits were 
issued to vessels in the open access General Category, and more than 
500 of these vessels landed scallops during the last 2 years.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    This action contains several new collection-of-information, 
reporting, and recordkeeping requirements. The following describes 
these requirements.
1. Application Process
    NMFS estimates that there would be 500 applicants for an IFQ 
scallop permit, 200 applicants for a NGOM scallop permit, and 500 
applicants for an Incidental scallop permit. Each IFQ scallop permit 
application would take approximately 30 min per application, while each 
NGOM and Incidental scallop permit application would take approximately 
15 min to process. Consequently, the total time burden for the initial 
applications would be 425 hr. Amendment 11 estimates that 370 IFQ 
scallop permit, 190 NGOM scallop permit, and 465 Incidental scallop 
vessels are expected to qualify and consequently renew their 
application each year. Permit renewal is estimated to take 15 min per 
application, on average, for a total burden of 256 hr per year. The 3-
year average total public time burden for IFQ, NGOM, and Incidental 
scallop permit initial applications, and permits renewals would be 312 
hr. The labor cost, at an hourly rate of $15, would be $4,680.
    To implement the 5-percent IFQ ownership cap, vessel owners would 
be required to submit an ownership form with each permit renewal. Since 
there would be an estimated 370 IFQ permits, there would be 370 
ownership forms each year. NMFS estimates that it would take 5 min to 
complete each ownership form; therefore, the annual reporting burden 
would be 31 hr, or 21 hr, averaged over the first 3 years. At an hourly 
rate of $15, the annualized time burden would be approximately $315.
    About 80 applicants are expected to appeal the denial of their 
permit application over the course of the 3-month application period. 
The appeals process is estimated to take 2 hr per appeal, on average, 
for a total burden of 160 hr. The burden of this one-time appeal, 
annualized over three years, would be 54 hr. At an hourly rate of $15, 
the time burden would be approximately $810.

2. Vessel Replacement, Upgrade, and Permit History Applications

    A standard form for vessel replacements, upgrades, and permit 
history applications (RUPH application) would be used for LAGC scallop 
permits, although vessel upgrades would not apply for LAGC scallop 
vessels unless the vessel is issued other limited access fishery 
permits that have upgrade restrictions. With the exception of upgrade 
restrictions, LAGC scallop vessels would be subject to similar 
replacement and permit history

[[Page 71322]]

restrictions as other Northeast Region limited access fisheries. 
Completion of an RUPH application requires an estimated 3 hr per 
response. It is estimated that 100 RUPH applications would be received 
annually. The resultant burden would be up to 300 hr. At an hourly rate 
of $15 per hour, the total public cost burden for RUPH applications 
would be $4,500 per year.

3. New VMS Requirements

    This action would require vessels issued any of the LAGC scallop 
permits to install VMS. Most vessels that qualify for an IFQ scallop 
permit would have been participating in the directed general category 
scallop fishery, which already has VMS requirements prior to the 
implementation of Amendment 11. Therefore, it is likely that most 
vessels that will qualify for an IFQ permit already have VMS. Vessels 
that qualify for an Incidental or NGOM scallop permit would not likely 
be participating in the directed general category scallop fishery. 
However, vessels that qualify for an Incidental or NGOM scallop permit 
may already have VMS reporting requirements through other fisheries, 
particularly the Northeast multispecies fishery. It is possible that 
some new permit holders would decide to purchase and install new VMS 
units in order to participate in one of these fisheries. Therefore, 
NMFS estimates that up to 10 vessels would purchase and install VMS 
units as a result of Amendment 11. NMFS estimates that it would take 2 
hr to purchase each unit, for a total time burden of 20 hr; annualized 
over 3 years, the burden would be about 7 hr per year. NMFS anticipates 
that a vessel owner would hire a VMS technician to install the VMS 
unit; therefore there would be no installation time burden for the 
vessel owner. At an hourly rate of $15 per hour, the total public cost 
burden for VMS purchases would be $105 per unit. Since position polling 
is automated, there is no associated time burden with this reporting 
requirement.

4. Trip Notification Requirements

    Each time a LAGC scallop vessel leaves port or is moved from the 
dock or mooring, the operator must submit a VMS trip declaration code 
to notify NMFS of the vessel's fishing activity.
    According to 2007 VMS trip declaration data for 1B scallop vessels, 
approximately 40 percent of the time general category 1B vessels 
declare a general category scallop trip; the remainder are codes for 
other activities (if a vessel leaves port, general category regulations 
require it to declare a trip, regardless of the fishing activity). The 
2008 scallop harvest specifications have not yet been finalized, but 
the proposed IFQ quota is 2.5 million lb (1,134 mt). Assuming each trip 
harvests the 400-lb (181.4-kg) possession limit, there would be an 
estimated 6,250 IFQ trip declarations per year, with an additional 
9,375 trip declarations for some activity other than scallop fishing, 
for a total of 15,625 trip declarations. Following each trip, NMFS 
assumes that the vessel operator would submit a power-down code to 
reduce polling costs and conserve battery power. NMFS estimates that it 
takes approximately 2 min to submit a trip declaration or power-down 
code. NMFS estimates that the IFQ fleet would submit 31,250 VMS 
declaration codes (15,625 trip declarations and 15,625 corresponding 
power-down code submissions); therefore, the annual IFQ trip 
declaration time burden would be 1,042 hr per year. At an hourly rate 
of $15, this burden would be $15,630.

5. NGOM Notification Requirements

    The proposed NGOM TAC is expected to be 64,000 to 100,030 lb 
(29,030 to 45,373 kg) each year. Assuming each trip lands the 200-lb 
(90.72-kg) possession limit, and using the upper limit of the proposed 
TAC, it is projected that there would be up to 500 NGOM trip 
declarations per year. For economic purposes it is unlikely that a 
vessel owner would incur the cost of a VMS unit solely to have a NGOM 
permit. Therefore, assuming these vessels already have VMS reporting 
requirements for other fisheries, VMS declaration reporting 
requirements for activities other than NGOM activity have already been 
accounted for in other PRA collections. The increased reporting burden 
resulting from the NGOM permit category would be approximately 500 trip 
declarations and 500 power-down declarations. Assuming each declaration 
takes approximately 2 min, the annual NGOM trip declaration time burden 
would be approximately 34 hr. At an hourly rate of $15, this burden 
would be $510.

6. Incidental Scallop Vessel VMS Notification Requirements

    In 2004 and 2005, dealer data indicated that the percent of 
scallops landed in quantities of 40 lb (18.14 kg) or less was 0.02% and 
0.06%, respectively, of the total scallop landings. The average scallop 
landings on these trips in 2004 and 2005 was 19,363 lb (8,783 kg). 
Using this average, NMFS estimates that there were approximately 500 
general category trips that landed scallops incidental to other 
fishing. Assuming this rate would remain approximately the same, there 
would be an estimated 500 Incidental trip declarations made annually. 
As previously noted, for economic purposes it is unlikely that a vessel 
owner would incur the cost of a VMS unit solely to have an Incidental 
scallop permit. Therefore, assuming these vessels already have VMS 
reporting requirements for other fisheries, VMS declaration reporting 
requirements for activities other than Incidental scallop permit 
activity have already been accounted for in other PRA collections. The 
increased reporting burden resulting from the Incidental scallop permit 
category would be approximately 500 trip declarations and 500 power-
down declarations. Assuming each trip declaration takes approximately 2 
min, the annual Incidental scallop trip declaration time burden would 
be approximately 34 hr. At an hourly rate of $15, this burden would be 
$510.

7. Pre-landing Notification Requirements

    VMS pre-landing notification forms would be required for each IFQ 
and NGOM scallop trip. Therefore, there would be 6,250 IFQ and 500 NGOM 
scallop vessel pre-landing notification forms submitted annually. NMFS 
estimates that it would take 5 min for each of the 6,750 reports, for 
an annual pre-landing notification time burden of 563 hr. At an hourly 
rate of $15, this burden would be $8,445.

8. State Waters Exemption Program Requirements

    The state waters exemption program enrollment form is estimated to 
take 5 min to submit through the VMS, the same amount of time as it has 
taken to enroll through interactive voice response system currently 
used. State waters exemption program trip declaration requirements are 
already accounted for in an approved collection under OMB Control No. 
0648-0202. Therefore, this burden would not increase the cost to vessel 
owners declaring into the state waters exemption program.

9. IFQ Transfers

    IFQ transfers would apply to IFQ scallop vessels, except that 
current limited access scallop vessels that also have been issued an 
IFQ scallop permit would not be permitted to transfer IFQ. Using the 
Northeast Region's Northeast Multispecies DAS leasing program (OMB 
Control No. 0648-0475) as a proxy for the response rate for the IFQ 
transfer program, NMFS anticipates that there would be approximately 75 
temporary transfers annually. Each

[[Page 71323]]

application would include information from both parties involved in the 
temporary transfer; therefore there would be two responses per 
application. NMFS estimates that it would take 5 min per response, or 
10 min per temporary IFQ transfer application. Therefore, the estimated 
burden would be 13 hr. At an hourly rate of $15 / hour, the total 
public cost burden for temporary IFQ transfer applications would be 
$195.
    The Northeast Multispecies DAS Permanent Transfer Program cannot be 
easily correlated with the general category permanent transfer program 
because the Northeast Multispecies Program has a 20-percent 
conservation tax on all transfers, while there would be no conservation 
tax on scallop IFQ transfers. Although NMFS anticipates that there 
would be more IFQ transfers than DAS transfers, IFQ transfers would be 
restricted by the requirement that no IFQ vessel owner could have an 
ownership interest in more than 5 percent of the total TAC for IFQ 
scallop vessels, and no vessel could have more than 2 percent of the 
total TAC for IFQ scallop vessels at any time. NMFS anticipates that 
there would be approximately 10 permanent IFQ transfers per year. Each 
application would include information from both parties involved in the 
transfer; therefore there would be two responses per application. It is 
estimated that it would take 5 min per response, or 10 min per 
permanent transfer application. Therefore, the estimated permanent IFQ 
transfer burden would be 2 hr. At an hourly rate of $15 per hour, the 
total public cost burden for permanent quota transfer applications 
would be $30.

10. Cost Recovery

    Since cost recovery for the scallop IFQ program is new, and there 
are no other current cost recovery programs in Northeast Region 
fisheries, the burden per response used by the Alaska Region's Alaska 
Individual Fishing Quota Cost-Recovery Program Requirements (OMB 
Control No. 0648-0398) was used as a proxy for the scallop IFQ program. 
Each IFQ permit holder would be required to submit a cost recovery 
payment once annually, which would take 2 hr per response. Therefore, 
370 payments would take 740 hr. At an hourly rate of $15 / hour, the 
total public cost burden for cost recovery would be $11,100.

11. LAGC Sector Program

    NMFS estimates that there could be up to nine sector proposals 
received over the next three years (2008-2009); five in the first year, 
two in the 2nd year, and two in the 3rd year. The earliest that the 
sectors proposed in the 2008 year could be implemented would be the 
2009 fishing year. Therefore, these sectors would be required to submit 
operation plans for the 2010 fishing year.
    Any person could submit a sector allocation proposal for a group of 
LAGC scallop vessels to the Council at least 1 year in advance of 
anticipated start of a sector program, and request that the sector be 
implemented through a framework procedure specified at Sec.  648.55. 
Based upon consultations with the Northeast multispecies sector 
program, it is estimated it would take 150 hr to prepare and submit a 
sector proposal. Therefore, the 3-year average annualized time burden 
for sector proposals would be 450 hr per year. At an hourly rate of $15 
per hour, the total public cost burden for sector proposals would be 
$6,750.
    A sector is required to resubmit its operations plan to the 
Regional Administrator no later than December 1 of each year, whether 
or not the plan has changed. Based upon consultations with the 
Northeast multispecies sector program, each operations plan takes 
approximately 100 hr. The earliest sector operation plans would be 
submitted in 2010 for the proposals submitted in 2008. Therefore, NMFS 
estimates it would take 500 hr to submit 5 operation plans. The 3-year 
average annualized time burden would be 167 hr per year. At an hourly 
rate of $15 per hour, the annual time burden cost would be 
approximately $2,500.

Economic Impacts of the Proposed Action Compared to Significant Non-
Selected Alternatives

1. Summary of the Combined Economic Impacts of the Limited Access 
Measures
    In summary, the proposed limited access program could have negative 
economic impacts in the short-term on the estimated 373 vessels that 
would not qualify for a LAGC scallop permit, with adverse impacts 
compared to 2005 scallop revenue estimated to be less than 5 percent 
for 119 vessels, 5 to 49 percent for 58 vessels, and 50 percent or more 
for 196 vessels. The measures would also have negative impacts on about 
153 out of 369 vessels that are estimated to qualify for the IFQ 
scallop permit, with adverse impacts compared to 2005 scallop revenue 
estimated to be less than 5 percent for 26 of these vessels, 5 to 50 
percent for 70 vessels, and over 50 percent for 57 vessels. Altogether, 
the proposed measures could reduce total revenues of 381 vessels of 
more than 5 percent in the short-term. There are several measures in 
the proposed action, however, to help mitigate and reduce the potential 
negative impacts on these vessels, as discussed above. Qualifying 
vessels would be permitted to stack allocation up to 2 percent of the 
entire general category allocation and to transfer (i.e., lease or buy) 
IFQ on a permanent or temporary basis. This would enable vessel owners 
who do not receive an adequate amount of allocation to increase their 
scallop revenue to mitigate negative impacts. Furthermore, there is a 
provision to allow the formation of voluntary sectors. It may be 
beneficial for a group of vessels from a fishing community, for 
example, to organize and apply for a sector in the general category 
fishery. Negative impacts on some vessel owners may be mitigated if a 
vessel would qualify for a NGOM scallop permit that authorizes it to 
fish for scallops at a reduced level. In addition, many of the vessels 
that would not qualify for the IFQ scallop permit would qualify for an 
Incidental scallop permit that would authorize the vessel to land up to 
40 lb (18.14 kg) of scallops per trip.
    Continuation of the open access fishery under the no action 
alternative would not guarantee that the affected vessel owners would 
get more scallop revenue than they could with the proposed limited 
access program. With continued open access, there would always be the 
risk of more vessels entering the fishery, with the potential for 
overfishing of the scallop resource. Overfishing would likely cause a 
reduction in landings per unit effort, an increase in fishing costs per 
pound of scallops, and dissipation of the profits for all limited 
access and general category vessels.
    There were also possible future negative effects on the existing 
limited access scallop vessels with the continuation of the open access 
program because the need to prevent an increase in overall fishing 
mortality would at some point reduce the DAS allocations for the 
limited access fleet to compensate for projected general category 
catcth. Assuming a scallop harvest of 50 million lb (22,680 mt), an 
increase in the share of general category landings to 20 percent of the 
total scallop landings would result in a decline of 17 percent to 21 
percent of the net vessel share (as a proxy for profits) for the 
limited access vessels. Given that, in 2005, the general category 
landings increased to 14 percent of the total landings from about 5 
percent in 2004, a further increase in general category effort could 
occur without a limited access program. Section 5.4.17.1

[[Page 71324]]

and Table 166 of the Amendment 11 document provide details about these 
impacts.
    Because it would prevent further expansion of the general category 
fishery, the economic impacts of the proposed measures on the 351 
existing limited access vessels would be positive both in the short and 
the long term. Reducing the general category catch from recent levels 
could increase the total DAS allocations for those vessels, resulting 
in approximately a 7-percent increase in their revenues compared to the 
status quo levels. Similarly, the general category limited access 
program would benefit the current limited access vessels that qualify 
for an IFQ permit, although the proposed 0.5-percent allocation of the 
total scallop TAC could lower their landings compared to recent levels 
(1.5 percent and 0.75 percent of overall scallop landings in 2005 and 
2006, respectively).
    The overall economic impacts of the limited entry in the medium to 
long term are expected to be positive for the sea scallop fishery as a 
whole, compared to taking no action. The proposed action would restrict 
the estimated number of participants in the general category fishery to 
369 vessels that meet the IFQ permit qualification criteria. The 
allocation of a 5-percent TAC for the general category would cap the 
fishing mortality from this component of the fleet. The limited access 
program would also prevent the profits of the qualifiers and limited 
access vessels from dissipating due to an increase in fleet capacity 
that would likely occur with continued open access.
2. Summary of the Economic Impacts of the Individual Measures
    Two alternatives to the proposed landings qualification criteria 
were considered: Cumulative annual landings of 100 lb (45.4 kg); and 
5,000 lb (2,268 kg). The 100-lb (45.4-kg) landing qualification 
criteria is estimated to qualify more vessels (548) for limited access 
and have a lower negative impact on the recent participants than the 
proposed alternative. On the other hand, by increasing the number of 
participants, this alternative would result in a lower share of general 
category TAC for each qualifier and would thus have a negative impact 
on individual vessels, especially on vessel onwers that have a high 
dependence on scallop revenue as a source of income. For example, the 
average allocation per vessel would decline from 5,429 lb (2,462 kg) to 
3,650 lb (1,656 kg) per vessel if the poundage criterion was set at 100 
lb (45.4 kg) instead of at 1,000 lb (454 kg) for a general category TAC 
of 2 million lb (907 mt). The alternative 5,000-lb (2,268-kg) landings 
qualification criterion is estimated to qualify only 188 vessels for 
limited access and, thus, would increase the share of each qualifier in 
general category TAC. As a result, average allocation per vessel would 
increase to 10,638 lb (4,825 kg) with a 2-million-lb (907-mt) general 
category TAC. Although this alternative would have positive economic 
impacts on the vessels that had a much higher historical dependence on 
scallops as a source of their income, it would deny eligibility to a 
much larger number of vessels that historically derived some revenue 
from scallop fishery. The proposed 1,000-lb (454-kg) alternative would 
deny eligibility to a large number of boats that have small landings of 
scallops (i.e., that landed between 100 and 999 lb (45.4 kg to 453 
kg)), while qualifying vessels that depend on scallops to a larger 
degree.

