[Federal Register Volume 73, Number 72 (Monday, April 14, 2008)]
[Rules and Regulations]
[Pages 20090-20133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-7795]



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Part II





Department of Commerce





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National Oceanic and Atmospheric Administration



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50 CFR Part 648



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

  Federal Register / Vol. 73, No. 72 / Monday, April 14, 2008 / Rules 
and Regulations  

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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 071130780-8013-02]
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: Final rule.

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SUMMARY: NMFS is implementing approved measures contained in Amendment 
11 to the Atlantic Sea Scallop Fishery Management Plan (FMP), developed 
by the New England Fishery Management Council (Council). Amendment 11 
was developed by the Council to control the capacity of the open access 
general category fleet. Amendment 11 establishes a new management 
program for the general category scallop 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: Effective June 1, 2008.

ADDRESSES: A final supplemental environmental impact statement (FSEIS) 
was prepared for Amendment 11 that describes the action and other 
considered alternatives and provides a thorough analysis of the impacts 
of the approved measures and alternatives. Copies of Amendment 11 and 
the FSEIS 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.nero.noaa.gov/nero/hotnews/scallamend11/.
    Written comments regarding the burden-hour estimate or other 
aspects of the collection-of-information requirement contained in this 
final rule should be submitted to the Regional Administrator at 1 
Blackburn Drive, Gloucester, MA 01930, 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

    Prior to the implementation of Amendment 11, the general category 
scallop fishery was an open access fishery allowing any vessel to fish 
for up to 400 lb (181.4 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 that applied to the large-scale 
scallop fishery. Over time, 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, 
181 general category vessels landed scallops, while in 2005 more than 
600 did.
    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 be published to notify the public that the 
Council was considering limiting entry to the general category scallop 
fishery as of a specified control date. NMFS subsequently established 
the control date of November 1, 2004 (69 FR 63341). 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 public meetings 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. Amendment 11 was adopted by the Council 
on June 20, 2007. The Notice of Availability (NOA) for Amendment 11 was 
published on November 30, 2007, (72 FR 67691) with a comment period 
ending on January 29, 2008. A proposed rule for Amendment 11 was 
published on December 17, 2007 (72 FR 71315), with a comment period 
ending on January 31, 2008. On February 27, 2008, NMFS approved 
Amendment 11 on behalf of the Secretary of Commerce.
    Amendment 11 establishes criteria and authority for determining the 
percentage of scallop catch allocated to the general category fleet, 
and establishes the IFQ program. However, these specific allocation 
amounts have been 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.

Approved Measures

    In a comment letter on the proposed rule, the Council suggested 
interpretations of the Council's intent regarding some of the measures 
and regulations. NMFS has accepted some of the Council's 
interpretations and clarifications which are reflected in the 
descriptions of the management measures and in the regulatory text in 
this final rule. Responses to comments identify whether NMFS agreed or 
disagreed with the Council's recommendations. Changes in the 
descriptions of the management measures from the proposed rule's 
descriptions are noted below. Changes in the regulatory text from the 
proposed rule are noted under ``Changes from Proposed Rule to Final 
Rule'' in the preamble of this final rule.
    The FSEIS for Amendment 11 included a description of each of the 
measures approved by the Council, but the description of the measures 
lack the regulatory detail necessary to ensure effective implementation 
and administration of the approved management measures. Under its 
authority granted by section 305(d) of the Magnuson-Stevens Act (16 
U.S.C. Sec.  1855(d)), NMFS added regulatory provisions in the proposed 
rule and in this final rule to ensure that the regulations are 
sufficiently detailed to ensure effective implementation, 
administration, and enforcement of the approved measures. While most of 
the measures described below required such additional regulatory 
detail, the most prominent regulatory additions appear in the limited 
access permit program, IFQ transfers, transition to IFQ, and Sector 
provisions.

Limited Access Program for the General Category Fishery

    Amendment 11 requires 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 are 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) are 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

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incidental catch LAGC scallop permit (Incidental scallop permit).
    A vessel is eligible to be issued an IFQ scallop permit if NMFS 
records verify that the vessel landed at least 1,000 lb (454 kg) of 
scallop meats in any fishing year between March 1, 2000, and November 
1, 2004, and a general category scallop permit had been issued 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 
can instead choose to apply for and be issued an NGOM or Incidental 
scallop permit. These permits have the same qualification requirement 
but have different restrictions. A vessel owner might choose the NGOM 
scallop permit if he or she wanted to land up to 200 lb (90.7 kg) per 
trip and fish exclusively within the most Northern portion of the 
scallop resource. A vessel owner might choose the Incidental scallop 
permit if he or she wants to retain up to 40 lb (18.1 kg) of scallops 
per trip while fishing for other species.
    A vessel qualifies for the NGOM or Incidental scallop permit if it 
was issued a valid general category scallop permit as of November 1, 
2004. There are no landings eligibility criteria. The NGOM scallop 
permit allows the vessel to fish in the NGOM exclusively, defined as 
the waters north of 42[deg]20' N. lat. and within the Gulf of Maine 
Scallop Dredge Exemption Area as defined in Sec.  648.80(a)(11), and 
are subject to additional restrictions outlined in the description of 
the NGOM Scallop Management Area below. The Incidental scallop permit 
allows a vessel to possess and land up to 40 lb (18.1 kg) of scallops 
per trip in all areas and is intended to allow landing of incidental 
scallop catch. The Council also indicated in its description of this 
measure that some vessels that qualify for an IFQ scallop permit may 
opt for the Incidental scallop permit because it allows vessels to land 
an incidental catch of scallops on an unlimited number of trips. In 
response to the proposed rule, the Council commented that a vessel that 
qualifies for an IFQ permit, but for which the owner elects to be 
issued an NGOM or Incidental scallop permit, automatically qualifies 
for an NGOM scallop permit. This clarification was necessary because a 
vessel that qualifies for an IFQ scallop permit would not necessarily 
meet the requirement that it held a general category scallop permit as 
of November 1, 2004 (i.e., it could have been issued a general category 
only in 1 year prior to the 2004 fishing year). However, the Council 
intended that the NGOM and Incidental Catch scallop permits have more 
liberal qualification requirements, allowing a qualified IFQ scallop 
vessel to choose the other permit category.

Initial Application for a LAGC Scallop Permit

    A vessel owner is required to submit an initial application for a 
LAGC scallop permit or confirmation of permit history (CPH) 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 establishes measures to govern future transactions 
related to limited access vessels, such as purchases, sales, or 
reconstruction. These measures apply to all LAGC scallop vessels. The 
Council clarified that this was the Council's intent. Except as noted, 
the provisions in Amendment 11 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 must be established 
during the first year after the implementation of Amendment 11. A 
vessel owner is required to submit an application for an LAGC scallop 
permit or CPH no later than 90 days from effective date of this final 
rule.
2. Landings History
    Amendment 11 specifies landings and permit history criteria that a 
vessel must meet to qualify for LAGC permits. It also specifies that an 
IFQ scallop vessel will be allocated IFQ based on its best year of 
scallop landings and the number of fishing years it was active during 
the qualification period of March 1, 2000, through November 1, 2004. 
Amendment 11 specifies that qualifying landings must be from the same 
scallop fishing year (March 1 through February 28/29, or through 
November 1, 2004, for the 2004 fishing year) that a vessel was issued a 
general category scallop permit during the qualification period. 
Therefore, this final 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 is 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 is the number of scallop fishing years during the 
qualification period (through November 1, 2004) that the vessel landed 
at least 1 lb (0.45 kg) of scallops, provided the vessel was issued a 
general category scallop permit. In-shell scallop landings reported in 
pounds of scallops are converted to meat-weight using the formula of 
8.33 lb (3.78 kg) of scallop meats for each pound of in-shell scallops, 
for qualification purposes. In-shell scallop landings reported in 
bushels of scallops are converted to meat-weight using the formula of 8 
lb (3.63 kg) of scallop meats per bushel of in-shell scallops.
    NMFS landings data from dealer reports will 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 shall be used to 
determine permit criteria eligibility for all LAGC scallop permits. 
Applicants are allowed to appeal the denial of an LAGC permit, or 
contribution factor (based on best year and years active), through the 
eligibility appeals process described below.
    The Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act) restricts the release of confidential fishery 
information to anyone other than the owner of the vessel at the time 
the data were compiled. Due to this restriction, for qualifying vessel 
IFQ information, for vessels that are currently owned by someone other 
than the owner of the vessel that made the landings, NMFS may be 
restricted in the release of the contribution factor if the release of 
such information is inconsistent with the MSA. NMFS understands that 
this may add complexity to the qualification and appeals process, but 
will work with vessel owners to ensure fairness in the appeals process.
3. Confirmation of Permit History
    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, is required to apply for and receive a 
CPH if the fishing and permit

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history of such vessel has been retained lawfully by the applicant and 
the applicant wishes to maintain eligibility for an LAGC scallop 
permit. An application for a CPH to establish the initial LAGC 
qualification of a vessel must 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 must 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 preserves 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 must be applied 
for in order for the applicant to preserve the LAGC scallop permit 
eligibility of the qualifying vessel. IFQ would be issued for IFQ 
scallop vessels in CPH, and IFQ associated with a CPH can be 
transferred. IFQ associated with a CPH counts toward a vessel owner's 
overall ownership of IFQ, and is restricted under the 5-percent 
ownership cap.
4. Permit Transfers
    An LAGC scallop permit and fishery history is 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 includes the permit-splitting provision currently in 
effect for other limited access fisheries in the Northeast region for 
transactions occurring after the initial qualification and permit 
issuance period. Therefore, after the initial issuance of an LAGC 
scallop permit, it cannot 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 does 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, with the exception of limited access vessels that qualify for 
an LAGC scallop permit. 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 are allowed to do so under Amendment 11. 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 cannot split the LAGC scallop permit or fishing history from the 
limited access scallop permit.
6. Qualification Restriction
    Except as provided under the permit splitting provision above, 
consistent with previous limited access programs, no more than one 
vessel can 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 Northeast Regional Administrator (Regional Administrator) will 
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 may appeal in 
writing to the Regional Administrator within 30 days of the denial, and 
any such appeal must be based on the grounds that the information used 
by the Regional Administrator was incorrect.
    The appeals process allows an opportunity for a hearing before a 
hearing officer designated by the Regional Administrator. The owner of 
a vessel denied an LAGC scallop permit can 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 shall issue such a letter for the pendency of any appeal, 
if requested. If the appeal is ultimately denied, the Regional 
Administrator shall 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 is not 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 shall 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 does 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 shall 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 final rule requires 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 is 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 may not be allocated more 
than 2 percent of the TAC allocated to the fleet of vessels issued IFQ 
scallop permits. In addition, an individual may 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

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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 does 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 can voluntarily exit the LAGC fishery by permanently 
relinquishing the permit. In some circumstances, doing so would 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 can 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 shall be cancelled due to 
the failure to renew, in which case no LAGC scallop permit can ever be 
reissued or renewed based on that vessel's permit and fishing history.
    Amendment 11 establishes an IFQ cost recovery program, with the 
payment procedures and details to be established in Framework 19. Under 
the IFQ program, up to 3 percent of the ex-vessel value of IFQ scallop 
landings will be collected by NMFS to offset the cost of managing, 
enforcing, and implementing the IFQ program, as required by the 
Magnuson-Stevens Act. NMFS will not renew an IFQ scallop permit for a 
subsequent fishing year for a vessel for which the owner failed to pay 
cost recovery fees by the specified due date. If a vessel owner fails 
to pay his or her cost recovery fee by the end of the fishing year for 
which the IFQ scallop permit has not been renewed due to failure to pay 
the cost recovery fee, no IFQ scallop permit could ever be reissued or 
renewed based on that vessel's permit and fishing history. The Council 
has proposed detailed cost recovery provisions as part of Framework 19 
to the FMP.

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 is 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 must 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 must have been issued 
a valid limited access scallop permit during the period March 1, 2000, 
through November 1, 2004, and must meet the landings criteria specified 
in ``Limited Access Program for the General Category Fishery'' and 
``Landings History'' above. LAGC scallop permit eligibility established 
while the vessel was also a limited access scallop vessel cannot be 
split from the limited access vessel. Limited access scallop vessels 
that also qualify for an IFQ scallop permit cannot transfer IFQ. 
Therefore, neither the general category maximum allocation restriction 
nor the maximum percentage ownership restriction for general category 
TAC apply. The limited access general category permit and IFQ scallop 
permit cannot be split from the limited access scallop permit. A 
limited access scallop vessel that does not qualify for a LAGC scallop 
permit cannot fish for, possess, or retain scallops when not fishing 
under the scallop DAS and Area Access programs.

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 will be allocated to vessels with IFQ 
scallop permits. This will be calculated by deducting estimated catch 
by Incidental scallop vessels from the total projected annual scallop 
catch. Five percent of the resultant catch will then be allocated to 
the IFQ scallop fishery. IFQs for IFQ scallop vessels will be derived 
from the 5-percent TAC allocation. The 5-percent allocation will not 
apply to current limited access vessels that also have IFQ scallop 
permits. Limited access scallop vessels with IFQ scallop permits will 
be allocated 0.5 percent of the total projected annual scallop catch 
after deduction of incidental catch. IFQs for these vessels will 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, shall be allocated for harvest by the current limited 
access scallop fishery. Based on a comment from the Council, NMFS has 
clarified that the NGOM TAC will not be deducted from the overall TACs, 
as was incorrectly described in the proposed rule preamble.

IFQs for Limited Access General Category Scallop Vessels

    A vessel issued an IFQ scallop permit will 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 will 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 will be determined to have been active in the scallop 
fishery if it landed at least 1 lb (0.45 kg) of scallops. Landings to 
determine the best year and years active must have been from November 
1, 2004, or earlier during the March 1, 2000, through November 1, 2004, 
qualification period. The index factors for varying levels of 
participation during the

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qualification period are: 0.75 for 1 year; 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 participated 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 shall be determined by multiplying the TAC for 
IFQ scallop vessels by the vessel's contribution percentage. The IFQs 
will be rounded up to the nearest 10 lb (4.5 kg). IFQ will be issued to 
owners of CPHs, since that vessel's contribution would be included in 
the determination of IFQs as described below. IFQ associated with a CPH 
is transferable.
    The following is an example of how a vessel's IFQ will 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 60,687 lb (27,527 kg) (48,550 lb (22,023 kg) x 1.25 = 
60,687 lb (27,527 kg)). In 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 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) = 36,250 lb (16,443 kg)).
    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 will 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 can transfer IFQ on a temporary 
or permanent basis. A temporary IFQ transfer (or lease) allows one IFQ 
scallop vessel to combine IFQs to increase fishing opportunity for a 
single fishing year. A permanent IFQ transfer permanently moves the IFQ 
from one vessel to another. Since a permanent IFQ transfer requires the 
vessel to transfer the IFQ scallop permit (and any other permits) to 
the transferee, the transferring vessel is not eligible to enter into 
an agreement to transfer IFQ back to the vessel, unless the vessel 
replaced another IFQ scallop vessel. Each IFQ allocation must be 
transferred in full before it is utilized, and a vessel that uses IFQ 
in a fishing year cannot transfer its IFQ during that fishing year. An 
IFQ can be transferred only once in a fishing year. An IFQ transfer 
will 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 will 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 Limited Access Privilege 
Program which includes IFQ programs 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 management, data 
collection, and enforcement of an IFQ program. The authority and 
procedures for collection of cost recovery fees are established in this 
rule. Further details of the cost recovery program have been proposed 
in Framework 19, in which TACs would be established for LAGC scallop 
vessels. The proposed rule for Amendment 11 specified that 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. However, in developing the actual IFQ cost recovery 
provisions in Framework 19, NMFS has determined that both vessel owners 
involved in IFQ transfers may be held responsible for non-payment of 
cost recovery fees. Therefore, this final rule clarifies that the 
transferor and transferee would be held jointly and severally 
responsible for non-payment of the cost recovery fee.

Measures for the Transition Period to IFQ

    Amendment 11 recognizes that it will take 12 to 24 months, or 
longer, 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 will 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 timing issue, Amendment 11 specifies measures 
for a transition period. During the transition period, the general 
category scallop fishery will be allocated 10 percent of the total 
projected scallop catch. The resulting TAC will be divided by quarter 
(Q1: March through May; Q2: June through August; Q3: September through 
November; Q4: December through February). Framework 19 proposes the 
percentage allocation of the TAC for each quarter. Vessels that qualify 
for an IFQ scallop permit and vessels under appeal for an IFQ scallop 
permit will 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 will close 
for the remainder of the quarter. Any underage or overage of the first 
quarter will be applied to the third quarter, and any underage or 
overage of the second and/or third quarter will 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 will 
result in a TAC that is intended to be consistent with recent 
projections for scallop mortality from the general category fishery and 
will account for additional effort expected from vessels under the 
appeals process.
    Although there appears to be some confusion based on the comment 
from the Council about the level of scallop TAC to be allocated to the 
general category scallop fishery in the unlikely event that the IFQ 
program is not implemented by the start of the 2010 fishing year, 
Amendment 11 clearly states that the level should be 10 percent for the 
entire transition period, without regard to how long it takes. 
Therefore, NMFS has specified in this final rule that the 10-percent 
allocation of TAC to the general category scallop fishery, divided by 
quarter, would continue beyond the 2009 fishing year if the IFQ program 
cannot be implemented.

