The pink bollworm, Pectinophora gossypiella (Saunders), is one of the world's most destructive pests of cotton. This insect spread to the United States from Mexico in 1917 and now exists throughout most of the cotton-producing States west of the Mississippi River.

The pink bollworm regulations, contained in 7 CFR 301.52 through 301.52-10 (referred to below as the regulations), quarantine certain States and restrict the interstate movement of regulated articles from regulated areas in quarantined States for the purpose of preventing the interstate spread of the pink bollworm.

Regulated areas for the pink bollworm are designated as either suppressive areas or generally infested areas. Restrictions are imposed on the interstate movement of regulated articles from both types of areas in order to prevent the movement of pink bollworm into noninfested areas.

Prior to the effective date of this document, a portion of Poinsett County, AR, was designated as a suppressive area. Based on 2 years of negative trapping surveys conducted by inspectors of Arkansas and the Animal and Plant Health Inspection Service, we have determined that the pink bollworm no longer exists in this area. We are, therefore, removing this area from the list of suppressive areas in § 301.52-2a.

As of the effective date of this document, there will be no areas in Arkansas regulated because of the pink bollworm. We are, therefore, also removing Arkansas from the list of States in § 301.52-2a quarantined because of the pink bollworm.

The Administrator of the Animal and Plant Health Inspection Service has determined that there is good cause for publishing this interim rule without prior opportunity for public comment. Immediate action is warranted to relieve unnecessary restrictions on the interstate movement of regulated articles from areas where the pink bollworm no longer exists.

Because prior notice and other public procedures with respect to this action are impracticable and contrary to the public interest under these conditions, we find good cause under 5 U.S.C. 553 to make this action effective less than 30 days after publication. We will consider comments that are received within 60 days of publication of this rule in the Federal Register . After the comment period closes, we will publish another document in the Federal Register . The document will include a discussion of any comments we receive and any amendments we are making to the rule as a result of the comments.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review process required by Executive Order 12866.

We are amending the pink bollworm regulations by removing the previously regulated area in Poinsett County, AR, from the list of suppressive areas for pink bollworm. We are also removing Arkansas from the list of States quarantined because of the pink bollworm. We are taking this action because trapping surveys show that the pink bollworm no longer exists in this area. This action is necessary to relieve unnecessary restrictions on the interstate movement of regulated articles from the previously regulated area.

This emergency situation makes compliance with section 603 and timely compliance with section 604 of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) impracticable. If we determine that this rule would have a significant economic impact on a substantial number of small entities, then we will discuss the issues raised by section 604 of the Regulatory Flexibility Act in our final regulatory flexibility analysis.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This interim rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) Has no retroactive effect; and (3) Does not require administrative proceedings before parties may file suit in court challenging this rule.

This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

In the final rule correction, FR Doc. 99-18469, published on July 20, 1999 (64 FR 38816), in the third column on page 38816, instruction number 3 for § 170.12 is corrected to read as follows:

3. On page 31470, in the first column, paragraphs (b)(7)(ii) and (b)(7)(iii) are redesignated as paragraphs (b)(7)(ii)(B) and (b)(7)(ii)(C), respectively, and a new paragraph (b)(7)(ii)(A) is added to read as follows:

Airworthiness Directive (AD) 99-27-14, amendment 39-11495, applicable to all Airbus Model A340-211, -212, -213, -311, -312, and -313 series airplanes, was published in the Federal Register on January 6, 2000 (65 FR 697). That AD requires repetitive operational tests to ensure proper operation of the actuator of the secondary locks of the thrust reversers, and corrective actions, if necessary.

As published, AD 99-27-14 contains an erroneous reference to the AD number cited in the paragraph preceding the applicability of the AD. That paragraph incorrectly references AD 99-01-05, Amendment 39-10980. The correct reference is AD 99-01-15, Amendment 39-10980.

Since no other part of the regulatory information has been changed, the final rule is not being republished.

The effective date of this AD remains January 21, 2000.

In FR Doc. 00-53 appearing on page 1000 in the Federal Register of Thursday, January 6, 2000, the following corrections are made:

1. On page 1034, in the 3d column, in the 2d full paragraph, beginning in the 16th line, the phrase “The agency also notes that as discussed” is corrected to read “The agency also notes that as discussed in comment 95 of section III.A of this document”.

2. On page 1046, in the 2d column, in the 28th line, the sentence is corrected to read “Even this 62 percent figure is too high, however, because RTI over-sampled herbal products, which have a higher probability of claims. Thus, FDA believes that the true percentage of dietary supplement products with claims would not exceed 60 percent and has used this figure as its final estimate.”

3. On page 1047, in the 2d column, in the 2d full paragraph, in the 14th line “not” is corrected to read “now”.

These regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1685. Responses to these collections of information are mandatory.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

For further information concerning these collections of information, and where to submit comments on the collections of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register .

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

The Treasury Department and the IRS are concerned about the proliferation of corporate tax shelters. These temporary regulations are intended to provide the Service with early notification of large corporate transactions with characteristics that may be indicative of such tax shelter activity.

Accordingly, this document amends 26 CFR part 1 regarding the general filing requirement for persons required to file a return for a taxable year with respect to a tax imposed under section 11. Section 6011(a) provides that any person made liable for any tax imposed by the Internal Revenue Code (Code), or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary of the Treasury.

The temporary regulations provide that every person that is required to file a return for a taxable year with respect to any tax imposed under section 11 (corporate taxpayers) and that has participated in a reportable transaction shall attach a disclosure statement to its return for each taxable year for which the taxpayer's Federal income tax liability is affected by its participation in the reportable transaction. In addition, a copy of the disclosure statement must be sent to the IRS in Washington, DC for the first taxable year for which the transaction is disclosed on the taxpayer's Federal income tax return. The temporary regulations outline the form and content of the disclosure statement and also provide an example of the statement.

Where the temporary regulations require a taxpayer to attach a disclosure statement to its return, the information required to be set forth thereon is a required part of the return to the same extent as information required pursuant to prescribed forms. See § 1.6011-1. Therefore, when a taxpayer verifies its return, which includes a declaration that the return is complete, a taxpayer affirms that it has accurately made all disclosures required by these temporary regulations.

In the event of an underpayment attributable to a reportable transaction, a taxpayer's failure to satisfy the disclosure requirements of the temporary regulations may affect its exposure to penalties under sections 6662 and 6663 of the Code. Section 6664(c)(1) provides that such penalties may not be imposed with respect to any portion of a taxpayer's underpayment “if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion.” (Emphasis added.) Whether a taxpayer is considered to have satisfied the requirements of section 6664(c)(1) is determined on a case-by-case basis, taking into account all pertinent facts and circumstances. See § 1.6664-4(b)(1).

The fact that a professional tax advisor has advised a taxpayer that its return position is more likely than not the proper tax treatment is not necessarily sufficient to satisfy the requirements of section 6664(c)(1). If a taxpayer has an underpayment attributable to its participation in a reportable transaction that has not been properly disclosed on its return, the nondisclosure could indicate that the taxpayer has not acted in “good faith” with respect to the underpayment, even if the taxpayer's return position has sufficient legal justification to meet the minimum requirements of section 6664(c)(1). In such a case, the determination of whether a taxpayer has acted in “good faith” will depend on all of the facts and circumstances, including the reason or reasons why the taxpayer failed to make the required disclosure.

The temporary regulations define two categories of reportable transactions. The first category includes certain types of transactions identified by the Treasury and the Service as tax avoidance transactions. The second category includes transactions that warrant further scrutiny because they possess certain identified characteristics that are common in corporate tax shelters.

The regulations require disclosure only for large transactions that provide tax savings in excess of certain dollar thresholds (the projected tax effect test). In addition, the regulations contain exceptions to ensure that normal business transactions are not subject to disclosure. The fact that a transaction is reportable or not reportable under these regulations shall not affect the legal determination whether the tax benefits claimed with respect to the transaction are allowable.

The first category of reportable transactions includes any transaction that is the same as or substantially similar to one of the specified types of tax avoidance transactions that the IRS has identified by published guidance as a listed transaction for purposes of section 6011 and that is expected to reduce the taxpayer's Federal income tax liability by more than $1 million in any single taxable year or by a total of more than $2 million for any combination of taxable years. However, a listed transaction is not treated as a reportable transaction if it has affected the taxpayer's Federal income tax liability as reported on any tax return filed on or before February 28, 2000.

The second category of reportable transactions includes transactions entered into after February 28, 2000 that are expected to reduce a taxpayer's Federal income tax liability by more than $5 million in any single taxable year or by a total of more than $10 million for any combination of taxable years and that have at least two of the following characteristics:

(A) The taxpayer has participated in the transaction under conditions of confidentiality (as defined in § 301.6111-2T(c)).

(B) The taxpayer has obtained or been provided with contractual protection against the possibility that part or all of the intended tax benefits from the transaction will not be sustained, including, but not limited to, recission rights, the right to a full or partial refund of fees paid to any person, fees that are contingent on the taxpayer's realization of tax benefits from the transaction, insurance protection with respect to the tax treatment of the transaction, or a tax indemnity or similar agreement (other than a customary indemnity provided by a principal to the transaction that did not participate in the promotion of the transaction to the taxpayer).

(C) The taxpayer's participation in the transaction was promoted, solicited, or recommended by one or more persons who have received or are expected to receive fees or other consideration with an aggregate value in excess of $100,000, and such person or persons' entitlement to such fees or other consideration was contingent on the taxpayer's participation in the transaction.

(D) The expected treatment of the transaction for Federal income tax purposes in any taxable year differs or is expected to differ by more than $5 million from the treatment of the transaction for purposes of determining book income as taken into account on the schedule M-1 (or comparable schedule) on the taxpayer's Federal corporate income tax return for the same period.

(E) The transaction involves the participation of a person that the taxpayer knows or has reason to know is in a Federal income tax position that differs from that of the taxpayer (such as a tax exempt entity or a foreign person), and the taxpayer knows or has reason to know that such difference in tax position has permitted the transaction to be structured on terms that are intended to provide the taxpayer with more favorable Federal income tax treatment than it could have obtained without the participation of such person (or another person in a similar tax position).

(F) The expected characterization of any significant aspect of the transaction for Federal income tax purposes differs from the expected characterization of such aspect of the transaction for purposes of taxation of any party to the transaction in another country.

However, a transaction that has at least two of the foregoing characteristics is not a reportable transaction if any of the following conditions is satisfied—

(A) The taxpayer has participated in the transaction in the ordinary course of its business in a form consistent with customary commercial practice, and the taxpayer reasonably determines that it would have participated in the same transaction on substantially the same terms irrespective of the expected Federal income tax benefits;

(B) The taxpayer has participated in the transaction in the ordinary course of its business in a form consistent with customary commercial practice, and the taxpayer reasonably determines that there is a long-standing and generally accepted understanding that the expected Federal income tax benefits from the transaction (taking into account any combination of intended tax consequences) are allowable under the Code for substantially similar transactions;

(C) The taxpayer reasonably determines that there is no reasonable basis under Federal tax law for denial of any significant portion of the expected Federal income tax benefits from the transaction; or

(D) The transaction is identified in published guidance as being excepted from disclosure.

A transaction involving the acquisition, disposition, or restructuring of a business, including the acquisition, disposition, or other change in the ownership or control of an entity that is engaged in a business, or a transaction involving a recapitalization or an acquisition of capital for use in the taxpayer's business, shall be considered a transaction carried out in the ordinary course of a taxpayer's business.

The taxpayer must retain all documents related to a transaction subject to disclosure under this section until the expiration of the statute of limitations for the first taxable year for which a disclosure statement is filed with its tax return. (This obligation is in addition to any document retention requirements that section 6001 generally imposes on the taxpayer.) Such documents include, but are not limited to, the following: all marketing materials related to the transaction; all written analyses used in decision-making related to the transaction; all correspondence and agreements related to the transaction between the taxpayer and any promoter, advisor, lender, or other party to the reportable transaction; all documents discussing, referring to, or demonstrating the tax benefits arising from the reportable transaction; and all documents, if any, referring to the business purposes for the reportable transaction.

The temporary regulations apply to Federal corporate income tax returns filed after February 28, 2000.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that the persons responsible for filing the statement required by these regulations are principally large publicly traded corporations, and the burden is not significant as described earlier in the preamble. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these temporary regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal authors of these regulations are Mary Beth Collins and Richard Castanon, Office of Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

These regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1686. Responses to these collections of information are mandatory.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

For further information concerning these collections of information, and where to submit comments on the collections of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register .