Qualification Time Period

    Eligibility for limited access would require a vessel to have made 
the required amount of landings in any scallop fishing year during a 
specified time period. In addition to the proposed March 1, 2000, 
through November 1, 2004, qualification period, the Council considered 
two alternative qualification periods: March 1, 1994, through November 
1, 2004; and March 1, 2003, through November 1, 2004. The economic 
impacts of qualification period, combined with the landing criteria, 
are analyzed in several sub-sections of Section 5.4 of the Amendment 11 
document and summarized here. The impacts on the general category 
permit holders and vessels that qualify for limited access are analyzed 
in Section 5.4.3 of the Amendment 11 document. The impacts on revenues, 
fishing costs, average net revenues, crew and vessel shares are 
analyzed in Section 5.4.5 of the Amendment 11 document, for various 
levels of general category TAC. The impacts of the proposed 5-yr 
qualification period and other alternatives on recent participants in 
the general category fishery are analyzed in Section 5.4.6 of the 
Amendment 11 document.
    The proposed 5-yr qualification period, combined with the 1,000-lb 
(454-kg) landings criteria, is expected to have positive economic 
impacts in the short and long term on vessel owners with vessels that 
qualify for limited access. It would provide access to those general 
category vessels that were active in the fishery in recent years, as 
well as to historical participants that were active from March 1, 2000, 
through November 1, 2004. The proposed 1000-lb (454-kg) poundage 
criteria and the 5-yr qualification period would qualify 369 vessels, 
but would deny eligibility to 90 vessels that meet the 1,000-lb (454-
kg) criteria for their activity during 1994-1999 fishing years. The 
economic impacts on these historic participants would be negative in 
terms of a loss in future potential revenue from scallops, unless they 
buy a vessel that qualifies for limited access. The proposed 5-yr 
qualification period would not have any impact on the current income of 
most of these vessels, given that most have not been active since 2000; 
only 10 vessels are estimated to have participated in the fishery after 
the control date (November 1, 2004). The longer qualification period 
would cause the general category TAC to be divided among a larger 
number of vessels, most of which were not recently active in the 
fishery, and vessels that depend on scallops would receive a smaller 
share than they would with the proposed 5-yr qualification period. This 
would have negative economic impacts on the vessels that depend on 
scallops to a larger degree. There are also some measures included in 
the proposed action that could mitigate some of these adverse economic 
impacts on non-qualifiers. If these vessels had a permit before the 
control date, they could obtain an incidental catch permit and land up 
to 40 lb (18.14 kg) per trip, thus still earn some revenue from 
scallops. Other vessel owners could chose to obtain an NGOM scallop 
permit and participate in the NGOM fishery, subject to a possession 
limit of 200 lb (90.72 kg) per trip and a hard TAC.
    The 2-yr qualification period alternative would have restricted 
eligibility to 277 general category vessels that landed 1,000 lb (454 
kg) or more of scallops during the period March 1, 2003, through 
November 1, 2004, instead of 369 vessels under the proposed action. 
Although this alternative would result in a larger share per vessel 
qualified for limited access, it was found to be inequitable to 
participants who did not fish for scallops in 2003-2004, but did fish 
in recent years since 2000.

IFQ Vessel Contribution Factor

    Under the proposed action, each IFQs vessel's contribution factor 
would be determined by identifying the year with the highest landings 
during the qualification time period, and multiplying it by an index 
that increases as the number of years in which the vessel landed 
scallops during the qualification time period increases. For example, 
the index is 0.75 if the vessel

[[Page 71325]]

landed scallops in 1year, and 1.25 if the vessel landed scallops in 5 
years. Therefore, the proposed action would allocate more pounds to 
those vessels that were active in the fishery for a longer period of 
time.
    In addition to the proposed measure, the Council considered three 
alternatives to calculate the contribution factor. One alternative used 
the vessel's best year of landings during the qualification time 
period. Another alternative used the vessel's best year multiplied by a 
lower range of index factor than the proposed action. The third 
alternative used either the best year of landings during the 
qualification time period, or the indexed best year of landings during 
the qualification time period, but capped the contribution at 50,000 lb 
(22,680 kg) of scallops. The economic impacts of the contribution 
factor alternatives are analyzed in Section 5.4.7.1 through 5.4.7.2 of 
the Amendment 11 document.
    The alternatives to the proposed option would have distributional 
economic impacts less favorable to the vessels that were active in the 
fishery for many years. The alternative that used a lower range of 
index values (0.9 to 1.10, rather than 0.75 to 1.25) would provide only 
a slight increase in IFQ share for vessels that were active in the 
fishery for a long period of time, while only slightly decreasing share 
for vessels that were in the general category scallop fishery for only 
1 year. This would have had more negative impacts on a larger number of 
vessels that had a longer history in the general category scallop 
fishery. The alternative allocation based on best year (Section 
3.1.2.3.1 of the Amendment 11 document) would have had negative 
economic impacts on those vessels that had a longer history of 
participation, since allocation would be determined regardless of years 
active. For the same reason, this alternative would have had positive 
economic impacts on those vessels that had a shorter history of 
participation. The final alternative, which would establish the 50,000-
lb (22,680-kg) cap on a vessel's contribution factor, would prevent a 
vessel from getting a larger share of the fishery even if it had very 
high historical landings. This alternative would have impacted vessels 
with higher landings more severely than vessels with lower landings, 
and was therefore not selected. The proposed alternative using the 
best-year indexed by the number of years active is intended to help 
reduce the negative impacts on those participants with an established 
history and long-term investment in scallop fishing.

Scallop Allocation for LACG Scallop Vessels

    The Council considered several ways of allocating IFQ to vessels 
that qualify for a LAGC scallop permit (excluding NGOM and Incidental 
scallop vessels). These included: Allocations by vessel in pounds of 
scallops or number of trips per vessel; allocations to two allocation 
tiers where every vessel in a tier would receive the same allocation; 
allocation to three allocation tiers; a fleetwide hard TAC; and a 
fleetwide hard TAC allocated into either quarters or trimesters. The 
Council also considered a stand-alone IFQ alternative that would confer 
eligibility on IFQ vessels based only on past permit issuance, and 
would use the contribution factor alternative adopted by the Council to 
allocate a vessel's IFQ. The economic impacts of the allocation 
alternatives are analyzed in section 5.4.8 of the Amendment 11 
document.
    Under the proposed action, NMFS would calculate a vessel's IFQ by 
multiplying the overall general category TAC by the vessel's 
contribution factor. An example demonstrating the calculation of a 
vessel's IFQ is provided in the ``IFQs for limited access general 
category scallop vessels'' section of the preamble of this proposed 
rule.
    The allocation of IFQ would eliminate the derby fishing effect that 
results from a TAC because an IFQ assures that each vessel can land a 
given quantity anytime during the fishing year. Vessel owners would 
have the flexibility to select the time and the area to fish in order 
to minimize their costs and/or maximize their revenues. Since the 
fishing effort would be spread over a longer period of time, the price 
of scallops would be more stable throughout the season. This, combined 
with the availability of a fresh and/or higher quality scallops over a 
longer season, would benefit consumers as well as producers. Therefore, 
the proposed allocation alternative would have positive economic 
impacts on the vessels that qualify for limited access general category 
fishery. Although maintaining the 400-lb (181.44-kg) possession limit 
would cause some inefficiencies and result in higher costs compared to 
a higher possession limit (alternative 2,000 lb (907 kg) per trip), 
this provision is intended to help preserve the historical small-boat 
character of this fleet.
    The non-selected alternative that would have allocated a number of 
trips to each scallop vessel has an advantage over the IFQ alternative 
because it is easier to monitor and enforce, but could result in either 
reduced revenue or increased costs for vessels that catch less than 400 
lb (181.44 kg) of scallops on any trip, because the trip would have 
been considered to be used irrespective of amount landed. Another non-
selected alternative would have established two permit tiers to which 
vessels would be assigned based on the level of historical scallop 
landings. Vessels that had historical landings of less than 5,000 lb 
(2,268 kg) would have a possession limit of 200 lb (90.72 kg), while 
vessels that had historical landings greater than 5,000 lb (2,268 kg) 
would have a scallop possession limit of 400 lb (181.44 kg) per trip. 
The alternative did not restrict the number of trips that could be 
taken or pounds that could be landed by vessels within a tier. This 
alternative would have negative economic impacts on vessels that landed 
less than 5,000 lb (2,268 kg) and would be restricted to a 200-lb 
(90.72-kg) possession limit because it would reduce landings from 
recent historical levels. The three-tiered allocation alternative would 
allocate equal pounds or trips to each vessel within one of three tiers 
based on the vessel's historical level of landings, with the pounds or 
trips allocated to each tier based on the average amount of scallops 
landed by vessels in each tier. As a result, this alternative would 
have negative impacts on a vessel in a tier that landed a higher amount 
of scallops than the average for the tier. The stand-alone alternative 
would allocate IFQ to a larger number of vessels, but would have 
negative distributional impacts on vessels that have had higher recent 
annual landings of scallops. Instead of individual allocation, the 
alternative that would establish a hard TAC with limited entry vessel 
permits could lead to a race to fish and market gluts. This could have 
negative economic impacts, especially on smaller vessels that fish 
seasonally and cannot access all areas due to the constraints on their 
capacity. A fleet-wide hard TAC allocated by trimester or by quarter 
would extend the fishing season and reduce negative impacts from derby 
fishing and market gluts, to some extent. These alternatives would have 
larger negative distributional impacts on some vessels compared to the 
proposed IFQ program, and other vessel allocation alternatives 
considered, because the opportunity to fish and land scallops would be 
dependent upon the level of fishing by other vessels. For example, a 
vessel may not get the opportunity to fish for scallops at all under a 
quarterly fleetwide TAC alternative if other general category vessels 
quickly harvest the entire TAC. If such a vessel had landings of 
scallops before Amendment 11, the vessel would experience scallop

[[Page 71326]]

revenue losses compared to alternatives that would allow the vessel to 
fish for scallops regardless of the scallop fishing activity of other 
vessels.

Limited Entry Permit Provisions

    Amendment 11 includes most of the provisions adopted in other 
limited access fisheries in the Northeast Region to govern the initial 
qualification process, future ownership changes, and vessel 
replacements. For the most part, there is no direct economic impact. 
The nature of a limited access program requires rules for governing the 
transfer of limited access fishing permits. The procedures have been 
relatively standard for previous limited access programs, which makes 
it easier for a vessel owner issued permits for several limited access 
fisheries to undertake vessel transactions. The standard provisions 
adopted in Amendment 11 are those governing change in ownership; 
replacement vessels; CPH; abandonment or voluntary relinquishment of 
permits; and appeal of denial of permits. In addition, IFQ scallop 
vessels would be restricted to a cap on the amount of IFQ they could 
own. This ownership cap restriction is based on a similar ownership cap 
provision for current limited access vessels. This action would modify 
some of the other provisions for LAGC scallop vessels. LAGC scallop 
vessels would not have any vessel size and horsepower upgrade 
restrictions for vessel modifications or vessel replacements (unless 
the vessel has other limited access permits). This action would also 
allow a vessel owner to retain a general category scallop fishing 
history prior to the implementation of Amendment 11 to be eligible for 
issuance of the LAGC scallop permit based on the eligibility of the 
vessel that was sold, even if the vessel was sold with other limited 
access permits.
    The economic impacts of the limited access permit provisions are 
analyzed in section 5.4.9 of the Amendment 11 document. Measures 
allowing vessel owners to appeal limited access permit denials would 
indirectly benefit all participants by ensuring that only those vessels 
that provide verification of permit and landings history would qualify 
and receive allocation based on accurate records. The proposed 
regulations regarding qualification with retained vessel histories 
would have positive economic impacts for participants that sold their 
vessel to another but retained the fishing history. The proposed action 
would allow a vessel owner to modify a LAGC scallop vessel's size or 
horsepower without any upgrade restriction, provided that there are no 
other limited access permits issued to the vessel. This would provide 
flexibility for the vessel owners to adjust their fishing power under 
changing fishery conditions. Flexibility with a vessel's size and 
horsepower could also improve safety at sea. Since the vessels would be 
allocated individual pounds, this is not expected to impact the total 
scallop landings or provide an unfair advantage to larger vessels.
    Amendment 11 would allow a vessel owner to obtain permanent or 
temporary transfers of IFQ, up to 2 percent of the total general 
category allocation per vessel. This would help vessel owners to 
maintain an economically viable operation if the allocations for 
separate vessels are too low to generate revenue to cover variable and 
fixed expenses. It could also allow a vessel owner to sell or lease a 
small IFQ to another vessel owner, which would generate income from the 
IFQ without operating costs. This measure, combined with a restriction 
that an individual could not have an ownership interest in more than 5 
percent of the overall TAC, would also prevent a few individuals or 
corporations from dominating the fishery and would help to redistribute 
gains from the limited access more equitably among more fishermen. Non-
preferred alternatives considered other ways to limit the accumulation 
of IFQ. One would have allowed two allocations only to be combined, and 
the other set a cap of 60,000 lb (27,216 kg) total allocation. The 
selected alternative provided more flexibility while maintaining an 
overall limit on the amount of IFQ that could be held by a single 
vessel.
    Non-preferred alternatives would have prohibited IFQ transfers, 
would have maintained vessel size and horsepower upgrade restrictions 
consistent with other limited access permits (allowed upgrades up to 10 
percent in length, and gross and net tonnage, and 20 percent in 
horsepower), and would have prohibited IFQ transfers, providing less 
flexibility for vessel owners and reduced economic benefits.

Sectors

    Amendment 11 proposes to allow participants in the IFQ scallop 
fishery to organize voluntary fishing sectors. Amendment 11 specifies 
sector requirements and the process through which proposals would be 
submitted to the Council and NMFS. Amendment 11 does not establish 
sectors--just the process under which future sectors could be proposed. 
The proposed sector process would provide an opportunity for fishermen 
to benefit from an economically viable operation when the allocations 
of individual vessels are too small to make scallop fishing profitable. 
In comparison, the only alternative to the proposed action would not 
allow the formation of sectors, decreasing flexibility and eliminating 
any possible future economic benefits of forming sectors.

Measures for Transition to the IFQ program

    Amendment 11 specifies measures that would be implemented for at 
least 1 year, while the eligibility process for IFQ scallop permits is 
underway to establish the fleet of IFQ scallop vessels. The economic 
impacts of the transition period alternatives are analyzed in section 
5.4.12 of the Amendment 11 document. The proposed interim alternative 
would establish the following measures. These would help to prevent a 
short-term increase in overfishing of the scallop resource by limiting 
the general category landings to 10 percent of the total scallop 
landings through specification of a TAC. The proposed action would 
prevent further expansion in the general category catch and benefit the 
participants of the general category fishery by providing some 
adjustment time for general category vessels until the transition 
period is over. The allocation amounts for many IFQ scallop vessels are 
likely to be lower with the proposed 5-percent TAC for the IFQ fishery 
than their recent landings. Although management of the general category 
fishery by a fleetwide TAC during the transition period would create 
some derby fishing, the allocation of the total TAC into quarters would 
reduce derby effects to some extent, and lessen the negative economic 
impacts associated with derby fishing. A 10-percent fleetwide TAC may 
not constitute a significant constraint on recent landings, given that 
only those vessels that qualify for an IFQ permit, or that are under 
appeal for an IFQ permit, would be authorized to fish during the 
transition period. General category scallop landings by those vessels 
that had a permit before the control date were approximately 11 percent 
of total landings in 2005.
    An alternative was considered that would have established an annual 
fleetwide TAC. It was not selected because the Council believed it 
would increase the derby effect, with potential negative economic and 
safety implications. It would increase the likelihood that a vessel 
would not have the opportunity to fish for scallops because other 
vessels could rapidly harvest the TAC. Another alternative proposed 
that the transition year would

[[Page 71327]]

have no TAC. It would eliminate the incentives for derby style fishing 
and the economic impacts of this alternative compared to the status quo 
would be negligible, provided participation by general category vessels 
that had a permit before the control date does not increase 
significantly above the recent levels. On the other hand, it is 
possible for the number of appeals to be greater than the number of 
vessels that fished during the recent years, resulting in more vessels 
participating in the fishery. If this were to happen, and the general 
category scallop landings increase above 10 percent of total scallop 
harvest, there could be short-term unexpected increase in fishing 
mortality on the scallop resource.

NGOM Scallop Management Area

    Amendment 11 includes management measures specific to the NGOM 
scallop management area intended to allow a level of scallop fishing 
activity to occur outside of the constraints of the IFQ program and 
some other Amendment 11 provisions for general category vessels. 
Measures include the establishment of a TAC for the area derived from 
the Federal portion of the resource; a 200-lb (90.72-kg) possession 
limit for NGOM and IFQ scallop vessels; a restriction on dredge size; a 
restriction that catch by IFQ scallop vessels fishing in the area would 
be deducted from the IFQ scallop vessel's IFQ and from the NGOM TAC; 
trip declaration requirments; and a closure of the NGOM to all scallop 
vessels (including current limited access scallop vessels and 
Incidental scallop vessels) when the NGOM TAC is reached. The economic 
impacts of the NGOM Scallop Managemetn Area are analyzed in section 
5.4.14.4 of the Amendment 11 document. The proposed NGOM Scallop 
Management Area alternative would have positive economic impacts on a 
large number of vessels that are not estimated to qualify for the IFQ 
permit but are estimated to qualify for an NGOM permit. These vessels 
would have an opportunity to land scallops in this area when the 
resource conditions are favorable. It would reduce the possession limit 
for NGOM and IFQ scallop vessels to 200 lb (90.72 kg) per trip to 
reduce incentives for larger vessels targeting scallops in this area. 
Although reducing the possession limit would have negative economic 
impacts on some vessels, the majority of the active vessels that would 
qualify for the NGOM permit general category permit landed 200 lb 
(90.72 kg) or less of scallops from any one trip, therefore would not 
be negatively impacted from 200 lb (90.72 kg) possession limit. In 
comparison, the no action alternative would have had negative economic 
impacts for vessels that could not qualify for the IFQ scallop permit.
    Under one alternative, Amendment 11 provisions would not have 
applied to NGOM and the general category vessels would have retained 
the opportunity to fish for scallops in NGOM and land up to 400 lb 
(181.44 kg) per trip. The lack of a TAC to limit landings, and the 
higher possession limit, would have had positive economic impacts on 
these vessels compared to the proposed alternative. On the other hand, 
because this alternative would let any vessel obtain a permit to fish 
in the area, it could lead to an influx of vessels from other areas to 
participate in the open access fishery in the NGOM. This would have 
negative impacts on the resource that made it unacceptable.
    Another alternative proposed that to qualify for an NGOM scallop 
permit, a vessel would have to have landed 100 lb (45.4 kg) of scallops 
during the period March 1, 1994, through November 1, 2004. The NGOM TAC 
under this alternative would be based on all landings of scallops from 
the NGOM area (not exclusively the Federal portion of the resource, as 
in the proposed action). This alternative also would have allowed 
vessels to continue fishing for up to 40 lb (18.14 kg) of scallops 
after harvest of the NGOM TAC. This alternative would also provide an 
advantage to IFQ scallop vessels by allowing them to land 400 lb 
(181.44 kg) per trip from this area, whereas NGOM scallop vessels could 
possess and land only up to 200 lb (90.72 kg) per trip. This 
alternative was not adopted because the qualification criteria would 
have had very little restriction on participation, would have had 
excessive administrative costs, and would not promote conservation of 
the scallop resource within the Gulf of Maine or overall. While it 
would have qualified more vessels than the proposed measure, the 
economic opportunity for those vessels would have been diluted by a 
very large number of qualified vessels fishing for a relatively small 
TAC.
    The no action alternative for the NGOM Scallop Management Area 
would not distinguish this area from other areas, and all Amendment 11 
measures would apply equally throughout the range of the scallop 
resource. It was not selected because it would have negative impacts on 
vessels that traditionally fish in the NGOM and that could not qualify 
for the IFQ permit.