[[Page 20095]]

Mechanism To Allow Voluntary Sectors in the General Category Fishery

    Amendment 11 includes a mechanism to allow the owners of IFQ 
scallop vessels to form voluntary sectors that could manage their own 
fishing activity as a group. This rule outlines the procedures that 
must be used to form a sector, and the sector program requirements. The 
sector provisions include: 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 interactions between sectors; monitoring and 
enforcement provisions for sectors; a prohibition on trading of 
allocation between sectors; restrictions on vessel movement between 
sectors; and a 20-percent maximum total allocation for a single sector. 
The 400-lb (181.4-kg) possession limit is 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. 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 does not 
allow sectors to be exempt from any scallop regulations, except that 
participating vessels would not be restricted by their IFQs. Amendment 
11 specified the sector provisions but omitted some of the details 
necessary for implementation of sector provisions. Under its authority 
granted by section 305(d) of the Magnuson-Stevens Act (16 U.S.C. 
1855(d)), NMFS has included regulations in the Sector provisions in 
Sec.  648.63 that are necessary to ensure effective implementation and 
administration of the Sector provisions, and to ensure consistency with 
some of the Sector provisions for the NE Multispecies FMP.

NGOM Scallop Management Area

    The NGOM scallop management area is defined as waters north of 
42[deg]20' N. lat. and within the Gulf of Maine Scallop Dredge 
Exemption Area specified in Sec.  648.80(a)(11). The proposed rule for 
Amendment 11 specified that the NGOM Scallop Management Area was all 
areas north of 42[deg]20' N. lat., but the Council commented that 
Amendment 11 specifies that the area is confined within the Gulf of 
Maine Scallop Dredge Exemption Area as well. The NGOM scallop 
management area is managed separately, because the Council clarified 
that the fishery there has unique characteristics. The abundance of 
scallops in the NGOM fluctuates more widely, supporting sporadic 
fisheries, and scallops are confined to small ``patchy'' areas 
throughout the area. There are times and areas within the NGOM that 
have sufficient abundance of scallops in small areas to support a 
substantial fishery and other times and areas that do not. The NGOM 
scallop management area measures 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 (90.7 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 shall have 
scallop landings deducted from its IFQ 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 cannot continue 
fishing in the NGOM once the TAC for the area has been reached.

Monitoring

    All LAGC scallop vessels are required to install and operate a 
vessel monitoring system (VMS). Operators of IFQ and NGOM scallop 
vessels are required to declare a general category trip or other 
fishing activity code, as appropriate. In addition, IFQ and NGOM 
scallop vessels are required to report scallop landings through VMS. 
This provision improves monitoring of the 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 includes the vessel trip report (VTR) serial 
number, amount of scallops on-board, the port of landing, and the 
approximate time of arrival in port, and any other information relevant 
to a general category trip as required by the Regional Administrator. 
This monitoring requirement enables 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 is 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 makes this permit consistent with the existing 
limited access scallop permit issuance date.

Other Measures

    This action clarifies that vessels that are fishing under a 
Northeast multispecies or monkfish DAS are not 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 (18.1 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.
    This action allows an IFQ scallop vessel to possess up to 100 bu 
(35.2 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 (17.6 hL) of in-shell scallops. This measure is 
included because scallop vessel owners and operators testified that it 
often takes more than 50 bu (17.6 hL) of in-shell scallops to yield 400 
lb (181.4 kg) of scallop meats. NMFS noted in the proposed rule that 
similar increases were not specified by the Council for the NGOM 
possession limits of 200 lb (90.7 kg) of shucked or 25 bu (8.8 hL) in-
shell scallops, or the 40 lb (18.1 kg) of shucked or 5 bu (1.76 hL) of 
in-shell scallops. However, given the rationale for the increased 
possession limit, NMFS noted that would be inconsistent to apply the 
increased possession limit for only one LAGC scallop permit category or 
declared fishing activity. Under its authority granted by section 
305(d) of the Magnuson-Stevens Act (16 U.S.C. Sec.  1855(d)), NMFS 
specified that vessels fishing for scallops up to 200 lb (90.7 kg) or 
25 bu (8.8 hL), or up to 40 lb (18.1 kg) or 5 bu (1.76 hL), could 
possess up to 50 bu (17.6 hL) or 10 bu (3.52 hL), respectively, seaward 
of the VMS Demarcation Line. The Council reviewed this issue in the 
proposed rule and concluded that NMFS's interpretation was correct.

[[Page 20096]]

    Finally, this final rule clarifies 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 appeals process.'' However, the 
regulations were 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 
regulations did 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 final rule clarifies 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 makes the regulations consistent with the Council's 
original intent under Amendment 4. This issue was not recommended by 
the Council as part of Amendment 11. Rather, NMFS proposed the 
clarification in the Amendment 11 proposed rule as a regulatory 
amendment. No comments, other than from the Council verifying that the 
change is appropriate, were received on this proposed measure.

Comments and Responses

    A total of 24 relevant comment letters were received from general 
category scallop vessel owners, industry representatives, and other 
interested public on Amendment 11 and the proposed rule. Four comments 
were also received from a general category vessel owner, two industry 
representatives, and the Council on the proposed rule after the close 
of the NOA comment period. All but one of these comments addressed the 
regulatory text included in the proposed rule. Comments on the proposed 
rule received after the close of the NOA comment period that addressed 
issues in Amendment 11 are reflected in the comments and responses 
below. The Council provided comments and recommendations on Amendment 
11 based on review by the Council's Scallop Oversight Committee 
(Committee) and staff through a letter signed by the Executive Director 
of the Council.

General Comments

    Comment 1: Two individuals requested an extension of the comment 
period on Amendment 11 and the proposed rule.
    Response: NMFS has a statutory requirement to approve, partially 
approve, or disapprove an amendment within 95 days from the date that 
the amendment has been officially transmitted to NMFS; otherwise, the 
amendment is automatically approved. The day by which NMFS had to make 
the decision for Amendment 11 was February 28, 2008. In order to ensure 
that NMFS considers public comments within that statutory time period, 
it must limit comment periods to 60 days for the amendment NOA and 45 
days for the proposed rule (the Magnuson-Stevens Act requires 15 to 60 
days for the proposed rule comment period, but NMFS typically allows 45 
days). If the comment period on the proposed rule ends after the NOA 
comment period, those comments received on the proposed rule but after 
the end of the NOA comment period may be excluded from NMFS's 
consideration relative to the decision on the amendment. Therefore, 
NMFS cannot extend the comment period on an amendment NOA, and prefers 
to keep the proposed rule comment period consistent with the NOA 
comment period. Moreover, given that Amendment 11 has been in 
development in the public arena by the Council for approximately 2 
years, NMFS considers the public comment period to be adequate.
    Comment 2: One commenter appeared to oppose Amendment 11, but urged 
overall management changes to protect the oceans for future 
generations. The commenter stated that ``* * * total take should be 
banned * * *'' and that ``* * * a moratorium on all catch of this 
should be in effect for 5 years for species regeneration * * *.'' The 
same individual commented that the total overall quota should be cut by 
50 percent this year, and by 10 percent each year thereafter, to let 
all species recover. The commenter provided no additional details or 
suggestions on the relevance of the comments to Amendment 11.
    Response: NMFS approved Amendment 11 because it is consistent with 
the Magnuson-Stevens Act and promotes a sustainable scallop fishery. 
Banning or reducing scallop catch as suggested by the commenter would 
be inconsistent with NMFS's responsibilities under the Magnuson-Stevens 
Act.
    Comment 3: One individual addressed several issues relative to the 
historical development of the general category fishery and the 
differences between the limited access and general category fleets. 
Another commenter stated that the continuation of a directed, full-time 
general category fishery is not consistent with the original intent of 
the general category fleet as a part-time fishery for vessels that did 
not qualify for, or did not want to participate in, the limited access 
scallop permits in 1994.
    Response: The Council recognized more recent developments in the 
general category fishery, which resulted in the development of 
Amendment 11. The general category fishery has changed since its 
inception in 1994, and the Council considered the recent growth in the 
general category scallop fishery after the control date to be its 
primary concern, regardless of whether the fishery was historically a 
directed scallop fishery or not. Amendment 4 to the FMP did not 
guarantee that general category scallop vessels would be able to 
continue fishing without controls on the number of overall 
participants. Without specific restrictions against it in any FMP 
action, including and since Amendment 4, the general category scallop 
fishery was allowed to expand beyond what some believe was the original 
intent of Amendment 4. Amendment 11 recognizes the expansion while 
providing general category fishery participants that developed a 
directed fishery the ability to continue fishing at levels consistent 
with their recent participation. Amendment 11 also prevents future 
expansion of the fishery.
    Comment 4: Several commenters stated that some parties involved in 
the development of Amendment 11 made biased decisions based on personal 
gain or agenda.
    Response: There is no evidence to suggest bias of various 
participants in the development of Amendment 11. The Council's 
decisions were based on numerous meetings open to the public and on 
information, comments, and input provided by the public.
    Comment 5: Several individuals urged no action on Amendment 11.
    Response: The analysis supporting Amendment 11 demonstrates that 
uncontrolled entry and effort levels in the general category fishery 
cannot continue. Maintaining a large number of

[[Page 20097]]

general category vessels would continue to allow catch levels by this 
component of the fishery to expand and compromise the ability to 
effectively manage the scallop fishery overall. Uncontrolled, the 
general category fishery could contribute to excess fishing mortality 
on the scallop resource. Although one of the most difficult management 
programs to implement due to the level of controversy, limited access 
and the associated measures in Amendment 11 are necessary to ensure a 
sustainable scallop fishery. Furthermore, the Council could not 
accurately establish catch limits in the future, now a requirement of 
the Magnuson-Stevens Act, without controls on the level of catch and 
effort in this segment of the fishery.
    The impacts of Amendment 11 are largely social and economic and 
will be positive in the long term. The measures will have direct 
negative economic impacts on vessel owners that do not have a 
qualifying vessel or that have fished more intensely recently than 
during the qualifying time period. However, as more fully discussed 
below, a control date announcing the possibility of a limited access 
program was published on November 1, 2004. The control date's purpose 
was to provide fishers with advance notice that they may not qualify 
for entry into, or full participation in, the general category scallop 
fishery. The intent of the control date was to deter individuals from 
unduly investing in or relying on this fishery without full and fair 
warning of the consequences of future limitation on access to the 
fishery.
    The social and economic impacts on qualified vessels and all of the 
fishery participants will be positive over time as the general category 
fishery is better integrated into the management program of the FMP, 
which strives to maximize yields through Area Rotation Program, effort 
controls, and restrictions on the general category fleet. Although 
limited access is one of the most controversial management programs to 
implement, limited access and the associated measures in Amendment 11 
are necessary to ensure a sustainable scallop fishery.
    Comment 6: Several commenters stated that Amendment 11 will 
eliminate the small vessels in the fishery and allow large vessels and 
large fishing operations to continue. Commenters urged NMFS to allow 
both small and large vessel operations to continue in the scallop 
fishery. One commenter believes that Amendment 11 will do irreparable 
harm to several small fishing businesses that do not deserve to be 
closed out and believes that many provisions in Amendment 11 may be 
inconsistent with Federal laws mandating equal treatment of permit 
holders.
    Response: The source of concern that small vessels will be 
eliminated is not clear. The Council recognized this potential impact, 
particularly with an IFQ fishery, and designed Amendment 11 consistent 
with its vision to ``* * * maintain a fleet made up of relatively small 
vessels, with possession limits to maintain the historical character of 
the fleet * * *.'' To achieve this, Amendment 11 includes provisions to 
promote the continued operations of small operations. A vessel may only 
be allocated up to 2 percent of the TAC allocated to all IFQ vessels 
combined, and an individual may own only up to 5 percent of the TAC 
allocated to all IFQ vessels. The 400-lb (181.4-kg) possession limit 
also remains under Amendment 11. These factors should ensure only 
minimal shifting to large-scale operations and that the small-vessel 
character of the fleet is maintained. While some consolidation is 
possible through the IFQ transfer program, it is unlikely, with the 
percentage allocation limits, that the fishery will evolve into a large 
vessel or large-scale operations fishery. Based on these analyses, NMFS 
determined that Amendment 11 is consistent with all National Standards, 
including National Standard 4 (which requires management measures to be 
fair and equitable, but which recognizes that fishing privileges may 
need to be allocated among fishermen), and National Standard 8 
(requiring management measures to minimize adverse economic impacts, to 
the extent practicable, on fishing communities).
    Comment 7: An individual representing fishing vessel owners from 
New Jersey commented on behalf of the fishermen that they are 
supportive of the proposed amendment and options implementing a limited 
access program with IFQs, in trips or pounds, based on a vessel's 
landings in its best year from 2000 to 2004. The group of fishermen 
supported measures in Amendment 11, except that they would prefer a 
qualification landings criterion of 5,000 lb (2,268 kg), rather than 
1,000 lb (453.6 kg), because it would allow the IFQs to be better 
distributed among a smaller number of vessels. The comment urged NMFS 
to implement IFQs as soon as possible and provided suggestions on how 
appeals could be handled to expedite the process during the transition 
period. Other suggestions on alternatives were also provided in the 
comment letter.
    Response: NMFS agrees with the comments supporting Amendment 11 
measures and approved Amendment 11. However, under the Magnuson-Stevens 
Act, NMFS cannot implement substantial measures that were not adopted 
by the Council or that are inconsistent with Amendment 11. NMFS may 
only approve, disapprove, or partially approve an amendment submitted 
by the Council. NMFS will ensure that the IFQ program is implemented as 
soon as possible. NMFS intends that the IFQ program will be implemented 
on March 1, 2009, as intended in Amendment 11.
    Comment 8: One individual commented that some scallop permit 
holders are not aware of how Amendment 11 will impact them.
    Response: Amendment 11 was developed over the course of 
approximately 2 years through a public process, including 35 meetings 
open to the public. The Council's development was well publicized by 
the Council and general and industry-focused media. Therefore, it is 
not clear how any individual with a stake in the fishery could have 
been completely unaware of Amendment 11 and its impacts. Once adopted 
by the Council, NMFS published a proposed rule and made the FSEIS 
available for public review. The FSEIS described and analyzed the 
impacts of all of the measures and alternatives and has been available 
in its final form since November 2007. In such a highly regulated 
fishery, it is a vessel owner's responsibility to understand current 
and upcoming regulations and the impacts that the proposed regulations 
may have on the vessel's ability to continue fishing.
    Comment 9: One individual commented that Amendment 11 does not 
address problems that it will create in terms of loss of jobs.
    Response: NMFS acknowledges that Amendment 11 will have some 
negative impacts, particularly on owners of vessels that do not qualify 
for the limited access general category scallop permit. However, NMFS 
concluded that the limited access program, including the use of the 
November 1, 2004, control date as a cutoff for eligibility, is a 
necessary component of a comprehensive management approach to control 
capacity and fishing mortality in the general category scallop fishery. 
NMFS considered all of the impacts relative to the sustainability of 
the scallop fishery and the FMP's objective to maximize scallop yield, 
as well as the impacts on fishery participants. The analysis supporting 
Amendment 11 demonstrates that uncontrolled entry and effort levels in 
the general category

