This administrative action is governed by the provisions of sections 556 and 557 of Title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866.

Notice is hereby given of a public hearing to be held at the Embassy Suites Hotel, 1900 Diagonal Rd., Alexandria, Virginia 22314, beginning at 8 a.m., on Monday, May 8, 2000, with respect to proposed amendments to the tentative marketing agreements and to the orders regulating the handling of milk in the Northeast and other marketing areas.

The hearing is called pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of practice and procedure governing the formulation of marketing agreements and marketing orders (7 CFR Part 900).

The purpose of the hearing is to receive evidence with respect to the economic and marketing conditions which relate to re-consideration of the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk orders. The mandate from Congress via the Consolidated Appropriations Act, 2000 (Pub. L. 106-113, 115 Stat. 1501), requires the Secretary of Agriculture to conduct a formal rulemaking proceeding to reconsider the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk orders and to implement any changes on January 1, 2001.

To ensure a comprehensive consideration of these pricing formulas, the Department invited all interested persons to submit proposals. As detailed below, 32 proposals (and any appropriate modifications thereof) will be heard. A number of other proposals were rejected in that they lacked authority, were beyond the purpose of the hearing, or were otherwise inappropriate. The proposals received are available for public inspection at USDA/AMS/Dairy Programs, Room 2968, South Building, 14th and Independence Ave., SW., Washington, DC 20250.

The legislation requiring the hearing describes the proceeding as an emergency. It should be noted that an emergency rulemaking proceeding omits a recommended decision with the opportunity to file comments thereon. Evidence will be taken to determine whether emergency marketing conditions exist that would warrant omission of a recommended decision under the rules of practice and procedure (7 CFR 900.12(d)) with respect to the proposal.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), the Agricultural Marketing Service (AMS) has considered the economic impact of the proposed amendment on small entities and has prepared this initial regulatory flexibility analysis. The RFA provides that when preparing such analysis an agency shall address: the reasons, objectives, and legal basis for the anticipated proposed rule; the kind and number of small entities which would be affected; the projected recordkeeping, reporting, and other requirements; and federal rules which may duplicate, overlap, or conflict with the proposed rule. Finally, any significant alternatives to the proposal should be addressed. This initial regulatory flexibility analysis considers these points and the impact of this proposed regulation on small entities. The legal basis for this action is discussed in the preceding section.

This Act seeks to ensure that, within the statutory authority of a program, the regulatory and informational requirements are tailored to the size and nature of small businesses. For the purpose of the Act, a dairy farm is a “small business” if it has an annual gross revenue of less than $500,000, and a dairy products manufacturer is a “small business” if it has fewer than 500 employees. For the purposes of determining which dairy farms are “small businesses,” the $500,000 per year criterion was used to establish a production guideline of 326,000 pounds per month. Although this guideline does not factor in additional monies that may be received by dairy producers, it should be an inclusive standard for most “small” dairy farmers. For purposes of determining a handler's size, if the plant is part of a larger company operating multiple plants that collectively exceed the 500-employee limit, the plant will be considered a large business even if the local plant has fewer than 500 employees.

USDA has identified as small businesses approximately 66,327 of the 71,716 dairy producers (farmers) that have their milk pooled under a Federal order. Thus, small businesses represent approximately 92.5 percent of the dairy farmers in the United States. On the processing side, there are approximately 1,200 plants associated with Federal orders, and of these plants, approximately 720 qualify as “small businesses,” representing about 60 percent of the total.

During January 2000, there were approximately 240 fully regulated handlers (of which 186 were small businesses), 43 partially regulated handlers (of which 28 were small businesses), and 71 producer-handlers of which all were considered small businesses for the purpose of this initial regulatory flexibility analysis, submitting reports under the Federal milk marketing order program. This volume of milk pooled under Federal orders represents 72 percent of all milk marketed in the U.S. and 74 percent of the milk of bottling quality (Grade A) sold in the country. Forty-four distributing plants were exempt from Federal order regulation on the basis of their small volume of distribution.

Producer deliveries of milk used in Class I products (mainly fluid milk products) totaled 3.965 billion pounds in January 2000—38.8 percent of total Federal order producer deliveries. More than 200 million Americans reside in Federal order marketing areas—approximately 77 percent of the total U.S. population.

In order to accomplish the goal of imposing no additional regulatory burdens on the industry, a review of the current reporting requirements was completed pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). In light of this review, it was determined that these proposed amendments would have little or no impact on reporting, recordkeeping, or other compliance requirements because these would remain identical to the current Federal order program. No new forms have been proposed, and no additional reporting would be necessary.

This notice does not require additional information collection that requires clearance by the OMB beyond the currently approved information collection. The primary sources of data used to complete the forms are routinely used in most business transactions. Forms require only a minimal amount of information which can be supplied without data processing equipment or a trained statistical staff. Thus, the information collection and reporting burden is relatively small. Requiring the same reports for all handlers does not significantly disadvantage any handler that is smaller than industry average.

No other burdens are expected to fall upon the dairy industry as a result of overlapping Federal rules. This proposed rulemaking does not duplicate, overlap or conflict with any existing Federal rules.

To ensure that small businesses are not unduly or disproportionately burdened based on these proposed amendments, consideration was given to mitigating negative impacts. Possible changes to the Class III and Class IV price formulas should not have any special impact on small handler entities. All handlers manufacturing dairy products from milk classified as Class III or Class IV would remain subject to the same minimum prices regardless of the size of their operations. Such handlers would also be subject to the same minimum prices to be paid to producers. These features of minimum pricing should not raise barriers to the ability of small handlers to compete in the marketplace. It is similarly expected that small producers would not experience any particular disadvantage to larger producers as a result of any of the proposed amendments.

Interested parties are invited to present evidence on the probable regulatory and informational impact of the hearing proposals on small businesses. Also, parties may suggest modifications of these proposals for the purpose of tailoring their applicability to small businesses.

In order to assist the industry in considering the effects of various types of proposals, the Department conducted a preliminary analysis. While the proposals seek to amend the product pricing formulas used to price milk regulated under Federal milk marketing orders and classified as either Class III or Class IV milk, these product price formulas also would affect the prices of regulated milk classified as Class I and Class II. Of those proposals submitted, six were selected for preliminary quantitative analysis. Selection of a proposal for analysis should not be considered to be a judgement on the merit of a proposal. Proposals were selected either as reflective of a significant number of proposals received or to capture the possible range of impacts of the proposals submitted. For a number of reasons, including lack of authority, lack of detail presented by the proponent, and lack of data, all proposed amendments could not be analyzed.

Scope of Analysis. The scope of the proposed amendments were segmented into four categories for analysis. The categories were: (A) Butter and Butterfat Prices and Factors; (B) Cheese and Protein Prices and Factors; (C) Whey Powder and Other Solids Prices and Factors; and (D) Nonfat Dry Milk and Nonfat Solids Prices and Factors.

The first proposal selected for analysis would subtract six cents from the National Agricultural Statistic Service (NASS) Grade AA butter price prior to inputting it into the Class IV and Class III formulas for purposes of establishing Class II, Class III, and Class IV butterfat prices, as well as the advanced Class I butterfat price.

The second proposal selected for analysis would substitute the make allowance determined by a study performed by the Rural Business-Cooperative Service (RB-CS) for the current butter make allowance. As a proxy for a study result expected to be presented at the hearing, the butter make allowance result of the most recent RB-CS study available was used in the analysis.

One proposal was selected for preliminary analysis. The selected proposal would reduce the make allowance per pound of cheese from the current level of $0.1702 to $0.142. The proposed make allowance of $0.142 is the level determined by the most recent RB-CS study available of costs of manufacturing cheddar cheese before the addition of marketing costs or return on investment.

One proposal was selected for preliminary analysis. The selected proposal would increase the make allowance for dry whey from $0.137 per pound to $0.171 per pound.

The first proposal selected for preliminary analysis would replace the current make allowance for nonfat dry milk of $0.137 per pound with a make allowance of $0.1563 per pound.

The second proposal selected for analysis would replace the current make allowance, $0.137, with the make allowance determined by an RB-CS study expected to be made available at the hearing. The most recent RB-CS study available of the cost of manufacturing nonfat dry milk placed the cost at $0.126 per pound before the addition of a marketing cost or a return on investment.

Scope of Analysis. Impacts were measured as changes from the model baseline as adapted from the USDA dairy baseline. That baseline—a national annual projection of the supply-demand-price situation for milk and dairy products—was the basis for the model projection. Both the USDA baseline and the model baseline assume: (1) The price support program would end on December 31, 2000; (2) the Dairy Export Incentive Program would continue to be utilized; and (3) the Federal Milk Marketing Order Program would continue unchanged.

It was necessary to make some simplifying assumptions in order to provide some preliminary analysis prior to the hearing. It is anticipated that the proponents of the various proposals will provide some analysis as to their expectations of the adoption of their proposals. At this point in time, AMS has made no judgement of the impacts of any proposal on orderly marketing of milk, including the willingness or ability of manufacturers to accept regulated milk for manufacturing, or of the long term existence of sufficient capacity to clear the market of milk surplus to the fluid market. The Federal order share of U.S. milk marketings is about 67 percent. About 60 percent of all milk manufactured is marketed under Federal order regulation. Given the prominence of Federal order marketings in the U.S. milk manufacturing industry, prices paid for manufactured milk under Federal orders cannot get too far out of alignment with the value of milk for manufacturing in the rest of the United States. Similarly, the fluid prices in non-Federal order markets are largely reflective of Federal order minimum Class I prices. Therefore, U.S. milk marketings are estimated as a function of the U.S. all-milk price, and the Federal order share is estimated as a function of the Federal order all-milk price relative to the U.S. all-milk price.

