[Federal Register: April 11, 2007 (Volume 72, Number 69)]
[Rules and Regulations]
[Page 18105-18118]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ap07-1]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
[[Page 18105]]
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
15 CFR Part 902
50 CFR Part 270
[Docket No. 040720212-6238-02; I.D. 040204A]
RIN 0648-AS09
Fish and Seafood Promotion Act Provisions; Seafood Marketing
Councils
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Department of Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In response to renewed fishing industry support for marketing
and promotion-related activities, NMFS enacts regulations to implement
the Fish and Seafood Promotion Act (FSPA) of 1986 for the
establishment, organization, and operation of Seafood Marketing
Councils (Councils). Council marketing and promotion plans will be
designed to increase the general demand for fish and fish products by
encouraging, expanding, and improving the marketing and utilization of
fish and fish products both in domestic or foreign markets, through
consumer education, research, and other marketing and promotion
activities. The intent of this rule is to increase benefits from
domestic fisheries while maintaining consistency with NMFS' stewardship
goals and mission statement.
DATES: Effective May 11, 2007.
ADDRESSES: Copies of this rule, its Regulatory Impact Review (RIR), and
Initial Regulatory Flexibility Analysis (IRFA) are available from
Christopher M. Moore, Chief, Federal-State Division, Office of
Sustainable Fisheries, NMFS, 1315 East West Highway, Silver Spring, MD
20910. The Final Regulatory Flexibility Analysis (FRFA) consists of the
IRFA, public comments and responses, and the summary of impacts and
alternatives contained in the Classification section of the preamble of
this final rule.
Comments regarding the burden-hour estimates or other aspects of
the collection-of-information requirements contained in this final rule
should be submitted to Christopher M. Moore at the address above or fax
to (301) 713-0596 and to David Rostker by e-mail at
David_Rostker@omb.eop.gov, or fax to (202) 395-7285.
FOR FURTHER INFORMATION CONTACT: Gordon J. Helm, NMFS, telephone: (301)
713-2379 or E-mail: Gordon.J.Helm@noaa.gov.
SUPPLEMENTARY INFORMATION:
Background
This final rule enacts regulations that implement the Fish and
Seafood Promotion Act (FSPA) of 1986 (16 U.S.C. 4001 et seq.) to
establish and operate Seafood Marketing Councils (Councils) in order to
promote the consumption of domestically harvested seafood. A proposed
rule requesting public comment on this action published in the Federal
Register on January 24, 2006 (71 FR 3797). Public comments were
accepted through February 23, 2006. A full discussion of the background
of this rule was presented in the preamble to the proposed rule for
this action and is not repeated here.
In summary, NMFS issued a final rule in 1989 enacting the FSPA, as
it pertains to Councils, for one or more species of fish or fish
products. The FSPA permitted the creation of Councils under a set of
guidelines established by the Secretary of Commerce (Secretary), who
delegated authority to NMFS, to establish a National Seafood Marketing
Council (National Council). This National Council was authorized to
fund applicants' referenda to establish and terminate species-specific
marketing councils. However, no species-specific marketing councils
were established and the National Council was disbanded. In 1996, the
regulations implementing the FSPA were removed from the Code of Federal
Regulations (CFR) as part of the government-wide Presidential
regulatory reform effort. Although the implementing regulations were
withdrawn from the CFR, the FSPA remains in effect.
The seafood promotion council rule addresses a market failure that
reduces consumer demand for seafood as a result of the dissemination of
partial, misleading or faulty information to consumers. In reality, no
consumer can have perfect information about a seafood product. However,
the dissemination of significantly incorrect information about a
product can substantially lower consumer demand. In the case of
seafood, this could reduce consumption of an important health-
beneficial food. While the role of the federal government is not to
promote seafood, it does have a responsibility to the consumer to
ensure that the information presented to them is accurate and
scientifically valid. The Secretary of Commerce or designee on the
Seafood Promotion Council has the responsibility of approving or
rejecting proposed marketing plans based on the accuracy and scientific
validity of the information presented to the public.
An example of a case where partial information leads to a
substantial reduction in the consumer demand for a seafood product
includes recent marketplace confusion over contaminants such as mercury
in seafood. The Food and Drug Administration and industry have promoted
the health benefits of omega-3 fatty acids, but consumers also hear
that many of the fish highest in omega-3 fatty acids also generally
contain the higher levels of contaminants. This leads to consumer
confusion over the degree to which the relative health benefits exceed
the risk from contaminants and may result in consumers diverting their
demand for protein to other products that may provide fewer health
benefits or carry different health risks. While the seafood industry
could tackle this imperfect information market failure on its own
through promotional campaigns and consumer education, opponents could
counter that the industry action is ``self serving.'' To counter this
perceived conflict of interest, the Federal government can offer,
through the Seafood Promotion Act, a seal of approval to assure
consumers that the
[[Page 18106]]
information being offered is accurate and reliable.
Industry has expressed to NMFS interest and support for seafood
marketing and promotion-related activities. Niche marketing programs
have been initiated by both the Pacific salmon harvesters in Alaska and
by the Wild American Shrimp organization in the southern Atlantic and
Gulf of Mexico states. Additional interest has been expressed by U.S.
tuna processors who are also facing declining market shares due to
foreign competition. In response to industry requests, NMFS promulgates
regulations providing the foundation for the establishment,
organization, and administrative practices of the Councils.
Application to Establish A Council
An application package submitted to NMFS to establish a Council
must consist of the following information: (1) an application
requesting NMFS to establish a Council; (2) a list of sector
participants who are eligible to vote in the referendum; (3) a proposed
charter under which the proposed Council would operate; and (4) an IRFA
and/or other analytical documentation addressing the requirements of
the Regulatory Flexibility Act, Executive Order 12866, National
Environmental Policy Act, and other information which may include, but
is not limited to, an analysis of the primary, secondary, and tertiary
affects of increasing demand for seafood. This information will be used
by NMFS to determine if the proposed council or its marketing program
is consistent with NMFS conservation goals, national standards, and
other guidelines. The applicant will also have to demonstrate to NMFS
that the council or its marketing program is consistent with Federal
standards and guidelines on nutrition and health. For detailed
information regarding application requirements, see the preamble to the
proposed rule published January 24, 2006.
NMFS will determine if the application package is complete and
complies with all of the requirements set forth in the implementing
regulations, the FSPA of 1986, and other applicable law and make an
initial decision on the application within 180 days of receipt.
Referendum on Adoption of Proposed Charter and Council Appointments
NMFS will conduct a referendum on the adoption of the proposed
charter within 90 days of its initial affirmative decision. The
referendum will be conducted among all sector participants that meet
the requirements for eligibility to participate in the referendum, as
identified in the proposed charter. The vote may be made by any
responsible officer, owner, or employee representing a sector
participant. The referendum to establish a Council would pass if votes
cast in favor of the proposed charter constitute a majority of the
sector participants voting in each and every sector. Further, the
majority must collectively account for, in the preceding 12-month
period, at least 66 percent of the value of the fish and fish products
described in the proposed charter that were handled during this period,
in that sector, and by those who met the eligibility requirements to
vote in the referendum. If the referendum passes, NMFS will establish a
Council and approve the proposed charter.
NMFS will initially pay all costs related to the conduct of the
referendum to establish a Council. Once an application has been
approved, NMFS will estimate the cost of conducting the referendum,
notify the applicants, and request that they post a bond or provide
other applicable security, such as a cashier's check, to cover costs of
the referendum. After the referendum has been conducted, NMFS will
inform the applicants of the exact cost. If the referendum is approved
and the proposed charter is adopted, the Council will be required to
reimburse NMFS for the total actual costs of the referendum within 2
years after establishment of the Council. This amount would be paid for
from assessments collected by the Council. If a referendum fails to
result in establishment of a Council, NMFS would immediately recover
all expenses incurred from the bond or security posted by applicants.
Within 30 days after a Council is established, NMFS will solicit
nominations for Council members from the sector participants
represented on the Council in accordance with the approved charter. The
members of each Council should be individuals who, by reason of their
occupational or other experience, scientific expertise, or training,
are knowledgeable with regard to the activities of the sector which the
individual would represent on the Council. NMFS will appoint the
members of the Council from among the nominees within 60 days. The term
for members would be 3 years. Council members will serve without
compensation but would be reimbursed for their reasonable expenses
incurred in performing their duties as members of the Council.