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document amends 26 CFR part 301 regarding the requirement to maintain lists of investors in potentially abusive tax shelters under section 6112. Section 6708 provides penalties for failing to maintain the investor list under section 6112.

The temporary regulations have been drafted in question and answer format. No inference should be drawn regarding issues not raised or because certain questions and not others are included. The temporary regulations contained in this document will remain in effect until additional temporary or final regulations are published in the Federal Register .

Section 6112 provides that any person who organizes or sells any interest in a potentially abusive tax shelter must maintain a list identifying each person who was sold an interest in such shelter. A potentially abusive tax shelter under section 6112 includes any investment that is required to be registered with the IRS as a tax shelter under section 6111, and any other entity, plan, or arrangement, if specified in regulations, that has a potential for tax avoidance or evasion. Any person who is required to maintain a list under section 6112 must make the list available for inspection upon request by the Secretary of the Treasury, and generally must retain any information required to be included on the list for seven years. References in these regulations to the term “transaction” include all of the factual elements necessary to support the tax benefits that are expected to be claimed with respect to any entity, plan, or arrangement, including any series of related steps carried out as part of a prearranged plan.

Section 6112 authorizes the Secretary of the Treasury to specify in regulations transactions other than those subject to registration under section 6111 that have a potential for tax avoidance or evasion. The conference report accompanying section 6112 explains that “in designating these other arrangements, the Secretary may, for example, specifically identify types of investments, or may provide that any investment falling within a modified form of the definition of tax shelter for registration purposes is subject to the listing requirement.” H.R. Conf. Rep. No. 861, 98th Cong., 2d Sess. 982 (1984).

Concurrent with the addition of these amendments to the temporary regulations under section 6112, the Service has issued temporary and proposed regulations under section 6111(d) relating to the registration of confidential corporate tax shelters. These regulations under section 6112 follow a modified form of the definition of a confidential corporate tax shelter under section 6111(d)(1) for purposes of defining the potentially abusive tax shelters that are subject to the list requirement under section 6112. Under the modified definition, as under section 6111(d)(1)(A), the term “potentially abusive tax shelter” includes a transaction for which a significant purpose of the structure of the transaction is the avoidance or evasion of Federal income tax. The rules set forth in the temporary regulations under section 6111(d) are applicable in determining whether a significant purpose of the structure of a transaction is the avoidance or evasion of Federal income tax.

For purposes of section 6112, the definition of tax shelter under section 6111(d)(1) has been modified in two respects: (1) The limitation of section 6111(d)(1)(B) to transactions offered to any potential participant under conditions of confidentiality does not apply for purposes of section 6112; and (2) the limitation of section 6111(d)(1)(C) to transactions in which the promoters may receive fees in excess of $100,000 does not apply for purposes of section 6112. Therefore, certain categories of transactions that are not subject to registration under section 6111 may be subject to the list requirement of section 6112, including any non-confidential transactions offered directly or indirectly to corporate participants a significant purpose of the structure of which is the avoidance or evasion of Federal income tax within the meaning of section 6111(d) and the regulations thereunder.

Section 301.6111-2T provides a procedure for obtaining rulings as to whether a transaction is subject to registration under § 301.6111-2T. The same procedure shall be available to a person who is uncertain whether a transaction constitutes a potentially abusive tax shelter for which a list must be maintained under section 6112, and the requirement to maintain a list available for inspection by the Secretary shall be suspended during the period that such ruling request is pending and for sixty days thereafter.

The regulations provide that for purposes of the list requirement, an organizer includes a promoter as defined in section 6111(d)(2), as well as any person designated as an organizer under the existing temporary regulations. A promoter is any person who participates in the organization, management, or sale of the tax shelter or any related person (within the meaning of section 267 or 707).

Section 6112 authorizes the Secretary of the Treasury to specify the information that organizers and sellers of interests in potentially abusive tax shelters are required to include as part of the lists of persons who were sold interests in the tax shelters. The temporary regulations modify the information that must be included as part of the lists and made available for inspection by the IRS. The regulations provide that in addition to the information currently required under A-17 of § 301.6112-1T, each list must include (1) a detailed description of the tax shelter that describes both the structure of the tax shelter and the intended tax benefits for participants in the tax shelter, (2) the amount of money invested or to be invested by each person who is required to be included on the list, (3) a summary or schedule of the tax benefits that each such person is intended or expected to derive from participation in the tax shelter, if known by the organizer or seller, and (4) copies of any additional written materials, including tax analyses and opinions, relating to the tax shelter that have been given to any potential participant in the tax shelter or to any representatives, tax advisors, or agents of potential participants by the organizer or seller or by any other person who has participated in the offering of the tax shelter (excluding any written materials that the organizer or seller has never possessed).

Generally, a separate list must be maintained for each potentially abusive tax shelter. Moreover, the temporary regulations provide that interests in substantially similar tax shelter transactions that are sold to different persons generally are to be treated as interests in the same tax shelter for purposes of section 6112. To ensure that the IRS is able to identify all of the tax shelters that have been offered by an organizer or seller and that are structured in a similar manner, the regulations further provide that the list for each tax shelter must identify each other tax shelter (if any) that the organizer or seller has offered that has not been treated as part of the same tax shelter, but that utilizes a similar structure or is intended to produce similar tax benefits.

It is recognized that, in the absence of a limitation on the disclosure obligation under section 6112, there could be situations in which section 6112 and the temporary regulations would require an organizer or a seller of a potentially abusive tax shelter to disclose information that is otherwise protected by the common law attorney-client privilege or by the privilege for confidential tax advice under section 7525(a). The temporary regulations provide that, in any case in which an organizer or a seller of a potentially abusive tax shelter believes that information required to be maintained as part of the list for that tax shelter is protected by the attorney-client privilege or constitutes confidential tax advice protected under section 7525(a), such information may be withheld from disclosure to the Service, provided that the organizer or seller provides the Service with a statement signed under penalties of perjury with information and representations required in that statement that are the same as those required by the regulations under section 6111(d) if the promoter of a confidential corporate tax shelter asserts that information required to be included with Form 8264, “Application for Registration of a Tax Shelter,” is privileged.

An organizer or a seller must maintain a list with respect to any interest acquired by an investor in a potentially abusive tax shelter after February 28, 2000. If a transaction becomes a potentially abusive tax shelter after interests are acquired by investors, an organizer or a seller must maintain a list with respect to any interest in the transaction acquired after the transaction becomes a potentially abusive tax shelter. Additionally, the IRS will not ask to inspect any list for a potentially abusive tax shelter, other than a tax shelter described in section 6111(c), until August 29, 2000. The lists required by the preceding two sentences with regard to interests acquired in potentially abusive tax shelters must contain the information required by A-17 of this section as it relates to such interests. The rules that apply with respect to interests acquired in potentially abusive tax shelters on or before February 28, 2000, are contained in 26 CFR part 301 revised as of April 1, 1999.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that persons responsible for maintaining the investor lists described in the regulations are principally large publicly traded corporations and the burden is not significant, as described in the preamble. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these temporary regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are Mary Beth Collins and Richard Castanon, Office of Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

Accordingly, 26 CFR parts 301 and 602 are amended as follows:

These regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1687. Responses to these collections of information are mandatory.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

For further information concerning these collections of information, and where to submit comments on the collections of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register .

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

In enacting section 6111(d), Congress added confidential corporate tax shelters as a type of tax shelter that must be registered under section 6111. Congress intended the provision to improve tax compliance by giving the Treasury Department earlier notification of transactions that may not comport with Federal tax law and by discouraging taxpayers from entering into questionable transactions. See H.R. Rep. No. 148, 105th Cong., 1st Sess. 469 (1997); S. Rep. No. 33, 105th Cong., 1st Sess. 148 (1997).

Section 1028(e)(1) of the Act provides that the registration requirements of section 6111 and the penalty provisions of section 6707 for failing to comply with the registration requirements apply to confidential corporate tax shelters in which interests are offered to potential participants after the IRS issues guidance on the registration requirements. These regulations provide the guidance necessary to activate the registration requirements of section 6111 and the penalty provisions of section 6707 for confidential corporate tax shelters.

These temporary regulations relate to disclosure obligations for tax shelter organizers and promoters under section 6111. Although the terms of section 6111(d)(1)(A), which are part of the definition of a confidential corporate tax shelter, are similar to the definition of tax shelter under section 6662(d)(2)(C)(iii), these temporary regulations are not intended to define a tax shelter for purposes of section 6662, which relates to the imposition of penalties.

Under section 6111(d)(1) and the temporary regulations, a confidential corporate tax shelter is any entity, plan, arrangement, or transaction that satisfies the following three requirements: (1) A significant purpose of the structure of the transaction is the avoidance or evasion of Federal income tax for a direct or an indirect corporate participant; (2) the transaction is offered to any potential participant under conditions of confidentiality; and (3) the tax shelter promoters may receive fees in excess of $100,000 in the aggregate.

Under the temporary regulations, there are three categories of transactions for which the avoidance or evasion of Federal income tax is considered a significant purpose of the structure of the transaction.

First, the avoidance or evasion of Federal income tax is considered a significant purpose of the structure of a transaction if the transaction is the same as or substantially similar to one of the specified types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction for purposes of section 6111.

Second, the avoidance or evasion of Federal income tax is generally considered a significant purpose of the structure of a transaction if the present value of the participant's reasonably expected pre-tax profit (after taking into account foreign taxes as expenses and transaction costs) from the transaction is insignificant relative to the present value of the participant's expected net Federal income tax savings from the transaction. However, if the substance of the transaction is the borrowing of money or the acquisition of financial capital by a corporate participant, the transaction falls within this second category if the present value of the Federal income tax deductions of the taxpayer to whom the loan or financial capital is provided significantly exceeds the present value of the pre-tax return of the person providing the loan or financial capital.

Third, the avoidance or evasion of Federal income tax is generally considered to be a significant purpose of the structure of a transaction if the transaction has been structured to produce Federal income tax benefits that constitute an important part of the intended results of the transaction and the tax shelter promoter (or other person who would be responsible for registration under this section) reasonably expects the transaction to be presented (in the same or substantially similar form) to more than one potential participant. However, a transaction does not come within this third category if the promoter reasonably determines that the potential participant is expected to participate in the transaction in the ordinary course of its business in a form consistent with customary commercial practice, and the promoter reasonably determines that there is a long-standing and generally accepted understanding that the expected Federal income tax benefits from the transaction (taking into account any combination of intended tax consequences) are allowable under the Code for substantially similar transactions.

Except for listed transactions, the avoidance or evasion of Federal income tax will not be considered a significant purpose of the structure of a transaction if the tax shelter promoter (or other person who would be responsible for registration under this section) reasonably determines that there is no reasonable basis under Federal tax law for denial of any significant portion of the expected Federal income tax benefits from the transaction.

The IRS may make a determination, by published guidance, individual ruling, or otherwise, that a transaction is not required to be registered under the temporary regulations. If a tax shelter promoter (or other person who would be responsible for registration under this section) is uncertain whether a transaction is properly classified as a confidential corporate tax shelter or is otherwise uncertain whether registration is required under this section, that person may, on or before the date that registration would otherwise be required under this section, submit a request to the IRS for a ruling as to whether the transaction is subject to the registration requirements of this section. If the request fully discloses all relevant facts relating to the transaction, that person's potential obligation to register the transaction will be suspended during the period that the ruling request is pending and, if the Service subsequently concludes that the transaction is a confidential corporate tax shelter subject to registration under this section, until the sixtieth day after the issuance of the ruling (or, if the request is withdrawn, sixty days from the date that the request is withdrawn). In the alternative, that person may register the transaction in accordance with the requirements of this section and append a statement to the Form 8264, “Application for Registration of a Tax Shelter,” which states that the person is uncertain whether the transaction is required to be registered as a confidential corporate tax shelter, and that the Form 8264 is being filed on a protective basis.

