The United States General Accounting Office originally settled claims concerning federal employees'compensation and leave, compensation of deceased employees, and proceeds of canceled checks for veterans' benefits payable to deceased beneficiaries. On June 30, 1996, the Legislative Branch Appropriations Act of 1996 transferred the authority to settle these claims from the General Accounting Office to the Director of the Office of Management and Budget. See Sec. 211, Pub. L. 104-53, 109 Stat. 535. On June 28, 1996, the Acting Director of the Office of Management and Budget issued a determination order redelegating to OPM the authority to settle claims against the United States involving federal employees' compensation and leave, deceased employees' compensation, and proceeds of canceled checks for veterans' benefits payable to deceased beneficiaries. Congress subsequently codified these changes through additional legislation. See Pub.L. 104-316, 110 Stat. 3826.

The Director of OPM initially delegated the claims settlement authority to the Office of General Counsel. On April 10, 2000, the Director of OPM transferred the claims settlement authority to the Office of Merit Systems Oversight and Effectiveness. Consequently, OPM is amending section 178.102(e)(1), as well as section 178.207(b) and (c), to reflect that individuals should file Part 178 claims with the Office of Merit Systems Oversight and Effectiveness rather than with the Claims Adjudication Unit, Office of the General Counsel.

I find, under 5 U.S.C. 553(b)(3)(B), that good cause exists for waiving the general notice of proposed rulemaking. The notice is being waived because these amendments merely reflect an organizational change within OPM and do not affect the rights of federal employees to file claims for settlement under Part 178. In addition, potential claimants must know, as soon as possible, where they now should file their claims.

I certify that this regulation would not have a significant economic impact on a substantial number of small entities because they would apply only to Federal agencies and employees.

This rule is issued under Marketing Agreement No. 130 and Marketing Order No. 958, both as amended (7 CFR part 958), regulating the handling of onions grown in certain designated counties in Idaho, and Malheur County, Oregon, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (Department) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order now in effect, Idaho-Eastern Oregon onion handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable onions beginning on July 1, 2000, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file 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 law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the 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 his or her principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule decreases the assessment rate established for the Committee for the 2000-2001 and subsequent fiscal periods from $0.09 per hundredweight to $0.08 per hundredweight of onions handled.

The order provides authority for the Committee, with the approval of the Department, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The Committee consists of six producer members, four handler members and one public member, each of whom is familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The budget and assessment rate were discussed at a public meeting and all directly affected persons had an opportunity to participate and provide input.

For the 1998-99 and subsequent fiscal periods, the Committee recommended, and the Department approved, an assessment rate of $0.09 per hundredweight that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by the Secretary upon recommendation and information submitted by the Committee or other information available to the Secretary.

The Committee met on April 6, 2000, and unanimously recommended 2000-2001 expenditures of $1,047,637 and an assessment rate of $0.08 per hundredweight of onions handled during the 2000-2001 and subsequent fiscal periods. The Committee estimated that the 2000-2001 onion crop will approximate 9,600,000 hundredweight of onions. In comparison, the 1999-2000 fiscal period budget was established at $1,133,785 on an estimated assessable onion crop of 9,200,000 hundredweight of onions. The Committee recommended the decreased assessment rate to help offset the negative effects of the currently depressed onion market.

The Committee anticipates that assessment income during the 2000-2001 fiscal period will be approximately $768,000, which is $60,000 less than the $828,000 assessment income estimated for its 1999-2000 budget. The Committee now projects a total income of approximately $944,372 and expenditures of about $1,025,098 by June 30, 2000. At the time the 1999-2000 fiscal period budget was recommended, the Committee had estimated that it would draw up to $260,785 from its operating reserve. However, since current assessment income is greater than anticipated and expenditures are less than budgeted, the operating reserve may actually be depleted by about $80,726. Thus, the Committee has estimated that its operating reserve will be approximately $859,793 on July 1, 2000, and, if it requires an estimated $234,637 from its monetary reserve as budgeted during the 2000-2001 fiscal period, approximately $625,156 on July 1, 2001. Lower assessment rates were considered, but not recommended because they would not generate the income necessary to administer the program with an adequate operating reserve.

The major expenditures recommended by the Committee for the 2000-2001 fiscal period include $235,105 for marketing order administration, which includes salary, office, travel and Committee expenses, $58,532 for production research, $675,000 for market promotion including paid advertising, $54,000 for export market development, and $25,000 for marketing order contingencies. Budgeted expenses for these items in the 1999-2000 fiscal period were $224,685, $69,100, $750,000, $60,000, and $30,000, respectively.

The Committee has based its recommended assessment rate decrease on the 2000-2001 crop estimate and fiscal period expenditures estimate, the current condition of the onion market, and the current and projected size of its monetary reserve. The decreased assessment rate should provide $768,000 in income, which, when combined with interest income of $45,000 and operating reserve funds of $234,637, would be adequate to cover budgeted expenses. As noted above, the Committee estimates it will have approximately $859,793 in its operating reserve at the end of the 1999-2000 fiscal period, which should be adequate to cover any income shortages. This amount is within the maximum permitted by the order of approximately one fiscal period's expenditures (§ 958.44).

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by the Secretary upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or the Department and are locally published. Committee meetings are open to the public and interested persons may express their views at these meetings. The Department will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, the AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are approximately 34 handlers of Idaho-Eastern Oregon onions who are subject to regulation under the order and approximately 270 onion producers in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $500,000.

The Committee estimates that all of the handlers of Idaho-Eastern Oregon onions ship under $5,000,000 worth of onions on an annual basis. In addition, based on acreage, production, and producer prices reported by the National Agricultural Statistics Service, and the total number of onion producers in the regulated production area, the average gross annual producer revenue from onions is about $230,000. Based on this information, it can be concluded that the majority of Idaho-Eastern Oregon onion handlers and producers may be classified as small entities, excluding receipts from other sources.

This rule decreases the assessment rate established for the Committee and collected from handlers for the 2000-2001 and subsequent fiscal periods from $0.09 per hundredweight to $0.08 per hundredweight of onions handled. Both the $0.08 assessment rate and the 2000-2001 budget of $1,047,637 were unanimously recommended by the Committee at its April 6, 2000, meeting. The $0.08 assessment rate is $0.01 lower than the 1999-2000 rate. The Committee recommended a decreased assessment rate to help offset the negative effects of the currently depressed onion market. The anticipated 2000-2001 crop of 9,600,000 hundredweight is approximately 400,000 hundredweight larger than the crop estimate used to establish the 1999-2000 budget. The $0.08 rate should provide $768,000 in assessment income, which, when combined with estimated interest income of $45,000 and up to $234,637 from the operating reserve, should be adequate to meet the 2000-2001 fiscal period's budgeted expenses.

The Committee reviewed and unanimously recommended 2000-2001 expenditures of $1,047,637 which include increases in administrative expenses, salaries, and committee expenses, and decreases in production research, market promotion, export market development, and contingency fund expenses. Prior to recommending this budget, the Committee considered information from various sources, including the Idaho-Eastern Oregon Onion Executive, Research, Promotion and Export Market Development Committees. Alternative expenditure levels were discussed and rejected by these subcommittees, and ultimately by the full Committee, based upon the relative value of various research and promotion projects to the Idaho-Eastern Oregon onion industry.

The major expenditures recommended by the Committee for the 2000-2001 fiscal period include $235,105 for marketing order administration, which includes salary, office, travel and Committee expenses, $58,532 for production research, $675,000 for market promotion including paid advertising, $54,000 for export market development, and $25,000 for marketing order contingencies. Budgeted expenses for these items in the 1999-2000 fiscal period were $224,685, $69,100, $750,000, $60,000, and $30,000, respectively.

A review of historical information and preliminary information pertaining to the upcoming season indicates that the F.O.B. price for the 2000-2001 onion season could average $5.50 per hundredweight of onions. Therefore, the estimated assessment revenue for the 2000-2001 fiscal period ($768,000) as a percentage of the projected total F.O.B. revenue ($52,800,000) would be 0.0145 percent. This figure indicates that the $0.08 assessment rate will have a relatively insignificant impact on the Idaho-Eastern Oregon onion industry.

This action decreases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs would be offset by the benefits derived by the operation of the order. In addition, the Committee's meeting was widely publicized throughout the Idaho-Eastern Oregon onion industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the April 6, 2000, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

This rule imposes no additional reporting or recordkeeping requirements on either small or large onion handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

A proposed rule concerning this action was published in the Federal Register on May 15, 2000 (65 FR 30920). A copy of the proposed rule was mailed to the Committee office, which in turn notified Committee members and industry members. The proposed rule was also made available on the Internet by the Office of the Federal Register. A 30-day comment period ending June 14, 2000, was provided for interested persons to respond to the proposal. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) The Committee needs to have sufficient funds to pay its expenses which are incurred on a continuous basis; (2) the 2000-2001 fiscal period begins on July 1, 2000, and the order requires that the rate of assessment for each fiscal period apply to all assessable onions handled during such fiscal period; (3) handlers are aware of this action which was unanimously recommended by the Committee at a public meeting; and (4) a 30-day comment period was provided for in the proposed rule, and no comments were received.

This rule is issued under Marketing Agreement No. 115 and Marketing Order No. 982, both as amended (7 CFR Part 982), regulating the handling of hazelnuts grown in Oregon and Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is intended that this action apply to all merchantable hazelnuts handled during the 1999-2000 marketing year (July 1, 1999, through June 30, 2000). This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file 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 law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the 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 his or her principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule continues in effect percentages which allocate the quantity of inshell hazelnuts that may be marketed in domestic markets. The Board is required to meet prior to September 20 of each marketing year to compute its marketing policy for that year, and compute and announce an inshell trade demand if it determines that volume regulations would tend to effectuate the declared policy of the Act. The Board also computes and announces preliminary free and restricted percentages for that year.

The inshell trade demand is the amount of inshell hazelnuts that handlers may ship to the domestic market throughout the marketing season. The order specifies that the inshell trade demand be computed by averaging the preceding three “normal” years trade acquisitions of inshell hazelnuts, rounded to the nearest whole number. The Board may increase the three-year average by up to 25 percent, if market conditions warrant an increase. The Board's authority to recommend volume regulations and the computations used to determine the percentages are specified in § 982.40 of the order.

The National Agricultural Statistics Service (NASS) estimated hazelnut production at 38,000 tons for the Oregon and Washington area. The majority of domestic inshell hazelnuts are marketed in October, November, and December. By November, the marketing season is well under way.

The quantity marketed is broken down into free and restricted percentages to make available hazelnuts which may be marketed in domestic inshell markets (free) and hazelnuts which must be exported, shelled or otherwise disposed of by handlers (restricted). The preliminary free percentage releases 80 percent of the adjusted inshell trade demand. The adjusted inshell trade demand used by the Board was the average of the past three years' sales (4,136 tons), plus an additional 10 percent for market development (414 tons), minus the declared carryin from last year's crop (110 tons).

The purpose of releasing only 80 percent of the inshell trade demand under the preliminary percentage is to guard against an underestimate of crop size. The preliminary free percentage is expressed as a percentage of the total supply subject to regulation (supply) and is based on the preliminary crop estimate.

Based on the NASS crop estimate of 38,000 tons, the Board computed and announced preliminary free and restricted percentages of 10 percent and 90 percent, respectively, at its August 31, 1999, meeting. This action initially released 3,552 tons of hazelnuts from the 1999 supply for domestic inshell use as the preliminary free percentage. The preliminary restricted percentage of the 1999 supply for export and kernel markets thus initially totaled 31,143 tons.

A special meeting of the Board was held on October 26, 1999, to increase the percentage of free product released for market development from 10 percent (414 tons) to 20 percent (827 tons) which is 120 percent of the three-year average trade acquisitions of inshell hazelnuts. The Board took this action because it determined that the demand for domestic inshell hazelnuts was greater than previously thought. Based upon the new adjusted trade demand of 4,854 tons, the Board computed revised preliminary free and restricted percentages of 11 percent and 89 percent, respectively. This revised preliminary free percentage (11 percent) released 3,883 tons of hazelnuts from the 1999 supply for domestic inshell use rather than the initially computed 3,552 tons. The revised preliminary restricted percentage (89 percent) of the 1999 supply for export and kernel markets thus totaled 30,720 tons, rather than 31,143 tons.

Under the order, the Board must meet on or before November 15 to recommend interim final and final percentages. The Board uses current crop estimates to calculate interim final and final percentages. The interim final percentages are calculated in the same way as the preliminary percentages and release the remaining 20 percent (to total 100 percent of the inshell trade demand) previously computed by the Board. Final free and restricted percentages may release up to an additional 15 percent of the average of the preceding three years' trade acquisitions to provide an adequate carryover into the following season ( i.e., desirable carryout). The order requires that the final free and restricted percentages shall be effective 30 days prior to the end of the marketing year, or earlier, if recommended by the Board and approved by the Secretary. Revisions in the marketing policy can be made until February 15 of each marketing year, but the inshell trade demand can only be revised upward, consistent with § 982.40(e).

The Board met on November 15, 1999, and reviewed and approved an amended marketing policy and recommended the establishment of interim final and final free and restricted percentages. The interim final free and restricted percentages were recommended at 15 percent free and 85 percent restricted. Final percentages, which included an additional 15 percent of the average of the preceding three-years' trade acquisitions for desirable carryout, were recommended at 16 percent free and 84 percent restricted effective March 1, 2000. The final percentages release 5,474 tons of inshell hazelnuts from the 1999 supply for domestic use.