Continued Operation of a Council
Continued operation of a Council is at the discretion of NMFS and
subject to NMFS' annual review of a market assessment prepared by the
Council and evaluation of Council performance. Increases in product
prices will not be the sole criteria for determining the effectiveness
of a marketing program. The Council must demonstrate that the marketing
plan will not adversely impact those fisheries for which conservation
and management measures are necessary to prevent overfishing and
rebuild overfished stocks, i.e., the market plan should be designed to
increase profits rather than increase harvest. The marketing plan
should also demonstrate that conservation and management efforts in
other fisheries are not adversely affected, but NMFS may use the
primary, secondary, or tertiary impacts in evaluating whether the
Council should be allowed to continue operating. Where measures have
been implemented to reduce the overall harvest in a fishery, the
marketing plan should clearly identify how stock conservation harvest
capacity reduction would not be adversely impacted. Council support of
the regional fishery management council's adoption of dedicated or
controlled access programs, for example but not limited to programs
such as Individual Fishing Quota, moratorium on new entrants into a
fishery, and other effort control measures, are programs that comply
with this standard. NMFS retains the authority to determine if the
continued operation of a Council would be in the public interest.
Councils will be required to: (1) meet performance standards
approved by NMFS that demonstrate that marketing and promotion programs
are effective in increasing consumer demand for species-specific
seafood products; (2) conduct market assessments based on economic,
market, social and demographic, and biological information as deemed
necessary by NMFS; (3) submit annual plans and budgets for species-
specific marketing and promotion plans; (4) submit progress reports on
implementation of the marketing and promotion plans; and (5) submit
financial reports with respect to the receipt and disbursement of funds
entrusted to it. NMFS will require a complete audit report to be
conducted by an independent public accountant and submitted to NMFS at
the end of each fiscal year.
Assessments
Councils will be funded through voluntary assessment of the
industry
[[Page 18107]]
represented on the Councils. Assessments will be imposed on sector
participants in the receiving sector or the importing sector or both as
specified in the approved Council charter. Assessment rates will be
based on value that may be expressed in monetary units or units of
weight or volume. Once a participant declines to pay an assessment, or
elects not to participate in a Council, no future assessments will be
imposed. With NMFS' concurrence, a Council will establish the
applicable assessment for those seeking to rejoin or participate in a
Council at a future time.
The Council will notify a sector participant subject to assessment
that the assessment is due. The notification informs the participant of
the right to seek review of the assessment by filing a written petition
of objection with NMFS at any time during the time period to which the
assessment applies in accordance with the procedures in Sec. 270.19.
The notification also informs the participant of the right to request a
refund of the assessment and provides deadlines for submission of the
request.
Persons subject to an assessment will be required to pay the
assessment on or before the date due, unless they have demanded a
refund or filed a petition of objection with NMFS under Sec. 270.21.
However, a person who has demanded a refund under Sec. 270.22 or filed
a petition of objection under Sec. 270.21 may submit proof of these
actions in lieu of payment. In the case of a petition of objection,
NMFS will inform the Council and the petitioner of its finding at which
time petitioner must pay the revised assessment if applicable.
Pursuant to 16 U.S.C. 4014, any sector participant who pays an
assessment under the FSPA may demand and must promptly receive from the
Council a refund of the assessment. A demand for refund must be made in
accordance with procedures in the approved charter and within the time
limits prescribed by the Council and approved by NMFS. Procedures to
provide such a refund will be established before any such assessment
will be collected. Once a refund has been requested by a sector
participant and paid by the Council, that sector participant will no
longer participate in a referendum or other business of the Council
during the remainder of the assessment rate period. However, if
assessments are paid during a future assessment rate period and no
refund is requested, that sector participant will be able to again
participate in a referendum or other business of the Council.
Quality Standards
Each Council may develop and submit to NMFS for approval, or upon
the request of a Council, NMFS will develop, quality standards for the
species of fish or fish products described in the approved charter. Any
quality standard developed should be consistent with the purposes of
the FSPA. A quality standard should be adopted by a Council by a
majority of its members following a referendum conducted by the Council
among sector participants of the concerned sector(s). In order for a
quality standard to be brought before Council members for adoption, the
majority of the sector participants of the concerned sector(s) must
vote in favor of the standard. Furthermore, according to the best
available data, the majority must collectively account for, in the
preceding 12-month period, not less than 66 percent of the value of the
fish or fish products described in the charter that were handled during
such period in that sector by those who meet the eligibility
requirements to vote in the referendum. Councils may develop quality
standards establishing the criteria for the fish or fish products being
promoted. The Council will submit a plan to conduct the referendum on
the quality standards to NMFS for approval at least 60 days in advance
of such referendum date.
An official observer appointed by NMFS will be allowed to be
present at the ballot counting and any other phase of the referendum
process, and may take whatever steps NMFS deems appropriate to verify
the validity of the process and results of the referendum.
Quality standards developed must meet or exceed the U.S. Food and
Drug AdministrationSec. s minimum requirements for fish and fish
products for human consumption and must be consistent with applicable
standards of the U.S. Department of Commerce (NOAA) or other recognized
Federal standards and/or specifications for fish and fish products.
Dissolution of a Council
In order to terminate a Council, at least three sector participants
in any one sector must file a petition with NMFS. The petition should
be accompanied by a written document explaining the reasons for the
petition. If NMFS initially determines that the petition is accompanied
by the signatures, or corporate certifications, of no less than three
sector participants in the sector who collectively accounted for, in
the preceding 12-month period, not less than 20 percent of the value of
the fish or fish products that were handled by that sector during the
period, NMFS within 90 days after the initial determination, will
conduct a referendum for termination of the Council among all sector
participants in that sector.
If the referendum votes which are cast in favor of terminating the
Council constitute a majority of the sector participants voting and the
majority, in the preceding 12-month period, collectively accounted for
not less than 66 percent of the value of such fish and fish products
the that were handled during that period by the sector who filed the
petition, NMFS will by order terminate the Council effective as of a
date by which the affairs of the Council should be concluded.
Cost of Referendum
NMFS will initially pay all costs of this referendum. However,
prior to conducting the referendum, NMFS will require petitioners to
post a bond or other security acceptable to NMFS in an amount which
NMFS determines to be sufficient to pay any expenses incurred for the
conduct of the referendum.
If a Council is terminated, NMFS, after recovering all expenses
incurred for the conduct of the referendum, will take action as is
necessary and practicable to ensure that moneys remaining in the
account established by the Council are paid on a prorated basis to the
sector participants from whom those moneys were collected. If a
referendum fails to result in the termination of the Council, NMFS will
immediately recover the amount of the bond posted by the petitioners.
If the amount remaining in the Council account is insufficient for
NMFS to recover all expenses incurred for the conduct of the
referendum, NMFS will recover the balance of the expenses from the
petitioners that posted a bond.
Comments and Responses
Sixteen commenters provided 15 comments during the comment period
for the proposed rule for this action. Commenters included commercial
and recreational fishermen, processors, importers, distributors,
marketers, senior scientists, environmental non-governmental
organizations, and concerned citizens.
Comment 1: Several commenters were concerned that the establishment
of Seafood Marketing Councils would promote over-fishing or favor the
commercial industry at the expense of recreational fishing
opportunities. Some of the species listed as candidates for a marketing
program (e.g., some groupers,
[[Page 18108]]
snappers, cod, and flatfish) are already overexploited.
Response: Seafood Marketing Councils and their marketing plans are
required to comply with NMFS' conservation and stewardship goals and
objectives. Marketing Councils will not play any role in the management
of fisheries through the setting of annual quotas, limitations on
fishing effort or the allocation of fishery resources. Rebuilding plans
for overexploited stocks will not be affected by this rule.
Comment 2: A number of commenters emphasized the importance of
educating the public about the nutritional benefits of seafood and the
risks associated with mercury and other contaminants.
Response: NMFS agrees that educating the public on the benefits and
risks of eating seafood is important. The establishment of Seafood
Marketing Councils is an opportunity to provide the public with
accurate information about contaminant risks for vulnerable sub-
populations and to document the health benefits associated with
consuming seafood.
Comment 3: Several commenters were concerned that NMFS would
intrude in the industrySec. s marketing decisions. Commenters
suggested that NMFS should not review or be expected to approve
marketing plans developed by private sector experts. Additionally, they
were concerned that Federal intervention in marketing efforts would
strip away free market abilities.
Response: This rule is intended to create a voluntary program that
operates under the control of its participants. NMFS' role is to ensure
that scientifically accurate information is provided to consumers of
seafood products and to ensure the smooth functioning of the Marketing
Councils. Marketing Councils will improve the transmission of clear and
accurate information about seafood products to consumers and thereby
enhance free market capabilities to allocate and price seafood
products.
Comment 4: Several non-governmental organizations emphasized the
need for an Environmental Impact Statement (EIS).
Response: Based on preliminary analyses under the National
Environmental Policy Act (NEPA), NMFS has concluded that preparation of
an EIS is not necessary at this time because the effort is primarily
educational and informational in nature. The promotional nature of the
effort is such that it will not affect individually or cumulatively the
quality of the human environment, or impact managed species, essential
fish habitat, or species or their habitat protected under the
Endangered Species Act (16 U.S.C. 1531 et seq.). Further analysis under
NEPA will be required before any Seafood Marketing Council is
considered for approval by the Secretary. There is nothing in this
action that would establish a precedent about future proposals.
