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Annual Report

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2016 Annual Report of the
Atlantic Sea Scallop Individual Fishing
Quota Cost Recovery Program

June 2017

Prepared by:
Greater Atlantic Regional Fisheries Office
National Marine Fisheries Service
55 Great Republic Drive
Gloucester, MA 01930


The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires NOAA’s National Marine Fisheries Service (NMFS) to collect fees to recover the “actual costs directly related to the management, data collection, and enforcement” of an individual fishing quota (IFQ) program (16 U.S.C. 1854(d)(2)).  The law provides that IFQ allocation holders pay a fee based on the ex-vessel value of fish landed under the program.  The fee may be as high as, but cannot exceed, 3 percent of the ex-vessel value of the fish harvested under the IFQ program.  For the Limited Access General Category (LAGC) scallop IFQ program, the ex-vessel value is calculated as the average price paid per pound of scallops during the fee period multiplied by the total weight landed. 

Although the 2016 scallop fishing year ran from March 1 through the last day of February, the cost recovery fee is based on expenses and landings made during the fee period, which runs from October 1 through September 30 each year.  The 2016 fee period (October 1, 2015, through September 30, 2016) was the sixth year that NMFS collected fees from scallop IFQ vessels.

Use of Funds

Payments received as a result of the scallop IFQ cost recovery program are deposited in the Limited Access System Administrative Fund as required by the Magnuson-Stevens Act.  Funds deposited in this account are available only to the Secretary of Commerce and may only be used to defray the costs of management, data collection, and enforcement of the fishery for which the fees were collected.  Therefore, fees collected as part of this cost recovery program will be used for management, data collection, and enforcement of the scallop IFQ program.

Determining the Value of the Fishery

As required in the Atlantic Sea Scallop Fishery Management Plan (FMP), NMFS determines the value of the scallop IFQ fishery by multiplying the total landings of IFQ scallops by the average price paid by dealers to IFQ scallop vessels for IFQ scallops.  While ex-vessel prices for scallops vary over the course of the fee period, the Scallop FMP requires that the price of all IFQ scallops landed during the entire fee period be the basis of the average price (as opposed to the average price per vessel, per month, or some other unit of scallop landings).  Federally permitted scallop dealers must report the weight and price paid for all scallops purchased.  From these data, we calculated an average price of $13.26 per lb paid to vessels participating in the scallop IFQ fishery during the 2016 fee period.  The total of all LAGC IFQ landings during the 2016 fee period was 3,370,899 lb (shucked meats).  Using this average price, we determined that the total value of LAGC IFQ landings was $44,698,121 for the 2016 fee period.  NMFS used this value to determine the overall fee percentage and the individual fees for vessel owners.  We describe these determinations on page 4 of this report.

Cost of Management, Data Collection, and Enforcement

The Magnuson-Stevens Act requires the collection of the IFQ fee to recover the actual costs of the program.  We have determined that the recoverable costs associated with the management, data collection, and enforcement for the scallop IFQ program include only the incremental costs of the IFQ program, and not the costs that would still have been incurred regardless of the fishery’s status as an IFQ.

The Magnuson-Stevens Act requires that the Councils and NMFS conduct a formal and detailed review five years after the implementation of an IFQ program to review the operations of the program.  Most of the work to conduct this review and write the report took place during the 2016 fee period and resulted in additional staff time for both the Regional Office and the Northeast Fisheries Science Center, which was recoverable under this program.  This additional work resulted in a significant increase in recoverable costs in the 2016 fee period.

We calculated personnel costs by multiplying hours spent by staff on tasks directly related to the IFQ program, with the hourly salary rates for those individuals.  Salary rates included the Government’s share of benefits, prorated.  We calculated contract expenses as the cost of contract employees prorated for the percentage of time the contract employees spent on tasks directly related to the IFQ program.  In the 2016 fee period, the bulk of the recoverable expenses was comprised of costs related to developing the five-year review of the scallop IFQ program.  This includes a combined cost of $179,794 from the Northeast Fisheries Science Center and their contractors to provide data analysis and prepare reports for this review.   Additional recoverable expenses consisted of time spent by personnel working on tasks related to the administration of the IFQ program.  The following is a breakdown of the tasks by division:

Sustainable Fisheries Division (SFD)

SFD is primarily responsible for the management and implementation of the Atlantic Sea Scallop FMP, which includes the LAGC IFQ program.  SFD staff provides oversight to the IFQ program and associated allocation monitoring and cost recovery requirements. 