Monitoring Provisions

    The economic impacts of monitoring provisions proposed in Amendment 
11 are analyzed in section 5.4.15 of the Amendment 11 document. Since 
general category vessels that land over 40 lb (18.14 kg) are already 
required to have a VMS onboard, the compliance costs of this action are 
not expected to be significant. Vessels operating in the Northeast 
multispecies fishery are also required to have operational VMS units. 
Some of these vessel also have general category scallop permits and 
would be expected to qualify for one of the LAGC scallop permits. The 
majority of general category scallop vessels currently operate VMS as 
required either by the scallop regulations or the Northeast 
multispecies fishery regulations. The non-selected interactive voice 
reporting (IVR) alternative does not have a distinct advantage compared 
to reporting through VMS. The no action alternative would not have the 
associated costs of reporting landings, but reporting of scallop catch 
for each trip is essential to monitor and enforce the IFQ and NGOM 
scallop fishery measures.

Impacts of Limited Access Fishing under General Category Rules

    Amendment 11 provides the opportunity for current limited access 
vessels (i.e., full-time, part-time, or occasional limited access 
scallop vessels) to also be issued a LAGC scallop permit, if the vessel 
meets the qualification criteria. The economic impacts of allowing 
limited access vessels to continue to fish under general category rules 
are analyzed in section 5.4.16.1 of the Amendment 11 document. The 
proposed action would have positive economic impacts on 57 limited 
access vessels (38 full-time, and 19 part-time and occasional) that 
Amendment 11 estimates would qualify for an IFQ scallop permit. One 
non-selected alternative would prevent any limited access vessel from 
having a general category permit and another would prevent current 
full-time limited access scallop vessels from fishing under general 
category rules. This would result in negative economic impacts compared 
to the proposed alternative for those vessels noted above that have a 
historical level of participation in the general category fishery while 
fishing outside of scallop DAS.
    Under the proposed allocation to LAGC scallop vessels, 0.5 percent 
of the overall scallop TAC would be allocated to vessels with IFQ 
scallop permits that also have been issued a full-time, part-

[[Page 71328]]

time, or occasional limited access scallop permit. IFQs for these 
vessels would be determined from the 0.5-percent TAC allocation. Under 
the transition measure before the IFQ program is implemented, IFQ 
scallop vessels that have also been issued a full-time, part-time, or 
occasional limited access scallop permit would fish under the 10-
percent TAC allocated to the general category fleet. The proposed 
action would have positive economic impacts on those vessels. The 0.5-
percent TAC for the limited access qualifiers is less than the 
percentage share of these vessels in total general category scallop 
landings in recent years, but almost equal to what was reported in the 
2004 fishing year. Under one alternative, scallops landed by limited 
access vessels under general category rules would be deducted from the 
5-percent TAC allocated to the IFQ vessels, negatively impacting the 
general category vessels that qualify for limited access, with small 
positive economic impacts on the limited access scallop fleet. This 
alternative was therefore not selected, and the separate 0.5-percent 
TAC is proposed.

Allocation Between Limited Access and General Category Fisheries

    The Council considered alternative values for the TAC that would be 
allocated to IFQ scallop vessels (excluding IFQ scallop vessels also 
issued a full-time, part-time, or occasional limited access scallop 
permit), equal to 2.5, 5.0, 7.0, 10.0, and 11.0 percent of the overall 
projected scallop catch. The economic impacts of the various levels of 
TAC allocation between the limited access and LAGC fishery are analyzed 
in section 5.4.17 of the Amendment 11 document and have different 
distributional impacts. The proposed 5-percent general category TAC 
would have negative economic impacts on many general category vessels 
compared to status quo management because the fishery landed twice that 
level in both the 2005 and 2006 fishing years. On the other hand, the 
5-percent TAC is higher than the long-term average percentage share of 
total scallop landings for the general category scallop fishery, which 
is 2.5 percent of overall scallop landings. The 5-percent allocation 
corresponds to the highest level reached by the general category 
fishery before the control date. Therefore, this allocation is 
consistent with the Council's decision in 2004 to implement a control 
date recognizing that that the substantial increase in general category 
fishing effort could lead to overfishing of the scallop resource and 
reduce economic benefits for everyone. The short-term and long-term 
economic impacts of the 5-percent TAC, combined with the limited entry 
program, compared to other alternative allocation amounts are discussed 
extensively above and are not repeated here.
    The proposed action includes several measures that could mitigate 
some of the adverse economic impacts of the limited access program for 
general category including the 5-percent TAC. The separate limited 
entry program for the NGOM is expected to provide an opportunity for 
owners of vessels that would not qualify for the IFQ scallop permit, 
but who have historically participated in the NGOM scallop fishery, to 
fish for scallops at a reduced scale (at a lower possession limit of 
200 lb (90.72 kg) per trip) when the resource conditions in this area 
become favorable. The incidental catch permit would provide opportunity 
for the vessels that land scallops occasionally up to 40 lb (18.14 kg) 
per trip, including some vessels that qualify for limited access but 
received allocations lower than what they could land annually with the 
incidental permit. Furthermore, Amendment 11 includes a provision to 
allow vessel owners to combine IFQ allocations through the IFQ transfer 
program, up to 2 percent of the TAC allocated to the IFQ scallop 
fishery, so that vessel owners can buy or lease additional IFQ. 
Similarly, the proposed action to establish a process for sectors in 
the general category fishery would provide an opportunity for fishermen 
to benefit from an economically viable operation when the allocations 
of individual vessels are too small to make scallop fishing profitable.
    A lower TAC for general category would have larger negative 
proportional impacts on general category vessels while potentially 
increasing the revenues of the limited access fishery by a small 
percentage. A higher percentage TAC would reduce the negative impacts 
on general category vessels, but would lower the positive economic 
impacts on the current limited access.

Incidental Catch Permit

    The economic impacts of the proposed Incidental catch permit are 
analyzed in section 5.4.18 of the Amendment 11 document. The proposed 
action would create an incidental catch permit for vessels to retain 
and sell up to 40 lb (18.14 kg) of scallop meats per trip, provided 
they had been issued a general category scallop permit as of November 
1, 2004. The economic impacts of this alternative would be positive on 
vessels that do not qualify for the IFQ permit because it would allow 
them to still earn some income from scallops under the incidental catch 
permit. This measure could also benefit some vessels that qualify for 
the IFQ permit with low allocations. The owner of such a vessel might 
elect the Incidental scallop permit because the vessel could land more 
total pounds of scallops on several 40-lb (18.14-kg) trips than it 
could under its IFQ.
    The only alternative considered was no action, which would allow 
vessels to possess and land, but not sell, an incidental catch of 
scallops. This alternative would not provide any source of revenue for 
vessels that do not qualify for the IFQ or NGOM scallop permit. It also 
would complicate the Council's and NMFS's ability to determine the 
overall level of scallop catch from a fleet of vessels without scallop 
permits because none of the reporting and compliance measures would 
apply to non-permitted vessels. This could result in more cautious 
management measures in the future, with possible negative economic 
impacts on all vessels issued scallop permits.

Changing of the Issuance Date of General Category Permits

    Amendment 11 proposes to change the permit issuance date for 
general category scallop permits from May 1 to March 1, to better align 
the general category scallop fishery with the scallop fishing year of 
March 1 through February 28/29. The economic impacts of changing the 
date that general category permits are issued are analyzed in section 
5.4.19 of the Amendment 11 document. Changing the general category 
permit to March 1 is an administrative change and procedural adjustment 
for owners accustomed to a May 1 permit renewal. The proposed measure 
would allow, however, better estimation of the number of participants, 
the level of effort in the fishery and allocation of TAC by aligning 
the issuance date with date for the limited access fishery. As a 
result, the proposed action would have indirect positive economic 
impacts on the sea scallop fishery.
    The Council considered revising the start of the fishing year to 
May 1 or August 1. This would have had some positive impacts over the 
long term by better aligning the fishing year with the scallop survey, 
resulting in updated information on which to base the following year's 
management. This would increase the confidence in the effectiveness of 
scallop fishery management measures relative to the scallop fishing 
mortality goals of the

[[Page 71329]]

FMP. On the other hand, these alternatives were strongly opposed by the 
scallop industry because it would require a change in the business 
plans of the scallop vessel owners.

Other Measures Included in Amendment 11

    Amendment 11 proposes two changes to scallop regulations, including 
a clarification that the maximum sweep length for trawl gear under the 
FMP would not apply to vessels fishing for Northeast multispecies or 
monkfish, and an allowance for general category vessels to possess up 
to 100 bu (35.24 hL) of in-shell scallops seaward of the VMS 
demarcation line. The economic impacts of these measures are analyzed 
in sections 5.4.20 and 5.4.21 of the Amendment 11 document. 
Clarification of trawl gear restriction for vessels fishing under a 
multispecies or monkfish DAS would have positive economic impacts on 
those general category vessels that catch scallops only incidentally, 
compared to no action. Setting the possession limit at 100 bu (35.24 
hL) seaward of the demarcation line would have positive economic 
impacts on the general category vessels when they catch scallops with 
lower meat yield. The only alternative to both of these measures is the 
no action alternative, which does not provide the benefits of the 
proposed action noted above.

Change to Ownership Cap Restriction to Account for CPHs

    This proposed rule includes a change to the ownership cap 
restriction for current limited access scallop vessels to clarify that 
the regulation was intended to apply to limited access scallop permits 
and CPHs. Currently, if a vessel owner has been issued a CPH, that 
owner cannot activate that CPH on a vessel if they already own 5 
percent of the limited access scallop permits. That owner would 
therefore have to sell a vessel to activate the CPH. This clarification 
of the ownership cap to include CPH's does not change this, or the 
economic impacts of the ownership cap restrictions. There are no 
alternatives to clarifying the regulation, since the result would be 
that the scallop regulations would continue to be inconsistent with the 
intent of the original ownership cap restrictions included in the FMP.

List of Subjects in 50 CFR Part 648

    Fisheries, Fishing, Recordkeeping and reporting requirements.

    Dated: December 7, 2007.
William T. Hogarth,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR part 648 is 
proposed to be amended as follows:

PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES

    1. The authority citation for part 648 continues to read as 
follows:

    Authority: 16 U.S.C. 1801 et seq.
    2. In Sec.  648.2, definitions for ``limited access general 
category (LAGC) scallop vessel'' and ``limited access scallop vessel'' 
are added in alphabetical order to read as follows:


Sec.  648.2  Definitions.

* * * * *
    Limited access general category (LAGC) scallop vessel means a 
vessel that has been issued an individual fishing quota (IFQ), Northern 
Gulf of Maine (NGOM), or incidental catch LAGC scallop permit pursuant 
to Sec.  648.4(a)(2)(ii). An LAGC scallop vessel may also be issued a 
limited access scallop permit.
    Limited access scallop vessel means a vessel that has been issued a 
limited access full-time, part-time, or occasional scallop permit 
pursuant to Sec.  648.4(a)(2)(i). A limited access scallop vessel may 
also be issued an LAGC scallop permit.
* * * * *
    3. In Sec.  648.4, paragraphs (a)(1)(i)(I)(3), (a)(2) introductory 
text, (a)(2)(i) introductory text, (a)(2)(i)(M)(1), (a)(2)(i)(M)(2), 
(a)(2)(ii), and (e)(1)(iv) are revised, and paragraph (a)(2)(i)(P) is 
added to read as follows:


Sec.  648.4  Vessel permits.

    (a) * * *
    (1) * * *
    (i) * * *
    (I) * * *
    (3) With the exception of combination vessels, a vessel issued a 
limited access sea scallop dredge permit pursuant to paragraph 
(a)(2)(i) of this section is not eligible for limited access 
multispecies permits. This restriction is not applicable to vessels 
issued an LAGC scallop permit pursuant to paragraph (a)(2)(ii) of this 
section, unless such vessel has also been issued a limited access 
scallop permit pursuant to paragraph (a)(2)(i) of this section.
* * * * *
    (2) Atlantic sea scallop vessels--Any vessel of the United States 
that fishes for, possesses, or lands Atlantic sea scallops, except 
vessels that fish exclusively in state waters for scallops, must have 
been issued and carry on board a valid scallop vessel permit pursuant 
to this section.
    (i) Limited access scallop permits. Any vessel of the United States 
that possesses or lands more than 400 lb (181.44 kg) of shucked 
scallops, or 50 bu (17.62 hL) of in-shell scallops per trip, or 
possesses more than 100 bu (35.24 hL) seaward of the VMS Demarcation 
Line, except vessels that fish exclusively in state waters for 
scallops, must have been issued and carry on board a valid limited 
access scallop permit.
* * * * *
    (M) Percentage ownership restrictions. (1) For any vessel acquired 
after March 1, 1994, a vessel owner is not eligible to be issued a 
limited access scallop permit for the vessel, or a confirmation of 
permit history, if, as a result of the issuance of the permit or 
confirmation of permit history, the vessel owner, or any other person 
who is a shareholder or partner of the vessel owner, will have an 
ownership interest in a total number of limited access scallop vessels 
and limited access scallop confirmations of permit history in excess of 
5 percent of the number of all limited access scallop vessels and 
confirmations of permit history at the time of permit application.
    (2) Vessel owners who were initially issued a 1994 limited access 
scallop permit or confirmation of permit history, or who were issued or 
renewed a limited access scallop permit or confirmation of permit 
history for a vessel in 1995 and thereafter, in compliance with the 
ownership restrictions in paragraph (a)(2)(i)(M)(1) of this section, 
are eligible to renew such permits(s) or confirmation(s) of permit 
history, regardless of whether the renewal of the permits or 
confirmations of permit history will result in the 5 percent ownership 
restriction being exceeded.
* * * * *
    (P) VMS requirement. A vessel issued a limited access scallop 
permit, as specified in paragraph (a)(2)(i) of this section, except a 
vessel issued an occasional scallop permit that is not fishing in a sea 
scallop access area, must have an operational VMS installed. Prior to 
issuance of a limited access scallop permit, NMFS must receive a signed 
VMS certification from the vessel owner and be notified by the VMS 
vendor that the unit has been installed and is operational.
    (ii) LAGC scallop permits. With the exception of any vessel that 
fishes exclusively in state waters for scallops, any vessel of the 
United States that is not in possession of a limited access scallop 
permit pursuant to paragraph

[[Page 71330]]

(a)(2)(i) of this section, and any vessel issued a limited access 
scallop permit that fishes for scallops outside of the scallop DAS 
program described in Sec.  648.53 or the Area Access program described 
in Sec.  648.60, any vessel that fishes for, possesses, or lands 
scallops must be issued an LAGC scallop permit and must comply with the 
permit requirements described in paragraphs (a)(2)(ii)(A), (B), or (C) 
of this section. To be issued an LAGC scallop permit, a vessel owner 
must meet the qualification criteria specified in paragraphs 
(a)(2)(ii)(D) or (F) of this section and must comply with the 
application procedures specified in paragraph (a)(2)(ii)(H) of this 
section.
    (A) Individual fishing quota LAGC permit. To possess or land up to 
400 lb (181.44 kg) of shucked meats, or 50 bu (17.62 hL) of in-shell 
scallops per trip, or possess up to 100 bu (35.24 hL) of in-shell 
scallops seaward of the VMS demarcation line, a vessel must have been 
issued an individual fishing quota LAGC scallop permit (IFQ scallop 
permit). Issuance of an initial IFQ scallop permit is contingent upon 
the vessel owner submitting the required application and other 
information to demonstrate that the vessel meets the eligibility 
criteria specified in paragraph (a)(2)(ii)(D) of this section.
    (B) Northern Gulf of Maine LAGC permit. To possess or land up to 
200 lb (90.72 kg) of shucked or 25 bu (8.81 hL) in-shell scallops per 
trip, or to possess up to 50 bu (17.62 hL) seaward of the VMS 
demarcation line, a vessel must have been issued a Northern Gulf of 
Maine LAGC scallop permit (NGOM scallop permit). A vessel issued a NGOM 
scallop permit may not fish for scallops south of 42[deg]20'N. Lat, and 
may not possess or land more than 200 lb (90.72 kg) of shucked or 25 bu 
(8.81 hL) of in-shell scallops at any time, except the vessel may 
possess up to 50 bu (17.62 hL) of in-shell scallops seaward of the VMS 
demarcation line. Issuance of an initial NGOM scallop permit is 
contingent upon the vessel owner submitting the required application 
and other information to demonstrate that the vessel meets the 
eligibility criteria specified in paragraph (a)(2)(ii)(F) of this 
section.
    (C) Incidental catch LAGC permit. To possess or land up to 40 lb 
(18.14 kg) of shucked or 5 bu (1.76 hL) in-shell scallops per trip, or 
possess up to 10 bu (3.52 hL) in-shell scallops per trip seaward of the 
VMS demarcation line, but not more than these amounts per trip, a 
vessel must have been issued an incidental catch general category 
scallop permit (Incidental scallop permit). A vessel issued an 
incidental catch general scallop permit may not possess or land more 
than 40 lb (18.14 kg) of shucked or 5 bu (1.76 hL) of in-shell scallops 
at any time, except the vessel may possess up to 10 bu (3.52 hL) of in-
shell scallops seaward of the VMS demarcation line. Issuance of an 
initial incidental catch category scallop permit is contingent upon the 
vessel owner submitting the required application and other information 
to demonstrate that the vessel meets the eligibility criteria specified 
in paragraph (a)(2)(ii)(G) of this section.
    (D) Eligibility for an IFQ scallop permit. A vessel is eligible for 
and may be issued an IFQ scallop permit if it meets both eligibility 
criteria specified in paragraphs (a)(2)(ii)(D)(1) and (2) of this 
section, or is replacing a vessel that meets both the eligibility 
criteria specified in paragraphs (a)(2)(ii)(D)(1) and (2) of this 
section. A vessel owner may appeal NMFS's determination that a vessel 
does not meet the requirements specified in paragraphs (a)(2)(ii)(D)(1) 
and (2) of this section by complying with the appeal process, as 
specified in paragraph (a)(2)(ii)(O) of this section.
    (1) Permit criteria. A vessel must have been issued a general 
category scallop permit in at least one scallop fishing year, as 
defined in Sec.  648.2, between March 1, 2000, and November 1, 2004.
    (2) Landings criteria. A vessel must have landed at least 1,000 lb 
(454 kg) of shucked scallops in any one year when the vessel also held 
a general category scallop permit as specified in paragraph 
(a)(2)(ii)(D)(1) of this section. NMFS dealer data will be used to make 
the initial determination of vessel eligibility. If a dealer reported 
more than 400 lb (181.44 kg) of scallops on a trip, 400 lb (181.44 kg) 
will be credited toward the landings criteria. For dealer reports that 
indicate clearly that the landings were bushels of in-shell scallops, a 
conversion of 8.33 lb (3.78 kg) of scallop meats per bushel will be 
used to calculate meat-weight, up to the maximum of 400 lb (181.44 kg) 
per trip.
    (E) Contribution factor for determining a vessel's individual 
fishing quota. An eligible IFQ scallop vessel's best year of scallop 
landings, as specified in Sec.  648.53(h)(2), and the vessel's number 
of years active, as specified in Sec.  648.53(h)(3), shall be used to 
calculate a vessel's contribution factor, as specified in Sec.  
648.53(h)(1). A vessel owner that has applied for an IFQ scallop permit 
will be notified of the vessel's contribution factor at the time of 
issuance of the IFQ scallop permit. A vessel owner may appeal NMFS's 
determination of the IFQ scallop vessel's contribution factor by 
complying with the appeal process as specified in paragraph 
(a)(2)(ii)(O) of this section.
    (F) Eligibility for NGOM or Incidental scallop permit. A vessel 
that is not eligible for, or for which the vessel's owner chooses not 
to apply for an IFQ scallop permit, may be issued either a NGOM scallop 
permit or an Incidental scallop permit if the vessel held a general 
category scallop permit on November 1, 2004, or if the vessel is 
replacing a vessel that held a general category scallop permit on 
November 1, 2004. A vessel owner may appeal NMFS's determination that a 
vessel does not meet this criteria by complying with the appeal process 
as specified in paragraph (a)(2)(ii)(O) of this section.
    (G) LAGC permit restrictions--(1) Change of permit category. (i) 
IFQ scallop permit. A vessel issued an IFQ scallop permit may not 
change its general category scallop permit category at any time without 
voluntarily relinquishing its IFQ scallop permit eligibility as 
specified in paragraph (a)(2)(ii)(M) of this section. If the vessel 
owner has elected to relinquish the vessel's IFQ permit and instead be 
issued an NGOM or Incidental scallop permit, the IFQ permit shall be 
permanently relinquished.
    (ii) NGOM and Incidental scallop permit. A vessel may be issued 
either an NGOM or Incidental scallop permit for each fishing year, and 
a vessel owner may not change his/her LAGC scallop permit category 
during the fishing year, except as specified in this paragraph, 
(a)(2)(ii)(G)(1)(ii) . The owners of a vessel issued an NOGM or 
Incidental scallop permit must elect a permit category in the vessel's 
permit application and shall have one opportunity to request a change 
in its permit category by submitting an application to the Regional 
Administrator within 45 days of the effective date of the vessel's 
permit. After that date, the vessel must remain in that permit category 
for the duration of the fishing year.
    (2) VMS requirement. A vessel issued a LAGC permit must have an 
operational VMS installed. Issuance of an Atlantic sea scallop permit 
requires the vessel owner to submit a copy of the vendor's installation 
receipt or provide verification of vendor activation from a NMFS-
approved VMS vendor as described in Sec.  648.9.
    (H) Application/renewal restrictions. See paragraph (a)(1)(i)(B) of 
this section. Applications for a LAGC permit described in paragraph 
(a)(2)(ii) of this section must be postmarked no later than [date 90 
days from the date the Final Rule is published in the FEDERAL 
REGISTER]. Applications for LAGC