Comment 5: Two non-governmental organizations were concerned that
the Seafood Marketing Councils may raise seafood prices for U.S.
consumers. Middle- to low-income families would be less likely to
purchase seafood and receive its nutritional benefits.
Response: The market for fish products is diverse and complex. An
increase in price for one commodity does not translate into an increase
across all commodities. One commodity's price increase could result in
a price decline for other seafood products. Many lower cost fish
product alternatives will still exist for consumers even with a price
increase in one product.
Comment 6: One commenter questioned why the regulations to create
Seafood Marketing Councils were previously removed.
Response: The Fish and Seafood Promotion Act (FSPA) initially
established a National Seafood Council funded by Congress. When the
Congressional funds were exhausted, the seafood industry did not choose
to continue the funding for the National Seafood Council, and it was
deactivated. During that time, seafood product prices remained at
premium levels and industry did not feel the need to fund generic
marketing programs. Since the 1990s, the advance of aquaculture
production worldwide has contributed to a decline in general prices for
seafood products. Today, domestic commercial seafood harvesters are
facing a financial crisis. Therefore, there is some renewed industry
interest and support for seafood marketing and promotion-related
activities.
Comment 7: Several commenters were concerned that the amount of
required analytical documentation to apply is too burdensome for the
industry, and that there would be little incentive for industry to
participate in this program.
Response: The amount of analysis will vary according to the design
and composition of each potential Seafood Marketing Council. NMFS staff
will coordinate with applicants in the development of specific analysis
requirements, subject to NMFS review and approval.
Comment 8: Some commenters were concerned about the associated
costs to NMFS during a time when the agency struggles with meeting
costs of established programs. They requested that NMFS funds be
allocated for issues like conservation and education, rather than
seafood promotion.
Response: Expenses of operating the Marketing Councils are to be
borne entirely by Council participants. These are voluntary, self-
financed, industry-based, marketing programs that will not interfere
with NMFS' ability to meet its mission goals.
Comment 9: One association suggested that the criteria for a
referendum should be the participation of companies representing
greater than fifty percent of the industry's revenue rather than the
participation of more than half of the industry's participants.
Response: According to the FSPA, the majority of sector
participants that vote in favor of establishing the Marketing Council
must represent 66 percent of the value of the fish and fish products
produced in the last six months by the sector petitioning to create a
Marketing Council.
Comment 10: One commenter suggested that foreign seafood market
development should not be among the responsibilities of the Marketing
Councils, since this function is already filled by the U.S. Department
of Agriculture.
Response: The focus of the Marketing Councils is on the domestic
marketing of seafood. They are not intended to compete with other
federal or state programs that have jurisdiction for international
marketing of seafood products.
Comment 11: One commenter suggested that the rule include a
provision that allows small, regional marketing organizations to
organize under a Seafood Marketing Council if they so choose.
Response: Existing regional marketing organizations have a voice in
the formation of any new Councils through the referendum process.
Comment 12: One commenting organization was concerned that the rule
promotes a singular species message that may conflict with their
broader multi-species message. Another commenter was concerned that the
Marketing Councils would exclude some participants or finance the
promotion of one type of seafood at the expense of another.
Response: Existing regional marketing councils can petition to form
multi-species Councils. The merits of each potential Marketing Council
will be considered on a case-by-case basis.
Comment 13: One commenting group was opposed to voluntary
participation. If someone decides not to vote in the referendum, that
person will not be
[[Page 18109]]
assessed even if the majority of other sector participants agree to the
formation of a Seafood Marketing Council. In their view, if a Marketing
Council is formed for a particular fish or fish product, assessments
should be required of all sector participants.
Response: Recent decisions by the U.S. Supreme Court (Johanns v.
Livestock Marketing Association; 544 U.S. 550; 2005 U.S. LEXIS 4343),
while not specifically addressing voluntary participation in Seafood
Marketing Councils, strongly indicated that a voluntary Marketing
Council program would be preferable to mandatory participation in
future councils.
Comment 14: One commenter suggested that the quality seal should
not be used as an eco-label; this perception could be confusing to the
public.
Response: The criteria supporting a quality seal will be subject to
approval by the Secretary, and made known to the public. A quality seal
will not be taken to mean environmentally friendly.
Comment 15: Several organizations believe the rule is inconsistent
with NOAASec. s goal of decreasing the seafood trade deficit. They
suggested that by allowing importers to participate in the Marketing
Councils, NMFS would be providing an indirect subsidy for imported
seafood, thus undermining a program such as offshore aquaculture that
was intended to reduce U.S. dependence on seafood imports.
Response: The establishment of Seafood Marketing Councils will not
be a Government subsidy to the commercial fishing industry, either
foreign or domestic, since all costs will be funded by the Marketing
Council's participants. It is not expected to contribute to the seafood
trade deficit.
Changes From the Proposed Rule
Pursuant to the Paperwork Reduction Act (PRA), part 902 of title 15
CFR displays control numbers assigned to NMFS information collection
requirements by the Office of Management and Budget (OMB). This part
fulfills the requirements of section 3506(c)(1)(B)(I) of the PRA, which
requires that agencies display a current control number assigned by the
Director of OMB, for each agency information collection requirement.
This final rule codifies OMB control numbers for 0648-0556 for Sec.
270.
Under NOAA Administrative Order 205-11, 07/01, dated December 17,
1990, the Under Secretary for Oceans and Atmosphere has delegated
authority to sign material for publication in the Federal Register to
the Assistant Administrator for Fisheries, NOAA.
Classification
This final rule has been determined to be significant for purposes
of Executive Order 12866.
This final rule contains a collection-of-information requirement
subject to the Paperwork Reduction Act (PRA) and which has been
approved by OMB under control number 0648-0556. The information
collection requirements contained in this final rule can be broadly
categorized into two categories: (1) Information required of an
individual or organization applying for consideration to form a
Council, and (2) information required of a formed and operating
Council. Information required of an individual or organization applying
for consideration to form a Council, consists of an ``application for
charter'' that is composed of three sections: petition, proposed
charter, and a list of eligible referendum participants. Public
reporting burden for this portion of the collection requirement in 50
CFR part 270 is 320 hours in total, with an average of 80 hours to
develop a petition, 200 hours to develop a proposed charter, and 40
hours to develop a list of eligible referendum participants. All other
information requirements in the final rule are imposed on the Councils,
once they are established. The estimated reporting time for these
information requirements varies from 1 to 120 hours per response.
Council submission of an annual plan, an annual budget, and an annual
financial report are estimated at 120 hours each for a total of 360
hours. Council submissions of semi-annual progress reports are
estimated at 40 hours twice a year, notice of assessments at 20 hours
once a year, list of Council nominations following a favorable
referendum at 20 hours once a year, and meeting notices at 1-2 hours
once a year. Other submissions are optional and are dependent upon the
operation of a particular Council and its participants. For instance,
Council submission of a plan to conduct a referendum on development of
quality standards is estimated at 40 hours with no more than annual
frequency. Additionally, assessed participants of a Council submission
of a petition of objection and/or request for refund is estimated at 2
hours each no more than 6 times a year. These estimated reporting times
include the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information. The total time estimate is
1,127 hours. The total annual cost burden to respondents is expected to
be $4,700 based on the need for outside auditing of Seafood Marketing
Council financial records. Start up costs are $3,200 and annual
operating costs are $1,500. Send comments regarding these burden
estimates or any other aspects of the data collection to NMFS (see
ADDRESSES) and by e-mail to David_Rostker@omb.eop.gov, or fax to (202)
395-7285.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a 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.
Final Regulatory Flexibility Analysis
NMFS prepared this FRFA which incorporates the Initial Regulatory
Flexibility Analysis (IRFA) published in the Federal Register on
January 24, 2006 (71 FR 3797). The IRFA is not repeated here in its
entirety. The need for and the objectives of the rule are explained in
the SUMMARY and SUPPLEMENTARY INFORMATION sections of the proposed rule
and this final rule.
Description of and Estimate of the Number of Small Entities to Which
the Final Rule Will Apply
The potential universe of entities affected by this action includes
all harvesters, importers, marketers, and processors of seafood. With
the exception of a small number of catcher-processor vessels, most
harvesters are identified as small entities under the Regulatory
Flexibility Act meeting a size standard of less than $4.0 million in
gross receipts. Importers and marketers are characterized as small if
the number of employees working in a typical pay period number are 100
or fewer, while seafood processors employing 500 people or less are
considered small. A Council could be made up of any combination of
small or large firms depending upon the sector or sectors of a
particular fishery the Council is representing. NMFS statistics
indicate that there are approximately 17,679 harvesters, 935 processing
plants, and 2,446 wholesale and marketing establishments that could be
affected by this proposed rule.
Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements
The information collection requirements contained in this final
rule can be broadly categorized into two categories: (1) Information
required of an individual or organization applying for consideration to
form a Council, and
[[Page 18110]]
(2) information required of a formed and operating Council. Information
required of an individual or organization applying for consideration to
form a Council, consists of an ``application for charter'' that is
composed of three sections: petition, proposed charter, and a list of
eligible referendum participants. The estimated reporting time for this
portion of the collection requirement in 50 CFR part 270 is 320 hours
in total, with an average of 80 hours to develop a petition, 200 hours
to develop a proposed charter, and 40 hours to develop a list of
eligible referendum participants. All other information requirements
are imposed on the Councils, once they are established. The estimated
reporting time for these information requirements varies from 1 to 120
hours per response. Council submission of an annual plan, an annual
budget, and an annual financial report are estimated at 120 hours each
for a total of 360 hours. Council submissions of semi-annual progress
reports is estimated at 40 hours twice a year, notice of assessments at
20 hours once a year, list of Council nominations following a favorable
referendum at 20 hours once a year, and meeting notices at 1-2 hours
once a year. Other submissions are optional and are dependent upon the
operation of a particular Council and its participants. For instance,
Council submission of a plan to conduct a referendum on development of
quality standards is estimated at 40 hours with no more than annual
frequency. Additionally, assessed participants of a Council's
submission of an objection petition and/or request for refund is
estimated at 2 hours each no more than 6 times a year. These estimated
reporting times include the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
In addition to recordkeeping and reporting requirements required to
create a Council, small entities could also be required to complete
forms required to administer assessment fees, petition for a refund of
assessment fees, or participate in any referendum under a specific
Council's charter. NMFS believes the number of burden hours to small
entities to meet Council obligations could range between 5 and 20 hours
annually. This final rule does not implement a seafood marketing
program, therefore, the Paperwork Reduction Act requirements are not
triggered. However, there may be a need for additional burden hours
once a Council's charter is accepted.
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 Final Rule as a
Result of Such Comments
NMFS received 15 comments from 16 commenters on the proposed rule.
Of these, seven comments were submitted either directly on the
conclusions reached in the IRFA or on the economic viability of the
rulemaking vis-a-vis small businesses.
Comment A: Several commenters believed that the promotion of
fishery exports is already supported by the Foreign Agricultural
Service (FAS), United States Department of Agriculture (USDA), and the
proposed seafood marketing councils may overlap with rulemaking
specific to the FAS.
Response: NMFS recognizes that there may be a slight overlap with
rulemaking that may be specific to the functions of the FAS. However,
NMFS believes that the overlaps are not significant and seafood
marketing councils may provide additional benefits to constituents by
providing unique services. Discussions between FAS and NMFS are ongoing
to address any overlaps that could result from this rulemaking.
Comment B: One commenter believes that too much Federal involvement
strips away free market abilities from any individual.
Response: The IRFA notes that the implementation of this final rule
does not guarantee that all firms will benefit equally from a seafood
promotion program. However, NMFS believes that increasing the demand
for seafood products would only serve to enhance the markets for
seafood via increased demand and increased pricing power.
Comment C: One commenter believes the Council should not give money
to one seafood at the expense of a different type.
Response: NMFS is requiring seafood councils, as part of their
planning process, to submit an economic analysis that would support
Regulatory Flexibility Act (RFA) and Executive Order 12866 (E.O. 12866)
analysis used for rulemaking to determine impacts to other seafood
products. NMFS will not support marketing plans for one product that
would significantly affect the profitability of firms operating in
another seafood sector of the economy. If the analysis indicates
potential impacts to small entities, the Agency will attempt to
mitigate to the extent practicable adverse impacts to other sectors
that may accrue.
Comment D: One commenter disagreed with the Agency's assertion that
the free rider problem would be less significant for fisheries than
agricultural products.
Response: As noted in the IRFA, NMFS believes that relative price
changes would be less severe in situations where increased supplies
from the aggregate of firms respond to higher demand (also known as an
elastic demand for most fishery products). However, NMFS did not state
that a free rider problem would not exist and pointed out that product
differentiation could alleviate much of the perceived problem.
Comment E: One commenter believed that requiring analyses that
would support RFA or E.O. 12866 analyses would be burdensome.
Response: NMFS agrees that this would be time consuming but the
benefits of performing these analyses would far outweigh the costs in
regard to the ability to estimate the effects of marketing plans on
small entities, producers of other seafood and agricultural products,
and the general economy as well.
Comment F: One commenter representing a regional fisheries
marketing council noted that direct competition from species-specific
Federally-guided councils would directly compete against their products
and dilute their position in the marketplace.
Response: See Response to Comment C.
Comment G: One commenter representing a fishing industry sector
believes that all firms identified as part of a sector should pay a
mandatory fee regardless of whether they desire to participate in a
council or not and further asserts that voluntary or ``de facto
voluntary'' formation of seafood promotion councils is not what the
Fish and Seafood Promotion Act (FSPA) intended.
Response: NMFS specifically requested comments on whether the
amount of funds collected through ``de facto'' voluntary assessments
after considering administrative costs, program costs, the effect of
free riders, and other economic considerations would enable Councils to
develop and maintain marketing, assessment, and research programs
sufficient to benefit both the industry and those firms choosing to pay
``de facto'' voluntary assessments. There were no comments received on
this specific solicitation.
[[Page 18111]]
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
There are two major provisions of this final rule that will
minimize economic impacts to small entities. Firstly, the Agency has
provided a means for a small entity to forego a mandatory assessment
fee even though they may be listed as a participant for a proposed
Council. By making Council participation voluntary, small businesses
that believe it will not be cost effective to participate in a Council
would not be required to do so. Consequently, these businesses could
avoid additional cost of sales that could reduce or squeeze their
overall profit margin. Secondly, the provision that will require
Councils to submit, to NMFS, economic analysis of the impacts to small
entities of proposed marketing and promotion plans will allow the
Agency to mitigate to the extent practicable any adverse impacts that
may accrue to participants in a Council, other fishery sectors, or non-
fishery sectors.
Small Entity Compliance Guide
Section 212 of the Small Business 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. There are no
compliance issues directly associated with the implementation of this
rule. However, when a petition to form a Council is received by the
Agency, a copy of this published final rule with a cover letter
informing the petitioners of administrative requirements for initiating
the Council process including requirements for conducting a referendum
will be provided to the petitioners. The cover letter will also list
Agency contacts responsible the Seafood Marketing Council program.
Copies of this final rule and cover letter are available from the
Office of Sustainable Fisheries, NMFS (see ADDRESSES).
List of Subjects
15 CFR Part 902
Reporting and recordkeeping requirements.
50 CFR Part 270
Administrative practice and procedure, Fish, Marketing, Seafood.
Dated: April 4, 2007.
William T. Hogarth,
Assistant Administrator for Fisheries, National Marine Fisheries
Service.
0
For the reasons set out in the preamble, 15 CFR Chapter IX and 50 CFR
Chapter II are amended as follows:
15 CFR Chapter IX
PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE
PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS
0
1. The authority citation for part 902 continues to read as follows:
Authority: 44 U.S.C. 3501 et seq.
0
2. In Sec. 902.1, the table in paragraph (b) under ``50 CFR'' is
amended by adding new entries to read as follows:
Sec. 902.1 OMB control numbers assigned pursuant to the Paperwork
Reduction Act
* * * * *
(b) * * *
------------------------------------------------------------------------
Current OMB control
CFR part or section where the information number(all numbers begin
collection requirement is located with 0648-)
------------------------------------------------------------------------
* * * * *
50 CFR ...........................
* * * * *
270.3 -0556
270.6 -0556
270.8 -0556
270.10 -0556
270.12 -0556
270.13 -0556
270.14 -0556
270.15 -0556
270.19 -0556
270.20 -0556
270.23 -0556
* * * * *
------------------------------------------------------------------------
0
3. A new subchapter H consisting of part 270 is added to Chapter II to
read as follows:
50 CFR Chapter II
SUBCHAPTER H--FISH AND SEAFOOD PROMOTION
PART 270--SPECIES-SPECIFIC SEAFOOD MARKETING COUNCILS
Sec.