Cooperatives manufacture about 40 percent of the cheese and about 70 percent of the butter and nonfat dry milk manufactured nationally, and sell such dairy products in wholesale and retail markets in competition with other manufacturers. In estimating the change in the all-milk price and in cash receipts from milk marketings, it is assumed that these proposals will have a lesser effect on farm prices and receipts of member milk processed and marketed by cooperatives than on prices and receipts of milk manufactured by proprietary processors. A baseline assumption is that a cooperative passes through to its members the best price and best return on investment that it can. A higher minimum Federal order price could result in cooperatives paying higher monthly prices for milk, but would result in lower returns on investments paid at the end of the year. Total cash receipts for member milk marketings processed by the cooperative would be changed only by changes in wholesale product prices. The proposals under consideration are expected to have a minimal secondary impact on the wholesale prices for butter, cheese or nonfat dry milk. Therefore, total revenues from the sale of these products by manufacturers will be virtually unchanged.

In addition to altering the sharing of manufacturing proceeds between manufacturing plants and producers, these proposals have an impact on Class I and Class II prices. Class II prices move in concert with changes in Class IV. The effects on the Class I price depend upon how proposals affect the Class III price relative to the Class IV price since Class I prices are based on the higher of the Class III or IV prices.

We have assumed that plants would pay a higher or lower minimum price and that plant pooling decisions would be unchanged from the baseline. Changes in pay prices and cash receipts to cooperative members for raw milk marketed by cooperatives or to non-members for milk marketed to proprietary handlers would be fully reflected by changes in the Federal order blend price, given changes in Federal minimum class prices and uses. Changes in pay prices and cash receipts to cooperative members for milk manufactured by cooperatives are additionally influenced by the changes in market prices for manufactured milk resulting from changes in manufactured product prices. For the 40 percent of the Class III milk and 70 percent of the Class IV milk manufactured by cooperatives, it is assumed that differences between the model generated average price for manufactured milk and the average of the Class II, Class III, and Class IV prices would be passed on to producer-members in the form of higher or lower pay prices. In the case of proprietary plants, it is assumed that the differences would be absorbed by the plants. However, in the case of a loss, proprietary manufacturing plants could de-pool milk to equalize their margins with cooperative plant margins. We hope proponents will shed some light on this issue.

Retail prices of fluid milk and Class II soft manufactured products are assumed to respond penny for penny to changes in the milk cost of these products. Wholesale and retail margins are assumed unchanged from baseline for all proposals analyzed. Demands for products in these classes are functions of price, per capita consumption and population. Wholesale prices for cheese, butter and nonfat dry milk reflect supply and demand for these products. The milk supply for manufacturing these hard products is the result of milk marketings minus the volumes demanded for Class I and Class II products. The remaining volume is allocated to Class III and Class IV according to returns to manufacturing in each class. Demands for products in these classes are functions of price, per capita consumption and population.

The results of the proposed amendments to the Class III and Class IV formulas are summarized using six-year, 2001-2005, average changes from the model baseline. Averages tend to mask year-to-year changes in the variables. These results in the Federal order system are in the context of the larger U.S. market. In particular, the Federal order price formulas use national manufactured dairy product prices. In addition, the advanced Class I price mover is driven by the higher of the Class III or Class IV prices; both of which are used over the period, and do switch depending on the scenario. The preliminary results are summarized in Table 1.

Changes in Class III and Class IV minimum pricing formulas have secondary effects beyond the initial price change because of the impacts on Class I and Class II prices and uses. If Class III or Class IV minimum prices are reduced, minimum Class I or II prices are also reduced. These lower prices result in increased use of milk in Class I or II, reducing the volume of milk available for Class III and Class IV uses. In turn, the prices for cheese, butter, and nonfat dry milk increase. The market prices for milk in manufactured uses increase with manufactured product price increases. The opposite can be the case with a proposal that increases either the minimum Class III or Class IV price. Thus, the market does tend to offset large changes over time and move the results towards the baseline.

The butter pricing scenarios are similar in effect and direction, differing only in magnitude in the butterfat price equation (BF price=(NASS butter price—0.114)/0.82). Using February 2000 prices and holding them constant, increases in the make allowance from $0.114 to $0.133 per pound reduces the Class IV price by $0.08 per hundredweight. Subtracting 6 cents from the NASS butter price before use in the formula yields a $0.26 reduction in the Class IV price.

For the 2001-2006 period, subtracting 6 cents from the butter price has about double the effect on marketings and cash receipts of raising the make allowance by 1.9 cents. The butterfat price and minimum Class IV and Class II prices fall in turn. The Class III price is increased slightly with the inverse effect on the butterfat price in the cheese protein price calculation. The increase in Class II use in response to the price decline reduces milk allocated to Class III and Class IV. This results in slight wholesale price increases for cheese, butter, and nonfat dry milk.

Producers. Changing the make allowance from $0.114 to $0.133 results in a decline of $0.002 per hundredweight in the Federal order blend for the 2001-2006 period. The average all-milk price for producers in Federal orders declines by only $0.001, reflecting the slightly higher prices for cheese, butter, and nonfat dry milk. Marketings decrease by 39.8 million pounds and cash receipts decrease by $7.0 million from baseline receipts of $16,116.8 million.

Deducting 6 cents from the NASS butter price decreases the 6-year Federal order blend by $0.006 per hundredweight and decreases the average all-milk price for Federal order producers by only $0.003, reflecting the higher cheese, butter, and nonfat dry milk prices. Cash receipts decrease by $14.0 million.

Milk Manufacturers and Processors. Soft product manufacturers benefit from the lower minimum Class II prices, driven by a lower average Class IV price. Federal order manufacturing receipts decline by $8.7 million with the $0.133 make allowance, and $24.6 million with the 6-cent deduction in the butter price. The decrease in total Federal order marketings and an increase in Class II use results in less milk moving to Class III and IV in the Federal order marketing areas. Thus, the reduction in the volume of milk used in Class III and Class IV results in increases in the wholesale prices for cheese, butter, and nonfat dry milk. In the case of Class IV, handlers benefit as well from lower Class IV prices. Cheese manufacturers face an increased Class III price.

Consumers. The fluid milk price increases by $0.004 with the $0.133 increase in make allowance, and is increased by $0.027 per hundredweight with the 6-cent reduction in the NASS butter price. The larger change converts to 0.3 cents per gallon. Thus, the retail price increase would be expected to be no greater than one cent per gallon.

Reducing the cheese make allowance from $0.1702 to $0.142 affects the Class III price through the protein price. The Class III formula is: Protein Price=((Cheese price—0.1702)×1.405)+((((Cheese price—0.1702) ×1.582)—Butterfat price)×1.28). Using February 2000 prices, reducing the make allowance results in a $0.29 per hundredweight increase in the Class III price.

For the 2001-2006 analytical period, the Class III price increases by an average of $0.21 per hundredweight, and Class II and IV prices drop by $0.09. The Class III price increase results in an increase in the Class I price of $0.19 per hundredweight. Consumers respond to the Class I price increase by reducing fluid consumption and Class I use declines. The reduction in Class I use is diverted to Class III and Class IV use. Consumers require lower prices for cheese, butter, and nonfat dry milk to clear the product markets of higher volumes. While the blend price increases, the increase in the all-milk price for Federal order producers is somewhat smaller because the lower product prices drive manufactured milk values below Federal order prices, and this is reflected in cooperative producer pay prices.

Producers. Reducing the cheese make allowance from $0.1702 to $0.142 results in a $0.15 increase in Federal order blend prices. The average all-milk price for Federal order producers, however, increases by $0.09 per hundredweight, reflecting the lower cheese, butter, and nonfat dry milk prices. Marketings increase by about 627.9 million pounds, on average, and cash receipts increase by $198.2 million from baseline average receipts of $16,116.8 million.

Milk Manufacturers and Processors. Soft product manufacturers benefit from the lower minimum Class II prices, driven by a lower average Class IV price. Federal order manufacturing receipts increase by $123.5 million, with increases in the use of Class III and Class IV milk, and a Class III price increase.

Consumers. The fluid milk price increase of $0.19 per hundredweight, on average, converts to 1.6 cents per gallon. Thus average retail fluid price increases would be expected to be no greater than 2 cents per gallon for the 2001-2006 period.

Increasing the whey make allowance from $ 0.137 to $0.171 affects the Class III price through the other solids price formula: Other Solids Price = (Dry whey price—0.137)/0.968. Using February 2000 prices, increasing the make allowance results in a $0.20 per hundredweight reduction in the Class III price.

For the 2001-2006 analytical period, the Class III price decreases by an average of $0.17 per hundredweight and the Class I price drops by $0.07. Consumers respond to the Class I price decline by increasing fluid consumption and Class I use increases, resulting in reduced milk in Class III and Class IV use. The reduced volumes on the product markets result in higher prices for cheese, butter, and nonfat dry milk. While the blend price decreases, the decrease in the all-milk price received by Federal order producers is somewhat smaller because of the higher product prices.

Producers. Increasing the whey make allowance from $ 0.137 to $0.171 results in an average $0.09 decrease in Federal order blend prices. The average all-milk price for producers in Federal orders, however, declines by an average of only $0.06 per hundredweight, reflecting the higher cheese, butter, and nonfat dry milk prices. Marketings decline by an average of about 329.0 million pounds and cash receipts decrease by an average $113.1 million from baseline receipts of $16,116.8 million.

Milk Manufacturers and Processors. Soft product manufacturers face a slightly higher minimum Class II price, driven by a slightly higher average Class IV price. Federal order manufacturing receipts decrease by an average of $86.3 million, with a decrease in Class III and Class IV uses and a Class III price decrease. Wholesale prices for cheese, butter, and nonfat dry milk increase with reduced volumes of product.

Consumers. The average fluid milk price decrease of $0.07 per hundredweight converts to 0.6 cents per gallon. Thus retail fluid prices would be expected to be about 1 cent per gallon lower for 2001-2006.