The final marketing percentages are based on the Board's final production estimate (36,548 tons) and the following supply and demand information for the 1999-2000 marketing year:

In addition to complying with the provisions of the order, the Board also considered the Department's 1982 “Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders” (Guidelines) when making its computations in the marketing policy. This volume control regulation provides a method to collectively limit the supply of inshell hazelnuts available for sale in domestic markets. The Guidelines provide that the domestic inshell market has available a quantity equal to 110 percent of prior years' shipments before secondary market allocations are approved. This provides for plentiful supplies for consumers and for market expansion, while retaining the mechanism for dealing with oversupply situations. At its October 26 and November 15, 1999, meetings the Board recommended that an increase of 20 percent (827 tons) for market expansion be included in the inshell trade demand which was used to compute the interim percentages. The established final percentages are based on the final inshell trade demand, and made available an additional 620 tons for desirable carryout effective March 1, 2000. The total free supply for the 1999-2000 marketing year is 4,756 tons of hazelnuts, which is the final trade demand of 4,136 tons plus the 620 tons for desirable carryout. This amount is 135 percent of prior years' sales and exceeds the goal of the Guidelines.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, the AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are approximately 800 producers of hazelnuts in the production area and approximately 22 handlers subject to regulation under the order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $500,000, and small agricultural service firms are defined as those having annual receipts of less than $5,000,000. Using these criteria, virtually all of the producers are small agricultural producers and an estimated 19 of the 22 handlers are small agricultural service firms. In view of the foregoing, it can be concluded that the majority of hazelnut producers and handlers may be classified as small entities, excluding receipts from other sources.

Board meetings are widely publicized in advance of the meetings and are held in a location central to the production area. The meetings are open to all industry members and other interested persons who are encouraged to participate in the deliberations and voice their opinions on topics under discussion. Thus, Board recommendations can be considered to represent the interests of small business entities in the industry.

Many years of marketing experience led to the development of the current volume control procedures. These procedures have helped the industry solve its marketing problems by keeping inshell supplies in balance with domestic needs. The current volume control procedures fully supply the domestic inshell market while preventing oversupplies in that market.

Inshell hazelnuts sold to the domestic market provide higher returns to the industry than are obtained from shelling. The inshell market is inelastic and is characterized as having limited demand and being prone to oversupply.

Industry statistics show that total hazelnut production has varied widely over the last 10 years, from a low of 13,000 tons in 1989 to a high of 47,000 tons in 1997. Average production has been around 27,000 tons. While crop size has fluctuated, the volume regulations contribute toward orderly marketing and market stability, and help moderate the variation in returns for all producers and handlers, both large and small. For instance, production in the shortest crop year (1989) was 48 percent of the 10-year average (1989-1998). Production in the biggest crop year (1997) was 173 percent of the 10-year average. The percentage releases provide all handlers with the opportunity to benefit from the most profitable domestic inshell market. That market is available to all handlers, regardless of handler size.

NASS statistics show that the producer price per pound has increased over the last 5 years, from $.32 in 1993 to $.49 in 1998.

The Board discussed not regulating. However, without any regulations in effect, the Board believes that the industry would oversupply the inshell domestic market.

While the level of benefits of this rulemaking is difficult to quantify, the stabilizing effects of the volume regulations impact both small and large handlers positively by helping them maintain and expand markets even though hazelnut supplies fluctuate widely from season to season.

Hazelnuts produced under the order comprise virtually all of the hazelnuts produced in the United States. This production represents, on average, less than 5 percent of total U.S. tree nut production, and less than 5 percent of the world's hazelnut production.

This volume control regulation provides a method for the U.S. hazelnut industry to limit the supply of domestic inshell hazelnuts available for sale in the United States. Section 982.40 of the order establishes a procedure and computations for the Board to follow in recommending to the Secretary release of preliminary, interim final, and final quantities of hazelnuts to be released to the free and restricted markets each marketing year. The program results in plentiful supplies for consumers and for market expansion while retaining the mechanism for dealing with oversupply situations.

Currently, U.S. hazelnut production can be successfully allocated between the inshell domestic and secondary markets. One of the best secondary markets for hazelnuts is the export market. Inshell hazelnuts produced under the marketing order compete well in export markets because of quality. Europe, and Germany in particular, is historically the primary world market for U.S. produced inshell hazelnuts. A third market is for shelled hazelnuts (kernels) sold domestically. Domestically produced kernels generally command a higher price in the domestic market than imported kernels. The industry is continuing its efforts to develop and expand secondary markets, especially the domestic kernel market. Small business entities, both producers and handlers, benefit from the expansion efforts resulting from this program.

There are some reporting, recordkeeping, and other compliance requirements under the order. The reporting and recordkeeping burdens are necessary for compliance purposes and for developing statistical data for maintenance of the program. The information collection requirements have been previously approved by the Office of Management and Budget under OMB No. 0581-0178. The forms require information which is readily available from handler records and which can be provided without data processing equipment or trained statistical staff. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce or eliminate duplicate information collection burdens by industry and public sector agencies. This final rule does not change those requirements. In addition, as noted in the initial regulatory flexibility analysis, the Department has not identified any relevant Federal rules that duplicate, overlap or conflict with this regulation.

Further, the Board's meetings were widely publicized throughout the hazelnut industry and all interested persons were invited to attend the meetings and encouraged to participate in Board deliberations. Like all Board meetings, those held on August 31, October 26, and November 15, 1999, were open to the public and all entities, both large and small, were able to express their views on this issue. The Board itself is composed of 10 members, of which 4 are handlers, 5 are producers, and one is a public member. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

An interim final rule concerning this action was published in the Federal Register on January 19, 2000. Copies of the rule were mailed by the Board's staff to all Board members and hazelnut handlers. In addition, the rule was made available through the Internet by the Office of the Federal Register. That rule provided for a 60-day comment period which ended March 20, 2000. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the Board's recommendation, and other information, it is found that finalizing the interim final rule, without change, as published in the Federal Register (65 FR 2841, January 19, 2000), will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found that good cause exists for not postponing the effective date of this action until 30 days after publication in the Federal Register because: (1) The percentages continued herein apply to all merchantable hazelnuts handled during the 1999-2000 marketing year; (2) the 1999-2000 marketing year ends June 30, 2000; and (3) handlers are aware of this action and are prepared to comply with the marketing percentages.

This rule is issued under Marketing Order No. 985, as amended (7 CFR part 985), regulating the handling of spearmint oil produced in the Far West (Washington, Idaho, Oregon, and designated parts of Nevada and Utah), hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Far West spearmint oil handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable spearmint oil beginning June 1, 2000, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file 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 law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the 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 his or her principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule continues to decrease the assessment rate established for the Committee for the 2000-2001 and subsequent marketing years from $0.10 per pound to $0.09 per pound of spearmint oil handled.

The spearmint oil order provides authority for the Committee, with the approval of the Department, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers of spearmint oil. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 1995-1996 and subsequent marketing years, the Committee recommended, and the Department approved, an assessment rate that would continue in effect from marketing year to marketing year unless modified, suspended, or terminated by the Secretary upon recommendation and information submitted by the Committee or other information available to the Secretary.

The Committee met on February 23, 2000, and unanimously recommended 2000-2001 expenditures of $212,900 and an assessment rate of $0.09 per pound of spearmint oil handled. In comparison, last year's budgeted expenditures were $219,028. The assessment rate of $0.09 is $0.01 lower than the rate in effect prior to this action. The Committee discussed assessment rates both lower and greater than $0.09 per pound. However, the Committee decided that an assessment rate of less than $0.09 would not generate the income necessary to administer the program with an adequate reserve. The Committee recommended the decreased assessment rate to help offset the negative effects the current depressed spearmint oil market is having on the industry.

Expenditures recommended by the Committee for the 2000-2001 marketing year include $178,500 for Committee expenses and $34,400 for administrative expenses. For 2000-2001, a total of $156,000 is budgeted for agency fees, $21,000 is budgeted for Committee per diem and travel, $16,500 is budgeted for agency staff travel, and $10,700 is budgeted for copying, mail handling, postage, telephone and fax, cellular phone charges, officer liability insurance, and auditing. Actual expenses for these items in 1999-2000 are estimated to total $165,000, $22,133, $16,843, and $10,900. For 2000-2001, funds also are budgeted for market development ($5,000) and for compliance ($1,000). Expenditures for these items in 1999-2000 are expected to total $5,000.

The Committee estimates that spearmint oil sales for the 2000-2001 marketing year will be approximately 2,058,474 pounds, which should provide $185,263 in assessment income. This assessment income, when combined with $13,029 from the monetary reserve, $3,500 in interest income, and $11,108 from the sale of certain assets should be adequate to meet this year's expenses of $212,900. The Committee estimates that its monetary reserve will be approximately $156,757 at the beginning of the 2000-2001 marketing year. It is not anticipated that the reserve fund will exceed the maximum permitted by the order of approximately one marketing year's operational expense (§ 985.42).

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by the Secretary upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate is effective for an indefinite period, the Committee will continue to meet prior to or during each marketing year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or the Department. Committee meetings are open to the public and interested persons may express their views at these meetings. The Department will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, the AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are 7 spearmint oil handlers subject to regulation under the marketing order and approximately 119 producers of Scotch spearmint oil and 105 producers of Native spearmint oil in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those whose annual receipts are less than $500,000.

Based on the SBA's definition of small entities, the Committee estimates that 2 of the 7 handlers regulated by the order could be considered small entities. Most of the handlers are large corporations involved in the international trading of essential oils and the products of essential oils. In addition, the Committee estimates that 25 of the 119 Scotch spearmint oil producers and 7 of the 105 Native spearmint oil producers would be classified as small entities under the SBA definition. Thus, a majority of handlers and producers of Far West spearmint oil may not be classified as small entities.

This rule continues to decrease the assessment rate established for the Committee and collected from handlers for the 2000-2001 and subsequent marketing years from $0.10 per pound to $0.09 per pound of spearmint oil handled. The Committee estimates that spearmint oil sales will total 2,058,474 pounds in the 2000-2001 marketing year. The $0.09 per pound assessment rate should provide an estimated income of $185,263, which, when combined with $13,029 from the monetary reserve, $3,500 in interest income, and $11,108 from the sale of certain assets should be adequate to meet this year's expenses of $212,900. The Committee estimates that its monetary reserve will be approximately $156,757 at the beginning of the 2000-2001 marketing year and that the fund will not exceed the maximum permitted by the order of approximately one marketing year's operational expense (§ 985.42).

The Committee reviewed and unanimously recommended 2000-2001 expenditures of $212,900 which is $6,128 less than approved for last year. Prior to arriving at this budget, the Committee considered information from various sources, including the Committee's Executive Committee and the current marketing year's actual and anticipated expenditures. Alternative expenditure levels and assessment rates were discussed by the Committee officers prior to presentation to the full Committee for approval. The Committee decided that an assessment rate of less than $0.09 would not generate the income necessary to administer the program with an adequate reserve. The Committee recommended the decreased assessment rate to help offset the negative effects the current depressed spearmint oil market is having on the industry.

Expenditures recommended by the Committee for the 2000-2001 marketing year include $178,500 for Committee expenses and $34,400 for administrative expenses. For 2000-2001, a total of $156,000 is budgeted for agency fees, $21,000 is budgeted for Committee per diem and travel, $16,500 is budgeted for agency staff travel, and $10,700 is budgeted for copying, mail handling, postage, telephone and fax, cellular phone charges, officer liability insurance, and auditing. Actual expenses for these items in 1999-2000 are estimated to total $165,000, $22,133, $16,843, and $10,900. For 2000-2001, funds also are budgeted for market development ($5,000) and for compliance ($1,000). Expenditures for these items in 1999-2000 are expected to total $5,000.

Based on 1999 prices, the average price paid to producers for both Scotch and Native spearmint oils during the 2000-2001 marketing year could be about $9.80 per pound. Therefore, the estimated assessment revenue for the 2000-2001 marketing year as a percentage of total producer revenue could be about 0.92 percent.

This action continues to decrease the assessment obligation imposed on handlers. While this rule will impose some additional costs on handlers, the costs are minimal and in the form of uniform assessments on all handlers. Some of the additional costs may be passed on to producers. However, these costs will be offset by the benefits derived by the operation of the order. In addition, the Committee's meeting was widely publicized throughout the Far West spearmint oil industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the February 23, 2000, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

This action imposes no additional reporting or recordkeeping requirements on either small or large spearmint oil handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

An interim final rule concerning this action was published in the Federal Register on April 5, 2000 (65 FR 17756). A copy of the rule was mailed to the Committee office, which in turn provided copies for Committee members and industry members. Further, the interim final rule was made available on the Internet by the Office of the Federal Register. A 30-day comment period was provided for interested persons to respond to the interim final rule. The comment period ended on May 5, 2000, and no comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

This rule is issued under Marketing Agreement and Order No. 989 (7 CFR part 989), both as amended, regulating the handling of raisins produced from grapes grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order provisions now in effect, final free and reserve percentages may be established for raisins acquired by handlers during the crop year. This rule continues in effect final free and reserve percentages for Naturals and Zantes for the 1999-2000 crop year, which began August 1, 1999, and ends July 31, 2000. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file 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 law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the 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 his or her principal place of business, has jurisdiction in equity to review the Secretary's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule continues in effect final volume regulation percentages for 1999-2000 crop Naturals and Zantes covered under the order. The volume regulation percentages are 85 percent free and 15 percent reserve for Naturals and 51 percent free and 49 percent reserve for Zantes. Free tonnage raisins may be sold by handlers to any market. Reserve raisins must be held in a pool for the account of the Committee and are disposed of through various programs authorized under the order. For example, reserve raisins may be sold by the Committee to handlers for free use or to replace part of the free tonnage raisins they exported; used in diversion programs; carried over as a hedge against a short crop the following year; or disposed of in other outlets not competitive with those for free tonnage raisins, such as government purchase, distilleries, or animal feed.