[[Page 71331]]

permits that are not postmarked on or before [date 90 days from the 
date the Final Rule is published in the FEDERAL REGISTER] may be denied 
and returned to the sender with a letter explaining the denial. Such 
denials may not be appealed and shall be the final decision of the 
Department of Commerce.
    (I) Qualification restriction. (1) See paragraph (a)(1)(i)(C) of 
this section for restrictions applicable to limited access scallop 
permits.
    (2) Notwithstanding paragraph (a)(1)(i)(L) of this section, scallop 
landings history generated by separate owners of a single vessel at 
different times during the qualification period for LAGC scallop 
permits may be used the qualify more than one vessel, provided that 
each owner applying for an LAGC scallop permit demonstrates that he/she 
created distinct fishing histories, that such histories have been 
retained, and if the vessel was sold, that each applicant's eligibility 
and fishing history is distinct.
    (3) Notwithstanding paragraph (a)(1)(i)(L) of this section, vessel 
owners applying for a LAGC permit who sold a vessel with non-scallop 
limited access permits, as specified in paragraph (a)(1)(i)(D) of this 
section, and retained only the general category scallop history as 
specified in paragraph (a)(1)(i)(D) of this section, before [DATE FINAL 
RULE PUBLISHED IN THE FEDERAL REGISTER], may use the general category 
scallop history to qualify a vessel for the initial IFQ scallop permit.
    (J) Change in ownership. See paragraph (a)(1)(i)(D) of this 
section.
    (K) Replacement vessels. A vessel owner may apply to replace a 
qualified LAGC vessel with another vessel that he/she owns. There are 
no size or horsepower restrictions on replacing general LAGC vessels, 
unless the qualified vessel that will be replaced is subject to such 
restriction because of other limited access permits issued pursuant to 
Sec.  648.4. In order for a LAGC that also has other limited access 
permits issued pursuant to Sec.  648.4 to be replaced by a vessel that 
does not meet the replacement and upgrade restrictions specified for 
those other limited access permits, the other limited access permits 
must be permanently relinquished, as specified in paragraph 
(a)(1)(i)(K) of this section.
    (L) Confirmation of Permit History. See paragraph (a)(1)(i)(J) of 
this section.
    (M) Abandonment or voluntary relinquishment of permits. See 
paragraph (a)(1)(i)(K) of this section.
    (N) Restriction on permit splitting. See paragraph (a)(1)(i)(L) of 
this section.
    (O) Appeal of denial of permit--(1)Eligibility. Any applicant 
eligible to apply for an LAGC scallop permit who is denied such permit 
may appeal the denial to the Regional Administrator within 30 days of 
the notice of denial. Any such appeal may only be based on the grounds 
that the information used by the Regional Administrator was incorrect. 
The appeal must be in writing, must state the specific grounds for the 
appeal, and must include information to support the appeal.
    (2) Contribution factor appeals. Any applicant eligible to apply 
for a IFQ scallop permit who disputes NMFS's determination of the 
vessel's contribution factor specified in paragraph (a)(2)(ii)(E) of 
this section may appeal NMFS's determination to the Regional 
Administrator within 30 days of the notification of the vessel's best 
year and years active. Any such appeal may only be based on the grounds 
that the information used by the Regional Administrator was incorrect. 
The appeal must be in writing, must state the specific grounds for the 
appeal, and must include information to support the appeal. A vessel 
owner may appeal both the eligibility criteria and the contribution 
factor and must submit the appeal for both at the same time. An appeal 
of contribution factor determinations shall be reviewed concurrently 
with an eligibility appeal, if applicable.
    (3) Appeal review. The Regional Administrator shall appoint a 
designee who shall make the initial decision on the appeal. The 
appellant may request a review of the initial decision by the Regional 
Administrator by so requesting in writing within 30 days of the notice 
of the initial decision. If the appellant does not request a review of 
the initial decision within 30 days, the initial decision is the final 
administrative action of the Department of Commerce. Such review will 
be conducted by a hearing officer appointed by the Regional 
Administrator. The hearing officer shall make findings and a 
recommendation to the Regional Administrator, which shall be advisory 
only. Upon receiving the findings and the recommendation, the Regional 
Administrator shall issue a final decision on the appeal. The Regional 
Administrator's decision is the final administrative action of the 
Department of Commerce.
    (4) Status of vessels pending appeal. A vessel denied an LAGC 
scallop permit may fish while under appeal, provided that the denial 
has been appealed, the appeal is pending, and the vessel has on board a 
letter from the Regional Administrator authorizing the vessel to fish 
under the limited access general category permit. The Regional 
Administrator shall issue such a letter that shall be effective during 
the pendency of any appeal. The letter of authorization must be carried 
on board the vessel. If the appeal is finally denied, the Regional 
Administrator shall send a notice of final denial to the vessel owner; 
the authorizing letter becomes invalid 5 days after receipt of the 
notice of denial, but no later than 10 days from the date of the letter 
of denial.
* * * * *
    (e) * * *
    (1) * * *
    (iv) An applicant applying for a limited access multispecies 
combination vessel or individual DAS permit, a limited access scallop 
permit (except an occasional scallop permit), an LAGC scallop permit, 
or electing to use a VMS, has failed to meet all of the VMS 
requirements specified in Sec. Sec.  648.9 and 648.10; or
* * * * *
    4. In Sec.  648.5, paragraph (a) is revised as follows:


Sec.  648.5  Operator permits.

    (a) General. Any operator of a vessel fishing for or possessing: 
Atlantic sea scallops, NE multispecies, spiny dogfish, monkfish, 
Atlantic herring, Atlantic surfclam, ocean quahog, Atlantic mackerel, 
squid, butterfish, scup, black sea bass, or Atlantic bluefish, 
harvested in or from the EEZ; tilefish harvested in or from the EEZ 
portion of the Tilefish Management Unit; skates harvested in or from 
the EEZ portion of the Skate Management Unit; or Atlantic deep-sea red 
crab harvested in or from the EEZ portion of the Red Crab Management 
Unit, issued a permit, including carrier and processing permits, for 
these species under this part, must have been issued under this 
section, and carry on board, a valid operator permit. An operator's 
permit issued pursuant to part 622 or part 697 of this chapter 
satisfies the permitting requirement of this section. This requirement 
does not apply to operators of recreational vessels.
* * * * *
    5. In Sec.  648.9, paragraphs (c)(1)(iii) and (c)(2)(i)(D) are 
revised to read as follows:


Sec.  648.9  VMS requirements.

* * * * *
    (c) * * *
    (1) * * *
    (iii) At least twice per hour, 24 hr a day, throughout the year, 
for vessels issued a scallop permit and subject to the requirements of 
Sec.  648.4(a)(2)(ii)(B).
    (2) * * *
    (i) * * *
    (D) The vessel has been issued a general scallop permit, is not in

[[Page 71332]]

possession of any scallops onboard the vessel, is tied to a permanent 
dock or mooring, the vessel operator has notified NMFS through VMS by 
transmitting the appropriate VMS power-down code, that the VMS will be 
powered down, and the vessel is not required by other permit 
requirements for other fisheries to transmit the vessel's location at 
all times. Such a vessel must repower the VMS and submit a valid VMS 
activity declaration prior to moving from the fixed dock or mooring. 
VMS codes and instructions are available from the Regional 
Administrator upon request.
* * * * *
    6. In Sec.  648.10, paragraphs (b)(1)(i); and (b)(2)(i) and (ii), 
and (c) introductory text are revised; paragraphs (b)(1)(iii) and (iv) 
are removed and reserved; and paragraphs (b)(4)(i) through (iv) are 
added as follows:


Sec.  648.10  DAS and VMS notification requirements.

* * * * *
    (b) * * *
    (1) * * *
    (i) A scallop vessel issued a Full-time or Part-time limited access 
scallop permit or an LAGC scallop permit;
* * * * *
    (2) * * *
    (i) A vessel subject to the VMS requirements of Sec.  648.9 and 
this paragraph (b) that has crossed the VMS Demarcation Line specified 
under paragraph (a) of this section is deemed to be fishing under the 
DAS program, the general category scallop fishery, or other fishery 
requiring the operation of VMS as applicable, unless prior to the 
vessel leaving port, the vessel's owner or authorized representative 
declares the vessel out of the scallop, NE multispecies, or monkfish 
fishery, as applicable, for a specific time period by notifying NMFS by 
transmitting the appropriate VMS code through the VMS, or unless the 
vessel's owner or authorized representative declares the vessel will be 
fishing in the Eastern U.S./Canada Area as described in Sec.  
648.85(a)(3)(ii) under the provisions of that program.
    (ii) Notification that the vessel is not fishing under the DAS 
program, the general category scallop fishery, or other fishery 
requiring the operation of VMS, must be received prior to the vessel 
leaving port. A vessel may not change its status after the vessel 
leaves port or before it returns to port on any fishing trip.
* * * * *
    (4) * * *
    (i) IFQ scallop vessels. An IFQ scallop vessel that has crossed the 
VMS Demarcation Line specified under paragraph (a) of this section is 
deemed to be fishing under the IFQ program, unless prior to the vessel 
leaving port, the vessel's owner or authorized representative declares 
the vessel out of the scallop fishery (i.e., the vessel will not 
possess, retain, or land scallops) for a specific time period by 
notifying the Regional Administrator through the VMS. An IFQ scallop 
vessel that is fishing north of 42[deg]20' N. Lat. is deemed to be 
fishing under the NGOM scallop fishery unless prior to the vessel 
leaving port, the vessel's owner or authorized representative declares 
the vessel out of the scallop fishery as specified in paragraphs 
(b)(2)(i) and (ii) of this section, and the vessel does not possess, 
retain, or land scallops.
    (ii) NGOM scallop fishery. An NGOM scallop vessel is deemed to be 
fishing under the NGOM scallop fishery unless prior to the vessel 
leaving port, the vessel's owner or authorized representative declares 
the vessel out of all fisheries as specified in paragraphs (b)(2)(i) 
and (ii) of this section, and the vessel does not possess, retain, or 
land scallops.
    (iii) Incidental scallop fishery. An Incidental scallop vessel that 
has crossed the demarcation line on any declared fishing trip for any 
species is deemed to be fishing under the Incidental scallop fishery 
unless prior to the vessel leaving port, the vessel's owner or 
authorized representative declares the vessel out of all fisheries as 
specified in paragraphs (b)(2)(i) and (ii) of this section, and the 
vessel does not possess, retain, or land scallops.
    (iv) Catch reports. All scallop vessels fishing in the Sea Scallop 
Area Access Program as described in Sec.  648.60 are required to submit 
a daily report through VMS of scallops kept and yellowtail flounder 
caught (including discarded yellowtail flounder) on each Access Area 
trip. A vessel issued an IFQ or NGOM scallop permit must report through 
VMS the amount of scallops kept on each trip declared as a scallop trip 
or on trips that are not declared through VMS as a scallop trip, but on 
which scallops are caught incidentally. VMS catch reports by such 
vessels must be sent prior to crossing the VMS demarcation line on the 
way into port at the end of the trip and must include the amount of 
scallop meats to be landed, the estimated time of arrival in port, the 
port at which the scallops will be landed, and the vessel trip report 
serial number recorded from that trip's vessel trip report.
    (c) Call-in notification. The owner of a vessel issued a limited 
access monkfish or red crab permit who is participating in a DAS 
program and who is not required to provide notification using a VMS, 
and a scallop vessel qualifying for a DAS allocation under the 
occasional category that has not elected to fish under the VMS 
notification requirements of paragraph (b) of this section and is not 
participating in the Sea Scallop Area Access program as specified in 
Sec.  648.60, and any vessel that may be required by the Regional 
Administrator to use the call-in program under paragraph (d) of this 
section, are subject to the following requirements:
* * * * *
    7. In Sec.  648.14, paragraphs (a)(56), (a)(57), (a)(61), (f), 
(h)(1), (h)(6), (h)(9), (h)(19), (h)(27), (i), and (s) are revised, and 
paragraphs (a)(180) and (h)(28) are added to read as follows:


Sec.  648.14  Prohibitions.

    (a) * * *
    (56) Fish for, possess, or land, scallops without the vessel having 
been issued and carrying onboard a valid scallop permit in accordance 
with Sec.  648.4(a)(2) and having declared into the scallop fishery 
unless the scallops were harvested by a vessel that has not been issued 
a Federal scallop permit and fishes for scallops exclusively in state 
waters;
    (57) Fish for or land per trip, or possess at any time prior to a 
transfer to another person for a commercial purpose, other than solely 
for transport:
    (i) In excess of 40 lb (18.14 kg) shucked scallops at any time, 5 
bu (1.76 hl) in-shell scallops shoreward of the VMS Demarcation Line, 
or 10 bu (3.52 hL) of in-shell scallops seaward of the VMS Demarcation 
Line, unless:
    (A) The scallops were harvested by a vessel that has not been 
issued a scallop permit and fishes for scallops exclusively in state 
waters;
    (B) The scallops were harvested by a vessel that has been issued 
and carries on board an IFQ scallop permit issued pursuant to Sec.  
648.4(a)(2)(ii)(A) and is properly declared into the IFQ scallop 
fishery;
    (C) The scallops were harvested by a vessel that has been issued 
and carries on board an NGOM scallop permit issued pursuant to Sec.  
648.4(a)(2)(ii)(B), and is properly declared into the NGOM scallop 
management area, and the NGOM TAC specified in Sec.  648.62 has not 
been harvested; and/or
    (D) The scallops were harvested by a vessel that has been issued 
and carries on board an Incidental scallop permit allowing up to 40 lb 
(18.14 kg) of shucked or 5 bu (1.76 hL) of in-shell scallops, is 
carrying an at-sea observer, and is authorized by the Regional

[[Page 71333]]