Analysis and Program Support Division (APSD)

APSD is responsible for most of the LAGC IFQ implementation tasks.  These include issuing annual IFQ allocations and processing and tracking temporary leases and permanent allocation transfers.  APSD is also responsible for generating individual fees, mailing bills, tracking payments, and following up on late payments under the cost recovery program.  APSD is responsible for data collection and analysis, including extensive quality control of incoming data sources and tracking of landings against IFQ allocations.  In addition, quality control is a critical function of APSD and of any IFQ program because it ensures that the landings data NMFS uses to calculate IFQ landings and, ultimately, the individual fee is correct and consistent with owners’ records.  APSD staff therefore committed time to working with vessel owners, dealers, and other NMFS offices to correct landings data.

Information Resource Management (IRM)

IRM is responsible for development and maintenance of the information systems to support the scallop IFQ program.  These systems include the internal databases and computer systems for handling allocations, the Fish Online website, and the new web interface to the U.S. Department of the Treasury’s service.  These databases are critical to monitoring the IFQ program because they track individual landings, IFQ leasing, and permanent allocation transfers that take place in the LAGC IFQ fishery.

Operations and Budget Division (OBD)

OBD ensures the calculations of personnel costs and other costs are correct and meet required standards, as well as tracking the use of collected receipts. 

The Office of Law Enforcement (OLE)

OLE determined there were no increased enforcement activities as a result of the scallop IFQ program for the 2016 fee period, and, therefore, there were no recoverable expenses for enforcement.

Stakeholder Engagement Division (SED)

This division contains our port agents in the Region, as well as our communications team.  SED determined there were no recoverable expenses associated with the scallop IFQ program during the 2016 fee period.

NOAA General Counsel (GC)

The Northeast Section of the NOAA Office of General Counsel provides legal advice to NMFS and the Councils and reviews management actions for consistency with applicable legal requirements.  GC determined that there were no recoverable expenses associated with the scallop IFQ program during the 2016 fee period.

Northeast Fisheries Science Center (NEFSC)

NEFSC staff incurred recoverable costs during the 2016 fee period for the first time since the start of the scallop IFQ program.  Staff from both the Social Science Branch, Population Dynamics Branch, and their contractors contributed significant work to the five-year review of the IFQ program.  Tasks include assembly and synthesis of data from prior surveys of crew, captains and secondary sources, providing data analysis, and preparing reports to review the operations of the program.

Table 1 provides details of the recoverable costs by division within the Greater Atlantic Regional Fisheries Office and the Northeast Fisheries Science Center.

























































SFD (Sustainable Fisheries); APSD (Analysis and Program Support); IRM (Information Resource Management); OBD (Operations and Budget); NEFSC (Northeast Fisheries Science Center).
* Includes contractor costs to assist with data collection and analyses and collection fees
Personnel costs include all benefits

Calculating the Fee as a Percentage of Total Fishery Value

We calculated that the recoverable costs for the scallop IFQ program for the 2016 fee period represent 0.6058 percent of the value of the scallop IFQ fishery.  We calculated the fee percentage with the total fishery value of $44,698,121 and total recoverable program costs of $271,056 using the following formula:   

 $270,823/$44,698,121 x 100=0.6058 percent

This value of 0.6058 percent is less than the possible upper limit fee percentage of 3.0 percent (see background section, above).  Thus, we were able to assess permit holders the total recoverable costs of fee period 2016.

Calculating Fees Assessed to Individual Permit Holders

Under the scallop IFQ program regulations, an LAGC IFQ permit holder is responsible for the IFQ fee based on the value of the landings of scallops attributed to his/her LAGC scallop IFQ permit, including landings made from an allocation that he/she transferred in (permanent or temporary (lease)) from another IFQ holder.  The allocation tracking program that we have developed is able to identify all scallop IFQ transfers and attribute landings to the vessel that landed the scallops.  To determine the appropriate IFQ fee for each LAGC IFQ permit holder, we multiply the permit holder’s landings by the average price per lb and then by the fee percentage.  This is represented by the following formula:

(Vessel’s IFQ landings by lb) x ($13.26) x (0.6058 percent) = 2016 cost recovery fee

Based on this calculation, fees ranged from $18.71 to $6,886.04 per vessel.

We mailed bills for the scallop IFQ 2016 fee period to 160 LAGC IFQ permit holders on April 11, 2017.    Permit holders have until June 1, 2017, to pay the balance due through the section of the Greater Atlantic Region’s Fish Online website.

Changes from Previous Years

Total recoverable costs can fluctuate from year to year.  Some management tasks may need to be done every year, and some tasks may require more time and effort in some years.  As shown in Table 2, the scallop IFQ recoverable costs in 2016 were higher than previous years. The bulk of this increase was due to increased staff time to conduct analysis required for the five-year review of the IFQ program.

Table 2. Scallop IFQ recoverable costs, fishery value, and fee percentage by year

Fee Year

Recoverable Costs

Total Fishery Value

Fee Percentage

























For a PDF version of the above 2016 Annual Report of the Atlantic Sea Scallop Individual Fishing Quota Cost Recovery Program document, please contact or