Section 6111(d)(2) describes when an offer is made under conditions of confidentiality. The determination of whether an offer is made under conditions of confidentiality is based on all the facts and circumstances surrounding the offer, including prior conduct of the parties. If an offeree's disclosure of the structure or tax aspects of the transaction is limited in any way by an express or implied understanding or agreement with or for the benefit of a tax shelter promoter, an offer is considered made under conditions of confidentiality, whether or not such understanding or agreement is legally binding. An offer will also be considered made under conditions of confidentiality in the absence of any such understanding or agreement if any tax shelter promoter knows or has reason to know the transaction is protected from disclosure or use in any other manner, such as where the transaction is claimed to be proprietary to the tax shelter promoter or any party other than the offeree. An offeree's privilege to maintain the confidentiality of a communication relating to a tax shelter in which the taxpayer might participate or has agreed to participate, including an offeree's confidential communication with the offeree's attorney, is not itself a condition of confidentiality.

The temporary regulations provide that, unless facts and circumstances clearly indicate otherwise, an offer is not considered made under conditions of confidentiality if the tax shelter promoter enters into a written agreement with each person who participates or discusses participation in the transaction and such agreement expressly authorizes such persons to disclose every aspect of the transaction to any and all persons, without limitation of any kind.

The third requirement that must be satisfied for a transaction to be treated as a confidential corporate tax shelter is that the tax shelter promoters, whether or not related, may receive fees in excess of $100,000 in the aggregate. In determining whether the tax shelter promoters may receive fees in excess of $100,000, all the facts and circumstances surrounding the transaction are considered. For this purpose, all consideration that may be received by the tax shelter promoters is taken into account, including contingent fees, fees in the form of equity interests, and fees the promoters may receive for other transactions as consideration for promoting the tax shelter.

For example, if a tax shelter promoter may receive a fee for arranging a transaction that is a confidential corporate tax shelter and/or a separate fee for another transaction that is not a confidential corporate tax shelter, part or all of the fee paid with respect to the other transaction may be treated as a fee paid with respect to the confidential corporate tax shelter if the facts and circumstances indicate that the fee paid for the other transaction is in consideration for the confidential corporate tax shelter. For purposes of determining whether the tax shelter promoters may receive fees in excess of $100,000, the fees from all substantially similar transactions are considered part of the same tax shelter and must be aggregated.

To register a confidential corporate tax shelter, the person responsible for registering the tax shelter must file Form 8264, “Application for Registration of a Tax Shelter.” (Form 8264 is also used to register tax shelters defined in section 6111(c).) The exemptions from the registration requirements contained in the instructions to the current Form 8264 apply only to tax shelters defined in section 6111(c). Form 8264 will be revised and will include specific requirements and instructions for registering confidential corporate tax shelters. Until that time, persons responsible for registering confidential corporate tax shelters should follow the registration procedures outlined in these regulations.

The temporary regulations provide that the person registering a confidential corporate tax shelter must provide a detailed description of the tax shelter, including the structure of the tax shelter and the tax benefits. Any written materials presented in connection with an offer to participate in the shelter are required to be submitted with the registration form.

Consistent with the registration requirements for tax shelters defined in section 6111(c), the temporary regulations provide that any transactions involving similar business assets or similar plans or arrangements that are offered to corporate taxpayers by the same person or by related persons are aggregated and treated as a single tax shelter. However, in contrast with the registration requirements applicable to tax shelters defined in section 6111(c), the temporary regulations allow the tax shelter promoter to file a single Form 8264 with respect to any such aggregated tax shelter, provided an amended Form 8264 is filed to reflect any material changes and to include any additional or revised written materials presented in connection with an offer to participate in the shelter. Furthermore, the temporary regulations require all transactions that are part of the same tax shelter and that are to be carried out by the same corporate participant (or one or more other members of the same affiliated group within the meaning of section 1504) to be registered on the same Form 8264.

The temporary regulations provide that in cases in which an attorney or federally authorized tax practitioner acts as a tax shelter promoter with respect to a client's participation in a confidential corporate tax shelter and believes that information which would otherwise be required to be disclosed on Form 8264 is protected by the common law attorney-client privilege or the confidentiality privilege under section 7525(a), such promoter may omit the information believed to be privileged from Form 8264 if the promoter attaches a statement to the Form 8264 as described in these temporary regulations.

Section 6111(a)(1) requires a tax shelter to be registered not later than the day on which the first offering for sale of interests in such shelter occurs. Section 6111(d)(4) provides that an offer to participate in a confidential corporate tax shelter shall be treated as an offer for sale.

Registration under these temporary regulations will be limited to confidential corporate tax shelters that are offered for sale after February 28, 2000. If interests in a confidential corporate tax shelter were first offered for sale on or before February 28, 2000, the first offer for sale of interests in the shelter that occurs after February 28, 2000 shall be considered the first offer for sale under this section. The temporary regulations provide that the IRS will consider a registration as timely made for a confidential corporate tax shelter in which interests are offered for sale after February 28, 2000 if the confidential corporate tax shelter is registered no later than August 29, 2000.

If a transaction becomes a confidential corporate tax shelter ( e.g., because of a change in the law or factual circumstances, or because the transaction becomes a listed transaction) subsequent to the first offering for sale after February 28, 2000, and the transaction was not previously required to be registered as a confidential corporate tax shelter under this section, the transaction must be registered under this section if interests are offered for sale after the transaction becomes a confidential corporate tax shelter. The transaction must be registered by the later of the next offering for sale of interests in the shelter or August 29, 2000. However, because transactions identified as listed transactions are generally considered to have been structured for a significant tax avoidance purpose, such transactions ordinarily will have been subject to registration under this section before becoming listed transactions.

The temporary regulations provide that if an interest in a confidential corporate tax shelter is first offered for sale after February 28, 2000 and that shelter is also a tax shelter under section 6111(c), the person responsible for registering the shelter may either (1) complete and file Form 8264, including the information required by these temporary regulations for confidential corporate tax shelters, not later than the day on which an interest in the shelter is first offered for sale after February 28, 2000, or (2) complete and file Form 8264 for the section 6111(c) tax shelter not later than the day on which an interest in the tax shelter is first offered for sale under section 6111(a) and then file an amended Form 8264 with the information required by these temporary regulations not later than August 29, 2000.

The temporary regulations provide that the term “tax shelter promoter” as described in section 6111(d)(2) includes a tax shelter organizer under section 6111(e)(1) and § 301.6111-1T(Q&A-26 through Q&A-32) and any other person who participates in the organization, management or sale of a tax shelter (other than a person who merely performs services of the kind described in Q&A-33 of § 301.6111-1T) or any person related (within the meaning of section 267 or 707) to such tax shelter organizer or such other person.

In addition to the registration rules in section 6111, the rules in § 301.6111-1T(Q&A-34 through Q&A-39) apply for determining who must register a confidential corporate tax shelter.

The temporary regulations specify that, if all of the tax shelter promoters of a confidential corporate tax shelter are foreign persons and none of such promoters registers the shelter, any person who discusses participation in the shelter must register the shelter under section 6111(a). Pursuant to the authority in section 6111(f)(4), under limited circumstances, the temporary regulations apply to foreign as well as United States persons. For example, a foreign corporation that participates in a tax shelter with a significant purpose of reducing its United States taxes would be required to register the tax shelter if there were no U.S. promoters and the other requirements of the temporary regulations were satisfied.

Under the temporary regulations, if all the tax shelter promoters of a confidential corporate tax shelter are foreign persons, any person who discusses participation in the confidential corporate tax shelter with a tax shelter promoter must register the shelter within 90 days of beginning such discussions unless one or more of the following occurs: (1) the person does not participate in the shelter and notifies the promoter in writing, within the 90-day period, that the person will not participate; or (2) within the 90-day period, the person obtains and reasonably relies on both a written statement from one of the tax shelter promoters that such promoter has registered the tax shelter under this section and a copy of the registration.

To prevent avoidance of the purposes of section 6111(d)(3), the temporary regulations treat any person that participates in a shelter as having discussed that participation. Such discussion will be treated as occurring on the date of the agreement to participate or, if earlier, any other date the person is treated as having discussed participation under any other provision of these regulations. Thus, the participant is treated as having discussed participation in the shelter even if the agreement to participate is made without direct discussions by the participant. This might occur, for example, if participation is agreed to through an intermediary acting on the participant's behalf.

The temporary regulations also state that a person (first person) will be treated as participating indirectly in (and therefore as discussing) a tax shelter if a foreign person in which the first person has at least a 10 percent interest participates in the shelter with a significant purpose of avoiding or evading the first person's Federal income tax. For example, if a foreign corporation participates in a confidential corporate tax shelter with a significant purpose of reducing its 10 percent corporate shareholder's Federal income taxes, the temporary regulations would require the shareholder to register the tax shelter if all promoters are foreign.

For purposes of the registration requirements under section 6111(d)(3), it is presumed that the tax shelter promoters may receive fees in excess of $100,000 in the aggregate unless the person who would be responsible for registering the tax shelter can show otherwise.

Any person who organizes or sells an interest in a confidential corporate tax shelter must maintain a list of persons who were sold an interest in the tax shelter and such other information as required by section 6112. See § 301.6112-1T. Amendments to the temporary regulations under section 6112 have been published concurrently with the temporary regulations under section 6111(d). Among other things, the amended temporary regulations under section 6112 require lists to be maintained with respect to transactions for which the avoidance or evasion of Federal income tax is considered to be a significant purpose of the structure of the transaction, as determined in these temporary regulations under section 6111(d)(1)(A), whether or not the transactions are offered under conditions of confidentiality.

The regulations apply to confidential corporate tax shelters in which any interests are offered for sale after February 28, 2000.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that the persons responsible for promoting and registering the transactions described in these regulations are principally large publicly traded corporations, and the burden is not significant as described earlier in the preamble. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these temporary regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal authors of these regulations are Mary Beth Collins and Richard Castanon, Office of Chief Counsel (Passthroughs and Special Industries) and Rebecca Rosenberg, Office of Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

By notice dated October 27, 1998, EPA published the final NO X SIP call. The final NO X SIP call provided the opportunity for comments on 2007 baseline sub-inventory revisions. If data submitted by commenters were determined to be technically justified, the State baseline inventory and budgets for the NO X SIP call would be revised to include the new data. In response to the comments received during this comment period, revised baseline inventories and budgets were published in the May 14, 1999 technical amendment (64 FR 26298).

The EPA is proceeding to final action now on a second technical amendment based on further comments received from the public in response to the SIP call and the request for comments on inventory revisions as well as the May 14, 1999 technical amendment. The final NO X SIP call required that the SIPs be submitted by September 30, 1999 and the controls be implemented by May 1, 2003. On May 25, 1999, the courts granted a stay on the SIP submittal date of September 30, 1999. However, we are moving forward with these corrections because some States are voluntarily submitting SIPs as soon as they can incorporate the new emissions inventory and statewide budget numbers. Also, today's changes are necessary to make the NO X SIP Call inventory consistent with the inventory adopted when EPA granted Section 126 petitions on December 17, 1999. The NO X SIP Call and the Section 126 petitions are to be based on the same inventory. To the extent relevant, the corrections contained in today's action have already been incorporated in the section 126 inventory.

To the extent the Administrative Procedure Act might require publication of an additional notice of proposed rulemaking for this action, EPA finds good cause to dispense with such a proposal. The EPA finds it would be contrary to the public interest, because a number of States are proceeding with revisions to their SIPs that are dependent upon finalization of these inventories. Any delay in finalizing these inventories would require States to delay submitting their SIP revisions and therefore could delay emissions reductions that would be realized as a result of these SIP revisions. Furthermore, EPA has already provided a sufficient opportunity for public comment on the inventory issues (5 U.S.C. 553(b)(B)) through the prior comment period on the SIP call and the first technical amendment.

Subsequent to the publication of the May 14, 1999 technical amendment revising the emission budgets for the NO X SIP call, a number of commenters raised concerns about EPA's interpretation of their comments. In addition, new information was also submitted by commenters after May 14, 1999. Further, EPA conducted a thorough review of all the comments received regarding the May 14 technical amendment. This was done in an attempt to identify other mistakes made in incorporating the revision requests. The Agency modified the base inventories and budget calculations in areas where these reviews uncovered incorporation errors or where new data was found to be technically valid.

As part of the above review, EPA became aware of an error common to many stationary reciprocating internal combustion (IC) engines in several States. The error generally occurred because the permits issued to the sources used only one point and stack identification number for each of several engines located at one site; i.e., individual engines at one site that were permitted together received the same identification number. Then, in calculating the total emissions from that source, the inventory resulted in identifying the source incorrectly as a large source instead of several small sources with separate emission points.