[[Page 20098]]

fishery cannot continue. Without controls on access to the fishery, a 
large number of vessels would continue to exceed estimated catch levels 
and compromise our ability to effectively manage the scallop fishery 
overall. Also, without the constraints in Amendment 11, the general 
category fishery could contribute to excess fishing mortality on the 
scallop resource. Amendment 11 concludes that the long-term economic 
and social impacts would be negative if open access continues in the 
general category fishery. Based on these analyses, NMFS determined that 
Amendment 11 is consistent with National Standard 4, regarding fairness 
and equity, and National Standard 8, requiring measures to minimize 
adverse impacts, to the extent practicable, on fishing communities.
    Comment 10: One individual commented that the general category 
fishery has less environmental impact on the ocean than the limited 
access component of the fishery and that Amendment 11 is therefore not 
necessary.
    Response: An FSEIS, describing and analyzing the environmental 
impacts of the proposed and alternative measures, was completed for 
this action. Although reduced fishing time associated with the 
relatively low 400-lb (181.4-kg) possession limit has less 
environmental impact compared to higher catches associated with DAS 
vessels, the general category fishery as a whole contributes to the 
environmental impacts of the fishery, both in terms of effects on 
essential fish habitat (EFH) and bycatch. While it may be true that a 
general category vessel may not have as much impact on the environment 
as a DAS vessel, the commenter's argument is not valid in the context 
of Amendment 11. The effects of Amendment 11 are cumulative, in 
particular if participation and effort expand under an open access 
fishery.
    Comment 11: One individual commented that analyses in Amendment 11 
are flawed; specifically those that conclude that general category 
vessels are less efficient and can fish more days per year than limited 
access vessels, that Amendment 11 would provide benefits to the nation, 
and positive impacts on general category vessels overall.
    Response: Amendment 11 includes thorough descriptions of the 
scallop fishery and participating vessels, and analyses of the impacts. 
Analytical models predict the economic benefits and costs of all of the 
alternatives considered in Amendment 11. The analyses and models are 
based on information gathered throughout the development of Amendment 
11. These analyses were revised and perfected throughout the 
development process and were available for public review during the 
public meetings held on Amendment 11.
    Comment 12: One commenter stated that controls on the general 
category fishery were considered by the Council initially out of 
concern over a large increase in active vessels, but not as a result of 
overfishing caused by the general category fleet.
    Response: The relatively rapid and large increase in the size of 
the active general category fleet concerned both NMFS and the Council 
and resulted in the development of Amendment 11. The reason that such 
an increase was a concern is that the level of general category fishing 
continually exceeded the estimated level of fishing that was 
incorporated into annual management measures that were designed to 
achieve target fishing mortality rates. By exceeding the estimated 
catch, the unconstrained general category fishery was a threat to 
meeting the fishing mortality targets and the Magnuson-Stevens Act 
requirement to prevent overfishing. Therefore, while overfishing may 
not have been caused only by the general category fleet, the 
unconstrained expansion and effort in the fishery, combined with full 
utilization of effort and trips by the limited access fleet, 
contributed to overfishing in the years when overfishing was occurring.
    Comment 13: One individual stated that Amendment 11 allows an 
inequity to continue by maintaining more restrictive gear size 
restrictions in the Southern New England (SNE), Gulf of Maine, and 
Great South Channel sea scallop exemption areas that do not apply west 
of 72[deg]20' N. lat. In addition, the commenter stated that there are 
differences in bycatch in these areas that were not addressed in 
Amendment 11. The commenter believes that the perceived inequity will 
do serious harm to many vessels in the northern half of the general 
category scallop fishery.
    Response: The scallop dredge exemption areas referenced in the 
comment have been implemented under the Northeast Multispecies Fishery 
Management Plan (NE Multispecies FMP) to ensure that bycatch of 
regulated multispecies in the scallop dredge fishery does not 
compromise rebuilding efforts in the NE Multispecies FMP. Other than 
the dredge size restriction in the NGOM Scallop Management Area, 
Amendment 11 does not have different gear restrictions for different 
areas. However, Amendment 11 does recognize that the NE Multispecies 
FMP has restricted when and where general category scallop vessels can 
fish in terms of the description of the fishery and by incorporating 
data from the fishery overall. Nevertheless, modifying gear 
restrictions that have been implemented under the NE Multispecies FMP 
is outside of the scope of Amendment 11.
    Comment 14: Several comments suggested that Amendment 11 is not 
necessary because the scallop resource is in good condition. Many 
references were made to the 45th Stock Assessment Workshop and Stock 
Assessment Review Committee report (June 2007) (SAW 45), which 
concluded that the scallop fishery was not overfished in 2006 and 
overfishing was not occurring that year. Commenters stated that, based 
on the conclusions of SAW 45, the measures in Amendment 11 are not 
necessary because the general category fishery is not causing 
overfishing. One individual commented that, with general category 
landings only equal to about 12 percent of the catch, the adverse 
impacts of these vessels are unclear.
    Response: Amendment 11 does not state that the general category 
fishery caused overfishing historically. Until Amendment 11, an 
estimated amount of fishing effort and fishing mortality from the 
general category fleet was calculated into estimated catch levels and 
effort allocations for the limited access scallop fleet. Amendment 11 
recognizes that, without controls on the number of participants, the 
general category fleet can expand, especially when the resource 
conditions are very good. In these instances, the effort and catch in 
the general category fishery would likely be underestimated and could 
contribute to overfishing if combined with full utilization of limited 
access effort. Other types of controls, such as an overall TAC, were 
considered in Amendment 11 and prior FMP actions (Framework 18 and 
Amendment 10, specifically), but rejected because, without a limit on 
the number of participants, the general category fleet would have the 
capacity to rapidly harvest the TAC. This would not maximize yield, 
would promote derby and unsafe fishing conditions, and would be 
inconsistent with the FMP.
    Comment 15: Several individuals commented that general category 
vessel caught scallops are fresher and are more in demand than scallops 
from limited access boats that are at sea for several days at a time. 
Commenters were concerned that Amendment 11 would eliminate this higher 
quality product from the markets.

[[Page 20099]]

    Response: The FMP does not manage the scallop resource relative to 
condition of the scallops for sale to the seafood market. While other 
Federal programs are focused on ensuring seafood quality, the role of 
the FMP is to maximize yield from the resource while maintaining a 
sustainable fishery. Landings of scallops from both the limited access 
and general category fleets command a high market price, and high 
product quality is sought in all markets. The relative quality of the 
landings between the general category and limited access fleets is not 
a factor in the decision on Amendment 11.
    Comment 16: One commenter stated that scallop trip boats have 
control over the scallop fishery, which creates hardship on general 
category scallop vessel owners and families who depend on this for 
their livelihood.
    Response: It is not clear from the comment how the limited access 
fleet and fishery creates hardships on the general category fleet and 
the vessel owners' families. Since the implementation of limited access 
in 1994, vessels with limited access scallop permits have historically 
landed as much as 98 percent of the scallop catch, and about 85 percent 
of the catch, more recently. The limited access scallop fleet, 
therefore, does control, and has the most impact on, many aspects of 
the fishery, including market price, fishing mortality, and overall 
impacts. However, the general category fishery is an important 
component of the scallop fishery that contributes to overall fishing 
mortality and conditions in the fishery that the Council and NMFS must 
address. Amendment 11 achieves this goal, while allowing both the 
limited access and general category fleets to harvest the portion of 
the catch that reflects historical average shares (with a slight 
increase in the general category share and decrease in average limited 
access share).
    Comment 17: One individual commented that flexibility in fishing 
practices is necessary for small vessel owners to continue to make a 
living fishing. The commenter stated that, if a fishery becomes 
difficult or impossible to pursue, the small vessel must shift to 
another fishery, but that Amendment 11 would take away the opportunity 
to shift between fisheries.
    Response: NMFS must manage the scallop fishery to ensure that the 
fishery remains sustainable. While NMFS understands that fishing 
opportunities are becoming more limited, it cannot compromise the 
sustainability of one fishery in order to allow vessel owners to enter 
another fishery.

Control Date and Limited Access

    Comment 18: Several commenters supported the inclusion of the 
control date as a qualification criterion for the general category 
fishery.
    Response: NMFS has approved the limited access program based on the 
November 1, 2004, control date.
    Comment 19: Two individuals commented that, because they were not 
aware of the November 1, 2004, control date, they purchased vessels 
and/or scallop fishing equipment, investing substantial amounts of 
money into the fishery. These comments indicated that NMFS's Federal 
fishery permit application packages should have included information 
about the control date to warn applicants. They expressed concern that 
Amendment 11 would eliminate them from the fishery because they entered 
after the control date and asked that NMFS not use the control date or 
qualification criteria to qualify vessels.
    Response: Not including the control date information on permit 
application packages does not invalidate the control date, nor does it 
warrant expansion of the limited access qualification criteria to 
include the period after the control date. The control date was 
published in the Federal Register on November 1, 2004, announced to all 
permit holders, and posted on the NMFS Northeast Region's Web site. It 
was also announced and discussed in various fisheries publications 
throughout the region (e.g., Commercial Fisheries News and National 
Fisherman, two of the most widely known publications for fisheries in 
the region and nationwide). Individuals that are engaged in a Federal 
fishery should be aware of the highly regulated nature of the industry. 
While there is no legal requirement to establish a control date, the 
control date's purpose was to provide fishers with advance notice that 
they may not qualify for entry into, or full participation in, the 
general category scallop fishery, with the intent that individuals 
would not unduly invest in or rely on this fishing without full and 
fair warning of the consequences of a limited access fishery. Based on 
the increase in catch and vessels demonstrated in the Amendment 11 
FSEIS, it appears that even the period after the control date was 
viewed as an opportunity to fish for scallops and accrue income, even 
if temporary. Despite their knowledge of the control date, a large 
number of vessel owners entered the fishery because of the short-term 
profits that could be accrued. This post-control date expansion of the 
fishery was a primary concern of the Council during development of 
Amendment 11.
    Comment 20: One individual commented that NMFS should have stopped 
issuing general category permits in 2004.
    Response: NMFS cannot implement a moratorium on permits (i.e., a 
limited access permit program) without the approval of the majority of 
the voting members of the Council, as specified in section 304(c)(3) of 
the Magnuson-Stevens Act. After publication of the control date, NMFS 
encouraged the Council to develop management measures to control the 
general category fishery with consideration of the control date.
    Comment 21: One commenter suggested that vessels in the SNE region 
be allowed to appeal for a lower qualification amount based on 
investment in the fishery and some unspecified amount of landings, 
since an area in SNE was opened to general category scallop vessels in 
May 2004. The commenter stated that allowing such vessels to qualify 
through expanded qualification criteria or through the appeals process 
would not add many vessels, but could help a few vessels that depend on 
the scallop fishery for some of the year. The commenter believes that 
additional effort from these vessels would be minimal, and that the 
NGOM should not be treated differently than other areas.
    Response: The reasons that area-specific management and 
qualification criteria were not considered, with the exception of the 
NGOM Scallop Management Area, are described in the responses to 
Comments 12 and 42.
    Comment 22: A general category vessel owner expressed concern that 
Amendment 11 does not evaluate the number of qualifying vessels that 
have been inactive since the 2000 through 2004 qualification period, 
and does not consider the impact on the fishery or current 
participants.
    Response: Amendment 11 enables vessels that have not been active 
since the qualification period to qualify for an LAGC permit based on 
their fishing history prior to the control date. The Amendment 11 FSEIS 
fully analyzes the impacts on qualifying vessels, which the FSEIS 
evaluates based on fishing history during the qualification period. 
During NMFS's review of permit applications, some vessels may emerge 
that have not been recently active, but the Amendment 11 FSEIS has 
evaluated the impacts on the resource, the fishery, the participants, 
and the environment relative to the vessels that meet the qualification 
criteria, which includes

[[Page 20100]]

vessels that have not been active after the control date.
    Comment 23: Two general category scallop vessel owners expressed 
concern about the lack of broad appeals criteria in Amendment 11 that 
would allow appeals outside of simple discrepancies between dealer and 
owner records, and to address circumstances relative to re-rigging and 
new construction, which would protect fishermen who were in the re-
rigging process when the control date was implemented. The commenters 
question the exclusion of such a provision when the scallop resource is 
in good condition, whereas it was adopted in Amendment 4 to the FMP 
when the resource was in one of its worst historical conditions. The 
commenters raised concern about the decisions of managers involved in 
the process, relative to the qualification and appeals process.
    Response: This issue was discussed during the Council's development 
of Amendment 11 and the final Amendment 11 document did not include a 
re-rigging provision. The Council determined that it would be difficult 
to consider legitimate re-rigging for scallops, given the ease of 
converting a vessel to be a scallop vessel. In addition, the Council 
was concerned about the large influx of vessels and increased landings 
in 2005, which presumably included vessels that re-rigged for 
scalloping in 2004. The Council was concerned that, if a re-rigging 
clause were included, and vessel owners could show landings in 2005, it 
would be easy for someone to claim that they were re-rigging their 
vessel prior to the control date. The high landings in 2005 would 
result in more qualifiers and less ability to allocate IFQ consistent 
with qualifiers' historical levels of landings. Although re-rigging 
provisions were considered in other limited access programs, the 
Council had no obligation to include such a provision in Amendment 11, 
and provided a valid reason for excluding the provision in Amendment 
11.
    Comment 24: An individual commented that VTR data should be able to 
distinguish between a vessel's state and Federal waters landings to 
avoid qualifying vessels, or setting their IFQs, based on landings from 
state waters.
    Response: It is not clear why qualifying a vessel that had state 
waters landings of scallops while it held a Federal general category 
scallop permit is inconsistent with the goals of Amendment 11. If a 
vessel was issued a Federal scallop permit, all landings would have 
been considered for determinations of fishing mortality for the scallop 
resource overall.
    Comment 25: One individual commented that limited access scallop 
vessels should not be allowed to continue to fish with a general 
category permit or under general category rules under Amendment 11. The 
commenter believes that the issue was not sufficiently considered by 
the Council.
    Response: Amendment 11 was the second action in which the Council 
considered restrictions on limited access vessels fishing under general 
category rules. Under Amendment 10 to the FMP, the Council recommended 
that the limited access fleet be prohibited from landing scallops 
outside of DAS or access area trips. However, the Council recommended 
this measure as a way to prevent overfishing despite information 
showing that the limited access fleet harvested less than one half of a 
percent of the scallop catch while fishing outside of DAS. NMFS 
disapproved the measure because the reason the Council provided for 
including the measure was not supported by the information in Amendment 
10. Amendment 11 recognizes that some limited access vessels, including 
part-time and occasional scallop vessels, have relied on this portion 
of their catch historically. Therefore, maintaining the allowance for 
limited access vessels to harvest scallops with an LAGC scallop permit 
is consistent with Amendment 11's goal to preserve the historical 
participants in the general category scallop fishery.
    Comment 26: One individual commented that he has fished for 
scallops for approximately 30 years and will not qualify for an LAGC 
permit. The commenter expressed concern that Amendment 11 does not 
allow appeals based on hardships.
    Response: NMFS has opposed ``hardship'' grounds for appeal unless 
the Council recommends objective criteria for determining what 
qualifies as ``hardship.'' Without such criteria, NMFS would be forced 
to determine which vessels qualify and which do not by exercising its 
discretion in a very subjective way. This would lead to unpredictable 
numbers of qualifying vessels, which would make it difficult, if not 
impossible, to predict the efficacy of the limited access system 
achieving its objectives. NMFS believes that this kind of decision 
should be made and recommended by the Council, consistent with the 
Magnuson-Stevens Act. Because ``hardship'' is very difficult to define 
in advance and apply in one case to another, the Council has not been 
able, or willing, to develop such appeal criteria. Therefore, Amendment 
11 contains only objective appeal criteria, allowing appeals to be 
based only on the grounds that the denial of the application for an 
LAGC scallop permit was based on incorrect information.
    Comment 27: One individual commented that the control date caused 
the increase in fishing effort in the general category fishery after it 
was announced.
    Response: NMFS and the Council acknowledge that fishing effort and 
participation in the general category fishery increased substantially 
after the control date, although one of the express purposes of the 
control date was to curtail speculative entry into the fishery. Based 
on the increase in catch and active general category vessels identified 
in the Amendment 11 FSEIS, it appears that even the period after the 
control date was viewed as an opportunity to fish for scallops and 
accrue income, even if temporary. Despite the knowledge of the control 
date, and the fair warning they received concerning the potential 
ineligibility to fish, a large number of vessel owners entered the 
fishery to reap the short-term profits that could be accrued. This 
post-control date expansion of the fishery was a primary concern of the 
Council during development of Amendment 11 and guided it, in part, in 
choosing management measures. Allocation between IFQ scallop vessels 
and limited access scallop vessels.
    Comment 28: An individual commented that Amendment 11 violates 
National Standard 4 because limited access vessels receive a 
disproportionately high allocation and that, under Amendment 11, one 
individual limited access boat owner will be allowed to harvest more 
than the entire general category fleet combined. Another commenter was 
concerned that the allocation of 5 percent to the general category 
fleet is disproportionately high.
    Response: Amendment 11 developed an allocation for the general 
category fleet that is consistent with the historical average catch 
while allowing some expansion to account for the growth in the fishery. 
Limited access vessels have been allocated the majority of the scallop 
catch through DAS and access area trips. To allocate substantially more 
scallop catch than the historical average to the general category fleet 
would not be equitable because it would not be consistent with catch in 
the limited access fishery or the general category fishery. Amendment 
11 allocates 5 percent of the total scallop catch to general category 
vessels based on the historical average landings. While that average is 
about 2.5 percent,

[[Page 20101]]