The volume regulation percentages are intended to help stabilize raisin supplies and prices, and strengthen market conditions. Final percentages for Zantes were recommended by the Committee on January 13, 2000, and for Naturals on February 11, 2000.

Section 989.54 of the order prescribes the procedures and time frames to be followed in establishing volume regulation. This includes methodology used to calculate percentages. Pursuant to § 989.54(a) of the order, the Committee met on August 12, 1999, to review shipment and inventory data, and other matters relating to the supplies of raisins of all varietal types. The Committee computed a trade demand for each varietal type for which a free tonnage percentage might be recommended. Trade demand is computed using a formula specified in the order and, for each varietal type, is equal to 90 percent of the prior year's shipments of free tonnage and reserve tonnage raisins sold for free use into all market outlets, adjusted by subtracting the carryin on August 1 of the current crop year and by adding the desirable carryout at the end of that crop year. As specified in § 989.154(a), the desirable carryout for each varietal type is equal to the shipments of free tonnage raisins of the prior crop year during the months of August, September, and one-half of October. In accordance with these provisions, the Committee computed and announced 1999-2000 trade demands for Naturals and Zantes at 254,475 and 1,855 tons, respectively, as shown below.

As required under § 989.54(b) of the order, the Committee met on October 1, 1999, and announced a preliminary crop estimate of 294,519 tons for Naturals. This estimate was almost 15 percent lower than the 10-year average of 346,325 tons. Naturals are the major varietal type of California raisins. Combining the carryin inventory of 101,946 tons with the 294,519-ton crop estimate resulted in a total available supply of 396,465 tons, which was much higher than the 254,475-ton trade demand. Thus, the Committee determined that volume regulation for Naturals was warranted. The Committee announced preliminary free and reserve percentages for Naturals which released 65 percent of the computed trade demand since the field price had not yet been established. The preliminary percentages were 56 percent free and 44 percent reserve. The Committee authorized its staff to modify the preliminary percentages to release 85 percent of the trade demand once the field price was established. The field price was established on October 22, 1999, and the preliminary percentages were thus modified to 73 percent free and 27 percent reserve.

Also at its October 1, 1999, meeting, the Committee announced a preliminary crop estimate for Zantes at 4,187 tons, which is comparable to the 10-year average of 4,463 tons. Combining the carryin inventory of 1,906 tons with the 4,187-ton crop estimate resulted in a total available supply of 6,093 tons, which is significantly greater the 1,855-ton trade demand. Thus, the Committee determined that volume regulation for Zantes was warranted. The Committee announced preliminary free and reserve percentages for Zantes which released 65 percent of the computed trade demand since field price had not yet been established. The preliminary percentages were 29 percent free and 71 percent reserve. Like Naturals, the Committee authorized its staff to modify the preliminary percentages to release 85 percent of the trade demand once the field price was established. The field price was established on October 12, 1999, and the preliminary percentages were thus modified to 38 percent free and 62 percent reserve. As in past seasons, the Committee submitted its marketing policy to the Department for review. In addition, the Committee determined that volume regulation was not warranted for the other varietal types of raisins covered under the order.

Pursuant to 989.54(c) and (d) of the order, the Committee met on January 12, 2000, and announced interim percentages for Zantes at 50.75 percent free and 49.25 percent reserve. These interim percentages were based on a revised Zante crop estimate of 3,650 tons. At that meeting, the Committee also computed final percentages for Zantes which, when applied to the final 3,650-ton crop estimate, tend to release the full Zante trade demand. Final percentages compute to 51 percent free and 49 percent reserve.

The Committee met on February 11, 2000, and announced interim percentages for Naturals at 84.75 percent free and 15.25 percent reserve. These interim percentages were based on a revised crop estimate of 298,477 tons. The Committee also computed final percentages for Naturals which, when applied to the final 298,477-ton crop estimate, tend to release the full trade demand. Final percentages compute to 85 percent free and 15 percent reserve. The Committee's calculations to arrive at final percentages for Naturals and Zantes are shown in the table below.

In addition, the Department's “Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders” (Guidelines) specify that 110 percent of recent years' sales should be made available to primary markets each season for marketing orders utilizing reserve pool authority. This goal was met for Naturals and Zantes by the establishment of final percentages that released 100 percent of the trade demand and the offer of additional reserve raisins for sale to handlers under the “10 plus 10 offers.” As specified in § 989.54(g), the 10 plus 10 offers are two offers of reserve pool raisins that are made available to handlers during each season. For each such offer, a quantity of reserve raisins equal to 10 percent of the prior year's shipments is made available for free use. Handlers may sell their 10 plus 10 raisins to any market.

For Naturals, both 10 plus 10 offers were held in May 2000 where a total of about 44,000 tons of raisins were made available to handlers. This quantity is less than the amount specified in the order. As previously stated, the Committee utilized 1996-97 shipments of 314,013 tons as a base to compute trade demand because 1998-99 shipments were limited. Similarly, as specified in § 989.54(g), 1996-97 shipments were used as a base to compute the amount of tonnage to be made available in the 10 plus 10 offers. Thus, 31,402 tons should have been made available in each of the 10 plus 10 offers (62,804 tons total). However, this amount was not available in the reserve. Thus, all of the reserve pool raisins were made available to handlers for free use through the 10 plus 10 offers. A total of 265 tons of reserve Naturals were purchased in the offers.

Adding the 265 tons of 10 plus 10 raisins to the 254,475-ton trade demand figure, plus 101,946 tons of 1998-99 carryin inventory equates to about 356,686 tons natural condition raisins, or 334,835 tons packed raisins, made available for free use, or to the primary market thus far this season. This is 121 percent of the quantity of Naturals shipped during the 1998-99 crop year (295,401 natural condition tons or 277,305 packed tons).

For Zantes, both Zante 10 plus 10 offers were made available simultaneously in early February 2000 and 708 tons of raisins were purchased by handlers. Adding the 708 tons of 10 plus 10 raisins to the 1,855 ton trade demand figure, plus 1,906 tons of 1998-99 carryin inventory equates to 4,469 tons natural condition raisins, or about 3,985 tons packed raisins, made available for free use, or to the primary market. This is 126 percent of the quantity of Zantes shipped during the 1998-99 crop year (3,542 natural condition tons or 3,158 packed tons).

In addition to the 10 plus 10 offers, § 989.67(j) of the order provides authority for sales of reserve raisins to handlers under certain conditions such as a national emergency, crop failure, change in economic or marketing conditions, or if free tonnage shipments in the current crop year exceed shipments of a comparable period of the prior crop year. Such reserve raisins may be sold by handlers to any market. When implemented, these additional offers of reserve raisins make even more raisins available to primary markets, which is consistent with the Department's Guidelines.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are approximately 20 handlers of California raisins who are subject to regulation under the order and approximately 4,500 raisin producers in the regulated area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $500,000. Thirteen of the 20 handlers subject to regulation have annual sales estimated to be at least $5,000,000, and the remaining 7 handlers have sales less than $5,000,000, excluding receipts from any other sources. No more than 7 handlers, and a majority of producers, of California raisins may be classified as small entities, excluding receipts from other sources.

Pursuant to § 989.54(d) of the order, this rule continues in effect final volume regulation percentages for 1999-2000 crop Natural and Zante raisins. The volume regulation percentages are 85 percent free and 15 percent reserve for Naturals and 51 percent free and 49 percent reserve for Zantes. Free tonnage raisins may be sold by handlers to any market. Reserve raisins must be held in a pool for the account of the Committee and are disposed of through certain programs authorized under the order.

Volume regulation is warranted this season for Naturals because the final crop estimate of 298,477 tons combined with the carryin inventory of 101,946 tons results in a total available supply of 400,423 tons, which is about 57 percent higher than the 254,475-ton trade demand. Volume regulation is warranted for Zantes this season because the crop estimate of 3,650 tons combined with the carryin inventory of 1,906 tons results in a total available supply of 5,556 tons which is about 200 percent higher than the 1,855-ton trade demand. The volume regulation percentages are intended to help stabilize raisin supplies and prices, and strengthen market conditions.

Many years of marketing experience led to the development of the current volume regulation procedures. These procedures have helped the industry address its marketing problems by keeping supplies in balance with domestic and export market needs, and strengthening market conditions. The current volume regulation procedures fully supply the domestic and export markets, provide for market expansion, and help prevent oversupplies in the domestic market.

Raisin-variety grapes can be marketed as fresh grapes, crushed for use in the production of wine or juice concentrate, or dried into raisins. Annual fluctuations in the fresh grape, wine, and concentrate markets, as well as weather-related factors, cause fluctuations in raisin supply. These supply fluctuations can cause producer price instability and disorderly market conditions. Volume regulation is helpful to the raisin industry because it lessens the impact of such fluctuations and contributes to orderly marketing. For example, excluding the 1997-98 season for which complete data is not yet available, producer prices for Naturals have remained fairly steady between the 1992-93 through the 1998-99 seasons, although production has varied. As shown in the table below, production has varied from a low of 240,469 tons in 1998-99 to a high of 387,007 tons in 1993-94, or 61 percent. According to Committee data, during years of Natural volume regulation, the total producer return per ton, which includes proceeds from both free tonnage plus reserve pool raisins, has varied from a low of $901 in 1992-93 to a high of $1,049 in 1996-97, or 16 percent.

In addition, the Committee is implementing an export program for Naturals. Through this program, the Committee hopes to export more Naturals thereby helping to build and maintain export markets, and ultimately improve producer returns. Volume regulation helps the industry not only to manage its supply of raisins, but also maintain market stability.

Regarding Zantes, Zante production is much smaller than that of Naturals. Volume regulation has been implemented for Zantes during the 1994-95, 1995-96, 1997-98, and 1998-99 seasons. Various programs to utilize reserve Zantes were implemented when volume regulation was in effect during those seasons. As shown in the table following this paragraph, although production varied during those years, volume regulation helped to reduce inventories, and helped to strengthen total producer prices (free tonnage plus reserve Zantes) from $412.56 per ton in 1994-95 to an estimated high of $730 per ton in 1997-98. The Committee is implementing an export program for Zantes, in addition to Naturals. Through this program, the Committee hopes to export more Zantes, thereby continuing to reduce the industry's oversupply, helping to build export markets, and ultimately improve producer returns. Volume regulation helps the industry not only to manage oversupplies of raisins, but also maintain market stability.

Free and reserve percentages are established by variety, and usually in years when the supply exceeds the trade demand by a large enough margin that the Committee believes volume regulation is necessary to maintain market stability. However, volume regulation may also be utilized in short crop years so that the industry may utilize its export program as described to maintain its export markets and provide stability in the domestic market. Accordingly, in assessing whether to apply volume regulation or, as an alternative, not to apply such regulation, the Committee recommended only two of the nine raisin varieties defined under the order for volume regulation this season.

The free and reserve percentages release the full trade demands and apply uniformly to all handlers in the industry, regardless of size. For Naturals, with the exception of the 1998-99 crop year, small and large raisin producers and handlers have been operating under volume regulation percentages every year since 1983-84. There are no known additional costs incurred by small handlers that are not incurred by large handlers. All handlers are regulated based on the quantity of raisins that they acquire from producers. While the level of benefits of this rulemaking are difficult to quantify, the stabilizing effects of the volume regulations impact both small and large handlers positively by helping them maintain and expand markets even though raisin supplies fluctuate widely from season to season. Likewise, price stability positively impacts small and large producers by allowing them to better anticipate the revenues their raisins will generate.

There are some reporting, recordkeeping and other compliance requirements under the order. The reporting and recordkeeping burdens are necessary for compliance purposes and for developing statistical data for maintenance of the program. The requirements are the same as those applied in past seasons. Thus, this action will not impose any additional reporting or recordkeeping burdens on either small or large handlers. The forms require information that is readily available from handler records and which can be provided without data processing equipment or trained statistical staff. The information collection and recordkeeping requirements have been previously approved by the Office of Management and Budget (OMB) under OMB Control No. 0581-0178. As with other, similar marketing order programs, reports and forms are periodically studied to reduce or eliminate duplicate information collection burdens by industry and public sector agencies. In addition, the Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

Further, Committee and subcommittee meetings are widely publicized in advance and are held in a location central to the production area. The meetings are open to all industry members, including small business entities, and other interested persons who are encouraged to participate in the deliberations and voice their opinions on topics under discussion.

An interim final rule concerning this action was published in the Federal Register on April 10, 2000 (65 FR 18871). Copies of the rule were mailed by the Committee staff to all Committee members and alternates, the Raisin Bargaining Association, handlers, and dehydrators. In addition, the rule was made available through the Internet by the Office of the Federal Register. That rule provided for a 60-day comment period, which ended June 9, 2000. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab/html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the Committee's recommendation, and other information, it is found that this final rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Under the Federal Home Loan Bank Act (Bank Act), the Finance Board is responsible for the supervision and regulation of the 12 Federal Home Loan Banks (Banks), which provide advances and other financial services to their member institutions. See 12 U.S.C. 1422a(a) (1994). Institutions, including those not meeting the Qualified Thrift Leader (QTL) test, may become members of a Bank if they meet certain membership eligibility and minimum stock purchase criteria set forth in the Bank Act and the Finance Board's implementing Membership Regulation. See id. secs. 1424, 1426, 1430(e)(3) (1994); 12 CFR part 925. 1 Members may obtain advances from a Bank subject to certain statutory and regulatory requirements. See 12 U.S.C. 1430(a) (1994). Prior to recent amendments to the Bank Act, discussed further below, access to advances by non-QTL members was restricted in various ways. See id. sec. 1430(e).

