2025 Annual Report of the Atlantic Sea Scallop Individual Fishing Quota Cost Recovery Program

Background

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires NOAA Fisheries 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 2025 scallop fishing year ran from April 1, 2025, through March 31, 2026, the cost recovery fee is based on expenses and landings made during the fee period, which ran from October 1, 2024, through September 30, 2025. This is the 15th year that NOAA Fisheries has 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 be used solely 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), NOAA Fisheries 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. Although ex-vessel prices for scallops vary over the course of the fee period, the regulation requires that the price of all IFQ scallops landed during the entire fee period be used as 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 $19.14 per lb paid to vessels participating in the scallop IFQ fishery during the 2025 fee period. The total of all LAGC IFQ landings during the 2025 fee period was 1,176,738 lb (shucked meats). Using this average price, we determined that the total value of LAGC IFQ landings was $22,522,765 for the 2025 fee period. We 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 costs that would have been incurred regardless of the fishery’s status as an IFQ. 

We calculated personnel costs by multiplying hours spent by staff on tasks directly related to the IFQ program, by the hourly salary rates of those individuals. Salary rates included the Government’s share of benefits, prorated. We calculated contract expenses as the cost of contract employees, prorated based on the percentage of time they spent on tasks directly related to the IFQ program. In the 2025 fee period, the recoverable expenses primarily consisted of time spent by personnel working on tasks related to administration of the IFQ program in the following Divisions:

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 monitor the IFQ program’s allocation tracking and cost recovery components for consistency with the FMP and regulations, and generates this annual report. SFD is the principal point of contact with the New England Fishery Management Council. SFD implements any needed and approved regulatory changes recommended by the Council. For the 2025 fee year, we calculated that SFD incurred $419.42 in recoverable costs directly in support of the scallop IFQ program.

Analysis and Program Support Division (APSD)

APSD is responsible for most of the tasks associated with the ongoing operation of the scallop IFQ program. These include issuing annual IFQ allocations and processing and tracking temporary leases and permanent allocation transfers. APSD handles cost recovery tasks, such as generating individual fees, tracking payments, and, if needed, withholding permits for late payments. APSD is responsible for data collection and analysis, including extensive quality control of incoming data sources and tracking of landings against IFQ allocations. 

Quality control is a critical function of APSD and any IFQ program, as it ensures that the landings data NMFS uses to calculate IFQ landings, and ultimately individual fees, are accurate and consistent with owners’ records. 

APSD staff, including NOAA Fisheries port agents, work with vessel owners, dealers, and other NOAA Fisheries offices to correct landings data, as needed. For the 2025 fee year, we calculated that APSD incurred $95,104.07 in recoverable costs directly in support of the scallop IFQ program.

Technology and Data Management Division (TDMD)

TDMD is responsible for the development and maintenance of  information systems that support the scallop IFQ program. These systems include the internal databases and computer systems for handling allocations, the Fish Online website, and the data connections with Centralized Receivables Service, a free Department of Treasury service that issues the cost recovery bills and processes payments. 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. For the 2025 fee year, we calculated that TDMD incurred $12,761.82 in recoverable costs directly in support of the scallop IFQ program.

Operations and Budget Division (OBD)

OBD ensures that calculations of personnel and other costs are correct and meet required standards, as well as tracking the use of collected receipts. For the 2025 fee year, we calculated that OBD incurred $4,369.55 in recoverable costs directly in support of the scallop IFQ program.

Divisions with no recoverable expenses in 2025:

Communications and Internal Affairs (CIA) 

CIA is a team within the Regional Administrator’s office that coordinates internal and external communications and messaging for the Region. CIA determined that there were no recoverable expenses associated with the scallop IFQ program during the 2025 fee period. 

The Office of Law Enforcement (OLE) 

OLE determined there were no increased enforcement activities as a result of the scallop IFQ program for the 2025 fee period; therefore, there were no recoverable enforcement expenses.

NOAA General Counsel

The Northeast Section of the NOAA Office of General Counsel provides legal advice to NOAA Fisheries and the Councils and reviews management actions for consistency with applicable legal requirements. General Counsel determined that there were no recoverable expenses associated with the scallop IFQ program during the 2025 fee period.

Calculating the Fee as a Percentage of Total Fishery Value

The sum of the recoverable costs from the relevant divisions described above is $112,655.51. We use this amount in conjunction with the total fishery value to calculate the fee percentage. The recoverable costs for the scallop IFQ program for the 2025 fee period represent 0.50018 percent of the ex-vessel value of IFQ scallops harvested during the fee period. 

We calculated the fee percentage with the total fishery value of $22,522,765 and total recoverable program costs of $112,655.51 using the following formula:   

($112,655.51/$22,522,765) x 100 = 0.50018 percent

This value  (0.50018 percent) is below the maximum allowable fee percentage of 3.0 percent (see background section, above). Thus, we were able to assess the total recoverable costs for the 2025 fee period.

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 scallop landings attributed to their LAGC scallop IFQ permit, including landings from allocations  transferred to them (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 IFQ landings by lb) x (0.50018 %) = 2025 individual cost recovery fee

Based on this calculation, fees ranged from $13.49 to $3,874.18 per vessel.

Changes from Previous Years

Total recoverable costs can fluctuate from year to year.  Some management tasks occur annually, and some tasks may require more time and effort in some years.

Table 2. Scallop IFQ recoverable costs, fishery value, and fee percentage 2011-2025