Two nonfat solids price (NFS price=(NASS NDM price—0.137)/1.02) proposals were analyzed, in which the make allowance was increased by 1.9 cents to $0.156 per pound in one case, and decreased by 1.1 cents to $0.126 per pound in the other. Using February 2000 prices, increasing the nonfat dry milk make allowance to $0.156 decreases the minimum Class IV price by $0.16 per hundredweight. Decreasing the make allowance to $0.126 results in an increase of $0.09 per hundredweight in the Class IV price.

For the 2001-2006 analytical period, increasing the make allowance in the nonfat solids price decreases the Class IV price and therefore the Class II price. With less milk available to make cheese, the Class III price increases sightly due to an increase in the cheese price.

On the other hand, a decrease in the make allowance would increase the Class II and Class IV minimum prices during 2001-2006. This increase in Class IV price leads the Class IV price to be the Class I price mover during several of the years during the period of the analysis. With less milk going to Class I and Class II due to higher prices, the Class III price decreases slightly due to more milk available for cheese, resulting in slightly lower wholesale prices for cheese, butter, and nonfat dry milk.

Producers. The average all-milk price for producers in Federal orders would decrease by $0.007 per hundredweight during the analytical period with the make allowance increased to $0.156 per pound. Marketings decrease by 102.0 million pounds, on average, and cash receipts decrease by an average of $22.7 million from baseline receipts of $16,116.8 million.

The average all-milk price increases by $0.007 per cwt. with the make allowance reduced to $0.126 per pound, which leads to an annual average increase in milk marketings of 78.9 million pounds in the Federal order system. Total cash receipts increase by an average of $19.2 million over the six-year period.

Milk Manufacturers and Processors. With the nonfat dry milk make allowance at $0.156, Class II price declines, on average, by $0.14 per hundredweight from the baseline, benefitting soft product manufacturers with increased consumption of Class II dairy products. The decrease in total marketings and the increase in Class II volume is sufficient to reduce Class III and Class IV volumes and cause a slight increase in the wholesale prices for cheese, butter, and nonfat dry milk. The value of milk for manufacturing in the Federal orders decrease by $23.5 million, on average, over the 2001-2006 period.

When decreasing the nonfat dry milk make allowance to $0.126, Class I prices increase by $0.02 per hundredweight, Class II prices increase by $0.07 per hundredweight, and about 16 million pounds moves into Class III and IV use. Coupled with the increase in marketings of 79 million pounds, the total volume of milk available for manufacturing would increase by about 87 million pounds annually. The value of milk used to manufacture dairy products increases by an annual average of $12.1 million.

Consumers. The increase in the fluid milk price with an increase in the make allowance to $0.156 is less than a half cent per hundredweight. Reducing the make allowance proposals for the nonfat solids price to $0.126 would increase the fluid milk price $0.02 per hundredweight, which translates into a retail price increase of less than a cent for a gallon of milk. Consumers would spend $0.8 million more on fluid milk products under the $0.156 make allowance, and $7.1 million more under the $0.126 make allowance. Consumption of fluid milk products would decrease slightly under both proposals. The consumption of manufactured products would decrease on average by 101.5 million pounds under the make allowance of $0.156 and increase on average by 94.7 million pounds under the make allowance of $0.126.

Interested parties are invited to present evidence or testimony at the hearing concerning the economic impact of any of the proposals on producers, handlers, or the national economy.

A public hearing is being held in response to a mandate from Congress via the Consolidated Appropriations Act, 2000, that requires the Secretary of Agriculture to conduct a formal rulemaking proceeding to reconsider the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk orders. The consolidated orders were implemented on January 1, 2000.

Pursuant to Departmental Regulation (DR) 4300-4, a comprehensive Civil Rights Impact Analysis (CRIA) was conducted and published with the final decision on Federal milk order consolidation and reform. That CRIA included descriptions of (1) The purpose of performing a CRIA; (2) the civil rights policy of the U.S. Department of Agriculture; and (3) basics of the Federal milk marketing order program to provide background information. Also included in that CRIA was a detailed presentation of the characteristics of the dairy producer and general populations located within the former and current marketing areas.

The conclusion of that analysis disclosed no potential for affecting dairy farmers in protected groups differently than the general population of dairy farmers. All producers, regardless of race, national origin, or disability, who choose to deliver milk to handler regulated under a Federal order will receive the minimum blend price. It also was concluded that “one of the reasons for success of the Federal milk order program is that all producers benefit through assistance in developing steady, dependable markets, reducing price instability and unnecessary price fluctuations, and assurances of a minimum price for their milk. With this assurance, producers are more willing to make the significant cost investments in milk cows and equipment needed to produce high-quality milk. Federal orders provide the same assurance for all producers, without regard to sex, race, origin, or disability. The value of all milk delivered to handlers competing for sales within a defined marketing area is divided equally among all producers delivering milk to those handlers.”

The issue of the hearing being announced is an issue that was addressed as part of Federal milk order consolidation and reform. Establishing a representative make allowance in the formulas that price milk used in Class III and Class IV dairy products is an issue that affects the obligations of handlers of those products to the Federal milk order pool, and similarly the pool obligations of Class I and Class II handlers. However, the process of dividing the pool among all producers delivering milk to those regulated handlers is not affected. Therefore, USDA sees no potential for affecting dairy farmers in protected groups differently that the general population of dairy farmers.

Decisions on proposals to amend Federal milk marketing orders must be based on testimony and evidence presented on the record of the proceeding. Thus, testimony concerning any possible civil rights impact of the proposals being considered should be presented at the hearing.

Copies of the Civil Rights Impact Analysis can be obtained from AMS Dairy Programs at (202) 720-4392; any Milk Market Administrator office; or via the Internet at: www.ams.usda.gov/dairy/.

The amendments to the rules proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have a retroactive effect. If adopted, the proposed amendments would not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Agricultural Marketing Agreement Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 8c(15)(A) of the Act, any handler subject to an order may request modification or exemption from such order by filing with the Secretary a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with the law. A handler is afforded the opportunity for a hearing on the petition. After a hearing, the Secretary would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has its principal place of business, has jurisdiction in equity to review the Secretary's ruling on the petition, provided a bill in equity is filed not later than 20 days after the date of the entry of the ruling.

Interested parties who wish to introduce exhibits should provide the Presiding Officer at the hearing with 6 copies of such exhibits for the Official Record. Also, it would be helpful if additional copies are available for the use of other participants at the hearing.

Milk marketing orders.

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light of the comments received.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 99-SW-78-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Regional Counsel, Southwest Region, Attention: Rules Docket No. 99-SW-78-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137.

On June 8, 1999, the FAA issued AD 99-13-02, Amendment 39-11195 (64 FR 32399, June 17, 1999), applicable to Eurocopter France Model AS 332C, L, L1, and L2 helicopters. AD 99-13-02 requires, within 25 hours time-in-service (TIS) and any subsequent time that the fuel filter clogged caution lights illuminate, conducting a filter clogging warning test, and, if necessary, replacing a jammed valve with an airworthy valve. That action was prompted by reports of jammed fuel filter by-pass valves discovered during routine maintenance. That condition, if not corrected, could result in engine power loss due to fuel starvation, an engine flameout, and a subsequent forced landing.

Since the issuance of that AD, the Direction Generale De L'Aviation Civile (DGAC) has issued revised AD's that add another fuel filter to the previous applicability list. The revised DGAC AD's apply to helicopters with the following fuel filters installed:

The DGAC, the airworthiness authority for France, notified the FAA that an unsafe condition may exist on Eurocopter France Model AS 332C, C1, L, L1, and L2 helicopters. The DGAC advises that jammed valves could result in power loss due to fuel starvation, which could cause one or both engines to flameout. The DGAC issued AD's 1998-318-071(A)R2 and 1998-319-012(A)R2, both dated July 28, 1999, applicable to Eurocopter France Model AS 332C, C1, L, L1, and L2 helicopters. (Model AS 332C1 does not have a United States type certificate.)

The FAA has reviewed Eurocopter France Service Telex 00087 (Service Bulletin No. 01.00.56 R1) dated June 17, 1999, which describes procedures for verifying that the valve will correctly open and close in each engine fuel filter and conducting a filter clogging warning test on helicopters with certain fuel filters installed.

Since an unsafe condition has been identified that is likely to exist or develop on other Eurocopter France Model AS 332C, L, L1, and L2 helicopters of the same type designs, the proposed AD would supersede AD 99-13-02. In addition to the requirements in AD 99-13-02, the proposed AD would add a fuel filter, P/N 704A44620037, to the applicability. The actions are required to be accomplished in accordance with the service telex described previously.

The FAA estimates that one helicopter of U.S. registry would be affected by the proposed AD, that it would take approximately 3 work hours to accomplish the proposed actions, and that the average labor rate is $60 per work hour. Based on these figures, the total cost impact of the proposed AD on U.S. operators is estimated to be $180, assuming no valve would need to be replaced.

The regulations proposed herein would not have a substantial direct effect 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. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light of the comments received.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 99-NM-351-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 99-NM-351-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On October 9, 1997, the FAA issued AD 97-21-10, amendment 39-10163 (62 FR 53939, October 17, 1997), applicable to certain Airbus Model A319, A320, and A321 series airplanes, to require revising the FAA-approved Airplane Flight Manual to increase monitoring of the flight path of the airplane to detect certain software anomalies of the flight management guidance system (FMGS), and take appropriate corrective actions. That action was prompted by the issuance of mandatory continuing airworthiness information by a foreign civil airworthiness authority. The requirements of that AD are intended to ensure that the flightcrew detects and corrects an unintended flight path if certain software anomalies of the FMGS occur, which could result in an increased risk of collision with terrain or other airplanes.