270.1 Scope.
270.2 Definitions.
270.3 Submission of application.
270.4 Review of application.
270.5 Conduct of referendum.
270.6 Sector participants eligible to vote.
270.7 Results of referendum.
270.8 Nomination and appointment of Council members.
270.9 Terms, vacancies, and removal of Council members.
270.10 Responsibilities of a Council.
270.11 Responsibilities of NMFS.
270.12 Notice of Council meetings.
270.13 Books, records and reports.
270.14 Update of sector participant data.
270.15 Quality standards.
270.16 Deposit of funds.
270.17 Authority to impose assessments.
270.18 Method of imposing assessments.
270.19 Notice of assessment.
270.20 Payment of assessments.
270.21 Petition of objection.
270.22 Refunds.
270.23 Dissolution of Councils.
Authority: 16 U.S.C. 4001-4017
Sec. 270.1 Scope.
This part 270 describes matters pertaining to the establishment,
representation, organization, practices, procedures, and termination of
Seafood Marketing Councils.
Sec. 270.2 Definitions.
The following terms and definitions are in addition to or amplify
those contained in the Fish and Seafood Promotion Act of 1986:
Act means the Fish and Seafood Promotion Act of 1986 (Public Law
99-659) and any subsequent amendments.
Consumer education means actions undertaken to inform consumers of
matters related to the consumption of fish and fish products.
Council means a Seafood Marketing Council for one or more species
of fish and fish products of that species established under section 210
of the Act (16 U.S.C. 4009).
Expenditure means monetary or material worth of fishery products.
Expenditure is determined at the point a receiver obtains product from
a harvester or an importer obtains product from a foreign supplier.
Value may be expressed in monetary units (the price a receiver pays to
a harvester or an importer pays to a foreign supplier).
Fiscal year means any 12-month period as NMFS may determine for
each Council.
Fish means finfish, mollusks, crustaceans, and all other forms of
aquatic animal life used for human consumption; the term does not
include marine mammals and seabirds.
Harvester means any person in the business of catching or growing
fish for purposes of sale in domestic or foreign markets.
[[Page 18112]]
Importer means any person in the business of importing fish or fish
products from another country into the United States and its
territories, as defined by the Act, for commercial purposes, or who
acts as an agent, broker, or consignee for any person or nation that
produces, processes or markets fish or fish products outside of the
United States for sale or for other commercial purposes in the United
States.
Marketer means any person in the business of selling fish or fish
products in the wholesale, export, retail, or restaurant trade, but
whose primary business function is not the processing or packaging of
fish or fish products in preparation for sale.
Marketing and promotion means any activity aimed at encouraging the
consumption of fish or fish products or expanding or maintaining
commercial markets for fish or fish products.
Member means any person serving on any Council.
Participant means a member of a sector or business identified in an
application for a Council charter as being subject to the referendum or
assessment process.
Person means any individual, group of individuals, association,
proprietorship, partnership, corporation, cooperative, or any private
entity of the U.S. fishing industry organized or existing under the
laws of the United States or any state, commonwealth, territory or
possession of the United States who meets the eligibility requirements
as defined in a proposed charter to vote in a referendum.
Processor means any person in the business of preparing or
packaging fish or fish products (including fish of the processor's own
harvesting) for sale in domestic or foreign markets.
Receiver means any person who owns fish processing vessels and any
person in the business of acquiring (taking title to) fish directly
from harvesters.
Research means any type of research designed to advance the image,
desirability, usage, marketability, production, quality and safety of
fish and fish products.
Secretary means the Secretary of Commerce, or the Secretary's
designee.
Sector means
(1) The sector consisting of harvesters;
(2) The sector consisting of importers;
(3) The sector consisting of marketers;
(4) The sector consisting of processors;
(5) The sector consisting of receivers; or
(6) The consumer sector consisting of persons professionally
engaged in the dissemination of information pertaining to the
nutritional benefits and preparation of fish and fish products;
Sector participant means any individual, group of individuals,
association, proprietorship, partnership, corporation, cooperative, or
any private entity of the U.S. fishing industry organized or existing
under the laws of the United States or any state, commonwealth,
territory or possession of the United States who meets the eligibility
requirements as defined in a proposed charter to vote in a referendum.
Species means a fundamental category of taxonomic classification,
ranking after genus, and consisting of animals that possess common
characteristic(s) distinguishing them from other similar groups.
Value means monetary or material worth of fishery products. Value
is the difference between what a receiver is willing to pay for a
product provided by a harvester and its market price or an importer is
willing to pay for a product from a foreign supplier and its market
price. Value may be expressed in monetary units representing consumer
surplus or producer surplus.
Sec. 270.3 Submission of application.
(a) Persons who meet the minimum requirements for sector
participants as described in the proposed charter may file an
application with NMFS for a charter for a Seafood Marketing Council for
one or more species of fish and fish products of that species. One
signed original and two copies of the completed application package
must be submitted to the Assistant Administrator for Fisheries,
National Marine Fisheries Service, NOAA, 1315 East-West Highway, Silver
Spring, MD 20910. Applications should not be bound.
(b) The application consists of four parts:
(1) A document requesting NMFS to establish a Council;
(2) A proposed charter under which the proposed Council will
operate;
(3) A list of eligible referendum participants; and
(4) Analytical documentation addressing requirements of applicable
law.
(c) Content of application--(1) Application or requesting document.
The application or requesting document submitted by the applicants to
NMFS requesting that the Council be established, to the extent
practicable, must include the signatures or corporate certifications,
of no less than three sector participants representing each sector
identified in accordance with paragraph (c)(2)(v) of this section and
who, according to the available data, collectively accounted for, in
the 12-month period immediately preceding the month in which the
application was filed, not less than 10 percent of the value of the
fish or fish products specified in the charter that were handled during
such period in each sector by those who meet the eligibility
requirements to vote in the referendum as defined by the application.
The application must also include a statement that, if established, the
Council will have sufficient resources (e.g., cash, donated office
space, services, supplies, etc.) available for initial administrative
expenditures pending collection of assessments.
(2) Proposed charter. A proposed charter must contain, at a
minimum, the following information:
(i) The name of the Council and a provision proclaiming its
establishment;
(ii) A declaration of the purposes and objectives of the Council;
(iii) A description of the species of fish and fish products,
including the scientific and common name(s), for which the Council will
implement marketing and promotion plans under the Act. (The American
Fisheries Society's ``List of Common and Scientific Names of Fishes
from the United States and Canada'' (latest edition) or where
available, an appropriate volume of its ``List of Common and Scientific
Names of Aquatic Invertebrates of the United States and Canada''
(latest edition) should be used as the authority for all scientific and
common names.);
(iv) A description of the geographic area (state(s)) within the
United States covered by the Council;
(v) The identification of each sector and the number and terms of
representatives for each sector that will be voting members on the
Council. (The number of Council members should be manageable, while
ensuring equitable geographic representation. The term for members will
be 3 years. Initially, to ensure continuity, half of the members' terms
will be 2 years and half will be 3 years. Reappointments are
permissible.);
(vi) The identification of those sectors (which must include a
sector consisting of harvesters, a sector consisting of receivers, and,
if subject to assessment, a sector consisting of importers), eligible
to vote in the referendum to establish the Council;
(vii) For each sector described under paragraph (c)(2)(v) of this
section, a threshold level specifying the minimum requirements, as
measured by income,
[[Page 18113]]
volume of sales, or other relevant factors, that a person engaging in
business in the sector must meet in order to participate in a
referendum;
(viii) A description of the rationale and procedures for
determining assessment rates as provided in Sec. 270.18, based on a
fixed amount per unit of weight or measure, or on a percentage of value
of the product handled;
(ix) The proposed rate or rates that will be imposed by the Council
on receivers and, if subject to assessment, importers during its first
year of operation;
(x) The maximum amount by which an assessment rate for any period
may be raised above the rate applicable for the immediately preceding
period;
(xi) The maximum rate or rates that can be imposed by a Council on
receivers or importers during the operation of the Council;
(xii) The maximum limit on the amount any one sector participant
may be required to pay under an assessment for any period;
(xiii) The procedures for providing refunds to sector participants
subject to assessment who request the same in accordance with the time
limits specified Sec. 270.22;
(xiv) A provision setting forth the voting procedures by which
votes may be cast by proxy;
(xv) A provision that the Council will have voting members
representing the harvesting, receiving and, if subject to assessment,
importing sectors;
(xvi) A provision setting forth the definition of a quorum for
making decisions on Council business and the procedures for selecting a
chairperson of the Council;
(xvii) A provision that members of the Council will serve without
compensation, but will be reimbursed for reasonable expenses incurred
in performing their duties as members of the Council;
(xviii) A provision containing a requirement for submission to NMFS
the criteria and supporting data for evaluating the annual and/or
multi-year performance of proposed marketing plans and the Council's
performance;
(xix) A provision containing a requirement for submission of
documentation as requested by NMFS for purposes of evaluating
performance of proposed marking plans and the Council's related
performance;
(xx) Where adequate funds are not available, a provision containing
the minimum number of participants needed for sustained operations that
cannot receive assessment refunds;
(xxi) A provision acknowledging that NMFS will have the right to
participate in Council meetings;
(xxii) A provision that the Council will conduct its activities in
accordance with applicable NMFS requirements and that NMFS has final
approval authority over proposed marketing plans and Council actions;
(xxiii) A provision containing a requirement for the Council to
arrange for a complete audit report to be conducted by an independent
public accountant and submitted to NMFS at the end of each fiscal year;
(xxiv) A provision containing a requirement for the Council to
conduct a market assessment based on economic, market, social and
demographic, and biological information as deemed necessary by NMFS;
and
(xxv) A provision containing a requirement for the Council to
update the list of referendum participants on an annual basis.