Administrator to have an increased possession limit to compensate for 
the cost of carrying the observer.
    (ii) In excess of 200 lb (90.72 kg) shucked scallops at any time, 
25 bu (25x hl) in-shell scallops inside the VMS Demarcation Line, or 50 
bu (17.62 hL) of in-shell scallops seaward of the VMS Demarcation Line, 
unless:
    (A) The scallops were harvested by a vessel that has not been 
issued a scallop permit and fishes for scallops exclusively in state 
waters;
    (B) The scallops were harvested by a vessel that has been issued 
and carries on board a limited access scallop permit and is properly 
declared into the scallop DAS or Area Access program;
    (C) The scallops were harvested by a vessel that has been issued 
and carries on board an IFQ scallop permit issued pursuant to Sec.  
648.4(a)(2)(ii)(A), is fishing outside of the NGOM scallop management 
area, and is properly declared into the general category scallop 
fishery;
    (D) The scallops were harvested by a vessel that has been issued 
and carries on board a scallop permit and the vessel is fishing in 
accordance with the provisions of the state waters exemption program 
specified in Sec.  648.54; and/or
    (E) The scallops were harvested by a vessel that has been issued 
and carries on board an NGOM scallop permit allowing up to 200 lb 
(90.72 kg) of shucked or 25 bu (25x hL) of in-shell scallops, is 
carrying an at-sea observer, and is authorized by the Regional 
Administrator to have an increased possession limit to compensate for 
the cost of carrying the observer.
    (iii) In excess of 400 lb (181.4 kg) shucked scallops at any time, 
50 bu (17.6 hl) in-shell scallops shoreward of the VMS Demarcation 
Line, or 100 bu (35.24 hL) in-shell scallops seaward of the VMS 
Demarcation Line, unless:
    (A) The scallops were harvested by a vessel that has not been 
issued a scallop permit and fishes for scallops exclusively in state 
waters.
    (B) The scallops were harvested by a vessel that has been issued 
and carries on board a limited access scallop permit issued pursuant to 
Sec.  648.4(a)(2)(i) and is properly declared into the scallop DAS or 
Area Access program;
    (C) The scallops were harvested by a vessel that has been issued 
and carries on board a scallop permit and the vessel is fishing in 
accordance with the provisions of the state waters exemption program 
specified in Sec.  648.54;
    (D) The scallops were harvested by a vessel that has been issued 
and carries on board a limited access scallop permit that has also been 
issued an IFQ scallop permit, and is properly declared into the IFQ 
program; and/or
    (E) The scallops were harvested by a vessel that has been issued 
and carries on board an IFQ scallop permit, is carrying an at-sea 
observer, and is authorized by the Regional Administrator to have an 
increased possession limit to compensate for the cost of carrying the 
observer.
* * * * *
    (61) Sell, barter or trade, or otherwise transfer, or attempt to 
sell, barter or trade, or otherwise transfer, for a commercial purpose, 
scallops, unless the vessel has been issued a valid scallop permit 
pursuant to Sec.  648.4(a)(2), or the scallops were harvested by a 
vessel that has not been issued a scallop permit and fishes for 
scallops exclusively in state waters.
* * * * *
    (180) Fail to comply with the requirements and restrictions for 
general category scallop sectors specified in Sec.  648.63.
* * * * *
    (f) In addition to the general prohibitions specified in Sec.  
600.725 of this chapter and in paragraph (a) of this section, it is 
unlawful for any person owning or operating a vessel issued a scallop 
permit under Sec.  648.4(a)(2) to land, or possess at or after landing, 
in-shell scallops smaller than the minimum shell height specified in 
Sec.  648.50(a).
* * * * *
    (h) * * *
    (1) Fish for, possess, or land scallops after using up the vessel's 
annual DAS allocation and Access Area trip allocations or when not 
properly declared into the DAS or Area Access program pursuant to Sec.  
648.10, unless the vessel has been issued an LAGC scallop permit 
pursuant to Sec.  648.4(a)(2)(ii), has properly declared into a general 
category scallop fishery, and does not exceed the allowed possession 
limit for the LAGC scallop permit issued to the vessel as specified in 
Sec.  648.52, or unless exempted from DAS allocations as provided in 
Sec.  648.54.
* * * * *
    (6) Have an ownership interest in more than 5 percent of the total 
number of vessels issued limited access scallop permits and 
confirmations of permit history, except as provided in Sec.  
648.4(a)(2)(i)(M).
* * * * *
    (9) Possess more than 40 lb (18.14 kg) of shucked, or 5 bu (1.76 
hL) of in-shell scallops, or participate in the scallop DAS or Area 
Access programs, while in the possession of trawl nets that have a 
maximum sweep exceeding 144 ft (43.9 m), as measured by the total 
length of the footrope that is directly attached to the webbing of the 
net, except as specified in Sec.  648.51(a)(1), unless the vessel is 
fishing under the northeast multispecies or monkfish DAS program.
* * * * *
    (19) Fail to comply with any requirement for participating in the 
State Waters Exemption Program specified in Sec.  648.54.
* * * * *
    (27) Possess more than 50 bu (17.6 hL) of in-shell scallops, as 
specified in Sec.  648.52(f), outside the boundaries of the Elephant 
Trunk Access Area specified in Sec.  648.59(e) by a vessel that is 
properly declared into the Elephant Trunk Access Area under the Area 
Access Program as specified in Sec.  648.60.
    (28) Fish for or land per trip, or possess at any time, scallops in 
the NGOM scallop management area after notification in the Federal 
Register that the NGOM scallop management area TAC has been harvested, 
as specified in Sec.  648.62, unless the vessel possesses or lands 
scallops that were harvested south of 42[deg]20' N. Lat., the vessel is 
transiting the NGOM scallop management area, and the vessel's fishing 
gear is properly stowed and unavailable for immediate use.
    (i) LAGC scallop vessels. (1) In addition to the general 
prohibitions specified in Sec.  600.725 of this chapter and in 
paragraphs (a), (f), and (g) of this section, it is unlawful for any 
person owning or operating a vessel issued an LAGC scallop permit to do 
any of the following:
    (i) Fail to comply with the LAGC scallop permit restrictions as 
specified in Sec.  648.4(a)(2)(ii)(G) through (O);
    (ii) Fish for, possess, or land scallops on more than one trip per 
calendar day;
    (iii) Possess in-shell scallops while in possession of the maximum 
allowed amount of shucked scallops specified for each LAGC scallop 
permit category in Sec.  648.62;
    (iv) Fish for, possess, or land scallops on a vessel that is 
declared out of scallop fishing;
    (v) Possess or use trawl gear that does not comply with any of the 
provisions or specifications in Sec.  648.51(a), unless the vessel is 
fishing under the Northeast multispecies or monkfish DAS program;
    (vi) Possess or use dredge gear that does not comply with any of 
the provisions or specifications in Sec.  648.51(b).
    (vii) Refuse, or fail, to carry an observer after being requested 
to carry an observer by the Regional Administrator;

[[Page 71334]]

    (viii) Fail to provide an observer with required food, 
accommodations, access, and assistance, as specified in Sec.  648.11;
    (ix) Fail to comply with the notification requirements specified in 
Sec.  648.11(g)(2) or refuse or fail to carry an observer after being 
requested to carry an observer by the Regional Administrator or 
Regional Administrator's designee;
    (x) Fail to comply with any of the VMS requirements specified in 
Sec. Sec.  648.10 and 648.60;
    (xi) Fail to comply with any requirement for declaring in or out of 
the general category scallop fishery or other notification requirements 
specified in Sec.  648.10(b);
    (xii) Fail to comply with any of the requirements specified in 
Sec.  648.60;
    (xiii) Declare into or leave port for an area specified in Sec.  
648.59(b) through (d) after the effective date of the notification 
published in the Federal Register stating that the general category 
scallop TAC has been harvested as specified in Sec.  648.60;
    (xiv) Declare into or leave port for an area specified in Sec.  
648.59(b) through (d) after the effective date of the notification 
published in the Federal Register stating that the number of general 
category trips have been taken as specified in Sec.  648.60;
    (xv) Declare into or leave port for an area specified in Sec.  
648.59(b) through (d) after the effective date of the notification 
published in the Federal Register stating that the yellowtail flounder 
TAC has been harvested as specified in Sec.  648.85(c);
    (xvi) Declare into or leave port for the NGOM scallop management 
area specified in Sec.  648.62 after the effective date of the 
notification published in the Federal Register stating that the general 
category scallop TAC has been harvested as specified in Sec.  648.62;
    (xvii) Fish for, possess, or land scallops in or from the NGOM 
scallop management area after the effective date of the notification 
published in the Federal Register that the NGOM scallop management area 
TAC has been harvested, as specified in Sec.  648.62, unless the vessel 
possesses or lands scallops that were harvested south of 42[deg]20' N. 
Lat., the vessel is transiting the NGOM scallop management area, and 
the vessel's fishing gear is properly stowed and unavailable for 
immediate use;
    (xviii) Fail to comply with any of the requirements and 
restrictions for general category sectors and harvesting cooperatives 
specified in Sec.  648.63; or
    (xix) Fish for, land, or possess scallops at any time after 10 days 
from being notified that his or her appeal for an LAGC scallop permit 
has been denied and that the denial is the final decision of the 
Department of Commerce.
    (2) In addition to the general prohibitions specified in Sec.  
600.725 of this chapter and in paragraphs (a), (f), and (g) of this 
section, it is unlawful for any person owning or operating a vessel 
issued an IFQ scallop permit to do any of the following:
    (i) Fish for or land per trip, or possess at any time, in excess of 
400 lb (181.4 kg) of shucked, or 50 bu (17.62 hL) of in-shell scallops, 
unless the vessel is participating in the Area Access Program specified 
in Sec.  648.60, is carrying an observer as specified in Sec.  648.11, 
and an increase in the possession limit is authorized as specified in 
Sec.  648.60(d)(2);
    (ii) Fish for or land per trip, or possess at any time, in excess 
of 200 lb (90.7 kg) of shucked or 25 bu (8.81 hl) of in-shell scallops 
in the NGOM scallop management area, unless the vessel is seaward of 
the VMS Demarcation Line and in possession of no more than 50 bu (17.62 
hL) in-shell scallops, when not declared into the NGOM scallop 
management area, or is transiting the NGOM scallop management area with 
gear properly stowed and unavailable for immediate use.
    (iii) Possess more than 100 bu (35.24 hL) of in-shell scallops 
seaward of the VMS demarcation line, or possess, or land per trip, more 
than 50 bu (17.62 hL) of in-shell scallops shoreward of the VMS 
demarcation line, unless exempted from DAS allocations as provided in 
Sec.  648.54;
    (iv) Possess more than 50 bu (17.6 hL) of in-shell scallops, as 
specified in Sec.  648.52(d), outside the boundaries of the Elephant 
Trunk Access Area specified in Sec.  648.59(e) by a vessel that is 
properly declared into the Elephant Trunk Access Area under the Area 
Access Program as specified in Sec.  648.60;
    (v) Fish for, possess, or land scallops after the effective date of 
the notification in the Federal Register that the quarterly TAC 
specified in Sec.  648.53(a)(7) has been harvested;
    (vi) Fish for, possess, or land scallops in excess of a vessel's 
IFQ;
    (vii) Have an ownership interest in vessels that collectively is 
more than 5 percent of the total IFQ scallop TAC specified in 
accordance with Sec.  648.53(a), except as provided in Sec.  
648.4(h)(4);
    (viii) Have an IFQ allocation on an IFQ scallop vessel of more than 
2 percent of the total IFQ scallop TAC specified in accordance with 
Sec.  648.53(a), except as provided in Sec.  648.4(h)(4);
    (ix) Apply for an IFQ transfer that will result in the transferee 
having an aggregate ownership interest in more than 5 percent of the 
total IFQ scallop TAC, except as provided in Sec.  648.53(h)(4).
    (x) Apply for an IFQ transfer that will result in the receiving 
vessel having an IFQ allocation in excess of 2 percent of the total IFQ 
scallop TAC, except as provided inSec.  648.53(h)(4);
    (xi) Fish for, possess, or land transferred IFQ prior to approval 
of the transfer by the Regional Administrator as specified in Sec.  
648.53(h)(4)(ii);
    (xii) Provide false information in relation to or on an application 
for an IFQ transfer required underSec.  648.53(h)(4);
    (xiii) Sub-lease scallop IFQ;
    (xiv) Transfer scallop IFQ to another IFQ scallop vessel after the 
transferring vessel has landed scallops;
    (xv) Transfer a portion of a vessel's scallop IFQ; or
    (xvi) Transfer scallop IFQ to, or receive scallop IFQ on, a vessel 
that has not been issued a valid IFQ scallop permit.
    (3) In addition to the general prohibitions specified in Sec.  
600.725 of this chapter and in paragraphs (a), (f), and (g) of this 
section, it is unlawful for any person owning or operating a vessel 
issued an NGOM scallop permit to do any of the following:
    (i) Declare into or leave port for a scallop trip, or fish for or 
possess scallops south of 42[deg]20' N. Lat.;
    (ii) Fish for or land per trip, or possess at any time, in excess 
of 200 lb (90.7 kg) of shucked or 25 bu (8.81 hl) of in-shell scallops 
in or from the NGOM scallop management area, except when seaward of the 
VMS Demarcation Line and in possession of no more than 50 bu (17.62 hL) 
in-shell scallops; or
    (iii) Fish for, possess, or land scallops after the effective date 
of notification in the Federal Register that the NGOM scallop 
management area TAC has been harvested;
    (4) In addition to the general prohibitions specified in Sec.  
600.725 of this chapter and in paragraphs (a), (f), and (g) of this 
section, it is unlawful for any person owning or operating a vessel 
issued an Incidental scallop permit to fish for, possess, or retain, 
more than 40 lb (18.14 kg) of shucked scallops, or 5 bu (1.76 hL) of 
in-shell scallops, except the vessel may possess up to 10 bu (3.52 hL) 
of in-shell scallops while seaward of the VMS Demarcation Line.
* * * * *
    (s) Any person fishing for, possessing, or landing scallops at or 
prior to the time when those scallops are received or

[[Page 71335]]

possessed by a dealer, is subject to all of the scallop prohibitions 
specified in this section, unless the scallops were harvested by a 
vessel without a scallop permit that fishes for scallops exclusively in 
state waters.
* * * * *
    8. In Sec.  648.51, paragraphs (a)(1) and (a)(2)(i) are revised to 
read as follows:


Sec.  648.51  Gear and crew restrictions.

    (a) * * *
    (1) Maximum sweep. The trawl sweep of nets shall not exceed 144 ft 
(43.9 m), as measured by the total length of the footrope that is 
directly attached to the webbing, unless the net is stowed and not 
available for immediate use, as specified in Sec.  648.23, or unless 
the vessel is fishing under the Northeast multispecies or monkfish DAS 
programs.
    (2) * * *
    (i) Minimum mesh size. Subject to applicable minimum mesh size 
restrictions for other fisheries as specified under this part, the mesh 
size for any scallop trawl net in all areas shall not be smaller than 
5.5 inches (13.97 cm).
* * * * *
    9. Section 648.52 is revised to read as follows:


Sec.  648.52  Possession and landing limits.

    (a) A vessel issued an IFQ scallop permit that is declared into the 
IFQ scallop scallop fishery as specified in Sec.  648.10(b), unless 
exempted under the state waters exemption program described under Sec.  
648.54, may not possess or land, per trip, more than 400 lb (181.44 kg) 
of shucked scallops, or possess more than 50 bu (17.62 hL) of in-shell 
scallops shoreward of the VMS Demarcation Line. Such a vessel may fish 
for, possess, or land scallops only once in any calendar day. Such a 
vessels may possess up to 100 bu (35.24 hl) of in-shell scallops 
seaward of the VMS demarcation line on a properly declared IFQ scallop 
trip.
    (b) A vessel issued an NGOM scallop permit, or an IFQ scallop 
permit that is declared into the NGOM scallop fishery as described in 
Sec.  648.62, unless exempted under the state waters exemption program 
described under Sec.  648.54, may not possess or land, per trip, more 
than 200 lb (90.7 kg) of shucked, or 25 bu (8.81 hL) of in-shell 
scallops. Such a vessel may not fish for scallops more than once in any 
calendar day. Such a vessel may possess up to 50 bu (17.62 hL) of in-
shell scallops seaward of the VMS demarcation line on a properly 
declared NGOM scallop fishery trip.
    (c) A vessel issued an Incidental scallop permit, or an IFQ or NGOM 
scallop permit that is not declared into the IFQ or NGOM scallop 
fishery as required under Sec.  648.10(b)(4), unless exempted under the 
state waters exemption program described under Sec.  648.54, may not 
possess or land, per trip, more than 40 lb (18.14 kg) of shucked, or 5 
bu (1.76 hL) of in-shell scallops. Such a vessel may not fish for 
scallops more than once in any calendar day. Such a vessel may possess 
up to 10 bu (3.52 hL) of in-shell scallops seaward of the VMS 
demarcation line.
    (d) Owners or operators of vessels with a limited access scallop 
permit that have properly declared into the Sea Scallop Area Access 
Program as described in Sec.  648.60 are prohibited from fishing for or 
landing per trip, or possessing at any time, scallops in excess of any 
sea scallop possession and landing limit set by the Regional 
Administrator in accordance with Sec.  648.60(a)(5).
    (e) Owners or operators of vessels issued limited access permits 
fishing in or transiting the area south of 42 20'N. Lat. at any time 
during a trip are prohibited from fishing for, possessing, or landing 
per trip more than 50 bu (17.62 hl) of in-shell scallops shoreward of 
the VMS Demarcation Line, unless when fishing under the state waters 
exemption specified under Sec.  648.54.
    (f) A vessel that is declared into the Elephant Trunk Access Area 
Sea Scallop Area Access Program as described in Sec.  648.60, may not 
possess more than 50 bu (17.62 hL) of in-shell scallops outside of the 
Elephant Trunk Access Area described in Sec.  648.59(e).
    10. Section 648.53 is revised to read as follows:


Sec.  648.53  Total allowable catch, DAS allocations, and Individual 
Fishing Quotas.

    (a) Total allowable catch. The annual target total allowable catch 
for the scallop fishery shall be established through the framework 
adjustment process specified in Sec.  648.55. The annual target total 
allowable catch shall include the total allowable catch for all scallop 
vessels fishing in open areas and access areas, but shall exclude the 
total allowable catch established for the Northern Gulf of Maine 
Scallop Management Area as specified in Sec.  648.62. After deducting 
the total estimated incidental catch of scallops by vessels issued 
incidental catch general category scallop permits, and limited access 
and limited access general category scallop vessels not declared into 
the scallop fishery, the annual target total allowable catch for open 
and access areas shall each be divided between limited access vessels, 
limited access vessels that are fishing under a limited access general 
category permit, and limited access general category vessels as 
specified in paragraphs (a)(1) through (a)(4) of this section.
    (1) Access area total allowable catch. The TAC for each access area 
specified in Sec.  648.59 shall be determined through the framework 
adjustment process described in Sec.  648.55 and shall be specified in 
Sec.  648.59 for each access area. The TAC set-asides for observer 
coverage and research shall be deducted from the TAC in each Access 
Area prior to assigning the target total allowable catch and trip 
allocations for limited access scallop vessels, and prior to allocating 
TAC to limited access general category vessels. The percentage of the 
TAC for each Access Area allocated to limited access vessels, limited 
access general category vessels, and limited access vessels fishing 
under limited access general category permits shall be specified in 
accordance with Sec.  648.60 through the framework adjustment process 
specified in Sec.  648.55.
    (2) Open area TAC for limited access vessels. For the 2008 fishing 
year, the target total allowable catch for limited access vessels 
fishing under the scallop DAS program specified in this section shall 
be equal to 90 percent of the target total allowable catch specified in 
accordance with paragraph (a) of this section, minus the total 
allowable catch for all access areas specified in accordance with 
paragraph (b)(5) of this section. Beginning March 1, 2009, unless the 
implementation of the IFQ program is delayed beyond March 1, 2009, as 
specified in paragraph (a)(5) of this section, the target total 
allowable catch for limited access vessels fishing under the scallop 
DAS program specified in this section shall be equal to 94.5 percent of 
the target total allowable catch specified in accordance with paragraph 
(a) of this section, minus the total allowable catch for all access 
areas specified in accordance with paragraph (b)(5) of this section. 
The target total allowable catch for limited access vessels fishing 
under the DAS program shall be used to determine the DAS allocation for 
full-time, part-time, and occasional scallop vessels will receive after 
deducting the DAS set-asides for observer coverage and research.
    (3) Open area TAC for IFQ scallop vessels--(i) 2008 fishing year, 
and beyond if necessary. IFQ scallop vessels, and limited access 
scallop vessels that are fishing under an IFQ scallop permit outside of 
the scallop DAS and Area Access programs shall be allocated 10 percent 
of the annual target total