In some cases, this common error was noted by individual companies during the original comment period for the NO X SIP call. In the process of making the corrections described above, EPA also made minor corrections to the IC engine inventory based on further discussions with the industry and where concurrence of the relevant State agency was obtained.

In addition, on August 9, 1999, (64 FR 43124) EPA issued a Notice of Data Availability seeking comment on heat input and electrical output data that could be used to allocate NO X allowances under a Federal NO X Budget Trading Program. EPA received a number of comments on that Notice that have also lead to review of earlier comments submitted by those commenters. In some cases this review has led to changes in the electricity generating unit (EGU) and non-electricity generating unit (non-EGU) portions of the budget.

Changes to the Statewide NO X emissions budgets made in this technical amendment are mainly in response to the comments submitted during prior comment periods for the NO X SIP call and the May 14, 1999 technical amendment. Each of the sub-inventory sectors of electricity generating unit (EGU), non-electricity generating unit(non-EGU) point, area, nonroad mobile, and highway mobile were commented on and affected to some extent by this EPA action. The changes made in each sub-inventory sector are further described below. The total emissions budget for all of the sub-inventory sectors decreased less than 1 percent from the May 14, 1999 technical amendment to this action.

As a result of these revisions, EPA anticipates that full implementation of the NO X SIP call will reduce total NO X emissions by 1.111 million tons in the 2007 ozone season. This is a slight decrease from the 1.157 million tons in total NO X reductions identified in the final NO X SIP call. The total overall percent reduction decreased slightly from 28 percent to 25 percent as a result of the smaller amount of emissions reductions and an increase in the emissions inventory baseline. Even though there was a slight increase in the overall NO X emissions inventory, EPA expects that the impact on air quality benefits and cost effectiveness would be small because the emissions changes are minor.

The EGU source budgets increased by less than 1 percent from the final SIP call. A number of EGU point source units were reclassified to the non-EGU source sector and some non-EGU sources were reclassified to the EGU source sector. Further, in response to comments, the EGU budget also adds previously unidentified EGUs. Overall, the emissions reductions from this sector are similar to the emissions reductions of the final NO X SIP call.

On September 15, 1999, EPA took a direct final rulemaking (64 FR 49987) action modifying the EGU portions of the budget for the States of Connecticut, Massachusetts and Rhode Island. On November 1, 1999, after receiving adverse comment, EPA withdrew that final action (64 FR 58792).

Therefore, today's action does not include the modifications to the budgets for those three States that were finalized on September 15, 1999. EPA is reviewing the comments received on that action and intends to address them in a future rulemaking action. As explained in the September 15, 1999 action, such an action would be a redistribution of the budget among the three States and would have no affect on the budget or compliance supplement pool for any other states.

The non-EGU source budgets increased by 13 percent from the final NO X SIP call for several reasons. First, many sources were reclassified from large non-EGUs to small non-EGUs, thereby removing them from the category of non-EGU sources requiring budget level controls ( i.e., 30 percent reduction from large cement kilns, 60 percent reduction from large industrial boilers and large gas turbines, and 90 percent reduction from large IC engines). Second, some non-EGU units for which EPA assumed controls were reclassified to categories for which controls were not assumed; this reclassification results in excluding them from budget level controls ( e.g., large industrial boiler reclassified as a glass manufacturer). Many State and local agencies submitted revised non-EGU point source inventories which replaced their final NO X SIP call inventory for non-EGUs. A number of non-EGU point source units were reclassified to the EGU source sector and a number of EGU sources were reclassified to the non-EGU source sector. The result of all of these reclassifications is that fewer non-EGUs would be subject to EPA's assumed control strategy. Finally, corrections to the growth rates of many non-EGU sources were made to reflect the growth misapplied in the May 14, 1999 version of the budget. Because the 2007 base budget increased, but the total number of units that would be subject to controls under EPA's assumed control strategy decreased, these changes lower the amount of emissions expected to be reduced by the NO X SIP call by 44,072 tons.

Changes in the stationary area source budgets resulted in an increase of 10 percent from the final NO X SIP call to that portion of the budget. Some State and local agencies submitted revised stationary area source inventories to replace their final NO X SIP call inventory. In addition, EPA is applying a more consistent method for calculating ozone season emissions based on typical ozone season daily emissions. To retain consistency in State ozone season estimation methods, EPA is estimating seasonal emissions budgets by multiplying the typical ozone season day emission value by the number of days (153) in the ozone season. Since EPA does not apply any controls to this source sector in calculating the reductions for the final NO X SIP call, there is no expected effect on the overall reduction due to these changes.

Changes in the nonroad mobile source budget resulted in an overall increase of 15 percent to the nonroad mobile source budget from the nonroad source budget in the final NO X SIP call. The EPA applied the same ozone season estimation methods change described above for stationary area sources to the nonroad mobile source budget. Several State and local agencies provided emissions growth and control data for use in estimating the nonroad sector of the budgets. Since EPA did not apply any controls to this source sector in calculating the reductions for the final NO X SIP call, there is no expected affect on the overall reduction due to these changes.

Changes in the highway mobile source sector resulted in a 10 percent increase to the highway mobile source budget from the final NO X SIP call budget. Differences in the highway sector of the State emissions budgets are in response to State and local agency comments on vehicle miles traveled (VMT), VMT growth, vehicle mix throughout the State, State-to-county level VMT allocations, speed changes by vehicle and roadway type, and inspection and maintenance program application, as well as EPA's inclusion of excess NO X emissions from the use of “defeat devices” on highway heavy-duty diesel engines. This latter effect is discussed more fully in the following section. Since EPA did not apply any controls to this source sector in calculating the reductions for the final NO X SIP call, there is no expected effect on the overall reduction due to these changes.

Neither overall size of the compliance supplement pool, nor the methodology for distributing the compliance supplement pool has changed as a result of this rulemaking. Consistent with the final SIP Call, EPA has distributed the compliance supplement pool based on a State's share of the overall emissions reductions required. Therefore, if the inventory revisions contained in this final rule resulted in a decrease in any State's share of the overall emission reductions required by the SIP call, then there is a corresponding decrease in that State's compliance supplement pool. Conversely, if any of the inventory revisions resulted in an increase in a State's share of the overall emissions reductions required, then the State would receive a larger share of the 200,000 ton compliance supplement pool.

The final NO X budget numbers EPA is presenting today, include corrected estimates for the effects of excess NO X emissions from highway heavy-duty diesel engines with “defeat devices.” These diesel engines use computer software that cause the effectiveness of the engines' emission control systems to be reduced. In essence, the computer software alters the fuel injection timing when the engine operates in certain modes (such as highway driving), causing the engine to emit higher levels of NO X than indicated by their certification standards or by EPA's existing emission models. The EPA believes that the emissions impact of defeat devices peaked in the late 1990s and subsequently will decline rapidly as newer engines replace defeat device-equipped engines and as manufacturers undertake the mitigation commitments required under the consent decrees reached with the manufacturers of highway heavy-duty diesel engines equipped with defeat devices.

As of July 1, 1999, these consent decrees have become final. The consent decrees commit the manufacturers to reduce emissions from their engines and cease equipping them with defeat devices according to an agreed-upon schedule, and to take steps to mitigate the emissions effects of existing engines equipped with defeat devices. These mitigation commitments include the early introduction of heavy-duty diesel engines that will meet the more stringent NO X standards scheduled to take effect in 2004, rebuilding existing diesel engines to meet more stringent standards, and accelerating the introduction of lower-emitting nonroad diesel engines. Additional information regarding the defeat device consent decrees can be found in “Notices of Filing of Consent Decree under the Clean Air Act” (63 FR 59330-59334, November 3, 1998). Additional information about defeat devices and their emissions effects can be obtained from the U.S. EPA's Office of Mobile Sources by contacting the Engine Compliance Programs Group at (202) 564-9240 and requesting document VPCD-98-13 (HD Engine), dated October 15, 1998.

In the May 14, 1999 technical amendment, EPA presented updated estimates of NO X emissions from heavy-duty diesel engines that included the added emissions due to defeat devices and also accounted for the early introduction of engines that meet the 2004 highway heavy-duty diesel engine standards, as specified by the proposed consent decrees reached with the manufacturers of diesel engines equipped with these devices. Since the consent decrees became final, we have improved our estimates of the impact of defeat devices and the mitigation measures contained in the consent decrees. These improved estimates reflect the rebuild provisions of the consent decrees and more accurately account for the effects of defeat devices and the early introduction of engines meeting the 2004 standards. The final baseline NO X emission projections and NO X budgets presented in this notice include these improved estimates.

The EPA is including revised estimates of the effects of defeat devices in this technical amendment even though they were not available at the time of our proposal, for the final NO X SIP call, or for the May 14, 1999 technical amendment (note that as explained above, the May 14, 1999 technical amendment did include the best estimates that EPA had at that time of the effect of the defeat devices). The EPA finds good cause to use this information without prior proposal. Comment would be unnecessary, since EPA will be including the effects of the defeat devices in both the calculation of the baseline inventories and the establishment of the SIP call budgets. Because the effects of the defeat devices will be included in both the baseline and the emission levels that must be achieved, inclusion of the effects will not alter the obligations that the affected States must meet to comply with the SIP call. The result of this change does not alter the tons of NO X reductions that the States must achieve, nor does it change the type of controls States are expected to select to reduce NO X emissions. This change will more accurately reflect EPA's current understanding of emissions from highway mobile sources and the provisions of the final consent decrees. Therefore, EPA finds good cause to include these effects in this final action.

As described above, including the emissions due to defeat devices in the statewide NO X emissions budgets will not, by itself, alter the emissions reductions that will result from the final NO X SIP call, because the change in baseline and budget amounts is identical. The change in NO X budgets varies from State to State but averages approximately 3.5 percent across the entire 37-State Ozone Transport Assessment Group (OTAG) domain, which EPA believes approximates the increase in the States covered by the final NO X SIP call. The EPA does not believe this change is sufficiently large to alter the conclusions regarding significant contribution or estimates of the overall benefits of the rule, although it may alter the projected benefits of the rule in specific locations.

The final percent reductions from the final October 1999 base year inventory to the final February 18, 2000 budget for each sub-inventory sector are shown in Tables 1-5. The February 18, 2000 final statewide emissions budgets are shown in Table 6. Table 7 shows the percent change between the statewide NO X emissions budgets promulgated on May 14, 1999 and the revised final statewide NO X emissions budgets of February 18, 2000. Table 8 shows each State's final compliance supplement pool.

Section 112(l) of the Clean Air Act, as amended in 1990 (CAA), authorizes EPA to delegate to state or local air pollution control agencies the authority to implement and enforce the standards set out in 40 CFR Part 63, National Emission Standards for Hazardous Air Pollutants for Source Categories. On November 26, 1993, EPA promulgated regulations, codified at 40 CFR Part 63, Subpart E (hereinafter referred to as “Subpart E”), establishing procedures for EPA's approval of state rules or programs under section 112(l) ( see 58 FR 62262).

Any request for approval under CAA section 112(l) must meet the approval criteria in 112(l)(5) and 40 CFR Part 63, Subpart E. To streamline the approval process for future applications, a state or local agency may submit a one-time demonstration that it has adequate authorities and resources to implement and enforce any CAA section 112 standards. If such demonstration is approved, then the state or local agency would no longer need to resubmit a demonstration of these same authorities and resources for every subsequent request for delegation of CAA section 112 standards. However, EPA maintains the authority to withdraw its approval if the State does not adequately implement or enforce an approved rule or program.

On October 30, 1996, EPA approved the Maricopa County Environmental Services Department's (MC's) program for accepting delegation of section 112 standards that are unchanged from Federal standards as promulgated (see 61 FR 55910). The approved program reflects an adequate demonstration by MC of general resources and authorities to implement and enforce section 112 standards. However, formal delegation for an individual standard does not occur until MC obtains the necessary regulatory authority to implement and enforce that particular standard, and EPA approves MC's formal delegation request for that standard.

MC informed EPA that it intends to obtain the regulatory authority necessary to accept delegation of section 112 standards by incorporating section 112 standards into local codes of regulation. The details of this delegation mechanism are set forth in a Memorandum of Agreement (MOA) between MC and EPA, and are available for public inspection at the U.S. EPA Region IX office (docket No. A-96-25).