(3) List of referendum participants. The list of referendum
participants, to the extent practicable, must identify the business
name and address of all sector participants that the applicants believe
meet the requirements for eligibility to vote in the referendum on the
adoption of the proposed charter.
(i) The list should include all sectors in which a sector
participant meets the eligibility requirements to vote in a referendum.
If a sector participant has more than one place of business located
within the geographic area of the Council, all such places should be
listed and the primary place of business should be designated. The
agency will provide appropriate information in its possession of a non-
proprietary nature to assist the applicants in developing the list of
sector participants.
(ii) [Reserved]
(4) Analytical documentation. The applicant must address the
requirements of the Act, implementing regulations, and other applicable
law, i.e., E.O. 12866, Regulatory Flexibility Act, National
Environmental Policy Act, and other law as NMFS determines appropriate.
Sec. 270.4 Review of application.
Within 180 days of receipt of the application to establish a
Council, NMFS will:
(a) Determine if the application is complete and complies with all
of the requirements set out in Sec. 270.3 and complies with all
provisions of the Act and other applicable laws.
(b) Identify, to the extent practicable, those sector participants
who meet the requirements for eligibility to participate in the
referendum to establish the Council. NMFS may require additional
information from the applicants or proposed participants in order to
verify eligibility. NMFS may add names to or delete names from the list
of sector participants believed eligible by the applicants until the
time of the referendum based on additional information received.
(c) If NMFS finds minor deficiencies in an application that can be
corrected within the 180-day review period, NMFS will advise the
applicants in writing of what must be submitted by a specific date to
correct the minor deficiencies.
(d) If NMFS makes a final negative determination, on an
application, NMFS will advise the applicant in writing of the reason
for the determination. The applicant may submit another application at
any time thereafter. NMFS then has 180 days from receipt of the new
application to render a final determination on its acceptability.
Sec. 270.5 Conduct of referendum.
(a) Upon making affirmative determinations under Sec. 270.4, NMFS,
within 90 days after the date of the last affirmative determination,
will conduct a referendum on the adoption of the proposed charter.
(b) NMFS will estimate the cost of conducting the referendum,
notify the applicants, and request that applicants post a bond or
provide other applicable security, such as a cashierSec. s check, to
cover costs of the referendum.
(c) NMFS will initially pay all costs of a referendum to establish
a Council. Within two years after establishment, the Council must
reimburse NMFS for the total actual costs of the referendum from
assessments collected by the Council. If a referendum fails to result
in establishment of a Council, NMFS will immediately recover all
expenses incurred for conducting the referendum from the bond or
security posted by applicants. In either case, such expenses will not
include salaries of government employees or other administrative
overhead, but will be limited to those additional direct costs incurred
in connection with conducting the referendum.
(d) No less than 30 days prior to holding a referendum, NMFS will:
(1) Publish in the Federal Register the text of the proposed
charter and the most complete list available of sector participants
eligible to vote in the referendum; and
(2) Provide for public comment, including the opportunity for a
public meeting.
[[Page 18114]]
Sec. 270.6 Sector participants eligible to vote.
(a) Any participant who meets the minimum requirements as measured
by income, volume of sales or other relevant factors specified in the
approved charter may vote in a referendum.
(b) Only one vote may be cast by each participant who is eligible
to vote, regardless of the number of individuals that make up such
``participant'' and how many sectors the participant is engaged in. The
vote may be made by any responsible officer, owner, or employee
representing a participant.
Sec. 270.7 Results of referendum.
(a) Favorable vote to establish a Council. NMFS will, by order of
publication in the Federal Register, establish the Council and approve
an acceptable proposed charter, if the referendum votes which are cast
in favor of the proposed charter constitute a majority of the sector
participants voting in each and every sector. Further, according to the
best available data, the majority must collectively account for, in the
12-month period immediately preceding the month in which the proposed
charter was filed, at least 66 percent of the value of the fish and
fish products described in the proposed charter handled during such
period in each sector by those who meet the eligibility requirements to
vote in the referendum as defined by the applicants.
(b) Unfavorable vote to establish a Council. If a referendum fails
to pass in any sector of the proposed Council, NMFS will not establish
the Council or approve the proposed charter. NMFS will immediately
recover the cost of conducting the referendum according to Sec.
270.5(c).
(c) Notification of referendum results. NMFS will notify the
applicants of the results of the referendum and publish the results of
the referendum in the Federal Register.
Sec. 270.8 Nomination and appointment of Council members.
(a) Within 30 days after a Council is established, NMFS will
solicit nominations for Council members from the sectors represented on
the Council in accordance with the approved charter. If the harvesters
and receivers represented on the Council are engaged in business in two
or more states, but within the geographic area of the Council, the
nominations made under this section must, to the extent practicable,
result in equitable representation for those states. Nominees must be
knowledgeable and experienced with regard to the activities of, or have
been actively engaged in the business of, the sector that such person
will represent on the Council. Therefore, a resume will be required for
each nominee.
(b) In accordance with 16 U.S.C. 4009(f), NMFS will, within 60 days
after the end of the 30-day period, appoint the members of the Council
from among the nominees.
Sec. 270.9 Terms, vacancies and removal of Council members.
(a) A Council term is for 3 years, except for initial appointments
to a newly established Council where:
(1) Half of the Council member terms will be 2 years; and
(2) Half of the Council member terms will be 3 years.
(b) A vacancy on a Council will be filled, within 60 days after the
vacancy occurs, in the same manner in which the original appointment
was made. A member appointed to fill a vacancy occurring before the
expiration of the term for which the member's predecessor was appointed
will be appointed only for the remainder of such term.
(c) Any person appointed under the Act who consistently fails or
refuses to perform his or her duties properly and/or participates in
acts of dishonesty or willful misconduct with respect to
responsibilities under the Act will be removed from the Council by NMFS
if two-thirds of the members of the Council recommend action. All
requests from a Council to NMFS for removal of a Council member must be
in writing and accompanied by a statement of the reasons upon which the
recommendation is based.
Sec. 270.10 Responsibilities of a Council.
(a) Each Council will:
(1) Implement all terms of its approved charter;
(2) Prepare and submit to NMFS, for review and approval under Sec.
270.11(a)(1), a marketing and promotion plan and amendments to the plan
which contain descriptions of the projected consumer education,
research, and other marketing and promotion activities of the Council;
(3) Implement and administer an approved marketing and promotion
plan and amendments to the plan;
(4) Determine the assessment to be made under Sec. 270.18 and
administer the collection of such assessments to finance Council
expenses described in paragraph (b) of this section;
(5) Receive, investigate and report to NMFS accounts of violations
of rules or orders relating to assessments collected under Sec.
270.20, or quality standard requirements established under Sec.
270.15;
(6) Prepare and submit to NMFS, for review and approval a budget
(on a fiscal year basis) of the anticipated expenses and disbursements
of the Council, including
(i) All administrative and contractual expenses;
(ii) The probable costs of consumer education, research, and other
marketing and promotion plans or projects;
(iii) The costs of the collection of assessments; and
(iv) The expense of repayment of the costs of each referendum
conducted in regard to the Council.
(7) Comply with NMFS requirements, and prepare and submit to NMFS
for review, evaluation, and verification of results and analysis an
annual market assessment and related analytical documentation that is
based on economic, market, social, demographic, and biological
information as deemed necessary by NMFS;
(8) Maintain books and records, prepare and submit to NMFS reports
in accordance with respect to the receipt and disbursement of funds
entrusted to it, and submit to NMFS a completed audit report conducted
by an independent auditor at the end of each fiscal year;
(9) Reimburse NMFS for the expenses incurred for the conduct of the
referendum to establish the Council or any subsequent referendum to
terminate the Council that fails;
(10) Prepare and submit to NMFS report or proposals as the Council
determines appropriate to further the purposes of the Act.
(b) Funds collected by a Council under Sec. 270.17 will be used by
the Council for--
(1) Research, consumer education, and other marketing and promotion
activities regarding the quality and marketing of fish and fish
projects;
(2) Other expenses, as described in Sec. 270.10(a)(1);
(3) Such other expenses for the administration, maintenance, and
functioning of the Council as may be authorized by NMFS; and
(4) Any reserve fund established under paragraph (e)(4) of this
section and any administrative expenses incurred by NMFS specified as
reimbursable under this Part.