[[Page 71336]]

allowable catch specified in accordance with paragraph (a) of this 
section, minus the total allowable catch for all access areas specified 
in accordance with paragraph (b)(5) of this section.
    (ii) 2009 fishing year and beyond for IFQ scallop vessels without a 
limited access scallop permit. The total allowable catch for IFQ 
scallop vessels without a limited access scallop permit shall be equal 
to 5 percent of the target total allowable catch specified in 
accordance with paragraph (a) of this section, minus the total 
allowable catch for all access areas specified in accordance with 
paragraph (b)(5) of this section. If the IFQ program implementation is 
delayed beyond March 1, 2009, as specified in paragraph (a)(5) of this 
section, the quarterly fleetwide total allowable catch (TAC) specified 
in paragraph (a)(6) of this section would remain in effect until March 
1, 2010, or beyond if necessary.
    (iii) 2009 fishing year and beyond for IFQ scallop vessels with a 
limited access scallop permit. Limited access scallop vessels that are 
fishing under an IFQ scallop permit outside of the scallop DAS and Area 
Access programs shall be allocated 0.5 percent of the annual target 
total allowable catch specified in accordance with paragraph (a) of 
this section, minus the total allowable catch for all access areas 
specified in accordance with paragraph (b)(5) of this section. If the 
IFQ program implementation is delayed beyond March 1, 2009, as 
specified in paragraph (a)(5) of this section, the quarterly fleetwide 
TAC specified in paragraph (a)(6) of this section would remain in 
effect until March 1, 2010, or beyond if necessary.
    (4) Northern Gulf of Maine Scallop Fishery. The total allowable 
catch for the Northern Gulf of Maine Scallop Fishery shall be specified 
in accordance with Sec.  648.62, through the framework adjustment 
process specified in Sec.  648.55.
    (5) Delay of the IFQ program. If the IFQ program implementation is 
delayed beyond March 1, 2009, as specified in paragraph (a)(5) of this 
section, the quarterly fleetwide TAC specified in paragraph (a)(6) of 
this section would remain in effect until March 1, 2010, or a 
subsequent date, if necessary. The Regional Administrator shall proved 
notice to all scallop permit holders if the IFQ program is delayed 
beyond March 1, 2009. If the Regional Administrator determines that the 
IFQ program cannot be implemented on March 1, 2009, NMFS shall inform 
all scallop vessel owners that the IFQ program shall not take effect on 
March 1, 2009, and that the quarterly TACs specified in paragraph 
(a)(6) of this section shall remain in effect until March 1, 2010. The 
Regional Administrator shall inform LAGC scallop vessel owners of a 
decision to delay the IFQ program no later than January 1, 2009, 2010, 
or subsequent year, if necessary.
    (6) Distribution of transition period total allowable catch--(i) 
Allocation. For the 2008 fishing year, and subsequent fishing years 
until IFQs are implemented as specified in paragraph (j) of this 
section, the total allowable catch for IFQ scallop vessels shall be 
allocated as specified in paragraphs (a)(1) through (4) of this section 
into quarterly periods. The percentage allocation for each period 
allocated to the IFQ scallop vessels, including limited access vessels 
fishing under an IFQ scallop permit and vessels under appeal for a IFQ 
scallop permit pursuant to Sec.  648.4(a)(2)(ii) shall be specified in 
the framework adjustment process as specified in Sec.  648.55 and are 
specified in the following table:

------------------------------------------------------------------------
                Quarter                      Percent            TAC
------------------------------------------------------------------------
I. March-May                            To Be Determined  To Be
                                                           Determined
II. June-August                         To Be Determined  To Be
                                                           Determined
III. September-November                 To Be Determined  To Be
                                                           Determined
IV. December-February                   To Be Determined  To Be
                                                           Determined
------------------------------------------------------------------------

    (ii) Deductions of landings. All landings by IFQ scallop vessels 
and limited access vessels fishing under an IFQ scallop permit shall be 
deducted from the TAC allocations specified in the table in paragraph 
(a)(6)(i) of this section.
    (b) DAS allocations. (1) Total DAS to be used in all areas other 
than those specified in Sec.  648.59, shall be specified through the 
framework adjustment process as specified in Sec.  648.55, using the 
target total allowable catch for open areas specified in paragraph (a) 
of this section, and estimated catch per unit effort.
    (2) Prior to setting the DAS allocations specified in paragraph 
(b)(4) of this section, 1 percent of total available DAS will be set 
aside to help defray the cost of observers, as specified in paragraph 
(h)(1) of this section. Two percent of total available DAS will be set 
aside to pay for scallop related research, as outlined in paragraph 
(h)(2) of this section.
    (3) Assignment to DAS categories. Subject to the vessel permit 
application requirements specified in Sec.  648.4, for each fishing 
year, each vessel issued a limited access scallop permit shall be 
assigned to the DAS category (full-time, part-time, or occasional) it 
was assigned to in the preceding year, except as provided under the 
small dredge program specified in Sec.  648.51(e).
    (4) Each vessel qualifying for one of the three DAS categories 
specified in the table in this paragraph (b)(2) (Full-time, Part-time, 
or Occasional) shall be allocated the maximum number of DAS for each 
fishing year it may participate in the open area limited access scallop 
fishery, according to its category. A vessel whose owner/operator has 
properly declared out of the scallop DAS fishery, pursuant to the 
provisions of Sec.  648.10, including vessels that have used up their 
maximum allocated DAS, may leave port without being assessed a DAS, as 
long as it has made appropriate VMS declaration as specified in Sec.  
648.10(b)(4), possesses, fishes for, or retains the amount of scallops 
allowed by its general category permit, does not possess, fish for, or 
retain any scallops if the vessel does not have a general category 
scallop permit, and complies with all other requirements of this part. 
The annual open area DAS allocations for each category of vessel for 
the fishing years indicated, after deducting DAS for observer and 
research DAS set-asides, are as follows:

------------------------------------------------------------------------
              DAS category                    2007             2008
------------------------------------------------------------------------
Full-time                                51              To Be
                                                          Determined
Part-time                                20              To Be
                                                          Determined
Occasional                               4               To Be
                                                          Determined
------------------------------------------------------------------------

    (5) Additional open area DAS. If a TAC for yellowtail flounder 
specified in Sec.  648.85(c) is harvested for an Access Area specified 
in Sec.  648.59(b) through (d), a scallop vessel with remaining trips 
in the affected Access Area shall be allocated additional open area DAS 
according to the calculations specified in paragraphs (b)(5)(i) through 
(iii) of this section.
    (i) For each remaining complete trip in Closed Area I, a vessel may 
fish an additional 5.5 DAS in open areas during the same fishing year. 
A complete trip is deemed to be a trip that is not subject to a reduced 
possession limit under the broken trip provision in Sec.  648.60(c). 
For example, a full-time scallop vessel with two complete trips 
remaining in Closed Area I would be allocated 11 additional open area 
DAS (2 5.5 = 11 DAS) if the TAC for yellowtail flounder allocated to 
the scallop fishery for Closed Area I is harvested in that area. 
Vessels allocated compensation trips as specified in Sec.  648.60(c) 
that cannot be made because the yellowtail TAC in Closed Area I 
allocated to the scallop fishery is

[[Page 71337]]

harvested shall be allocated 0.458 additional DAS for each unused DAS 
in Closed Area I. Unused DAS shall be calculated by dividing the 
compensation trip possession limit by 1,500 lb (680 kg), (the catch 
rate per DAS). For example, a vessel with a 10,000-lb (4,536-kg) 
compensation trip remaining in Closed Area I would be allocated 3.05 
additional open area DAS in that same fishing year (0.458 times 10,000 
lb (4,536 kg)/1,500 lb (680 kg) per day).
    (ii) For each remaining complete trip in Closed Area II, a vessel 
may fish an additional 5.4 DAS in open areas during the same fishing 
year. A complete trip is deemed to be a trip that is not subject to a 
reduced possession limit under the broken trip provision in Sec.  
648.60(c). For example, a full-time scallop vessel with two complete 
trips remaining in Closed Area II would be allocated 10.8 additional 
open area DAS (2 5.4 = 10.8 DAS) if the TAC for yellowtail flounder 
allocated to the scallop fishery in Closed Area II is harvested in that 
area. Vessels allocated compensation trips as specified in Sec.  
648.60(c) that cannot be made because the yellowtail TAC in Closed Area 
II allocated to the scallop fishery is harvested shall be allocated 
0.450 additional DAS for each unused DAS in Closed Area II. Unused DAS 
shall be calculated by dividing the compensation trip possession limit 
by 1,500 lb (680 kg) (the catch rate per DAS). For example, a vessel 
with a 10,000-lb (4,536-kg) compensation trip remaining in Closed Area 
II would be allocated 3 additional open area DAS in that same fishing 
year (0.450 times 10,000 lb (4,536 kg)/1,500 lb (680 kg) per day).
    (iii) For each remaining complete trip in the Nantucket Lightship 
Access Area, a vessel may fish an additional 4.9 DAS in open areas 
during the same fishing year. A complete trip is deemed to be a trip 
that is not subject to a reduced possession limit under the broken trip 
provision in Sec.  648.60(c). For example, a full-time scallop vessel 
with two complete trips remaining in Nantucket Lightship Access Area 
would be allocated 9.8 additional open area DAS (2 4.9 = 9.8 DAS) if 
the TAC for yellowtail flounder allocated to the scallop fishery in the 
Nantucket Lightship Access Area is harvested in that area. Vessels 
allocated compensation trips as specified in Sec.  648.60(c) that 
cannot be made because the yellowtail TAC in Nantucket Lightship Access 
Area allocated to the scallop fishery is harvested shall be allocated 
0.408 additional DAS for each unused DAS in the Nantucket Lightship 
Access Area. Unused DAS shall be calculated by dividing the 
compensation trip possession limit by 1,500 lb (680 kg) (the catch rate 
per DAS). For example, a vessel with a 10,000-lb (4,536-kg) 
compensation trip remaining in Nantucket Lightship Access Area would be 
allocated 2.7 additional open area DAS in that same fishing year (0.408 
times 10,000 lb (4,536 kg)/1,500 lb (680 kg) per day).
    (6) DAS allocations and other management measures are specified for 
each scallop fishing year, which begins on March 1 and ends on February 
28 (or February 29), unless otherwise noted. For example, the 2006 
fishing year refers to the period March 1, 2006, through February 28, 
2007.
    (c) Adjustments in annual DAS allocations. Annual DAS allocations 
shall be established for 2 fishing years through biennial framework 
adjustments as specified in Sec.  648.55. If a biennial framework 
action is not undertaken by the Council and implemented by NMFS, the 
DAS allocations and Access Area trip allocations from the most recent 
fishing year shall remain in effect for the next fishing year. The 
Council may also recommend adjustments to DAS allocations through a 
framework action at any time.
    (d) End-of-year carry-over for open area DAS. With the exception of 
vessels that held a Confirmation of Permit History as described in 
Sec.  648.4(a)(1)(i)(J) for the entire fishing year preceding the 
carry-over year, limited access vessels that have unused Open Area DAS 
on the last day of February of any year may carry over a maximum of 10 
DAS, not to exceed the total Open Area DAS allocation by permit 
category, into the next year. DAS carried over into the next fishing 
year may only be used in Open Areas. DAS sanctioned vessels will be 
credited with unused DAS based on their unused DAS allocation, minus 
total DAS sanctioned.
    (e) Accrual of DAS. All DAS fished shall be charged to the nearest 
minute. A vessel carrying an observer and authorized to be charged 
fewer DAS in Open Areas based on the total available DAS set aside 
under paragraph (g)(1) of this section, shall be charged at a reduced 
rate as specified in paragraph (g)(1) of this section.
    (f) Good Samaritan credit. Limited access vessels fishing under the 
DAS program and that spend time at sea assisting in a USCG search and 
rescue operation or assisting the USCG in towing a disabled vessel, and 
that can document the occurrence through the USCG, will not accrue DAS 
for the time documented.
    (g) DAS set-asides--(1) DAS set-aside for observer coverage. As 
specified in paragraph (b)(2) of this section, to help defray the cost 
of carrying an observer, 1 percent of the total DAS shall be set aside 
from the total DAS available for allocation, to be used by vessels that 
are assigned to take an at-sea observer on a trip other than an Area 
Access Program trip. The DAS set-aside for observer coverage for the 
2007 fishing year is 165 DAS. Vessels carrying an observer shall be 
compensated with reduced DAS accrual rates for each trip on which the 
vessel carries an observer. For each DAS that a vessel fishes for 
scallops with an observer on board, the DAS shall be charged at a 
reduced rate based on an adjustment factor determined by the Regional 
Administrator on an annual basis, dependent on the cost of observers, 
catch rates, and amount of available DAS set-aside. The Regional 
Administrator shall notify vessel owners of the cost of observers and 
the DAS adjustment factor through a permit holder letter issued prior 
to the start of each fishing year. The number of DAS that are deducted 
from each trip based on the adjustment factor shall be deducted from 
the observer DAS set-aside amount in the applicable fishing year. 
Utilization of the DAS set-aside shall be on a first-come, first-served 
basis. When the DAS set-aside for observer coverage has been utilized, 
vessel owners shall be notified that no additional DAS remain available 
to offset the cost of carrying observers. The obligation to carry and 
pay for an observer shall not be waived due to the absence of set-aside 
DAS allocations.
    (2) DAS set-aside for research. As specified in paragraph (b)(2) of 
this section, to help support the activities of vessels participating 
in certain research, as specified in Sec.  648.56; the DAS set-aside 
for research for the 2007 fishing year is 330 DAS. Vessels 
participating in approved research shall be authorized to use 
additional DAS in the applicable fishing year. Notification of 
allocated additional DAS shall be provided through a letter of 
authorization, or Exempted Fishing Permit issued by NMFS, or shall be 
added to a participating vessel's open area DAS allocation, as 
appropriate.
    (h) Annual Individual fishing quotas--(1) IFQ restriction. For each 
fishing year of the IFQ program, a vessel issued an IFQ scallop permit 
may only harvest and land the total amount of scallop meats allocated 
in accordance with this subpart. Unless otherwise specified in this 
part, A vessel allocated scallop IFQ may not exceed the possession 
limits specified in Sec.  648.52 on any trip.

[[Page 71338]]

    (2) Calculation of IFQ. The total allowable catch allocated to IFQ 
scallop vessels, and the total allowable catch allocated to limited 
access scallop vessels issued IFQ scallop permits, as specified in 
paragraphs (a)(3)(ii) and (iii) of this section, shall be used to 
determine the IFQ of each vessel issued an IFQ scallop permit. Each 
fishing year, the Regional Administrator shall provide the owner of a 
vessel issued an IFQ scallop permit issued pursuant to Sec.  
648.4(a)(2)(ii) with the scallop IFQ for the vessel for the upcoming 
fishing year.
    (i) Individual fishing quota. The IFQ for an IFQ scallop vessel 
shall be the vessel's contribution percentage as specified in paragraph 
(h)(2)(iii) of this section and determined using the steps specified in 
paragraphs (h)(2)(ii) of this section, multiplied by the TAC allocated 
to the IFQ scallop fishery, or limited access vessels issued an IFQ 
scallop permit, as specified in paragraphs (a)(3)(ii) and (iii) of this 
section.
    (ii) Contribution factor. An IFQ scallop vessel's contribution 
factor is calculated using the best year, years active, and index 
factor as specified in paragraphs (h)(1)(ii)(A) through (C) of this 
section. A vessel's contribution factor shall be provided to the owner 
of a qualified limited access general category vessel following initial 
application for an IFQ scallop permit as specified in Sec.  
648.4(a)(2)(ii)(E).
    (A) Best year determination. An eligible IFQ scallop vessel's 
highest scallop landings in any scallop fishing year that the vessel 
was issued a general category scallop permit between March 1, 2000, and 
November 1, 2004, shall be determined using NMFS dealer reports. If a 
dealer reported more than 400 lb (181.44 kg) of scallops landed on a 
trip, only 400 lb (181.44 kg) will be credited for that trip toward the 
best year calculation. For dealer reports that indicate clearly that 
the landings were bushels of in-shell scallops, a conversion of 8.33 lb 
(3.78 kg) of scallop meats per bushel shall be used to calculate meat-
weight, up to a maximum of 400 lb (181.44 kg) per trip.
    (B) Years active. For each eligible IFQ scallop vessel, the total 
number of scallop fishing years during the period March 1, 2000, 
through November 1, 2004, in which the vessel had a general category 
scallop permit and landed at least 1 lb (0.45 kg) of scallop meats, or 
in-shell scallops, shall be counted as active years based on NMFS 
dealer reports.
    (C) Index to determine contribution factor. For each eligible IFQ 
scallop vessel, the best year as determined pursuant to paragraph 
(a)(2)(ii)(E)(1) of this section shall be multiplied by the appropriate 
index factor specified in the following table, based on years active as 
specified in paragraph (a)(2)(ii)(E)(2) of this section. The resulting 
contribution factor shall determine its IFQ for each fishing year based 
on the allocation to general category scallop vessels as specified in 
Sec.  648.53(a)(2) and the method of calculating the IFQ provided in 
Sec.  648.53(j).

------------------------------------------------------------------------
               Years Active                         Index Factor
------------------------------------------------------------------------
1                                                                  0.75
2                                                                 0.875
3                                                                   1.0
4                                                                 1.125
5                                                                  1.25
------------------------------------------------------------------------

    (D) Contribution factor example. If a vessel landed 48,550 lb 
(22,022 kg) of scallops in its best year, and was active in the general 
category scallop fishery for 5 years, the vessel's contribution factor 
is equal to 60,687 lb (27,527 kg) (48,550 lb (22,022 kg * 1.25).
    (iii) Contribution percentage. A vessel's contribution percentage 
will be determined by dividing its contribution factor by the sum of 
the contribution factors of all vessels issued an IFQ scallop permit. 
The sum of the contribution factors shall be determined when all IFQ 
scallop vessels are identified. Continuing the example in paragraph 
(h)(1)(ii)(D) of this section, the sum of the contribution factors for 
380 IFQ scallop vessels is estimated for the purpose of this example to 
be 4.18 million lb (1,896 mt). The contribution percentage of the above 
vessel is 1.45 percent (60,687 lb (27,527 kg) /4.18 million lb (1,896 
mt) = 1.45 percent).
    (iv) Vessel IFQ Example. Continuing the example in paragraphs 
(h)(1)(ii)(D) and (h)(1)(iii) of this section, with a TAC allocated to 
IFQ scallop vessels estimated for this example to be equal to 2.5 
million lb (1,134 mt), the vessel's IFQ would be 36,250 lb (16,443 kg) 
(1.45 percent * 2.5 million lb (1,134 mt).
    (3) IFQ ownership restrictions--(i) IFQ scallop vessel IFQ cap. A 
vessel issued an IFQ scallop permit or confirmation of permit history 
shall not be issued more than 2 percent of the TAC allocated to the IFQ 
scallop vessels as described in paragraphs (a)(3)(ii) and (iii) of this 
section.
    (ii) IFQ ownership cap. An owner of more than one IFQ scallop 
vessel may not have an aggregate ownership interest in more than 5 
percent of the TAC allocated to all IFQ scallop vessels and may not be 
issued an IFQ scallop permit for a vessel that would result in the 
individual owning more than 5 percent of the TAC allocated to IFQ 
scallop vessels. A confirmation of permit history shall be counted 
toward an individual's ownership. Vessel owners that were initially 
issued an IFQ scallop permit or were issued or renewed an IFQ scallop 
permit for a vessel in any fishing year following the 2008 fishing 
year, in compliance with this 5 percent ownership restriction, is 
eligible to renew the IFQ scallop permit for his or her vessel 
regardless of whether the renewal of the permit(s) will result in the 
5-percent IFQ ownership cap being exceeded.
    (iii) Limited access scallop vessels that have been issued an IFQ 
scallop permit. The IFQ scallop vessel IFQ cap and IFQ ownership cap 
specified in this paragraph (h)(3) do not apply to limited access 
scallop vessels that are also issued a limited access general category 
scallop permit because such vessels are already subject to an ownership 
limitation, as specified in Sec.  648.4(a)(2)(i)(M).
    (4) IFQ cost recovery. The owner of a vessel issued an IFQ scallop 
permit and subject to the IFQ program specified in paragraph (h) of 
this section must pay a portion of the proceeds from scallop fishing to 
NMFS to help NMFS recover up to 3 percent of the cost of administering 
and enforcing the IFQ program. The specific cost recovery provisions 
shall be specified in the first framework implementing the 
specifications for the IFQ program, including the overall total 
allowable catch and eligible vessels' IFQs. Payment of cost recovery 
funds shall be through electronic means unless otherwise notified by 
the Regional Administrator.
    (5) Transferring IFQ--(i) Temporary IFQ transfers. Unless otherwise 
restricted in paragraph (h)(5)(iii) of this section, the owner of an 
IFQ scallop vessel may temporarily transfer one or more entire IFQ from 
another IFQ scallop vessel. Temporary IFQ transfers shall be effective 
only for the fishing year in which the temporary transfer is requested 
and processed. The Regional Administrator has final approval authority 
for all temporary IFQ transfer requests.
    (ii) Permanent IFQ transfers. Unless otherwise restricted in 
paragraph (h)(5)(iii) of this section, the owner of an IFQ scallop 
vessel may transfer one or more entire IFQ indefinitely from another 
IFQ scallop vessel. The Regional Administrator has final approval 
authority for all IFQ transfer requests.
    (iii) IFQ transfer restrictions. The owner of an IFQ scallop vessel 
may transfer entire IFQ allocations only. The owner of an IFQ scallop 
vessel that has fished under its IFQ may not transfer