Amendment 11 allocates 5 percent in recognition of the changes that the 
general category fishery has experienced, and to allow some expansion 
from the historical average. This rationale is entirely consistent with 
National Standard 4 guidelines, which allow allocating fishing 
privileges to some, at the expense of others, in order to achieve 
biological objectives; and it is consistent with section 303(b)(6) of 
the Magnuson-Stevens Act, which allows establishment of a limited 
access system after taking into account such factors as historical 
fishing practices, present participation, and economics of the fishery.
    Comment 29: One commenter opposed an allocation of scallop TAC to 
the general category fishery, including the quarterly TAC during the 
transition period, and supported a target TAC that would be maintained 
through continuation of the 400-lb (181.4-kg) possession limit. The 
commenter believes that it is inappropriate to establish a TAC for the 
general category fishery until inequities involving vessels that fished 
more recently in the SNE scallop dredge exemption area. The commenter 
stated that the quarterly TAC during the transition would result in 
southern states rapidly harvesting the TAC, thus disadvantaging vessels 
from New England.
    Response: Without an overall TAC, the general category fishery 
would continue to be unconstrained. Furthermore, new Magnuson-Stevens 
Reauthorization Act provisions for annual catch limits require that all 
catch from fisheries managed by FMPs be accounted for, and that 
measures to prevent exceeding that catch level must be implemented. 
Although these new requirements must be implemented by 2011 for the 
FMP, including provisions to meet the new requirement in Amendment 11 
reduces the amount of issues the Council will need to consider in a 
future action to bring the FMP into compliance with the new 
requirement.
    Comment 30: One commenter opposed the cost recovery program 
included in Amendment 11 because the commenter does not believe that 
general category vessel owners should be required to pay to go to work. 
The commenter questioned why the general category fishery would be the 
first fishery that would be subject to the requirement, when fuel and 
insurance costs are increasing.
    Response: The Magnuson-Stevens Act requires NMFS to implement a 
cost recovery program to collect up to 3 percent of the ex-vessel value 
of IFQ landed scallops to help recover costs directly related to the 
management, data collection, and enforcement of the IFQ program. The 
cost recovery program in the IFQ general category scallop fishery will 
be one of the first cost recovery programs in the Northeast Region; 
cost recovery programs are also in development for the surfclam and 
ocean quahog ITQ program and a tilefish ITQ program being developed by 
the Mid-Atlantic Fishery Management Council. Similar programs have 
already been implemented in the Alaska and Southeast Regions.
    Comment 31: A general category scallop vessel owner commented that 
the allocation of 5 percent to the general category fleet under 
Amendment 11 only recognizes bycatch of scallops in other fisheries and 
does not represent an equitable allocation to vessels that direct 
fishing on scallops.
    Response: Amendment 11 analyzed a range of allocations from 2 to 11 
percent of the total scallop catch and recommended a level that fairly 
reflects past and current landings. These values were based on 
historical landings by the general category fleet, and as such, 
included directed trips and trips on which scallops were caught as 
incidental catch. Although an allocation of 5 percent of the catch is 
less than the catch by the general category fishery in recent years, it 
is higher than the historical average of 2.5 percent and allows for 
some expansion from historical fishing levels.
    Comment 32: One individual commented that the Council should have 
used recent years and future projections to determine the general 
category share of the scallop catch, rather than basing the catch on a 
level consistent with a depleted resource.
    Response: Amendment 11 included a range of allocation for the 
general category scallop fishery, from 2 to 11 percent, based on 
historical amount of catch, including more recent levels. The Council 
determined that 5 percent would best reflect the historical level of 
general category catch while accommodating some expansion from the 
historical level. The Council determined that the higher level of catch 
would not reflect the historical average catch of the fishery.
    Comment 33: An industry representative commented that Amendment 11 
included a 10-percent allocation to the general category fleet while 
the fishery is in transition to the IFQ program for the 2008 fishing 
year only. The industry representative commented that the Council 
authorized up to a 2 fishing year transitional 10-percent allocation in 
Amendment 11, but recommended a 1-year transitional 10-percent 
allocation in Framework 19.
    Response: NMFS disagrees that the transitional period was intended 
to be in place only for the 2008 fishing year. The Amendment 11 
document is clear in Section 3.1.2.8 that the transition period, 
regardless of length, would have the same allocation strategy. While 
the Council and NMFS do not expect the IFQ program to be delayed beyond 
the 2009 fishing year, NMFS cannot predict the amount of time that it 
will actually take to determine all of the qualified IFQ scallop 
vessels and cannot therefore confirm that the IFQ program can be 
implemented in the 2010 fishing year at the latest. Because the 
Amendment 11 document does not specify that transition measures would 
be different after 2009 fishing year, the final rule specifies that the 
10-percent allocation, divided into quarterly TACs, would remain in 
effect for the duration of the transition period, regardless of when 
the transition period ends. The Council's decisions relative to 
allocations in Framework 19 presumed that the IFQ program would be in 
place, but do not supersede the decision in Amendment 11 to have 
consistent management measures in place for the duration of the 
transitional period.
    Comment 34: An industry representative commented that the appeals 
process during the transition should not result in a delay of the IFQ 
program. The commenter believes that all categories of appeal should be 
able to be addressed relatively quickly by NMFS and questions whether 
the 10-percent allocation during the transition to accommodate 
appealing vessels is justified, since the majority of appellants would 
be appealing to make the minimal qualification amount of 1,000 lb 
(453.6 kg).
    Response: In order to allocate IFQs with the formula adopted by the 
Council, NMFS must know every qualifying IFQ vessel, since each 
vessel's IFQ is based, in part, on every other vessel's contribution to 
the overall scallop landings. For a period of time after 
implementation, NMFS will be conducting appeals and issuing new permits 
to vessels as appeals are approved. Appeals can be difficult to 
complete quickly, regardless of the reason. NMFS cannot predict how 
long the process of determining every qualified IFQ vessel will take. 
Based on previous limited access programs implemented by NMFS, it is 
possible that finalizing appeals will take more than 1 year. NMFS will 
attempt to resolve appeals in time to implement the IFQ program on 
March 1, 2009. The Council also provided no mechanism to allow the IFQ 
to be implemented mid-year.

[[Page 20102]]

IFQ

    Comment 35: One individual commented that the IFQ referendum 
required under the reauthorized Magnuson-Stevens Act should have been 
completed, despite the fact that the Council approved Amendment 11 
before the referendum was required.
    Response: The referendum was not required for any IFQ program for 
which final action had been taken by the Council before July 11, 2007, 
6 months after the Magnuson-Stevens Act was reauthorized. This delay 
allowed the Council to continue considering an IFQ program, which it 
had included in Amendment 11 well before the Magnuson-Stevens Act was 
reauthorized, without having to be concerned about how a referendum 
would be handled and what the impacts might be.
    Comment 36: One comment, endorsed by 31 general category and 
limited access scallop vessel owners, stated that Amendment 11 would 
result in a reduction in catch of about 40 percent or more to a 
fisherman that is 100-percent dependent on the fishery.
    Response: A vessel's IFQ will be based on its best year during the 
qualification period, indexed by a factor based on the number of years 
the vessel was active during the qualification period. Because landings 
have increased in the years since the control date, including overall 
landings and landings by vessel, it is likely that some vessels may not 
be allocated catch that is consistent with recent landings. However, 
such reductions are necessary to ensure that all IFQ vessels are 
allocated a fair share of the TAC allocated to the IFQ fleet, and that 
TAC objectives are met. Amendment 11 fully analyzed the impacts of 
these measures on fishing fleets.
    Comment 37: One individual commented that IFQs are an attempt to 
try to hide overfishing that is presently occurring in the scallop 
fishery.
    Response: The measures in Amendment 11, including the limited 
access and IFQ programs, are intended to prevent overfishing. It is not 
clear why an IFQ program would ``hide'' overfishing.
    Comment 38: One commenter preferred that IFQ could be stacked on a 
vessel up to 2.5 percent of the TAC, rather than the 2 percent 
proposed. The commenter stated that allowing 2.5 percent of the TAC to 
be combined on one vessel would make the general category fishery more 
efficient, more manageable, and more sustainable, and would result in 
fewer vessels in the fishery, less paperwork, and would make the 
fishery more fuel efficient. The comment stated that there should not 
be a limit on the number of permits that can be stacked to achieve the 
2.5-percent limit in order to allow fishermen that depend on the 
fishery to achieve a higher share or stake in the fishery if they 
decide to. The commenter stated that this would give back to the 
general category dependant fisherman more of his/her historical 
participation. The comment was endorsed by 31 general category and 
limited access scallop vessel owners.
    Response: Although the Council did not specifically consider an 
alternative that would allow stacking up to 2.5 percent, it did 
consider a sufficient range of levels and NMFS approved the level 
selected. Under the Magnuson-Stevens Act, NMFS cannot implement an 
alternative as part of Amendment 11 that was not recommended by the 
Council. The Council did consider a cap of 60,000 lb (27,216 kg) or 150 
trips per vessel, but determined that, if the overall TAC was very low 
in a particular year, setting the cap in pounds or trips could result 
in excessive (or insufficient) consolidation on one vessel. The cap in 
terms of percent of overall TAC allowed the value of the cap to adjust 
consistent with the TAC.
    Comment 39: A general category vessel owner preferred a 10-percent 
index value for best year and stated that a vessel that has fished 
multiple years and is being rated by its best year should not be given 
a baseline number that is more than that of a vessel that has fished 
only 1 year, if a weighted average must be chosen.
    Response: These types of concerns and different alternatives were 
weighed and considered by the Council in developing Amendment 11 and by 
NMFS in approving the amendment. Amendment 11 recognizes that some 
vessels relied more on the scallop fishery than others and provides 
those vessels with more weight in their IFQ determination based on the 
importance of the fishery to the vessel. The approved index values 
result in IFQ allocations that give more weight to vessels that 
depended on the fishery for more time during the qualification period.
    Comment 40: One commenter opposed the IFQ contribution factor 
because of inequities between various regions of the fishery 
(particular focus on the SNE scallop fishery), and suggested that there 
should be a SNE exemption to alleviate the problems. The commenter 
stated that allocation should be one-to-one, presumably meaning that 
the amount caught during the historical period would be the amount 
allocated. The commenter stated that, with the contribution factor 
based on best year and years active, SNE vessels should be exempt with 
a one-to-one allocation. Another general category scallop vessel owner 
echoed this comment, stating that the reason that such vessels should 
be exempted from the contribution factor is that the SNE exemption was 
only open for 6 months prior to the control date.
    Response: These types of concerns and alternatives were weighed and 
considered by the Council in developing Amendment 11 and by NMFS in 
approving the amendment. Some of the reasons that area-specific 
management and qualification criteria were not selected, with the 
exception of the NGOM Scallop Management Area, are described in the 
responses to Comments 12 and 42. Amendment 11 includes an index factor 
based on the years a vessel was active during the qualification period 
to adjust a vessel's contribution to the IFQ. This adjustment provides 
additional contribution for vessels that were active in, and relied 
more on, the scallop fishery for a longer period of time. A one-to-one 
contribution may not represent a fair allocation. As an example, a one-
to-one contribution factor would make a vessel with only 1 year active 
in the scallop fishery equal to a vessel with the same best year 
landings but that was active for 5 years during the qualification 
period.
    Comment 41: An industry representative commented that the 
qualification criteria and individual allocation in pounds would help 
ensure that more active participants will achieve more significant 
allocations while scaling back general category effort overall. The 
industry representative commented that the scale-back of effort is 
appropriate, given the reductions in effort for the limited access 
fleet. The industry representative also commented that individual 
allocations and the IFQ transfer provisions accommodate general 
category vessel owners' concerns about maintaining participation in the 
fishery.
    Response: NMFS agrees that the qualification criteria and 
allocations provide for appropriate distribution of the IFQ scallop 
fishery TAC to qualifiers and that the TAC represents an appropriate 
reduction of catch relative to more recent years in the general 
category scallop fishery. NMFS also agrees that the IFQ provisions, 
including the IFQ transfer provisions, provide IFQ scallop vessel 
owners with sustainable fishing opportunities under Amendment 11.

[[Page 20103]]

Sectors

    Comment 42: Several commenters supported sectors, but one 
individual expressed concern that NMFS and fishermen are not prepared 
for their complexity for management and enforcement.
    Response: NMFS is concerned about the potential for increased 
volume in sector proposals from both the scallop and multispecies 
industry. However, NMFS has approved the sector mechanism under 
Amendment 11 because it can result in effective and cooperative 
management of the IFQ scallop fishery. NMFS is preparing for the 
expansion of sector management through its Amendment 11 implementation 
strategy, combined with efforts to improve review and coordination of 
sector proposals and plans in the Northeast Regional Office.
    Comment 43: An industry representative supports the prohibition on 
exemptions under the sector provisions.
    Response: Although the Council could consider exemptions under the 
sector provisions consistent with its sector guidelines, it chose not 
to include exemptions in order to preserve the characteristics of the 
historical general category scallop fishery while allowing sector 
management.

NGOM Scallop Management Area

    Comment 44: A fishing industry representative urged NMFS to 
disapprove the NGOM Scallop Management Area because it would have 
disproportionate and negative impacts on vessels that qualify for an 
IFQ scallop permit that also have a history of fishing in the NGOM 
area. The representative states that, for IFQ scallop vessels, the 
lower possession limit in the NGOM area disadvantages IFQ scallop 
vessels because it is inconsistent with the higher (400-lb (181.4-kg)) 
possession limit in the rest of the general category scallop fishery. 
The commenter was concerned because the proposed rule implied that a 
vessel qualified for an IFQ scallop permit could opt for an incidental 
scallop permit instead, allowing the vessel to take ``unlimited'' trips 
at 40 lb (18.1 kg) each, although this would not apply to the NGOM 
where the fishery would be closed to all scallop harvest once the TAC 
is harvested.
    Response: The comment implies that vessels that qualify for IFQ 
scallop permits that have fished in the NGOM are confined to fishing 
within that area and there are no other alternatives for such vessels. 
To the contrary, the IFQ scallop permit allows maximum fishing 
flexibility within the general category scallop fishery under Amendment 
11. Not only can IFQ scallop vessels fish under their IFQ in any area 
open to scallop fishing, but if an owner chooses, he/she can transfer 
the IFQ to another IFQ scallop vessel. This provides an owner the 
option of fishing in other areas, or negotiating a business agreement 
to transfer the IFQ. On the other hand, vessels that do not qualify for 
the IFQ scallop permit have only the option of fishing in the NGOM or 
under the Incidental scallop permit. Further, the FSEIS for Amendment 
11 demonstrates that the reliance on the Gulf of Maine for a scallop 
fishery during the qualification period, and more recently, has been 
extremely low. The majority of scallop landings originate from more 
southern areas of the Gulf of Maine, and from Georges Bank, SNE, and 
Mid-Atlantic general category scallop fisheries. In addition, Amendment 
11 estimates that 70 vessels from Maine and 148 vessels from 
Massachusetts and New Hampshire would qualify for an IFQ scallop 
permit, with the majority of landings by those vessels coming from 
outside the boundaries of the NGOM scallop management area. To 
disapprove the NGOM for the advantage of the minority of the IFQ 
scallop fleet would result in no additional protective measures in the 
NGOM, where the fishery is distinct. This would be ineffective and 
would not meet the goal of the NGOM scallop management area to preserve 
the fishery in the area for any future fisheries that may occur. NMFS 
has therefore determined that the measures for the NGOM scallop 
management area are necessary and appropriate for the management of the 
scallop fishery. With respect to the implication that Incidental 
scallop vessels can take unlimited number of 40-lb (18.1 kg) trips, 
NMFS will clarify that would not be possible in the NGOM scallop 
management area because incidental catch is counted against the TAC and 
the possession of scallops in the NGOM scallop management area after 
the TAC has been reached is prohibited.
    Comment 45: An individual commented that the NGOM Scallop 
Management Area was created solely for residents of Maine, and that the 
NGOM Scallop Management Area is inconsistent with National Standard 4 
of the Magnuson-Stevens Act.
    Response: National Standard 4 states that measures shall not 
discriminate between residents of different states. The NGOM Scallop 
Management Area does not base any measures on being a resident of the 
State of Maine. Although the area is adjacent to the entire coast of 
Maine and may attract more Maine fishers, it also includes waters off 
of Massachusetts and New Hampshire. Furthermore, any LAGC vessel could 
fish in the NGOM Scallop Management Area under Amendment 11. The area 
is a special management area, similar to the Sea Scallop Access Areas, 
which aims to prevent overharvest of a unique portion of the scallop 
resource and was designed to allow additional fishers to qualify to 
fish in the area that may not have qualified for the IFQ scallop 
permit. The NGOM Scallop Management Area measures are therefore 
consistent with National Standard 4.
    Comment 46: The State of Maine commented on the proposed NGOM TAC 
specification. Although the comment is specific to the actual TAC 
recommended by the Council under Framework 19, the comment appears to 
take issue with the foundation of the TAC, in that it excludes landings 
from state waters. The comment provides details regarding how the State 
of Maine would prefer that the TAC be established, primarily by 
including landings by federally permitted vessels in state waters and 
landings by limited access vessels fishing in the NGOM area. Maine 
believes that, by including these sources of landings, the TAC should 
be 126,000 lb (57,153 kg) as opposed to the 70,000 lb (31,751 kg) TAC 
proposed by the Council under Framework 19. A fishing industry 
representative commented that the TAC in the NGOM cannot be calculated 
without an assessment of the biomass and appropriate fishing mortality 
rate in the area.
    Response: The value of the TAC is not specified in Amendment 11, 
but is instead proposed in Framework 19. The Council deliberated this 
issue at length for both Amendment 11 and Framework 19. Proponents 
argued, and Amendment 11 explains, that the NGOM Scallop Management 
Area is necessary as a placeholder for future scallop fishing Federal 
waters in the event that a large amount of harvestable scallops return 
to the Gulf of Maine. Based on this rationale, the Council determined 
that the TAC for the NGOM Scallop Management Area would be based on the 
``Federal portion of the resource only,'' meaning that landings from 
state waters would be excluded. Furthermore, landings by limited access 
vessels fishing under DAS were excluded because they are not a 
component of the general category landings or TAC.
    Comment 47: One commenter stated that the NGOM measures are useless 
in Amendment 11 because there are no scallops in the NGOM to be fished.