On February 1, 2000, MC requested delegation for several individual section 112 standards that have been incorporated by reference into the Maricopa County Air Pollution Control Regulations. The standards that are being delegated by today's action are listed in the table at the end of this rule.

On July 17, 1998, EPA published a direct final action delegating to ADEQ several NESHAPs and approving ADEQ's delegation mechanism for future standards (see 63 FR 38478). That action explained the procedure for EPA to grant delegations to ADEQ by letter, with periodic Federal Register listings of standards that have been delegated. On October 6, 1999, ADEQ requested delegation of the following NESHAPs contained in 40 CFR Part 63:

Subpart S—NESHAP from the Pulp and Paper Industry

Subpart LL—NESHAP for Primary Aluminum Reduction Plants

Subpart EEE—NESHAP for Hazardous Waste Combustors

After reviewing MC's request for delegation of various NESHAPs, EPA has determined that this request meets all the requirements necessary to qualify for approval under CAA section 112(l) and 40 CFR 63.91. Accordingly, MC is granted the authority to implement and enforce the requested NESHAPs. These delegations will be effective on May 1, 2000. A table of the NESHAP categories that will be delegated to MC is shown at the end of this rule. Although MC will have primary implementation and enforcement responsibility, EPA retains the right, pursuant to CAA section 112(l)(7), to enforce any applicable emission standard or requirement under CAA section 112. In addition, EPA does not delegate any authorities that require implementation through rulemaking in the Federal Register , or where Federal overview is the only way to ensure national consistency in the application of the standards or requirements of CAA section 112.

After a state or local agency has been delegated the authority to implement and enforce a NESHAP, the delegated agency becomes the primary point of contact with respect to that NESHAP. Pursuant to 40 CFR sections 63.9(a)(4)(ii) and 63.10(a)(4)(ii), EPA Region IX waives the requirement that notifications and reports for delegated standards be submitted to EPA as well as to MC.

In its February 1, 2000 request, MC included a request for delegation of the regulations implementing CAA section 112(i)(5), codified at 40 CFR Part 63, Subpart D. These requirements apply to state or local agencies that have a permit program approved under title V of the Act (see 40 CFR 63.70). MC received final interim approval of its title V operating permits program on October 30, 1996 (see 61 FR 55910). State or local agencies implementing the requirements under Subpart D do not need approval under section 112(l). Therefore, EPA is not taking action to delegate 40 CFR Part 63, Subpart D to MC.

MC also included a request for delegation of the regulations implementing CAA sections 112(g) and 112(j), codified at 40 CFR Part 63, Subpart B. These requirements apply to major sources only, and need not be delegated under the section 112(l) approval process. When promulgating the regulations implementing section 112(g), EPA stated its view that “the Act directly confers on the permitting authority the obligation to implement section 112(g) and to adopt a program which conforms to the requirements of this rule. Therefore, the permitting authority need not apply for approval under section 112(l) in order to use its own program to implement section 112(g)” ( see 61 FR 68397). Similarly, when promulgating the regulations implementing section 112(j), EPA stated its belief that “section 112(l) approvals do not have a great deal of overlap with the section 112(j) provision, because section 112(j) is designed to use the title V permit process as the primary vehicle for establishing requirements” ( see 59 FR 26447). Therefore, state or local agencies implementing the requirements under sections 112(g) and 112(j) do not need approval under section 112(l). As a result, EPA is not taking action to delegate 40 CFR Part 63, Subpart B to MC.

Today's document serves to notify the public of the details of MC's procedure for receiving delegation of future NESHAPs. As set forth in the MOA, MC intends to incorporate by reference, into local codes of regulation, each newly promulgated NESHAP for which it intends to seek delegation. MC will then submit a letter to EPA Region IX, along with proof of regulatory authority, requesting delegation for each individual NESHAP. Region IX will respond in writing that delegation is either granted or denied. If a request is approved, the delegation of authorities will be considered effective upon the date of the response letter from Region IX. Periodically, EPA will publish in the Federal Register a listing of the standards that have been delegated. Although EPA reserves its right, pursuant to 40 CFR section 63.96, to review the appropriateness of any future delegation request, EPA will not institute any additional comment periods on these future delegation actions. Any parties interested in commenting on this procedure for delegating future unchanged NESHAPs should do so at this time.

Today's document serves to notify the public that on November 10, 1999, EPA granted delegation to ADEQ for the following NESHAPs contained in 40 CFR Part 63:

• Subpart S—NESHAP from the Pulp and Paper Industry

• Subpart LL—NESHAP for Primary Aluminum Reduction Plants

• Subpart EEE—NESHAP for Hazardous Waste Combustors

EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial action and anticipates no adverse comments. However, in the Proposed Rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal for this action should relevant adverse comments be filed. This action will be effective May 1, 2000, without further notice unless the Agency receives relevant adverse comments by April 3, 2000.

If EPA receives such comments, then EPA will publish a document withdrawing this final rule and informing the public that the rule will take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on the rule. Any parties interested in commenting on the rule should do so at this time. If no such comments are received, the public is advised that this rule will be effective on May 1, 2000, and no further action will be taken on the proposed rule.

The Office of Management and Budget has exempted this regulatory action from review under Executive Order 12866.

This final rule is not subject to Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks,” because it is not an “economically significant” action under Executive Order 12866.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq. , EPA must prepare a regulatory flexibility analysis assessing the impact of any proposed or final rule on small entities. 5 U.S.C. 603 and 604. Alternatively, EPA may certify that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and government entities with jurisdiction over populations of less than 50,000.

Delegations of authority to implement and enforce unchanged Federal standards under section 112(l) of the Clean Air Act do not create any new requirements but simply transfer primary implementation authorities to the State. Therefore, because this action does not impose any new requirements, the Administrator certifies that it does not have a significant impact on any small entities affected.

Under section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to state, local, or tribal governments in the aggregate, or to private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the delegation action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under state or local law, and imposes no new Federal requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major” rule as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 1, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

You may be affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Electronically. You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/.

2. In person. The Agency has established an official record for this action under docket control number OPP-300981. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of August 5, 1998 (63 FR 41835) (FRL-6017-1), EPA issued a notice pursuant to section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170) announcing the filing of pesticide petitions (PP 7F3485, 6F4648, 1F3949) for a tolerance by Valent USA Company, 1333 North California Boulevard, Suite 600, Walnut Creek, CA 94596-8025. This notice included a summary of the petition prepared by Valent USA Company, the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.466 be amended by establishing a tolerance for residues of the insecticide fenpropathrin, in or on various food commodities as follows: (1) PP7F3485 proposes the establishment of tolerances for the pome fruit crop group (crop group 11) at 5.0 parts per million (ppm); (2) PP1F3949 proposes the establishment of tolerances for grapes at 5.0 ppm and the processed product raisins at 10 ppm; for the citrus fruit crop group (crop group 10) at 2.0 ppm and the processed product citrus oil at 50.0 ppm and dried citrus pulp at 4.0 ppm. Based on EPA's review of processing studies submitted by Valent, the petition was revised by the petitioner to propose the tolerance on citrus oil at 75.0 ppm; (3) PP6F4648 proposes the establishment of tolerances for the head and stem Brassica crop group (crop group 5A) at 3.0 ppm and the melons crop group (crop group 9A) at 0.5 ppm.

Fenpropathrin is the active ingredient in DANITOL 2.4 EC Spray (EPA Reg. No. 59639-35) and TAME 2.4 EC Spray (EPA Reg. No. 59639-77). Tolerances have been established on cottonseed; cottonseed oil; meat, meat byproducts, and fat of cattle, goats, hogs, horses, sheep and poultry; eggs; milkfat; peanuts; peanut hay; strawberries; and tomatoes. Fenpropathrin is currently proposed for use on pome fruits (crop group 11) including apples to control spotted tentiform leafminer, white apple leafhopper, tarnished plant bug, rosy apple aphid, potato leafhopper, apple maggot, codling moth, European apple sawfly, green fruitworm, lesser appleworm, Pandemis leafroller, plum curculio, obliquebanded leafroller, oriental fruitmoth, redbanded leafroller, spirea aphid, tufted apple budmoth, variegated leafroller, Japanese beetle, European red mite, twospotted spider mite, and pears to control pear psylla (overwintering adults) and codling moth; grapes to control eastern grape leafhopper, western grape leafhopper, variegated grape leafhopper, grape leaf skeletonizer, grape berry moth, and Japanese beetles; head and stem Brassica (crop group 5A) including cabbage, broccoli, Brussels sprouts, and cauliflower to control yellowstriped armyworms, cabbage looper, imported cabbageworm, silverleaf whitefly, sweetpotato whitefly, diamondback moth southern cabbageworm, cabbage webworm, green peach aphid, and cabbage aphid; citrus fruits (crop group 10) to control citrus thrips, citrus blackfly, citrus flat mite, citrus red mite, citrus rust mite, Texas citrus mite, and twospotted spider mite; and melons (crop group 9A) including watermelons, honeydews, and muskmelons to control fall armyworms, twospotted spider mite (except in CA), silverleaf whitefly and sweetpotato whitefly.

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. * * * ”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for tolerances for residues of fenpropathrin on pome fruit (crop group 11) and grapes at 5.0 ppm; head and stem Brassica (crop group 5A) at 3.0 ppm; citrus fruit (crop group 10) at 2.0 ppm; melons (crop group 9A) at 0.5 ppm; and in the processed products citrus oil at 75 ppm, raisins at 10 ppm, and dried citrus pulp at 4.0 ppm. EPA's assessment of the dietary exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by fenpropathrin are discussed in this unit.

1. Acute toxicity studies with technical fenpropathrin. Oral LD 50 in the rat is 54.0 milligram/kilogram (mg/kg) for males and 48.5 (mg/kg) for females—Toxicity Category I; dermal LD 50 is 1,600 mg/kg for males and 870 mg/kg for females—Category II; acute inhalation (unable to generate sufficient test article vapor or aerosol to elicit toxicity)—Category IV; primary eye irritation (no corneal involvement, mild iris and conjunctival irritation)—Category III; and primary dermal irritation (no irritation)—Category IV. Fenpropathrin is not a sensitizer.

2. In a subchronic oral toxicity study, rats were dosed at concentrations of 0, 3, 30, 100, 300, or 600 ppm in the diet. The lowest effect level (LEL) is 600 ppm (30 mg/kg/day) based on body weight reduction (female), body tremors, and increased brain (female) and kidney (male) weights. The no observed adverse effect level (NOAEL) is 300 ppm (15 mg/kg/day).

3. In a subchronic oral toxicity study, dogs were dosed at concentrations of 0, 250, 500, or 1,000 ppm in the diet. A 1,000 ppm dog was sacrificed moribund during the third week after having tremors and showing other signs of poisoning caused by the test article. Because of this death, the dose for this group was reduced to 750 ppm for the remainder of the study. The lowest observed adverse effect level (LOAEL) is 250 ppm (7.25 mg/kg/day) based on signs of GI tract disturbance. There was no NOAEL—note dog chronic, below).

4. In a 21-day dermal toxicity study, rabbits were dosed 5 days/week for 3 weeks on abraded or unabraded skin at doses of 0, 500, 1,200, or 3,000 mg/kg/day. There were no dose-related effects on body weight, food consumption, clinical pathology, gross pathology, or organ weights. Trace or mild inflammatory cell infiltration was seen in the intact and abraded skin in all groups, including controls, and was attributed to the test article. The systemic NOAEL is > 3,000 mg/kg/day. Local irritation only. Although a 21-day dermal toxicity study in rabbits is available, the Agency has determined that rats are the most sensitive species to ascertain the dermal toxicity potential of pyrethroid insecticides. Although these data are lacking, EPA has sufficient toxicity data to support these tolerances and these additional studies are not expected to significantly change the risk assessment.

5. In a 1-year feeding study, dogs were dosed at 0, 100, 250, or 750 ppm in the diet. The systemic LEL is 250 ppm (6.25 mg/kg/day) based on tremors in all dogs. The neurologic NOAEL is 100 ppm (2.5 mg/kg/day); the systemic NOAEL is 100 ppm (2.5 mg/kg/day).