In the preamble to AD 97-21-10, the FAA specified that the actions required by that AD were considered “interim action” until final action was identified, at which time further rulemaking action would be considered. Since the issuance of that AD, the Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, advises that a new standard of the flight management guidance computer (FMGC) includes software changes that improve navigational guidance calculations. The FAA now has determined that further rulemaking action is indeed necessary to require either the modification of all existing on-board replaceable modules of the FMGC's to incorporate software changes, or replacement of all existing FMGC's with new, improved FMGC's, in order to address the unsafe condition and ensure the continued safe operation of those airplanes. This proposed AD follows from that determination and allows opportunity for public comment.

Airbus has issued the following service bulletins:

• A320-22-1063, Revision 01, dated October 8, 1999.

• A320-22-1064, dated September 15, 1998.

• A320-22-1065, dated October 28, 1998.

• A320-22-1067, Revision 01, dated July 7, 1999.

• A320-22-1068, dated December 9, 1998.

• A320-22-1069, dated February 1, 1999.

These service bulletins describe procedures for either the modification of all existing on-board replaceable modules of the FMGC's to incorporate software changes, or the replacement of all existing FMGC's with new, improved FMGC's. The DGAC classified these service bulletins as mandatory and issued French airworthiness directive 1999-411-140(B), dated October 20, 1999, in order to assure the continued airworthiness of these airplanes in France.

These airplane models are manufactured in France and are type certificated for operation in the United States under the provisions of § 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the DGAC has kept the FAA informed of the situation described above. The FAA has examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would supersede AD 97-21-10 to continue to require a revision to the Airplane Flight Manual (AFM) to increase monitoring of the flight path of the airplane to detect certain software anomalies of the flight management guidance system, and take appropriate corrective actions. This proposed AD would add a requirement to either modify all existing on-board replaceable modules of the FMGC's to incorporate software changes, or replace all existing FMGC's with new, improved FMGC's; which would terminate the requirements for the AFM revision. The actions would be required to be accomplished in accordance with the service bulletins described previously, as applicable.

This proposed AD also would limit the applicability of the existing AD to airplanes on which a certain modification has been installed or service bulletin has been accomplished, and excludes airplanes on which another modification has been installed or service bulletin has been accomplished.

The FAA previously has issued AD 98-19-08, amendment 39-10750 (63 FR 50503, September 22, 1998), applicable to certain Airbus Model A321 series airplanes. AD 98-19-08 requires revising the AFM to prohibit automatic landings and Category III operations on runways with a magnetic orientation of 170 degrees through 190 degrees inclusive. That amendment provides optional terminating action for the AFM revision.

The modification or replacement action that would be required by this proposed AD constitutes terminating action for the AFM requirements of AD 98-19-08.

There are approximately 200 Airbus Model A319, A320, and A321 series airplanes of U.S. registry that would be affected by this proposed AD.

The actions that are currently required by AD 97-21-10 and retained in this AD take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts would be provided by the manufacturer at no charge to the operators. Based on these figures, the cost impact of the currently required actions on U.S. operators is estimated to be $60 per airplane.

The new actions that are proposed in this AD action would take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the proposed requirements of this AD on U.S. operators is estimated to be $12,000, or $60 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the current or proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted.

The regulations proposed herein would not have a substantial direct effect 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. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

The Rule was promulgated by the Commission on December 16, 1971, 36 FR 23883 (1971), and amended on May 20, 1983, 48 FR 22733 (1983). The Rule makes it an unfair or deceptive act or practice for manufacturers and importers of textile wearing apparel and certain piece goods to sell these items without attaching care labels stating “what regular care is needed for the ordinary use of the product.” (16 CFR 423.6(a) and (b)) The Rule defines a care label as a “permanent label or tag * * * that is attached or affixed in such a manner that it will not become separated from the product * * *” (16 CFR 423.1(a))

Section 423.8(b) of the Rule states that manufacturers or importers can ask for an exemption from the requirement of attaching a permanent care label for any textile wearing apparel product or product line if the label would harm the appearance or usefulness of the product. Section 423.8(c) of the Rule states that if an item is exempt from care labeling under subparagraph (b) of section 423.8, the consumers still must be given the required care information for the product, but the care information can be provided on a hang tag, on the package, or in some other conspicuous place, so that consumers will be able to see the care information before buying the product. The petitioner claims that the appearance and usefulness of the camisoles would be damaged by attaching permanent care labels.

See the information provided in the direct final rule, with the same title, which is located in the rules section of the Federal Register .

The DOE is developing the WIPP near Carlsbad in southeastern New Mexico as a deep geologic repository for disposal of TRU radioactive waste. As defined by the WIPP Land Withdrawal Act (LWA) of 1992 (Pub. L. 102-579), as amended (Pub. L. 104-201), TRU waste consists of materials containing elements having atomic numbers greater than 92 (with half-lives greater than twenty years), in concentrations greater than 100 nanocuries of alpha-emitting TRU isotopes per gram of waste. Most TRU waste consists of items contaminated during the production of nuclear weapons, such as rags, equipment, tools, and organic and inorganic sludges.

On May 13, 1998, EPA announced its final compliance certification decision to the Secretary of Energy (published May 18, 1998, 63 FR 27354). This decision states that the WIPP will comply with the EPA's radioactive waste disposal regulations at 40 CFR part 191, subparts B and C.

The final WIPP certification decision includes a condition that prohibits shipment of TRU waste for disposal at WIPP from any site other than Los Alamos National Laboratory (LANL) until EPA has approved the procedures developed to comply with the waste characterization requirements of § 194.24(c)(4) (condition 3 of appendix A to 40 CFR part 194). The EPA's approval process for waste generator sites is described in § 194.8. As part of EPA's decision making process, DOE is required to submit to EPA appropriate documentation of waste characterization programs at each DOE waste generator site seeking approval for shipment of TRU radioactive waste to WIPP. In accordance with § 194.8, EPA will place such documentation in the official Air Docket in Washington, D.C., and in informational dockets in the State of New Mexico, for public review and comment.

EPA inspected certain waste characterization processes at INEEL on July 28-30, 1998. DOE is proposing to apply those same processes that EPA inspected and approved (A-98-49 Items II-A-4-1 & 2) to new groups of waste streams. Specifically, the EPA approval (A-98-49 Items II-A-4-1 & 2) limits the applicability of the INEEL waste characterization processes and systems to graphite-bearing debris wastes. In the action described today, INEEL is seeking to have that approval expanded to include all debris wastes. EPA will conduct an inspection of INEEL to verify that these additional waste streams can be characterized in compliance with 40 CFR 194.24.

The INEEL documents submitted to EPA are: “Quality Assurance Project Plan for the Transuranic Waste Characterization Program (PLN-190), Revision 4 (March 2000),” “INEEL TRU Waste Characterization, Transportation, and Certification Quality Program Plan (PLN-182), Revision 4 (March 2000),” and “Program Plan for Certification of INEEL Contact-Handled Stored Transuranic Waste (PLN-579), Revision 0 (March 2000).” The “Quality Assurance Project Plan for the Transuranic Waste Characterization Program (PLN-190), Revision 4 (March 2000)” and the “INEEL TRU Waste Characterization, Transportation, and Certification Quality Program Plan (PLN-182), Revision 4 (March 2000)” set forth the quality assurance program applied to TRU waste characterization at INEEL. The “Program Plan for Certification of INEEL Contact-Handled Stored Transuranic Waste (PLN-579), Revision 0 (March 2000)” sets forth the waste characterization procedures for TRU wastes at INEEL. After EPA reviews these documents, EPA will conduct an inspection of INEEL to determine whether the requirements set forth in these documents are being adequately implemented in accordance with Condition 3 of the EPA's WIPP certification decision (appendix A to 40 CFR part 194). In accordance with § 194.8 of the WIPP compliance criteria, EPA is providing the public 30 days to comment on the documents placed in EPA's docket relevant to the site approval process. Because the inspection will occur during the comment period, EPA will respond to relevant comments received prior to, during, and after the inspection.

If EPA determines that the provisions in the documents are adequately implemented, EPA will notify the DOE by letter and place the letter in the official Air Docket in Washington, DC, and in the informational docket locations in New Mexico. A positive approval letter will allow DOE to ship additional TRU waste from INEEL. The EPA will not make a determination of compliance prior to the inspection or before the 30-day comment period has closed.

Information on the EPA's radioactive waste disposal standards (40 CFR part 191), the compliance criteria (40 CFR part 194), and the EPA's certification decision is filed in the official EPA Air Docket, Dockets No. R-89-01, A-92-56, and A-93-02, respectively, and is available for review in Washington, DC, and at the three EPA WIPP informational docket locations in New Mexico. The dockets in New Mexico contain only major items from the official Air Docket in Washington, DC, plus those documents added to the official Air Docket after the October 1992 enactment of the WIPP LWA.

We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking (USCG-1999-6098), indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by mail, hand delivery, fax, or electronic means to the Docket Management Facility at the address under ADDRESSES ; but please submit your comments and material by only one means. If you submit them by mail or hand delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

We do not plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

On May 9, 1996, the Department of Transportation published a final rule in the Federal Register (61 FR 21081). The rule explained the methodology used to set the rates for pilots working in the Great Lakes.

On December 14, 1998, the Coast Guard published a notice of annual review findings in the Federal Register (63 FR 68697). The Notice announced the results of the 1998 Rate Review and requested comments.

The Coast Guard is required by 46 CFR 404.1 (b) to conduct an annual review of rates for pilots working in the Great Lakes. We reviewed these rates by using the methodology found in 46 CFR, part 404, Appendix A, Step 2.A. As explained in Step 2.A, the compensation target for pilots providing service on designated waters of the Great Lakes is equal to the approximate average annual compensation for masters on U.S Great Lakes vessels. To calculate the compensation target for pilots, multiply the average annual compensation earned by first mates on U.S. Great Lakes vessels times 150%. The target compensation for pilots providing service on undesignated waters of the Great Lakes is equal to the approximate average annual compensation for first mates on U.S. Great Lakes vessels. We reviewed these pilotage rates and determined that they should be adjusted to meet pilot target compensation. Therefore, in accordance with 46 U.S.C. 9303(f), and based on the 1999 rate review, we are proposing to update the pilotage rates to meet these targets. We would like your comments on these updated rates.