[[Page 20104]]

    Response: The NGOM Scallop Management Area would provide for 
limited fishing opportunities for vessels that do not qualify for IFQ 
scallop permits. It was also designed to be a placeholder for a future 
Federal waters fishery in the area, should the scallop resource become 
more abundant in the area. Although not currently surveyed by NMFS or 
other entities, the Gulf of Maine contains scallops and has supported a 
small fishery in recent years.
    Comment 48: One commenter supported the creation of the NGOM 
scallop management area but believes that the SNE area also deserves 
the same exemption status, with a 400-lb (181.4-kg) possession limit, 
because the area was closed to scallop fishing from 1996 through May 
2004.
    Response: The SNE exemption was implemented under the NE 
Multispecies FMP in May 2004. The NGOM Scallop Management Area appears 
to have highlighted the SNE exemption because the Council adopted area-
specific measures only for the NGOM but excluded qualification criteria 
specific to the area or for vessels that fished in the area. The NGOM 
Scallop Management Area was developed because the fishery in the area 
is different from the rest of the fishery (it is patchy and sporadic). 
Although the SNE exemption area was not opened to scalloping until 
2004, there are no noteable differences in the fishery in that area 
that would warrant special management measures. The fishery in the NGOM 
is not integrated into the overall scallop fishery to the extent other 
areas, including the SNE, are. In addition, the NGOM area is not fished 
as actively and consistently as the SNE area has been recently. In 
addition, there would be no fair or equitable way to allow more lenient 
qualification criteria for vessels that fished within the SNE exemption 
area. Vessels that fished only in the SNE exemption area for scallops 
would have relied on the scallop fishery only between May and November, 
when the area was opened and the vessels first began to fish for 
scallops. Excluding a provision specific to these vessels is consistent 
with Amendment 11's goal to limit the fishery and allocation to vessels 
that had a reliance on the scallop fishery prior to the control date.

Other Measures

    Comment 49: One commenter agrees that VMS should be required, but 
expressed concern about the cost of operating VMS units.
    Response: VMS are necessary in the general category fishery to 
track landings and activity relative to IFQs, the NGOM Scallop 
Management Area, and access areas. Most LAGC vessels are already 
operating a VMS under existing FMP requirements, or requirements under 
the NE Multispecies FMP (for vessels that do not qualify for an IFQ 
scallop permit). NMFS has estimated the cost of all new trip 
declarations and catch reports for all IFQ vessels combined to be 
approximately $15,000 annually (or about $42 per vessel annually, 
assuming 369 qualified IFQ scallop vessels). The increase in VMS 
operating costs would therefore be just over $3.00 per month, which 
NMFS considers a reasonable cost. A detailed description of the costs 
for new information collection requirements is included in the Final 
Regulatory Flexibility Analysis (FRFA).
    Comment 50: An industry representative supported continuation of 
the 400-lb (181.4-kg) possession limit to prevent against consolidation 
of general category effort and capitalization of a new offshore scallop 
vessel fleet.
    Response: NMFS agrees that the 400-lb (181.4-kg) possession limit 
is necessary to prevent capitalization of a new type of general 
category scallop fishery that is inconsistent with the Council's vision 
to maintain the small-scale characteristics of the general category 
fishery.
    Comment 51: An industry representative supports the 40-lb (18.1-kg) 
possession limit for Incidental scallop vessels to allow for incidental 
catch in other fisheries while discouraging directed fishing with the 
low limit.
    Response: NMFS agrees that the 40-lb (18.1-kg) possession limit for 
Incidental Catch scallop vessels is important to ensure that this 
sector of the general category fishery continues to focus on incidental 
catch and does not expand into a directed fishery.

Comments on Proposed Measures and Regulations

1. Vessel Permits

    Comment 52: An industry representative suggested a revision to 
Sec.  648.4(a)(2)(i)(I) to clarify that a limited access scallop vessel 
could also be issued an LAGC scallop permit because, as written, the 
industry representative believed that the regulation prohibited a 
limited access vessel from also being issued an LAGC scallop permit.
    Response: NMFS recognizes this ambiguity in the proposed rule and 
has revised the regulation to allow a limited access scallop vessel to 
be issued an LAGC scallop permit as well.
    Comment 53: An industry representative commented that in Sec.  
648.4, paragraph (a)(2)(i)(P) should be redesignated as paragraph 
(a)(2)(i)(R), because paragraphs (a)(2)(i)(P) and (Q) already are 
designated.
    Response: NMFS disagrees. In Sec.  648.4, paragraph (a)(2)(i)(O) 
was the final paragraph, and is now followed by paragraph (a)(2)(i)(P).
    Comment 54: An industry representative recommended that, in Sec.  
648.4, paragraph (a)(2)(ii) should be reworded to more clearly convey 
the intent.
    Response: NMFS agrees and has reworded the regulation to be more 
clear.
    Comment 55: An industry representative commented that, in Sec.  
648.4, paragraph (a)(2)(ii)(E) contains an incorrect reference to best 
year and years active regulations in Sec.  648.53.
    Response: NMFS agrees and has corrected the references.
    Comment 56: The Council commented that it is not clear in Sec.  
648.4(a)(2)(ii)(F) that a vessel that qualifies for an IFQ permit can 
choose not to apply for an IFQ scallop permit and instead qualify for a 
NGOM or Incidental Catch scallop permit. The Council stated that 
Amendment 11 specifies that an NGOM and Incidental Catch scallop permit 
requires a vessel to have a general category scallop permit as of 
November 1, 2004, but a vessel that qualifies for an IFQ scallop permit 
may not meet that criterion if it had a permit prior to, but not on, 
the control date. The Council confirmed that, since the qualification 
for the NGOM and Incidental Catch scallop permits are intended to be 
less restrictive, a vessel that qualifies for an IFQ permit can choose 
to apply for an NGOM or Incidental Catch scallop permit and would 
qualify for the less restrictive permit. The Council recommended that 
the regulation reflect this intent.
    Response: NMFS has revised regulatory text in Sec.  648.4(a)(2)(ii) 
to clarify that a vessel that qualifies for an IFQ scallop permit could 
be issued an NGOM or Incidental Catch scallop permit instead, even if 
the vessel did not have a permit as of the November 1, 2004, control 
date.
    Comment 57: The Council agreed with NMFS's interpretation in the 
proposed rule that limited access permit provisions would apply to all 
LAGC scallop permits.
    Response: The regulations reflect this comment and no change to the 
regulations is necessary.
    Comment 58: The Council suggested that the regulations pertaining 
to landings qualification for the IFQ

[[Page 20105]]

scallop permit be explicit that landings must have occurred as of the 
November 1, 2004, control date and not beyond in the 2004 fishing year.
    Response: NMFS has revised the regulations to be clear that all 
landings must have occurred as of the November 1, 2004, control date 
for qualification, best year, and years active determinations.
    Comment 59: The Council commented that the proposed rule preamble 
should not have stated that a vessel's IFQ scallop permit would be 
invalidated for failure to pay cost recovery fees, but rather that the 
permit would not be renewed for the subsequent fishing year.
    Response: NMFS has clarified the regulations. However, these 
provisions were more specifically discussed under the Council's 
development of Framework 19 to the FMP. Proposed regulations for 
Framework 19 describe in detail the process and consequences for non-
payment of IFQ cost recovery fees.

2. Transition to IFQ

    Comment 60: The Council commented that regulations at Sec.  
648.53(a)(2) and (3) in the proposed rule do not clearly present the 
transition measures that would apply in 2009. The Council also 
commented that the regulations should indicate that the 10-percent 
allocation to general category fleet during the transition to IFQ 
should be in effect no longer than through the 2009 fishing year. After 
2009, the general category fleet would be allocated 5 percent of the 
scallop catch. The Council commented that it never intended the 
transition to extend longer than 2 years. An industry representative 
also commented that the regulations pertaining to allocations for the 
2008 and 2009 fishing years, particularly with respect to the 
transition to IFQ, are inconsistent with the Council's intent to allow 
transition to IFQs for no more than 2 years. The industry 
representative stated that NMFS does not have the authority to extend 
the transition measures beyond 2 years because such measures were not 
adopted by the Council.
    Response: NMFS has clarified the allocations and transition 
measures for the 2009 fishing years consistent with the Council's 
intent. However, as justified in the response to Comment 33, NMFS has 
clarified in this final rule that the 10-percent allocation divided by 
quarter would remain in place for the duration of the transition 
period, even if the transition period extends beyond the 2009 fishing 
year. Despite the comments and recommendations by the Council and 
industry representative, the Amendment 11 document and discussion 
clearly supports the continuation of the transition period allocation 
of 10 percent to the general category fishery for any period after 2009 
that remains under transition. Although it is clear that the Council 
expects the transition period to last up to 2 years, there are no 
specifications in Amendment 11 for measures beyond the 2009 fishing 
year if the transition period continues. NMFS is not extending the 
transition period through the measures in this final rule, but rather 
is specifying that the Council's approved transition period measures 
would remain in place if the IFQ program cannot be implemented after 
the 2009 fishing year. Although NMFS does not expect the IFQ program to 
be delayed beyond the 2009 fishing year, it cannot predict how long it 
will take to identify the universe of IFQ scallop vessels in order to 
implement the IFQ program.

3. IFQ

    Comment 61: The Council agreed with NMFS's interpretation in the 
proposed rule that a CPH would be issued IFQ and that the IFQ 
associated with a CPH could be transferred.
    Response: The regulations reflect this comment and no change to the 
regulations is necessary.
    Comment 62: An industry representative commented that, in Sec.  
648.53(h)(4), NMFS incorrectly characterized the cost recovery 
requirement of the Magnuson-Stevens Act by stating that ``The owner of 
a vessel issued an IFQ scallop permit and subject to the IFQ program 
specified in * * * 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 industry 
representative pointed out that this is inconsistent with the Magnuson-
Stevens Act and the proposed rule preamble, which provide that industry 
may be charged up to 3 percent of the value of the landed product to 
cover actual costs related to the IFQ program and its enforcement.
    Response: NMFS agrees and has clarified this statement in this 
final rule.

4. NGOM

    Comment 63: The Council and an industry representative commented 
that the proposed rule does not consistently and properly state that 
the NGOM TAC is separate from the rest of the scallop fishery's overall 
TAC.
    Response: NMFS agrees and has clarified in this final rule that the 
NGOM Scallop Management Area TAC is separate from the TACs for the rest 
of the general category scallop fishery.
    Comment 64: The Council and an industry representative commented 
that the area definition for the NGOM must be corrected to include the 
area north of 42[deg]20[min] N. Lat. and within the Gulf of Maine 
Scallop Dredge Exemption Area, as approved by the Council.
    Response: NMFS agrees that the NGOM Scallop Management Area should 
be confined to the area north of 42[deg]20[min] N Lat. and within the 
Gulf of Maine Scallop Dredge Exemption Area and has made that change in 
the final rule.
    Comment 65: The Council commented that scallop catch by Incidental 
Catch scallop vessels should count against the NGOM TAC, consistent 
with the proposed rule.
    Response: The regulations reflect this comment and no change to the 
regulations is necessary.

5. Sectors

    Comment 66: An industry representative commented that, in Sec.  
648.63(b)(6), a phrase prohibiting the exemption from the 400-lb (181.4 
kg) possession limit should be included to provide ``absolute clarity 
that no vessel operating in a sector is exempt from the 400-lb 
possession limit.''
    Response: This revision is not necessary. The paragraph is clear 
that no exemption can be granted to sectors under the FMP except for 
relief of a vessel's own limitation of its IFQ. Singling out one 
provision for which an exemption cannot be issued would be confusing, 
since one could question why other provisions are not equally 
emphasized.

6. Other Measures

    Comment 67: An industry representative commented that, in Sec.  
648.9, the use of the phrase ``general scallop permit'' is inconsistent 
with the use of ``LAGC scallop permit'' in all other sections of the 
proposed rule.
    Response: NMFS agrees and has changed ``general scallop permit'' to 
``LAGC scallop permit.''
    Comment 68: An industry representative commented that the use of 
``general category scallop fishery'' in Sec.  648.10 is unclear and 
questioned whether the phrase has utility in light of changes in the 
proposed rule to LAGC and other new references to the limited access 
general category scallop fishery.
    Response: NMFS has not modified the regulations based on this 
comment. The ``general category fishery'' describes the fishery that is 
conducted by LAGC scallop vessels.

[[Page 20106]]

    Comment 69: An industry representative questioned the elimination 
of the regulation in Sec.  648.10 requiring the use of VMS by small 
dredge category scallop vessels.
    Response: While NMFS has eliminated the specific regulation at 
Sec.  648.10(b)(1)(iii) in the Amendment 11 final rule, Sec.  
648.10(b)(1)(i) requires that all scallop vessels, except occasional 
scallop vessels that do not fish in access areas, must operate VMS 
units. No change is therefore necessary.
    Comment 70: An industry representative commented that, in Sec.  
648.14, paragraph (a)(57)(iii)(D) appears to allow an IFQ scallop 
vessel that also holds a limited access scallop permit to possess more 
than 400 lb (181.4 kg) of scallops while fishing under the IFQ scallop 
permit and outside of scallop DAS or the Area Access Program. The 
industry representative suggested deleting the paragraph.
    Response: NMFS agrees and has removed the paragraph and re-
designated paragraph (a)(57)(iii)(E) as (a)(57)(iii)(D).
    Comment 71: An industry representative commented that, in Sec.  
648.55(a), the scallop regulations should no longer refer to ``the 
adequacy of management measures to achieve the stock-rebuilding 
objectives.''
    Response: NMFS agrees that references to rebuilding the scallop 
resource may be misleading since the scallop resource is currently 
rebuilt. NMFS has revised this section of the regulation to be more 
generic to the conservation objectives of the FMP.
    Comment 72: An industry representative suggested that, in Sec.  
648.55, paragraph (e)(1) should be revised to read ``Target total 
allowable catch and DAS changes.''
    Response: NMFS disagrees that this change is necessary. By changing 
the regulation to allow changes to target TACs and DAS, the Council 
would be precluded from establishing the hard TACs for the general 
category fleet through the framework process, since no other framework 
provision listed in Sec.  648.55(e) would allow such specification. 
NMFS concludes that ``Total allowable catch'' can be either a target or 
hard TAC.
    Comment 73: The Council agreed with NMFS's interpretation that the 
increase of the possession limit of in-shell scallops seaward of the 
VMS demarcation line should apply to all LAGC scallop permitted vessels 
rather than just the IFQ scallop vessels.
    Response: The regulations reflect this comment and no change to the 
regulations is necessary.
    Comment 74: The Council commented that, while it did not recall 
specific discussion of the change in the ownership cap, as proposed by 
NMFS in the proposed rule, it agrees with the regulatory change so that 
the regulations are consistent with the original provision in Amendment 
4.
    Response: NMFS brought this issue to the attention of the Scallop 
Committee and the Council during the final development of Amendment 11. 
NMFS used the Amendment 11 proposed rule as a mechanism to propose, 
under its authority granted by section 305(d) of the Magnuson-Stevens 
Act (16 U.S.C. Sec.  1855(d)), the regulatory amendment to make the 
ownership cap and CPH regulations consistent with the intent of 
Amendment 4 to the FMP. As a regulatory amendment promulgated under the 
authority of the Secretary, the Council need not deem the regulation 
necessary and appropriate. NMFS generally confines regulatory 
amendments to those issues that are clarifications of existing 
regulations to improve consistency with an FMP's provisions or original 
intent of a measure that was inadvertently misrepresented in the final 
regulations implementing the measure.