6. In a chronic feeding/carcinogenicity study, rats were dosed at 0, 50, 150, 450, or 600 ppm in the diet (0, 1.93, 5.71, 17.06, or 22.80 mg/kg/day in males, and 0, 2.43, 7.23, 19.45, or 23.98 mg/kg/day in females). There was no evidence of carcinogenicity at any dose up to and including 600 ppm. The systemic NOAEL (male) is 450 ppm (17.06 mg/kg/day). The systemic NOAEL (female) is 150 ppm (7.23 mg/kg/day). Systemic LEL (male) is 600 ppm highest dose tested (HDT) based on increased mortality, body tremors, increased pituitary, kidney, and adrenal weights. The systemic LEL (female) is 450 ppm (19.45 mg/kg/day) based on increased mortality and body tremors.

7. In a chronic feeding/carcinogenicity study, mice were dosed at 0, 40, 150, or 600 ppm in the feed (0, 3.9, 13.7, or 56.0 mg/kg/day in males, and 0, 4.2, 16.2, or 65.2 mg/kg/day in females). Mortality was highest during the final quarter of the study, but the incidence was similar in all dosed and control groups. No other indications of toxicity or carcinogenicity were seen. The systemic NOAEL is > 600 ppm (HDT; male/female, 56.0/65.2 mg/kg/day).

8. In a developmental toxicity study in rats, pregnant female rats were dosed by gavage on gestation days 6-15 at 0 (corn oil control), 0.4, 1.5, 2.0, 3.0, 6.0, or 10.0 mg/kg/day. The maternal NOAEL is 6 mg/kg/day; maternal LEL is 10 mg/kg/day based on death, moribundity, ataxia, sensitivity to external stimuli, spastic jumping, tremors, prostration, convulsions, hunched posture, squinted eyes, chromodacryorrhea, and lacrimation; developmental NOAEL is 10 mg/kg/day.

9. In a developmental toxicity study in rabbits, pregnant female New Zealand rabbits were dosed by gavage on gestation days 7 through 19 at 0, 4, 12, or 36 mg/kg/day. Maternal NOAEL is 4 mg/kg/day; maternal LEL is 12 mg/kg/day based on grooming, anorexia, flicking of the forepaws; developmental NOAEL is > 36 mg/kg/day (HDT).

10. A 3-generation reproduction study was performed in rats. Rats were dosed with fenpropathrin at concentrations of 0, 40, 120, or 360 ppm (0, 3.0, 8.9, or 26.9 mg/kg/day in males; 0, 3.4, 10.1, or 32.0 mg/kg/day in females, respectively). Parents (male/female): Systemic NOAEL = 40 ppm (3.0/3.4 mg/kg/day). Systemic LEL = 120 ppm (8.9/10.1 mg/kg/day) based on body tremors with spasmodic muscle twitches, increased sensitivity and maternal lethality; reproductive NOAEL = 120 ppm (8.9/10.1 mg/kg/day). Reproductive LEL = 360 ppm (26.9/32.0 mg/kg/day) based on decrease mean F 1B pup weight, increased F 2B loss. Pups (male/female): Developmental NOAEL = 40 ppm (3.0/3.4 mg/kg/day). Developmental LEL = 120 ppm (8.9/10.1 mg/kg/day) based on body tremors, increased mortality.

11. Studies on gene mutation and other genotoxic effects: An Ames Assay was negative for Salmonella TA98, TA100, TA1535, TA1537, and TA1538; and E. coli WP2uvrA (trp-) with or without metabolic activation. Sister Chromosome Exchange in CHO-K1 Cells—there were no increases in sister chromatid exchanges seen in the CHO-K1 cells treated with S-33206 or the DMSO vehicle. Cytogenetics in vitro (CHO/CA)—negative for chromosome aberrations (CA) in Chinese hamster ovary (CHO) cells exposed in vitro to toxic doses (≧30 μg/mL) without activation; and to limit of solubility (1,000 μg/mL) with activation. In Vitro Assay in Mammalian Cells—equivocal results—of no concern. DNA Damage/Repair in Bacillus subtilis —not mutagenic or showing evidence of DNA damage at "5,000 μg/paper disk.

12. In a metabolism study in rats, animals were dosed with radiolabeled fenpropathrin radiolabeled in either the alcohol or acid portion of the molecule. Rats received 14 daily oral low-doses of 2.5 mg/kg/day of unlabeled fenpropathrin followed by a 15th dose of either the alcohol or acid radiolabeled fenpropathrin. Groups of rats received a single dose of either of the two radiolabeled test articles at 2.5 mg/kg or 25 mg/kg. No clinical signs were seen in any rats. The major biotransformations included oxidation at the methyl group of the acid moiety, hydroxylation at the 4'-position of the alcohol moiety, cleavage of the ester linkage, and conjugation with sulfuric acid or glucuronic acid. Four metabolites were found in the urine of rats dosed with alcohol labeled fenpropathrin. The major metabolites were the sulfate conjugate of 3-(4'-hydroxyphenoxy)benzoic acid and 3-phenoxybenzoic acid (22-44% and 3-9% of the administered dose, respectively). The major urinary metabolites of the acid-labeled fenpropathrin were TMPA-glucuronic acid and TMPA-CH 2 OH (11-26% and 6-10% of the administered dose, respectively). None of the parent chemical was found in urine. The major elimination products in the feces included the parent chemical (13-34% of the administered dose) and four metabolites. The fecal metabolites (and the percentage of administered dose) included CH 2 OH-fenpropathrin (9- 20%), 4'-OH-fenpropathrin (4-11%), COOH-fenpropathrin (2-7%), and 4'-OH-CH 2 OH-fenpropathrin (2-7%). There are no qualitatively unique plant metabolites. The primary aglycones are identical in both plants and animals; the only difference is in the nature of the conjugating moieties employed.

13. The metabolism and potential toxicity of the small amounts of terminal plant metabolites have been tested on mammals. Glucoside conjugates of 3-phenoxy-benzyl alcohol and 3-phenoxybenzoic acid, administered orally to rats, were absorbed as the corresponding aglycones following cleavage of the glycoside linkage in the gut. The free or reconjugated aglycones were rapidly and completely eliminated by normal metabolic pathways. The glucose conjugates of 3-phenoxybenzyl alcohol and 3-phenoxy-benzoic acid are less toxic to mice than the corresponding aglycones.

1. Acute toxicity . An acute reference dose (RfD) of 0.06 mg/kg/day was established based on clinical signs of neurotoxicity on the day of dosing in dams during a developmental toxicity study in rats. The NOAEL was 6.0 mg/kg/day to which an uncertainty factor of 100 was applied.

2. Short- and intermediate-term toxicity. EPA did not select an end-point for short and intermediate dermal risk assessments based on the lack of dermal or systemic toxicity at 3,000 mg/kg/day in a 21-day dermal study in rabbits. Therefore, a dermal risk assessment is not necessary.

3. Chronic toxicity . EPA has established the RfD for fenpropathrin at 0.025 milligrams/kilograms/day (mg/kg/day). This RfD is based on the observance of tremors in dogs in the 1-year oral feeding study. The NOAEL was 2.5 mg/kg/day to which an uncertainty factor of 100 was applied.

4. Carcinogenicity . As no indication of carcinogenicity was seen in rats or mice, fenpropathrin was classified as a group E chemical. A cancer risk assessment is therefore not necessary.

1. From food and feed uses. Tolerances have been established (40 CFR 180.466) for the residues of fenpropathrin, in or on a variety of raw agricultural commodities. Tolerances are established on plant commodities ranging from 0.6 ppm on tomatoes to 20 ppm on peanut, hay. Tolerances are also established on animal commodities, including meat, milk, poultry, and eggs. Fenpropathrin is a pyrethroid insecticide with broad spectrum activity on insects and mites. When formulated as the product DANITOL 2.4 EC Spray, the product is registered for agricultural use on outdoor terrestrial food crops. A separate fenpropathrin product, TAME 2.4 EC Spray, is registered for commercial, professional non-food use on indoor and outdoor ornamental and nursery stock. There are no uses registered for professional indoor pest control, termite prevention, homeowner use, or turf application. Danitol 2.4 EC Spray contains 30.9% fenpropathrin by weight (2.4 pounds of fenpropathrin per gallon). Danitol 2.4 EC Spray is not to be applied through any type of irrigation system. Risk assessments were conducted by EPA to assess dietary exposures from fenpropathrin as follows:

i. Acute exposure and risk. Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. The Dietary Exposure Evaluation Model (DEEM) acute analysis provides an estimate of the distribution of single-day exposures for the overall U.S. population and certain subgroups. The analysis evaluates individual food consumption as reported by respondents in the USDA 1989-1992 Continuing Survey of Food Intake by Individuals (CSFII) and accumulates exposure to the chemical for each commodity.

The percent acute population adjusted dose (aPAD) is a measure of how close the high end exposure comes to the aPAD. The percent aPAD that would be above EPA's level of concern is 100%. For this analysis the FQPA 10x safety factor was removed. As a result, the aPAD is equivalent to the acute RfD: 0.06 mg/kg/day. The exposure of all subgroups at the 99.9th percentile is below 100% aPAD with two exceptions: nursing infants and children 1-6 years (164% and 107%, respectively). In the analysis submitted by Valent all subgroups had exposures which were below 100% aPAD. However, Valent used the 1994-1996 food consumption survey. The Agency is in the process of reviewing the recipe translation for this survey. This review has not been completed. Therefore it is current EPA policy to use the 1989-1992 survey.

In the 1989-1992 survey there is a consumption value associated with grapes which can be considered to be aberrant. A single 10-month old nursing infant consumed 2/3 of a pound (310 grams) of grapes in 1-day. This is an unusually high quantity of grapes for an infant less than 1 years old to consume in 1-day. The percent aPAD for nursing infants at the 99.5th percentile of exposure is 92%. The exposure at the 99.5th percentile places less weight on the extreme value in the food consumption survey. There were only 4 nursing infants in the 1989-1992 survey who ate grapes. Because of the aberrant data point, the analysis was run using the 1994-1996 food consumption survey. When this survey is used the exposure of nursing infants at the 99.9th percentile of exposure is 50%. As for the subgroup children 1-6 years, EPA notes that at the 99.75th percentile of exposure (1989-1992 survey) the aPAD for this group decreases to 62%. In addition, when the analysis was run using the 1994-1996 food consumption database, the exposure of children 1-6 years decreased to 77% aPAD (99.9th percentile). The analysis was also run with grapes removed from the commodity residue list. The 1989-1992 food consumption survey was used. The most highly exposed subgroup is females (13+/nursing) which utilized 61% of the aPAD. This analysis confirms that in the 1989-1992 survey grapes is a major driver for acute dietary risk.

The acute analysis for fenpropathrin provides refined estimates (Tier 3) of dietary exposure for the U.S. population and all population subgroups. These estimates were made with the use of field trial values and percent crop treated (PCT) estimates. When the 1989-1992 food consumption survey is used, the U.S. population and most of the population subgroups are below EPA's level of concern. The population subgroups which are above EPA's level of concern are nursing infants and children 1-6 years. If the Agency uses data from the 1994-1996 food consumption survey for nursing infants and children 1-6 years, the exposure to these population subgroups is below EPA's level of concern. EPA feels that this action is justified for the following reasons: (1) There were only 4 nursing infants in the 1989-1992 survey who ate grapes (the one data point will therefore exert an inordinate amount of influence on the results of the analysis, particularly at the 99.9th percentile); (2) for most population subgroups the aPAD values given by the two consumption surveys were comparable; (3) field trial data were used in the analysis which makes the analysis more conservative than if monitoring data had been available; (4) although the analysis is refined there is still room for further refinement—100% PCT was assumed for the following crops: grapes, pome fruits, citrus, head and stem Brassica, and melons (based on PCT values for registered uses, the PCT for proposed uses will probably be well below 100% once the uses are granted); and (5) although acute exposure to fenpropathrin resulting from residues present in animal commodities is refined, there is room for further refinement here also. Animal diets which are more realistic can be constructed. For this analysis the nutritional value of the diets has not been considered. Instead, maximum theoretical dietary burdens were constructed. EPA anticipates that the 1994-1996 food consumption survey will be available for use in the first quarter of calendar year 2000.

(ii). Chronic, non-carcinogenic dietary risk a DEEM chronic dietary exposure analysis was performed using anticipated residues (field trial data) and PCT data provided by the Agency. As with the acute analysis, EPA used the 1989-1992 food consumption data base whereas Valent used the 1994-1996 data base. The FQPA 10x safety factor was removed. As a result, the chronic PAD (cPAD) is equivalent to the chronic RfD: 0.025 mg/kg/day. Based on the 1989-1992 data base, the most highly exposed subgroup (children 1-6 years) utilized 9% of the cPAD. As a result, exposure to fenpropathrin of the U.S. population and all population subgroups is below EPA's level of concern.

Section 408(b)(2)(E) authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide chemicals that have been measured in food. If EPA relies on such information, EPA must require that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. Following the initial data submission, EPA is authorized to require similar data on a time frame it deems appropriate. As required by section 408(b)(2)(E), EPA will issue a data call-in for information relating to anticipated residues to be submitted no later than 5 years from the date of issuance of this tolerance.

Section 408(b)(2)(F) states that the Agency may use data on the actual PCT for assessing chronic dietary risk only if the Agency can make the following findings: That the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; that the exposure estimate does not underestimate exposure for any significant subpopulation group; and if data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency used PCT information as follows:

The Agency believes that the three conditions, discussed in section 408 (b)(2)(F) in this unit concerning the Agency's responsibilities in assessing chronic dietary risk findings, have been met. The PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. Typically, a range of estimates are supplied and the upper end of this range is assumed for the exposure assessment. By using this upper end estimate of the PCT, the Agency is reasonably certain that the percentage of the food treated is not likely to be underestimated. The regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which may be applied in a particular area.

2. From drinking water. Fenpropathrin is persistent and immobile. There are no established Maximum Contaminant Levels for residues of fenpropathrin in drinking water. No health advisory levels for fenpropathrin in drinking water have been established (EPA Safe Drinking Water Hotline, 1(800)426-4791, date of call: September 7, 1999). EPA has used drinking water numbers based on Generic Estimated Environmental Concentration (GENEEC) and Screening Concentration in Ground Water (SCI-GROW) modeling.

The Agency used its SCI-GROW (Screening Concentration in Ground Water) screening model and environmental fate data to determine the estimated environmental concentration (EEC) for fenpropathrin in ground water. SCI-GROW is an empirical model based upon actual ground water monitoring data collected for the registration of a number of pesticides that serve as benchmarks for the model. The current version of SCI-GROW appears to provide realistic estimates of pesticide concentrations in shallow, highly vulnerable ground water sites (i.e., sites with sandy soils and depth-to-ground water of 10 to 20 feet). EPA reported a ground water EEC of 0.006 ppb for fenpropathrin applied to pears and citrus fruits.

The Agency used its GENEEC screening model and environmental fate data to determine the EECs for fenpropathrin in surface water. GENEEC is used to estimate pesticide concentrations in surface water for up to 56 days after a single runoff event. GENEEC simulates a 1 hectare by 2 meters deep edge-of-the-field farm pond which receives pesticide runoff from a treated 10 hectare field. GENEEC provides an upper-bound concentration value. GENEEC can substantially overestimate (by a ≥3-fold factor) true pesticide concentrations in drinking water. The acute (peak) value for use of fenpropathrin on pears and citrus fruits at the maximum application rate is 2.72 ppb and the chronic (average 56-day) value is 0.34 ppb.

A Drinking Water Level of Comparison (DWLOC) is a theoretical upper limit on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, drinking water, and through residential uses. A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Different populations will have different DWLOCs. The Agency uses DWLOCs internally in the risk assessment process as a surrogate measure of potential exposure associated with pesticide exposure through drinking water. In the absence of monitoring data for pesticides, it is used as a point of comparison against conservative model estimates of a pesticide's concentration in water. DWLOC values are not regulatory standards for drinking water. They do have an indirect regulatory impact through aggregate exposure and risk assessments.

i. Acute exposure and risk. For purposes of this acute risk assessment, the estimated acute maximum concentration (EEC) for fenpropathrin in surface and ground waters (2.72 ppb) was used for comparison to the back-calculated DWLOCs for the acute endpoint. The drinking water EEC (when determined using dietary exposures at the 99.9th percentile of exposure) exceeds the DWLOCs for the population subgroups nursing infants and children 1-6 years. The DWLOCs, which were calculated based on the exposure values at the 99.5th percentile of exposure for nursing infants and at the 99.75th percentile of exposure for children 1-6 years, were above the drinking water EEC. The same is true for the DWLOCs calculated based on the 99.9th percentile exposure values from the 1994-1996 food consumption survey. EPA anticipates that the 1994-1996 food consumption survey will be available for use in the first quarter of calendar year 2000. For this risk assessment only, the Agency is using the data from the 1994-1996 food consumption survey for these two population subgroups. Although the dietary exposure estimates are highly refined, EPA notes that 100% crop treated was used for the following crops: grapes, pome fruits, melons, citrus, and head and stem Brassica. Based on PCT values for registered uses, the PCT for proposed uses will probably be significantly less than 100%.

The DWLOCs were calculated based on the dietary analysis in which grapes were eliminated. Based on this analysis, for all population subgroups the acute DWLOCs exceed the drinking water EEC. For the population subgroup nursing infants and children 1-6 years, the DWLOC's were 400 and 250 ppb, respectively. Therefore, the acute risk of exposure to fenpropathrin from food and drinking water is below EPA's level of concern for the U.S. population and all population subgroups.

ii. Chronic exposure and risk. EPA generally reduces GENEEC model values by a factor of three when determining whether or not a chronic level of comparison has been exceeded. If the GENEEC model value is > 3 times the chronic DWLOC, the pesticide is considered to have passed the screen and no further assessment is needed. Acute DWLOCs are to be compared directly to GENEEC estimates; both acute and chronic DWLOCs are to be compared directly to SCI-GROW estimates. (Interim Guidance for Conducting Drinking Water Exposure and Risk Assessments, December 2, 1997).

Based on the chronic dietary food exposure estimates, chronic DWLOCs for fenpropathrin were calculated. The lowest DWLOC is 230 ppb for nursing infants and children 1-6 years. The highest EEC for fenpropathrin in surface water is from the application of fenpropathrin to pears and citrus fruits (0.34 ppb) and is substantially lower than the DWLOCs calculated. Therefore, chronic exposure to fenpropathrin residues in drinking water do not exceed EPA's level of concern.

3. From non-dietary exposure. There are no current registered residential uses for fenpropathrin. However, the label for TAME 2.4 EC SprayTM does include nonfood use on indoor and outdoor ornamental and nursery plantings. According to the label, this product can be applied by Professional Certified Operators (PCO) only. Therefore, an assessment for residential handlers is not required.

There is potential for dermal and oral exposure to adults and children during postapplication activities. Because no dermal endpoint of concern was found in dermal studies, no risk from dermal exposure is expected. However, an exposure assessment was performed for the following postapplication exposure scenarios: (1) incidental non-dietary ingestion of pesticide residues on garden plants from hand-to-mouth transfer, and (2) incidental non-dietary ingestion of soil from pesticide-treated areas.

i. Acute exposure and risk. Using EPA Standard Operating Procedures for Residential Exposure Assessments (Draft, December 18, 1997), the Short-Term Exposure Estimates and Risk Assessment (day “0”, postapplication must be assessed on the same day the pesticide is applied because it is assumed that toddlers could play in the ornamental site or garden immediately after application) were calculated. The MOE's for hand to mouth and soil ingestion are 120 and 460,000 respectively. These short term MOEs are above 100 and do not exceed EPA's level of concern.

The exposure estimates that were generated are based on some upper-percentile (i.e., maximum application rate, available residues, duration of exposure) and some central tendency (i.e., transfer coefficient, surface area, hand-to-mouth activity, and body weight) assumptions and are considered to be representative of high-end exposures. The uncertainties associated with this assessment stem from the use of an assumed amount of pesticide available from ornamentals, and assumptions regarding dissipation, transfer of chemical residues, and hand-to mouth activity. The estimated exposures are believed to be reasonable high-end estimates based on observations from chemical-specific field studies and professional judgement.

ii. Chronic exposure and risk. Intermediate-term and chronic postapplication exposures are not expected because these activities (incidental non-dietary ingestion of pesticide residues on garden plants from hand-to-mouth transfer and incidental non-dietary ingestion of soil from pesticide-treated areas) will not occur everyday at ornamental and nursery sites.

4. Cumulative exposure to substances with a common mechanism of toxicity . Section 408(b)(2)(D)(v) requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA does not have, at this time, available data to determine whether fenpropathrin has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, fenpropathrin does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that fenpropathrin has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).

1. Acute risk. For this risk assessment, the acute aggregate risk is equivalent to the risk from food + water. Using the 1994-96 Food Consumption Survey, it is estimated that acute exposure to fenpropathrin from food for the most highly exposed population subgroup, children (1-6 years), will utilize 77% of the acute PAD (see discussion in Unit III.C.). An acute dietary exposure (food + water) of 100% or less of the acute PAD is needed to protect the safety of all population subgroups. The EEC's of fenpropathrin in surface and ground water for acute exposure are below the DWLOCs. Thus, the acute aggregate risk of exposure to fenpropathrin from food and drinking water is below EPA's level of concern for the U.S. population and all population subgroups

2. Chronic risk. For this risk assessment, the chronic aggregate risk is equivalent to the risk from food + water. This is because there is no chronic residential exposure scenario. In addition, no chronic dermal or inhalation endpoints were identified. As discussed above, EPA has concluded that exposure to fenpropathrin from food for the most highly exposed subgroup (children 1-6 years) will utilize 9% of the cPAD. EPA generally has no concern for exposure below 100% of the cPAD because the cPAD represents the level at or below which daily aggregate dietary exposure over a lifetime will not pose appreciable risks to human health. The EEC's for fenpropathrin in drinking water are substantially lower than the DWLOCs. Therefore, chronic aggregate risk does not exceed EPA's level of concern.

3. Short- and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account chronic dietary food and water (considered to be a background exposure level) plus indoor and outdoor residential exposure. A short-term aggregate risk assessment was performed for infants and children because of the existence of short-term postapplication residential exposure scenarios. There is a hand-to-mouth exposure of 0.049 mg/kg/day and a soil ingestion exposure of 0.000013 mg/kg/day. These exposures were aggregated with the average food exposure to arrive at short-term aggregate DWLOCs. These DWLOCs were then compared with the 56-day GENEEC maximum EEC of 0.34 ppb. For all infant/children population subgroups the DWLOCs exceeded the maximum EEC. As a result, the short-term aggregate risk from exposure to fenpropathrin does not exceed EPA's level of concern for any of the infant/children population subgroups. Intermediate-term endpoints were not identified. In addition, intermediate-term postapplication exposures are not expected from the registered residential use of fenpropathrin.

4. Aggregate cancer risk for U.S. population . The Agency has determined that there is no evidence of carcinogenicity in studies in either the mouse or rat.

5. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result from aggregate exposure to fenpropathrin residues.

1. Safety factor for infants and children — i. In general . In assessing the potential for additional sensitivity of infants and children to residues of fenpropathrin, EPA considered data from developmental toxicity studies in the rat and rabbit and a 2-generation reproduction study in the rat. The developmental toxicity studies are designed to evaluate adverse effects on the developing organism resulting from maternal pesticide exposure gestation. Reproduction studies provide information relating to effects from exposure to the pesticide on the reproductive capability of mating animals and data on systemic toxicity.

FFDCA section 408 provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a margin of exposure (MOE) analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. EPA believes that reliable data support using the standard uncertainty factor (usually 100 for combined interspecies and intraspecies variability) and not the additional tenfold MOE/uncertainty factor when EPA has a complete data base under existing guidelines and when the severity of the effect in infants or children or the potency or unusual toxic properties of a compound do not raise concerns regarding the adequacy of the standard MOE/safety factor.

ii. Developmental toxicity studies . See Toxicological Profile in Unit III.A. of this preamble.

iii. Reproductive toxicity study . See Toxicological Profile in Unit III.A. of this preamble.

iv. Prenatal and postnatal sensitivity. There is no evidence of sensitivity to young rats or rabbits following prenatal or postnatal exposure to fenpropathrin.

v. Conclusion . There is a complete toxicity data base for fenpropathrin and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. Based on the above, EPA concludes that reliable data support use of the 100-fold uncertainty factor and that an additional uncertainty factor is not needed to protect the safety of infants and children.

2. Acute risk. (Food + Water) The percentages of the acute PAD utilized at the 99.9 percentile exposure are 56% for infants and 77% for children (1-6 years), the most highly exposed population subgroup. The EEC for fenpropathrin in drinking water is below the DWLOC. The Agency has no cause for concern if total acute exposure is 100% or less of the acute PAD. Therefore, the Agency has no acute aggregate concern due to exposure to fenpropathrin through food and drinking water.