The recently enacted Modernization Act  2 amended certain membership eligibility provisions, and repealed certain stock purchase and non-QTL advances provisions, in the Bank Act. See Pub. L. No. 106-102, secs. 602, 603, 604(c), (d)(1), 605, 608 (1999). Accordingly, the Finance Board adopted the Interim Final Rule, which amended its regulations to conform them to the Modernization Act amendments. See 65 FR 13866 (March 15, 2000). The Finance Board also took the opportunity in the Interim Final Rule to make certain technical revisions to the Membership Regulation that are not related to the Modernization Act, in order to clarify the treatment of de novo members that fail to meet the 10 percent residential mortgage loans requirement within the required one-year time frame. See id.

The Interim Final Rule provided for a 30-day public comment period, which closed on April 14, 2000. The Finance Board received a total of 7 comment letters on the Interim Final Rule. Commenters included 4 Banks and three financial institutions trade associations. Commenters generally focused their comments on how the three-year average total assets number for community financial institutions (CFIs) should be calculated. These comments are discussed below.

Section 4(a)(2)(A) of the Bank Act formerly provided that an insured depository institution may become a member of a Bank only if it has at least 10 percent of its total assets in residential mortgage loans (10 percent requirement). See 12 U.S.C. 1424(a)(2)(A) (1994). Section 4(a)(2) also provided that an insured depository institution commencing business operations after January 1, 1989 ( de novo institution), may become a member of a Bank if at least 10 percent of its total assets are in residential mortgage loans, within one year after the commencement of its operations. See id. sec. 1424(a)(2). Section 4(a)(2) is implemented by §§ 925.6(b), 925.10 and 925.14(a)(3) of the Finance Board's Membership Regulation. See 12 CFR 925.6(b), 925.10, 925.14(a)(3).

The Modernization Act amended section 4(a)(2) of the Bank Act to exempt from the 10 percent requirement any applicants, including de novo institutions, that qualify as “community financial institutions” See Modernization Act, sec. 605 ( to be codified at 12 U.S.C. 1424(a)(2)(A)(4)). The Modernization Act defines a “community financial institution” to mean an institution whose deposits are insured under the Federal Deposit Insurance Act (FDIA) and that has, as of the date of the transaction at issue, less than $500 million in average total assets, based on an average of total assets over the three years preceding that date. See id. sec. 602 ( to be codified at 12 U.S.C. 1422(13)). Accordingly, the Interim Final Rule amended §§ 925.6(b), 925.10 and 925.14(a)(3) of the Membership Regulation to include an exemption from the 10 percent requirement for CFIs, and added a definition of “community financial institution” in new § 925.1(ff) that mirrored the statutory definition. A definition of “community financial institution” that predates the Modernization Act, in § 925.1(n)(1)(iii), also was removed. The Finance Board requested comments in the Interim Final Rule on what source of data should be used in calculating the average of total assets over the three preceding years.

The issue of how to calculate an institution's average total assets over the three preceding years also arises in the context of the new authority under the Modernization Act allowing CFI members to pledge secured loans for small business or agriculture, or securities representing a whole interest in such secured loans, as security for advances. See Modernization Act, section 604(a)(5)(C). The Finance Board recently issued a proposed rule to implement this new advances collateral authority (Advances Collateral Rule). See 65 FR 26518 (May 8, 2000). A number of commenters on the Interim Final Rule recommended that the Banks be allowed to calculate average total assets of all of their member institutions on an annual basis, based on calendar year-end financial data available from the institutions' regulatory financial reports filed with their regulators or, in the alternative, based on data available from the institutions' quarterly regulatory financial reports for the preceding three years. Commenters stated that it would be confusing to determine CFI status on a quarterly or monthly basis when § 925.22(b)(1) of the Membership Regulation requires the Banks to calculate annually each member's minimum capital stock requirement using calendar year-end financial data. Commenters stated that calculation of CFI status on a quarterly or monthly basis would result in unnecessary administrative burdens and expense. Other commenters supported quarterly calculations of average total assets based on the institutions' quarterly regulatory financial reports over the three preceding years. Commenters also stated that calculation of CFI status on a quarterly or monthly basis would cause some members' CFI status to fluctuate more frequently, which, for members approaching the CFI asset cap, could have a chilling effect on their reliance on Bank funding secured by CFI-eligible collateral.

For membership eligibility purposes, the determination of whether an institution applying for Bank membership is a CFI and, therefore, exempt from the 10 percent requirement, is only required to be made by the Bank one time, during the membership application evaluation process. Therefore, the comments regarding the administrative burden and cost of performing more frequent periodic calculations, coordinating with the annual stock purchase calculation, and the effect on use of Bank funding, are inapposite for membership eligibility purposes. Rather, these comments appear to be directed at how CFI status should be calculated for purposes of allowing CFI members to use the expanded collateral authority under the Modernization Act. These comments, and the definition of CFI for advances collateral purposes, are more appropriately addressed in the Finance Board's final Advances Collateral Rule.

Under the Membership Regulation, the calculation of the 10 percent requirement is based on the applicant's total assets and residential mortgage loans drawn from its most recent quarterly regulatory financial report filed with its appropriate regulator. See 12 CFR 925.10. Since the calculation of average total assets to determine CFI status is necessary in order to determine whether the 10 percent requirement applies, it would be consistent with the current membership application review process at the Banks to use the same total assets data from the applicant's most recent quarterly regulatory financial report for the CFI calculation. In addition, since an average of total assets over three years is required for the CFI calculation, it also would be reasonable to include in the calculation the total assets data from the quarterly regulatory financial reports filed with the applicant's appropriate regulator for the immediately preceding 11 calendar quarters.

Because the calculation of the three-year total assets average affects the determination of CFI status for both membership and advances purposes, the definition of CFI belongs in § 900.1, which contains general definitions applying to all Finance Board regulations. Accordingly, this final rule removes the definitions of “community financial institution” and “community financial institution asset cap” (§ 925.1(ff) and (gg)) from the Membership Regulation. The final Advances Collecteral Rule will add the calculation for membership purposes as described above, as well a the calculation for advances purposes, to a definition of “community financial institution” in § 900.1. The final Advances Collateral Rule also will add the definition of “community financial institution asset cap” to § 900.1.

The final rule makes technical revisions to the language on readmission to membership in § 925.30 of the Interim Final Rule for greater clarity.

Because no notice of proposed rulemaking is required for this final rule, the provisions of the Regulatory Flexibility Act, U.S.C. 601 et seq. , do not apply.

For the reasons stated in the Interim Final Rule, the Finance Board adopted the Interim Final Rule on an expedited basis to conform provisions of its regulations to the recently enacted statutory amendments to the Bank Act. Due to the expedited nature of this rulemaking, the Finance Board has not completed its analysis of the information collection requirements contained in the final rule. The amendments in the final rule may result in a reduction in the information collection burden for institutions that qualify as community financial institutions, and an increase in the number of respondents that apply for Bank membership. The Finance Board intends to submit to the Office of Management and Budget the information collection requirements contained in this final rule in accordance with the requirements of section 3507(d) of the Paperwork Reudction Act of 1995, 44 U.S.C. 3507(d).

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) applicable to Allison Engine Company, Inc. AE 3007A and AE 3007C series turbofan engines was published in the Federal Register on August 5, 1999 (64 FR 42622). That action proposed to require the removal of certain turbine wheels from service before exceeding new, reduced cyclic life limits listed in Rolls-Royce Alert Service Bulletin (ASB) AE 3007A-A-72-105/AE 3007C-A-72-105, dated January 29, 1999.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

One commenter supports the proposed rule as written.

One commenter requests the addition of part numbers (P/N) to the compliance section. The commenter states that the way the NPRM is written, paragraphs (a)(2) and (b)(2) could be interpreted to mean that all stage 1 and stage 2 turbine wheels, respectively, should have lower lives. In fact, the life reduction is limited to a few part numbers. The addition of the affected part numbers would prevent confusion.

The FAA agrees. To eliminate confusion, paragraph (a)(2) of the compliance section of the final rule has been revised to specify P/Ns 23065891 and 23062373. Paragraph (b)(2) of the compliance section of the final rule has been revised to specify P/Ns 23065892 and 23063462.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the changes described previously. The FAA has determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 325 engines of the affected design in the worldwide fleet. The FAA estimates that 260 engines installed on aircraft of U.S. registry will be affected by this AD, that it will take approximately 63 work hours per engine to accomplish the required actions, and that the average labor rate is $60 per work hour. The estimated cost of the lost cycles due to the reduction of the engine cycle life limit is $57,800 per engine. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $15,028,000. The manufacturer of the affected turbine wheels has advised the FAA that it may defray the cost of the reduced life limits, thus reducing the overall cost to operators.

This rule does not have federalism implications, as defined in Executive Order 13132, because it does 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this rule.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) 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 final evaluation has been prepared for this action and is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

The Civil Aviation Authority (CAA), which is the airworthiness authority for the United Kingdom (U.K.), recently notified the FAA that an unsafe condition may exist on Rolls-Royce plc. (RR) RB211 Trent 768-60, Trent 772-60, and Trent 772B-60 turbofan engines with fan blade part numbers (P/N's) FK22580, FK23411, FK25441, and FK25968 installed. The CAA received a report of multiple fan blade root cracks in a factory engine. A recent inspection of a set of fan blades from a factory fleet leader test engine has identified small cracks in the blade roots on the convex root flank. To date, this is the only engine that has exhibited the blade root cracks. This condition, if not corrected, could result in possible multiple fan blade failures, which could result in an uncontained engine failure and damage to the airplane.

Rolls-Royce plc (RR) has issued service bulletin (SB) No. RB.211-72-C878, Revision 1, dated December 10, 1999, that specifies procedures for ultrasonic inspections for cracks in fan blade dovetail roots. The CAA classified this SB as mandatory and issued airworthiness directive (AD) 003-11-99 in order to assure the airworthiness of these engines in the U.K.

This AD applies only to those engines with fan blades having four specific part numbers. The manufacturer's service bulletin is not limited in that fashion. The FAA expects that future changes in the design of the affected fan blades will eliminate the need for the required inspections and that those newer fan blades will have different part numbers. The installation of the newer part number will therefore have the effect of removing the engine from the applicability of this AD.

This engine model is manufactured in the U.K. and is type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the CAA has kept the FAA informed of the situation described above. The FAA has examined the findings of the CAA, 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.

Although none of these affected engine models are used on any airplanes that are registered in the United States, the possibility exists that the engine models could be used on airplanes that are registered in the United States in the future. Because an unsafe condition has been identified that is likely to exist or develop on other RR RB211 Trent 768-60, Trent 772-60, and Trent 772B-60 series turbofan engines of the same type design, with fan blade P/N's FK22580, FK23411, FK25441, and FK25968 installed, this AD requires:

• Initial ultrasonic inspections within 200 cycles after the effective date of this AD, or within 200 cycles of achieving 2,800 cycles since new, whichever is later; and

• Repetitive ultrasonic inspection of the fan blade root within 340 cycles since the last inspection.

The actions are required to be completed in accordance with the service bulletin described previously.

Since there are currently no domestic operators of this engine model, notice and opportunity for prior public comment are unnecessary. Therefore, a situation exists that allows the immediate adoption of this regulation.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this 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 under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the 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 that summarizes each FAA-public contact concerned with the substance of this AD 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 2000-NE-05-AD.” The postcard will be date stamped and returned to the commenter.

This proposed rule does not have federalism implications, as defined in Executive Order 13132, because it 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this proposed rule.

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to all Airbus Model A330 and A340 series airplanes was published in the Federal Register on January 12, 2000 (65 FR 1833). That action proposed to require repetitive detailed visual and ultrasonic inspections of the main landing gear (MLG) to detect fatigue cracks, and repair if necessary; replacement of certain nose landing gear (NLG) handwheel controllers and certain placards with new placards; installation of steering angle recording software; corrective action for exceeding certain steering angles; and an AFM revision to limit the nose wheel steering angle for pushback and towing and to limit the nose wheel steering for powered turns.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comment received.

The commenter (an operator) requests that certain airplanes be excluded from the actions specified in the proposed AD. (Although the proposed rule identifies no affected U.S.-registered airplanes, the commenter has since taken delivery of several Model A330 series airplanes.) Subsequent to issuance of the proposed rule, the manufacturer developed the following production modifications for Model A330 and A340 series airplanes (all of which have been installed on the commenter's airplanes):

The FAA concurs with the request. The Direction Ge ne rale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, advises that the four production modifications are acceptable alternative means of compliance with all requirements of the parallel French airworthiness directives. Based on the data presented, the FAA has revised the applicability of the final rule to remove the inspection and modification requirements for airplanes on which all four of the referenced production modifications have been installed.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the change described previously. The FAA has determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

None of the airplanes affected by this action is on the U.S. Register. All airplanes included in the applicability of this rule currently are operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, the FAA considers that this rule is necessary to ensure that the unsafe condition is addressed in the event that any of these subject airplanes are imported and placed on the U.S. Register in the future.

Should an affected airplane be imported and placed on the U.S. Register in the future, it would require approximately 1 work hour to inspect the main landing gear; approximately 7 work hours to replace the controller; approximately 1 work hour to replace the placards; approximately 1 work hour to install the software program; and approximately 1 work hour to revise the AFM. The average labor rate is $60 per work hour. The manufacturer has previously committed to bearing the cost of the necessary parts to accomplish the actions. Based on these figures, the cost impact of the inspections required by this AD would be $60 per airplane, per inspection cycle, and $660 per airplane for the remaining actions.

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

Should an operator elect to modify the functional software of the brake steering and control unit (BSCU) rather than replace the nose wheel steering handwheel controllers, the modification would take approximately 1 work hour. Based on this figure, the cost impact of the optional modification would be $60 per airplane.