We propose to change the rates for pilots in 46 CFR 401.405, 401.407, and 401.410 as follows:

The yearly rate update is designed to minimize fluctuations in pilot compensation and avoid large changes in pilotage rates.

This rulemaking follows the methodology detailed in 46 CFR Part 404, including the step-by-step ratemaking calculations contained in Appendix A to Part 404. We summarized these calculations in the following tables and explained them in more detail afterwards.

Our first step is to gather financial data from each of the three Great Lakes pilot associations (the Associations). Each of the Associations must obtain an audit by an independent Certified Public Accountant (CPA) and submit these audits to the Director of the Great Lakes Pilotage (the Director), in accordance with 46 CFR 403.300.

Each year, the Director determines which Association expenses will be recognized for ratemaking purposes. The Director may hire an independent CPA firm to review the expenses reported by the Association using the guidelines contained in 46 CFR 404.05. However, for 1999 this was not possible due to the transfer of the Office of the Director, Great Lakes Pilotage from the St. Lawrence Seaway Development Corporation to the United States Coast Guard, and the fact that the position of Economist on the Director's staff was vacant for the last half of 1998. To determine the reasonable and necessary expenses for the purpose of the 1999 Rate Review, we used the Director's 1997 independent audit of the Associations. In the following paragraphs, we discuss some of the details of the audit and afterward, we have provided you with a table containing the expenses that the Director recognized and approved.

We calculate target pilot compensation each year based on the previous year's compensation earned by first mates on U.S. Great Lakes vessels. That figure is added to the total expenses to determine the revenue needed for ratemaking purposes. District 2 reported pilot compensation of $246,649 as training expenses and District 3 reported applicant pilot salaries and benefits of $274,509 as an expense. Because the figures represent pilot compensation, they cannot be considered expenses for ratemaking purposes. The Director subtracted these expenses from the expense bases of Districts 1 and 2.

To support safety and ongoing learning, each Pilot's Association agreed to develop a Continuing Education Plan for registered pilots to keep them aware of safety issues and refresh their skills. Each Association submitted a plan that the Director approved, with minor modifications. The Director will continue to monitor these plans to ensure they have been implemented, are effective and are applied to each District's continuing education account. The Director reserves the right to modify each plan as necessary.

In order to encourage safety and compensate each District for its training expenses, the Director has added the following figures to the expense bases of each District:

District 1: $30,000.

District 2: $40,000.

District 3: $50,000.

These figures include $2000 for each District for their “Train the Trainer” courses which prepare pilots to more effectively contribute to the training process.

The following table displays the results of the audits and the Director's adjustments.

We divided the adjustments we made to the reported expenses into five categories: (1) Equalization Between districts, (2) reimbursed expenses, (3) expenses not necessary for pilotage services, (4) expenses related to lobbying, and (5) expenses not conforming to IRS guidelines.

The Coast Guard must ensure that each association's expenses are analyzed fairly and consistently with the other associations because each one is organized differently. The District 1 and 3 Associations are organized as partnerships whereas the District 2 Association is organized as a corporation. Because of this difference, the District 2 Association pays for Social Security taxes, Medicare taxes, insurance and travel expenses out of corporate funds while in the District 1 and 3 Associations these expenses are paid directly by the pilots themselves. Since these taxes, insurance and travel expenses are legitimate business expenses that should be recognized for ratemaking purposes, funds for these expenses have been added to the expense base of Districts 1 and 3.

District 2 spends a great deal more than the other Districts on many categories of expenses. For instance, pilot boat expenses in District 2 average $176 per trip, while expenses in the other two Districts average approximately $97 per trip. Erie Leasing, a wholly owned subsidiary of District 2 pilot's association that leases equipment back to District 2, reported a net income from operations of $70,506 in 1997, while District 3 has no affiliated company and the District 1 affiliated company showed a net income of $4520 for 1997.

In the 1998 rate review, the Director stated that 1998 was the last year in which District 2 would be allowed to incur unreasonably high expenses. To bring pilot boat charges in line with Districts 1 and 3, the Director is reducing District 2's expense base by an additional $45,602. This deduction is intended to offset Erie Leasing's net income of $70,506 from operations. This, in effect, reduces Erie Leasing's net income to $24,904, which represents a 6.69% return on Erie Leasing's property and equipment of $372,270.

The independent CPA firm found that multiple parties reimburse some expenses for each association and recommended that these expenses should not be included in the expense base for each district. Examples of these expenses include reimbursement from one pilot association to another for shared pilot boats and dispatch, reimbursement from ships for tugboat use, and reimbursement from Canadian pilotage operations for shared administrative expenses. Although these are legitimate business expenses, they are paid by other districts or parties, not by basic pilotage rates, and should not be included in the calculation of pilotage rates for the district being reimbursed. The Director agrees with the independent CPA firm's recommendation to deduct reimbursed expenses from the expense bases of District's 2 and 3. These expenses include those for Canadian pilotage operations and shared administrative expenses.

Expenses that are not necessary for the provision of pilotage services are disallowed for ratemaking purposes. This is explained in 46 CFR 404.5 (a)(1), which contains some of the Great Lakes Pilotage Ratemaking regulations. This section states: “Each expense included in the rate base is evaluated to determine if it is necessary for the provision of pilotage service” and “expense items that the Director determines are not reasonable and necessary for the provision of pilotage service will not be recognized for ratemaking purposes.” The independent CPA firm determined that the largest portion of expenses that fits in this category came from the legal challenge by two Associations. They challenged the transfer of Great Lakes Pilotage oversight functions from the Commandant of the Coast Guard to the Administrator of the Saint Lawrence Seaway Development Corporation (SLSDC). This transfer did not affect the substantive rules regarding pilotage services. These litigation costs are distinguishable from expenses that are directly related to the provision of those services, such as the cost of transportation to and from vessels or the pilot's labor, from which the rate-paying public derives a direct benefit. The latter are costs that affect service to the public, while the former are not. We allowed some legal expenses directly related to the provision of pilotage service, such as the expense of defending a law suit by an applicant pilot discharged from the training program for cause, which directly affects the quality of service provided the public. While it is reasonable to expect the public to share the burden of the direct costs of services provided, it is not reasonable to pass on the costs of litigation over an issue that has no discernable effect on the actual provision of pilotage services. Therefore, we are disallowing these legal costs for the purposes of this ratemaking ($19,900 in District 1, $36,869 in District 3).

Furthermore, the Director believes that a major portion of the remaining legal costs, even after disallowance for the above, are still excessive. In 1997, District 1 reported $34,138 in legal expenses, District 2: $21,151, and District 3: $56,203. The Director intends to recognize only those legal expenses that are reasonable, necessary and directly related to the provision of pilotage services ( i.e., they directly result from a legal action). In 1997, District 1 incurred $34,138 in legal expenses; $1,244 of which was directly related to litigation. Therefore, in the absence of any documentation to justify these legal expenses, the Director, for ratemaking purposes, is disallowing $32,894 in legal expenses for District 1. Furthermore, because there were no legal expenses related to litigation in Districts 2 and 3, the Director is disallowing $21,151 for District 2 and $56,203 for District 3.

In addition to the costs associated with legal expenses, the independent CPA firm also recommended additional deductions from District 2's expenses in the amount of $4800 for overpayment of rent, $947 for business promotion, $400 in donations, and $1,988 for uniforms. None of these charges are necessary for the provision of pilotage services. The Director agrees with the independent CPA firm's findings and these expenses have been deducted from the rate base.

The independent CPA firm recommended that we deduct $1,392 from District 1, $3,428 from District 2, and $12,495 from District 3 for lobbying expenses including dues, legal charges, employee payrolls, and travel.

The independent CPA firm recommended that we deduct $2,484 from District 2's expense base for overpayment of a subsistence allowance that does not conform to IRS guidelines. The Director agrees with these findings and we deducted these expenses from the rate base.

During the 1999 navigational season, the Director initiated a change to District 1's Working Rules, in order to reduce pilot fatigue. This change increased the pilot's minimum time between assignments from eleven hours to thirteen hours and approved the use of a car service between home and pilot change points. During 1999, the cost of the car service was applied as a surcharge on the pilot's uniform source form. To incorporate this expense in District 1's expense base, the Director has approved an additional $45,000.

To adjust expenses for inflation, we increased the total recognized expenses for each association by 2.1%. The 2.1% inflation figure is based on the change in the Consumer Price Index (CPI) from January 1998 to April 1999.

Once all adjustments are made to the recognized operating expenses, the Director projects these expenses for each pilotage area. The Director considers foreseeable circumstances that could affect the accuracy of the projection and, as best as possible, determines the “projection of operating expenses.”

For this rulemaking, we adjusted association expenses by multiplying the pilotage hour projection for each district (described in step 2.B., below) by the aggregate percentage of Association expenses that change in relation to a change in pilotage hours. Analysis indicates about 57% of Association expenses are affected by a change in pilotage hours. For instance, in District 1, pilotage hours are projected to decrease 5% (see step 2.B. below) which is multiplied by 57% to project that District 1's operating expenses should decrease 2.8% in response to the projected decrease in pilotage hours. Then, District-wide expenses were apportioned to each area according to the number of pilots in that area, as determined in step 2.B., below. For instance, District 1 is calculated to need seven pilots in Area 1 and four pilots in Area 2, therefore, Area 1 was assigned 64% of the expenses for the District and Area 2 was assigned 36% of the expenses for the District. The results of Step 1 for each district are displayed below.