(c) Marketing and promotion plans and amendments to such plans
prepared by a Council under paragraph(a)(2) of this section will be
designed to increase the general demand for fish and fish products
described in accordance with Sec. 270.3(c)(2)(iii) by encouraging,
[[Page 18115]]
expanding, and improving the marketing, promotion and utilization of
such fish and fish products, in domestic or foreign markets, or both,
through consumer education, research, and other marketing and promotion
activities.
(d) Consumer education and other marketing and promotion activities
carried out by a Council under a marketing and promotion plan and
amendments to a plan may not contain references to any private brand or
trade name and will avoid the use of deceptive acts or practices in
promoting fish or fish products or with respect to the quality, value,
or use of any competing product or group of products.
(e) Authority of a Council. A Council may:
(1) Sue and be sued;
(2) Enter into contracts;
(3) Employ and determine the salary of an executive director who
may, with the approval of the Council employ and determine the salary
of such additional staff as may be necessary;
(4) Establish a reserve fund from monies collected and received
under Sec. 270.17 to permit an effective and sustained program of
research, consumer education, and other marketing and promotion
activities regarding the quality and marketing of fish and fish
products in years when production and assessment income may be reduced,
but the total reserve fund may not exceed the amount budgeted for the
current fiscal year of operation.
(f) Amendment of a charter. A Council may submit to NMFS amendments
to the text of the Council's charter. Any proposed amendments to a
charter will be approved or disapproved in the same manner as the
original charter was approved under Sec. 270.4 and Sec. 270.5 with
the exception of Sec. 270.4(b).
Sec. 270.11 Responsibilities of NMFS.
(a) In addition to the duties prescribed under 16 U.S.C. 4009, NMFS
will:
(1) Participate in Council meetings and review, for consistency
with the provisions of 50 CFR part 270 and other applicable law, and
approve or disapprove, marketing and promotion plans and budgets within
60 days after their submission by a Council;
(2) Immediately notify a Council in writing of the disapproval of a
marketing and promotion plan or budget, together with reasons for such
disapproval;
(3) Issue orders and amendments to such orders that are necessary
to implement quality standards under Sec. 270.15;
(4) Promulgate regulations necessary to carry out the purposes of
this chapter;
(5) Enforce the provisions of the Act;
(6) Make all appointments to Councils in accordance with Sec.
270.8 and the approved Council charter;
(7) Approve the criteria and time frames under which a Council's
performance will be evaluated; and
(8) Implement the provisions of 16 U.S.C. 4001 et seq. in
accordance with the available financial and management resources NMFS
determines can be utilized.
(b) NMFS may provide, on a reimbursable or other basis, such
administrative or technical assistance as a Council may request for
purposes of the initial organization and subsequent operation of the
Council. However, a Council is responsible for the cost of preparing
and submitting information (e.g., reports, evaluation data, etc.)
requested by NMFS.
Sec. 270.12 Notice of Council meetings.
The Council will give NMFS the same notice of its meetings as it
gives to its members. NMFS will have the right to participate in all
Council meetings.
Sec. 270.13 Books, records and reports.
(a) The Council must submit to NMFS the following documents
according to the schedule approved in the Council's charter:
(1) A marketing assessment and promotion plan;
(2) A financial report with respect to the receipt and disbursement
of funds;
(3) An audit report conducted by an independent public accountant;
and
(4) Other reports or data NMFS determines necessary to evaluate the
Council's performance and verify the results of the market assessment
and promotion plan..
(b) All Council records, reports, and data must be maintained by
the Council for a minimum of 3 years, even if the Council is
terminated.
Sec. 270.14 Update of sector participant data.
The Council will submit to NMFS at the end of each fiscal year an
updated list of sector participants who meet the minimum requirements
for eligibility to participate in a referendum as stated in the
approved charter.
Sec. 270.15 Quality standards.
(a) Each Council may develop and submit to NMFS for approval or,
upon the request of a Council, NMFS will develop quality standards for
the species of fish or fish products described in the approved charter.
Any quality standard developed under this paragraph must be consistent
with the purposes of the Act.
(b) A quality standard developed under paragraph (a) of this
section may be adopted by a Council by a majority of its members
following a referendum conducted by the Council among sector
participants of the concerned sector(s). In order for a quality
standard to be brought before Council members for adoption, the
majority of the sector participants of the concerned sector(s) must
vote in favor of the standard. Further, according to the best available
data, the majority must collectively account for, in the 12-month
period immediately preceding the month in which the referendum is held,
not less than 66 percent of the value of the fish or fish products
described in the charter that were handled during such period in that
sector by those who meet the eligibility requirements to vote in the
referendum as defined by the petitioners.
(c) The Council must submit a plan to conduct the referendum on the
quality standards to NMFS for approval at least 60 days in advance of
such referendum date. The plan must consist of the following:
(1) Date(s) for conducting the referendum;
(2) Method (by mail or in person);
(3) Copy of the proposed notification to sector participants
informing them of the referendum;
(4) List of sector participants eligible to vote;
(5) Name of individuals responsible for conducting the referendum;
(6) Copy of proposed ballot package to be used in the referendum;
and
(7) Date(s) and location of ballot counting.
(d) An official observer appointed by NMFS will be allowed to be
present at the ballot counting and any other phase of the referendum
process, and may take whatever steps NMFS deems appropriate to verify
the validity of the process and results of the referendum.
(e) Quality standards developed under this section of the
regulations must, at a minimum, meet Food and Drug Administration (FDA)
minimum requirements for fish and fish products for human consumption.
(f) Quality standards must be consistent with applicable standards
of the U.S. Department of Commerce (National Oceanic and Atmospheric
Administration) or other recognized Federal standards and/or
specifications for fish and fish products.
(g) No quality standard adopted by a Council may be used in the
advertising or promotion of fish or fish products as being inspected by
the United States Government unless the standard requires sector
participants to be in the U.S. Department of Commerce voluntary seafood
inspection program.
[[Page 18116]]
(h) The intent of quality standards must not be to discriminate
against importers who are not members of the Council.
(i) Quality standards must not be developed for the purpose of
creating non-tariff barriers. Such standards must be compatible with
U.S. obligations under the General Agreement on Tariffs and Trade, or
under other international standards deemed acceptable by NMFS.
(j) The procedures applicable to the adoption and the operation of
quality standards developed under this subchapter also apply to
subsequent amendments or the termination of such standards.
(k) With respect to a quality standard adopted under this section,
the Council must develop and file with NMFS an official identifier in
the form of a symbol, stamp, label or seal that will be used to
indicate that a fish or fish product meets the quality standard at the
time the official identifier is affixed to the fish or fish product, or
is affixed to or printed on the packaging material of the fish or fish
product. The use of such identifier is governed by Sec. 270.15.
Sec. 270.16 Deposit of funds.
All funds collected or received by a Council under this section
must be deposited in an appropriate account in the name of the Council
specified in its charter. Funds eligible to be collected or received by
a Council must be limited to those authorized under the Act.
(a) Pending disbursement, under an approved marketing plan and
budget, funds collected through assessments authorized by the Act must
be deposited in any interest-bearing account or certificate of deposit
of a bank that is a member of the Federal Reserve System, or in
obligations fully guaranteed as to principal and interest by the United
States Government.
(b) The Council may, however, pending disbursement of these funds,
invest in risk-free, short-term, interest-bearing instruments.
(1) Risk-free. All investments must be insured or fully
collateralized with Federal Government securities. In the absence of
collateral, accounts established at financial institutions should, in
aggregate, total less than $100,000 to assure both principal and
interest are federally insured in full.
(2) Short-term. Generally, all investments should be for a
relatively short time period (one year or less) to assure that the
principal is maintained and readily convertible to cash.
(3) Collateralization. Investments exceeding the $100,000 insurance
coverage level must be fully collateralized by the financial
institution.
(i) Collateral must be pledged at face value and must be pledged
prior to sending funds to the institution.
(ii) Government securities are acceptable collateral. Declining
balance, mortgage backed securities such as Government National
Mortgage Association (GNMA) and Federal National Mortgage Association
(FNMA) are not acceptable collateral.
(iii) If an account has been established, collateral may be held at
the local Federal Reserve Bank. Otherwise, another depository must hold
the collateral.
Sec. 270.17 Authority to impose assessments.
A Council will impose and administer the collection of the
assessments that are necessary to pay for all expenses incurred by the
Council in carrying out its functions under 50 CFR part 270.
Sec. 270.18 Method of imposing assessments.
Assessments will be imposed on sector participants in the receiving
sector or the importing sector or both as specified in an approved
Council charter. Assessment rates will be based on value that may be
expressed in monetary units or units of weight or volume.