The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) 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 final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES .

On March 6, 2000, the FAA issued AD 2000-05-16, Amendment 39-11626 (65 FR 13877, March 15, 2000). That AD for Sikorsky Model S-61 helicopters with pylon, part number (P/N) S6120-76265-001 or S6120-76266-507, installed, requires inspecting and repairing or, if necessary, replacing certain web fittings and the fitting faying surfaces. The AD also requires making an entry on the log card or equivalent record. That action was prompted by the discovery of extensive cracking in the area of the web fitting. That condition, if not corrected, could result in structural failure of certain web fittings due to stress corrosion, subsequent structural failure of the tailboom and loss of control of the helicopter.

Since the issuance of that AD, an operator notified the FAA of an error. That error is the reference in paragraph (a)(3) of the AD to paragraph 3.E. of the Accomplishment Instructions of Sikorsky Aircraft Corporation Alert Service Bulletin No. 61B20-33, dated September 3, 1999 (ASB). Requiring paragraph 3.E. of the ASB in paragraph (a)(3) of the AD would inadvertently require conducting a major inspection within 25 hours TIS, which is not intended. The Inspection Plan in Chart A of the ASB refers to paragraph 3.E., which specifies a major recurring inspection at 9000 flight hours or 4 years, whichever is less. That inspection is appropriately covered under paragraph (a)(6) of the AD, which requires entering on the log card or equivalent record the recurring inspection intervals in accordance with Chart A of the ASB.

Since requiring the major inspection within 25 hours TIS is not required to correct the unsafe condition, this AD supersedes AD 2000-05-16. This AD would correct the requirement that inadvertently requires conducting the major inspection in 25 hours TIS by removing the words “and 3.E.” from paragraph (a)(3) of the AD. The short compliance time involved is required because the superseded AD is ambiguous and the previously described major inspection requiring unscheduled disassembly of the helicopter is impractical and unnecessary to maintain safety, and creates an undue burden on the public. Therefore, correcting paragraph (a)(3) by removing the words “and 3.E.” is required and this AD must be issued immediately.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

The FAA estimates that 125 helicopters will be affected by this AD, that it will take approximately 115 work hours to accomplish the inspection and replacement of parts, and that the average labor rate is $60 per work hour. Required parts will cost approximately $75,000 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $10,237,500 if the parts have to be replaced on the entire fleet.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this 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 under the caption ADDRESSES . All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the 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 that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2000-SW-18-AD.” The postcard will be date stamped and returned to the commenter.

The regulations adopted herein will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES .

The FAA has developed RNAV RWY 13 SIAP to serve the Oelwein Municipal Airport, Oelwein, IA. The amendment to Class E airspace at Oelwein, IA will provide additional controlled airspace at and above 700 feet AGL in order to contain the SIAP within controlled airspace, and thereby facilitate separation of aircraft operating under Instrument Flight Rules (IFR). The amendment at Oelwein Municipal Airport, IA, will provide additional controlled airspace for aircraft operating under IFR and revise the ARP. The area will be depicted on appropriate aeronautical charts. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9G, dated September 10, 1999, and effective September 16, 1999, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

The FAA anticipates that this regulation will not result in adverse or negative comment and, therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. The amendment will enhance safety for all flight operations by designating an area where VFR pilots may anticipate the presence of IFR aircraft at lower altitudes, especially during inclement weather conditions. A greater degree of safety is achieved by depicting the area on aeronautical charts. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Although this action is in the form of a final rule and was not preceded by a notice of proposed rulemaking, comments are invited on this rule. Interested persons are invited to comment on this 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 under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended or withdrawn in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of this action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy-related aspects of the rule that might suggest a need to modify the 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 that summarizes each FAA-public contact concerned with the substance of this action will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 00-ACE-12.“ The postcard will be date stamped and returned to the commenter.

The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (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.

The FAA has developed RNAV RWY 18 SIAP to serve the Fairfield Municipal Airport, Fairfield, IA. The amendment to Class E airspace at Fairfield, IA, will provide additional controlled airspace at and above 700 feet AGL in order to contain the SIAP within controlled airspace, and thereby facilitate separation of aircraft operating under Instrument Flight Rules (IFR). The amendment at Fairfield Municipal Airport, IA, will provide additional controlled airspace for aircraft operating under IFR and revise the ARP. The area will be depicted on appropriate aeronautical charts. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9G, dated September 10, 1999, and effective September 16, 1999, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

The FAA anticipates that this regulation will not result in adverse or negative comment and, therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. The amendment will enhance safety for all flight operations by designating an area where VFR pilots may anticipate the presence of IFR aircraft at lower altitudes, especially during inclement weather conditions. A greater degree of safety is achieved by depicting the area on aeronautical charts. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Although this action is in the form of a final rule and was not preceded by a notice of proposed rulemaking, comments are invited on this rule. Interested persons are invited to comment on this 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 under the caption ADDRESSES . All communications received on or before the closing date for comments will be considered, and this rule may be amended or withdrawn in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of this action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy-related aspects of the rule that might suggest a need to modify the 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 that summarizes each FAA-public contact concerned with the substance of this action will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 00-ACA-13.” The postcard will be date stamped and returned to the commenter.

The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The statements in the staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.

This document contains final regulations relating to the Income Tax Regulations (CFR part 1) under section 894 of the Internal Revenue Code (Code). On June 30, 1997, the IRS and Treasury issued temporary regulations (TD 8722 [1997-2 C.B. 81]) in the Federal Register (62 FR 35673, as corrected at 62 FR 46876, 46877) under section 894 of the Code relating to eligibility for benefits under income tax treaties for payments to entities. A notice of proposed rulemaking ([1997-2 C.B. 646]) cross-referencing the temporary regulations was also published in the same issue of the Federal Register (62 FR 35755).

Since the publication of TD 8722 and proposed regulation § 1.894(d)(REG-104893-97, 62 FR 35755), the IRS and Treasury have received numerous comments. This Treasury decision contains changes made in response to some of those comments.

These final section 894 regulations clarify the availability of treaty benefits with respect to an item of U.S. source income paid to an entity that is treated as fiscally transparent under the laws of one or more jurisdictions (including the United States) with respect to that item of income. An entity that is treated as fiscally transparent in one jurisdiction but not another is referred to as a hybrid entity. If an item of U.S. source income is paid to a hybrid entity, the United States may regard the entity as fiscally transparent with respect to the item of income and the foreign treaty jurisdiction may regard the entity as deriving the item of income. Alternatively, the United States may regard the entity as deriving the item of income under U.S. tax principles, but a foreign treaty jurisdiction may regard the entity as fiscally transparent and may therefore regard the interest holders as deriving the item of income. This dual classification may give rise to inappropriate and unintended results under tax treaties, such as double non-taxation or double taxation of the item of income, unless the tax treaties are interpreted to resolve the conflict of laws.

These final regulations clarify how to apply U.S. treaties when the entity classification law of the United States and a foreign treaty jurisdiction conflict by providing that a reduced treaty rate for an item of U.S. source income is available only if the income is derived by a foreign recipient resident in the applicable treaty jurisdiction. This general rule, which has been simplified but not substantially changed from the rule contained in the temporary and proposed section 894 regulations, is discussed in greater detail below.

These final regulations are fully consistent with existing U.S. treaties. They rely on the basic principle that tax treaties are intended to relieve double taxation or excessive taxation. Accordingly, the United States and its treaty partners agree to cede part or all of their taxation rights on income arising from sources within their respective borders on the mutual understanding that the other party is asserting tax jurisdiction over the items of income. This objective is generally achieved through treaty provisions that limit or eliminate the tax that the source state may impose on income arising within its borders to the extent that the income is considered to be derived by a resident of the other jurisdiction. In general, an item of income will be considered derived by a resident for treaty purposes only when the residence country is asserting taxing jurisdiction over the item of income. However, the source state does not necessarily require, as a condition for ceding its taxing jurisdiction, that the income actually be taxed in the residence state or taxed at a rate commensurate with the rate imposed in the source state. The source state and the residence state may come to different conclusions regarding the appropriate taxation principles that apply to a particular type of taxpayer or a particular type of income. Such differences reflect how each state has decided to assert its taxing jurisdiction over that taxpayer or item of income and may or may not affect the source state's willingness to forego its taxing rights in whole or in part during the treaty negotiation process.

The approach adopted in these final regulations is consistent with the evolving multilateral consensus among the member countries of the Organization for Economic Cooperation and Development (OECD) on the appropriate method for source countries to follow to determine if they should provide treaty benefits on items of income paid to fiscally transparent entities, particularly when an entity classification conflict exists between the source and residence states. This evolving multilateral consensus is described in greater detail in the OECD report, “The Application of the OECD Model Tax Convention to Partnerships” (OECD Partnership Report). The report generally provides that a source state is required to grant treaty benefits on income paid to an entity only if the income is considered to be derived by a resident of a treaty partner for purposes of the treaty partner's tax laws. IRS and Treasury will continue to coordinate these issues with U.S. tax treaty partners both bilaterally and multilaterally to resolve substantive issues arising from application of the principles set forth in the section 894 regulations and the OECD Partnership Report.

These regulations apply with respect to all U.S. income tax treaties regardless of whether such treaties contain partnership provisions, unless the competent authorities agree otherwise. As with the proposed and temporary regulations, the final regulations address only the treatment of U.S. source income that is not effectively connected with the conduct of a U.S. trade or business. The IRS and Treasury may issue additional regulations addressing the availability of other tax treaty benefits, such as the application of business profits provisions, with respect to the income of fiscally transparent entities, particularly where a conflict in entity classification exists.

The temporary and proposed section 894 regulations adopted an objective approach to determining whether the United States should grant treaty benefits on U.S. source items of income paid to entities. Application of the regulations did not turn on whether there existed a tax avoidance motive for choosing a particular transaction or structure.

Commentators recommended a narrower approach that would deny treaty benefits on items of income paid to an entity only if the entity served a tax avoidance purpose. As part of this approach, commentators requested implementation of a ruling procedure that could be used to claim treaty benefits by rebutting any deemed tax avoidance motive for the items of income paid to an entity. This suggestion was not adopted. These final regulations are intended to provide objective rules regarding eligibility for treaty benefits on certain items of U.S. source income paid to entities. Although a ruling procedure was not adopted, taxpayers may still invoke the Mutual Agreement Procedures under an applicable treaty in appropriate circumstances.

The proposed and temporary regulations provided that the tax imposed by sections 871(a), 881(a), 1461, and 4948(a) on an item of income received by an entity is eligible for reduction under the terms of an income tax treaty to which the United States is a party if such item of income is treated as derived by a resident of an applicable treaty jurisdiction, such resident is a beneficial owner of the item of income, and all other applicable requirements for benefits under the treaty are satisfied. The proposed and temporary regulations further provided that an item of income received by an entity is treated as derived by a resident only to the extent the item of income is subject to tax in the hands of a resident of such jurisdiction. Numerous comments were received stating that this general rule needed clarification. As a result, the IRS and Treasury are eliminating the use of the terms beneficial ownership and subject to tax from the general rule, as described in greater detail below.

Commentators requested clarification regarding the relationship between beneficial owner and the § 1.881-3 anti-conduit regulations issued under the authority of section 7701(l). The anti-conduit rules under section 7701(l) are incorporated into the U.S. determination of beneficial owner. They are not separate additional requirements.

The concept of beneficial owner was included in the proposed regulations to explain the circumstances under which a hybrid entity may beneficially own an item of income for purposes of an income tax treaty, in light of the then proposed withholding regulations under § 1.1441-1(c)(6)(ii)(B). However, the definition of beneficial owner in § 1.1441-1(c)(6) of the amended final regulations (TD 8881 [2000-23 I.R.B 1158]) does not apply to claims for reduced withholding under an income tax treaty. Accordingly, because there is no longer a need to clarify the meaning of the term under the section 1441 regulations in the treaty context, these final regulations no longer provide specific rules for this determination. The concept of beneficial owner nevertheless remains an important condition for claiming tax treaty benefits that is determined under U.S. tax principles, including the anti-conduit rules.

Commentators suggested that the term subject to tax in the proposed and temporary regulations was ambiguous and could be misinterpreted. Commentators suggested that the term subject to tax could be interpreted as requiring that an actual tax be paid rather than requiring an exercise of taxing jurisdiction by the applicable treaty jurisdiction, whether or not there is an actual tax paid. Commentators suggested that such an interpretation would lead to anomalous results, for example, in cases when the applicable treaty jurisdiction provides an exemption from income for U.S. source dividends under its tax laws.

The IRS and Treasury agree that the term subject to tax could cause unintentional confusion and that a more direct and simpler way of ensuring that an item of income is subject to the taxing jurisdiction of the residence country is to determine if the item of income is derived by a resident of a treaty jurisdiction. The concept of derived by a resident is a more useful surrogate for the concept of subject to the taxing jurisdiction of the residence state, the necessary prerequisite for the grant of treaty benefits on an item of income.

The regulations now provide three specific situations in which income is derived by a resident of a treaty jurisdiction, and thus considered subject to the taxing jurisdiction of the residence jurisdiction and eligible for treaty benefits.

In the first situation, an item of income paid to an entity is considered to be derived by the entity if the entity is not fiscally transparent with respect to the item of income under the laws of the entity's jurisdiction. The entity's jurisdiction is generally the place of the entity's organization, although it may be the place of management and control of the entity if it is a resident in a jurisdiction by reason of such factors.