[[Page 71339]]

that vessel's IFQ to another IFQ scallop vessel. A transfer of an IFQ 
may not result in the sum of the IFQs on the receiving vessel exceeding 
2 percent of the total allowable catch allocated to IFQ scallop 
vessels. Limited access scallop vessels that are also issued an IFQ 
scallop permit may not transfer or receive IFQ from another IFQ scallop 
vessel. A vessel permanently transferring its IFQ to another vessel 
must transfer all of its Federal limited access permits for which it is 
eligible to the transferee vessel in accordance with the vessel 
replacement restrictions under Sec.  648.4, or permanently cancel such 
permits.
    (iv) Application for an IFQ transfer. The owner of vessels applying 
for a transfer IFQ must submit a completed application form obtained 
from the Regional Administrator. The application must be signed by both 
parties (transferor and transferee) involved in the transfer of the 
IFQ, and must be submitted to the NMFS Northeast Regional Office at 
least 30 days before the date on which the applicants desire to have 
the IFQ effective on the receiving vessel. The Regional Administrator 
shall notify the applicants of any deficiency in the application 
pursuant to this section. Applications may be submitted at any time 
during the scallop fishing year, provided the vessel transferring the 
IFQ to another vessel has not utilized any of its own IFQ. Applications 
for temporary transfers received 45 days prior to the end of the 
fishing year may not be processed in time for a vessel to utilize the 
transferred IFQ prior to the expiration of the fishing year for which 
the IFQ transfer, if approved, would be effective.
    (A) Application information requirements. An application to 
transfer IFQ must contain at least the following information: 
Transferor's name, vessel name, permit number, and official number or 
state registration number; transferee's name, vessel name, permit 
number and official number or state registration number; total price 
paid for purchased IFQ; signatures of transferor and transferee; and 
date the form was completed. Information obtained from the transfer 
application will be held confidential, and will be used only in 
summarized form for management of the fishery. If applicable, an 
application for a permanent IFQ transfer must be accompanied by 
verification, in writing, that the transferor either has requested 
cancellation of all limited access Federal fishing permits, or has 
applied for a transfer of all of its limited access permits in 
accordance with the vessel replacement restrictions under Sec.  648.4.
    (B) Approval of IFQ transfer applications. Unless an application to 
transfer IFQ is denied according to paragraph (h)(5)(iii)(C) of this 
section, the Regional Administrator shall issue confirmation of 
application approval to both parties involved in the transfer within 45 
days of receipt of an application.
    (C) Denial of lease or transfer application. The Regional 
Administrator may reject an application to transfer IFQ for the 
following reasons: The application is incomplete; the transferor or 
transferee does not possess a valid limited access general category 
permit; the transferor's or transferee's vessel or IFQ scallop permit 
has been sanctioned, pursuant to an enforcement proceeding; the 
transferor's or transferee's vessel is prohibited from fishing; the 
transfer will result in the transferee's vessel having an allocation 
that exceeds 2 percent of the total allowable catch allocated to IFQ 
scallop vessels; the transfer will result in the transferee having 
ownership of general category scallop allocation that exceeds 5 percent 
of the total allowable catch allocated to IFQ scallop vessels; or any 
other failure to meet the requirements of this subpart. Upon denial of 
an application to transfer IFQ, the Regional Administrator shall send a 
letter to the applicants describing the reason(s) for the rejection. 
The decision by the Regional Administrator is the final agency decision 
and there is no opportunity to appeal the Regional Administrator's 
decision.
    11. In Sec.  648.54, paragraphs (b), (c)(3) and (f) are revised to 
read as follows:


Sec.  648.54  State waters exemption.

* * * * *
    (b) LAGC scallop vessel gear and possession limit restrictions. Any 
vessel issued an LAGC scallop permit is exempt from the gear 
restrictions specified in Sec.  648.51(a), (b), (e)(1), and (e)(2), and 
the applicable possession limits specified in Sec.  648.52, while 
fishing exclusively landward of the outer boundary of the waters of a 
state that has been issued a state waters exemption, provided the 
vessel complies with paragraphs (d) through (g) of this section.
* * * * *
    (c) * * *
    (3) Prior to Amendment 11 to the FMP, which became effective [date 
30 days from publication of the Final Rule in the Federal Register], 
Maine, New Hampshire, and Massachusetts were determined by the Regional 
Administrator to have scallop fisheries and scallop conservation 
programs that do not jeopardize the biomass and fishing mortality/
effort limit objectives of the FMP. States must resubmit information 
describing their scallop fishery conservation programs so that the 
Regional Administrator can determine if such states continue to have 
scallop fisheries and scallop conservation programs that do not 
jeopardize the biomass and fishing mortality/effort limit objectives of 
the FMP. In addition, these states must immediately notify the Regional 
Administrator of any changes in their respective scallop conservation 
program. The Regional Administrator shall review these changes and, if 
a determination is made that the state's conservation program 
jeopardizes the biomass and fishing mortality/effort limit objectives 
of the FMP, or that the state no longer has a scallop fishery, the 
Regional Administrator shall publish a rule in the Federal Register, in 
accordance with the Administrative Procedure Act, amending this 
paragraph (c)(3) to eliminate the exemption for that state. The 
Regional Administrator may determine that other states have scallop 
fisheries and scallop conservation programs that do not jeopardize the 
biomass and fishing mortality/effort limit objectives of the FMP. In 
such case, the Regional Administrator shall publish a rule in the 
Federal Register, in accordance with the Administrative Procedure Act, 
amending this paragraph (c)(3) to provide the exemption for such 
states.
* * * * *
    (f) Duration of exemption. An exemption expires upon a change in 
the vessel's name or ownership, or upon notification through VMS by the 
participating vessel's owner.
* * * * *
    12. In Sec.  648.55, paragraphs (a) and (e) are revised to read as 
follows:


Sec.  648.55  Framework adjustments to management measures.

    (a) Biennially, or upon a request from the Council, the Regional 
Administrator shall provide the Council with information on the status 
of the scallop resource. Within 60 days of receipt of that information, 
the Council PDT shall assess the condition of the scallop resource to 
determine the adequacy of the management measures to achieve the stock-
rebuilding objectives. Based on this information, the PDT shall prepare 
a Stock Assessment and Fishery Evaluation (SAFE) Report that provides 
the information and analysis needed to evaluate potential management 
adjustments. Based on this information and analysis, the Council shall 
initiate a framework adjustment to establish or revise total allowable 
catch, DAS

[[Page 71340]]

allocations, rotational area management programs, percentage 
allocations for limited access general category vessels in Sea Scallop 
Access Areas, scallop possession limits, or other measures to achieve 
FMP objectives and limit fishing mortality. The Council's development 
of an area rotation program shall take into account at least the 
following factors: General rotation policy; boundaries and distribution 
of rotational closures; number of closures; minimum closure size; 
maximum closure extent; enforceability of rotational closed and re-
opened areas; monitoring through resource surveys; and re-opening 
criteria. Rotational Closures should be considered where projected 
annual change in scallop biomass is greater than 30 percent. Areas 
should be considered for Sea Scallop Access Areas where the projected 
annual change in scallop biomass is less than 15 percent.
* * * * *
    (e) After considering the PDT's findings and recommendations, or at 
any other time, if the Council determines that adjustments to, or 
additional management measures are necessary, it shall develop and 
analyze appropriate management actions over the span of at least two 
Council meetings. To address interactions between the scallop fishery 
and sea turtles and other protected species, such adjustments may 
include proactive measures including, but not limited to, the timing of 
Sea Scallop Access Area openings, seasonal closures, gear 
modifications, increased observer coverage, and additional research. 
The Council shall provide the public with advance notice of the 
availability of both the proposals and the analyses, and opportunity to 
comment on them prior to and at the second Council meeting. The 
Council's recommendation on adjustments or additions to management 
measures must include measures to prevent over fishing of the available 
biomass of scallops and ensure that OY is achieved on a continuing 
basis, and must come from one or more of the following categories:
    (1) Total allowable catch and DAS changes;
    (2) Shell height;
    (3) Offloading window reinstatement;
    (4) Effort monitoring;
    (5) Data reporting;
    (6) Trip limits;
    (7) Gear restrictions;
    (8) Permitting restrictions;
    (9) Crew limits;
    (10) Small mesh line;
    (11) Onboard observers;
    (12) Modifications to the overfishing definition;
    (13) VMS Demarcation Line for DAS monitoring;
    (14) DAS allocations by gear type;
    (15) Temporary leasing of scallop DAS requiring full public 
hearings;
    (16) Scallop size restrictions, except a minimum size or weight of 
individual scallop meats in the catch;
    (17) Aquaculture enhancement measures and closures;
    (18) Closed areas to increase the size of scallops caught;
    (19) Modifications to the opening dates of closed areas;
    (20) Size and configuration of rotation management areas;
    (21) Controlled access seasons to minimize bycatch and maximize 
yield;
    (22) Area-specific trip allocations;
    (23) TAC specifications and seasons following re-opening;
    (24) Limits on number of area closures;
    (25) TAC or DAS set-asides for funding research;
    (26) Priorities for scallop-related research that is funded by a 
TAC or DAS set-aside;
    (27) Finfish TACs for controlled access areas;
    (28) Finfish possession limits;
    (29) Sea sampling frequency;
    (30) Area-specific gear limits and specifications;
    (31) Modifications to provisions associated with observer set-
asides; observer coverage; observer deployment; observer service 
provider; and/or the observer certification regulations;
    (32) Specifications for IFQs for limited access general category 
vessels;
    (33) Revisions to the cost recovery program for IFQs;
    (34) Development of general category fishing industry sectors and 
fishing cooperatives;
    (35) Adjustments to the Northern Gulf of Maine scallop fishery 
measures;
    (36) VMS requirements; and
    (37) Any other management measures currently included in the FMP.
* * * * *
    13. Section 648.57 is revised to read as follows:


Sec.  648.57  Sea scallop area rotation program.

    An area rotation program is established for the scallop fishery, 
which may include areas closed to scallop fishing defined in Sec.  
648.58, and/or Sea Scallop Access Areas defined in Sec.  648.59, 
subject to the Sea Scallop Area Access program requirements specified 
in Sec.  648.60. Areas not defined as Rotational Closed Areas, Sea 
Scallop Access Areas, EFH Closed Areas, or areas closed to scallop 
fishing under other FMPs, are open to scallop fishing as governed by 
the other management measures and restrictions in this part. The 
Council's development of area rotation programs is subject to the 
framework adjustment process specified in Sec.  648.55, including the 
Area Rotation Program factors included in Sec.  648.55(a). The 
percentage of the total allowable catch for each Sea Scallop Access 
Area that is allocated to limited access scallop vessels and limited 
access general category scallop vessels shall be specified in Sec.  
648.59 through the framework adjustment process specified in Sec.  
648.55.
    14. In Sec.  648.59, paragraphs (b)(5)(ii), (c)(5)(ii), (d)(5)(ii), 
and (e)(6)(ii) are revised to read as follows:


Sec.  648.59  Sea Scallop Access Areas.

* * * * *
    (b) * * *
    (5) * * *
    (ii) LAGC scallop vessels. (A) The percentage of the Closed Area I 
total allowable catch allocated to LAGC scallop vessels shall be 
specified in this paragraph (b)(5)(ii) through the framework adjustment 
process. The resulting total allowable catch allocated to LAGC scallop 
vessels shall be specified in this paragraph (b)(5)(ii) and shall 
determine the number of trips specified in paragraph (b)(5)(ii)(B) of 
this section.
    (B) Except as provided in paragraph (b)(5)(ii)(C) of this section, 
subject to the possession limit specified in Sec. Sec.  648.52(a) and 
(b), and 648.60(g), and subject to the seasonal restrictions specified 
in paragraph (b)(4) of this section, an LAGC scallop vessel may not 
enter in, or fish for, possess, or land sea scallops in or from the 
Closed Area I Access Area once the Regional Administrator has provided 
notification in the Federal Register, in accordance with Sec.  
648.60(g)(4), the date on which 216 trips are projected to be taken, in 
total, by all LAGC scallop vessels, unless transiting pursuant to 
paragraph (f) of this section. The Regional Administrator shall notify 
all LAGC scallop vessels of the date when the maximum number of allowed 
trips have been, or are projected to be, taken for the 2007 fishing 
year.
    (C) A vessel issued a NE Multispecies permit and a LAGC scallop 
permit that is fishing in an approved SAP under Sec.  648.85 under 
multispecies DAS may fish in the Scallop Access Areas without being 
subject to the restrictions of paragraph (b)(5)(ii)(A) of this section, 
provided that it has not enrolled in the Scallop Area Access program. 
Such vessel is prohibited from fishing for, possessing, or landing 
scallops.
    (c) * * *

[[Page 71341]]

    (5) * * *
    (ii) LAGC scallop vessels--(A) The percentage of the Closed Area II 
total allowable catch allocated to LAGC scallop vessels shall be 
specified in this paragraph (c)(5)(ii) through the framework adjustment 
process. The resulting total allowable catch allocated to LAGC scallop 
vessels shall be specified in this paragraph (c)(5)(ii) and shall 
determine the number of trips specified in paragraph (c)(5)(ii)(B) of 
this section.
    (B) Except as provided in paragraph (c)(5)(ii)(C) of this section, 
subject to the possession limits specified in Sec. Sec.  648.52(a) and 
(b), and 648.60(g), and subject to the seasonal restrictions specified 
in paragraph (c)(4) of this section, an LAGC scallop vessel may not 
enter in, or fish for, possess, or land sea scallops in or from the 
Closed Area II Access Area once the Regional Administrator has provided 
notification in the Federal Register, in accordance with Sec.  
648.60(g)(4), of the date on which the total number of trips is 
projected to be taken, in total, by all LAGC scallop vessels, unless 
transiting pursuant to paragraph (f) of this section. The Regional 
Administrator shall notify all LAGC scallop vessels of the date when 
the maximum number of allowed trips have been, or are projected to be, 
taken.
    (C) A vessel issued a NE Multispecies permit and an LAGC scallop 
permit that is fishing in an approved SAP under Sec.  648.85 under 
multispecies DAS may fish in the Scallop Access Areas without being 
subject to the restrictions of paragraph (c)(5)(ii)(A) of this section 
provided that it has not enrolled in the Scallop Area Access program. 
Such vessel is prohibited from fishing for, possessing, or landing 
scallops.
    (d) * * *
    (5) * * *
    (ii) LAGC scallop vessels. (A) The percentage of the Nantucket 
Lightship Access Area total allowable catch allocated to LAGC scallop 
vessels shall be specified in this paragraph (d)(5)(ii) through the 
framework adjustment process. The resulting total allowable catch 
allocated to LAGC scallop vessels shall be specified in this paragraph 
(d)(5)(ii) and shall determine the number of trips specified in 
paragraph (d)(5)(ii)(B) of this section.
    (B) Except as provided in paragraph (d)(5)(ii)(C) of this section, 
subject to the possession limits specified in Sec. Sec.  648.52(a) and 
(b), and 648.60(g), an LAGC scallop vessel may not enter in, or fish 
for, possess, or land sea scallops in or from the Nantucket Lightship 
Access Area once the Regional Administrator has provided notification 
in the Federal Register, in accordance with Sec.  648.60(g)(4), of the 
date on which 394 trips are projected to be taken, in total, by all 
LAGC scallop vessels, unless transiting pursuant to paragraph (f) of 
this section. The Regional Administrator shall notify all LAGC scallop 
vessels of the date when the maximum number of allowed trips have been, 
or are projected to be, taken for the 2007 fishing year.
    (C) A vessel issued a NE Multispecies permit and an LAGC scallop 
permit that is fishing in an approved SAP under Sec.  648.85 under 
multispecies DAS may fish in the Scallop Access Areas without being 
subject to the restrictions of paragraph (d)(5)(ii)(A) of this section 
provided that it has not enrolled in the Scallop Area Access program. 
Such vessel is prohibited from fishing for, possessing, or landing 
scallops.
    (e) * * *
    (6) * * *
    (ii) LAGC scallop vessels. (A) The percentage of the Elephant Trunk 
Access Area total allowable catch allocated to LAGC scallop vessels 
shall be specified in this paragraph (e)(6)(ii) through the framework 
adjustment process. The resulting total allowable catch allocated to 
limited access general category vessels shall be specified in this 
paragraph (e)(6)(ii) and shall determine the number of trips specified 
in paragraph (e)(6)(ii)(B) of this section.
    (B) Subject to the possession limits specified in Sec. Sec.  
648.52(a) and (b), and 648.60(g), an LAGC scallop vessel may not enter 
in, or fish for, possess, or land sea scallops in or from the Elephant 
Trunk Sea Scallop Access Area once the Regional Administrator has 
provided notification in the Federal Register, in accordance with ' 
648.60(g)(4), of the date on which 865 trips allocated March 1, 2007, 
are projected to be taken, in total, by all LAGC scallop vessels, 
unless transiting pursuant to paragraph (f) of this section. The 
Regional Administrator shall notify all LAGC scallop vessels of the 
date when the maximum number of allowed trips have been, or are 
projected to be, taken.
* * * * *
    15. In Sec.  648.60, paragraph (a) introductory text, paragraphs 
(g)(1) and (2), and paragraph (g)(3) introductory text are revised to 
read as follows:


Sec.  648.60  Sea scallop area access program requirements.