Changes From Proposed Rule to Final Rule

    In Sec.  648.4, paragraph (a)(2)(i)(O) is revised to correct the 
reference to the vessel replacement provisions in paragraph 
(a)(1)(i)(E) of that section.
    In Sec.  648.4, paragraph (a)(2)(ii) is revised to clarify that all 
vessels fishing for scallops must have an LAGC scallop permit, or a 
limited access scallop permit.
    In Sec.  648.4, paragraph (a)(2)(ii)(B) is revised to clarify the 
requirement that NGOM scallop vessels must fish within the NGOM scallop 
management area boundaries defined in Sec.  648.62.
    In Sec.  648.4, paragraph (a)(2)(ii)(D)(2) is revised to clarify 
that scallop landings must have occurred on or before November 1, 2004, 
and to specify the conversion rates for in-shell scallops to meat-
weight.
    In Sec.  648.4, paragraph (a)(2)(ii)(E) is revised to correct 
references to Sec.  648.53(h) for IFQ calculations.
    In Sec.  648.4, paragraph (a)(2)(ii)(F) is revised to clarify the 
requirement to have a general category scallop permit as of November 1, 
2004, and that a vessel that qualifies for an IFQ scallop permit 
automatically qualifies for an NGOM or Incidental scallop permit if the 
owner of the IFQ scallop vessel elects instead to be issued an NGOM or 
Incidental scallop permit.
    In Sec.  648.4, paragraph (a)(2)(ii)(G)(3) is revised to clarify 
the restriction on permit splitting prior to the effective date of 
Amendment 11.
    In Sec.  648.4, paragraph (a)(2)(ii)(N) is revised to clarify the 
permit splitting restriction.
    In Sec.  648.4, paragraph (a)(2)(ii)(O)(4) is revised to clarify 
the provision allowing vessels to fish under a temporary letter of 
authorization while an appeal is pending.
    In Sec.  648.9(c)(2)(D), ``general category scallop permit'' is 
replaced with ``LAGC scallop permit.''
    In Sec.  648.10, paragraph (b)(4)(iv) is revised to clarify the 
requirement for daily catch reports through VMS by vessels fishing in 
the Area Access Program.
    In Sec.  648.14, paragraph (a)(56) reference to the trip 
declaration is deleted to avoid requiring Incidental scallop vessels 
from declaring a general category scallop trip.
    In Sec.  648.14, the text in paragraph (a)(57)(iii)(D) is replaced 
with the text of paragraph (a)(57)(iii)(E), and paragraph 
(a)(57)(iii)(E) is removed. Paragraph (a)(57)(iii)(D) is revised by 
deleting the trip declaration requirement to avoid requiring Incidental 
scallop vessels from declaring a general category scallop trip.
    In Sec.  648.14, the revision of paragraph (h)(19) has been re-
designated as a revisions to paragraph (h)(20).
    In Sec.  648.14, paragraph (i)(1)(ii) is revised to prohibit a 
vessel from landing scallops more than once per calendar day, rather 
than from fishing for, possessing, or landing scallops more than once 
per calendar day.
    In Sec.  648.14, paragraph (i)(1)(iv) is revised to clarify that 
declaration requirements do not apply to Incidental scallop vessels.
    In Sec.  648.14, paragraph (i)(2)(xiii) is revised by eliminating 
the term ``sub-lease'' since ``lease'' is not used elsewhere in the 
scallop regulations pertaining to IFQ transfers.
    In Sec.  648.52, paragraphs (a), (b), and (c) are revised to 
restrict a vessel to landing scallops only once per calendar day, 
rather than fishing for, possessing, or landing scallops only once per 
calendar day.
    In Sec.  648.53, paragraph (a) is revised in its entirety to 
clarify the TAC allocations and the transition measures to IFQ.
    In Sec.  648.53, paragraph (a)(9) is added to specify the 
incidental catch TAC.
    In Sec.  648.53, paragraphs (h)(2)(ii)(A) and (B) are revised to 
clarify that landings of scallops for ``best year'' and ``years 
active'' determinations must have occurred on or before November 1, 
2004.

[[Page 20107]]

    In Sec.  648.53, paragraph (h)(3)(i) is revised to specify that a 
vessel can exceed the 2-percent IFQ limit if its contribution 
percentage specified during the initial application process results in 
the vessel's allocation exceeding 2 percent.
    In Sec.  648.53, paragraph (h)(3)(i) is revised to specify that a 
vessel owner can exceed the 5-percent ownership cap if the total IFQ 
for all of the vessels combined upon initial application/issuance of 
the IFQ scallop permit results in the owner having an ownership 
interest in more than 5 percent of the TAC allocated to the IFQ scallop 
fleet.
    In Sec.  648.53, paragraph (h)(4) is revised to clarify that the 
cost recovery fee is equal to 3 percent of the value of landed 
scallops, not 3 percent of the cost of administering the IFQ program. 
In addition, this paragraph clarifies the general requirements for IFQ 
vessel owners involved in a temporary transfer of IFQ to pay cost 
recovery fees.
    In Sec.  648.53, paragraph (h)(5)(ii) is revised to specify that a 
permanent transfer cannot be limited in duration.
    In Sec.  648.53, the term ``lease'' has been removed from the 
heading of paragraph (h)(5)(iv)(C) to be consistent with terminology 
for the IFQ transfer program throughout the scallop regulations.
    In Sec.  648.55, paragraph (a) is revised by replacing ``rebuilding 
objectives'' with ``scallop resource conservation objectives.''
    In Sec.  648.59, paragraphs (b)(5)(i), (c)(5)(i), (d)(5)(i), and 
(e)(6)(i) are revised to include a provision to specify the TACs for 
each access area that would be used to determine the number of limited 
access trips per area and for each category of limited access scallop 
trips.
    In Sec.  648.59, paragraphs (b)(5)(ii)(B), (c)(5)(ii)(B), and 
(d)(5)(ii)(B) are revised to reflect the 2008 fishing year 
specifications.
    In Sec.  648.59, paragraph (e)(6)(i) and (ii) are re-designated as 
paragraphs (e)(4)(i) and (ii). Paragraph (e)(6) is no longer included 
in Sec.  648.59.
    In Sec.  648.62, paragraph (a) is revised to clarify that the NGOM 
scallop management area is defined as the area north of 42[deg]20' N. 
lat. and within the Gulf of Maine Scallop Dredge Exemption Area.
    In Sec.  648.62, paragraph (b)(2) is revised to clarify the 
reference to the NGOM scallop management area definition.
    In Sec.  648.63, paragraph (c)(1)(L) is added to require submission 
of other necessary and appropriate information as part of the Sector 
operations plan.
    In Sec.  648.63, paragraph (d)(3) is revised to reflect current 
timing requirements for submission of annual operations plans by 
Sectors. The December 1 date specified in the proposed rule would not 
provide NMFS with sufficient time to complete all associated review 
requirements for Sector operations plan submissions. This change is 
consistent with current provisions accepted for the NE Multispecies FMP 
Sector policy and operating provisions.

Classification

    NMFS has determined that the amendment this final rule implements 
is consistent with the national standards of the Magnuson-Stevens Act 
and other applicable laws. NMFS, in making that determination, has 
taken into account the data, views, and comments received during the 
comment period.
    This 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 final rule contains collection-of-information requirements 
subject to the Paperwork Reduction Act (PRA) and which has been 
approved by OMB under control number 0648-0529. Public reporting burden 
for these collections of information are estimated to average as 
follows:

Add PRA Approval Number to Req's--Need OMB Approval First

    1. Initial application for an IFQ scallop permit, OMB 
0648-0491--30 min per response;
    2. Initial application for an NGOM or Incidental scallop permit, 
OMB 0648-0491--15 min per response;
    3. Completion of ownership cap form for IFQ scallop vessel owners, 
OMB 0648-0491--5 min per response;
    4. Appeal for an LAGC scallop permit and IFQ scallop vessel 
contribution factor, OMB 0648-0491--2 hr per response;
    5. Application for a vessel replacement or confirmation of permit 
history OMB 0648-0491--3 hr per response;
    6. Purchase and installation of a VMS unit for general category 
scallop vessels, OMB 0648-0491--2 hr per response;
    7. IFQ scallop vessel VMS trip notification requirements, OMB 
0648-0491--2 min per response;
    8. NGOM scallop fishery VMS trip notification requirements, OMB 
0648-0491--2 min per response;
    9. Incidental catch vessel VMS trip notification requirements, OMB 
0648-0491--2 min per response;
    10. Pre-landings VMS notification requirements, OMB 0648-
0491--5 min per response;
    11. Application for an IFQ transfer, OMB 0648-0491--10 min 
per response;
    12. Electronic payment of cost recovery payment, OMB 0648-
0491--2 hr per response;
    13. LAGC scallop fishery sector applications, OMB 0648-
0491--150 hr per response; and
    14. Sector operations plans, OMB 0648-0491--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. Send 
comments regarding these burden estimates, or any other aspect of this 
data collection, including suggestions for reducing the burden, to NMFS 
(see ADDRESSES) 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.
    NMFS, pursuant to section 604 of the Regulatory Flexibility Act 
(RFA), has prepared a FRFA in support of Amendment 11. The FRFA 
describes the economic impact that this final rule, along with other 
non-preferred alternatives, will have on small entities.
    The FRFA incorporates the economic impacts and analysis summarized 
in the IRFA for the proposed rule to implement Amendment 11, the 
comments and responses in this final rule, and the corresponding 
economic analyses prepared for Amendment 11 (e.g., the FSEIS and the 
RIR). The contents of these incorporated documents are not repeated in 
detail here. A copy of the IRFA, the RIR, and the FSEIS are available 
upon request (see ADDRESSES). A description of the reasons for this 
action, the objectives of

[[Page 20108]]

the action, and the legal basis for this final rule are found in 
Amendment 11 and the preamble to the proposed and final rules.

Statement of Need for This Action

    The purpose of this action is to improve the management of the 
general category scallop fishery and the scallop fishery overall.

A Summary of the Significant Issues Raised by the Public Comments in 
Response to the IRFA, a Summary of the Assessment of the Agency of Such 
Issues, and a Statement of Any Changes Made in the Proposed Rule as a 
Result of Such Comments

    Fishing privileges will be assigned based on a vessel's fishing 
history and vessels that do not meet the qualification requirements for 
an LAGC scallop permit will no longer be eligible to fish for scallops 
unless the vessel replaces a vessel that is qualified for on the of the 
LAGC scallop permits. The allocation of scallop catch to the general 
category fleets will further restrict the amount of revenues derived 
from scallop landings by the general category fleet while ensuring that 
fishing mortality objectives of the FMP are achieved. The impacts of 
Amendment 11 are therefore largely social and economic. The measures 
will have direct negative economic impacts on vessel owners that do not 
have a qualifying vessel or that have fished more intensely recently 
than during the qualifying time period. As a result, the majority of 
comments opposing Amendment 11 that are described in the ``Comments and 
Responses'' section of the preamble of this final rule addressed issues 
relative to the IRFA in that commenters expressed concern directly and 
indirectly about the economic impacts of the measures and the impacts 
on small-scale vessel operations. NMFS's assessment of the issues 
raised in comments and responses is provided in the ``Comments and 
Responses'' section of the preamble of this final rule and are not 
repeated here. After taking all public comments into consideration, 
NMFS approved Amendment 11 on February 27, 2008.

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

    All vessels in the Atlantic sea scallop fishery are considered 
small business entities because all of them grossed less than $4.5 
million according to dealer data for the 2004 and 2005 fishing years. 
Therefore, there are no disproportionate impacts on 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 fishing year (FY) 2004 and 
$88,702 in FY 2005. Average total revenue per general category vessel 
was higher, exceeding $240,000 in FY's 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 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 will 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 
will take approximately 30 min per application, while each NGOM and 
Incidental scallop permit application will take approximately 15 min to 
process. Consequently, the total time burden for the initial 
applications will be approximately 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 approximately 256 hr per 
year. The 3-year average total public time burden for IFQ, NGOM, and 
Incidental scallop permit initial applications, and permits renewals is 
expected to be approximately 312 hr. The labor cost, at an hourly rate 
of $15, will to be $4,680.
    To implement the 5-percent IFQ ownership cap, vessel owners will be 
required to submit an ownership form with each permit renewal. Since 
there will be an estimated 370 IFQ permits, there will be about 370 
ownership forms each year. NMFS estimates that it will take 5 min to 
complete each ownership form; therefore, the annual reporting burden 
will be about 31 hr, or 21 hr, averaged over the first 3 years. At an 
hourly rate of $15, the annualized time burden will 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 3 years, will be about 54 hr. At an hourly rate of $15, 
the time burden will be approximately $810.
2. Vessel Replacement, Upgrade, and Permit History Applications
    A standard form for vessel replacements, upgrades, and permit 
history applications (RUPH application) will be used for LAGC scallop 
permits, although vessel upgrades will 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 will be subject to similar 
replacement and permit history 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 
will be received annually. The resultant burden will be up to 300 hr. 
At an hourly rate of $15 per hour, the total public cost burden for 
RUPH applications will be about $4,500 per year.
3. New VMS Requirements
    This action will require vessels issued any of the LAGC scallop 
permits to install VMS. Most vessels that qualify for an IFQ scallop 
permit have been participating in the directed general category scallop 
fishery, which already had VMS requirements prior to the implementation 
of Amendment 11. Therefore, it is likely that most vessels that will 
qualify for an IFQ permit

[[Page 20109]]

already have VMS. Vessels that qualify for an Incidental or NGOM 
scallop permit will 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 NE multispecies 
fishery. It is possible that some new permit holders will 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 will 
purchase and install VMS units as a result of Amendment 11. NMFS 
estimates that it will take 2 hr to purchase each unit, for a total 
time burden of 20 hr; annualized over 3 years, the burden will be about 
7 hr per year. NMFS anticipates that a vessel owner will hire a VMS 
technician to install the VMS unit; therefore there will 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 will 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 will 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 per year. NMFS assumes that the 
vessel operator will submit a power-down code to reduce polling costs 
and conserve battery power following each trip. NMFS estimates that it 
takes approximately 2 min to submit a trip declaration or power-down 
code. NMFS estimates that the IFQ fleet will 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 will be 1,042 hr. At an hourly rate of $15, 
this burden will 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 
(90.7-kg) possession limit, and using the upper limit of the proposed 
TAC, it is projected that there will be up to 500 NGOM trip 
declarations per year. For economic purposes it is unlikely that a 
vessel owner will 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 approved PRA collections. The increased 
reporting burden resulting from the NGOM permit category will be 
approximately 500 trip declarations and 500 power-down declarations. 
Assuming each declaration takes approximately 2 min, the annual NGOM 
trip declaration time burden will be approximately 34 hr. At an hourly 
rate of $15, this burden will be $510.
6. Incidental Scallop Vessel VMS Notification Requirements
    In 2004 and 2005, dealer data indicated that the percentage of 
scallops landed in quantities of 40 lb (18.1 kg) or less was 0.02 and 
0.06 percent, respectively, of the total scallop landings. The average 
scallop landings on these trips in FY 2004 and 2005 was 19,363 lb 
(8,783 kg). Using this average, NMFS estimates that approximately 500 
general category trips landed scallops incidental to other fishing. 
Assuming this rate will remain approximately the same, an estimated 500 
Incidental trip declarations will be made annually. As previously 
noted, for economic purposes it is unlikely that a vessel owner will 
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 approved PRA 
collections. The increased reporting burden resulting from the 
Incidental scallop permit category will 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 will be approximately 34 hr. At an hourly 
rate of $15, this burden will be $510.
7. Pre-Landing Notification Requirements
    VMS pre-landing notification forms will be required for each IFQ 
and NGOM scallop trip. Therefore, there will be 6,250 IFQ and 500 NGOM 
scallop vessel pre-landing notification forms submitted annually. NMFS 
estimates that it will 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 will 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 will not increase the cost to vessel 
owners declaring into the state waters exemption program.
9. IFQ Transfers
    IFQ transfers will apply to IFQ scallop vessels, except that 
current limited access scallop vessels that also have been issued an 
IFQ scallop permit will 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 will be approximately 75 
temporary transfers annually. Each application will include information 
from both parties involved in the temporary transfer; therefore there 
will be two responses per application. NMFS estimates that it will take 
5 min per response, or 10 min per temporary IFQ transfer application. 
Therefore, the total estimated annual burden will be 13 hr. At an 
hourly rate of $15/hour, the total public cost burden for temporary IFQ 
transfer applications will be $195 per year.
    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 will be no conservation 
tax on scallop IFQ transfers. Although NMFS anticipates that there will 
be more IFQ transfers than DAS transfers, IFQ transfers will be

[[Page 20110]]

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 will be approximately 10 permanent IFQ transfers per year. Each 
application will include information from both parties involved in the 
transfer; therefore there will be two responses per application. It is 
estimated that it will take 5 min per response, or 10 min per permanent 
transfer application. Therefore, the estimated permanent IFQ transfer 
burden will be 2 hr per year. At an hourly rate of $15 per hour, the 
total public cost burden for permanent quota transfer applications will 
be $30 per year.
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 will be required to submit a cost recovery 
payment once annually, which will take 2 hr per response. There will be 
370 payments (one per qualified IFQ scallop vessel) that will take 
approximately 740 hr in total. At an hourly rate of $15/hour, the total 
public cost burden for cost recovery will be $11,100 per year.
11. LAGC Sector Program
    NMFS estimates that there could be up to nine sector proposals 
received over the next 3 years (2008-2009)--five in the first year, two 
in the second year, and two in the third year. The earliest that the 
sectors proposed in the 2008 year could be implemented is the 2009 
fishing year. Therefore, these sectors will 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 the 
anticipated start of a sector program, and request that the sector be 
implemented through the framework procedure specified at Sec.  648.55. 
Based upon consultations with the Northeast multispecies sector 
program, it is estimated it will take 150 hr to prepare and submit a 
sector proposal. Therefore, the 3-year average annualized time burden 
for sector proposals will be 450 hr per year. At an hourly rate of $15 
per hour, the total public cost burden for sector proposals will be 
$6,750 per year.
    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 will be 
submitted in 2010 for the proposals submitted in 2008. Therefore, NMFS 
estimates it will take 500 hr to submit five operation plans. The 3-
year average annualized time burden will be 167 hr per year. At an 
hourly rate of $15 per hour, the annual time burden cost will be 
approximately $2,500.

Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes, Including a Statement of the 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and Why Each One of the Other Significant 
Alternatives to the Rule Considered by the Agency Which Affect the 
Impact on Small Entities Was Rejected

    The following discussion also includes a description of the 
economic impacts of the proposed action compared to significant non-
selected alternatives as required under the RFA for inclusion in the 
FRFA.
    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, 
approved Amendment 11 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. 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 (18.1 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 
overcapitalization of the scallop fishery and 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 would also be 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 
catch. 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.
    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

[[Page 20111]]

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 being dissipated due to an increase in fleet 
capacity that would likely occur with continued open access.
    NMFS evaluated the Council's proposed measures relative to 
compliance with the Magnuson-Stevens Act, including national standards, 
required provisions, and the discretionary provision pertaining to 
limited access programs, as well as with applicable laws and the FMP. 
NMFS has determined that Amendment 11 is consistent with all National 
Standards, including National Standard 4 (which requires management 
measures to be fair and equitable, but which recognizes that fishing 
privilege may need to be allocated among fishermen), and National 
Standard 8 (requiring management measures to minimize adverse economic 
impacts, to the extent practicable, on fishing communities). Without 
Amendment 11 and the controls on access to the fishery, estimated catch 
levels would continue to be exceeded, compromising NMFS's ability to 
effectively manage the scallop fishery overall. Uncontrolled, the 
general category fishery could contribute to excess fishing mortality 
on the scallop resource. As a result, the long-term economic and social 
impacts would be negative for the scallop fishery as a whole. All 
general category fishermen are small scale fishermen, given the 
vessels' relatively low level of scallop catch compared to vessels in 
the limited access fleet. All scallop fishing vessels are small 
entities as defined by the RFA.
    Amendment 11 measures will impact all scallop vessels to varying 
degrees. General category scallop landings and revenues since the 
November 1, 2004, control date have been the highest on record. 
Amendment 11 will curtail this recent ramp-up in effort, thus having a 
negative impact on revenues of some fishermen. Amendment 11 will have 
short-term negative economic and social impacts on vessel owners that 
fished more intensely recently than they did during the qualifying time 
period. Vessel owners with historical landings and participation 
similar to current levels will be the least impacted.
    Negative impacts on non-qualified vessels (i.e., post-control date 
entrants) will be most severe, since their revenues from scallop 
landings will be terminated. Amendment 11 contains no provisions 
specifically designed to minimize negative impacts on non-qualified 
vessels, although various alternatives to allow such vessels to 
continue fishing were considered and rejected by the Council because 
they were not consistent with the goal of Amendment 11 to reduce 
capacity and mortality in the general category fishery. These vessels 
entered the fishery after the November 1, 2004, control date, despite 
the control date's intent to deter individuals from unduly investing 
in, or relying on this fishery. In order for the effort reduction to be 
meaningful, while allowing remaining fishery participants to have 
reasonable opportunities to fish, some vessels must be eliminated. NMFS 
has concluded that the historic participants should have the 
opportunity to continue to fish.
    The evaluation of Amendment 11 measures concluded that the suite of 
measures; in particular the limited access program, the IFQ program, 
IFQ transfer provisions, and sector provisions; combine to minimize the 
negative impacts on qualified vessels. Positive impacts on the 
qualified participants, as well as the existing limited access fleet, 
are expected as the harvest capacity of, and fishing mortality by the 
general category fleet is controlled.
    A description of significant alternatives to the measures approved 
as part of Amendment 11 which affect the impact on small entities and 
the reasons why these other alternatives were not adopted follows.

Landings Criteria

    Two alternatives to the proposed landings qualification criteria 
were considered: Scallop landings on one trip during the qualification 
period of 100 lb (45.4 kg) or more; and cumulative annual landings of 
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 
preferred 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 owners 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 vessels 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 the qualification period, combined with the landing 
criteria, are analyzed in several sub-sections of Section 5.4 of the 
Amendment 11 document and are 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

[[Page 20112]]

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 1,000-lb (454-kg) poundage 
criterion 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) criterion for their activity during FY 1994-1999. 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 (18.1 kg) per trip, and thus still earn some revenue from 
scallops. Other vessel owners could choose to obtain an NGOM scallop 
permit and participate in the NGOM fishery, subject to a possession 
limit of 200 lb (90.7 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 who 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 landed scallops in 1 year, 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

[[Page 20113]]

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 (181.4-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 (181.4 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 (90.7 kg), while 
vessels that had historical landings greater than 5,000 lb (2,268 kg) 
would have a scallop possession limit of 400 lb (181.4 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 
(90.7-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 
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 of 
these provisions. 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. Amendment 11 allows the general 
category fishing history to be retained and split from other limited 
access permits prior to the effective date of Amendment 11. This is a 
departure from other limited access permit programs that prohibit such 
histories from being split from other fishing history. Allowing the 
splitting avoids complicated ownership disputes between individuals 
that completed vessel sale transactions that effectively split fishing 
history before and during the development of Amendment 11.
    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

[[Page 20114]]

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 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 (90.7-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 requirements; 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 Management 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 that 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 (90.7 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 (90.7 
kg) or less of scallops from any one trip, therefore would not be 
negatively impacted from 200 lb (90.7 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 
(181.4 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 (18.1 kg) of scallops after 
harvest of the NGOM TAC. This

[[Page 20115]]

alternative would also provide an advantage to IFQ scallop vessels by 
allowing them to land 400 lb (181.4 kg) per trip from this area, 
whereas NGOM scallop vessels could possess and land only up to 200 lb 
(90.7 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 (18.1 kg) of scallops 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 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.

Limited Access Vessels 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-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 FY 2004. 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 FY 2005 and FY 2006. 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 the substantial increase in general category fishing effort could 
lead to overfishing of the scallop resource and reduce economic 
benefits for everyone in the fishery. 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 (90.7 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 (18.1 kg) 
per trip, including some vessels that qualify for limited access but 
that 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

[[Page 20116]]

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 (18.1 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 (18.1-kg) trips than it could 
under its IFQ.
    The only other 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 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 (35.2 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 (35.2 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 final 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 he/she already owns 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.

Small Entity Compliance Guide

    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. As part of 
this rulemaking process, a small entity compliance guide was prepared. 
The guide will be sent to all holders of permits issued for the 
Atlantic scallop fishery. In addition, copies of this final rule and 
guide (i.e., permit holder letter) are available from the Regional 
Administrator and are also available from NMFS, Northeast Region (see 
ADDRESSES).

List of Subjects in 50 CFR Part 648

    Fisheries, Fishing, Recordkeeping and reporting requirements.

    Dated: April 7, 2008.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 648 is amended as 
follows:

PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES

0
1. The authority citation for part 648 continues to read as follows:

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


[[Page 20117]]



0
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.
* * * * *

0
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)(i)(O), (a)(2)(ii), and (e)(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 (181.4 kg) of shucked 
scallops, or 50 bu (17.6 hL) of in-shell scallops per trip, or 
possesses more than 100 bu (35.2 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) * * *
    (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, and/or a confirmation of permit history, if, as a result of the 
issuance of the permit and/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) and/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.
* * * * *
    (O) Replacement vessels. See paragraph (a)(1)(i)(E) of this 
section.
    (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. Any vessel of the United States that has 
not been issued a limited access scallop permit pursuant to paragraph 
(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(b) or the Area Access program 
described in Sec.  648.60, that possesses, retains, or lands scallops 
in or from Federal waters, 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 (181.4 kg) of shucked meats, or 50 bu (17.6 hL) of in-shell 
scallops per trip, or possess up to 100 bu (35.2 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 that demonstrates 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 (90.7 kg) of shucked or 25 bu (8.81 hL) in-shell scallops per 
trip, or to possess up to 50 bu (17.6 hL) seaward of the VMS 
demarcation line in the NGOM Scallop Management Area, 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 outside of the NGOM Scallop Management Area as defined in 
Sec.  648.62, and may not possess or land more than 200 lb (90.7 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 (17.6 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 that demonstrates 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 
(18.1 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 (18.1 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

[[Page 20118]]

required application and other information that demonstrates 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 criterion. 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 criterion. 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. To qualify, scallop landings in the 
2004 fishing year must have occurred on or before November 1, 2004. 
NMFS dealer data shall be used to make the initial determination of 
vessel eligibility. If a dealer reported more than 400 lb (181.4 kg) of 
scallops on a trip, only 400 lb (181.4 kg) will be credited toward the 
landings criteria. For dealer reports that indicate that the landings 
were bushels of in-shell scallops, a conversion of 8 lb (3.63 kg) of 
scallop meats per bushel will be used to calculate meat-weight, up to 
the maximum of 400 lb (181.4 kg) per trip. For dealer reports that 
indicate that the landings were reported in pounds of in-shell scallops 
are converted to meat-weight using the formula of 8.33 lb (3.78 kg) of 
scallop meats for each pound of in-shell scallops, up to the maximum of 
400 lb (181.4 kg) per trip, for qualification purposes.
    (E) Contribution factor for determining a vessel's IFQ. An eligible 
IFQ scallop vessel's best year of scallop landings during the 
qualification period of March 1, 2000, through November 1, 2004, as 
specified in Sec.  648.53(h)(2)(ii)(a), and the vessel's number of 
years active, as specified in Sec.  648.53(h)(2)(ii)(B), shall be used 
to calculate a vessel's contribution factor, as specified in Sec.  
648.53(h)(2)(ii)(C). 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, consistent with confidentiality 
restrictions of the Magnuson-Stevens Act specified at 16 U.S.C. 1881a. 
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 was issued 
a general category scallop permit as of November 1, 2004, or if the 
vessel is replacing a vessel that was issued a general category scallop 
permit as of November 1, 2004. A vessel owner may appeal NMFS's 
determination that a vessel does not meet this criterion by complying 
with the appeal process as specified in paragraph (a)(2)(ii)(O) of this 
section. A vessel that qualifies for an IFQ scallop permit 
automatically qualifies for an NGOM or Incidental scallop permit if the 
vessel's owner chooses to be issued an NGOM or Incidental scallop 
permit instead of the IFQ scallop permit.
    (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 each fishing year 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 an LAGC permit described in paragraph 
(a)(2)(ii) of this section must be postmarked no later than August 30, 
2008. Applications for LAGC permits that are not postmarked on or 
before August 30, 2008, 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 to 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, a 
vessel owner applying for a LAGC permit who sold or transferred 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 of such vessel as specified in paragraph 
(a)(1)(i)(D) of this section, before April 14, 2008, may use the 
general category scallop history to qualify a different vessel for the 
initial IFQ scallop permit, regardless of whether the history from the 
sold or transferred vessel was used to qualify another vessel for 
another limited access 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

[[Page 20119]]

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. Except as provided in 
paragraphs (a)(2)(ii)(I)(2) and (3) of this section, paragraph 
(a)(1)(i)(L) of this section applies.
    (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 temporarily authorizing the 
vessel to fish under the limited access general category permit. The 
Regional Administrator shall issue such a letter that shall be 
effective only during the pendency of any appeal. The temporary letter 
of authorization must be carried on board the vessel and all 
requirements of the permit category for which the appeal has been made 
shall apply. If the appeal is finally denied, the Regional 
Administrator shall send a notice of final denial to the vessel owner; 
the temporary 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, regardless of the date of the owner's receipt of the 
denial.
* * * * *
    (e) * * *
    (1) * * *
    (iv) An applicant 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
* * * * *

0
4. In Sec.  648.5, paragraph (a) is revised to read 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.
* * * * *

0
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 hrs. 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 an LAGC scallop permit, is not in 
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.
* * * * *

0
6. In Sec.  648.10, paragraphs (b)(1)(i), and (c) introductory text are 
revised; paragraphs (b)(1)(iii) and (iv) are removed and reserved; and 
paragraphs (b)(2)(i), and (ii), and (b)(4)(i) through (iv) are added to 
read 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;
* * * * *
    (iii)-(iv) [Reserved]
* * * * *
    (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

[[Page 20120]]

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. The VMS catch reporting requirements are specified in Sec.  
648.60(a)(9). 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 IFQ and NGOM scallop 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:
* * * * *

0
7. In Sec.  648.14, paragraphs (a)(56), (a)(57), (a)(61), (f), (h)(1), 
(h)(6), (h)(9), (h)(20), (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), 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 (18.1 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; 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 
(18.1 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 
Administrator to have an increased possession limit to compensate for 
the cost of carrying the observer.
    (ii) In excess of 200 lb (90.7 kg) shucked scallops at any time, 25 
bu (8.8 hl) in-shell scallops inside the VMS Demarcation Line, or 50 bu 
(17.6 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; 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 (90.7 
kg) of shucked or 25 bu (8.8 hL) of in-shell scallops, is carrying an 
at-sea observer,

[[Page 20121]]

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 (35.2 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; or
    (D) 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 (18.1 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.
* * * * *
    (20) 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 in accordance 
with Sec.  648.23.
    (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) 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 unless the vessel has been issued an 
Incidental scallop permit;
    (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 or designee;
    (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

[[Page 20122]]

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 in accordance with Sec.  648.23;
    (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 (17.6 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 (8.8 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 (17.6 
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 in accordance 
with Sec.  648.23;
    (iii) Possess more than 100 bu (35.2 hL) of in-shell scallops 
seaward of the VMS demarcation line, or possess, or land per trip, more 
than 50 bu (17.6 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)(8) 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)(5)(ii) and (iii), except as provided in 
Sec.  648.4(h)(3)(ii);
    (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)(5)(ii) and (iii), except as provided in Sec.  
648.4(h)(3)(i);
    (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)(3)(ii).
    (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 in Sec.  648.53(h)(3)(i);
    (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)(5)(iv)(B);
    (xii) Provide false information in relation to or on an application 
for an IFQ transfer required under Sec.  648.53(h)(5)(iv);
    (xiii) Request to transfer IFQ that has already been temporarily 
transferred from an IFQ scallop vessel in the same fishing year;
    (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 outside of the NGOM Scallop Management Area as defined 
in Sec.  648.62;
    (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 (17.6 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 (18.1 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 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.
* * * * *

0
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).
* * * * *

0
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

[[Page 20123]]

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 (181.4 kg) of shucked 
scallops, or possess more than 50 bu (17.6 hL) of in-shell scallops 
shoreward of the VMS Demarcation Line. Such a vessel may land scallops 
only once in any calendar day. Such a vessel may possess up to 100 bu 
(35.2 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 land scallops only once in any calendar 
day. Such a vessel may possess up to 50 bu (17.6 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 (18.1 kg) of shucked, or 5 
bu (1.76 hL) of in-shell scallops. Such a vessel may land scallops only 
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[deg]20'N. lat. at any 
time during a trip are prohibited from fishing for, possessing, or 
landing per trip more than 50 bu (17.6 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 (17.6 hL) of in-shell scallops outside of the 
Elephant Trunk Access Area described in Sec.  648.59(e).