In the second situation, regardless of whether the entity is found to be fiscally transparent with respect to the item of income under the laws of the entity's jurisdiction, an interest holder in the entity may derive the item of income if that interest holder can establish that, under the laws of the jurisdiction in which the interest holder is a resident, the entity is fiscally transparent with respect to the item of income. Under this test, the interest holder itself must not be considered fiscally transparent with respect to the item of income under the laws of its jurisdiction in order to claim the treaty benefit of that jurisdiction.

In the third situation, an item of income paid to a type of entity specifically listed in a treaty as a resident of that treaty jurisdiction is treated as derived by a resident of that jurisdiction. The reason for this rule is that the two treaty partners reached an explicit agreement on the appropriate treatment of that entity and treaty benefits accordingly should be provided on items of income paid to it.

In some circumstances, both the entity and the interest holders in the entity will be treated as deriving the item of income under the foregoing tests. In that event, both the interest holder and the entity may be entitled to treaty benefits if all other conditions are satisfied. See § 1.1441-6(b)(2) for procedures for dual rate claims under separate income tax treaties.

The concept of fiscally transparent therefore is critical to the determination of whether an item of income is derived by an entity or an interest holder in an entity. Paragraph (d)(4)(ii) of the proposed and temporary regulations provided that an entity is treated as fiscally transparent by a jurisdiction to the extent the jurisdiction requires interest holders in the entity to take into account separately on a current basis their respective shares of the items of income paid to the entity and to determine the character of such item as if such items were realized directly from the source from which realized by the entity for purposes of the tax laws of the jurisdiction. The proposed and temporary regulations further provided that entities that are fiscally transparent for U.S. federal income tax purposes include partnerships, common trust funds described under section 584, simple trusts, grantor trusts, as well as certain other entities (including entities that have a single interest holder) that are treated as partnerships or as disregarded entities for U.S. federal income tax purposes.

The IRS and Treasury received numerous comments regarding the definition of fiscally transparent under the proposed regulations. The comments stated that it is unclear, in situations when multiple foreign jurisdictions are involved, which jurisdiction's laws apply in determining whether an entity is fiscally transparent. The comments further stated that the requirement that all items of income be separately stated is not consistent with the U.S. tax rules regarding partnerships, which permit partners not to state separately certain items if the outcome is the same whether or not the item is separately stated. Commentators also suggested that the regulations were unclear as to whether fiscal transparency is an item by item determination or a determination made with respect to the entity as a whole.

In response to the comments, several simplifying and clarifying changes were made to the regulations. When an entity is invoking the treaty, paragraph (d)(3)(ii) of the final regulations provides a definition for purposes of determining whether the entity will be treated as fiscally transparent under the laws of the entity's jurisdiction with respect to an item of income received by the entity. When an interest holder in an entity is invoking the treaty, paragraph (d)(3)(iii) of the final regulations provides a definition for purposes of determining whether the entity will be fiscally transparent under the laws of the interest holder's jurisdiction. This clarifies which jurisdiction's laws apply in determining fiscal transparency in cases in which multiple foreign jurisdictions are involved.

Paragraphs (d)(3)(ii) and (iii) of the final regulations generally retain the definition of fiscally transparent as provided by the proposed and temporary regulations, with certain clarifications and modifications. They provide that an entity will be fiscally transparent only if inclusion by the interest holders in the entity is required whether or not an item of income is distributed to such interest holders and, generally, the character and source of the item in the hands of the interest holder are determined as if such item were realized directly from the source from which realized by the entity. They also provide that fiscal transparency is determined on an item of income by item of income basis. Accordingly, for example, an entity can be fiscally transparent with respect to interest income, but not with respect to dividend income. The regulations further provide, however, that if an item of income is not separately taken into account by its interest holders, the entity may still be fiscally transparent with respect to that item of income if failure to take the item of income into account separately does not result in a treatment under the tax laws of the applicable treaty jurisdiction different from that which would be required if the interest holder did separately take the share of such item into account. This is consistent with the U.S. tax provisions with respect to partnerships.

Because the final regulations adopt an item by item determination of fiscal transparency, the provision in the proposed regulations stating that partnerships, common trust funds described in section 584, simple trusts, grantor trusts and certain other entities are fiscally transparent for U.S. federal income tax purposes has been deleted from the final regulations. The foregoing language implied that fiscal transparency is determined with respect to the entity as a whole. Although the final regulations remove this language, it is anticipated that such entities ordinarily will be fiscally transparent for federal income tax purposes with regard to all items of income received by them.

Commentators also requested clarification regarding the treatment of investment vehicles that may be allowed an exclusion or deduction from income for amounts distributed to interest holders. The final regulations clarify that if an entity such as an investment company is not otherwise fiscally transparent as defined in paragraphs (d)(3)(ii) and (iii) of the final regulations, it will not be deemed to be fiscally transparent merely because it is allowed to exclude or deduct from income amounts distributed to interest holders. Examples provide further guidance with respect to foreign investment vehicles, most of which will not be fiscally transparent under the final regulations.

In addition to the foregoing, several commentators suggested that the regulations undermine reciprocal treaty exemptions for pension funds and other tax exempt organizations by, for example, denying treaty benefits under circumstances when the fund or organization invests in U.S. LLCs that are treated as partnerships for purposes of U.S. tax law and as corporations under the laws of the applicable treaty jurisdiction. Treasury does not believe that the regulations conflict with U.S. treaty obligations to provide reduced treaty rates to pension funds and other tax exempt organizations investing in the United States. In most cases, the denial of benefits described by commentators can be avoided by ensuring that the pension fund or tax exempt organization invests directly or through an entity treated as fiscally transparent under the laws of the jurisdiction of the fund or organization, with the result that the fund or organization will still be able to claim exemptions under the applicable treaty. In addition, treaties may be negotiated that permit pensions and other tax exempt organizations to invest in the United States through nonfiscally transparent entities and still obtain reduced treaty rates. (See for example paragraph 2(b) of Article XXI of the U.S.-Canada treaty, with respect to pension funds). Further, paragraph (d)(4) gives the competent authorities the flexibility, in appropriate circumstances, to enter into a mutual reciprocal understanding that would depart from the rules of paragraph (d) with respect to certain classes of entities.

The proposed and temporary regulations did not specifically address the treatment of section 661 trusts that are permitted to accumulate income from year to year. Commentators suggested that they should be treated as fiscally transparent for U.S. tax purposes because, under section 662, the distributable net income of such trusts retains its character in the hands of the beneficiaries if it is distributed in the current year and not accumulated. The definitions of fiscally transparent as set forth in the final regulations provide that, in order for the entity to be fiscally transparent with respect to an item of income, the interest holder must be required to take that item of income into account in a taxable year whether or not the item is distributed, and generally the character and source of the item in the hands of the interest holder are determined as if such item were realized directly from the source from which realized by the entity.

Thus, to the extent the beneficiaries of a trust are required under section 662 to take an item of the trust's income into account in a taxable year, whether or not the item is distributed, and the character and source of the item in the hands of the beneficiaries are determined as if such item were realized directly from the source from which realized by the entity, the trust will be treated as fiscally transparent for U.S. tax purposes with respect to that item of income. If inclusion by the interest holders is not required whether or not such item of income is distributed, or the character and source of the item in the hands of the interest holder are determined as if such item were realized directly from the source from which realized by the entity, the trust will not be treated as fiscally transparent for U.S. tax purposes. In determining whether a trust, or any other entity, is fiscally transparent with respect to an item of income under the laws of any other jurisdiction, the treatment of that item of income under the laws of that jurisdiction controls, not the treatment under U.S. laws.

Commentators also argued that controlled foreign corporations should be treated as fiscally transparent to the extent interest holders are required to account for the controlled foreign corporation's net passive income on a current basis. This suggestion was rejected because the nature of an inclusion under an anti-deferral regime is that of a deemed distribution of after-tax profits of the controlled foreign corporation, while an inclusion because an entity is fiscally transparent is in the nature of a share of the item of income itself, as if the interest holder realized the income directly. This follows from the definition of fiscal transparency contained in paragraph (d)(3)(iii), relating to whether an entity is fiscally transparent under the laws of the interest holder's jurisdiction.

Section 1.894-1T(d)(3) provided guidance on the appropriate treatment of items of income paid to an entity that is treated as a domestic corporation for U.S. tax purposes but is treated as fiscally transparent under the laws of an interest holder's jurisdiction (a “domestic reverse hybrid” entity). That section provided that § 1.894-1T(d)(1) may not be applied to reduce the amount of federal income tax on U.S. source income received by a domestic reverse hybrid entity through application of an income tax treaty. Commentators expressed concern that this rule did not provide sufficient guidance and could lead to inappropriate results, noting that an item of income paid by a domestic reverse hybrid entity could be viewed as neither “received by” the interest holder nor “subject to tax” because the interest holder's jurisdiction would treat the domestic reverse hybrid entity as fiscally transparent. Thus, the interest holder's jurisdiction would view the interest holder as “receiving” the items of income paid to the domestic reverse hybrid entity and as being “subject to tax” on those items of income on an immediate basis, but may not recognize the items of income paid by the domestic reverse hybrid entity to the interest holder.

The IRS and Treasury are also aware of certain abusive structures involving domestic reverse hybrid entities, which are designed to manipulate differences in U.S. and foreign entity classification rules to produce inappropriate reductions in U.S. tax. These transactions give rise to some of the same concerns that led to the promulgation of the temporary and proposed regulations and caused Congress to enact section 894(c). Treasury and the IRS expect to issue guidance shortly regarding payments by domestic reverse hybrid entities to their interest holders in a separate regulation package. Thus, these final regulations reserve on the question of eligibility for treaty benefits with respect to payments by domestic reverse hybrid entities.

The final regulations apply to items of income paid on or after June 30, 2000. Withholding agents should consider the effect of these regulations on their withholding obligations, including the need to obtain a new withholding certificate to confirm claims of treaty benefits for items of income paid on or after the effective date.

It has been determined that this treasury decision not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required.

Drafting Information: The principal author of these regulations is Shawn R. Pringle of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury participated in their development.

MMS uses standards, specifications, and recommended practices developed by standard-setting organizations and the oil and gas industry as a means of establishing requirements for activities in the OCS. This practice, known as incorporation by reference, allows MMS to incorporate the requirements of technical documents into the regulations without increasing the volume of the Code of Federal Regulations (CFR). MMS currently incorporates by reference approximately 85 documents into the offshore operating regulations.

The regulations found at 1 CFR part 51 govern how MMS and other Federal agencies incorporate various documents by reference. Agencies can only incorporate by reference through publication in the Federal Register . Agencies must also gain approval from the Director of the Federal Register for each publication incorporated by reference.

Incorporation by reference of a document or publication is limited to the edition of the document or publication cited in the regulations. This means that newer editions, amendments, or revisions to documents already incorporated by reference in regulations are not part of MMS's regulations.

This rule adds the following API document to those currently incorporated by reference into MMS regulations:

• API Manual of Petroleum Measurement Standards (MPMS), Chapter 10, Section 9, Standard Test Method for Water in Crude Oils by Coulometric Karl Fischer Titration, First Edition, November 1993.

MMS has reviewed this document and has determined that it must be incorporated into regulations to ensure that industry is able to use the best available and most accurate technologies. Our review shows that the option to use this standard will not impose additional costs on the offshore oil and gas industry. In fact, industry will still have the option to use the other procedures in current documents incorporated, as approved. Therefore, MMS is including this document via a final rule. MMS has determined under the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)) that publishing this rule as a notice of proposed rulemaking would be contrary to the public interest. The regulations found at 30 CFR 250.198(a)(2) allow updating documents without opportunity to comment when MMS determines that the revisions to a document result in safety improvements or represent new industry standard technology and do not impose undue costs on the affected parties.

A summary of MMS's review of the document is provided below:

API MPMS Chapter 10, Section 9, Standard Test Method for Water in Crude Oils by Coulometric Karl Fischer Titration, First Edition, November, 1993 .

This document lists the method for directly determining water in crude oils by volume and weight. It represents an industry standard that would be newly used in the OCS. The MMS will retain the documents from MPMS, Chapter 10, Sediment and Water, that describe the other methods of determining water in crude oils.

This is a very simple rule. The rule's purpose is to add a document to those that are currently incorporated by reference in the regulations. If MMS did not give the option to use the other techniques incorporated into the regulations, MMS could not add this document via a final rule. The document will not cause any economic effect on any entity (small or large). It simply gives industry standards for using an alternate method to determine sediment and water.

According to Executive Order 13132, the rule does not have

Federalism implications because it does not affect the relationship between the Federal and State governments.

The rule simply provides the option and guidance to use new technology. It does not prevent any lessee, operator, or drilling contractor from performing operations on the OCS, provided they follow the regulations. This rule will not impose costs on States or localities.

This document is not a significant rule and is not subject to review by the Office of Management and Budget (OMB) under Executive Order 12866.

(1) This rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. This rule does not have new requirements. This rule will not create an inconsistency or otherwise interfere with an action taken or planned by another agency.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. The standards only apply to those lessees who choose to use the new technology. Either way, the costs will be the same.

(3) This rule does not alter the budgetary effects or entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. There are no new costs. The standards contain guidance if lessees use the new measurement technology. They do have the option to use current technology. Therefore, the costs will be the same.

(4) This rule does not raise novel legal or policy issues. The requirements are based on the legal authority of the OCS Lands Act and other laws.

According to Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of §§ 3(a) and 3(b)(2) of the Order.

This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The document was added to give lessees the option to use new technology. If they choose to do so, the cost will be the same. It does not contain new requirements, and it will not have a significant or unique effect on State, local, or tribal governments or the private sector. Therefore, a statement containing the information required by the UMRA (2 U.S.C. 1531 et seq. ) is not required.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the NEPA is not required.