    (a) A limited access scallop vessel may only fish in the Sea 
Scallop Access Areas specified in Sec.  648.59, subject to the seasonal 
restrictions specified in Sec.  648.59, when fishing under a scallop 
DAS, provided the vessel complies with the requirements specified in 
paragraphs (a)(1) through (a)(9), and (b) through (f) of this section. 
An LAGC scallop vessel may fish in the Sea Scallop Access Areas 
specified in Sec.  648.59, subject to the seasonal restrictions 
specified in Sec.  648.59, provided the vessel complies with the 
requirements specified in paragraph (g) of this section.
* * * * *
    (g) * * *
    (1) An LAGC scallop vessel, except a vessel issued a NE 
Multispecies permit and an LAGC scallop permit that is fishing in an 
approved SAP under Sec.  648.85 under multispecies DAS that has not 
enrolled in the LAGC Access Area fishery, may only fish in the Closed 
Area I, Closed Area II, and Nantucket Lightship Sea Scallop Access 
Areas specified in Sec.  648.59(b) through (d), subject to the seasonal 
restrictions specified in Sec.  648.59(b)(4), (c)(4), and (d)(4), and 
subject to the possession limit specified in Sec.  648.52(a), and 
provided the vessel complies with the requirements specified in 
paragraphs (a)(1), (a)(2), (a)(6) through (a)(9), (d), (e), (f), and 
(g) of this section, and Sec.  648.85(c)(3)(ii). A vessel issued a NE 
Multispecies permit and an LAGC scallop permit that is fishing in an 
approved SAP under Sec.  648.85 under multispecies DAS that has not 
enrolled in the Sea Scallop Area Access program as specified in 
paragraph (a)(2) of this section is not subject to the restrictions and 
requirements specified in Sec.  648.59(b)(5)(ii), (c)(5)(ii), 
(d)(5)(ii), and this paragraph (g), and may not fish for, possess, or 
land scallops on such trips.
    (2) Gear restrictions. An LAGC scallop vessel authorized to fish in 
the Access Areas specified in Sec.  648.59(b) through (d) must fish 
with dredge gear only. The combined dredge width in use by, or in 
possession on board, LAGC scallop vessels fishing in the Access Areas 
described in Sec.  648.59(b) through (d) may not exceed 10.5 ft (3.2 
m), measured at the widest point in the bail of the dredge.
    (3) Scallop TAC. An LAGC scallop vessel authorized to fish in the 
Access Areas specified in Sec.  648.59(b) through (e) may land 
scallops, subject to the possession limit specified in Sec.  648.52(a), 
unless the Regional Administrator has issued a notice that the scallop 
TAC specified in Sec.  648.59(b)(5)(ii), (c)(5)(ii), (d)(5)(ii), and 
(e)(4)(ii) in the Access Area has been or is projected to be harvested. 
Upon a determination from the Regional Administrator that the scallop 
TAC for a specified Access Area, as specified in this paragraph (g)(3), 
has been, or is projected to be harvested, the Regional Administrator 
shall publish notification of this determination in the

[[Page 71342]]

Federal Register, in accordance with the Administrative Procedure Act.
* * * * *
    16. Section 648.62 is added to read as follows:


Sec.  648.62  Northern Gulf of Maine (NGOM) scallop management area.

    (a) The NGOM scallop management area is the area north of42[deg] 20 
N. Lat. To fish for or possess scallops in the NGOM scallop management 
area, a vessel must be issued a scallop permit as specified in Sec.  
648.4(a)(2).
    (1) If a vessel has been issued a NGOM scallop permit, the vessel 
is restricted to fishing for or possessing scallops only in the NGOM 
scallop management area.
    (2) Scallop landings by all vessels issued LAGC scallop permits, 
including IFQ scallop permits, and fishing in the NGOM scallop 
management area shall be deducted from the NGOM scallop total allowable 
catch specified in paragraph (b) of this section. Scallop landings by 
an IFQ scallop vessels and fishing in the NGOM scallop management area 
shall be deducted from their respective scallop IFQ. Landings by 
limited access scallop vessels fishing under the scallop DAS program 
shall not be deducted from the NGOM total allowable catch specified in 
paragraph (b) of this section.
    (3) A vessel issued a NGOM or IFQ scallop permit that fishes in the 
NGOM may fish for, possess, or retain up to 200 lb (90.72 kg) of 
shucked or 25 bu (8.81 hL) of in-shell scallops, and may possess up to 
50 bu (17.62 hL) of in-shell scallops seaward of the VMS Demarcation 
Line. A vessel issued an incidental catch general category scallop 
permit that fishes in the NGOM may fish for, possess, or retain only up 
to 40 lb of shucked or 5 U.S. bu (1.76 hL) of in-shell scallops, and 
may possess up to 10 bu (3.52 hL) of in-shell scallops seaward of the 
VMS Demarcation Line.
    (b) Total allowable catch. The total allowable catch for the NGOM 
scallop management area shall be specified through the framework 
adjustment process. The total allowable catch for the NGOM scallop 
management area shall be based on the Federal portion of the scallop 
resource in the NGOM. The total allowable catch shall be determined by 
historical landings until additional information on the NGOM scallop 
resource is available, for example through an NGOM resource survey and 
assessment. The total allowable catch and allocations as specified in 
Sec.  648.53(a) shall not include the total allowable catch for the 
NGOM scallop management area, and landings from the NGOM scallop 
management area shall not be counted against the total allowable catch 
and allocations specified in Sec.  648.53(a).
    (1) NGOM total allowable catch. To be determined.
    (2) Unless a vessel has fished for scallops outside of the NGOM 
scallop management area and is transiting the area north of 42[deg] 20 
N. Lat. with all fishing gear stowed in accordance with Sec.  
648.23(b), no vessel issued a scallop permit pursuant to Sec.  
648.4(a)(2) may possess, retain, or land scallops in the NGOM scallop 
management area once the Regional Administrator has provided 
notification in the Federal Register that the NGOM scallop total 
allowable catch in accordance with this paragraph (b) has been reached. 
A vessel that has not been issued a Federal scallop permit that fishes 
exclusively in state waters is not subject to the closure of the NGOM 
scallop management area.
    (c) VMS requirements. Except scallop vessels issued a limited 
access scallop permit pursuant to Sec.  648.4(a)(2)(i) that have 
declared a trip under the scallop DAS program, a vessel issued a 
scallop permit pursuant to Sec.  648.4(a)(2) that intend to fish for 
scallops in the NGOM scallop management area or fishes for, possesses, 
or lands, scallops in or from the NGOM scallop management area, must 
declare a NGOM scallop management area trip and report scallop catch 
through the vessel's VMS unit, as required in Sec.  648.10.
    (d) Gear restrictions. Except scallop vessels issued a limited 
access scallop permit pursuant to Sec.  648.4(a)(2)(i) that have 
properly declared a trip under the scallop DAS program, the combined 
dredge width in use by, or in possession on board, LAGC scallop vessels 
fishing in the NGOM scallop management area may not exceed 10.5 ft (3.2 
m), measured at the widest point in the bail of the dredge.
    17. Section 648.63 is added to read as follows:


Sec.  648.63  General category sectors and harvesting cooperatives.

    (a) Procedure for implementing Sector allocation proposals. (1) Any 
person may submit a Sector allocation proposal for a group of LAGC 
scallop vessels to the Council, at least 1 year in advance of the start 
of the proposed sector, and request that the Sector be implemented 
through a framework procedure specified at Sec.  648.55, in accordance 
with the conditions and restrictions of this section.
    (2) Upon receipt of a Sector allocation proposal, the Council must 
decide whether to initiate such framework. Should a framework 
adjustment to authorize a Sector allocation proposal be initiated, the 
Council shall follow the framework adjustment provisions of Sec.  
648.55. Any framework adjustment developed to implement a Sector 
allocation proposal must be in compliance with the general requirements 
specified in paragraphs (b) and (c) of this section. Vessels that do 
not join a Sector would remain subject to the LAGC scallop vessel 
regulations for non-Sector vessels specified under this part.
    (b) General requirements applicable to all Sector allocations. All 
Sectors approved under the provisions of paragraph (a) of this section 
must submit the documents specified under paragraphs (a)(1), and (c) of 
this section, and comply with the conditions and restrictions of this 
paragraph (b).
    (1) Participation. (i) Only LAGC scallop vessels are eligible to 
form Sectors and Sectors may choose which eligible permit holders to 
include or exclude in the sector, consistent with all applicable law. A 
Sector may establish additional criteria for determining its 
membership, provided such criteria are specified in the operations plan 
and are consistent with all applicable law. Any interested group that 
meets the eligibility criteria may submit a proposal for a sector. To 
initiate the process of sector creation, a group (two or more) of 
permit holders must agree to cooperate and submit a binding plan for 
management of that sector's allocation of total allowable catch. 
Vessels that do not choose to participate in a sector will fish under 
the IFQ program and remain in the non-sector scallop fishery.
    (ii) Participation by incidental catch or NGOM scallop vessels in 
the Sector is subject to approval by the New England Fishery Management 
Council as part of the action that implements the Sector allocation, 
provided the details of such participation are specified in the 
Sector's operations plan. A Sector allocation may be harvested by non-
Sector members, provided the Sector operations plan specifies that the 
Sector may authorize non-Sector vessels to harvest the Sector 
allocation. In this case, if the Sector is approved, the landings 
history of the participating non-Sector vessels may not be used in the 
calculation of future Sector shares and may not be used as scallop 
catch history for such vessels. The operations plan must specify how 
such participating non-Sector shall be subject to the rules of the 
Sector.
    (iii) Once a vessel operator and/or vessel owner signs a binding 
contract to have his/her vessel participate in a Sector, that vessel 
must remain in the Sector for the remainder of the fishing year.

[[Page 71343]]

    (iv) Vessels that fish in the LAGC scallop fishery outside the 
Sector allocation in a given fishing year may not participate in a 
Sector during that same fishing year, unless the Operations Plan 
provides an acceptable method for accounting for IFQ used, or catch by 
the vessel, prior to implementation of the Sector.
    (v) Once a vessel operator and/or vessel owner has agreed to 
participate in a Sector as specified in paragraph (b)(1)(iii) of this 
section, that vessel must remain in the Sector for the entire fishing 
year. If a permit is transferred by a Sector participant during the 
fishing year, the new owner must also comply with the Sector 
regulations for the remainder of the fishing year.
    (vi) Vessels and vessel operators and/or vessel owners removed from 
a Sector for violation of the Sector rules will not be eligible to fish 
under the scallop regulations for non-Sector vessels specified under 
this part either for any period specified in the final decision of 
penalty or sanction.
    (vii) If a pre-existing Sector accepts a new member, the percentage 
share brought to the Sector is based on that vessel's average 
qualification landings at the time it joins the Sector (i.e., the 
vessel is treated as a 'Sector of one' and a share based on the 
appropriate adjusted TACs is calculated). This new single-vessel-Sector 
share is added to the existing Sector. If a vessel leaves a Sector, 
that Sector's share is reduced by the individual vessel share the 
exiting vessel had when it joined the Sector.
    (viii) A vessel may not be a member of more than one Sector. Once a 
vessel enters into a Sector, it cannot fish during that fishing year 
under the regulations that apply to the common pool. Additionally, 
vessels cannot shift from one Sector to another during a single fishing 
year. Therefore, if a vessel leaves a Sector for any reason, it cannot 
participate in the general category scallop fishery during the 
remainder of that fishing year
    (2) Allocation of TAC to Sectors. (i) The Sector allocation shall 
be equal to a percentage share of the TAC allocation for IFQ scallop 
vessels specified in Sec.  648.53(a), similar to a IFQ scallop vessel's 
IFQ as specified in Sec.  648.53(h). The Sector's percentage share of 
the IFQ scallop fishery TAC catch shall not change, but the amount of 
allocation based on the percentage share will change based on the TAC 
specified in Sec.  648.53(a).
    (ii) Sector share determination. When a Sector proposal is 
submitted, NMFS shall verify the contribution percentage as specified 
in Sec.  648.53(h)(3) for each vessel listed as a Sector member. The 
Sector's share shall be the sum of the participating vessels' 
contribution percentages.
    (iii) A Sector shall not be allocated more than 20 percent of the 
TAC for IFQ vessels specified in Sec.  648.53(a).
    (3) Once a Sector's allocation is projected to be harvested, Sector 
operations will be terminated for the remainder of the fishing year.
    (4) If a Sector's allocation is exceeded in a given fishing year, 
the Sector, each vessel, and vessel operator and/or vessel owner 
participating in the Sector may be charged jointly and severally for 
civil penalties and permit sanction pursuant to 15 CFR part 904. If a 
Sector exceeds its allocation in more than one fishing year, the 
Sector's authorization to operate may be withdrawn.
    (5) A vessel operator and/or vessel owner participating in a Sector 
is not subject to the limit on the vessel's catch based on the vessel's 
own IFQ or contribution percentage as defined in Sec.  648.53(h), 
provided the vessel is participating in the Sector and carries on board 
a Letter of Authorization to participate in the Sector. The Sector 
shall determine how the Sector's allocation will be divided between its 
participating vessels, regardless of whether the catch by a 
participating vessel exceeds that vessel's own IFQ.
    (6) Each vessel operator and/or vessel owner fishing under an 
approved Sector must comply with all scallop management measures of 
this part and other applicable law, except the vessel's own IFQ as 
specified in paragraph (b)(11) of this section. Each vessel and vessel 
operator and/or vessel owner participating in a Sector must also comply 
with all applicable requirements and conditions of the Operations Plan 
specified in paragraph (c) of this section and the Letter of 
Authorization issued pursuant to paragraph (b)(11) of this section. It 
shall be unlawful to violate any such conditions and requirements and 
each Sector, vessel, and vessel operator and/or vessel owner 
participating in the Sector may be charged jointly and severally for 
civil penalties and permit sanctions pursuant to 15 CFR part 904.
    (7) Approved Sectors must submit an annual year-end report to NMFS 
and the Council, within 60 days of the end of the fishing year, that 
summarizes the fishing activities of its members, including harvest 
levels of all federally managed species by Sector vessels, enforcement 
actions, and other relevant information required to evaluate the 
performance of the Sector.
    (8) It shall be the responsibility of each Sector to track its 
activity and internally enforce any provisions adopted through 
procedures established in the operations plan and agreed to through the 
Sector contract. Sector contracts should describe graduated sanctions 
including grounds for expulsion of Sector member vessels. A Sector is a 
legal entity, and participating Sector vessels shall be subject to NMFS 
enforcement action for violations of the regulations pertaining to 
Sectors and other regulations under 50 CFR part 648. Vessels operating 
within a Sector are responsible for judgments against the Sector. 
Sector operations plans shall specify how a Sector will monitor its 
landings to assure that Sector landings do not exceed the Sector 
allocation. At the end of the fishing year, NMFS will evaluate landings 
using VMS, and any other available information to determine whether a 
Sector has exceeded any of its allocations based on the list of 
participating vessels submitted in the operations plan. If a Sector 
exceeds its TAC, the Sector may be subject to enforcement action and 
may have its authorization as a Sector be withdrawn by the Regional 
Administrator, after consultation with the New England Fishery 
Management Council.
    (9) Permanent or temporary transfers of allocation between Sectors 
or between Sector and non-Sector participants is prohibited. For 
purposes of harvesting a Sector allocation only, vessels under contract 
to a Sector are assumed to be part of that Sector for the duration of 
that contract.
    (10) The Sector allocation proposal must contain an appropriate 
analysis that assesses the impact of the proposed Sector, in compliance 
with the National Environmental Policy Act.
    (11) If a Sector is approved as specified in paragraph (d)(3) of 
this section, the Regional Administrator shall issue a Letter of 
Authorization to each vessel operator and/or owner for the 
participating Sector vessel. The Letter of Authorization shall 
authorize participation in the Sector operations and shall exempt the 
participating vessel from the requirement that the vessel cannot exceed 
its own IFQ. The Letter of authorization may include requirements and 
conditions deemed necessary to ensure effective administration of and 
compliance with the Sector's operations plan and the Sector's 
allocation.
    (c) Operations plans. (1) A group that wants to form a Sector and 
receive an allocation must submit a legally binding operations plan to 
the Council and the Regional Administrator. The operations plan must be 
agreed upon and signed by all members of the Sector and, if approved, 
shall constitute a contract.

[[Page 71344]]

    (2) The operations plan among all of the Sector members must have, 
at a minimum, the following components:
    (A) A list of all participants;
    (B) A contract signed by all participants indicating their 
agreement to abide by the operations plan;
    (C) An entity name, address, phone number, and the name and contact 
information for a Sector representative (a manager or director) that 
NMFS can contact regarding Sector management issues;
    (D) A plan explaining how the Sector will harvest its allocation, 
including methods to inform NMFS of changes in those arrangements over 
the year;
    (E) The original distribution of catch history of vessels in the 
Sector (maintaining vessel data confidentiality);
    (F) A plan detailing how the Sector will avoid exceeding its 
allocated TACs, including provisions for monitoring and enforcement of 
the Sector regulations, and documenting all landings and discards;
    (G) Rules for entry to and exit from the Sector, including 
sanctions and procedures for removing members who do not comply with 
the operations plan;
    (H) Procedure for notifying NMFS if a member is no longer part of 
the Sector and the reason for leaving;
    (I) The process through which the operations plan can be amended by 
Sector members;
    (J) If the Sector plans to authorize non-Sector vessels to harvest 
scallops allocated to the Sector, details of such arrangements must be 
described in the operations plan;
    (K) Any documents and analyses necessary to comply with the 
National Environmental Protection Act must be submitted to NMFS. The 
development of the analytical document is the responsibility of the 
applicants.
    (d) Sector review, approval, and revocation. (1) A Sector shall 
submit its operations plan and any NEPA documents to the Regional 
Administrator and the New England Fishery Management Council no less 
than 1 year prior to the date that it wishes to begin operations under 
the Sector. The New England Fishery Management Council shall consider 
this plan in the course of the periodic framework adjustment or 
specification process and may, if approved, implement it through either 
of those processes. After New England Fishery Management Council 
approval of a Sector, the details of its operation shall be addressed 
between the Sector and NMFS, although the New England Fishery 
Management Council may review and provide comment on the proposed 
details.
    (2) The Regional Administrator may withdraw approval of a Sector at 
any time if he/she, in consultation with the New England Fishery 
Management Council, determines that Sector participants are not 
complying with the requirements of an approved operations plan or that 
the continuation of the operations plan will undermine achievement of 
fishing mortality objectives of the FMP. Withdrawal of approval of a 
Sector shall be completed after notice and comment rulemaking, pursuant 
to the Administrative Procedure Act.
    (3) A Sector is required to resubmit its operations plan to the 
Regional Director no later than December 1 of each year, whether or not 
the plan has changed. NMFS may consult with the Council and will 
solicit public comment on the operations plan for at least 15 days, 
through proposed rulemaking in the Federal Register. Upon review of the 
public comments, the Regional Administrator may approve or disapprove 
Sector operations, through a final determination pursuant to the 
Administrative Procedure Act.
[FR Doc. E7-24254 Filed 12-14-07; 8:45 am]
BILLING CODE 3510-22-S