0
10. Section 648.53 is revised to read as follows:


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

    (a) Target total allowable catch (TAC) for scallop fishery. The 
annual target total TAC for the scallop fishery shall be established 
through the framework adjustment process specified in Sec.  648.55. The 
annual target TAC shall include the TAC for all scallop vessels fishing 
in open areas and Sea Scallop Access Areas, but shall exclude the TAC 
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, as specified at Sec.  648.53(a)(9), 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 TAC for open and 
Sea Scallop 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)(3) through (a)(6) of this section. In the 
event that a framework adjustment does not implement an annual TAC for 
a fishing or part of a fishing year, the preceding fishing year's 
scallop regulations shall apply.
    (1) 2008 fishing year target TAC for scallop fishery. To be 
determined.
    (2) 2009 fishing year target TAC for scallop fishery. To be 
determined.
    (3) Access area TAC. 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 TAC 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.
    (4) Open area target TAC for limited access vessels.--(i) 2008 
fishing year. For the 2008 fishing year, the target TAC for limited 
access vessels fishing under the scallop DAS program specified in this 
section is equal to 90 percent of the target TAC specified in 
accordance with this paragraph (a), minus the TAC for all access areas 
specified in accordance with paragraph (a)(3) of this section.
    (ii) 2009 fishing year. Beginning March 1, 2009, unless the 
implementation of the IFQ program is delayed beyond March 1, 2009, as 
specified in paragraph (a)(7) of this section, the target TAC for 
limited access vessels fishing under the scallop DAS program specified 
in this section is equal to 94.5 percent of the target TAC specified in 
accordance with this paragraph (a), minus the TAC for all access areas 
specified in accordance with paragraph (a)(3) of this section. The 
target TAC 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.
    (5) Open area TAC for IFQ scallop vessels--(i) 2008 fishing year. 
For the 2008 fishing year, 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 TAC specified in accordance with paragraph (a) of 
this section minus the TAC for all access areas specified in accordance 
with paragraph (a)(3) of this section.
    (ii) 2009 fishing year and beyond for IFQ scallop vessels without a 
limited access scallop permit. For the 2009 fishing year, unless the 
IFQ program is delayed beyond March 1, 2009, as specified in paragraph 
(a)(7) of this section, the TAC for IFQ scallop vessels without a 
limited access scallop permit shall be equal to 5 percent of the target 
TAC specified in accordance with this paragraph (a), minus the TAC for 
all access areas specified in accordance with paragraph (a)(3) of this 
section. If the IFQ program implementation is delayed beyond March 1, 
2009, the allocation of TAC to IFQ scallop vessels is specified in 
paragraph (a)(7) of this section.
    (iii) 2009 fishing year and beyond for IFQ scallop vessels with a 
limited access scallop permit. For the 2009 fishing year, unless the 
IFQ program is delayed beyond March 1, 2009, as specified in paragraph 
(a)(7) of this section, 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 TAC 
specified in accordance with this paragraph (a)

[[Page 20124]]

minus the TAC for all access areas specified in accordance with 
paragraph (a)(3) of this section. If the IFQ program implementation is 
delayed beyond March 1, 2009, the allocation of TAC to IFQ scallop 
vessels is specified in paragraph (a)(7) of this section.
    (6) Northern Gulf of Maine Scallop Fishery. The TAC 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. The Northern Gulf of Maine Scallop Fishery TAC is 
specified in Sec.  648.62(b)(1).
    (7) Delay of the IFQ program. If the IFQ program implementation is 
delayed beyond March 1, 2009, IFQ scallop vessels, including vessels 
fishing under temporary letter of authorization while their appeal for 
an IFQ scallop permit is pending, 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 TAC specified in accordance with paragraph (a) of this section 
minus the TAC for all access areas specified in accordance with 
paragraph (a)(3) of this section until the IFQ program is implemented. 
The distribution of the TAC as specified in paragraph (a)(8) of this 
section would remain in effect. If the Regional Administrator 
determines that the IFQ program cannot be implemented by March 1, 2009, 
NMFS shall inform all scallop vessel owners that the IFQ program shall 
not take effect.
    (8) Distribution of transition period TAC--(i) Allocation. For the 
2008 fishing year, and 2009 fishing year, and beyond, if the IFQ 
program is not implemented as specified in paragraph (a)(7) of this 
section, the TAC for IFQ scallop vessels shall be allocated as 
specified in paragraphs (a)(5) of this section into quarterly periods. 
The percentage allocations for each period allocated to the IFQ scallop 
vessels, including limited access vessels fishing under an IFQ scallop 
permit and vessels under appeal for an IFQ scallop permit pursuant to 
Sec.  648.4(a)(2)(ii) shall be specified in the framework adjustment 
process in Sec.  648.55 and are specified in the following table:

----------------------------------------------------------------------------------------------------------------
                     Quarter                          Percent                           TAC
----------------------------------------------------------------------------------------------------------------
I. March-May....................................              35   To be determined.
II. June-August.................................              40   To be determined.
III. September-November.........................              15   To be determined.
IV. December-February...........................              10   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)(8)(i) of this section.
    (iii) Closure of fishery for the quarter. No vessel issued an IFQ 
scallop permit, or vessel issued a temporary letter of authorization to 
fish for scallops while their appeal for an IFQ scallop permit is 
pending pursuant to Sec.  648.4(a)(2)(ii), may possess, retain, or land 
scallops once the Regional Administrator has provided notification in 
the Federal Register that the scallop total allowable catch for the 
specified quarter, in accordance with this paragraph (a)(8) has been 
reached.
    (iv) Overages and underages of quarterly TACs. Any overage or 
underage of catch during quarter 1 as specified in this paragraph 
(a)(8) shall be applied to the third quarter TAC as specified in this 
paragraph (a)(8). Any overage or underage of catch during quarters 2 
and 3, as specified in this paragraph (a)(8), shall be applied to the 
fourth quarter TAC as specified in this paragraph (a)(8).
    (9) Scallop incidental catch target TAC. To be determined.
    (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.
------------------------------------------------------------------------


[[Page 20125]]

    (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 times 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 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 times 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 times 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.

[[Page 20126]]

    (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.
    (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), consistent with confidentiality restrictions of the 
Magnuson-Stevens Act specified at 16 U.S.C. 1881a.
    (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. 
Scallop landings in the 2004 fishing year must have occurred on or 
before November 1, 2004. If a dealer reported more than 400 lb (181.4 
kg) of scallops landed on a trip, only 400 lb (181.4 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 (181.4 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. Scallop landings in the 2004 fishing year must have 
occurred on or before November 1, 2004.
    (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(h).

------------------------------------------------------------------------
                      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) 
Unless otherwise specified in paragraph (h)(3)(i)(B) and (C) of this 
section, 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.
    (B) A vessel may be initially 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, if the initial determination of 
its contribution factor specified in accordance with Sec.  
648.4(a)(2)(ii)(E) and paragraph (h)(2)(ii) of this section, results in 
an IFQ that exceeds 2 percent of the TAC allocated to the IFQ scallop 
vessels as described in paragraphs (a)(3)(ii) and (iii) of this 
section. A vessel that is allocated an IFQ that exceeds 2 percent of 
the TAC allocated to the IFQ scallop vessels as described in paragraphs 
(a)(3)(ii) and (iii) of this section in accordance with this paragraph 
(h)(3)(i)(B), may not transfer IFQ to that vessel, as specified in 
paragraph (h)(5) of this section.
    (C) A vessel initially issued a 2008 IFQ scallop permit or 
confirmation of permit history, or issued or renewed a limited access 
scallop permit or confirmation of permit history for a vessel in 2009 
and thereafter, in compliance with the ownership restrictions in 
paragraph (h)(3)(i)(A) of this section, are eligible to renew such 
permits(s) and/or confirmation(s) of permit history, regardless of 
whether the renewal of the permits or confirmations of permit history 
will result in the 2-percent ownership restriction being exceeded.
    (ii) IFQ ownership cap. (A) For any vessel acquired after June 1, 
2008, a vessel owner is not eligible to be issued an IFQ scallop permit 
for the vessel, and/or a confirmation of permit history, and is not 
eligible to transfer IFQ to the vessel, if, as a result of the issuance 
of

[[Page 20127]]

the permit and/or confirmation of permit history, or IFQ transfer, the 
vessel owner, or any other person who is a shareholder or partner of 
the vessel owner, will have an ownership interest in more than 5 
percent of the TAC allocated to the IFQ scallop vessels as described in 
paragraphs (a)(3)(ii) and (iii) of this section.
    (B) Vessel owners who were initially issued a 2008 IFQ 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 2009 and thereafter, in compliance with the ownership 
restrictions in paragraph (h)(3)(ii)(A) of this section, are eligible 
to renew such permits(s) and/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.
    (C) Having an ownership interest includes, but is not limited to, 
persons who are shareholders in a vessel owned by a corporation, who 
are partners (general or limited) to a vessel owner, or who, in any 
way, partly own a vessel.
    (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. NMFS shall collect a fee, not to exceed 3 
percent of the ex-vessel value of fish harvested in a fishing year, to 
recover the costs associated with management, data collection, and 
enforcement of the IFQ program. Owners of IFQ scallop vessels shall be 
responsible for paying the fee as required by NMFS. For IFQ scallop 
vessel owners involved in a temporary transfer of IFQ as specified in 
paragraph (h)(5) of this section, the transferor and transferee shall 
be joint and severally responsible for any failure to pay cost recovery 
fees. By agreeing to and accepting the transfer of IFQ, the transferee 
waives confidentiality of information associated with landings of the 
transferred IFQ for the use of the transferor only. 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. Subject to the 
restrictions in paragraph (h)(5)(iii) of this section, the owner of an 
IFQ scallop vessel not issued a limited access scallop permit may 
temporarily transfer one or more entire IFQs to or 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. Subject to the restrictions in 
paragraph (h)(5)(iii) of this section, the owner of an IFQ scallop 
vessel not issued a limited access scallop permit may transfer one or 
more entire IFQs permanently to or 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. Any 
such transfer cannot be limited in duration and is permanent unless the 
IFQ is subsequently transferred to another IFQ scallop vessel, other 
than the originating IFQ scallop vessel, in a subsequent fishing year. 
The Regional Administrator has final approval authority for all IFQ 
transfer requests.
    (iii) IFQ transfer restrictions. The owner of an IFQ scallop vessel 
not issued a limited access scallop permit may transfer entire IFQ 
allocations only. The owner of an IFQ scallop vessel not issued a 
limited access scallop permit that has fished under its IFQ in a 
fishing year may not transfer that vessel's IFQ to another IFQ scallop 
vessel in the same fishing year. 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, either 
temporarily or permanently. 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 in that 
fishing year. 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 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

[[Page 20128]]

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.

0
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, 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, 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, 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.
* * * * *
0
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 scallop 
resource conservation 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 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 overfishing 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 rotational 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;

[[Page 20129]]

    (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.
* * * * *

0
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.

0
14. In Sec.  648.59, paragraphs (b)(5)(i), (b)(5)(ii), (c)(5)(i), 
(c)(5)(ii), (d)(5)(i), (d)(5)(ii), (e)(4)(i), and (e)(4)(ii) are 
revised to read as follows:


Sec.  648.59  Sea Scallop Access Areas.

* * * * *
    (b) * * *
    (5) * * *
    (i) Limited access vessels. Based on its permit category, a vessel 
issued a limited access scallop permit may fish no more than the 
maximum number of trips in the Closed Area I Access Area as specified 
in Sec.  648.60(a)(3)(i), unless the vessel owner has made an exchange 
with another vessel owner whereby the vessel gains a Closed Area I 
Access Area trip and gives up a trip into another Sea Scallop Access 
Area, as specified in Sec.  648.60(a)(3)(ii), or unless the vessel is 
taking a compensation trip for a prior Closed Area I Access Area trip 
that was terminated early, as specified in Sec.  648.60(c). The number 
of trips allocated to limited access vessels in the Closed Area I 
Access Area shall be based on the TAC for the access area, which will 
be determined through the annual framework process and specified in 
this paragraph (b)(5)(i).
    (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 2008 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) * * *
    (5) * * *
    (i) Limited access vessels. Based on its permit category, a vessel 
issued a limited access scallop permit may fish no more than the 
maximum number of trips in the Closed Area II Access Area, unless the 
vessel owner has made an exchange with another vessel owner whereby the 
vessel gains a Closed Area II Access Area trip and gives up a trip into 
another Sea Scallop Access Area, as specified in Sec.  
648.60(a)(3)(ii), or unless the vessel is taking a compensation trip 
for a prior Closed Area II Access Area trip that was terminated early, 
as specified in Sec.  648.60(c). The number of trips allocated to 
limited access vessels in the Closed Area II Access Area shall be based 
on the TAC for the access area, which will be determined through the 
annual framework process and specified in this paragraph (c)(5)(i).
    (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.

[[Page 20130]]

    (d) * * *
    (5) * * *
    (i) Limited access vessels. Based on its permit category, a vessel 
issued a limited access scallop permit may fish no more than the 
maximum number of trips in the Nantucket Lightship Access Area, unless 
the vessel owner has made an exchange with another vessel owner whereby 
the vessel gains a Nantucket Lightship Access Area trip and gives up a 
trip into another Sea Scallop Access Area, as specified in Sec.  
648.60(a)(3)(ii), or unless the vessel is taking a compensation trip 
for a prior Nantucket Lightship Closed Area Access Area trip that was 
terminated early, as specified in Sec.  648.60(c). The number of trips 
allocated to limited access vessels in the Nantucket Lightship Access 
Area shall be based on the TAC for the access area, which will be 
determined through the annual framework process and specified in this 
paragraph (d)(5)(i).
    (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 the total number of 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.
    (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) * * *
    (4) * * *
    (i) Limited access vessels. Based on its permit category, a vessel 
issued a limited access scallop permit may fish no more than the 
maximum number of trips in the Elephant Trunk Sea Scallop Access Area, 
as specified in Sec.  648.60(a)(3)(i), unless the vessel owner has made 
an exchange with another vessel owner whereby the vessel gains an 
Elephant Trunk Sea Scallop Access Area trip and gives up a trip into 
another Sea Scallop Access Area, as specified in Sec.  
648.60(a)(3)(ii), or unless the vessel is taking a compensation trip 
for a prior Elephant Trunk Access Area trip that was terminated early, 
as specified in Sec.  648.60(c). The number of trips allocated to 
limited access vessels in the Elephant Trunk Access Area shall be based 
on the TAC for the access area, which will be determined through the 
annual framework process and specified in this paragraph (e)(4)(i).
    (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)(4)(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)(4)(ii) and shall determine the number of trips specified 
in paragraph (e)(4)(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 Sec.  
648.60(g)(4), of the date on which 865 trips allocated March 1, 2008, 
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.
* * * * *

0
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), but 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 20131]]

Federal Register, in accordance with the Administrative Procedure Act. 
Once this determination has been made, and LAGC scallop vessel may not 
fish for, possess, or land scallops in or from the specified Access 
Area.
* * * * *

0
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 of 42(20' N. 
lat. and within the boundaries of the Gulf of Maine Scallop Dredge 
Exemption Area as specified in Sec.  648.80(a)(11). To fish for or 
possess scallops in the NGOM scallop management area, a vessel must 
have been 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 
IFQ scallop vessels fishing in the NGOM scallop management area shall 
be deducted from their respective scallop IFQs. 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 (90.7 kg) of shucked 
or 25 bu (8.81 hL) of in-shell scallops, and may possess up to 50 bu 
(17.6 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 NGOM scallop management area 
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 intends 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.

0
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 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 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 Sector's 
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 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.

[[Page 20132]]

    (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.
    (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)(2)(iii) 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)(5)(ii) or (iii).
    (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)(2)(iii), provided the vessel is participating in the Sector 
and carries on board a Letter of Authorization to participate in the 
Sector and exempts the vessel from its IFQ limit and any other related 
measures. 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, unless exempted under a Letter of 
Authorization, 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. The Sector 
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 shall 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 have its authorization as a Sector withdrawn by the 
Regional Administrator, after consultation with the Council, and may be 
subject to enforcement action.
    (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 may exempt the 
participating vessel from the requirement that the vessel cannot exceed 
its own IFQ and related measures. 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.

[[Page 20133]]

    (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.
    (2) The operations plan among all of the Sector members must have, 
at a minimum, the following components:
    (i) A list of all participants;
    (ii) A contract signed by all participants indicating their 
agreement to abide by the operations plan;
    (iii) 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;
    (iv) A plan explaining how the Sector will harvest its allocation, 
including methods to inform NMFS of changes in those arrangements over 
the year;
    (v) The original distribution of catch history of vessels in the 
Sector (maintaining vessel data confidentiality);
    (vi) 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;
    (vii) Rules for entry to and exit from the Sector, including 
sanctions and procedures for removing members who do not comply with 
the operations plan;
    (viii) Procedure for notifying NMFS if a member is no longer part 
of the Sector and the reason for leaving;
    (ix) The process through which the operations plan can be amended 
by Sector members;
    (x) 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;
    (xi) 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.
    (xii) Any other information determined to be necessary and 
appropriate.
    (d) Sector review, approval, and revocation. (1) A Sector shall 
submit its operations plan and any NEPA documents to the Regional 
Administrator and the Council no less than 1 year prior to the date 
that it wishes to begin operations under the Sector. The 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 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 Administrator no later than July 1 of each year, whether or 
not the plan has changed. Once the submission documents specified under 
paragraphs (a)(1) and (c)(2) of this section have been determined to 
comply with the requirements of this section, NMFS may consult with the 
Council and shall approve or disapprove Sector operations consistent 
with applicable law.

 [FR Doc. E8-7795 Filed 4-11-08; 8:45 am]
BILLING CODE 3510-22-P