According to Executive Order 12630, the proposed rule does not represent a governmental action capable of interference with constitutionally protected property rights. The standards are optional. Thus, a Takings Implication Assessment need not be prepared according to Executive Order 12630, Government Action and Interference with Constitutionally Protected Property Rights.

The Department certifies that this document will not have a significant economic effect on a substantial number of small entities under the RF Act (5 U.S.C. 601 et seq. ). The optional standards will not have a significant economic effect on offshore lessees and operators, including those that are classified as small businesses. The Small Business Administration (SBA) defines a small business as having:

• Annual revenues of $5 million or less for exploration service and field service companies.

• Fewer than 500 employees for drilling companies and for companies that extract oil, gas, or natural gas liquids.

Under the Standard Industrial Classification code, 1381, Drilling Oil and Gas Wells, MMS estimates that there is a total of 1,380 firms that drill oil and gas wells onshore and offshore. Of these, approximately 130 companies are offshore lessees/operators, based on current estimates. According to SBA estimates, 39 companies qualify as large firms, leaving 91 companies qualified as small firms with fewer than 500 employees. This rule imposes no new operational requirements, reporting burdens, or other measures that would increase costs to lessees/operators, large or small. Therefore, this rule has no significant economic impact on small entities.

Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small businesses. If you wish to comment on the enforcement actions of MMS, call toll-free (888) 734-3247.

This rule is not a major rule under (5 U.S.C. 804(2)) the SBREFA. This rule:

(a) Does not have an annual effect on the economy of $100 million or more. The main purpose of this rule is to add industry standards to give lessees the option to use new measurement technology and the guidance if they choose to do so. The rule does not have new requirements.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The cost to comply with the rule is the same as current requirements.

(c) Does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or ability of United States-based enterprises to compete with foreign-based enterprises. The rule does not contain new requirements.

The Department of the Interior has determined that this regulation does not contain information collection requirements pursuant to PRA (44 U.S.C. 3501 et seq. ). We will not be submitting an information collection request to OMB.

32 CFR Part 199, “Civilian Health and Medical Program of the Uniformed Services (CHAMPUS),” was published in the Federal Register on July 1, 1986. This interim final rule implements a bonus payment, in addition to the amount normally paid under the allowable charge methodology, to providers in medically underserved areas. For purposes of this rule, medically underserved areas are the same as those determined by the Secretary of Health and Human Services for the Medicare program. Such bonus payments shall be equal to the bonus payments authorized by Medicare, except as necessary to recognize any unique or distinct characteristics or requirements of the CHAMPUS program, and as described in instructions issued by the Director, OCHAMPUS. If the Department of Health and Human Services acts to amend or remove the provision for bonus payments under Medicare, CHAMPUS likewise may follow Medicare in amending or removing provision for such payments. To expedite access to healthcare coverage that has been impacted by lower payments in such medically underserved areas, the interim final rule process is being utilized. Additionally, it provides a reimbursement enhancement that favors providers in underserved areas, thus alleviating healthcare access problems experienced by beneficiaries residing in such areas. Finally, because Medicare previously established a bonus payment reimbursement mechanism in these areas, our emulation of this well established mechanism complies with existing statutory mandates that CHAMPUS follow Medicare reimbursement policy wherever practicable. This rule will not unilaterally increase payments to all providers, but just those residing in these underserved areas. Due to the urgency for additional payments to ensure beneficiary access to care in these areas, it would be impracticable and contrary to the public's interest not to use the interim final rule process. To do otherwise would prevent OCHAMPUS from fulfilling its duty to beneficiaries in these underserved areas.

Executive Order 12866 requires certain regulatory assessments for any significant regulatory action, defined as one which would result in an annual effect on the economy of $100 million or more, or have other substantial impacts. The Regulatory Flexibility Act (RFA) requires that each Federal agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities. This Interim Final Rule is not a significant regulatory action under Executive Order 12866, nor would it have a significant impact on a substantial number of small entities. The changes set forth in the interim final rule are minor revisions to the existing regulation.

The interim final rule will not impose additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3511). This rule is being issued as an interim final rule, with comment period, as an exception to our standard practice of soliciting public comments prior to issuance. The Assistant Secretary of Defense (Health Affairs) has determined that following the standard practice in this case would be impracticable, unnecessary, and contrary to the public interest. This determination is based on several factors. Most importantly, this change directly implements a payment process already used by Medicare. All public comments are invited.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM because information concerning the exact date and times of the event were only recently received. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register because information concerning the exact date and times of the event were only recently received.

These regulations are required to provide for the safety of life on navigable waters because of the inherent danger of fireworks during the Harbour Town Display, Calibogue Sound, Hilton Head, SC.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, 1979). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary as this regulation will only be in effect for one hour in a limited area.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612) we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small business, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. The rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in a portion of Calibogue Sound from 8:30 p.m. to 9:30 p.m. on July 4, 2000 (or July 5, 2000 if the event is postponed). This special local regulation will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for only 1 hour, and vessel traffic can pass safely around the regulated area.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process. If the rule would affect your small business, organization, or government jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed under FOR FURTHER INFORMATION CONTACT for assistance in understanding and participating in this rulemaking. We also have a point of contact for commenting on actions by employees of the Coast Guard. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule contains no collection of information requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

We have analyzed this rule under Executive Order 13132 and have determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531—1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those unfunded mandate costs. This rule will not impose an unfunded mandate.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or safety that may disproportionately affect children.

The Coast Guard has considered the environmental impact of this action and has determined under Figure 2-1, paragraph 34(h) of Commandant Instruction M16475.1C, that this rule is categorically excluded from further environmental documentation.

A notice of proposed rulemaking (NPRM) was not published for this regulation. In keeping with requirements of 5 U.S.C. 553(B), the Coast Guard finds a good cause exists for not publishing a NPRM. In keeping with requirements of 5 U.S.C. 553 (d)(3), the Coast Guard also finds that cause exists for making this regulation effective less than 30 days after publication in the Federal Register due to receipt of application for this marine event was not received until June 6, 2000. Publication of a NPRM and delay of effective date would be contrary to the public interest because immediate action is necessary to protect the safety of the maritime vessel traffic.

Each year, on or about the 3rd of July, a tug vessel with a barge conducts fireworks display activities within an established 100 yd safety zone (33 CFR 165.1706) located on the navigable waters of Gastineau Channel, mid-channel off the shoreline of the city of Juneau, AK. This year will differ slightly from the established safety zone, in that a blast or fallout radius of 300 yards is required for the city authorized 12-inch fireworks display shells and 600 lbs of Division 1.3G (UN 0335) Fireworks.

This will occur at 12 a.m. ADT, and will last approximately 1 hour. This safety zone is necessary to protect the maritime public from the fallout hazards created by the vessel conducting firework display activities.

This temporary rule is not a significant regulatory action under section 3(f) of the Executive Order 12866 and does not require an assessment of potential costs and benefits under sections 6(a)(3) of that Order. It has been exempted from review by the Office of Management and Budget under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), the Coast Guard must consider whether this rule will have a significant impact on a substantial number of small businesses and not-for-profit organizations that are not dominant in their respective fields, and governmental jurisdictions with populations less than 50,000. For the same reasons set forth in the above Regulatory Evaluation, the Coast Guard certifies under Section 605 (b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

In accordance with Sec. 213 (a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process. If your small business or organization is affected by this rule and you have questions concerning its provisions or options for compliance, please contact the office listed in ADDRESSES in this preamble.

This rule contains no information collection requirements under the Paperwork Reduction Act of 1995 (44 US.C. 3501 et seq. ).

The Coast Guard has analyzed this temporary final rule under the principles and criteria contained in Executive Order 13132 and has determined that this temporary final rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The Coast Guard considered the environmental impact of this temporary final rule and concluded that, under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.1C, this temporary final rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES .

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) and E.O. 12875, Enhancing the Intergovernmental Partnership, (58 FR 58093; October 28, 1993) govern the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule will not impose an unfunded mandate.

Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) was not published for this regulation and good cause exists for making it effective less then 30 days after Federal Register publication. Due to the date that conclusive information for this event was received, there was insufficient time to draft and publish an NPRM. Any delay encountered in this regulation's effective date would be contrary to public interest since immediate action is needed to close a portion of the waterway to protect the maritime public from the hazards associated with this fireworks display, which is intended for public entertainment.

This regulation establishes a safety zone in all waters within a five hundred (500) yard radius of the fireworks launching barge in Provincetown Harbor, Provincetown, MA on July 4, 2000, with a rain date of July 5, 2000. This safety zone is needed to protect the maritime community from possible hazards associated with a fireworks display. No vessel may enter the safety zone without permission of the Captain of the Port (COTP), Providence RI.

This temporary final rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, l979). We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary. This safety zone involves a very small area of Provincetown Harbor. The effect of this regulation will not be significant due to the lateness of the hour, all vessel traffic may safely transit around this safety zone, and the extensive maritime advisories that will be made.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule contains no collection of information requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).

We have analyzed this action under E.O. 13132 and have determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This temporary rule would not impose an unfunded mandate.

This temporary rule would not effect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This temporary rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this temporary rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

The Coast Guard has considered the environmental impact of implementing this temporary rule and concluded that, under figure 2-1, paragraph 34(g), of Commandant Instruction M16475.lC, this proposed rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(8), the Coast Guard finds that good cause exists for not publishing an NPRM. Good cause exists for not publishing an NPRM due to the date that specific information on the President's visit to New York City was made available to the Coast Guard, there was insufficient time to draft and publish an NPRM. This event will have minimal impact on the waterway, vessels may still transit through the western 600 yards of the 950-yard wide Hudson River during the President's visit to the Intrepid Sea Air and Space Museum, and the zone is only in effect for 5 hours. Additionally, the New York City Passenger Ship Terminal does not have any vessels scheduled to be berthed at Piers 88 or 90 during the event and do not expect to receive any at this late date. Circle Line Sightseeing Cruises anticipates only having to move 2 vessels at Pier 83 between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) which they will be authorized to do. Any delay encountered in this regulation's effective date would be unnecessary and contrary to security interests as immediate action is needed to protect the Port of New York/New Jersey and the President.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . This is due to the following reasons: this event will have minimal impact on the waterway, vessels may still transit through the western 600 yards of the 950-yard wide Hudson River during the President's visit to the Intrepid Sea Air and Space Museum, and the zone is only in effect for 5 hours. Additionally, the New York City Passenger Ship Terminal does not have any vessels scheduled to be berthed at Piers 88 or 90 during the event and do not expect to receive any at this late date. Circle Line Sightseeing Cruises anticipates only having to move 2 vessels at Pier 83 between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) which they will be authorized to do.

This zone is needed to ensure the security of the Port of New York/New Jersey while the President is visiting the Intrepid Sea Air and Space Museum in Manhattan. This security zone will safeguard the Port of New York/New Jersey during his visit to the Intrepid Museum against terrorism, sabotage or other subversive acts and incidents of a similar nature. This security zone provides for an exclusion area during the President's visit at the museum. This zone includes all waters of the Hudson River bound by the following points: from the southeast corner of Pier 90, Manhattan, where it intersects the seawall, west to approximate position 40°46′10″ N 074°00′13″ W (NAD 1983), south to approximate position 40°45′54″ N 074°00′25″ W (NAD 1983), then east to the northeast corner of Pier 83 where it intersects the seawall, then north to the point of beginning. The security zone is based on security needs for the Port of New York/New Jersey and the President. All vessels are prohibited from transiting the area for approximately five hours during the President's visit at the Intrepid Museum. The New York City Passenger Ship Terminal does not have any vessels scheduled to be berthed at Piers 88 or 90 during the event and do not expect to receive any at this late date. Circle Line Sightseeing Cruises anticipates only having to move 2 vessels at Pier 83 between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) which they will be authorized to do. This security zone has been narrowly tailored to impose the least impact on maritime interests yet provide the level of security deemed necessary. Entry into or movement within this security zone is prohibited unless authorized by the Coast Guard Captain of the Port, New York.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, 1979).

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

This finding is based on the minimal time that vessels will be restricted from the zone, that vessels may still transit through the western 600 yards of the 950-yard wide Hudson River while the security zone is in effect. Additionally, the New York City Passenger Ship Terminal does not have any vessels scheduled to be berthed at Piers 88 or 90 during the event and do not expect to receive any at this late date. Circle Line Sightseeing Cruises anticipates only having to move 2 vessels at Pier 83 between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) which they will be authorized to do, and extensive advance notifications that will be made.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under section 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in a portion of the Hudson River during the time this zone is activated.

This security zone will not have a significant economic impact on a substantial number of small entities for the following reasons: Vessel traffic can transit through the western 600 yards of the 950-yard wide Hudson River while the security zone is in effect, this rule will be in effect for only five hours, and extensive advance notifications which will be made. Additionally, the New York City Passenger Ship Terminal does not have any vessels scheduled to be berthed at Piers 88 or 90 during the event and do not expect to receive any at this late date. Circle Line Sightseeing Cruises anticipates only having to move 2 vessels at Pier 83 between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) which they will be authorized to do.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its affects on them and participate in the rulemaking process. The New York City Passenger Ship Terminal and Circle Line Sightseeing Cruises were both contacted about the affects this zone may have on their business. The Passenger Ship Terminal does not have any vessels scheduled to be berthed during the event. Circle Line anticipates only having to move 2 vessels between 6 p.m. (e.s.t.) and 6:30 p.m. (e.s.t.) during the event which they will be authorized to do.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

We have analyzed this rule under Executive Order 13132 and have determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those unfunded mandate costs. This rule will not impose an unfunded mandate.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

The Coast Guard considered the environmental impact of this rule and concluded that, under figure 2-1, paragraph 34(g), of Commandant Instruction M16475.1C, this rule is categorically excluded from further environmental documentation. This rule fits paragraph 34(g) as it establishes a security zone. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

A notice of proposed rulemaking (NPRM) was not published for this regulation. In keeping with requirements of 5 U.S.C. 553(B), the Coast Guard finds a good cause exists for not publishing a NPRM. In keeping with requirements of 5 U.S.C. 553(d)(3), the Coast Guard also finds that cause exists for making this regulation effective less than 30 days after publication in the Federal Register due to receipt of application for this marine event was not received until June 12, 2000. Publication of a NPRM and delay of effective date would be contrary to the public interest because immediate action is necessary to protect the safety of the maritime vessel traffic.