(a) An assessment on sector participants in the receiving sector
will be in the form of a percentage of the value or a fixed amount per
unit of weight or volume of the fish described in the charter when
purchased by such receivers from fish harvesters.
(b) An assessment on sector participants who own fish processing
vessels and harvest the fish described in the charter will be in the
form of a percentage of the value or on a fixed amount per unit of
weight or volume of the fish described in the charter that is no less
than the value if such fish had been purchased by a receiver other than
the owner of the harvesting vessel.
(c) An assessment on sector participants in the importing sector
will be in the form of a percentage of the value that an importer pays
to a foreign supplier, as determined for the purposes of the customs
laws, or a fixed amount per unit of weight or volume, of the fish or
fish products described in the charter when entered or withdrawn from
warehouse for consumption, in the customs territory of the United
States by such sector participants.
(d) A Council may not impose an assessment on any person that was
not eligible to vote in the referendum establishing the Council by
reason of failure to meet the requirements specified under unless that
person, after the date on which the referendum is held, meets the
requirements of section.
(e) Any person may make voluntary payments or in-kind contributions
to a Council for purposes of assisting the Council in carrying out its
functions.
Sec. 270.19 Notice of assessment.
(a) The Council must serve each person subject to assessment with
notice that the assessment is due. The notice of assessment must
contain:
(1) A specific reference to the provisions of the Act, regulations,
charter and referendum that authorize the assessment;
(2) The amount of the assessment;
(3) The period of time covered by the assessment;
(4) The date the assessment is due and payable, which will not be
earlier than 30 days from the date of the notice;
(5) The form(s) of payment; and
(6) To whom and where the payment must be made.
(b) The notice must advise such person of his or her right to seek
review of the assessment by filing a written petition of objection with
NMFS at any time during the time period to which the assessment
applies, including the right to request a hearing on the petition. The
notice must state that the petition of objection must be filed in
accordance with the procedures in Sec. 270.21.
(c) The notice must also advise such persons of his or her right to
a refund of the assessment as provided in Sec. 270.22. The notice must
state that a refund may be requested for not less than 90 days from
such collection, and provide that the Council will make the refund
within 60 days after the request for the refund is requested.
Sec. 270.20 Payment of assessments.
Persons subject to an assessment would be required to pay the
assessment on or before the date due, unless they have demanded a
refund or filed a petition of objection with NMFS under Sec. 270.21.
However, persons who have demanded a refund under Sec. 270.22 or filed
a petition of objection under Sec. 270.21 may submit proof of these
actions in leu of payment. In the case of a petition of objection, NMFs
will inform the Council and the petitioner of its finding at which time
petitioner must pay the revised assessment if applicable.
Sec. 270.21 Petition of objection.
(a) Filing a petition. Any person issued a notice of assessment
under
[[Page 18117]]
Sec. 270.19 may request that NMFS modify or take other appropriate
action regarding the assessment or promotion plan by filing a written
petition of objection with NMFS. Petitions of objection may be filed:
(1) Only if the petitioner determines one or more of the following
criteria is not in accordance with the law:
(i) The assessment;
(ii) The plan upon which the assessment is based; or
(iii) Any obligation imposed on the petitioner under the plan.
(2) Only during the time period to which the assessment applies.
(b) Contents of the petition of objection. A petition must be
addressed to Assistant Administrator for Fisheries, National Marine
Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910, and
must contain the following:
(1) The petitioner's correct name, address, and principal place of
business. If the petitioner is a corporation, this must be stated,
together with the date and state of incorporation, and the names,
addresses, and respective positions of its officers; if a partnership,
the date and place of formation and the name and address of each
partner;
(2) The grounds upon which the petition of objection is based,
including the specific terms or provisions of the assessment, the
marketing and promotion plan, or obligation imposed by the plan, to
which the petitioner objects;
(3) A full statement of the facts upon which the petition is based,
set forth clearly and concisely, accompanied by any supporting
documentation;
(4) The specific relief requested; and
(5) A statement as to whether or not the petitioner requests a
hearing.
(c) Notice to Council. NMFS will promptly furnish the appropriate
Council with a copy of the petition of objection.
(d) Opportunity for informal hearing. (1) Any person filing a
petition of objection may request an informal hearing on the petition.
The hearing request must be submitted with the petition of objection.
(2) If a request for hearing is timely filed, or if NMFS determines
that a hearing is advisable, NMFS will so notify the petitioner and the
Council. NMFS will establish the applicable procedures, and designate
who will be responsible for conducting a hearing. The petitioner, the
Council, and any other interested party, may appear at the hearing in
person or through a representative, and may submit any relevant
materials, data, comments, arguments, or exhibits. NMFS may consolidate
two or more hearing requests into a single proceeding.
(3) Final decision. Following the hearing, or if no hearing is
held, as soon as practicable, NMFS will decide the matter and serve
written notice of the decision on the petitioner and the Council.
NMFS's decision will be based on a consideration of all relevant
documentation and other evidence submitted, and will constitute the
final administrative decision and order of the agency. NMFS will have
the discretion to waive collection of a contested assessment or revise,
modify, or alter the assessment amount based on a Council method of
assessment.
Sec. 270.22 Refunds.
(a) Notwithstanding any other provision of the Act, any person who
pays an assessment under the Act may demand and must promptly receive
from the Council a refund of such assessment. A demand for refund must
be made in accordance with procedures in the approved charter and
within such time as will be prescribed by the Council and approved by
NMFS. Procedures to provide such a refund must be established before
any such assessment may be collected. Such procedures must allow any
person to request a refund 90 days or more from such collection, and
provide that such refund must be made within 60 days after demand for
such refund is made.
(b) Once a refund has been requested by a sector participant and
paid by the Council, that sector participant may no longer participate
in a referendum or other business of the Council during the remainder
of the assessment rate period. Future assessments will only be sent to
such a sector participant at the request of the sector participant. If
assessments are paid during a future assessment rate period and no
refund is requested, that sector participant may again participate in a
referendum or other business of the Council.
Sec. 270.23 Dissolution of Councils.
(a) Petition for termination. (1) A petition to terminate a Council
may be filed with NMFS by no less than three sector participants in any
one sector. Any petition filed under this subsection must be
accompanied by a written document explaining the reasons for such
petition.
(2) If NMFS determines that a petition filed under paragraph (a)(1)
of this section is accompanied by the signatures, or corporate
certifications, of no less than three sector participants in the sector
referred to in paragraph (a)(1) of this section who collectively
accounted for, in the 12-month period immediately preceding the month
in which the petition was filed, not less than 20 percent of the value
of the fish or fish products described in Sec. 270.3(c)(2)(iii) that
were handled by that sector during the period, NMFS within 90 days
after the determination, will conduct a referendum for termination of
the Council among all sector participants in that sector.
(3) Not less than 30 days prior to holding a referendum, NMFS will
publish an announcement in the Federal Register of the referendum,
including an explanation of the reasons for the petition for
termination filed under paragraph (a)(1) of this section and any other
relevant information NMFS considers appropriate.
(4) If the referendum votes which are cast in favor of terminating
the Council constitute a majority of the sector participants voting and
the majority, in the period in paragraph (a)(2) of this section,
collectively accounted for not less than 66 percent of the value of
such fish and fish products that were handled during such period by the
sector in paragraph (a)(1) of this section, NMFS will by order of
publication terminate the Council effective as of a date by which the
affairs of the Council may be concluded on an orderly basis.
(5) NMFS initially will pay all costs of a referendum conducted in
Sec. 270.23. Prior to conducting such a referendum, NMFS will require
petitioners to post a bond or other security acceptable to NMFS in an
amount which NMFS determines to be sufficient to pay any expenses
incurred for the conduct of the referendum.
(6) If a referendum conducted under Sec. 270.23 fails to result in
the termination of the Council, NMFS will immediately recover the
amount of the bond posted by the petitioners under Sec. 270.23(a)(5).
(7) If a referendum conducted under this subsection results in the
termination of the Council, NMFS will recover the expenses incurred for
the conduct of the referendum from the account established by the
Council. If the amount remaining in such account is insufficient for
NMFS to recover all expenses incurred for the conduct of the
referendum, NMFS will recover the balance of the expenses from the
petitioners that posted a bond under paragraph (a)(5) of this section.
(b) Payment of remaining funds. If a Council is terminated under
section Sec. 270.23(a)(4), NMFS, after recovering all expenses
incurred for the conduct of the referendum under paragraph (a) of this
section, will take such action as is necessary and practicable to
ensure that moneys remaining in the account established by the Council
under
[[Page 18118]]
Sec. 270.17 are paid on a prorated basis to the sector participants
from whom those moneys were collected under Sec. 270.20.
[FR Doc. E7-6751 Filed 4-10-07; 8:45 am]
BILLING CODE 3510-22-S