3. Chronic risk. Using the exposure assumptions described in this unit, EPA has concluded that aggregate exposure to fenpropathrin from food will utilize 5% of the cPAD for infants and 9% for children. EPA generally has no concern for exposures below 100% of the RfD because the RfD represents the level at or below which daily aggregate dietary exposure over a lifetime will not pose appreciable risks to human health. Despite the potential for exposure to fenpropathrin in drinking water and from non-dietary, non-occupational exposure, EPA does not expect the aggregate exposure to exceed 100% of the RfD.

4. Short- or intermediate-term risk. See Aggregate Risks and Determination of Safety for US Population in Unit III (D)(3) above.

5. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to residues.

The nature of the residue in plants is adequately understood. Adequate metabolism studies with three dissimilar crops have been submitted. The metabolism of fenpropathrin in apples, tomatoes, and cotton has been reviewed and has been considered adequate. The residue of concern is the parent compound fenpropathrin.

The nature of the residue in animals is adequately understood. Metabolism studies with goats and poultry dosed with radiolabeled fenpropathrin were submitted. The majority of the residue in muscle, fat, and milk and eggs was found to be the parent compound, fenpropathrin. The residue in kidney and liver consisted mainly of various metabolites. Livestock metabolites, with the possible exception of TMPA lactone, have also been identified in rat metabolism studies and their contributions to the overall toxicity of fenpropathrin have been considered. For the apple and pear tolerances, the levels of the metabolites in livestock were low enough not to be included in the tolerance expression. The organs in which metabolites of the synthetic pyrethroids are found (i.e., liver and kidney) are minor human food consumption items. As a result, the nature of the residue in animals is adequately understood for the purposes of this tolerance petition. The residue of concern in livestock commodities is the parent compound.

EPA has concluded that adequate methodology is available for enforcement of the proposed tolerances for plant and animal commodities. Method RM-22-4 can be used for the analysis of fenpropathrin in citrus, grapes, head and stem Brassica crops, melons, and pome fruits. This method includes cleanup procedures for oily crops and oils. Residues are extracted with acetone/hexane, cleaned up with silica gel and C18 Sep Pak chromatography and detection is by gas chromatography. Oily crops are extracted with acetone/hexane, partitioned into hexane, cleaned up by gel permeation, silica gel, and C18 Sep Pak chromatography and detected by gas chromatography. Oils are partitioned between hexane and acetonitrile, cleaned up on an alumina column and determined by electron capture gas chromatography using a split/splitless capillary column. The limit of detection is reported as 0.01 ppm. An EPA trial of Method RM-22-4 to determine fenpropathrin residues in apples was successfully conducted. The method was also validated for meat and milk. Recovery of fenpropathrin was tested through FDA multiresidue methods and fenpropathrin was found to be completely recovered by the PAM I Section 302 Method (Luke Method).

An adequate number of residue field trials reflecting the proposed use rates were submitted to EPA to demonstrate that tolerances for pome fruit (crop group 11) and grapes at 5.0 ppm; head and stem Brassica (crop group 5A) at 3.0 ppm; citrus fruit (crop group 10) at 2.0 ppm; melons (crop group 9A) at 0.5 ppm; processed products citrus oil at 75 ppm, raisins at 10 ppm, and dried citrus pulp at 4.0 ppm will not be exceeded when fenpropathrin products labeled for these uses are used as directed.

There are Codex maximum residue levels MRLs of 5 ppm for both grapes and pome fruit. EPA is establishing tolerances of 5 ppm for these commodities which will result in harmonized tolerances.

Rotational crop studies are not required for grapes, citrus, and pome fruit. The registrant submitted the results of confined and rotational crop studies. These studies are adequate to support the proposed use of fenpropathrin on head and stem Brassica and melons. No rotational crop restrictions or tolerances are required.

EPA is required to develop a screening program to determine whether certain substances (including all pesticides and inerts) “may have an effect in humans that is similar to an effect produced by a naturally occurring estrogen, or such other endocrine effect. * * * ” The Agency is currently working with interested stakeholders, including other government agencies, public interest groups, industry and research scientists in developing a screening and testing program and a priority setting scheme to implement this program. Congress has allowed 3 years from the passage of FQPA (August 3, 1999) to implement this program. At that time, EPA may require further testing of this active ingredient and end use products for further endocrine disrupter effects.

Therefore, the tolerance is established for residues of fenpropathrin in pome fruit (crop group 11) and grapes at 5.0 ppm; head and stem Brassica (crop group 5A) at 3.0 ppm; citrus fruit (crop group 10) at 2.0 ppm; melons (crop group 9A) at 0.5 ppm; and in the processed products citrus oil at 75 ppm, raisins at 10 ppm, and dried citrus pulp at 4.0 ppm.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-300981 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before May 1, 2000.

1. Filing the request. Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.

2. Tolerance fee payment. If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov , or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

3. Copies for the Docket. In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-300981, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov . Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any prior consultation as specified by Executive Order 13084, entitled Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998); special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or require OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

You may be affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations” and hen look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/.

2. In person . The Agency has established an official record for this action under docket control number OPP-300980. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of June 25, 1997 (62 FR 34269) (FRL-5719-6), EPA issued a notice pursuant to section 408 of the FFDCA, 21 U.S.C. 346a as amended by the FQPA of 1996 (Public Law 104-170) announcing the filing of a pesticide petition (PP) for tolerance by Gustafson, Incorporated, P.O. Box 660065, Dallas, TX 75255-0065. This notice included a summary of the petition prepared by Gustafson, Incorporated, the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.472(a) be amended by establishing tolerances for combined residues of the insecticide imidacloprid, (1-[(6-chloro-3-pyridinyl)methyl]-N-nitro-2-imidazolidinimine) and its metabolites containing the 6-chloropyridinyl moiety, all expressed as (1-[(6-chloro-3-pyridinyl)methyl]-N-nitro-2-imidazolidinimine), in or on corn, field fodder at 0.2 parts per million (ppm), corn, field forage at 0.1 ppm, and corn, field grain at 0.05 ppm. The tolerances will expire on December 31, 2000. Time-limited tolerances are being established based on EPA's initial review of the crop field trial data for seed-treatment of field corn, which indicates that the data support the proposed tolerances for combined residues of imidacloprid and its metabolites containing the 6-chloropyridinyl moiety. The time-limited tolerances for field corn are being established until a full review of the residue data is completed and permanent tolerances are established.

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. * * *”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for tolerances for combined residues of imidacloprid on corn, field fodder, forage, and grain at 0.2, 0.1, and 0.05 ppm, respectively. EPA's assessment of the exposures and risks associated with establishing the tolerance was included in the preamble to two separate final rules on imidacloprid pesticide tolerances, published in the Federal Register on September 18, 1998 (63 FR 49837) (FRL-6027-1) and August 2, 1999 (64 FR 41804) (FRL-6090-2). The risk assessment supporting the tolerance actions in the August 2, 1999 Federal Register Notice also, assumed that tolerances would be established on corn, field fodder, forage, and grain at 0.2, 0.1, and 0.05 ppm, respectively. Accordingly, the analysis and findings in the August 2, 1999 preamble apply equally to the tolerances for corn, field fodder, forage, and grain being established by this final rule and EPA reaffirms those findings in promulgating this rule.

Data concerning the metabolism of imidacloprid in apples, potatoes, tomatoes, eggplant, cottonseed, field corn, ruminants and poultry have previously been submitted. The nature of imidacloprid residues in plants and animals is adequately understood. The residue of concern is imidacloprid and its metabolites containing the 6-chloropyridinyl moiety, all expressed as parent, as specified in 40 CFR 180.472.

Adequate enforcement methods are available for determination of the regulated imidacloprid residue in plant (Bayer GC/MS Method 00200 and Bayer HPLC-UV Confirmatory Method 00357) and animal (Bayer GC/MS Method 00191) commodities. These methods have successfully completed EPA Tolerance Method Validation, and are awaiting publication in the Pesticide Analytical Manual II (PAM II). In the interim, these methods are available from: Calvin Furlow, PRRIB, IRSD (7502C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 305-5229; e-mail address: furlow.calvin@epa.gov.

Bayer Corporation has previously submitted adequate multiresidue method (MRM) recovery data for imidacloprid and its olefin, hydroxy, guanidine, and 6-chloronicotininc acid metabolites through FDA's Protocols A through E. Imidacloprid and its metabolites were not recoverable by these methods. These data have been forwarded to FDA and we expect them to be published in PAM, Vol I, Appendix I in a future update. Additional MRM recovery data are not required.

An initial review of the crop field trial data for seed-treatment of field corn support the proposed tolerances for combined residues of imidacloprid and its metabolites containing the 6-chloropyridinyl moiety. Time-limited tolerances for field corn are being established until a full review of the residue data is completed and permanent tolerances are established.

There are no established CODEX, Canadian or Mexican residue limits for imidacloprid in/on field corn fodder, forage, and grain. Thus, harmonization of the proposed tolerances with CODEX, Canada and Mexico is not an issue for these petitions.

Data concerning the metabolism of imidacloprid in confined rotational crops was previously submitted. The nature of the residue in rotational crops is adequately understood and is nearly identical to that identified in the primary crops. The residue of concern in rotational crops is imidacloprid and its metabolites containing the 6-chloropyridinyl moiety, all expressed as parent. Treated areas may be replanted with any crop specified on an imidacloprid label, or any crop for which a tolerance exists for imidacloprid, as soon as practical following the last application, with the exception of cereals, legumes, and safflower, which have a 30-day plant-back restriction. A 12-month plant-back restriction must be observed for crops not listed on an imidacloprid label and for crops for which no tolerances for imidacloprid have been established.

Therefore, tolerances are established for combined residues of imidacloprid and its metabolites containing the 6-chloropyridinyl moiety, in or on corn, field fodder at 0.2 ppm, corn, field forage at 0.1 ppm, and corn, field grain at 0.05 ppm.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-300980 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before May 1, 2000.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-300980, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any prior consultation as specified by Executive Order 13084, entitled Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998); special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or require OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

The GSAR, as reissued—

GSA published and interim rule in the Federal Register on July 9, 1999 (64 FR 37200). One respondent submitted comments in response to the interim rule. GSA considered those comments in developing the final rule. The changes in this rule:

This order was not subject to Office of Management and Budget review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

GSA certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The GSAR rewrite adds guidance on disclosure and use of proprietary information when GSA will release proposals outside the Government for evaluation and provided a contract clause to ensure that evaluation contractors protect proposal information appropriately. The rewrite also adds GSA agency protest procedures. These procedures offer vendors an alternate forum which is quicker and less expensive than protests to the General Accounting Office or the Courts. The guidance on use of selection criteria for architect-engineer contracts eliminates unnecessary restrictions to competition in GSA's use of geographic limitations in the evaluation process for these contracts. The other revisions do not add any new requirements; but reduce the number of agency regulations, restate existing requirements in plain language, and provide consistency with the FAR. These revisions streamline GSA acquisition rules, provide greater flexibility, and promote understanding.

The reissued GSAR contains information collection requirements subject to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) which were approved previously by OMB and assigned the control numbers shown in section 501.106.

This rule is not a major rule under 5 U.S.C. 804. This rule was submitted to Congress and GAO under 5 U.S.C. 801.

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The Final 2000 Harvest Specifications for Groundfish (65 FR 8282, February 18, 2000) established the first seasonal allowance of Atka mackerel TAC specified for the Central Aleutian District as 11,424 metric tons (mt). See § 679.20(c)(3)(iii).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the first seasonal allowance of Atka mackerel TAC specified for the Central Aleutian District will be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 11,174 mt, and is setting aside the remaining 250 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance soon will be reached. Consequently, NMFS is prohibiting directed fishing for Atka mackerel in the Central Aleutian District of the BSAI.

Maximum retainable bycatch amounts may be found in the regulations at § 679.20(e) and (f).

This action responds to the best available information recently attained from the fishery. It must be implemented immediately to prevent overharvesting the first seasonal allowance of Atka mackerel TAC specified for the Central Aleutian District of the BSAI. A delay in the effective date is impracticable and contrary to the public interest. Further delay would only result in overharvest. NMFS finds for good cause that the implementation of this action should not be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived.

This action is required by § 679.20 and is exempt from review under E.O. 12866.