On or about the 4th of July, a tug and barge conducts fireworks display activities within an established 100 yd safety zone (33 CFR 165.1708) located on the navigable waters of Tongass Narrows, off the northern tip of Pennock Island. This year the tug and barge will be positioned approximately 55°20′32″ N, 131°39′40″ W and a blast or fallout radius has been increased to 300 yd for the fireworks display.

This will occur at 10 p.m. July 4, 2000 and ending approximately 1 a.m. July 5, 2000. This safety zone is required to protect the maritime public from the hazards created by the vessel conducting fireworks activities.

This temporary rule is not a significant regulatory action under section 3(f) of the Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. It has been exempted from review by the Office of Management and Budget under that order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), the Coast Guard must consider whether this rule will have a significant impact on a substantial number of small businesses and not-for-profit organizations that are not dominant in their respective fields, and governmental jurisdictions with populations less than 50,000. For the same reasons set forth in the above Regulatory Evaluation, the Coast Guard certifies under Section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

In accordance with Sec. 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process. If your small business or organization is affected by this rule and you have questions concerning its provisions or options for compliance, please contact the office listed in ADDRESSES in this preamble.

This rule contains no information collection requirements under the Paperwork Reduction Act (44 U.S.C. § 3501 et seq. ).

The Coast Guard has analyzed this rule under the principles and criteria contained in Executive Order 13132 and has determined that this temporary rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The Coast Guard considered the environmental impact of this temporary final rule and concluded that, under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.1C, this temporary final rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) and E.O. 12875, Enhancing the Intergovernmental Partnership (58 FR 58093; October 28, 1993), govern the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule will not impose an unfunded mandate.

Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) was not published for this regulation. Good cause exists for not publishing a NPRM and for making this regulation effective in less than 30 days after Federal Register publication. Conclusive information about this event was not provided to the Coast Guard until June 2, 2000, making it impossible to draft or publish a NPRM or a final rule 30 days in advance of its effective date. Publishing a NPRM and delaying its effective date would be contrary to the public interest since immediate action is needed to close a portion of the waterway and protect the maritime public from the hazards associated with this fireworks display.

This regulation establishes a safety zone on the waters of Massachusetts Bay in a four hundred (400) yard radius around the fireworks barge located at position 42°34.05′N, 070°45.52′W. The safety zone is in effect from 8 p.m. until 11 p.m. on Monday, July 3, 2000. This safety zone prohibits entry into or movement within this portion of Massachusetts Bay and is needed to protect the maritime public from the dangers posed by a fireworks display.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, 1979).

The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

Due to the limited duration of the safety zone, the fact that the safety zone will not restrict the entire Bay, allowing marines to freely navigate around the safety zone, and the advance maritime advisories that will be made, the Coast Guard expects the economic impact of this regulation to be so minimal that a Regulatory Evaluation is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in a portion of Massachusetts Bay from 8 p.m. until 11 p.m. on July 3, 2000. This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: The safety zone is only 3 hours in duration; mariners may freely navigate around the safety zone, and the Coast Guard will issue marine radio advisories before the effective period.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard offers to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

The Coast Guard analyzed this rule under E.O. 13132 and has determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule would not impose an unfunded mandate.

This rule would not effect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

The Coast Guard analyzed this rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

The Coast Guard considered the environmental impact of this rule and concluded that, under figure 2-1, (34)(g), of Commandant Instruction M16475.lC, this rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES .

On August 27, 1998, the Postal Service published in the Federal Register , final regulations on procedures and categorical exclusions regarding NEPA (63 FR 45719). After the publication of the regulations, it was discovered that an error had been made in language in section 775.9(a)(1). Specifically, it was not intended that a written determination not to prepare an environmental assessment be required for all actions. When these regulations were proposed on August 11, 1997 (62 FR 42958), the Postal Service expanded the list of postal activities that were subject to NEPA review and also expanded the list of categorical exclusions. Previous and current internal guidance for facilities programs and projects requires a checklist for all facility actions, while previous and current internal guidance for operational activities only requires a checklist for certain actions that exceed certain higher level financial approval requirements. When these regulations were finalized, internal facilities policy was inadvertently carried over to all activities. This was not intended and is inconsistent with internal guidance and the purpose for establishing categorical exclusions. Postal policy, as discussed in the August 1997 notice, requires a checklist to screen for potential environmental concerns, but it was not intended to do one for all activities, even if categorically excluded.

In a further development, it was recently discovered that a sentence in the regulations was inadvertently dropped during the codification process. In § 775.9(b)(1), the original second sentence in the 1997 version of the published regulations in Title 39, Code of Federal Regulations was dropped out of the version of the regulations published in 1999. The old second sentence was to have become the third sentence in § 775.9(b)(1).

In light of the foregoing, the Postal Service adopts the following minor revisions to its NEPA regulations.

This is a synopsis of the Commission's Report and Order, MM Docket No. 99-291, adopted June 26, 2000, and released June 29, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, S.W., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a synopsis of the Commission's Report and Order, MM Docket No. 99-252, adopted June 26, 2000, and released June 29, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW, Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a summary of the Commission's Report and Order, MM Docket No. 99-287, adopted May 31, 2000, and released June 9, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Center, 445 12th Street, SW, Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Services, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800, facsimile (202) 857-3805.

This is a synopsis of the Commission's Report and Order, MM Docket No. 99-84, adopted May 31, 2000, and released July 9, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 445 12th Street, SW, Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a summary of the Commission's Report and Order, MM Docket No. 98-128, adopted May 31, 2000, and released June 9, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Center, 445 12th Street, SW, Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Services, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800, facsimile (202) 857-3805.

An electronic copy of this document may be downloaded by using a computer, modem and suitable communications software from the Government's Printing Office Electronic Bulletin Board Service at (202) 512-1661. Internet users may reach the Office of the Federal Register's home page at: http://www.nara.gov/fedreg and the Government Printing Office's database at: http://www.access.gpo.gov/nara.

Effective October 9, 1999, the Secretary of Transportation rescinded the authority of the Federal Highway Administrator to perform motor carrier safety functions and operations and redelegated it to the Director of a newly established Office of Motor Carrier Safety in the Department of Transportation. (64 FR 56270, October 19, 1999; 64 FR 58356, October 29, 1999.) This action was consistent with section 338 of the Fiscal Year 2000 Department of Transportation and Related Agencies Appropriations Act (Pub. L. 106-69), as amended by Pub. L. 106-73, which prohibits the Federal Highway Administration from spending funds made available or limited in that Act to carry out such functions. On December 9, 1999, the Motor Carrier Safety Improvement Act of 1999 (MCSI Act) (Public Law No. 106-159, 113 Stat. 1748) was enacted for the purpose of establishing the Federal Motor Carrier Safety Administration effective January 1, 2000. As we noted in a prior delegation to the FMCSA, 49 U.S.C. 113(f), as enacted by section 101(a) of the MCSI Act, states that the Federal Motor Carrier Safety Administrator shall carry out a number of duties and powers related to motor carrier and motor carrier safety and gives the Secretary discretion to delegate the authority to promulgate safety standards for commercial motor vehicles and equipment subsequent to initial manufacture. As a result, Part 1 of title 49, CFR, was amended to reflect this new provision by substituting the words “Administrator of the Federal Motor Carrier Safety Administration” for the words “Director of the Office of Motor Carrier Safety.” (65 FR 220, January 4, 2000.) It was also amended to reflect the Federal Motor Carrier Safety Administration as an organization within the Department of Transportation and to describe its general responsibilities. Id. In addition, section 1.73 of this Part was amended in accordance with section 101(f) of the MCSI Act to reflect the Secretary's reservation to himself of the authority to promulgate safety standards for commercial motor vehicles and equipment subsequent to initial manufacture. Id. These amendments were effective January 1, 2000.

This rule amends 49 CFR Part 1 to reflect the Secretary's decision to now delegate to the National Highway Traffic Safety Administrator the authority to promulgate safety standards for commercial motor vehicles and equipment already in use when the standards are based upon and similar to an FMVSS promulgated under chapter 301 of title 49, U.S.C. In issuing standards under this delegation, the Administrator will coordinate with the Federal Motor Carrier Safety Administrator. This rule also amends Part 1 to delegate to the Federal Motor Carrier Safety Administrator the authority to promulgate safety standards for commercial motor vehicles and equipment already in use when the standards are not based upon and similar to an FMVSS promulgated under chapter 301 of title 49, U.S.C. Nothing in this rule changes the existing authority of the Federal Motor Carrier Safety Administration to promulgate standards relating to motor carrier operations and maintenance of commercial motor vehicles, to inspect vehicles and equipment for compliance with applicable safety standards and maintenance requirements, and to take enforcement action as necessary.

The Administrators of the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration have the authority to redelegate the functions described in this document if not inconsistent with statute, departmental regulations, policies, and orders governing delegation of functions.

As the rule relates to Departmental organization, procedure, and practice, notice and comment on it are unnecessary under 5 U.S.C. 553(b). This action makes no substantive changes to the motor carrier safety regulations. Therefore, prior notice and opportunity to comment are unnecessary, and good cause exists under 5 U.S.C. 553(d)(3) to dispense with the 30-day delay in the effective date requirement so that the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration may immediately operate pursuant to the changes noted below.

The fisheries for coastal migratory pelagic resources are regulated under the FMP. The FMP was prepared jointly by the Gulf of Mexico and South Atlantic Fishery Management Councils and was approved and implemented by NMFS through regulations at 50 CFR part 622. In accordance with the framework procedure, the South Atlantic Fishery Management Council (Council) recommended, and NMFS published, a proposed rule (65 FR 31132, May 16, 2000) to: Increase the annual TAC and increase the commercial trip limit off the southeast coast of Florida for Atlantic group king mackerel; and increase the TAC, modify the commercial trip limits applicable off Florida, and increase the recreational bag limit for Atlantic group Spanish mackerel. The proposed rule described the need and rationale for these measures, which are not repeated here.

One public comment on the proposed rule was received from the Council.

Comment : The Council reiterated its support for a TAC of 7.04 million lb (3.19 million kg) for Atlantic group Spanish mackerel; noted that the regulations would relieve restrictions, consistent with conserving the resource, and would benefit fishers who had experienced necessary restrictions in the past; and urged timely implementation of the regulations.

Response : NMFS agrees that the Council's proposed actions are appropriate, has approved them, and is implementing them by this final rule.

The proposed rule inadvertently did not include the revision of the adjusted quota for Atlantic group Spanish mackerel that results automatically from the increase in TAC. This final rule incorporates the appropriate revision in § 622.44(b)(2).

This final rule has been determined to be not significant for purposes of E.O. 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration when this rule was proposed that it would not have a significant economic impact on a substantial number of small entities. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not prepared.

The President has directed Federal agencies to use plain language in their communications with the public, including regulations. To comply with this directive, we seek public comment on any ambiguity or unnecessary complexity arising from the language used in this final rule. Comments should be sent to the Southeast Regional Office, NMFS, 9721 Executive Center Drive N., St. Petersburg, FL 33702.

The reef fish fishery is managed under the FMP as prepared by the Gulf of Mexico Fishery Management Council (Council) and approved and implemented by NMFS, under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), by regulations at 50 CFR part 622.

On December 17, 1999, NMFS announced the availability of Amendment 17 and requested comments on the amendment (64 FR 70678). NMFS approved Amendment 17 on March 16, 2000, and published a proposed rule to implement the 5-year extension of the current commercial reef fish vessel permit moratorium, which would otherwise expire on January 1, 2001, in Amendment 17 and requested comments on it (65 FR 14518, March 17, 2000). The background and rationale for the measure in the amendment and proposed rule are contained in the preamble to the proposed rule and are not repeated here.

One comment from the Department of the Interior (DOI) was received on Amendment 17. The DOI requested an extension of the comment period due to the inability to respond with comments in the allotted time. However, the 60-day comment period for the amendment is set by section 304 of the Magnuson-Stevens Act and cannot be extended.

No comments were received on the proposed rule.

The Administrator, Southeast Region, NMFS, determined that Amendment 17 is necessary for the conservation and management of the reef fish fishery and that it is consistent with the Magnuson-Stevens Act and other applicable laws.

This final rule has been determined to be not significant for purposes of E.O. 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration when this rule was proposed that it would not have a significant economic impact on a substantial number of small entities. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not prepared.

The President has directed Federal agencies to use plain language in their communications with the public, including regulations. To comply with this directive, we seek public comment on any ambiguity or unnecessary complexity arising from the language used in this final rule. Comments should be sent to the Southeast Regional Office, NMFS, 9721 Executive Center Drive N., St. Petersburg, FL 33702.

In the final rule implementing the 2000 annual specifications for summer flounder, scup, and black sea bass, the regulations were inadvertently made effective for the same time frame as the quotas (i.e., for the calendar year). The regulations were meant to remain effective until revised. This correction clarifies that the regulations are final, not temporary, regulations.

In FR Doc. 00-12993, published in the Federal Register issue of May 24, 2000, on page 33486, in column 2, correct the DATES caption to read as follows:

This action is required by 50 CFR part 648 and is exempt from review under E.O. 12866.