Section 4(b)(3)(B) of the Endangered Species Act of 1973 (Act), as amended (16 U.S.C. 1531 et seq. ), requires that within 90 days of receipt, to the maximum extent practicable, we make a finding on whether a petition to list, delist, or reclassify a species presents substantial scientific or commercial information indicating that the requested action may be warranted. If the petition contains substantial information, the Act requires that we initiate a status review of the species and publish a 12-month finding indicating whether the petitioned action is (a) not warranted, (b) warranted, or (c) warranted but precluded from immediate listing proposal by other pending proposals of higher priority. Such 12-month findings are to be published promptly in the Federal Register .

On June 6, 1997, we received a formal petition to list the westslope cutthroat trout ( Oncorhynchus clarki lewisi ) as threatened throughout its range and designate critical habitat for this subspecies pursuant to the Act. The petitioners are American Wildlands, Clearwater Biodiversity Project, Idaho Watersheds Project, Inc., Montana Environmental Information Center, the Pacific Rivers Council, Trout Unlimited's Madison-Gallatin Chapter, and Mr. Bud Lilly.

The westslope cutthroat trout (WCT) is 1 of 14 subspecies of cutthroat trout native to interior regions of western North America (Behnke 1992). Cutthroat trouts owe their common name to the distinctive red slash that occurs just below both sides of the lower jaw. Adult WCT, especially males during the spawning season, typically exhibit bright yellow, orange, and red colors. Characteristics of WCT that distinguish this fish from the other cutthroat subspecies include a pattern of irregularly shaped spots on the body that has few spots below the lateral line, except near the tail; a unique number of chromosomes; and other genetic and morphological traits that appear to reflect a distinct, evolutionary lineage (Behnke 1992).

The historic range of WCT is considered the most geographically widespread among the 14 subspecies of inland cutthroat trout (Behnke 1992). Although not known precisely, the historic distribution of WCT in streams and lakes can be summarized as follows: West of the Continental Divide, the subspecies is native to several major drainages of the Columbia River basin, including the upper Kootenai River drainage from its headwaters in British Columbia, through northwest Montana, and into northern Idaho; the Clark Fork River drainage of Montana and Idaho downstream to the falls on the Pend Oreille River near the Washington-British Columbia border; the Spokane River above Spokane Falls and into Idaho's Coeur d'Alene and St. Joe River drainages; and the Salmon and Clearwater River drainages of Idaho's Snake River basin. The historic distribution of WCT also includes disjunct areas draining the east slope of the Cascade Mountains in Washington (Methow River and Lake Chelan drainages), the John Day River drainage in northeastern Oregon, and the headwaters of the Kootenai River and several other small disjunct regions in British Columbia. East of the Continental Divide, the historic distribution of WCT includes the headwaters of the South Saskatchewan River drainage (United States and Canada); the entire Missouri River drainage upstream from Fort Benton, Montana, and extending into northwest Wyoming; and the headwaters of the Judith, Milk, and Marias Rivers, which join the Missouri River downstream from Fort Benton. Today, various WCT stocks remain in each of these major river basins in Montana, Idaho, Washington, Oregon, and Wyoming, but occur in scattered, disjunct populations in Canada.

On July 2, 1997, we notified the petitioners that our Final Listing Priority Guidance, published in the December 5, 1996, Federal Register (61 FR 64425), designated the processing of new listing petitions as being of lower priority than completion of emergency listings and processing of pending proposed listings. A backlog of listing actions, as well as personnel and budget restrictions in Region 6 (Mountain-Prairie Region), which was assigned responsibility for the WCT petition, prevented our staff from working on a 90-day finding for the petition.

On January 25, 1998, the petitioners provided an amended petition to list the WCT as threatened throughout its range and designate critical habitat for the subspecies. The amended petition contained additional new information in support of the requested action. Because substantial new information was provided, we treated the amended petition as a new petition.

On June 10, 1998, we published a notice in the Federal Register (63 FR 31691) of a 90-day finding that the amended WCT petition provided substantial information indicating that the requested action may be warranted and immediately began a comprehensive status review of WCT (U.S. Fish and Wildlife Service 1999). In the notice, we asked for data, information, technical critiques, comments, or questions relevant to the amended petition. The comment period closed August 10, 1998; however, we reopened the comment period on August 17, 1998 (63 FR 43902), until October 13, 1998.

The petitioners assert that remaining, genetically pure stocks of WCT occur almost exclusively in small, isolated streams in mountainous areas. In Montana, the region for which most data were provided, the petitioners indicate that stocks of genetically pure WCT occur in about 3.5 percent and 1.5 percent of their historic stream habitat in the Kootenai River and upper Missouri River drainages, respectively. The petition includes similar percentages for genetically pure WCT stocks in other drainages in Montana.

The petitioners assert that it is common for today's WCT stocks to have some degree of hybridization with introduced, nonnative trout. The petitioners further assert that stocks of WCT now occur in 11 percent of historic habitat in Idaho and 41 percent in Oregon, although data on genetic purity are not available for most of those stocks. The petitioners have little information on the status of native WCT stocks in Alberta, British Columbia, and Washington, although several stocks have been confirmed by recent studies. According to the petitioners, only about half of the few streams in Wyoming that were historic habitat for WCT now have stocks of this subspecies, but all of these stocks are considered hybridized to some degree with introduced, nonnative trout.

The petitioners assert that the WCT should be listed as threatened because the subspecies' present distribution and abundance are substantially reduced from historic conditions; remaining stocks are small and widely separated and continue to decline in abundance; and the threats to the survival of WCT are pervasive and ongoing. The petitioners allege that threats to WCT include habitat destruction from logging and associated road building; adverse effects on habitat resulting from livestock grazing, mining, urban development, agricultural practices, and the operation of dams; historic and ongoing stocking of nonnative fish species that compete with or prey upon WCT or jeopardize the subspecies' genetic integrity through hybridization; and excessive harvest by anglers.

The petitioners further assert that programs to protect and restore WCT are inadequate or nonexistent, and that stocks of this fish continue to be threatened by a wide variety of ongoing and proposed activities.

A review team consisting of U.S. Fish and Wildlife Service biologists from Region 1 (headquartered in Portland, Oregon) and Region 6 (headquartered in Denver, Colorado) conducted the WCT status review. Team members were: Scott A. Deeds, Fish and Wildlife Biologist, Upper Columbia River Basin Field Office, Spokane, Washington; Lynn R. Kaeding, Team Leader and Chief, Branch of Native Fishes Management, Montana Fish and Wildlife Management Assistance Office, Bozeman, Montana; Dr. Samuel C. Lohr, Fishery Biologist, Snake River Basin Office, Boise, Idaho; and Douglas A. Young, Fish and Wildlife Biologist, Central Oregon Field Office, Bend, Oregon.

In response to our June 10 and August 17, 1998, Federal Register notices, we received 56 comments from State game and fish departments, the U.S. Forest Service, National Park Service, Tribal governments, and private corporations, as well as private citizens, organizations, and other entities containing information on WCT (U.S. Fish and Wildlife Service 1999). State game and fish departments provided information on the status, distribution, abundance, and genetics of the WCT in their respective States. We also reviewed information on WCT obtained from scientific journal articles, agency reports and file documents, and telephone interviews and written correspondence with natural resources managers familiar with WCT. In addition, we analyzed the extensive information on WCT provided by the Interior Columbia River Basin Ecosystem Management Project (1996). Detailed procedures and results of our comprehensive assessment of the available information are described in the WCT status review document (U.S. Fish and Wildlife Service 1999) and summarized in this notice.

Throughout the historic range of WCT, few of the remaining WCT stocks have been genetically classified on the basis of chromosome counts, biochemical characteristics, or molecular genetic information. Although application of such genetic techniques for characterizing fish stocks is becoming more common today, in most cases the taxonomic classification of extant WCT stocks has been based largely on the spotting patterns shown by the fish and the professional judgments and experiences of the fishery biologists who examined the fish in the field. Although WCT stocks with varying degrees of genetic purity are known to occur across the subspecies' range, there is currently little definitive information on the genetic characteristics of most WCT stocks (U.S. Fish and Wildlife Service 1999). Even in Montana, where an extensive database on the genetic characteristics of many WCT stocks exists, the precise genetic characteristics of most stocks are unknown. Consequently, we based the WCT status review on the professional judgments made by the State game and fish departments that the fish the departments classified as WCT actually represented the subspecies, even though the precise genetic characteristics of those stocks may not be known, or the stocks may consist of intercross progeny that were the product of some low or nondetectable level of interbreeding between WCT and another fish species. In addition, given the very small, disjunct populations in Canada, we evaluated WCT status on the basis of WCT stocks that currently occur within the historic range of the subspecies in the United States ( i.e., introduced and naturally occurring stocks in Canada and introduced stocks outside the historic range in the United States were not included in the evaluation).

The National Marine Fisheries Service and our agency have adopted criteria (61 FR 4722) for designation of Distinct Population Segments (DPSs) for vertebrate organisms, such as WCT, under the Act. To constitute a DPS, a stock or group of stocks must be: (1) Discrete ( i.e., spatially, ecologically, or behaviorally separated from other stocks of the taxon); (2) significant ( e.g., ecologically unique for the taxon, extirpation would produce a significant gap in the taxon's range, the only surviving native stock of the taxon, or substantial genetic divergence occurs between the stock and other stocks of the taxon); and (3) the population segment's conservation status must meet the Act's standards for listing. We found no morphological, physiological, or ecological data for WCT that indicated unique adaptations of individual WCT stocks or assemblages of stocks anywhere within the historic range of the subspecies. Although the disjunct WCT stocks in Canada, Washington, and Oregon, for example, met the first criterion for DPS designation (discreteness), evidence in support of the second criterion (significance) appeared entirely speculative for those and other stocks across the range of the subspecies. Congress has made clear (61 FR 4722) that in the absence of compelling evidence of genetic, ecological, or other characteristics that indicate a unique significance of a stock or assemblage of stocks, DPSs should be used “sparingly” in the context of the Act. We found no compelling evidence in support of recognizing DPSs for WCT. Instead, a single WCT population was recognized for purposes of the status review (U.S. Fish and Wildlife Service 1999).

