Federal Register: April 11, 2007 (Volume 72, Number 69)

DOCID: fr11ap07-1 FR Doc E7-6751

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

CFR Citation: 15 CFR Part 902

Docket ID: [Docket No. 040720212-6238-02; I.D. 040204A]

RIN ID: RIN 0648-AS09

NOTICE: RULES

DOCID: fr11ap07-1

ACTION: Fish and seafood promotion:

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY:

Fish and Seafood Promotion Act Provisions; Seafood Marketing Councils

DATES: Effective May 11, 2007.

DOCUMENT SUMMARY:

In response to renewed fishing industry support for marketing and promotionrelated 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.

SUMMARY:

Seafood-specific seafood marketing councils; establishment and operation,

SUPPLEMENTAL 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 speciesspecific marketing councils. However, no speciesspecific 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 governmentwide 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 omega3 fatty acids, but consumers also hear that many of the fish highest in omega3 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
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information being offered is accurate and reliable.

Industry has expressed to NMFS interest and support for seafood marketing and promotionrelated 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 12month 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 speciesspecific 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
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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 12month 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 12month 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 12month 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 nongovernmental organizations, and concerned citizens.

Comment 1: Several commenters were concerned that the establishment of Seafood Marketing Councils would promote overfishing 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,
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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 nongovernmental 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 nongovernmental organizations were concerned that the Seafood Marketing Councils may raise seafood prices for U.S. consumers. Middle to lowincome 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 promotionrelated 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, industrybased, 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 multispecies 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 multispecies Councils. The merits of each potential Marketing Council will be considered on a casebycase 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
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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 ecolabel; 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 06480556 for Sec. 270.

Under NOAA Administrative Order 20511, 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 collectionofinformation requirement subject to the Paperwork Reduction Act (PRA) and which has been approved by OMB under control number 06480556. 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 semiannual 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 12 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 email to David_Rostker@omb.eop.gov, or fax to (202) 3957285.

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 collectionofinformation 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 catcherprocessor 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
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(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 semiannual 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 12 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 visavis 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 speciesspecific Federallyguided 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.
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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.
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 902NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE

FOR FURTHER INFORMATION CONTACT

Gordon J. Helm, NMFS, telephone: (301) 7132379 or Email: Gordon.J.Helm@noaa.gov.