Information provided primarily by State game and fish departments in Montana, Idaho, Washington, and Oregon indicated WCT currently occur in about 4,275 tributaries or stream reaches that collectively encompass more than 23,000 linear miles (36,800 kilometers (km)) of stream habitat (U.S. Fish and Wildlife Service 1999). Those WCT stocks are distributed among 12 major drainages and 62 component watersheds in the Columbia, Missouri, and Saskatchewan River basins. In addition, WCT are known to occur naturally in 6 lakes in Idaho and Washington, totaling about 72,900 hectares (ha) (180,000 acres (ac)), and in at least 20 lakes in Glacier National Park, Montana, totaling 2,165 ha (5,347 ac). The distribution of WCT in any particular stream or stream reach was based on field sampling or the professional judgment of fisheries biologists familiar with that geographic region. Because sampling all stream reaches in a watershed is generally not feasible, especially in remote and mountainous regions, information concerning linear stream distances occupied by WCT that the departments supplied were often total lengths for an entire stream in which WCT were known or suspected to occupy some portion. Although WCT stocks that occupied large, mainstem rivers and lakes and their principal tributaries are reduced from their historic levels, the degree that those stocks are reduced cannot be determined precisely because definitive historic data are limited. Nonetheless, we find that viable, self-sustaining WCT stocks remain widely distributed throughout the historic range of the subspecies, most notably in headwater areas.

In the context of the Act, the term “threatened species” means any species (or subspecies or, for vertebrates, DPS) that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The term “endangered species” means any species that is in danger of extinction throughout all or a significant portion of its range. The Act does not indicate threshold levels of historic population size at which (as the population of a species declines) listing as either “threatened” or “endangered” becomes warranted. Instead, the principal considerations in the determination of whether or not a species warrants listing as a threatened or endangered species under the Act are the threats that currently confront the species and the likelihood that the species will persist in “the foreseeable future.”

Evidence from the Missouri River basin indicates that a conspicuous decline in the WCT population occurred early in the twentieth century (U.S. Fish and Wildlife Service 1999). That decline was mainly attributed to rapid, abundant colonization of mainstem rivers and their major tributaries by one or more introduced, nonnative fish species ( e.g., brook trout ( Salvelinus fontinalis ), brown trout ( Salmo trutta ), and rainbow trout ( Oncorhynchus mykiss )) that had adverse effects on WCT. Our analysis also showed that the rate of decline in the WCT population is markedly lower today than it was early in the twentieth century. The evidence from the Missouri River basin provided a model for the historic decline of WCT that is probably applicable to WCT in other regions of the subspecies' range.

We also have evidence that many of the headwater streams inhabited by extant WCT stocks throughout the subspecies' range are relatively secure from colonization by the nonnative fishes that are known to adversely affect WCT. Throughout the inland, western United States today, stocks of various subspecies of indigenous cutthroat trout often persist in high-elevation, high-velocity, headwater streams, where they appear to have a competitive advantage over nonnative fishes. Thus, the headwater streams inhabited by many extant WCT stocks may be relatively secure from colonization by nonnative fishes. In addition, because they occur in high-elevation areas, those headwater streams are relatively secure from the adverse effects of human activities.

Spatial separation of many extant WCT stocks precludes natural movement and interbreeding among some stocks, thereby potentially increasing the likelihood that those stocks will become extinct due to limited genetic variability. In addition, the probable small sizes of some WCT stocks and the short stream reaches that they might inhabit make those stocks more vulnerable to extirpation due to natural catastrophes such as floods, landslides, wild fires, and other stochastic environmental events. Remaining WCT stocks in the Lower Missouri River and part of the Columbia River (in Washington) drainages, for example, occupy stream reaches that average 2.9 and 3.4 miles (4.6 and 5.4 km) long, respectively (U.S. Fish and Wildlife Service 1999). Despite the probable small sizes of many extant WCT stocks that inhabit restricted, headwater stream reaches, however, we find no evidence of negative impacts of inbreeding within stocks. Similarly, although the probable small sizes of some of those WCT stocks and the short stream reaches that they inhabit make some stocks more vulnerable to extirpation due to stochastic environmental events, we find no evidence that the loss of WCT stocks that could result from such infrequent, natural catastrophes would threaten the continued existence of the subspecies as a whole (U.S. Fish and Wildlife Service 1999).

The status review revealed that most of the habitat for extant WCT stocks lies on lands administered by Federal agencies, particularly the U.S. Forest Service (U.S. Fish and Wildlife Service 1999). Moreover, most of the strongholds for WCT stocks occur within roadless or wilderness areas or national parks, all of which afford considerable protection to WCT. In addition, numerous existing Federal and State regulatory mechanisms, if properly administered and implemented, are working to protect WCT and their habitats throughout the range of the subspecies. For example, the States generally restrict the harvest of WCT, and in many regions only catch-and-release angling is allowed. However, some regions have regulatory mechanisms with primary goals that could maintain habitat conditions at levels that are less than optimal for WCT.

We also are encouraged by ongoing State and local programs, most notably those in Montana, to protect and restore WCT within its historic range (U.S. Fish and Wildlife Service 1999). The U.S. Forest Service, State game and fish departments, and National Park Service reported more than 700 ongoing projects directed toward the protection and restoration of WCT and their habitats. In addition, on private lands in Montana's Columbia River basin, for example, Plum Creek Timber Company is working closely with us to develop a Native Fish Habitat Conservation Plan that includes provisions for the conservation of WCT on 1.5 million acres of Plum Creek property. Elsewhere in Montana, restoration activities under way as part of the Blackfoot Challenge, a cooperative endeavor between private landowners and public agencies to conserve and restore streams and riparian habitats in the Blackfoot River valley, include removal of fish-passage barriers, screening of irrigation diversions to prevent the loss of WCT to canals, and general improvement of instream fish habitat.

Finally, WCT also accrue some additional level of protection from the Act's section 7 consultation process in the numerous geographic areas where WCT distribution and habitat requirements overlap with the distributions of one or more fish species currently listed as threatened or endangered under the Act, specifically, bull trout ( Salvelinus confluentus ), steelhead ( Oncorhynchus mykiss ), and Pacific salmon species and their habitats on Federal lands in the Columbia River basin. Conservation efforts to protect these species, improve available habitat, and minimize adverse impacts on them would provide similar conservation benefits to WCT.

The Act identifies five factors of potential threats to a species: (1) The present or threatened destruction, modification, or curtailment of the species' habitat or range; (2) overutilization for commercial, recreational, scientific, or educational purposes; (3) disease or predation; (4) the inadequacy of existing regulatory mechanisms; and (5) other natural or manmade factors affecting the species' continued existence. The overall WCT population has been reduced from historic levels, and extant stocks of this subspecies face threats from some of these factors in several areas of the historic range. However, we find that the magnitude and imminence of those threats are small. WCT have a widespread distribution, and there are numerous robust populations throughout its range.

On the basis of the best available information, which is detailed and analyzed in the status review document (U.S. Fish and Wildlife Service 1999) and summarized in this notice, we conclude that the WCT is not likely to become a threatened or endangered species within the foreseeable future. Therefore, listing of the WCT as a threatened or endangered species under the Act is not warranted at this time.

Authors: The primary author of this document is Lynn R. Kaeding (see ADDRESSES section).

The authority for this action is the Endangered Species Act (16 U.S.C. 1531 et seq. ).

In January 1999, the National Marine Fisheries Service (NMFS) published a document titled “Status Review of Coastal Cutthroat Trout ( Oncorhynchus clarki clarki ) from Washington, Oregon, and California” (Johnson et al. 1999). The status review document determined that there were six Evolutionarily Significant Units (ESUs) of coastal cutthroat trout along the coast of Washington, Oregon, and California. Subsequent to the completion of the status review, NMFS and the Fish and Wildlife Service (FWS) (jointly, the Services) published a proposed rule on April 5, 1999, (64 FR 16397) to list one of the six cutthroat trout ESUs as threatened under the Endangered Species Act (ESA). The proposed ESU consisted of coastal cutthroat trout populations in southwestern Washington and the Columbia River, excluding the Willamette River above Willamette Falls. This proposed rule was issued jointly due to a question regarding which agency (FWS or NMFS) had regulatory jurisdiction over coastal cutthroat trout. The proposal also proposed, based on newly available information, to delist the Umpqua River coastal cutthroat trout ESU previously listed by NMFS as endangered.

Since the joint proposal was published, agency jurisdiction has been determined to be with FWS. On November 22, 1999, the Services jointly signed a letter announcing FWS regulatory jurisdiction over Coastal cutthroat trout (USDI & USDC 1999). This document clarified that NMFS would retain responsibility to reach a final determination, subject to our concurrence, on the proposal to delist the Umpqua population, and we would assume all other regulatory ESA responsibilities for coastal cutthroat trout (USDI & USDC 1999). A notice will soon be published in the Federal Register announcing this change in regulatory jurisdiction.

Under the timeframe established for listing decisions by the ESA (section 4(3)(b)(6)(A)), a final determination on the proposal to list the Southwestern Washington/Columbia River ESU of the coastal cutthroat trout in Washington and Oregon would normally be due by April 5, 2000. However, when substantial scientific disagreement occurs regarding the sufficiency or accuracy of the available data, as in this case, the Act allows for a 6-month extension of a final listing determination for the purpose of soliciting additional data (section 4(3)(b)(6)(B)(i)). The 6-month extension announced in this notice is based on this provision.

Two groups (hatchery populations and above-barrier populations of coastal cutthroat trout) were not fully examined in the NMFS status review. The proposed rule (64 FR 16397) stated:

In the section on the framework for ESUs, the NMFS status review document (Johnson et al. 1999) discussed the issue of barriers to migration (p. 125). The NMFS Biological Review Team (BRT) questioned the role played by above-barrier populations in ESUs immediately downstream, and found this analysis to be a challenging problem. Evidence of the challenge includes the fact that “[t]he BRT was divided regarding whether populations above long-standing natural barriers (i.e., those that effectively preclude all migration for hundreds or thousands of years) should be included in ESUs.” The BRT went on to discuss the reasons they might or might not choose to include populations above such barriers in ESUs, but failed to reach any resolution or pass on recommendations. The BRT also addressed the question of whether populations above barriers that permit some one-way migration should be included in an ESU downstream. A majority of BRT members felt that such populations should be included in the downstream ESU because these populations may “* * * contribute demographically and genetically to populations below them * * *”, and “* * * may represent genetic resources shared by populations below these barriers (and potentially a significant component of diversity for an ESU)” (Johnson et al. 1999).

When the Services published the proposed rule, however, the question on whether to include above-barrier populations in downstream ESUs remained unresolved. Furthermore, the BRT unanimously decided that the guidance on including populations above one-way passable barriers into downstream ESUs should not be followed in the case of Willamette Falls, a barrier that allows some one-way (and possibly in rare instances, two-way) migration between the currently proposed Southwestern Washington/Lower Columbia River ESU and the upper Willamette ESU (for which the BRT made no status assessment). In fact, the BRT went so far as to conclude that the upper Willamette population deserved its own ESU status, based primarily on the fact that it “* * * encompasses a large area with considerable habitat complexity * * *” and that it “* * * supports several different populations * * *” of coastal cutthroat trout (Johnson et al. 1999). However, it is possible that, with additional analysis, the area identified by NMFS as the Upper Willamette ESU is actually part of the Southwestern Washington/Lower Columbia River ESU. Another issue that needs to be addressed is how the BRT handled other populations either above impassable barriers, or above barriers allowing one-way passage, and if any of these populations warrant recognition as distinct vertebrate population segments.

In addition, we are aware of additional information provided to the BRT by the Washington Department of Fish and Wildlife (WDFW) that indicates that some coastal Washington populations currently included within the Southwestern Washington/Lower Columbia River ESU should not be included. Although this information was presented to the BRT during the status review, it was not made available to the FWS until after the decision regarding regulatory jurisdiction over coastal cutthroat trout was resolved. The BRT has also recently alerted the FWS to a compilation of new genetic data that the BRT indicated “* * * are relevant to the identification of distinct population segments in the Lower Columbia River and southwestern Washington coast” (Waples, in litt. 2000). Therefore, with further review, the WDFW information, information concerning the role of above-barrier and hatchery populations of cutthroat trout, and the new genetic data may lead us to modify the boundaries of the ESU proposed for listing. Such modification may result in the need to repropose the distinct vertebrate population segment for listing, if we determine that the status of the segment warrants protection under the ESA.

Therefore, in consideration of all the above issues, we are providing notice that, according to section 4(b)(6)(B)(i) of the ESA, the 1-year timeframe allowed to make a final determination on a listing proposal will be extended an additional 6 months. The 6-month extension will enable us to evaluate new information regarding the status of above-barrier and hatchery populations, and allow the integration of this information into the final listing decision. With this 6-month extension, a final decision regarding the proposal to list the Southwestern Washington/Columbia River ESU of the coastal cutthroat trout (64 FR 16397) is due by October 5, 2000.

In order to resolve the substantial scientific disagreement, we are requesting comments from interested parties on the following three topics:

(1) The role of hatchery populations of coastal cutthroat trout within the Southwestern Washington/Columbia River ESU, and their importance to the conservation of this population;

(2) The role of above-barrier populations, including the area identified as the Upper Willamette ESU, within the Southwestern Washington/Columbia River ESU and their importance to the conservation of this ESU; and

(3) Genetic data or other information that may help resolve the identification of distinct population segments in the southwestern Washington coast, Lower Columbia River, and Upper Willamette River areas.

Regulations in 50 CFR part 21 provide for review and approval of State falconry laws by the Fish and Wildlife Service. A list of States whose falconry laws are approved by the Service is found in 50 CFR 21.29(k). The practice of falconry is authorized in those States. As provided in 50 CFR 21.29 (a) and (c), the Director has reviewed certified copies of the falconry regulations adopted by the State of Delaware and has determined that they meet or exceed Federal falconry standards. Federal falconry standards contained in 50 CFR 21.29(d) through (i) include permit requirements, classes of permits, examination procedures, facilities and equipment standards, raptor marking, and raptor taking restrictions. Delaware regulations also meet or exceed all restrictions or conditions found in 50 CFR 21.29(j), which include requirements on the number, species, acquisition, and marking of raptors. Therefore, we are proposing that the State of Delaware be listed under § 21.29(k) as a State that meets Federal falconry standards. Inclusion of Delaware in this list would eliminate the current restriction that prohibits falconry within that State.

We are publishing the entire list of States that have met the Federal falconry standards, including the State of Delaware. We believe that publishing this list in its entirety will eliminate any confusion concerning which States have approval for falconry and further indicate which States participate in a cooperative Federal/State permit system program. We are adding asterisks to both Delaware and Vermont to identify them as participants in the cooperative permit program as explained below.

The need for the proposed changes to 50 CFR 21.29(k) arose from the expressed desire of the State of Delaware to institute a falconry program for the benefit of citizens interested in the sport of falconry and to participate in a cooperative Federal/State permit system. Accordingly, the State has promulgated regulations that meet or exceed Federal requirements protecting migratory birds. The proposed changes to 50 CFR 21.29(k) are necessary to allow, by inclusion within the listing of authorized falconry States, persons in the State of Delaware to practice falconry. We are also identifying the State of Vermont as a participant in a cooperative Federal/State permit system following that State's addition to the list of approved falconry States on September 7, 1999 (64 FR 48565).

In compliance with the requirements of section 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4332(2)(C)), and the Council on Environmental Quality's regulations for implementing NEPA (40 CFR parts 1500-1508), the Service prepared an Environmental Assessment (EA) in July 1988 to support establishment of simpler, less restrictive regulations governing the use of most raptors. This EA is available to the public at the location indicated under the ADDRESSES caption. Based on review and evaluation of the proposed rule to amend 50 CFR 21.29(k) by adding Delaware to the list of States whose falconry laws meet or exceed Federal falconry standards, and Delaware and Vermont as participants in the cooperative application program, we have determined that the issuance of the proposed rule is categorically excluded from NEPA documentation under the Department of the Interior's NEPA procedures in 516 DM 2, Appendix 1.10.

Section 7 of the Endangered Species Act (ESA) of 1972, as amended (16 U.S.C. 1531, et seq. ), provides that, “The Secretary [of the Interior] shall review other programs administered by him and utilize such programs in furtherance of the purposes of this Act” [and] shall “insure that any action authorized, funded, or carried * * * is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat * * *” Our review pursuant to section 7 concluded that this action is not likely to adversely affect listed species. A copy of this determination is available by contacting us at the address indicated under the ADDRESSES caption.

This rule was not subject to the Office of Management and Budget (OMB) review under Executive Order 12866. The Department of the Interior has determined that this rule would not have a significant effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). This is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act; it will not have an annual effect on the economy of $100 million or more, will not cause a major increase in costs or prices, and will not adversely affect competition, employment, investment, productivity, or innovation. We estimate that 20 individuals would obtain falconry permits as a result of this rule, and many of the expenditures of those permittees would accrue to small businesses. The maximum number of birds allowed by a falconer is 3, so the maximum number of birds likely to be possessed is 60. Some birds would be taken from the wild, but others could be purchased. Using one of the more expensive birds, the northern goshawk, as an estimate, the cost to procure a single bird is less than $5,000, which, with an upper limit of 60 birds, translates into $300,000. Expenditures for building facilities would be less than $32,000 for 60 birds, and for care and feeding less than $60,000. These expenditures, totaling less than $400,000, represent an upper limit of potential economic impact from the addition of Delaware to the list of approved States.

This rule has no potential takings implications for private property as defined in Executive Order 12630. The only effect of this proposed rule on the constituent community would be to allow falconers in the State of Delaware to apply for falconry permits. We estimate that no more than 20 people would apply for falconry permits in Delaware. This rule does contain information collection requirements that are approved by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The information collection is covered by an existing OMB approval for licenses/permit applications, number 1018-0022. For further details concerning the information collection approval, see 50 CFR 21.4.

We have determined, and certify pursuant to the Unfunded Mandates Act, 2 U.S.C. 1502 et seq. , that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The rule does not have significant Federalism effects pursuant to Executive Order 13132. We also have determined that these regulations meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988 for civil justice reform, and that the rule does not unduly burden the judicial system.

Regarding Government-to-Government relationships with Tribes, this rulemaking would have no effect on federally recognized Tribes. There are no federally recognized Tribes in the State of Delaware. Furthermore, the revisions to the existing regulations are of a purely administrative nature affecting no Tribal trust resources.

If you wish to comment, you may do so by any one of several methods. You may mail or hand-deliver comments to: Chief, Office of Migratory Bird Management, U.S. Fish and Wildlife Service, 4401 North Fairfax Drive, Room 634, Arlington, Virginia 22203. You may also fax comments to this office at (703) 358-2016.

Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondents's identify, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.

For the reasons described in the preamble, we are proposing to amend part 21, subchapter B, chapter I of title 50 of the Code of Federal Regulations, as set forth below: