The Treasury Ethics Regulations were issued in 1995 to minimize potential conflicts of interest and supplement OGE's Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR part 2635) (Standards). See 60 FR 22251 (May 5, 1995), as codified at 5 CFR part 3101. The OTS-pertinent part of the Treasury Ethics Regulations, Additional rules for OTS employees, at 5 CFR 3101.109 prohibits “covered OTS employees” from seeking or obtaining any loan or other extension of credit from a savings association. The requirement prevents employees from taking actions that may violate conflict of interest laws or that may constitute violations of 18 U.S.C. 213 concerning credit extended to examiners. Exceptions to the general prohibition permit covered OTS employees to obtain a credit card from a savings association under certain circumstances. See 5 CFR 3101.109(c)(3).

Under the current regulation, most covered OTS employees are permitted to hold and use savings association credit cards if they recuse themselves from any work involving savings associations from which they hold credit cards. This general exception, however, is not available to covered OTS employees assigned to regional offices who wish to obtain a credit card from a savings association headquartered in their region. Under current Treasury Ethics Regulations, no regional covered employees may obtain credit cards from a savings association headquartered in their region. See 5 CFR 3101.109(c)(3)(i)(A).

The Department has been prohibiting regional covered OTS employees from holding credit cards issued by a saving association headquartered in their region to strengthen public confidence in the integrity of OTS programs and to facilitate the assignment of work without constraints arising from employees' credit card recusals. When adopted, this restriction did not impose a significant burden on regional covered employees seeking credit cards. Since then, industry consolidation and conversions to the savings association charter have reduced the credit card options available to those employees. Further, the current rules have created problems in terms of staffing certain matters because of widespread holding of particular cards by covered employees. Subsequent to the issuance of the Treasury Ethics Regulation, the OTS examined the extent to which credit cards present conflicts of interest and concluded that in most instances, neither obtaining nor holding a credit card creates a conflict of interest or presents a likelihood for a loss of impartiality by an OTS employee. For these reasons, the existing credit card exception is being revised so that the general prohibition more closely conforms to the scope of 18 U.S.C. 213, the statutory prohibition barring only examiners from accepting credit from savings associations that they examine. This amended rule changes the Treasury Ethics Regulations' prohibition against OTS covered employees obtaining credit and the exceptions to the prohibition in the following ways.

To assure that the regional and Washington offices have maximum flexibility to assign projects to covered employees who are not examiners, this amendment eliminates the requirement for employees who are not examiners (attorneys, economists, analysts, etc.) to be recused from work concerning savings associations that have issued them credit cards. These employees may obtain a credit card from a savings association as long as the credit card is obtained and held on terms and conditions no more favorable than those offered to the general public.1 Both the existing regulation and the regulation as amended concern the extension of credit by OTS-regulated savings associations and their subsidiaries. The exceptions in the existing regulation allow examiners and other covered employees to obtain credit cards from regulated savings associations under certain circumstances. These exceptions applied to subsidiaries of regulated savings associations only by implication. The amended regulation specifically extends the exceptions for examiners and other covered employees to subsidiaries of OTS-regulated savings associations from which credit cards may be obtained. See new § 3101.109(c)(3)(i) and (ii).

OTS is the primary federal regulator of savings associations. OTS examiners assigned to the agency's five regions conduct examinations, make recommendations and prepare reports for savings associations headquartered in these respective geographical jurisdictions. The current rule prohibits examiners from holding credit cards issued by savings associations headquartered in their region. This rule continues that provision. In addition, OTS assigns examiners with certain skills to examine institutions outside their region. Consistent with the statutory language, the rule has been revised to reflect current practice of prohibiting examiners from obtaining or holding credit from savings associations headquartered outside their region if they are actually assigned to examine the savings associations. The final rule prohibits an examiner from obtaining a credit card from any savings associations or their subsidiaries that are headquartered in his or her region; or if not headquartered in the examiner's region, that he or she is assigned to examine. The rule retains the requirement that an examiner must obtain and hold credit cards on terms and conditions no more favorable than those offered to the general public.

The rule also requires an examiner to submit a written disqualification from examining a savings association issuing a credit card to the examiner, but not from participating in other regulatory and supervisory matters affecting the savings association, such as applications, investigations, or records review. 18 U.S.C. 212 and 213 do not bar such participation, and permitting this participation by examiners broadens OTS staffing options for various activities.

Because this rule more clearly connects the credit card restriction to the examiners' actual or likely work assignments, it will provide OTS examiners greater access to credit cards without restricting the flexibility of supervisors in making work assignments and without increasing the potential for conflicts of interest. Therefore, the rule is consistent with the fundamental purpose of Treasury Ethics Regulations restrictions on savings association credit card use by covered OTS employees.

The existing regulations permit covered employees to use exceptions to the prohibition only under limited circumstances, including when the employee (1) obtains a credit card sponsored by a retail firm (§ 3101.109(c)(3)(ii)); or (2) obtains the credit through the assumption of a savings association mortgage on the employee's residence in accordance with the mortgage's original terms (§ 3101.109(c)(3)(iii)). The amended rule eliminates the reference to retail store sponsored credit cards, because a retail store credit card issued by a saving association will be treated no differently than any other savings association issued card. The amended rule's reference to mortgage assumptions also is being deleted as unnecessary.

The current rule's prohibition on obtaining credit from a savings association in § 3101.109(c)(1) applies to “any loan or extension of credit, including credit obtained through the use of a credit card.” The amended rule shortens and simplifies that provision by removing the reference to a credit card. It is clear from the content of the rest of paragraph (c) that credit includes the use of a credit card.

Pursuant to 5 U.S.C. 553(a)(2), (b), and (d), the Department has found that good cause exists for waiving the regular notice of proposed rulemaking, opportunity for public comment, and 30-day delayed effective date for this final rule amendment. This action is being taken because it is in the public interest that this rule, which concerns matters of agency management, personnel, organization, practice and procedure, and which relieves certain restrictions placed on OTS employees, become effective on the date of publication.

Pursuant to section 605(b) of the Regulatory Flexibility Act, the Department certifies that this rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Accordingly, no regulatory flexibility analysis is required. The rule would not increase the regulatory burden on savings associations. The economic impact of this rule on savings associations, regardless of size, is expected to be minuscule at most.

The Department has determined that this final rule does not constitute a “significant regulatory action” for the purposes of Executive Order 12866.

Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act) 2 requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. As discussed in the preamble, this rule limits the restrictions on OTS employees borrowing from savings associations. The Department therefore has determined that the rule will not result in expenditures by State, local, or tribal governments or by the private sector of $100 million or more. Accordingly, the Department has not prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.

On November 3, 2000, the FAA issued AD 2000-23-51, which required a one-time fluorescent penetrant inspection of the shaft. That AD was prompted by the discovery of a cracked shaft having 477 hours TIS. Since the issuance of that AD, additional incidents of cracked shafts occurred, and we determined that additional inspections are required. On November 9, 2000, we issued superseding Emergency AD 2000-23-52, for Sikorsky Model S-76A, S-76B, and S-76C helicopters, which requires an initial and recurring fluorescent penetrant inspections of the shaft. Also required, before the first flight of each day, are visual inspections for any crack. If any crack is found, the shaft must be replaced before further flight with an airworthy shaft.

The FAA has reviewed Sikorsky Aircraft Corporation Alert Service Bulletin No. 76-66-31, Revision B, dated November 7, 2000, which describes procedures for inspecting the shaft, part number 76351-09030 series and 76351-09630 series. In addition to requiring the inspections prescribed in this alert service bulletin, the FAA has determined that certain shafts, part number 76351-09030 series, serial numbers with a prefix of “B” and numbers 015-00700 through 00706, must be removed from service because the three cracked shafts discovered thus far came from that manufacturing lot.

Since the unsafe condition described is likely to exist or develop on other Sikorsky Model S-76A, S-76B, and S-76C helicopters of the same type designs, the FAA issued superseding Emergency AD 2000-23-52 to prevent failure of the shaft and subsequent loss of control of the helicopter. The AD requires, before further flight, performing a fluorescent penetrant inspection of the shaft in the area above the upper shaft output seal and below the lower hub attachment flange. Thereafter, recurring fluorescent penetrant inspections are required at specified time intervals and visual inspections using a 10× or higher magnifying glass are required before the first flight of each day. If any crack is found, the shaft must be replaced before further flight with an airworthy shaft that has been inspected in accordance with the requirements of this AD. The actions must be accomplished in accordance with the alert service bulletin described previously. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the structural integrity and controllability of the helicopter. Therefore, the actions stated previously are required before further flight and at the specified time intervals, and this AD must be issued immediately.

Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on November 9, 2000, to all known U.S. owners and operators of Sikorsky Model S-76A, S-76B, and S-76C helicopters. These conditions still exist, and the AD is hereby published in the Federal Register as an amendment to 14 CFR 39.13 to make it effective to all persons. However, there was an error in the preamble section of the emergency AD; the superseded AD number is 2000-23-51, the emergency AD incorrectly referenced AD 2000-53-21. The correction to the superseded AD number is made in this AD; the FAA has determined that this change will neither increase the economic burden on an operator nor increase the scope of the AD.

The FAA estimates that 172 helicopters of U.S. registry will be affected by this AD, that it will take approximately 4 work hours per helicopter to accomplish the fluorescent inspection, 1/2 work hour per helicopter to perform each visual inspection, and 8 work hours per helicopter to replace the shaft, if necessary, and that the average labor rate is $60 per work hour. Required parts, if a shaft needs to be replaced, will cost approximately $25,000 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $2,913,680 per year (assuming $41,280 for the initial fluorescent inspections; $206,400 for 5 repetitive inspections on each helicopter; $516,000 for 100 visual inspections on each helicopter; and $2,150,000 to replace the shaft on half of the 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-61-AD.” 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 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 Securities and Exchange Commission (“Commission”) is adopting new rule 35d-1 (17 CFR 270.35d-1) under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (“Investment Company Act”).1

Section 35(d) of the Investment Company Act, as amended by the National Securities Markets Improvement Act of 1996, prohibits a registered investment company from using a name that the Commission finds by rule to be materially deceptive or misleading.2 Before section 35(d) was amended, the Commission was required to declare by order that a particular name was misleading and, if necessary, obtain a federal court order prohibiting further use of the name. In amending section 35(d), Congress reaffirmed its concern that investors may focus on an investment company's name to determine the company's investments and risks, and recognized that investor protection would be improved by giving the Commission rulemaking authority to address potentially misleading investment company names.3

Today the Commission is adopting new rule 35d-1 to address certain investment company names that are likely to mislead an investor about a company's investment emphasis. The Commission believes that investors should not rely on an investment company's name as the sole source of information about a company's investments and risks.4 An investment company's name, like any other single piece of information about an investment, cannot tell the whole story about the investment company.5 As Congress has recognized, however, the name of an investment company may communicate a great deal to an investor.

The rule applies to all registered investment companies, including mutual funds, closed-end investment companies, and unit investment trusts (“UITs”), and requires an investment company with a name that suggests a particular investment emphasis to invest in a manner consistent with its name. The rule, for example, would require an investment company with a name that suggests that the company focuses on a particular type of security (e.g., an investment company that calls itself the ABC Stock Fund, the XYZ Bond Fund, or the QRS U.S. Government Fund) to invest at least 80% of its assets in the type of security indicated by its name. An investment company seeking maximum flexibility with respect to its investments would be free to select a name that does not connote a particular investment emphasis.

Under current positions of the Division of Investment Management (“Division”), an investment company with a name suggesting that the company focuses on a particular type of investment generally is required to invest only 65% of its assets in the type of investment suggested by its name.6 In 1997, we proposed rule 35d-1 to replace the staff's positions with a rule codifying the Commission's views and to increase the 65% threshold to 80%.7

Today we are adopting rule 35d-1 and the 80% investment requirement to guard against the use of misleading investment company names and to implement Congress's intent in amending section 35(d). Requiring an investment company to invest at least 80% of its assets in the type of investment suggested by its name will provide an investor greater assurance that the company's investments will be consistent with its name. The need for investment companies to invest in a manner consistent with their names is particularly important to retirement plan and other investors who place great emphasis on allocating their investment company holdings in well-defined types of investments, such as stocks, bonds, and money market instruments.8 As of the end of 1999, an estimated 82.8 million individuals in 48.4 million U.S. households held $ 5.5 trillion in mutual fund assets.9 These investors face an increasingly diverse universe of investment companies when choosing a company suitable for their investment needs.10 The 80% investment requirement will help reduce confusion when an investor selects an investment company for specific investment needs and asset allocation goals.

The Commission received 28 letters commenting on proposed rule 35d-1.11 Most of the commenters supported the proposal, asserting that an investment company with a name indicating that it will invest in a particular security or industry should follow an overall investment strategy consistent with its name. Many commenters recommended revisions to the proposed rule. In addition, the Commission has received five rulemaking petitions urging adoption of the proposed rule.12 The Commission is adopting rule 35d-1 with the modifications described below that address commenters' concerns.

We are adopting, substantially as proposed, the requirement that an investment company with a name that suggests that the company focuses its investments in a particular type of investment (e.g., the ABC Stock Fund or XYZ Bond Fund) or in investments in a particular industry (e.g., the ABC Utilities Fund or the XYZ Health Care Fund) invest at least 80% of its assets in the type of investment suggested by the name.13 The 80% requirement will allow an investment company to maintain up to 20% of its assets in other investments. In the case of mutual funds, these assets, for example, could include cash and cash equivalents that could be used to meet redemption requests. While many commenters supported setting the investment requirement at 80%, some commenters opposed the level of the investment requirement, arguing that it would unduly restrict legitimate portfolio strategies and result in decreased diversification and increased risk and deter investment companies from using descriptive names.

The Commission disagrees with these commenters. Investment companies are not required to adopt names that describe their investment policies. Those investment companies that do not adopt such a name are not subject to the 80% requirement. We believe that if an investment company elects to use a name that suggests its investment policy, it is important that the level of required investment be high enough that the name will accurately reflect the company's investment policy. Moreover, we believe that certain modifications to the proposed rule (e.g., allowing an investment company to have a policy that it will notify its shareholders 60 days prior to a change in its investment policy, rather than requiring that the investment policy be fundamental) will maintain the rule's flexibility and prevent the percentage investment requirement from being too restrictive.14

One commenter recommended that the Commission adopt an additional requirement that the remaining 20% of an investment company's assets be invested in securities that are substantially equivalent to its primary investments. We are not adopting the commenter's recommendations because we do not believe that an investment company's name, standing alone, can be expected to fully inform investors about all of the investments of the company.15 Further, we are concerned that restricting the investment of the remaining 20% of an investment company's assets would unnecessarily reduce the manager's flexibility without providing significant additional benefit to shareholders.

We note, however, that the 80% investment requirement is not intended to create a safe harbor for investment company names. A name may be materially deceptive and misleading even if the investment company meets the 80% requirement. Index funds, for example, generally would be expected to invest more than 80% of their assets in investments connoted by the applicable index. Similarly, a UIT with a name indicating that its distributions are tax-exempt may have a misleading name even if it invests 80% of its assets in tax-exempt investments.16

We are modifying the requirement in the proposal that the 80% investment requirement be a fundamental policy of the investment company, i.e., a policy that may not be changed without shareholder approval.17 Most commenters opposed the fundamental policy requirement, arguing that it would be too burdensome for investment companies, constraining their ability to respond efficiently to market events or to new regulatory requirements, and discouraging them from using descriptive names.

The Commission is persuaded by the commenters' arguments, and the rule, as adopted, generally will provide investment companies with an alternative to the fundamental policy requirement. In lieu of adopting the 80% investment requirement as a fundamental policy, an investment company may adopt a policy that it will provide notice to shareholders at least 60 days prior to any change to its 80% investment policy.18 This notice alternative will ensure that when shareholders purchase shares in an investment company based on its name, and with the expectation that it will follow the investment policy suggested by that name, they will have sufficient time to decide whether to redeem their shares in the event that the investment company decides to pursue a different investment policy.19 Any investment company that changes its 80% investment policy would, of course, also be required to change its name, as necessary to comply with the requirements of rule 35d-1 in light of its new investment policy.

We are, however, adopting, as proposed, the provision that the 80% investment requirement be adopted as a fundamental policy for tax-exempt investment companies. This requirement is consistent with the long-standing Division position that a tax-exempt fund may not change its tax-exempt status without shareholder approval.20 The Commission believes that the 80% investment requirement should continue to be a fundamental policy for a tax-exempt investment company because of the critical importance of the tax-exempt status to its investors.

This is a summary of the amendment to 47 CFR 51.807 in the Commission's Order, FCC 01-21, adopted January 17, 2001 and released January 19, 2001. The complete text of this Order is available for inspection and copying during regular business hours in the FCC Reference information Center, Courtyard Level, 445 12th Street, SW., Washington, DC, and also may be purchased from the Commission's copy contractor, International Transcription Services (ITS, Inc.), CY-B400, 445 12th Street, SW., Washington, DC.

1. The Commission adopted an interim rule in the Local Competition Order establishing a scheme of “final offer” arbitration for section 252(e)(5) proceedings. This rule provides that, in issuing an arbitration award, the arbitrator “shall use final offer arbitration,” which may take the form of either entire package final offer arbitration or issue-by issue final offer arbitration.” 47 CFR 51.807(d)(1). If the parties' offers do not meet the standards of section 251, the arbitrator may require the parties to submit additional final offers or may adopt a result offered by neither party. 47 CFR 51.807(f)(3) (1999).

2. Experience gained by states in arbitrating numerous interconnection disputes over the past five years suggest that “final offer” arbitration may not always afford the arbitrator sufficient flexibility to resolve complex interconnection issues. Accordingly, the Commission amends § 51.807(f)(3) to provide the arbitrator additional flexibility in certain circumstances. The arbitrator shall have discretion to require the parties to submit new final offers, or adopt a result not submitted by any party, in circumstances where a final offer submitted by one or more of the parties fails to comply with the Act or the Commission's rules. There may be some unique circumstances where, even though the parties submit a final offer that complies with the Act and the Commission's rules, the arbitrator will have a basis for concluding that another result is more consistent with the requirements of section 252(c) of the Act, and the Commission's rules, although we do not identify those circumstances here.

3. Because this rule is a rule of agency procedure and practice, it may be adopted without affording prior notice and opportunity for comment. See 5 U.S.C. 553(b)(3)(A). In addition, we find good cause to make this change effective upon publication in the Federal Register. See 5 U.S.C. 553(d)(3). In an order released contemporaneously herewith, the Commission has preempted the jurisdiction of the Commonwealth of Virginia State Corporation Commission and therefore may soon need to begin the process of arbitrating complex interconnection agreement issues among carriers in Virginia. This rule change is necessary to facilitate the efficient and expeditious discharge of the Commission's statutory responsibility in the Virginia arbitration proceeding pursuant to section 252 of the Communications Act.

4. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public.

5. The action contained herein relates to agency procedure and practice and does not change the Commission's Regulatory Flexibility Analysis in connection with the amended rule.

4. This Order is effective February 1, 2001.

5. Pursuant to sections 4(i ), 4(j), 201(b), 303(r), 251, and 252 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 201(b), 303(r), 251, and 252, that the amendment to § 51.807 is adopted as set forth in the appendix to this Order, to be effective February 1, 2001.

For the reasons set forth in the preamble, amend Part 51 of 47 CFR as follows:

1. The authority citation for part 51 continues to read:

This is a synopsis of the Commission's Memorandum Opinion and Order in MM Docket No. 00-101, adopted January 17, 2001, and released January 19, 2001. The full text of this decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., (202) 857-3800, 1231 20th Street NW., Washington DC 20036.

This is a summary of the Memorandum Opinion and Order on Reconsideration (“MO&O”) in MM Docket No. 99-339, FCC 01-7, adopted on January 4, 2001, and released on January 18, 2001. The full text of this decision is available for inspection and copying during regular business hours in the FCC Reference Center, 445 Twelfth Street, SW, Room CY-A257, Washington DC, and also may be purchased from the Commission's copy contractor, International Transcription Service, (202) 857-3800, 445 Twelfth Street, SW, Room CY-B402, Washington DC. The complete text is also available under the file name fcc01007.doc on the Commission's Internet site at www.fcc.gov.

1. On August 7, 2000, the Commission adopted rules requiring broadcasters and other video programming distributors to provide video description and to make emergency information more accessible to visually impaired viewers. In this Order, the Commission grants in part and denies in part eight petitions seeking reconsideration of the Report and Order (“R&O”) (65 FR 54805, September 11, 2000). The Commission also provides clarification on certain issues related to the video description rules.

2. The rules adopted in the R&O require affiliates of ABC, CBS, Fox, and NBC in the top 25 Designated Market Areas (DMAs) to provide 50 hours per calendar quarter of prime time or children's programming with video description. Multichannel video programming distributors (MVPDs) with 50,000 or more subscribers must provide 50 hours of video described programming each quarter on each of the top five national nonbroadcast networks they carry. All broadcast stations and MVPDs that have the technical capability to do so, regardless of market size or number of subscribers, must “pass through” any video description received from a programming provider. The R&O also adopted “undue burden” exemption procedures as well as enforcement procedures under which complaints alleging violations would be filed with the Commission. The video description rules become effective April 1, 2002. In addition, under new rules that become effective upon approval from the Office of Management and Budget broadcast stations and MVPDs that provide local emergency information must make the critical details of that information accessible to persons with visual disabilities through aural presentation or accompany a “crawl” or “scroll” with an aural tone to alert persons with disabilities to an emergency situation.

3. The Commission amends its rules to define the top five nonbroadcast networks as those that are ranked in the top five as defined by national audience share and that also reach 50 percent or more of MVPD households. The Commission amends the rules to allow broadcast stations and MVPDs to count previously aired programming one time toward quarterly requirements. The Commission clarifies that once a broadcast station or MVPD that is required under the rules to provide video description has aired a particular program with video description, all subsequent airings of that program by that broadcast station or MVPD on the same network or channel must contain the video description. The Commission further clarifies that broadcast stations and MVPDs may use the SAP channel to provide services other than video description when subsequently airing a video described program, as long as those services, such as foreign language translations, are program-related. Similarly, the Commission establishes an exception to the pass-through requirements, allowing broadcast stations and MVPDs to use the SAP channel to provide program-related services other than video description when airing a program that contains video description. The Commission amends its rules to allow programming providers, in addition to programming distributors, to file waivers for exemptions. The Commission will allow consumers to bring informal complaints to the Commission at any time. The Commission amends its rules, however, to require consumers to certify in any formal complaint to the Commission, and distributors to certify in their answers, that they have attempted to resolve the dispute prior to filing the complaint with the Commission. The Commission adopts a definition of “prime time” and clarifies the definition of “technical error” for purposes of determining compliance with the rules. The Commission believes that these modifications promote its goal of not imposing an undue burden on programming producers or distributors, while enhancing the availability of video description to the visually impaired segment of our society.

4. In the R&O, the Commission adopted a rule that requires broadcast stations in the top 25 DMAs affiliated with the top four commercial broadcast networks, ABC, CBS, Fox, and NBC, as well as “larger” MVPDs, MVPDs that serve 50,000 or more subscribers, to provide programming with video description. The Commission further explained that implicit in the rules is the decision to hold programming distributors, rather than programming producers, responsible for compliance with the rules.

5. One petitioner contends that the Commission's rules hold “the wrong party” responsible for providing video described programming, arguing that the Commission should hold programmers responsible for compliance with the video description rules because distributors have no ability to do so. If a programmer violates the rules, the petitioner asserts that MVPDs will be subject to costly litigation seeking indemnification for any liability incurred. As the Commission acknowledged and explained in the Notice of Proposed Rulemaking (“NPRM”) (64 FR 67236, December 1, 1999), while its expects that programming networks, and not broadcast stations or MVPDs, will describe the programming, the Commission should hold distributors responsible for compliance for ease of enforcement and monitoring of compliance with the rules. The petitioner presents no new arguments or evidence that would lead the Commission to change its conclusion. Consistent with its findings in adopting closed captioning rules, while the Commission is placing the ultimate responsibility on program distributors, it expects that distributors will incorporate video description requirements into their contracts with program producers and owners, and that parties will negotiate for an efficient allocation of video description responsibilities. The Commission therefore denies the request to hold programming producers, rather than programming distributors, responsible for compliance with its rules.

6. The video description rules require MVPDs that serve 50,000 or more subscribers to provide video description during prime time or on children's programming. The Commission recognized in the R&O that this standard would include within the scope of the rules two DBS systems that together reach 12 million subscribers: DIRECTV, Inc. (DIRECTV) and EchoStar Satellite Corporation (EchoStar). The Commission determined that while DIRECTV indicated that modifying its network to support three audio channels would cost “tens of millions of dollars,” those costs appeared to be more than offset by revenues. Specifically, the Commission found that DIRECTV had more than 8.5 million customers as of May 2000, and based on the DBS average programming price of $30 per month, it expects that DIRECTV subscriber revenues would be over $3 billion per year. Similarly, based on EchoStar's more than 4 million subscribers as of May 2000, the Commission expects that EchoStar's subscriber revenues would appear to be nearly $1.5 billion per year.

7. DIRECTV and EchoStar argue in their petitions that the Commission failed to adequately address the costs that the video description rules impose on DBS operators. DIRECTV asserts that the Commission based its decision “on a fictitious revenue figure” and that “gross revenues are an inappropriate measure” of its ability to bear the expenses associated with the new rules. Both petitioners claim that neither company is currently profitable. DIRECTV explains that, in addition to the costs needed to upgrade its system, the rules create staffing costs and missed opportunity costs, and impose costs for video describing programs “estimated at $4,000 per hour.” EchoStar asserts that “[a] requirement supporting SAP feeds for all the hundreds of broadcast stations retransmitted by EchoStar would constitute a significant additional expenditure of bandwidth * * * approximately 6.25% of a channel of incremental bandwidth * * * comparable to, or even greater than, the 4% set-aside for public interest programming.” Neither petitioner, however, explains how this information would lead the Commission to change its finding that MVPDs serving 50,000 or more subscribers should provide programming with video description. The Commission recognizes that the video description rules impose costs on DIRECTV and EchoStar, as they do on other MVPDs, as well as broadcast stations. DIRECTV and EchoStar have not provided information to convince the Commission, however, that direct broadcast satellite (DBS) providers should be categorically exempt from the rules. Neither petitioner explains how the rules impose an undue financial burden or an undue burden on available bandwidth sufficient for the Commission to determine that either should be exempt from the video description rules. While the Commission finds no reason at this time to change its standard for MVPDs, DIRECTV and EchoStar have the option of seeking individual exemptions by providing sufficiently detailed information under the rules demonstrating that compliance would result in an undue burden.

8. MVPDs that fall within the scope of the video description rules must provide 50 hours of described programming quarterly on each of any of the top five nonbroadcast networks they carry, as defined by prime time national audience share. In the NPRM, the Commission proposed to require larger MVPDs to provide programming with video description on nonbroadcast networks that reach 50 percent or more of MVPD households. Noting, however, that, as one commenter pointed out, more than 40 cable networks serve 50 percent or more of MVPD households and that it might be burdensome for cable systems to retransmit video described programming on so many nonbroadcast networks, the Commission decided to limit the number of nonbroadcast networks to the top five. In the R&O, the Commission also stated that it believed its decision to require 50 hours per quarter would avoid any conflicts between competing uses of the SAP channel. In particular, the Commission noted that it did not expect certain premium networks, including the Home Box Office (HBO), to be among the top five nonbroadcast networks subject to the rules. The rule, as currently written, however, would require HBO to provide video description.

9. HBO asserts that the Commission never intended to include networks like HBO within the scope of the video description rules. In its petition, HBO contends that by modifying the standard from MVPDs that reach 50 percent of the MVPD households to the top five nonbroadcast networks, the Commission did not intend to expand the scope of the rule to include networks that would not have been subject to the rules originally proposed in the NPRM. HBO suggests several options to remedy this issue: change the definition of nonbroadcast networks covered by the rule to be either the top five national non-premium nonbroadcast networks, based on Nielsen Media Research, Inc. (Nielsen) national prime time audience share, or those national nonbroadcast networks that reach 50 percent or more of MVPD households and are ranked in the top five, based on Nielsen national prime time audience share; or exempting from the rules those networks that currently transmit a high percentage (such as 65 percent or more) of their prime time schedules with Spanish language audio using the SAP channel.

10. All parties that filed pleadings in response to its petition support HBO's request. Two parties urge the Commission to adopt one of HBO's options because they believe networks, like HBO, that provide substantial amounts of Spanish language programming should not be forced to eliminate or disrupt that programming. Other parties do not object to a rule modification based on an audience reach criterion, but urge the Commission to reject HBO's argument that the Commission could create an exemption based on use of the SAP channel for Spanish programming. They assert that Spanish language translations and video descriptions can be offered on alternate feeds to provide multiple broadcasts or cablecasts of the same programs.

11. The Commission did not intend, in adopting the video description rules, to include networks within the scope of those rules that would not have fallen within the scope of its proposal in the NPRM. Accordingly, the Commission amends § 79.3(b)(3) to clarify that the 50-hour requirement applies to the top five national nonbroadcast networks, based on Nielsen national prime time audience share, that reach 50 percent or more of MVPD households. This result is consistent with the Commission's goal of enhancing the widespread availability of video description. The programming of each of the several nonbroadcast, non-premium networks with the highest ratings is available to more than 75 million subscribers. By contrast, while HBO is among the nonbroadcast networks with the highest ratings during prime time, only 27 million subscribers subscribe to its service. The Commission thus believes that limiting the top nonbroadcast networks to those that are ranked in the top five as defined by national audience share and that reach 50 percent or more of MVPD households best fulfills its goal of ensuring the widest availability of video description. The Commission also believes that this result reconciles its proposal in the NPRM and its intent to limit the number of nonbroadcast networks required to provide video described programming for the reasons set forth in the R&O.

12. In the R&O, the Commission adopted pass-through requirements for programming that contains video description. Broadcast stations, including NCE stations, that have the technical capability to do so, must pass through any second audio program containing video description that they receive from their affiliated networks. Similarly, MVPDs that have the technical capability to do so must pass through any second audio program containing video description that they receive from a broadcast station or nonbroadcast network.

13. One petitioner asks the Commission not to apply the pass-through requirement where a top 25 market broadcast station has already met its 50-hour quarterly requirement, if the station wants to provide Spanish language or any other SAP service for that particular program. Similarly, the petitioner asks the Commission not to apply the rule to a small market station not subject to any quarterly minimum, if the station wants to provide any other SAP service for that particular program. One party opposes the request, arguing that there is no reason to deprive the visually impaired community of described programming where the station already has the equipment in place and is receiving the programming in described format. Another party agrees that stations should be able to serve their non-English speaking viewers, but both parties express concern that allowing local stations to use their SAP channel to provide any other services would allow a local broadcaster to use its SAP channel for information or services that are not related to any programming, including radio feeds or farm reports.

14. The Commission agrees that it should provide some additional flexibility under the rule. Because the SAP channel cannot be used to provide two services simultaneously, broadcast stations and MVPDs should be able to provide another service on a SAP channel when airing a program that contains video description, as long as that service is related to the program. Accordingly, the Commission amends §§ 79.3(b)(2) and (4) to require broadcast stations and MVPDs that have the technical capability to do so to pass through video description, unless a program-related use of the SAP channel would cause a conflict with the video description. This holds true even if an entity subject to the video description rules has met the 50-hour requirement. The Commission believes this approach affords broadcast stations and MVPDs reasonable flexibility to meet the needs of visually impaired viewers and other viewers that might benefit from program-related use of the SAP channel.

15. In the R&O, the Commission stated that the newly adopted video description rules do not apply to digital broadcasts, but that it expects ultimately to require digital television broadcasts to contain video description. One petitioner argues that the Commission should not mandate video description in an analog environment because the costs for providing video description represent “orphan” investments in analog systems that are scheduled to be abandoned. Other parties, on the other hand, argue that video description rules should apply to both analog and digital broadcasts. The Commission rejects the argument that because it did not “impose expenditures” on the cable industry for new analog equipment in the navigation devices proceeding, the Commission should similarly not require broadcasters to provide video description with analog broadcasts. The purpose of the navigation devices proceeding was to make equipment, including cable television set-top boxes or direct broadcast satellite receivers previously available only from MVPDs, available for commercial retail purchase. The statutory authority underlying the proceeding is premised on the belief that consumers would benefit from competition in the manufacturing and sale of this equipment. The Commission determined, however, that there would not be a market demand for analog-only services, that analog devices would “soon be obsolete,” and that requiring the development of analog equipment would interfere with the development of competition in the digital marketplace.

16. The Commission found that these reasons are inapplicable here. One of the ways in which video description may be transmitted with digital broadcasts is by using an additional audio channel like the SAP channel. The petitioner simply presents no evidence supporting its contention that technical upgrades made to analog systems cannot be used after the transition to digital television (DTV). The Commission thus has no reason to believe that requiring video description with analog broadcasts will result in significant orphaned investments. As the Commission has previously stated and as several parties argue, the need for video description exists now and given that broadcasters will likely continue transmitting in analog format until at least December 2006, the Commission does not wish to wait for the transition to be complete before adopting video description requirements.

17. Certain parties argue that “the Commission should make clear now that its mandate will extend to transmission and reception of video description in digital television.” Both parties argue the Commission should implement rules that require manufacturers of digital consumer reception equipment to support the ancillary audio channel that video description can use in DTV, and provide a schedule for implementing video description on digital programming. One party warns that “unless the Commission signals now that description will need to be supported in DTV, expensive retrofitting or substantial delays will occur down the road.” As the Commission has stated throughout this proceeding, it expects ultimately to require DTV broadcasts to contain video description, but the Commission believes that the decision on how and when to develop those requirements should come after there has been further experience with both digital broadcasting and video description. The Commission fully intends to address the issues raised in a future periodic DTV review proceeding. Given its intent to require video description of digital programming at a later time, however, the Commission urges equipment manufacturers to design their products with video description in mind.

a. Counting Repeats of Video Described Programming. 18. In the R&O, the Commission clarified that, once the rules go into effect, broadcast stations and MVPDs may not count toward their 50-hour quarterly requirement programming that they have previously aired with video description. The Commission further explained in the R&O that broadcast stations and MVPDs may, however, count any programming they air in excess of their quarterly requirements, if and when they repeat the programming later. In addition, a broadcast station or MVPD may count any video described programming that they air before the effective date of the rule, if they repeat it after the effective date of the rule.

19. All parties that filed petitions or responses to petitions on this issue support flexibility in counting programming previously aired with video description toward the 50-hour quarterly requirement. Three petitioners argue that broadcast stations and MVPDs do not have enough programming each quarter to meet the 50-hour requirement and not counting repeats of video described programming will force broadcast stations and MVPDs to change regularly scheduled programming or describe programming, such as sports programming, to meet the requirement. Two petitioners also contend that the restriction will force cable program networks to pay to video describe licensed programming, programming that they do not own. Petitioners argue that there is no reason for counting repeat showings of captioned programming toward quarterly closed captioning requirements, but not repeats of video described programming toward video description requirements.

20. One party agrees with the petitioners that broadcast stations and MVPDs should be allowed to count previously described programming toward their quarterly requirement, whether the programming is distributed on the same channel for which it was originally described or on another channel. That party states that the blind and visually impaired audience is not interested in the description of programming such as sports. Similarly, two other parties believe some flexibility is warranted. One suggests that a maximum number of repeats in any one quarter could be established or broadcasters and MVPDs could be credited with the first repeat of a described program. Both parties, however, disagree with the petitioners that repeats for closed captioning can be compared with video description because the majority of television programs are now captioned, but the rules only require a few hours of video described programming per quarter. Certain parties believe that program distributors and producers can provide for description as part of licensing arrangements and, therefore, oppose any recommendation to exempt programming that is licensed, but not owned, from the rules.

21. The Commission agrees that some flexibility is warranted and will allow broadcast stations and MVPDs to count a repeat of a described program once toward their 50-hour requirement. Broadcast stations and MVPDs can count a repeat of a previously aired program in the same quarter or in a later quarter, but only once altogether. Based on the information provided in the petitions, the Commission recognizes that some entities may not have enough new programming each quarter that is appropriate for video description. For example, one petitioner explains that the four major networks do not produce new prime time programming during the summer rerun season and another asserts that program networks already have little flexibility because the rules are limited to children's and prime time programming. While the Commission is unwilling to allow broadcast stations and MVPDs to count all previously aired programming that contains video description toward quarterly requirements, it believes that allowing a limited number of repeats will provide broadcast stations and MVPDs reasonable flexibility to make programming more accessible to the blind or visually impaired without intruding unnecessarily into program production and distribution.

22. The Commission rejects the implicit argument that cable program networks should not have to pay to video describe licensed programming. The Commission agrees with several parties that programming distributors and producers can provide for video description as part of a licensing agreement. MVPDs may file waiver requests if the cost of providing video description for licensed programming creates an undue burden.

23. As noted, some parties argue that they do not have enough programming each quarter to enable them to meet the 50-hour requirement without counting repeats, unless they change their regularly scheduled programming to describe programming, such as sports programming, to meet the requirement. In the R&O, the Commission declined to exempt categories of programming, including sports programming, from the video description requirement. The Commission believed it was unnecessary to create these types of exemptions because of the limited nature of its initial requirement. That is, the Commission believed that the top networks subject to its rules would be able to select 50 hours per quarter without having to describe programming such as sports programming. If any entities subject to the Commission's rules find that they do not have enough prime time or children's programming to enable them to meet their requirement without describing sports programming or repeats, they may seek an undue burden exemption on that basis.

b. Subsequent Airings. 24. In addition to outlining rules on how to count repeats of video described programming, the Commission adopted rules in the R&O pertaining to when a station must provide the video description contained in a previously aired program. Specifically, the Commission stated that “once a broadcast station or MVPD has aired a particular program with video description, all of that broadcast station's or MVPD's subsequent airings of that program should contain video description, unless another use is being made of the SAP channel.” The Commission further explained that this requirement should not impose any burden because the cost of both describing programming and upgrading equipment and infrastructure to distribute it should be a one-time fixed cost.

25. A petitioner asks the Commission to modify this “subsequent airing” requirement as it applies to MVPDs. According to the petitioner, the assumption that the cost of both describing programming, and upgrading equipment and infrastructure should be a one-time fixed cost “does not hold true if this obligation applies to cable operators.” The petitioner argues that if, for example, “a broadcast station carried by a cable operator airs a video-described program, and a cable program network later airs that same program, that cable network would have to create the entire infrastructure necessary to provide that one program with video description—even if that network would not be otherwise subject to the video description rules.” One party agrees that the rule should be clarified and asserts that the Commission's rule on subsequent airing of video described programming refers to the particular programming network, not the MVPD.

26. The Commission clarifies that once an MVPD that must provide video description under the rules has aired a particular program with video description on a particular network, every subsequent time that MVPD transmits that program on the same network, it must include the video description, unless another program-related use is being made of the SAP channel. Applying this requirement only to the network that initially aired the video-described program is consistent with the finding in the R&O that the cost of describing programming and upgrading facilities should be a one-time cost. In addition, consistent with its earlier decision regarding the obligation to pass through video described programming, the Commission amends § 79.3(c)(3) to clarify that a broadcast station or MVPD may elect not to provide video description in subsequent airings of a program if the network is using the SAP channel to provide another program-related service.

27. The Commission does not agree, however, that this “subsequent airing” rule should apply to networks that are not subject to the quarterly requirement, but have the technical capability to provide video description. The Commission believes that imposing a “subsequent airing” requirement on networks not otherwise required to provide any video description might discourage those networks from voluntarily providing video description in the first place.

28. Broadcast stations and MVPDs must provide described programming either during prime time or in children's programming. The Commission explained in the R&O that prime time programming is the most watched programming, and so programming provided during this time will reach more people than programming provided at any other time.

29. While none of the petitioners challenged the requirement that video programming be described during prime time, one petitioner asked that the Commission clarify the definition of prime time. The petitioner notes that “the predominant definition of ‘prime time’ in the industry is 8:00-11:00 p.m. local time in the Eastern and Pacific time zones Monday-Saturday, and 7:00-11:00 p.m. on Sunday. Under this definition, prime time in the Central time zone coincides with the Eastern time zone (an hour earlier local time) and prime time in the Mountain zone is divided between prime time in the Pacific time zone and prime time in the Central time zone.” Other parties agree that clarification is needed and support the definition that the petitioner provides. The petitioner also asks the Commission to clarify that for TBS Superstation, a single-transponder nonbroadcast network, “prime time” nationwide will be considered prime time in the Eastern time zone. The other parties stated that they had no objection to this request.

30. The Commission adopts the industry definition of “prime time” for purposes of video description. Accordingly, the Commission amends § 79.3(a)(6) to define “prime time” as the period from 8 to 11:00 p.m. Monday through Saturday, and 7 to 11:00 p.m. on Sunday local time, except that in the central time zone the relevant period shall be between the hours of 7 and 10:00 p.m. Monday through Saturday, and 6 and 10:00 p.m. on Sunday, and in the mountain time zone each station shall elect whether the period shall be 8 to 11:00 p.m. Monday through Saturday, and 7 to 11:00 p.m. on Sunday, or 7 to 10:00 p.m. Monday through Saturday, and 6 to 10:00 p.m. on Sunday. While part 76 of its rules provides a five-hour time period to define prime time, the Commission notes that the repealed prime-time access rules limited presentations of programs from national networks to a three-hour period during prime time. The Commission also notes that Nielsen uses a three-hour time period from Monday through Saturday, and the four-hour time period on Sunday to collect audience prime time viewing data. The Commission finds that using Nielsen's time periods is consistent with its decision to define the top five nonbroadcast networks based on the audience share during prime time as determined by Nielsen. The Commission notes that the parties are in agreement on this definition. The Commission also agrees that prime time for TBS Superstation, a single-transponder system, should be defined as prime time in the Eastern time zone. Again, as the petitioner points out, this definition coincides with Nielsen's standard practice and none of the parties object to this definition.

31. In the R&O, the Commission recognized that making text information accessible to the blind and visually impaired is important, but that it believed a secondary audio program may not be the appropriate vehicle to provide text-based information. The Commission therefore encouraged programming producers with text information to provide that information aurally, by announcing, for example, the names of speakers. The Commission also adopted rules for providing emergency information to visually impaired viewers. All broadcast stations and MVPDs that provide emergency information intended to further life, health, safety, and property through regularly scheduled newscasts and newscasts that are sufficiently urgent to interrupt regular programming, must make the critical details of that information accessible to persons with visual disabilities through aural presentation. A broadcast station or MVPD that provides emergency information using a “crawl” or “scroll” must accompany the message with an aural tone to alert persons with visual disabilities to turn on a radio, the SAP channel, or a designated digital channel.

32. One petitioner contends that the Commission's final video description rules are fundamentally flawed because they give priority to describing programming over making printed information on the screen accessible. The petitioner argues that the Commission should rescind the final rules and begin an entirely new proceeding because “[b]y the time anyone gets around to thinking about accessible information * * * the available resources will already be committed elsewhere.” Several parties support the petitioner's concerns about providing described text information, but oppose its request, in effect, to “start all over again.” Instead, the parties encourage the Commission to initiate a separate proceeding to address the issue of video descriptions for text information. They also explain that while the technology and production outlets for delivering video description for television programs has been in place for years, the technology for described information is still being developed. Another petitioner likewise encourages programming producers with text information to provide that information aurally, but argues that the petitioner does not explain “how any broader requirement to verbalize textual information could be accomplished without unduly disrupting the viewing experiences of many customers.”

33. The Commission emphasizes that it fully recognizes the importance of described text information. As certain parties explain, the industry has begun to examine the use of “synthetic voice” and the Commission encourages further development of this or any other technology that would address the issue of described information. The Commission agrees, however, that video description of programming should not be delayed until the issues of describing text information are addressed. The petitioner has not presented any new arguments that would lead the Commission to change its finding that video described programming and video described text information are not mutually exclusive services. The Commission therefore denies the request to rescind the video description rules while recognizing the importance of addressing the issue of described information in a separate proceeding.

34. In the R&O, the Commission stated that it believed its decision to require 50 hours per quarter, or roughly 4 hours per week, of programming with video description would avoid any conflicts between competing uses of the SAP channel. One petitioner argues that mandatory requirements to use the SAP channel for video description will confuse customers and that consumer education will not alleviate the problem. The petitioner contends that it will be required to dedicate staff and resources to address these consumer issues on a permanent basis because “one-time consumer education measures will not alleviate the problem.” In response, another party states that “both Spanish speaking and blind people can figure out program schedules and learn to adjust their viewing habits accordingly.”

35. The Commission recognized in the R&O that no technical solution to allow two uses of the SAP channel simultaneously is currently available, but that most networks that use the SAP channel to provide Spanish language audio do so on a limited basis. The Commission concluded that in the majority of cases its rules would not create conflicts between Spanish language audio and video description for use of the SAP channel and that any confusion could be corrected through viewer education. The petitioner presents no new arguments or evidence in its petition for reconsideration that would lead the Commission to change that conclusion. Any change in programming, whether voluntary or mandatory, requires some measure of consumer education and associated costs to provide that education. The petitioner fails to present any information that the cost of providing that education would outweigh the benefits of the rules. The Commission also believes that the minimal amount of programming required under its rules does not overly burden use of the SAP channel. Rather, the roughly 4-hour per week requirement reasonably accommodates competing uses of the SAP channel, such as providing programming that is accessible to Spanish-speaking viewers.

36. In the R&O, the Commission adopted the “undue burden” exemption procedures and standards that it uses in the closed captioning context. The Commission will exempt any affected broadcast station or MVPD that can demonstrate through sufficient evidence that compliance would result in an “undue burden,” which means significant difficulty or expense. The Commission declined, however, to exempt any particular category of programming or class of programming providers, given the limited nature of the initial video description rules. The Commission stated that it would consider these issues when it considers expanding the scope of entities that must provide video described programming, and the amount of video description those entities must provide.

37. Several parties urge the Commission to amend the video description rules to permit program networks and producers, in addition to distributors, to file requests for waivers for undue burden as they are permitted to do under the closed captioning rules. Noting that cable program networks and program owners are not included within the definition of “video programming distributor” under part 79 of the Commission's rules, one petitioner asserts that these entities, rather than the cable operator, would be the appropriate entities to file for undue burden waivers in most cases. Another petitioner argues that while the rules place substantial burdens on networks, those networks have no opportunity to petition for an exemption from the requirements of the rules, leaving them no recourse. One party agrees, noting that program networks and producers must be involved and supportive partners with MVPDs to achieve successful provision of described programming. That party asserts that both networks and producers should have rights similar to distributors to request undue burden exemptions.

38. The Commission agrees that video programming providers should be allowed to file waivers for exemptions under the undue burden standard, as they are allowed under the Commission's closed captioning rules. Accordingly, the Commission amends § 79.3(d) to permit video programming providers, as defined under part 79 of its rules, to petition the Commission for a full or partial exemption from the video description requirements. As it similarly stated in the closed captioning proceeding, the undue burden exemption is intended to be “sufficiently flexible to accommodate a wide variety of circumstances” for which compliance with the video description requirements would pose a significant financial or technical burden. As the Commission has previously recognized, video description is most likely to be added to programming at the production stage prior to distribution, where it is most economically and technically efficient. To the extent a broadcast station's or MVPD's inability to comply with its rules stems from problems at, for example, the programming producer end, the Commission believes it should allow the programming producer to plead its hardship directly to the Commission. Otherwise, the programming producer would have to submit information to its local distribution outlets around the country, which would then file numerous separate waiver requests with the Commission. To avoid this inefficiency, therefore, the Commission will allow programming providers to seek exemptions under the undue burden standard. The Commission emphasizes, however, that while it will allow other programming providers to seek exemptions from its rules, it holds programming distributors responsible for compliance.

39. In the R&O, the Commission adopted procedures to enforce its initial video description rules. Under these procedures, complaints are not required to be submitted to a programming distributor before being filed with the Commission. A complainant may allege a violation of the video description rules by sending a complaint to the Consumer Information Bureau (CIB) at the Commission by any reasonable means, such as a letter, facsimile transmission, telephone (voice/TRS/TTY), Internet e-mail, audio-cassette, Braille, or some other method that would best accommodate a complainant's disability. CIB will forward formal complaints to the Commission's Enforcement Bureau.

40. Petitioners note that the Commission has established enforcement procedures for its video description rules that differ from the enforcement procedures for the Commission's closed captioning rules. They contend that complaints should be submitted to a programming distributor before being filed with the Commission. According to one petitioner, “requiring the complainant to go to the video programming distributor first will allow the parties to more quickly and satisfactorily resolve the dispute.” Another petitioner argues that there is no basis on which to adopt a different complaint procedure for the enforcement of video description rules than for closed captioning because “the record does not indicate that the existing closed captioning rules have been ineffective or inadequate.” Certain parties oppose the petitioners' request, arguing that obtaining information to contact programming distributors is too difficult for blind and visually impaired viewers. One party contends that “[i]t would be simpler and far more efficient for visually impaired viewers to have a single point of contact.”

41. The Commission believes that viewers should try to resolve disputes with video programming distributors prior to filing a formal complaint with the Commission. The Commission therefore amends its rules to require complainants to certify in formal complaints to the Commission, and distributors to certify in their answers, that they have attempted in good faith to settle disputes prior to filing formal complaints and answers with the Commission. The Commission notes that this result is consistent with its recently revised rules for filing formal complaints against common carriers. The Commission also followed these rules when it adopted rules to implement section 255 of the Act, which requires manufacturers of telecommunications equipment, and providers of telecommunications services, to make such equipment and provide such services in a manner that is accessible to persons with disabilities. Prior to or instead of filing a formal complaint, however, viewers may contact CIB either to attempt to resolve disputes by filing an informal complaint, or to obtain information about how to contact the programming distributor. The Commission believes that these procedures will provide parties the opportunity to resolve disputes quickly and efficiently.

42. The video description rules provide that, in evaluating whether a video programming distributor has complied with the requirement to provide video programming with video description, the Commission will consider a showing that any lack of video description was de minimis and reasonable under the circumstances. One petitioner asks the Commission to clarify that technical errors beyond an individual station's control will fall under the “reasonable circumstances” provision. The petitioner explains, for example, that “if a station is ready and able to pass through to viewers described programming received from its network, but, due to technical difficulties beyond the station's control, the described programming is not properly received, then that ‘lack of video description’ should be deemed ‘reasonable under the circumstances.’” Stating that the Commission rarely faults a broadcaster or cablecaster for a temporary rule violation, one party argues that a technical error should not be construed to include the lack of equipment to provide video descriptions, but that a technical error is “a temporary difficulty” that is “a short-term failure of equipment.”

43. The Commission clarifies that to be classified as a technical error, the problem must be beyond a station's control. In addition, the problem must be de minimis and reasonable under the circumstances. The Commission will examine carefully, however, any showings ascribed to technical error to ensure that those instances are only a temporary difficulty, such as that caused by short-term failure of equipment, and not by a station unreasonably failing to pass-through the described programming supplied by its network.

44. In the R&O, the Commission held that it has the authority to adopt video description rules. The Commission explained that Sections 1, 2(a), 4(i), and 303(r) of the Act, taken together, direct and empower the Commission to make available to all Americans a radio and wire communication service, and to make regulations to carry out this mandate, that are consistent with the public interest and not inconsistent with other provisions of the Act or other law. In reaching this decision, the Commission considered but rejected the arguments of commenters that video description rules would be inconsistent with other law, namely Sections 624(f) and 713(f) of the Act, as well as the First Amendment, and might also interfere with the rights of copyright holders.

45. Petitioners raise the same arguments raised before in this proceeding. For example, petitioners suggest that analysis of the issue of the Commission's authority to adopt video description rules begins and ends with Section 713(f) of the Act, which instructed the Commission to “commence an inquiry * * * and report to Congress” on video description, but not to make rules. Against the backdrop of Section 713, petitioners contend that the Commission cannot rely on other provisions of the Act to make rules. Petitioners also suggest that the rules are content-based, violating the First Amendment and, as applied to cable operators, Section 624(f) of the Act, which does not permit the government to “impose requirements regarding the provision or content of cable services, except as expressly provided in [Title VI of the Act.]” Petitioners further suggest that the rules interfere with the rights of copyright holders.

46. The Commission addressed most of the statutory arguments petitioners raised at the R&O stage, and they have offered no reason for the Commission to reconsider its conclusion. As discussed in detail in the R&O, Sections 1, 2(a), 4(i), and 303(r) make clear that the Commission's fundamental purpose is to make available so far as possible to all Americans a radio and wire communication service, and it has the power to make rules to carry out this mandate that are consistent with the public interest, and not inconsistent with other law. The video description rules further the public interest because they are designed to enhance the accessibility of video programming to persons with visual disabilities, but at the same time not impose an undue burden on the video programming production and distribution industries. The video description rules are not inconsistent with Sections 624(f) and 713(f) of the Act, the First Amendment, or copyright law. The rules are not inconsistent with Section 713(f), because that section neither authorizes nor prohibits a rulemaking on video description. The rules are not inconsistent with Section 624(f), because they do not require cable operators to carry any particular programming. The rules are not inconsistent with the First Amendment, because they are content-neutral regulations, and satisfy the applicable test of serving an important government interest without burdening substantially more speech than necessary. The rules are not inconsistent with copyright law because they do not violate any copyright holder's rights.

47. The Commission also rejects one petitioner's new argument that the rules are inconsistent with Section 255 of the Act. Section 255 requires manufacturers of telecommunications equipment, and providers of telecommunications services, to make such equipment and services accessible to persons with disabilities, but only “if readily achievable.” The petitioner suggests that the video description rules do not have a similar contingency. The petitioner also argues that the discrepancy between the “readily achievable” standard and the video description rules further suggests that the Commission does not have authority to adopt such rules—Congress did not qualify the provision of video description because there was no access obligation to qualify in the first place. The petitioner overlooks, however, the fact that the video description rules contain procedures for waiver if compliance would create an undue burden. In sum, as the Commission explained in greater detail in the R&O, the Commission believes that the video description rules further the very purpose for which the Commission was created—“to make available, so far as possible, to all the people of the United States * * * a rapid, efficient, Nation-wide, and world-wide wire and radio communication service”—and are within its power to adopt because they are “not inconsistent with [the] Act” and serve the “public convenience, interest, and necessity” and are “not inconsistent with law.”

48. Authority for issuance of this MO&O is contained in sections 4(i), 303(r), 403, and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), 403, and 405.

49. Supplemental Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act (RFA), the Commission has prepared a Supplemental Final Certification of the possible impact on small entities of the rules adopted in this MO&O. The Supplemental Final Certification is set forth in the MO&O.

50. The Regulatory Flexibility Act (RFA) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The NPRM in this proceeding proposed rules to provide video description on video programming to ensure the accessibility of video programming to persons with visual impairments. The R&O adopted rules requiring broadcasters and other video programming distributors to provide video description and to make emergency information more accessible to visually impaired viewers.

51. In an abundance of caution, the Commission published an Initial Regulatory Flexibility Analysis (IRFA) in the NPRM, even though the Commission was reasonably confident that the proposed rules would not have the requisite “significant economic impact” on a “substantial number of small entities.” The IRFA sought written public comment on the proposed rules. No written comments were received on the IRFA, nor were any general comments received that raised concerns about the impact of the proposed rules on small entities. Because the Commission believed the rules adopted in the R&O would have a negligible effect on small businesses, the Commission published a Final Certification that the rules adopted in that order would not have a significant economic impact on a substantial number of small entities.

52. The MO&O amends certain rules adopted in the R&O. The Commission amends its rules to define the top five nonbroadcast networks as those that are ranked in the top five as defined by national audience share and that also reach 50 percent or more of MVPD households. The amended rules allow broadcast stations and MVPDs to count previously aired programming one time toward quarterly requirements. Once a broadcast station or MVPD subject to the video description rules has aired a particular program with video description, only subsequent airings of that program by that broadcast station or MVPD on the same network or channel must contain the video description. Under both this “subsequent airing” rule and the “pass-through” rule, broadcast stations and MVPDs may now use the SAP channel to provide services other than video description, as long as those services, such as foreign language translations, are program-related. The rule amendments allow programming providers, in addition to programming distributors, to file waivers for exemptions. The rule amendments adopt a definition of “prime time” and clarify the definition of “technical error” for purposes of determining compliance with the rules. These amendments only affect large entities as discussed in the Final Certification included in the R&O. No small entities will experience an economic impact as a result of these amendments.

53. Under the rule amendments, consumers may bring informal complaints to the Commission at any time, but must include in a formal complaint to the Commission a certification that they have tried to resolve a dispute with the distributor prior to filing the complaint. In addition, distributors are required to make similar certifications in their answers. These amendments to the rules are created to attempt to resolve issues prior to filing a formal complaint. The Commission believes that requiring these certifications is necessary to assure a smooth process to address outstanding issues in a timely and efficient manner. The burden imposed by the inclusion of these certifications is nominal for both consumers and distributors because it will require no more than a single statement to be added to the initial formal complaint and its answer. These amendments will not have a significant economic impact on a substantial number of small entities.

54. The Commission therefore certifies, pursuant to the RFA, that the rule amendments adopted in the present MO&O will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the MO&O, including a copy of this Supplemental Final Certification, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act. In addition, the Commission will send a copy of the MO&O, including a copy of this Supplemental Final Certification, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, a copy of the MO&O and this Supplemental Final Certification will be published in the Federal Register.

55. The petitions for reconsideration or clarification are granted to the extent provided herein and otherwise are denied pursuant to sections 1, 2(a), 4(i), 303(r), 307, 309, 310, 403, 405, and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i), 303(r), 307, 309, 310, 403, 405, 613, and § 1.429(i) of the Commission's rules, 47 CFR 1.429(i).

56. Pursuant to sections 4(i) & (j), 303(r), 307, 308 and 309 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i) & (j), 303(r), 307, 308, 309, part 79 of the Commission's rules, 47 CFR Part 79, is amended as set forth in the MO&O.

57. The rule amendments set forth in the MO&O that revise § 79.3 of the Commission's rules, 47 CFR 79.3, shall become effective on April 1, 2002.

58. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this MO&O in MM Docket No. 99-339, including the Supplemental Final Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

59. This proceeding is hereby terminated.

The Mexican spotted owl (Strix occidentalis lucida) is one of three subspecies of spotted owl occurring in the United States; the other two are the northern spotted owl (S. o. caurina) and the California spotted owl (S. o. occidentalis). The Mexican spotted owl is distinguished from the California and northern subspecies chiefly by geographic distribution and plumage. The Mexican spotted owl is mottled in appearance with irregular white and brown spots on its abdomen, back, and head. The spots of the Mexican spotted owl are larger and more numerous than in the other two subspecies, giving it a lighter appearance.

The Mexican spotted owl has the largest geographic range of the three subspecies. The range extends north from Aguascalientes, Mexico, through the mountains of Arizona, New Mexico, and western Texas, to the canyons of Utah and Colorado, and the Front Range of central Colorado. Much remains unknown about the species' distribution in Mexico, where much of the owl's range has not been surveyed. The owl occupies a fragmented distribution throughout its United States range, corresponding to the availability of forested mountains and canyons, and in some cases, rocky canyonlands. Although there are no estimates of the owl's historical population size, its historical range and present distribution are thought to be similar.

According to the Recovery Plan for the Mexican Spotted Owl (United States Department of the Interior 1995) (Recovery Plan), 91 percent of owls known to exist in the United States between 1990 and 1993 occurred on land administered by the U.S. Forest Service (FS); therefore, the primary administrator of lands supporting owls in the United States is the FS. These numbers are based upon preliminary surveys that were focused on National Forests in the southwest. Nevertheless, most owls have been found within Region 3 of the FS, which includes 11 National Forests in New Mexico and Arizona. FS Regions 2 and 4, including two National Forests in Colorado and three in Utah, support fewer owls. The range of the owl is divided into 11 Recovery Units (RU), 5 in Mexico and 6 in the United States, as identified in the Recovery Plan. The Recovery Plan also identifies recovery criteria and provides distribution, abundance, and density estimates by RU. Of the RUs in the United States, the Upper Gila Mountains RU, located in the central portion of the species' U.S. range in central Arizona and west-central New Mexico, contains over half of known owl sites. Owls here use a wide variety of habitat types, but are most commonly found inhabiting mature mixed-conifer and ponderosa pine-Gambel oak forests. The Basin and Range-East RU encompasses central and southern New Mexico, and includes numerous parallel mountain ranges separated by alluvial valleys and broad, flat basins.

Most breeding spotted owls occur in mature mixed-conifer forest. The Basin and Range-West RU contains mountain ranges separated by non-forested habitat. These “sky island” mountains of southern Arizona and far-western New Mexico contain mid-elevation mixed-conifer forest and lower elevation Madrean pine-oak woodlands that support spotted owls. The Colorado Plateau RU includes northern Arizona, southern Utah, southwestern Colorado, and northwestern New Mexico, with owls generally confined to deeply incised canyon systems and wooded areas of isolated mountain ranges. The Southern Rocky Mountains-New Mexico RU consists of the mountain ranges of northern New Mexico. Owls in this unit typically inhabit mature mixed-conifer forest in steep canyons. The smallest number of spotted owls occurs in the Southern Rocky Mountains-Colorado RU. This unit includes the southern Rocky Mountains in Colorado, where spotted owls are largely confined to steep canyons, generally with significant rock faces and various amounts of mature coniferous forest. The critical habitat units identified in this designation are all within these RUs.

A reliable estimate of the numbers of owls throughout its entire range is not currently available. Using information gathered by Region 3 of the FS, Fletcher (1990) calculated that 2,074 owls existed in Arizona and New Mexico in 1990. Based on more up-to-date information, we subsequently modified Fletcher's calculations and estimated a total of 2,160 owls throughout the United States (USDI 1991). However, these numbers are not considered reliable estimates of current population size for a variety of statistical reasons, and a pilot study (Ganey et al. 1999) conducted in 1999, estimated the number of owls for the upper Gila Mountains Recovery Unit (exclusive of tribal lands) as 2,950 (95 percent confidence interval 717-5,183).

Mexican spotted owls nest, roost, forage, and disperse in a diverse array of biotic communities. Nesting habitat is typically in areas with complex forest structure or rocky canyons, and contains uneven-aged, multi-storied mature or old-growth stands that have high canopy closure (Ganey and Balda 1989, USDI 1991). In the northern portion of the range (Utah and Colorado), most nests are in caves or on cliff ledges in steep-walled canyons. Elsewhere, the majority of nests appear to be in Douglas fir (Pseudotsuga menziesii) trees (Fletcher and Hollis 1994, Seamans and Gutierrez 1995). A wide variety of tree species is used for roosting; however, Douglas fir is the most commonly used species in mixed conifer forests (Ganey 1988, Fletcher and Hollis 1994, Young et al. 1998). Owls generally use a wider variety of forest conditions for foraging than they use for nesting/roosting.

Seasonal movement patterns of Mexican spotted owls are variable. Some individuals are year-round residents within an area, some remain in the same general area but show shifts in habitat use patterns, and some migrate considerable distances (20-50 kilometers (km)) (12-31 miles (mi)) during the winter, generally migrating to more open habitat at lower elevations (Ganey and Balda 1989b, Willey 1993, Ganey et al.1998). The home-range size of Mexican spotted owls appears to vary considerably among habitats and/or geographic areas (USDI 1995), ranging in size from 261-1,487 ha (647-3,688 ac) for individuals birds, and 381-1,551 ha (945-3,846 ac) for pairs (Ganey and Balda 1989b, Ganey et al. 1999). Little is known about habitat use by juveniles dispersing soon after fledging. Ganey et al. (1998) found dispersing juveniles in a variety of habitats ranging from high-elevation forests to piñon-juniper woodlands and riparian areas surrounded by desert grasslands.

Mexican spotted owls do not nest every year. The owl's reproductive pattern varies somewhat across its range. In Arizona, courtship usually begins in March with pairs roosting together during the day and calling to each other at dusk (Ganey 1988). Eggs are typically laid in late March or early April. Incubation begins shortly after the first egg is laid, and is performed entirely by the female (Ganey 1988). The incubation period is about 30 days (Ganey 1988). During incubation and the first half of the brooding period, the female leaves the nest only to defecate, regurgitate pellets, or receive prey from the male, who does all or most of the hunting (Forsman et al. 1984, Ganey 1988). Eggs usually hatch in early May, with nestling owls fledging 4 to 5 weeks later, and then dispersing in mid-September to early October (Ganey 1988).

Little is known about the reproductive output for the spotted owl. It varies both spatially and temporally (White et al. 1995), but the subspecies demonstrates an average annual rate of about one young per pair. Based on short-term population and radio tracking studies, and longer-term monitoring studies, the probability of an adult owl surviving from 1 year to the next is 80 to 90 percent. Average annual juvenile survival is considerably lower, at 6 to 29 percent, although it is believed these estimates may be artificially low due to the high likelihood of permanent dispersal from the study area, and the lag of several years before marked juveniles reappear as territory holders and are detected as survivors through recapture efforts (White et al. 1995). Little research has been conducted on the causes of mortality, but predation by great horned owls (Bubo virginianus), northern goshawks (Accipter gentilis), red-tailed hawks (Buteo jamaicensis), and golden eagles (Aquila chrysaetos), as well as starvation, and collisions (e.g., with cars, powerlines), may all be contributing factors.

Mexican spotted owls consume a variety of prey throughout their range, but commonly eat small- and medium-sized rodents such as woodrats (Neotoma spp.), peromyscid mice (Peromyscus spp.), and microtine voles (Microtus spp.). Owls also may consume bats, birds, reptiles, and arthropods (Ward and Block 1995). Each prey species uses a unique habitat, so that the differences in the owl's diet across its range likely reflect geographic variation in population densities and habitats of both the prey and the owl (Ward and Block 1995). Deer mice (P. maniculatus) are widespread in distribution in comparison to brush mice (P. boylei), which are restricted to drier, rockier substrates, with sparse tree cover. Mexican woodrats (N. mexicana) are typically found in areas with considerable shrub or understory tree cover and high log volumes or rocky outcrops. Mexican voles (M. mexicanus) are associated with high herbaceous cover, primarily grasses, whereas long-tailed voles (M. longicaudus) are found in dense herbaceous cover, primarily forbs, with many shrubs and limited tree cover.

Two primary reasons were cited for listing the owl as threatened in 1993: (1) Historical alteration of its habitat as the result of timber management practices, specifically the use of even-aged silviculture, and the threat of these practices continuing; and (2) the danger of catastrophic wildfire. The Recovery Plan for the owl outlines management actions that land management agencies and Indian tribes should undertake to remove recognized threats and recover the spotted owl. This critical habitat designation is based on recovery needs and guidelines identified in the Recovery Plan.

The entire spotted owl species (Strix occidentalis) was classified in the January 6, 1989, Animal Notice of Review (54 FR 554) as a category 2 candidate species. A category 2 candidate species was one for which listing may have been appropriate, but for which additional biological information was needed to support a proposed rule.

On December 22, 1989, we received a petition submitted by Dr. Robin D. Silver requesting the listing of the Mexican spotted owl as an endangered or threatened species. On February 27, 1990, we found that the petition presented substantial information indicating that listing may be warranted and initiated a status review. In conducting our review, we published a notice in the Federal Register (55 FR 11413) on March 28, 1990, requesting public comments and biological data on the status of the Mexican spotted owl. On February 20, 1991, we made a finding, based on the contents of the status review, that listing the Mexican spotted owl under section 4(b)(3)(B)(I) of the Act was warranted. Notice of this finding was published in the Federal Register on April 11, 1991 (56 FR 14678). We published a proposed rule to list the Mexican spotted owl as threatened without critical habitat in the Federal Register on November 4, 1991 (56 FR 56344).

We published a final rule listing the Mexican spotted owl as a threatened species on March 16, 1993 (58 FR 14248). Section 4(a)(3) of the Act requires that, to the maximum extent prudent and determinable, we designate critical habitat at the time a species is determined to be endangered or threatened. The Act's implementing regulations (50 CFR 424.12(a)(2)) state that critical habitat is not determinable if information sufficient to perform required analyses of the impacts of the designation is lacking or if the biological needs of the species are not sufficiently well known to permit identification of an area as critical habitat. At the time of listing, we found that, although considerable knowledge of owl habitat needs had been gathered in recent years, habitat maps in sufficient detail to accurately delineate these areas were not available. After the listing, we began gathering the data necessary to develop a proposed rule to designate critical habitat.

On June 23, 1993, and again on August 16, 1993, we received petitions to remove the Mexican spotted owl from the List of Endangered and Threatened Wildlife. In subsequent petition findings published in the Federal Register (58 FR 49467, 59 FR 15361), we addressed the issues raised in the petitions and determined that the delisting petitions did not present substantial information indicating that delisting the Mexican spotted owl was warranted. The petitioners challenged this decision in Federal District Court in New Mexico in Coalition of Arizona/New Mexico Counties for Stable Economic Growth v. United States Fish and Wildlife Service, et al., CIV 94-1058-MV. The district court held that the Coalition failed to show that the Service violated any procedural rules that amounted to more than harmless error and failed to demonstrate that the Service acted arbitrarily or capriciously in listing or refusing to delist the Mexican spotted owl. A judgment was issued by the district court denying the plaintiff's petition to delist the owl.

On February 14, 1994, a lawsuit was filed in Federal District Court in Arizona against the Department of the Interior for failure to designate critical habitat for the owl (Dr. Robin Silver, et al. v. Bruce Babbitt, et al., CIV-94-0337-PHX-CAM). On October 6, 1994, the Court ordered us to “ * * * publish a proposed designation of critical habitat, including economic exclusion pursuant to 16 U.S.C. Sec. 1533(b)(2), no later than December 1, 1994, [and] publish its final designation of critical habitat, following the procedure required by statute and Federal regulations for notice and comment,” by submitting the final rule to the Federal Register no later than May 27, 1995. Under an extension granted by the court, we issued the proposed rule to designate critical habitat on December 7, 1994 (59 FR 63162).

We prepared a draft economic analysis, and published a notice of its availability in the Federal Register on March 8, 1995 (60 FR 12728; 60 FR 12730). The publication also proposed several revisions to the original proposal, solicited additional information and comments, opened an additional 60-day comment period extending to May 8, 1995, and announced the schedule and location of public hearings. We published a final rule designating critical habitat for the Mexican spotted owl on June 6, 1995 (60 FR 29914).

After the listing of the Mexican spotted owl, a Recovery Team was appointed by our Southwestern Regional Director to develop a Recovery Plan in March 1993. The Team assembled all available data on Mexican spotted owl biology, the threats faced across the subspecies' range, current protection afforded the subspecies, and other pertinent information. Using that information, the Team developed the Recovery Plan, which was finalized in the fall of 1995. In 1996, the Southwest Region of the FS incorporated elements of the Recovery Plan into their Forest Plans.

In 1996, the Tenth Circuit Court of Appeals in Catron County Board of Commissioners v. United States Fish and Wildlife Service, 75 F.3d 1429, 1439 (10th Cir. 1996), ruled that the Service had to comply with the National Environmental Policy Act (NEPA) before designating critical habitat for two desert fish, the spikedace and loach minnow. In addition, a Federal district court in New Mexico later set aside the final rule designating critical habitat for the owl and forbid the Service from enforcing critical habitat for the owl (Coalition of Arizona-New Mexico Counties for Stable Economic Growth v. U.S. Fish and Wildlife Service, No. 95-1285-M Civil). As a result of these court rulings, we removed the critical habitat designation for the owl from the Code of Federal Regulations on March 25, 1998 (63 FR 14378).

On March 13, 2000, the United States District Court for the District of New Mexico, (Southwest Center for Biological Diversity and Silver v. Babbitt and Clark, CIV 99-519 LFG/LCS-ACE), ordered us to propose critical habitat within 4 months of the court order, and to complete and publish a final designation of critical habitat for the Mexican spotted owl by January 15, 2001. On July 21, 2000, we published a proposal to designate critical habitat for the Mexican spotted owl in Arizona, Colorado, New Mexico, and Utah, mostly on Federal lands (65 FR 45336). The initial comment period was open until September 19, 2000. During this 60-day comment period, we held six public hearings on the proposed rule. On October 20, 2000, we published a notice announcing the reopening of the comment period and announced the availability of the draft economic analysis and draft environmental assessment on the proposal to designate critical habitat for the Mexican spotted owl (65 FR 63047). The final comment period was open until November 20, 2000.

In the July 21, 2000, proposed rule, we requested all interested parties to submit comments or information that might bear on the designation of critical habitat for the Mexican spotted owl (65 FR 45336). The first comment period closed September 19, 2000. The comment period was reopened from October 20 to November 20, 2000, to once again solicit comments on the proposed rule and to accept comments on the draft economic analysis and draft environmental assessment (65 FR 63047). We contacted all appropriate State and Federal agencies, Tribes, county governments, scientific organizations, and other interested parties and invited them to comment. In addition, we published newspaper notices inviting public comment and announcing the public hearings in the following newspapers in New Mexico: Albuquerque Journal, Albuquerque Tribune, Sante Fe New Mexican, Silver City Daily Press, Rio Grande Sun, Las Cruces Sun, and Alamogordo Daily News; Arizona: Arizona Republic, Arizona Daily Star, Arizona Daily Sun, Sierra Vista Daily Herald Dispatch, Navajo-Hopi Observer, White Mountain Independent, Lake Powell Chronicle, Verde-Independent-Bugle, Eastern Arizona Courier, and Prescott Daily Courier; Colorado: Rocky Mountain News, Pueblo Chiefton, Denver Post, Colorado Springs Gazette, and Canon City Daily; and Utah: The Spectrum Newspaper, Southern Utah News, Salt-Lake City Tribune, and Times Independent. We held six public hearings on the proposed rule: Sante Fe (August 14, 2000) and Las Cruces (August 15, 2000), New Mexico; Tucson (August 16, 2000) and Flagstaff (August 17, 2000), Arizona; Colorado Springs, Colorado (August 21, 2000); and Cedar City, Utah (August 23, 2000). Transcripts of these hearings are available for inspection (see ADDRESSES section).

We solicited seven independent expert ornithologists who are familiar with this species to peer review the proposed critical habitat designation. However, only two of the peer reviewers submitted comments. Both responding peer reviewers supported the proposal. We also received a total of 27 oral and 813 written comments (the majority of written comments were in the form of printed postcards). Of those oral comments, 10 supported critical habitat designation, 14 were opposed to designation, and 3 provided additional information but did not support or oppose the proposal. Of the written comments, 756 supported critical habitat designation, 38 were opposed to designation, and 19 were neutral but provided information. We reviewed all comments received for substantive issues and new data regarding critical habitat and the Mexican spotted owl. We address all comments received during the comment periods and public hearing testimony in the following summary of issues. Comments of a similar nature are grouped into issues.

(1) Comment: The wording of the attributes of the primary constituent elements are not consistent with the definitions of forest cover types as described in the Mexican Spotted Owl Recovery Plan, and there is a high potential for confusion over exactly which areas are included in the proposed designation. Do all of the primary constituent elements have to be present or just one, for the area to be considered critical habitat? The constituent elements described are vague (violating 50 CFR Sec. 424.12(c)) and should include the required greater detail defining what constitutes critical habitat. The boundaries are impossible to identify.

Our Response: As stated in the critical habitat designation section, the critical habitat designation is consistent with the Mexican Spotted Owl Recovery Plan and includes areas within the mapped boundaries that meet the definition of protected and restricted areas. Protected areas are areas where owls are known to occur or are likely to occur. Protected areas include, (1) 600 acres around known owl sites within mixed conifer forests or (2) pine-oak forests with slopes greater than 40 percent and where timber harvest has not occurred in the past 20 years. Restricted habitat include areas outside of protected areas which may contain Mexican spotted owls. Restricted areas include mixed conifer forest, pine-oak forest and riparian areas.

We clarified the definitions and use of the terms protected and restricted habitat and the attributes of primary constituent elements of critical habitat in this rule. This final rule describes in the greatest detail possible the primary constituent elements important to Mexican spotted owls to the extent the elements are known at this time. If new information on the primary constituent elements becomes available, we will then evaluate whether a revision of designated critical habitat is warranted, depending on funding and staffing.

Critical habitat units are defined by Universal Transverse Mercator (UTM) coordinates. A list of those coordinates can be obtained by contacting the New Mexico Ecological Services Field Office (see ADDRESSES section). We believe that with the revisions to the description of primary constituent elements and the availability of UTM coordinates, the boundaries should be clear.

(2) Comment: Some areas proposed as critical habitat units contain a considerable amount of land that is not suitable for or occupied by Mexican spotted owls, and therefore, the areas should be mapped more accurately. Some commenters questioned whether 13.5 million acres are needed for Mexican spotted owls.

Our Response: There are some areas within the critical habitat boundaries that do not, and cannot, support the primary constituent elements and are, by definition, not considered to be critical habitat, even though they are within the identified mapped boundaries. We clarified the primary constituent element descriptions to assist landowners and managers in identifying areas containing these elements. However, a lack of precise habitat location data and the short amount of time allowed by the court to complete this final designation did not allow us to conduct the fine-scale mapping necessary to physically exclude all of the areas that do not contain suitable habitat. Critical habitat is limited to areas within the mapped boundaries that meet the definition of protected and restricted habitat in the Recovery Plan. In addition, the total gross area included within critical habitat boundaries in this final rule is 4.6 million acres, and the actual area designated as critical habitat is considerably less than the 4.6 million acre figure provided in Table 1.

(3) Comment: Lack of forest management has resulted in successional and structural changes to forests throughout the range of Mexican spotted owl. Designation and management of critical habitat will place an additional burden on land management agencies, further inhibiting their ability to prevent and suppress catastrophic wildfire, one of the greatest threats to the forest types this species inhabits. The risk and intensity of wildfire will increase. Therefore, designating critical habitat seems contradictory to the owl's recovery.

Our Response: Critical habitat designation does not prevent actions that alleviate the risk of wildfire, nor will it have an effect on suppression activities. The maintenance of mature forest attributes in mixed conifer and pine-oak habitat types over a portion of the landscape and in areas that support existing owl territories is important to the recovery of the Mexican spotted owl; however, critical habitat designation does not emphasize the creation of these features where they do not currently exist. It also does not preclude the proactive treatments necessary to reduce the risk of catastrophic fire. Clearly, the loss of owl habitat by catastrophic fire is counter to the intended benefits of critical habitat designation.

Section 7 prohibits actions funded, authorized, or carried out by Federal agencies from jeopardizing the continued existence of a listed species or destroying or adversely modifying the listed species' critical habitat. Actions likely to “jeopardize the continued existence” of a species are those that would appreciably reduce the likelihood of the species' survival and recovery (50 CFR 402.02). Actions likely to “destroy or adversely modify” critical habitat are those that would appreciably reduce the value of critical habitat for the survival and recovery of the listed species (50 CFR 402.02). Common to both definitions is an appreciable detrimental effect on both survival and recovery of a listed species. Given the similarity of these definitions, actions likely to destroy or adversely modify critical habitat would almost always result in jeopardy to the species concerned when the habitat is occupied by the species. Therefore, the designation of critical habitat likely will not require any additional restrictions for section 7 consultations, including projects designed to reduce the risk of wildfire (e.g., prescribed burns, mechanical thinning, etc.). Furthermore, we expect that some activities may be considered to be of benefit to Mexican spotted owl habitat and, therefore, would not be expected to adversely modify critical habitat or place an additional burden on land management agencies. Examples of activities that could benefit critical habitat may include some protective measures such as fire suppression, prescribed burning, brush control, snag creation, and certain silvicultural activities such as thinning.

We agree that many vegetative communities have undergone successional and structural changes as a result of past and current management practices. These practices include, to varying degrees, the combined effects of long-term and widespread fire suppression, reduction in surface fuels, rates of tree overstory removal and regeneration treatments on cycles shorter than those found in natural disturbance regimes, inadequate control of tree densities responding to fire suppression and tree harvest, and in xeric forest types, decreases in the proportion of the landscape in stands composed of more fire resistant large-diameter trees. We also agree that the vegetative structural and landscape changes may require proactive management to restore an appropriate distribution of age classes, control regeneration densities, and reintroduce some measure of natural disturbance processes such as fire events. This may include prescribed fire and thinning treatments, restoration of the frequency and spatial extent of such disturbances as regeneration treatments, and implementation of prescribed natural fire management plans where feasible. We consider use of such treatments to be compatible with the ecosystem management of habitat mosaics and the best way to reduce the threats of catastrophic wildfire. We will fully support land management agencies in addressing the management of fire to protect and enhance natural resources under their stewardship.

(4) Comment: The designation of critical habitat for the Mexican spotted owl will conflict with the management objectives of other animal and plant species and ecosystem management. The designation of critical habitat will surely have an impact on many other species of wildlife.

Our Response: Critical habitat management primarily focuses on the maintenance of habitat features in mixed conifer and pine-oak habitat types that support Mexican spotted owls, and the maintenance of good montane riparian habitat conditions. It does not emphasize the creation of these features where they do not currently exist, or do not have the potential to naturally occur. The management approach to critical habitat addresses diversity at the landscape scale by maintaining spatial variation and distribution of age classes, and at the stand scale by managing for complex within-stand structure. The methods to attain or conserve the desired measure of diversity vary, but are designed to maintain existing mature/old forest characteristics while allowing some degree of timber harvest and management of other objectives such as tree density control and prescribed fire. Older forests are productive successional stages that provide favorable environments for diverse assemblages of plants and animals. The maintenance of this under represented seral stage at landscape and stand scales will provide and enhance biological diversity. Therefore, critical habitat management does not preclude managing for other objectives or other species. In addition, critical habitat management is adaptive and will incorporate new information on the interaction between natural disturbance events and forest ecology. We continue to support sound ecosystem management and the maintenance of biodiversity.

As outlined in our final environmental assessment, in areas within the geographic range occupied by the Mexican spotted owl, native fish, wildlife, and plants may directly or indirectly benefit as a result of ecosystem protections provided through the conservation of the owl and the associated requirements of section 7 of the Act. Designation of critical habitat in areas within the geographic range potentially occupied by the owl could provide similar ecological benefits to fish, wildlife, and plants.

(5) Comment: How does the critical habitat designation correspond to the reasons why the owl is listed?

Our Response: The two primary reasons for listing the Mexican spotted owl as threatened were historical alteration of its habitat as the result of timber management practices, and the threat of these practices continuing; and the risk of catastrophic wildfire (58 FR 14248). The Recovery Plan outlines management actions that land managers should undertake to remove recognized threats and recover the spotted owl. This critical habitat designation is based on recovery needs identified in the Recovery Plan, and therefore promotes the reduction in the threats that necessitated listing the Mexican spotted owl. By not adversely modifying or destroying critical habitat, the threat of alteration by timber management practices is reduced.

(6) Comment: Your list of constituent elements and condemnation of even-aged silviculture suggests that the constituent elements must occur on every acre of the 13.5 million acres. There appears to be an attempt to idealize and maximize owl populations over a very large area. The owl is flexible, adaptable, and capable of doing well with less and surviving.

Our Response: The determination of primary constituent elements and designation of critical habitat is consistent with the Mexican Spotted Owl Recovery Plan. In the Recovery Plan, we outline steps necessary to remove the owl from the list of threatened species (see response to comment 9). The Recovery Plan recognizes that Mexican spotted owls nest, roost, forage, and disperse in a diverse array of biotic communities. The Recovery Plan provides realistic goals for the recovery of the species (including a significant increase in owl population numbers), and these goals are flexible in that they require local land managers to make site-specific decisions, including silviculture management.

(7) Comment: Designation of critical habitat is not needed to conserve the owl, because there is information that shows the spotted owl is doing very well; a year ago you were in the process of delisting the spotted owl, because it was doing well. What happened to that activity?

Our Response: We never proposed nor began the process of delisting the Mexican spotted owl. Although the Mexican spotted owl appears to be doing well in some areas of its range (e.g., Sacramento Ranger District, Lincoln National Forest, New Mexico), other populations may be declining (Seamans et al. 1999). On September 23, 1993, and April 1, 1994, we announced separate 90-day findings on two petitions to remove the Mexican spotted owl from the list of endangered and threatened wildlife (FR 58 49467, FR 59 15361). We found that the petitions did not present substantial scientific or commercial information indicating that delisting the Mexican spotted owl was warranted.

(8) Comment: The designation of critical habitat will not provide any additional conservation benefit to the Mexican spotted owl, which is already protected under section 7.

Our Response: We agree that designation of critical habitat will provide no additional regulatory benefit in areas already managed compatibly with owl recovery. However, the designation of critical habitat may provide some additional conservation benefit to the Mexican spotted owl on lands that are within the geographic range potentially occupied or that may become unoccupied in the future since section 7 consultations required under the listing of the species may not always be done in these areas of potentially occupied habitat. Critical habitat designation requires Federal agencies to consult with us to ensure that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat.

(9) Comment: Several commenters questioned whether the designation of critical habitat will improve conservation of the Mexican spotted owl because the current Recovery Plan is being implemented.

Our Response: Lands managed by agencies who have formally adopted the Recovery Plan, as well as Indian Tribes who are implementing management plans compatible with owl recovery, have been excluded from the designation.

A recovery plan for the Mexican spotted owl was finalized in December 1995. This plan recommends recovery goals, strategies for varying levels of habitat protection, population and habitat monitoring, a research program to better understand the biology of the Mexican spotted owl, and implementation procedures. In addition, we have continued working with the Mexican spotted owl recovery team since the plan was finalized. We believe this critical habitat designation is consistent with the Recovery Plan and recommendations of those team members, and will contribute to the conservation and eventual recovery of the species. Designation of critical habitat will help to implement the Recovery Plan because it helps to conserve habitat for the Mexican spotted owl; one of the actions outlined in the Recovery Plan.

(10) Comment: One commenter stated that not enough information is known about the total habitat requirements of the species to define critical habitat.

Our Response: Section 4(b)(2) of the Act states “The Secretary shall designate critical habitat, and make revisions thereto, under section (a)(3) on the basis of the best scientific data available * * *” We considered the best scientific information available at this time, as required by the Act. Our recommendation is based upon a considerable body of information on the biology of the Mexican spotted owl, as well as effects from land-use practices on their continued existence. Much remains to be learned about this species; should credible, new information become available which contradicts this designation, we will reevaluate our analysis and, if appropriate, propose to modify this critical habitat designation, depending on available funding and staffing.

(11) Comment: The designation of critical habitat will place an additional burden on land management agencies above and beyond what the listing of the species would require. The number of section 7 consultations will increase; large areas where no Mexican spotted owls are known to occur will now be subject to section 7 consultation and will result in a waste of time and money by the affected agencies. Many Federal agencies have been making a “no effect” call within unoccupied suitable habitat. Now, with critical habitat there will be “may effect” determinations, and section 7 consultation will be required if any of the constituent elements are present.

Our Response: If a Federal agency funds, authorizes, or carries out an action that may affect either the Mexican spotted owl or its critical habitat, the Act requires that the agency consult with us under section 7 of the Act. For a project to affect critical habitat, it must affect the habitat features important to the Mexican spotted owl, which are defined in the regulation section in this final rule. Our view is and has been that any Federal action within the geographic area occupied or potentially occupied by the species that affects these habitat features should be considered a situation that “may affect” the Mexican spotted owl and should undergo section 7 consultation. This is true whether or not critical habitat is designated, even when the particular project site within the larger geographical area occupied by the species is not known to be currently occupied by an individual Mexican spotted owl. All areas designated as critical habitat are within the geographical area occupied or potentially occupied by the species, so Federal actions affecting essential habitat features of the species should undergo consultation. Thus, the need to conduct section 7 consultation should not be affected by critical habitat designation. As in the past, the Federal action agency will continue to make the determination as to whether their project may affect a species even when the particular project site is not known to be currently occupied by an individual Mexican spotted owl.

(12) Comment: Many commenters expressed concern that the Mexican Spotted Owl Recovery Plan is not being implemented, and that federally funded or authorized activities (i.e., logging, grazing, dam construction, etc.) within Mexican spotted owl habitat are not consistent with recovery for the species and/or are not undergoing section 7 consultation for potential impacts to the owl.

Our Response: We have consulted with Federal agencies on numerous projects since we issued the Recovery Plan. The Recovery Plan recognizes, as do we, that agencies must make management decisions for multiple use objectives, and that other pressing resource needs may not always be compatible with Mexican spotted owl recovery. Thus, agencies consult with us under section 7 when they propose actions that may be inconsistent with Recovery Plan recommendations, as well as when they propose actions may affect the species or critical habitat. However, there have been no consultations to date that have concluded that a proposed action is likely to jeopardize the continued existence of the Mexican spotted owl. Further, we are not aware of instances where action agencies have failed to properly consult on actions that may affect the species or its habitat.

(13) Comment: One commenter believes that the designation of critical habitat for the Mexican spotted owl conflicts with the Federal Land Policy and Management Act of 1976, the Mining and Minerals Policy Act of 1970, the National Materials and Minerals Policy, Research, and Development Act of 1980, and other State and county policies and plans within the four States.

Our Response: We read through the comments and information provided concerning the various acts and policies; however, the commenter failed to adequately explain the rationale for why they believe critical habitat designation conflicts with the above Federal laws and policies or other State and County policies and plans. We are unaware of any conflicts with the cited laws, policies, and plans.

(14) Comment: The Rocky Mountain Region of the Forest Service provided Geographic Information System (GIS) coverages for Pike and San Isabel National Forests and the Royal Gorge Resource area of the BLM. They requested that we revise the critical habitat units in these areas by reducing the size of one critical habitat unit and increasing the size of another. The FS indicated that suggested revisions are based upon digital elevation models, elevation, vegetation, Mexican spotted owl surveys, and BLM land management designations (i.e., wilderness study areas). There was an expressed concern that much of the area within the proposed critical habitat boundaries does not contain the combination of primary constituent elements and attributes to meet the definition of critical habitat and should not be included.

Our Response: We considered the information provided by the commenter and determined that the critical habitat units contain areas that meet the definition of protected areas in the Recovery Plan (e.g., slopes greater than 40 percent where timber harvest has not occurred in the past 20 years). The BLM land management designations (i.e., wilderness study areas) do not provide “special management considerations or protections,” pursuant to the definition of critical habitat in section 3 of the Act. Likewise, we have no formal documentation (e.g., consultation records) that demonstrates whether the FS or BLM is integrating the Mexican Spotted Owl Recovery Plan into their activities. Thus, these lands do not meet our criteria for exclusion and we conclude the areas should be designated as they were originally proposed.

We recognize that some areas within the critical habitat units do not contain protected habitat or restricted habitat. These areas are not considered critical habitat. Critical habitat is limited to areas within the mapped boundaries that meet the definition of protected or restricted habitat as described in the Recovery Plan.

(15) Comment: Some commenters expressed concern that there are areas containing Mexican spotted owls, but these were not within the critical habitat boundaries. Additional areas not identified in the proposed rule should be designated critical habitat.

Our Response: The critical habitat designation did not include some areas that are known to have widely scattered owl sites, low population densities, and/or marginal habitat quality, which are not considered to be essential to this species' survival or recovery. Section 3(5)(C) of the Act and our regulations (50 CFR Sec. 424.12(e)) state that, except in certain circumstances, not all suitable or occupied habitat be designated as critical habitat, rather only those areas essential for the conservation of the species. Additionally, section 4(b)(4) of the Act requires that areas designated as critical habitat must first be proposed as such. Thus, we cannot make additions in this final rule to include areas that were not included in the proposed rule. Designation of such areas would require a new proposal and subsequent final rule.

If, in the future, we determine from information or analysis that those areas designated in this final rule need further refinement or additional areas are identified which we determine are essential to the conservation of the species and require special management or protection, we will evaluate whether a revision of critical habitat is warranted at that time.

(16) Comment: Why are areas included in the designation that are not presently occupied by the Mexican spotted owl?

Our Response: The inclusion of both currently occupied and potentially occupied areas in this critical habitat designation is in accordance with section 3(5)(A) of the Act, which provides that areas outside the geographical area currently occupied by the species may meet the definition of critical habitat upon a determination that they are essential for the conservation of the species. Our regulations also provide for the designation of areas outside the geographical area currently occupied if we find that a designation limited to its present range would be inadequate to ensure the conservation of the species (50 CFR 424.12(e)). The species' Recovery Plan recommends that some areas be managed as “restricted habitat” in order to provide for future population expansion and to replace currently occupied areas that may be lost through time. We believe that such restricted habitat is essential and necessary to ensure the conservation of the species.

(17) Comment: If land has dual ownership of private and Federal, is it critical habitat? The land in question is under private ownership and the mineral rights are owned by the BLM.

Our Response: The surface ownership is what would contain the primary constituent elements of critical habitat. Because the surface ownership is private and we are not including private land in this designation, we would not consider the lands to be designated critical habitat. However, if a Federal agency (e.g., BLM) funds, authorizes, or carries out an action (e.g., mineral extraction) that may affect the Mexican spotted owl or its habitat, the Act requires that the agency consult with us under section 7 of the Act. This is required whether or not critical habitat is designated for a listed species.

(18) Comment: Fort Carson, Colorado, provided information during the comment period that indicated the Mexican spotted owl is not known to nest on the military installation and the species is a rare winter visitor. Protected and restricted habitat is also not known to exist on Fort Carson. Further, Fort Carson is updating the Integrated Natural Resources Management Plan (INRMP) to include specific guidelines and protection measures that have been recently identified through informal consultation with us. The INRMP will include measures to provide year-round containment and suppression of wildland fire and the establishment of a protective buffer zone around each roost tree. The target date of completion for this revision is early 2001. Fort Carson, through consultation with us, indicated they will ensure that the INRMP will meet the criteria for exclusion. They also provided additional information and support to indicate that no protected or restricted habitat exists on the base, and asked to be excluded from the final designation.

Our Response: We agree that Fort Carson should be excluded from the final designation (see discussion under Exclusions section). Nevertheless, Federal agencies are already required to consult with us on activities with a Federal nexus (i.e., when a Federal agency is funding, permitting, or in some way authorizing a project) when their activities may affect the Mexican spotted owl. For example, if Mexican spotted owls are present during certain times of the year (e.g., winter) and there is the potential for Fort Carson's activities to affect the species, the Act requires they consult with us under section 7, regardless of critical habitat designation.

(19) Comment: How will the exclusion of certain lands (e.g., State, private, Tribal) affect recovery and delisting of the Mexican spotted owl?

Our Response: In accordance with section 3(5)(A)(i) of the Act and regulations at 50 CFR 424.12, we are required to base critical habitat designation on the best scientific and commercial data available and to consider those physical and biological features (primary constituent elements) that are essential to conservation of the species and that may require special management considerations or protection. We designated critical habitat for those lands we determined are essential to conservation of the Mexican spotted owl. We did not include certain lands (e.g., State, private, and Tribal) because we determined these lands are either not essential to the recovery of the Mexican spotted owl or are already managed in a manner compatible with Mexican spotted owl conservation. The exclusion of State, private, and tribal lands in the designation of critical habitat for the Mexican spotted owl will not affect the recovery and future delisting of the species. Whether or not a species has designated critical habitat, it is protected both from any actions resulting in an unlawful take and from Federal actions that could jeopardize the continued existence of the species.

(20) Comment: The areas proposed as critical habitat in Colorado make up 4.2 percent of the total proposed critical habitat. Much of the areas proposed in Colorado do not contain the primary constituent elements for critical habitat of the Mexican spotted owl. It is difficult to understand how the small amount of habitat proposed in Colorado is essential for the survival and recovery of the owl. The current tree stocking levels, species composition, and stand structure of areas proposed as critical habitat in Colorado do not currently nor are they likely to meet the definition of threshold habitat as defined in the Recovery Plan.

Our Response: We carefully considered the information provided with the above comment. If habitat within the mapped boundaries does not meet the definition of protected or restricted habitat as described in the Recovery Plan, then it is not considered critical habitat. We agree that not all of the land within the critical habitat boundaries in Colorado supports protected and restricted habitat and, therefore, is not critical habitat.

(21) Comment: The statement that continued grazing in upland habitat will not adversely affect or modify critical habitat is unsubstantiated and is counter to FS information that suggests grazing may affect Mexican spotted owl prey and increase the susceptibility of owl habitat to fire.

Our Response: Our data indicate that continued grazing in upland habitat has the potential to adversely impact the owl or its designated critical habitat. We concur with reports that there may be a link between continued grazing and an effect to Mexican spotted owl prey populations. We understand that the natural fire regime of frequent low-intensity and spatially extensive understory fire events has been interrupted by a variety of reasons (e.g., grazing eliminating fine fuels, suppression of wildfires, etc). When grazing activities involve Federal funding, a Federal permit, or other Federal action, consultation is required when such activities have the potential to adversely affect the Mexican spotted owl or its critical habitat. The consultation will analyze and determine to what degree those activities impact the Mexican spotted owl.

(22) Comment: A premise for the proposed rule is that the Service was ordered by the court on March 13, 2000, to designate critical habitat by January 15, 2001. The court may not order critical habitat to be designated. Rather, the court may order the Service to make a decision on whether to designate critical habitat. The designation of critical habitat is an action that is ultimately discretionary, and the Service must apply the criteria in the ESA and its regulations to decide whether to designate critical habitat. Thus, the Service should seek correction of that court order and reconsider whether and to what extent critical habitat should be designated.

Our Response: The commenter is correct that we cited a court order requiring actual designation of critical habitat. However, recent case law has indicated that critical habitat designation is required for listed species except in only rare instances (for example, Natural Resources Defense Council versus U.S. Department of the Interior 113 F. 3d 1121 (9th Cir. 1997); Conservation Council for Hawaii versus Babbitt, 2 F. Supp. 2d 1280 (D. Hawaii 1998)). Thus, we saw no reason to challenge the court order.

(23) Comment: Are lands within a National Park that are already protected, but proposed as wilderness areas, considered critical habitat?

Our Response: Yes, we consider lands that are within critical habitat boundaries, that contain the primary constituent elements, and required special management and protection, as critical habitat, regardless of whether they are currently designated as wilderness.

(24) Comment: Military aircraft overflights and ballistic missile testing activities have no adverse effect on Mexican spotted owl critical habitat.

Our Response: The designation of critical habitat will not impede the ability of military aircraft to conduct overflights nor to conduct ballistic missile testing activities. Activities such as these that do not affect designated critical habitat will not require section 7 consultation. However, proposed low-level military aircraft overflights that could potentially affect the Mexican spotted owl will be reviewed during the consultation process as they have in the past.

(25) Comment: Explain the rationale for excluding, by definition, State and private lands from the proposed designation; there are documented nesting sites for the Mexican spotted owl in Colorado located on State-leased lands; State and private lands should be included; the majority of owl locations are from Federal lands because no one is doing surveys on private and State lands.

Our Response: Although we are aware of some Mexican spotted owl locations on State and private lands, the majority of owl locations are from Federal and Tribal lands. Thus, we believe that Mexican spotted owl conservation can best be achieved by management of Federal and Tribal lands, and determined that State and private lands are not essential to the species' recovery.

(26) Comment: Several commenters asked whether projects that have obtained a biological opinion pursuant to section 7 of the Act would be required to reinitiate consultation to address the designation of critical habitat. Will the FS have to reinitiate consultation on their Forest Plans when critical habitat is designated?

Service Response: In the case of projects that have undergone section 7 consultation and where that consultation did not address potential destruction or adverse modification of critical habitat for the Mexican spotted owl, reinitiation of section 7 consultation may be required. We expect that projects that do not jeopardize the continued existence of the Mexican spotted owl will not likely destroy or adversely modify its critical habitat and no additional modification to the project would be required.

(27) Comment: The El Paso Natural Gas Company questioned whether the designation of critical habitat will require consultation for routine maintenance and operations. For example, if a linear pipeline project crosses State, private, and FS lands, will consultation be required?

Our Response: Federal agencies are already required to consult with us on activities with a Federal nexus (i.e., when a Federal agency is funding, permitting, or in some way authorizing a project) when their activities may affect the species. We do not anticipate additional regulatory requirements beyond those required by listing the Mexican spotted owl as threatened. For routine maintenance and operations of public utilities or if a linear pipeline project crosses State, private, and FS lands and does not affect critical habitat, consultation will not be required. If maintenance activities would affect critical habitat and there is a Federal nexus, then section 7 consultation will be necessary.

(28) Comment: The National Forests in Arizona have amended their land and resource management plans to incorporate the Mexican Spotted Owl Recovery Plan. Consistent with the Service's justification for not designating critical habitat on certain tribal lands because habitat management plans are still valid and being implemented on these lands, the designation of critical habitat on FS lands may not be necessary because of existing land and resource management plans that are responsive to Mexican spotted owl conservation.

Our Response: We determined that FS lands in Arizona and New Mexico do not meet the definition of critical habitat, and have not been included in this designation (see Exclusions section).

(29) Comment: Several commenters questioned what the phrase, “may require special management considerations,” means; what kind of management activities might be implemented?

Our Response: Under the definition of critical habitat, an area must be both essential to a species' conservation and require “special management considerations or protections.” Our interpretation is that special management is not required if adequate management or protections are already in place. Adequate special management or protection is provided by a legally operative plan that addresses the maintenance and improvement of the primary constituent elements important to the species and manages for the long term conservation of the species (see Exclusions Under Section 3(5)(A) Definition section).

(30) Comment: Maps and descriptions provided are vague and violate the Act and 50 CFR Sec. 424.12(c).

Our Response: The required descriptions of areas designated as critical habitat are available from the New Mexico Ecological Services Field Office (see ADDRESSES section), as are more detailed maps and GIS digital files. The maps published in the Federal Register are for illustration purposes, and the amount of detail that can be published is limited. If additional clarification is necessary, contact the New Mexico Ecological Services Field Office.

(31) Comment: Several commenters questioned the adequacy of the Environmental Assessment (EA) and other aspects of our compliance with NEPA. They believe the Fish and Wildlife Service should prepare an Environmental Impact Statement (EIS) on this action.

Our Response: The commenters did not provide sufficient rationale to explain why they believed the EA was inadequate and an EIS necessary. An EIS is required only in instances where a proposed Federal action is expected to have a significant impact on the human environment. In order to determine whether designation of critical habitat would have such an effect, we prepared an EA of the effects of the proposed designation. We made the draft EA available for public comment on October 20, 2000, and published notice of its availability in the Federal Register (65 FR 63047). Following consideration of public comments, we prepared a final EA and determined that critical habitat designation does not constitute a major Federal action having a significant impact on the human environment. That determination is documented in our Finding of No Significant Impact (FONSI). Both the final EA and FONSI are available for public review (see ADDRESSES section).

(32) Comment: Several local and county governments, a coalition of Arizona and New Mexico counties, and a Soil and Water Conservation District requested Joint Lead Agency or Cooperating Agency status in preparation of the NEPA documents for this critical habitat designation. Why were those requests denied?

Our Response: The Village of Cloudcroft; Otero County, New Mexico; the Board of Coalition of Arizona/New Mexico Counties for Stable Economic Growth; and the San Francisco Soil and Water Conservation District, New Mexico, requested Joint Lead Agency status to assist us in preparation of the NEPA documents on the critical habitat designation. When preparing an EIS, a Joint Lead Agency may be a Federal, State, or local agency. However, a cooperating agency may only be another Federal agency (40 CFR 1501.5 and 1501.6). In our EA on the proposed action, we determined that an EIS was not necessary. Thus, the EA resulted in a FONSI, and the issue of Joint Lead Agency or Cooperating Agency status on preparation of an EIS became moot.

(33) Comment: The draft economic analysis failed to adequately estimate the potential economic impacts to landowners regarding various forest management practices.

Our Response: The economic analysis addressed a variety of forest management concerns that were voiced by stakeholders (e.g., fire and grazing management, timber harvesting, etc.). These activities are usually subject to a Federal nexus because the actions involve Federal funding, permitting, or authorizations. Although critical habitat designation may result in new or reinitiated consultations associated with activities on Federal lands, we believe these activities likely will not result in additional modifications beyond that required by listing. Whether or not a species has designated critical habitat, it is protected both from any actions resulting in an unlawful take and from Federal actions that could jeopardize the continued existence of the species.

(34) Comment: Several commenters voiced concern that they were not directly contacted for their opinions on the economic impacts of critical habitat designation.

Our Response: It was not feasible to contact every potential stakeholder in order for us to develop a draft economic analysis. We believe we were able to understand the issues of concern to the local communities based on public comments submitted on the proposed rule and draft economic analysis, on transcripts from public hearings, and from detailed discussions with Service representatives. To clarify issues, we solicited information and comments from representatives of Federal, State, Tribal, and local government agencies, as well as some landowners.

(35) Comment: The draft Economic Analysis and Environmental Assessment were not available for comment during the first comment period; the opportunity for public comment on these documents was limited.

Our Response: We published the proposed critical habitat determination in the Federal Register on July 21, 2000, and invited public comment for 60 days. We used comments received on the proposed critical habitat to develop the draft economic analysis. We reopened the comment period from October 20 to November 20, 2000, to allow for comments on the draft Economic Analysis, Environmental Assessment, and proposed rule. We believe that sufficient time was allowed for public comment given the short time frame ordered by the court.

(36) Comment: Your draft Economic Analysis did not consider watersheds, nor water rights, State water rights, nor adjudication with Texas on water rights, nor the effect on water rights of any of the people within those watersheds.

Our Response: In conducting our economic analysis, we read through these comments and concluded that the commenter failed to adequately explain the rationale for why they believe critical habitat designation for the Mexican spotted owl impacts watersheds or water rights.

(37) Comment: The draft economic analysis and proposed rule do not comply with Executive Order 12866, which requires each Federal agency to assess the costs and benefits of proposed regulations.

Our Response: We determined that this rule will not have an annual economic effect of $100 million or adversely affect an economic sector, productivity, jobs, the environment, or other units of government. Thus, a cost-benefit analysis is not required for purposes of Executive Order 12866 (see Required Determinations section).

(38) Comment: The draft economic analysis, draft environmental assessment, and proposed rule failed to adequately estimate and address the potential economic and environmental consequences and how timber, fuel wood, land acquisition and disposal, oil and gas development, and mining would be impacted by the designation.

Our Response: We solicited further information and comments associated with the potential impacts of designating critical habitat for the Mexican spotted owl. We read through all comments received during the two comment periods and have concluded that further information was not provided on how the designation of critical habitat would result in economic or environmental consequences beyond those already addressed in the economic analysis, environmental assessment, or this final rule.

(39) Comment: One commenter questioned whether publishing the proposed rule on July 21, 2000, and not releasing the EA until October 20, 2000, violated the intent of NEPA by being pre-decisional. Others contend that the range of alternatives considered in the EA was inadequate.

Our Response: We began work on our Environmental Assessment at approximately the same time we began to draft the proposed rule. Our Proposed Alternative in the EA was to finalize the designation of critical habitat as described in the proposed rule published in the Federal Register on July 21, 2000 (65 FR 45336). The draft EA considered a no-action alternative and four action alternatives. We believe our EA was consistent with the spirit and intent of NEPA, and was not pre-decisional.

(40) Comment: The assumption applied in the economic analysis that the designation of critical habitat will cause no impacts above and beyond those caused by listing of the species is faulty, legally indefensible, and contrary to the ESA. “Adverse modification'and “jeopardy” are different, will result in different impacts, and should be analyzed as such in the economic analysis.

Our Response: The statutory language in the Act prohibits us from considering economic impacts when determining whether or not a species should be added to the list of federally protected species. As a result, the designation of critical habitat for the Mexican spotted owl has been evaluated in the economic context known as “with” critical habitat and “without” critical habitat (i.e., the effects of listing alone). Elsewhere in this rule we discuss that the definitions of “jeopardy” to the species and “adverse modification” of critical habitat are nearly identical and that the designation of critical habitat will not have significant economic impacts above and beyond those already imposed by listing the Mexican spotted owl. Further, it is our position that both within and without critical habitat, Federal agencies should consult with us if a proposed action is (1) within the geographic areas occupied and potentially occupied by the species, whether or not owls have been detected on the specific project site; (2) the project site contains habitat features that can be used by the species; and (3) the proposed action is likely to affect that habitat (see response to comment 12).

(41) Comment: The proposed designation of critical habitat will impose economic hardship on private landowners. There is an expressed concern that the proposed critical habitat designation would have serious financial implications for grazing and sources of revenue that depend upon Federal “multiple-use” lands. The designation will have harmful impacts on the quality of life, education, and economic stability of small towns.

Our Response: As stated in the economic analysis, the proposed rule to designate critical habitat for the Mexican spotted owl is adding few, if any, new requirements to the current regulatory process. Since the adverse modification standard for critical habitat and the jeopardy standard are almost identical, the listing of the Mexican spotted owl itself initiated the requirement for consultation. The critical habitat designation adds no additional requirements not already in place due to the species' listing.

(42) Comment: Why are tribal lands included in the proposed designation?

Our Response: In our proposal to designate critical habitat, we found that lands of the Mescalero Apache, San Carlos Apache, and Navajo Nation likely met the definition of critical habitat with respect to the Mexican spotted owl, and portions of those lands were proposed as critical habitat. However, we worked with the tribes in developing voluntary measures adequate to conserve Mexican spotted owls on tribal lands. The Navajo Nation and Mescalero Apache Tribe completed management plans for the Mexican Spotted Owl that are consistent with the Recovery Plan. The San Carlos Apache Reservation management plan is substantially complete and is expected to be completed in March 2001. We reviewed a draft of their plan and found it to be consistent with the Recovery Plan. We determined that adequate special management is being provided for the Mexican spotted owl on the Navajo Nation and Mescalero Apache lands and, therefore, they were not included in the designation since they do not meet the definition of critical habitat (see Exclusions Under Section 3(5)(A) Definition section of this rule for further information). In the case of the San Carlos Apache Reservation we found, in accordance with section 4(b)(2) of the Act, that the benefits of excluding their lands outweighed the benefits of including them in the designation (see American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act section of this rule for further information).

(43) Comment: The Mescalero Apache Tribe believes the Service did not adequately consider how the designation of critical habitat on tribal lands will benefit the Mexican spotted owl or how the designation will impact the Mescalero Apache Reservation.

Our Response: We did not include the Mescalero Apache or other tribal lands in the final designation. As stated in our response above, we determined that adequate special management is being provided for the Mexican spotted owl on Mescalero Apache lands and, therefore, they were not included in the designation since they do not meet the definition of critical habitat.

(44) Comment: The designation of critical habitat would constitute a “government land grab.” The Mexican spotted owl is merely the vehicle by which environmental groups plan to stop harvest of “old growth” forests.

Our Response: The designation of critical habitat has no effect on non-Federal actions taken on private or State lands, even if the land is within the mapped boundary of designated critical habitat, because these lands were specifically excluded from the designation. We believe that the designation of critical habitat for the Mexican spotted owl does not impose any additional restrictions on land managers/owners within those areas designated as critical habitat, beyond those imposed due to the listing of the Mexican spotted owl (see response to comment 11). All landowners are responsible to ensure that their actions do not result in the unauthorized take of a listed species, and all Federal agencies are responsible to ensure that the actions they fund, permit, or carry out do not result in jeopardizing the continued existence of a listed species, regardless of where the activity takes place.

We also note that this designation is consistent with the Recovery Plan. While the Recovery Plan does not explicitly protect “old-growth” forests, it does recommend that large trees and other forest attributes that may be found in “old-growth” forests be retained to the extent practicable within certain forest types. Large trees are important ecosystem components, have been much reduced in the Southwest, and take many decades to replace once they are lost.

(45) Comment: The Mexican spotted owl by its very name is not exclusive to the United States. Typical of most Mexican fauna entering the United States, it appears rarer than it really is. Therefore, it is Mexico's duty to protect it.

Our Response: A significant portion of the species' entire population occurs in the United States. Furthermore, according to CFR 402.12(h) “Critical habitat shall not be designated with foreign countries or in other areas outside of the United States jurisdiction.”

(46) Comment: Why were the public hearings in Utah held in the southwestern part of the State when most of the critical habitat is in the southeastern portion?

Our Response: The Act requires that at least one public hearing be held if requested. We held six public hearings throughout the four state region. We selected Cedar City, Utah, for a hearing location because of its proximity to four of the five proposed critical habitat units in the State.

(47) Comment: The designation of critical habitat abrogates the Treaty of Guadalupe Hidalgo. You do not have constitutional authority to do so.

Our Response: The Treaty of Guadalupe Hidalgo resulted in grants of land made by the Mexican government in territories previously appertaining to Mexico, and remaining for the future within the limits of the United States. These grants of land were respected as valid, to the same extent that the same grants would have been valid within the territories if the grants of land had remained within the limits of Mexico. The designation of critical habitat has no effect on non-Federal actions taken on private land (e.g., land grants), even if the private land is within the mapped boundary of designated critical habitat because we excluded State and private lands by definition. Critical habitat has possible effects on activities by private landowners only if the activity involves Federal funding, a Federal permit, or other Federal action. If such a Federal nexus exists, we will work with the landowner and the appropriate Federal agency to ensure that the landowner's project can be completed without jeopardizing the species or adversely modifying critical habitat. The designation of critical habitat for the Mexican spotted owl in no way abrogates any treaty of the United States.

(48) Comment: Many commenters were concerned that the designation of critical habitat would prohibit recreational and commercial activities from taking place.

Our Response: As stated in the economic analysis and this final rule, we do not believe the designation of critical habitat will have adverse economic effects on any landowner above and beyond the effects of listing of the species. It is correct that projects funded, authorized, or carried out by Federal agencies, and that may affect critical habitat, must undergo consultation under section 7 of the Act. This provision includes commercial activities. However, as stated elsewhere in this final rule, we do not expect the result of those consultations to result in any restrictions that would not be required as a result of listing the Mexican spotted owl as a threatened species.

Designation of critical habitat does not preclude commercial projects or activities such as riparian restoration, fire prevention/management, or grazing if they do not cause an adverse modification of critical habitat. We will work with Federal agencies that are required to consult with us under section 7 of the Act to ensure that land management will not adversely modify critical habitat (see responses to prior comments).

Critical habitat is defined in section 3(5)(A) of the Act as—(i) the specific areas within the geographic area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) that may require special management considerations or protection and; (ii) specific areas outside the geographic area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. The term “conservation,” as defined in section 3(3) of the Act, means “the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary” (i.e., the species is recovered and removed from the list of endangered and threatened species).

Section 4(b)(2) of the Act requires that we base critical habitat designation on the best scientific and commercial data available, taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. We may exclude areas from critical habitat designation if we determine that the benefits of exclusion outweigh the benefits of including the areas as critical habitat, provided the exclusion will not result in the extinction of the species.

In order to be included in a critical habitat designation, the habitat must first be “essential to the conservation of the species.” Critical habitat designations identify, to the extent known using the best scientific and commercial data available, habitat areas that provide essential life cycle needs of the species (i.e., areas on which are found the primary constituent elements, as defined at 50 CFR 424.12(b)).

Section 4 requires that we designate critical habitat at the time of listing and based on what we know at the time of the designation. When we designate critical habitat at the time of listing or under short court-ordered deadlines, we will often not have sufficient information to identify all areas of critical habitat. We are required, nevertheless, to make a decision and thus must base our designations on what, at the time of designation, we know to be critical habitat.

Within the geographic area occupied by the species, we will designate only areas currently known to be essential. We will not speculate about what areas might be found to be essential if better information became available, or what areas may become essential over time. If the information available at the time of designation does not show that an area provides essential life cycle needs of the species, then the area should not be included in the critical habitat designation.

Our regulations state that, “The Secretary shall designate as critical habitat areas outside the geographic area presently occupied by the species only when a designation limited to its present range would be inadequate to ensure the conservation of the species.” (50 CFR 424.12(e)). Accordingly, when the best available scientific and commercial data do not demonstrate that the conservation needs of the species require designation of critical habitat outside of occupied areas, we will not designate critical habitat in areas outside the geographic area occupied by the species.

The Service's Policy on Information Standards Under the Endangered Species Act, published in the Federal Register on July 1, 1994 (Vol.59, p. 34271), provides criteria, establishes procedures, and provides guidance to ensure that decisions made by the Service represent the best scientific and commercial data available. It requires Service biologists, to the extent consistent with the Act and with the use of the best scientific and commercial data available, to use primary and original sources of information as the basis for recommendations to designate critical habitat. When determining which areas are critical habitat, a primary source of information should be the listing package for the species. Additional information may be obtained from a recovery plan, articles in peer-reviewed journals, conservation plans developed by states and counties, scientific status surveys and studies, and biological assessments or other unpublished materials (i.e. gray literature).

Habitat is often dynamic, and species may move from one area to another over time. Furthermore, we recognize that designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. For these reasons, all should understand that critical habitat designations do not signal that habitat outside the designation is unimportant or may not be required for recovery. Areas outside the critical habitat designation will continue to be subject to conservation actions that may be implemented under Section 7(a)(1) and to the regulatory protections afforded by the section 7(a)(2) jeopardy standard and the Section 9 take prohibition, as determined on the basis of the best available information at the time of the action. We specifically anticipate that federally funded or assisted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans, or other species conservation planning efforts if new information available to these planning efforts calls for a different outcome.

In accordance with section 3(5)(A)(I) of the Act and regulations at 50 CFR 424.12, we are required to base critical habitat designation on the best scientific and commercial data available and to consider those physical and biological features (primary constituent elements) that are essential to conservation of the species and that may require special management considerations or protection. Such requirements include, but are not limited to—space for individual and population growth, and for normal behavior; food, water, or other nutritional or physiological requirements; cover or shelter; sites for breeding, reproduction, or rearing of offspring; and habitats that are protected from disturbance or are representative of the historic geographical and ecological distributions of a species.

The primary constituent elements essential to the conservation of the Mexican spotted owl include those physical and biological features that support nesting, roosting, and foraging. These elements were determined from studies of Mexican spotted owl behavior and habitat use throughout the range of the owl. Although the vegetative communities and structural attributes used by the owl vary across the range of the subspecies, they consist primarily of warm-temperate and cold-temperate forests, and, to a lesser extent, woodlands and riparian deciduous forests. The mixed-conifer community appears to be the most frequently used community throughout most portions of the subspecies' range (Skaggs and Raitt 1988; Ganey and Balda 1989, 1994; USDI 1995). Although the structural characteristics of Mexican spotted owl habitat vary depending on uses of the habitat (e.g., nesting, roosting, foraging) and variations in the plant communities over the range of the subspecies, some general attributes are common to the subspecies' life-history requirements throughout its range.

The Mexican Spotted Owl Recovery Plan provides for three levels of habitat management: protected areas, restricted areas, and other forest and woodland types. The Recovery Plan recommends that Protected Activity Centers (PACs) be designated around known owl sites. A PAC would include an area of at least 243 ha (600 ac) that includes the best nesting and roosting habitat in the area. Based on available data, the recommended size for a PAC includes, on average, 75 percent of the foraging area of an owl. Protected habitat includes PACs and all areas within mixed conifer or pine-oak types with slopes greater than 40 percent, where timber harvest has not occurred in the past 20 years.

Restricted habitat includes mixed conifer forest, pine-oak forest, and riparian areas outside of protected areas described above. Restricted habitat should be managed to retain or attain the habitat attributes believed capable of supporting nesting and roosting owls as depicted in Table III.B.1. on page 92 of the Recovery Plan. These areas are essential to the conservation of the species because the Recovery Plan identifies these areas as providing additional owl habitat that is needed for recovery.

Other forest and woodland types (ponderosa pine, spruce-fir, piñon-juniper, and aspen) are not expected to provide nesting or roosting habitat for the Mexican spotted owl (except when associated with rock canyons). Thus, these other forest and woodland types are not considered to be critical habitat unless specifically delineated within PACs.

Existing man-made features and structures within the boundaries of the mapped units, such as buildings, roads, aqueducts, railroads, airports, other paved areas, and other urban areas, do not contain Mexican spotted owl habitat and are not considered critical habitat.

We determined the primary constituent elements for Mexican spotted owl from studies of their habitat requirements and the information provided in the Recovery Plan and references therein. Since owl habitat can include both canyon and forested areas, we identified primary constituent elements in both areas. Within PACs, primary constituent elements include all vegetation and other organic material within the 243 ha (600 ac) areas delineated by land managers. Within restricted habitat (described in the Recovery Plan,Volume I, part III, pages 84-95, including Table III.B.1), the primary constituent elements that occur in mixed conifer, pine-oak, and riparian forest types, which currently contain or may attain the habitat attributes believed capable of supporting nesting and roosting owls include:

The forest habitat attributes listed above usually develop with increasing forest age, but their occurrence may vary by location, past forest management practices or natural disturbance events, forest type, and productivity. These characteristics may also develop in younger stands, especially when the stands contain remnant large trees or patches of large trees from earlier stands. Certain forest management practices may also enhance tree growth and mature stand characteristics where the older, larger trees are allowed to persist.

Canyon habitats used for nesting and roosting are typically characterized by cooler conditions found in steep, narrow canyons, often containing crevices, ledges, and/or caves. These canyons frequently contain small clumps or stringers of ponderosa pine, Douglas fir, white fir, and/or piñon-juniper. Deciduous riparian and upland tree species may also be present. Adjacent uplands are usually vegetated by a variety of plant associations including piñon-juniper woodland, desert scrub vegetation, ponderosa pine-Gambel oak, ponderosa pine, or mixed conifer. Owl habitat may also exhibit a combination of attributes between the forested and canyon types.

In designating critical habitat for the owl, we reviewed the overall approach to the conservation of the species undertaken by local, State, tribal, and Federal agencies and private individuals and organizations since the species' listing in 1993. We also considered the features and overall approach identified as necessary for recovery, as outlined in the species' Recovery Plan. We reviewed the previous proposed (59 FR 63162) and final critical habitat rules (60 FR 29914) for the owl, new location data, habitat requirements and definitions described in the Recovery Plan, and habitat and other information provided during the two comment periods, as well as utilized our own expertise.

The previous critical habitat designation included extensive use and evaluation of owl habitat and territory maps, vegetation maps, aerial photography, and field verification to identify areas for designation as critical habitat. We considered several qualitative criteria (currently suitable habitat, large contiguous blocks of habitat, occupied habitat, rangewide distribution, the need for special management or protection, adequacy of existing regulatory mechanisms) when identifying critical habitat areas. We finalized the previous designation prior to the completion of the Recovery Plan for the Mexican Spotted Owl. For this new designation, we examined the previously designated critical habitat units, but relied primarily on the Recovery Plan to provide guidance. We expanded or combined previous units to comply with the Recovery Plan. We also included wilderness areas and other areas containing protected and restricted habitat areas as defined in the Recovery Plan. Some lands were excluded if they did not meet our definition of critical habitat (see discussion below).

The designated critical habitat constitutes our best assessment of areas needed for the conservation of the owl and that are in need of special management or protection. The areas designated are within the range of the species, and include (1) most known occupied sites, (2) some sites not surveyed but suspected to be occupied, and (3) other sites surveyed without detecting owls, but believed to be capable of periodically supporting owls. We consider these areas to be within the geographic range occupied or potentially occupied by the species. We've included these areas in the designation based on information contained within the Recovery Plan that finds them to be essential to the conservation of the species because they either currently support populations of the owl, or because they currently possess the necessary habitat requirements for nesting, roosting, and foraging (see description of primary constituent elements). All protected habitat and restricted habitat as described in the Recovery Plan that is within the designated boundaries, is considered critical habitat.

Critical habitat units are designated in portions of McKinley, Rio Arriba, Sandoval, Socorro, and Taos, Counties in New Mexico; Apache, Cochise, Coconino, Graham, Mohave, and Pima Counties in Arizona; Carbon, Emery, Garfield, Grand, Iron, Kane, San Juan, Washington, and Wayne Counties in Utah; and Custer, Douglas, El Paso, Fremont, Huerfano, Jefferson, Pueblo, and Teller Counties in Colorado. Precise legal descriptions of each critical habitat unit are on file at the New Mexico Ecological Services Field Office, as are digital files of each unit (see ADDRESSES section).

This critical habitat designation does not include tribal lands; FS lands within Arizona and New Mexico; Fort Carson, Colorado; and low-density areas (see discussion under Exclusions Under Section 3(5)(A) Definition). This critical habitat designation does include FS lands in Utah and Colorado, and other Federal lands used by currently known populations of Mexican spotted owls (Table 1).

We did not designate some areas that are known to have widely scattered owl sites, low population densities, and/or marginal habitat quality, which are not considered to be essential to this species' survival or recovery. These areas include Dinosaur National Park in northwest Colorado; Mesa Verde National Park, Ute Mountain Ute Reservation, Southern Ute Reservation, other FS and Bureau of Land Management land in southwest Colorado and central Utah; and the Guadalupe and Davis Mountains in southwest Texas. We also did not include isolated mountains on the Arizona Strip, such as Mount Trumbull, due to their small size, isolation, and lack of information about owls in the area.

State and private lands are not included in this designation. Some State and private parcels within the critical habitat boundaries likely support mid-and higher-elevation forests that are capable of providing nesting and roosting habitat. However, given that the majority of the owl's range occurs on Federal and tribal lands, we do not consider State and private lands essential to the recovery of the species and, therefore, we are not designating these areas as critical habitat. The overwhelming majority of Mexican spotted owl records are from Federal and tribal lands, indicating that those lands are essential to the species' recovery. Where feasible, we drew critical habitat boundaries so as to exclude State and private lands. However, the short amount of time allowed by the court to complete this designation did not allow us to conduct the fine-scale mapping necessary to physically exclude the smaller and widely scattered State and private parcels that remain within the mapped boundaries. Those areas under State or private ownership that are within mapped critical habitat unit boundaries are excluded from this designation of critical habitat by definition.

We significantly reduced some critical habitat units that we proposed as critical habitat (December 7, 1994; 59 FR 63162 and July 21, 2000; 65 FR 45336) within Arizona and New Mexico because, as discussed below, we are excluding FS lands governed by existing forest management plans. Nevertheless, the remaining Federal lands (e.g., Bureau of Land Management (BLM), National Park Service, etc.) within the mapped boundaries in Arizona and New Mexico, are designated as critical habitat. The critical habitat designation on Federal lands adjacent to FS lands within Arizona and New Mexico will ensure that “special management considerations or protections” are provided for the Mexican spotted owl on all Federal lands, pursuant to the definition of critical habitat in section 3 of the Act. (See Exclusion Under Section 3(5)(A) Definition section for additional information.)

The approximate Federal ownership within the boundaries of owl critical habitat is shown in Table 1. Actual critical habitat is limited to areas within the mapped boundaries that meet the definition of protected and restricted habitat in the Recovery Plan. Therefore, the area actually designated as critical habitat is considerably less than the gross acreage indicated in Table 1.

Section 3(5) of the Act defines critical habitat, in part, as areas within the geographical area occupied by the species “on which are found those physical and biological features (I) essential to the conservation of the species and (II) which may require special management considerations and protection.” As noted above, special management considerations or protection is a term that originates in the definition of critical habitat. Additional special management is not required if adequate management or protection is already in place. Adequate special management considerations or protection is provided by a legally operative plan/agreement that addresses the maintenance and improvement of the primary constituent elements important to the species and manages for the long-term conservation of the species. We use the following three criteria to determine if a plan provides adequate special management or protection: (1) A current plan/agreement must be complete and provide sufficient conservation benefit to the species; (2) the plan must provide assurances that the conservation management strategies will be implemented; and (3) the plan must provide assurances that the conservation management strategies will be effective, i.e., provide for periodic monitoring and revisions as necessary. If all of these criteria are met, then the lands covered under the plan would no longer meet the definition of critical habitat.

We considered that the Southwest Region of the FS amended the Forest Plans in Arizona and New Mexico in 1996 to incorporate the Mexican Spotted Owl Recovery Plan guidelines as management direction, and these plan amendments underwent consultation (Biological Opinion 000031RO). We evaluated the Forest Plan Amendments against our three criteria used to determine whether lands require “special management considerations or protections,” under the definition of critical habitat in section 3 of the Act. We determined that the FS amended their National Forest Plans in Arizona and New Mexico to conform with the Mexican Spotted Owl Recovery Plan, and these plans adequately meet all of our three criteria. The plan provides a conservation benefit to the species since it incorporates all elements of the Recovery Plan; the plan provides assurances that the management plan will be implemented since the FS in the Southwest Region has authority to implement the plan and has obtained all the necessary authorizations or approvals; and the plan provides assurances that the conservation plan will be effective since it includes biological goals consistent with the Recovery Plan, monitoring, and adaptive management (65 FR 63438, 65 FR 63680, 65 FR 69693). Moreover, we consider that the Mexican spotted owl is receiving substantial protection on FS lands in Arizona and New Mexico. We, therefore, determined that FS lands in Arizona and New Mexico do not meet the definition of critical habitat, and we did not include them in this final designation.

At the time of the proposal these lands were included in the designation, even though the FS amended their Forest Plans in 1996 to follow the Recovery Plan. We had recently published a notice seeking public comment on the direction we should take in developing a national critical habitat policy (June 14, 1999; 64 FR 31871). Due to the diversity of comments that we received in response to this notice, we reopened this comment period and held two national workshops on February 8 and 11, 2000, to further discuss critical habitat issues with major stakeholders and the public to obtain their input. Based upon information we received from the public and in our internal discussions that followed these workshops, one issue which emerged was how to consistently interpret the term special management in our critical habitat designations. In the past, we removed areas from critical habitat designations, typically Federal lands, because we felt that the areas were adequately managed and provided for the conservation of the species. For example, we excluded National Park Lands and National Wildlife Refuges from the critical habitat designation for the cactus ferruginous pygmy-owl because we felt that they were adequately protected (July 12, 1999; 64 FR 37419). In the final rule designating critical habitat for the coastal California gnatcatcher (65 FR 63680), we identified three criteria we used to determine whether adequate special management was being provided for to determine, in this case, whether a Department of Defense INRMP was adequate. During our comment period on this proposal, we received two comments indicating that the FS is providing adequate special management through their Forest Plans. In light of these comments and information contained in our final designation of critical habitat for the gnatcatcher, we excluded National Forest lands in Arizona and New Mexico from this final designation since the FS is providing adequate special management through their Forest Plans.

The affected National Forests within the Rocky Mountain Region of the FS (i.e., Utah and Colorado) have not amended their Forest Plans to conform with the Mexican Spotted Owl Recovery Plan. The FS integrates the Mexican Spotted Owl Recovery Plan “as much as possible” into their forest management activities (Industrial Economics Inc., 2000). Nevertheless, we do not have formal documentation (e.g., completed consultation) that supports this contention. The National Forests in Utah and Colorado do not have “special management considerations or protections,” pursuant to the definition of critical habitat in section 3 of the Act. Thus, within the mapped boundaries of the National Forests in Utah and Colorado, those lands that meet the definition of protected or restricted habitat are designated as critical habitat.

The Sikes Act Improvements Act of 1997 (Sikes Act) requires each military installation that includes land and water suitable for the conservation and management of natural resources to complete an INRMP by November 17, 2001. An INRMP integrates implementation of the military mission of the installation with stewardship of the natural resources found there. Each INRMP includes an assessment of the ecological needs on the installation, including needs to provide for the conservation of listed species; a statement of goals and priorities; a detailed description of management actions to be implemented to provide for these ecological needs; and a monitoring and adaptive management plan. We consult with the military on the development and implementation of INRMPs for installations with listed species and critical habitat. We believe that bases that have completed and approved INRMPs that address the needs of listed species generally do not meet the definition of critical habitat discussed above, as they require no additional special management or protection. Therefore, we do not include these areas in critical habitat designations if they meet the three criteria described above.

Fort Carson provided information during the second comment period that indicated the Mexican spotted owl is not known to nest on the military installation and the species is a rare winter visitor. Similarly, protected and restricted habitat, as defined in the Recovery Plan, is not known to exist on Fort Carson. Therefore, lands on Fort Carson do not meet the definition of critical habitat and have been excluded from the final designation of critical habitat. Furthermore, Fort Carson, Colorado, is nearing completion of their updated INRMP, which includes specific guidelines for protection and management for the Mexican spotted owl. The target date of completion for this revision is early 2001, prior to the Sikes Act statutory deadline of November 17, 2001. Fort Carson, through consultation with us, indicated they will ensure that the INRMP meets the above criteria, and when Fort Carson's INRMP is complete, it will undergo formal consultation.

We indicated in the proposed rule (July 21, 2000; 65 FR 45336) that the Navajo Nation, Mescalero Apache, and San Carlos Apache were working on Mexican Spotted Owl Habitat Management Plans. We indicated that if any of these tribes submit management plans, we will consider whether these plans provide adequate special management considerations or protection for the species, or we will weigh the benefits of excluding these areas under section 4(b)(2).

During the second comment period, the Mescalero Apache and Navajo Nation completed management plans for the Mexican Spotted Owl. We reviewed these plans to determine whether adequate special management is being provided, through their consistency with the Recovery Plan. We determined that these plans conform with the Mexican Spotted Owl Recovery Plan, and therefore adequately meet all of our three criteria. Both plans provide a conservation benefit to the species since they are both complete and specifically written to provide for the conservation of the Mexican spotted owl. The Navajo Nation plan provide assurances that the management plan will be implemented since the Navajo Nation plan is within the scope of work of the Navajo Natural Heritage Program of the Navajo Nation. This program is contracted by the Bureau of Indian Affairs to collect and manage information on rare, and federally and tribally listed plant and animal species on the Navajo Nation and will ensure that the Mexican spotted owl plan will be properly implemented and funded. The Mescalero Apache plan has been approved by the Tribal council, indicating a commitment to implement the plan. Both plans provide assurances the conservation plan will be effective since they both include a monitoring component. We, therefore, determine that lands of the Mescalero Apache and virtually all lands of the Navajo Nation are not in need of special management considerations and protection, and therefore do not meet part 3(5)(A)(i)(II) of the definition of critical habitat and are not included in this designation.

During our review of the Navajo Nation management plan for the Mexican Spotted Owl, we concluded that there is a unique land ownership of Navajo National Monument and Canyon de Chelly wherein the land is owned by the Navajo Nation, but under the management authority and administration of the National Park Service. Although we excluded other lands owned by the Navajo Nation from critical habitat, we designated critical habitat on Navajo National Monument and Canyon de Chelly, because the National Park Service retains management authority over these lands, and any management that may have the potential to adversely affect the owl or its critical habitat would stem from their actions.

As reported in the proposed rule (65 FR 45336), the Southern Ute Reservation has not supported Mexican spotted owls historically, and our assessment revealed that the Southern Ute Reservation does not support habitat essential to the species' conservation. Thus, lands of the Southern Ute Reservation do not meet part 3(5)(A)(i)(I) of the definition of critical habitat stated above; we are, therefore, not designating these lands as critical habitat.

We are not designating lands of the Ute Mountain Ute Tribe as critical habitat. Due to the low owl population density and isolation from other occupied areas in Colorado, New Mexico, and Utah, the Mexican spotted owl habitat in southwestern Colorado is not believed to be essential for the survival or recovery of the species. Thus, these lands do not meet part 3(5)(A)(i)(I) of the definition of critical habitat stated above; we are, therefore, not designating these lands as critical habitat. Owls in these areas will retain the other protections of the Act, such as the prohibitions of section 9 and the prohibition of jeopardy under section 7.

In addition, other tribal lands including the Picuris, Taos, and Santa Clara Pueblos in New Mexico and the Havasupai Reservation in Arizona may have potential owl habitat. However, the available information, although limited, on the habitat quality and current or past owl occupancy in these areas does not indicate that these areas meet the definition of critical habitat. Therefore, we are not designating these lands as critical habitat.

In accordance with the Presidential Memorandum of April 29, 1994, we believe that, to the maximum extent possible, fish, wildlife, and other natural resources on tribal lands are better managed under tribal authorities, policies, and programs than through Federal regulation wherever possible and practicable. Based on this philosophy, we believe that, in most cases, designation of tribal lands as critical habitat provides very little additional benefit to threatened and endangered species. This is especially true where the habitat is occupied by the species and is therefore already subject to protection under the Act through section 7 consultations requirements. Conversely, such designation is often viewed by tribes as unwarranted and an unwanted intrusion into tribal self governance, thus compromising the government-to-government relationship essential to achieving our mutual goals of managing for healthy ecosystems upon which the viability of threatened and endangered species populations depend.

Section 4(b)(2) of the Act requires us to consider the economic and other relevant impacts of critical habitat designation, and authorizes us to exclude areas from designation upon finding that the benefits of exclusion outweigh the benefits of including the areas as critical habitat, so long as excluding those areas will not result in the extinction of the species concerned. As mentioned above, in the proposed rule we indicated that if the San Carlos Apache Tribe submitted a management plan to us, we would considering excluding their land from the designation under section 4(b)(2) of the Act.

The San Carlos Apache Tribe submitted a draft management plan for the Mexican Spotted Owl to us in September 2000, which we reviewed and determined to be consistent with the Recovery Plan and substantially complete. The Tribe also commented on the proposed rule and indicated in their comments that their management plan was nearing completion. Based on recent conversations with the Tribe, their plan is expected to be completed in March 2001. In 1996 we reviewed the San Carlos Apache Reservation Tribe's Malay Gap Management Plan and determined that the plan provided adequate special management for the owl. We did not include areas covered by that plan in the proposed designation. Based on our review of their draft plan, it is similar to the Tribe's Malay Gap Management Plan as they are both consistent with the Recovery Plan. Their comment letter also indicates that suitable nesting and roosting habitat, as well as foraging habitat, on the reservation has been mapped and PACs have been established for all known owl pairs. Thus, any impacts from management activities to either PACs or owl habitat will trigger section 7, regardless of critical habitat, since the areas are presently occupied by the owl. In light of this and the fact that the Tribe will soon have their management plan completed, we find that the designation of critical habitat will provide little or no additional benefit to the species. The designation of critical habitat would be expected to adversely impact our working relationship with the Tribe and we believe that Federal regulation through critical habitat designation would be viewed as an unwarranted and unwanted intrusion into tribal natural resource programs. Our working relationships with the Tribe has been extremely beneficial in implementing natural resource programs of mutual interest.

After weighing the benefits of critical habitat designation on these lands against the benefits of excluding them, we find that the benefits of excluding the San Carlos Apache Tribe from the designation of critical habitat outweighs the benefits of including those areas as critical habitat. We also find that the exclusion of these lands will not lead to the extinction of the species. Therefore, we are not designating San Carlos Apache Tribal lands as critical habitat for the owl.

Section 7(a) of the Act requires Federal agencies to ensure that actions they fund, authorize, or carry out do not destroy or adversely modify critical habitat to the extent that the action appreciably diminishes the value of the critical habitat for the survival and recovery of the species. Individuals, organizations, States, local governments, and other non-Federal entities are affected by the designation of critical habitat only if their actions occur on Federal lands, require a Federal permit, license, or other authorization, or involve Federal funding.

Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. If a species is listed and critical habitat is designated, section 7(a)(2) requires Federal agencies to ensure that actions they authorize, fund, or carry out are not likely to jeopardize the continued existence of such a species and do not destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us.

When we issue a biological opinion concluding that a project is likely to result in the destruction or adverse modification of critical habitat, we also provide reasonable and prudent alternatives to the project, if any are identifiable. Reasonable and prudent alternatives are defined at 50 CFR 402.02 as alternative actions identified during consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that we believe would avoid destruction or adverse modification of critical habitat. Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.

Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where critical habitat is subsequently designated and the Federal agency has retained discretionary involvement or control over the action or such discretionary involvement or control is authorized by law. Consequently, some Federal agencies may request reinitiation with us on actions for which formal consultation has been completed if those actions may affect designated critical habitat.

Activities on Federal lands that may affect the Mexican spotted owl or its critical habitat will require section 7 consultation. Activities on State or private lands requiring a permit from a Federal agency, such as a permit from the U.S. Army Corps of Engineers (Army Corps) under section 404 of the Clean Water Act, or some other Federal action, including funding (e.g., Federal Highway Administration, Federal Aviation Administration, or Federal Emergency Management Agency) will continue to be subject to the section 7 consultation process only for actions that may affect the Mexican spotted owl, but not for critical habitat because areas under State or private ownership are excluded from the critical habitat designation by definition. Similarly, Federal lands that we did not designate as critical habitat (e.g., FS lands in Arizona and New Mexico) will also continue to be subject to the section 7 consultation process only for actions that may affect the Mexican spotted owl. Federal actions not affecting listed species or critical habitat and actions on non-Federal lands that are not federally funded or regulated do not require section 7 consultation.

Section 4(b)(8) of the Act requires us to evaluate briefly in any proposed or final regulation that designates critical habitat those activities involving a Federal action that may adversely modify such habitat or that may be affected by such designation. Adverse effects on one or more primary constituent elements or segments of critical habitat generally do not result in an adverse modification determination unless that loss, when added to the environmental baseline, is likely to appreciably diminish the capability of the critical habitat to satisfy essential requirements of the species. In other words, activities that may destroy or adversely modify critical habitat include those that alter one or more of the primary constituent elements (defined above) of protected or restricted habitat to an extent that the value of critical habitat for both the survival and recovery of the Mexican spotted owl is appreciably reduced.

To properly portray the effects of critical habitat designation, we must first compare the section 7 requirements for actions that may affect critical habitat with the requirements for actions that may affect a listed species. Section 7 prohibits actions funded, authorized, or carried out by Federal agencies from jeopardizing the continued existence of a listed species or destroying or adversely modifying the listed species' critical habitat. Actions likely to “jeopardize the continued existence” of a species are those that would appreciably reduce the likelihood of the species' survival and recovery (50 CFR 402.02). Actions likely to “destroy or adversely modify” critical habitat are those that would appreciably reduce the value of critical habitat for the survival and recovery of the listed species (50 CFR 402.02).

Common to both definitions is an appreciable detrimental effect on both survival and recovery of a listed species. Given the similarity of these definitions, actions likely to destroy or adversely modify critical habitat would almost always result in jeopardy to the species concerned when the habitat is occupied by the species. The purpose of designating critical habitat is to contribute to a species' conservation, which by definition equates to survival and recovery. Section 7 prohibitions against the destruction or adverse modification of critical habitat apply to actions that would impair survival and recovery of the listed species, thus providing a regulatory means of ensuring that Federal actions within critical habitat are considered in relation to the goals and recommendations of any existing Recovery Plan for the species concerned. As a result of the direct link between critical habitat and recovery, the prohibition against destruction or adverse modification of the critical habitat should provide for the protection of the critical habitat's ability to contribute fully to a species' recovery.

A number of Federal agencies or departments fund, authorize, or carry out actions that may affect the Mexican spotted owl and its critical habitat. Among these agencies are the FS, Bureau of Indian Affairs, Bureau of Land Management, Department of Defense, Department of Energy, National Park Service, and Federal Highway Administration. We have reviewed and continue to review numerous activities proposed within the range of the Mexican spotted owl that are currently the subject of formal or informal section 7 consultations. Actions on Federal lands that we reviewed in past consultations on effects to the owl include land management plans; land acquisition and disposal; road construction, maintenance, and repair; timber harvest; livestock grazing and management; fire/ecosystem management projects (including prescribed natural and management ignited fire); powerline construction and repair; campground and other recreational developments; and access easements. We expect that the same types of activities will be reviewed in section 7 consultations for designated critical habitat.

Actions that would be expected to both jeopardize the continued existence of the Mexican spotted owl and destroy or adversely modify its critical habitat would include those that significantly and detrimentally alter the species' habitat over an area large enough that the likelihood of the Mexican spotted owls' persistence and recovery, either range-wide or within a recovery unit, is significantly reduced. Thus, the likelihood of an adverse modification or jeopardy determination would depend on the baseline condition of the RU and the baseline condition of the species as a whole. Some RUs, such as the Southern Rocky Mountains-New Mexico and Southern Rocky Mountains-Colorado, support fewer owls and owl habitat than other RUs and, therefore, may be less able to withstand habitat-altering activities than RUs with large contiguous areas of habitat supporting higher densities of spotted owls.

Actions not likely to destroy or adversely modify critical habitat include activities that are implemented in compliance with the Recovery Plan, such as thinning trees less than 9 inches in diameter in PACs; fuels reduction to abate the risk of catastrophic wildfire; “personal use” commodity collection such as fuelwood, latillas and vigas, and Christmas tree cutting; livestock grazing that maintains good to excellent range conditions; and most recreational activities including hiking, camping, fishing, hunting, cross-country skiing, off-road vehicle use, and various activities associated with nature appreciation. We do not expect any restrictions to those activities as a result of this critical habitat designation. In addition, some activities may be considered to be of benefit to Mexican spotted owl habitat and, therefore, would not be expected to adversely modify critical habitat. Examples of activities that could benefit critical habitat may include some protective measures such as fire suppression, prescribed burning, brush control, snag creation, and certain silvicultural activities such as thinning.

If you have questions regarding whether specific activities in New Mexico will likely constitute destruction or adverse modification of critical habitat, contact the Field Supervisor, New Mexico Ecological Services Field Office (see ADDRESSES section). In Arizona, Colorado, and Utah, refer to the regulation at the end of this final rule for contact information. If you would like copies of the regulations on listed wildlife or have questions about prohibitions and permits, contact the U.S. Fish and Wildlife Service, Division of Endangered Species, P.O. Box 1306, Albuquerque, New Mexico 87103 (telephone 505-248-6920; facsimile 505-248-6788).

In complying with our tribal trust responsibilities, we communicated with all tribes potentially affected by the designation of critical habitat for the Mexican spotted owl. We solicited and received information from the tribes (see discussion above) and arranged meetings with the tribes to discuss potential effects to them or their resources that may result from critical habitat designation.

In addition to the areas deleted from the proposed designation as described previously, this final rule differs from the proposal as follows:

We attempted to clarify the definitions and use of protected and restricted habitat and the attributes of primary constituent elements of critical habitat in this rule. As stated in the critical habitat designation section, critical habitat is limited to areas within the mapped boundaries that meet the definition of protected and restricted habitat.

In the proposed rule we stated that all “reserved” lands would be considered critical habitat and included “designated” wilderness areas. In this final rule, we are only considering lands that are within critical habitat boundaries and that meet the definition of protected and restricted habitat as critical habitat, regardless of whether they are currently designated as wilderness.

Section 4(b)(2) of the Act requires us to designate critical habitat on the basis of the best scientific and commercial data available and to consider the economic and other relevant impacts of designating a particular area as critical habitat. We based this designation on the best available scientific information, and believe it is consistent with the Recovery Plan and recommendations of those team members. We utilized the economic analysis, and took into consideration comments and information submitted during the public hearing and comment period to make this final critical habitat designation. We may exclude areas from critical habitat upon a determination that the benefits of such exclusions outweigh the benefits of specifying such areas as critical habitat. We cannot exclude such areas from critical habitat when such exclusion will result in the extinction of the species.

The economic effects already in place due to the listing of the Mexican spotted owl as threatened is the baseline upon which we analyzed the economic effects of the designation of critical habitat. The critical habitat economic analysis examined the incremental economic and conservation effects of designating critical habitat. The economic effects of a designation were evaluated by measuring changes in national, regional, or local indicators. A draft analysis of the economic effects of the proposed Mexican spotted owl critical habitat designation was prepared and made available for public review (65 FR 63047). We concluded in the final analysis, which included review and incorporation of public comments, that no significant economic impacts are expected from critical habitat designation above and beyond that already imposed by listing the Mexican spotted owl. A copy of the economic analysis is included in our administrative record and may be obtained by contacting the New Mexico Ecological Services Field Office (see ADDRESSES section).

In accordance with the criteria in Executive Order 12866, this rule is a significant regulatory action and has been reviewed by the Office of Management and Budget.

(a) This rule will not have an annual economic effect of $100 million or adversely affect an economic sector, productivity, jobs, the environment, or other units of government. A cost-benefit analysis is not required for purposes of Executive Order 12866. The Mexican spotted owl was listed as a threatened species in 1993. Since that time, we have conducted, and will continue to conduct, formal and informal section 7 consultations with other Federal agencies to ensure that their actions would not jeopardize the continued existence of the Mexican spotted owl.

Under the Act, critical habitat may not be adversely modified by a Federal agency action; critical habitat does not impose any restrictions on non-Federal persons unless they are conducting activities funded or otherwise sponsored or permitted by a Federal agency (see Table 2 below). Section 7 requires Federal agencies to ensure that they do not jeopardize the continued existence of the species. Based upon our experience with the species and its needs, we believe that any Federal action or authorized action that could potentially cause an adverse modification of the designated critical habitat would currently be considered as “jeopardy” to the species under the Act. Accordingly, we do not expect the designation of critical habitat in areas within the geographic range occupied by the species to have any incremental impacts on what actions may or may not be conducted by Federal agencies or non-Federal persons that receive Federal authorization or funding. Non-Federal persons who do not have a Federal “sponsorship” of their actions are not restricted by the designation of critical habitat (however, they continue to be bound by the provisions of the Act concerning “take” of the species).

We evaluated any potential impact through our economic analysis, and found that we anticipate little, if any, additional impact due to designating areas within the geographic range potentially occupied by the owl, because the designated critical habitat units all occur within the Recovery Units. (See Economic Analysis section of this rule.)

(b) This rule will not create inconsistencies with other agencies' actions. Federal agencies have been required to ensure that their actions do not jeopardize the continued existence of the Mexican spotted owl since its listing in 1993. The prohibition against adverse modification of critical habitat is not expected to impose any additional restrictions to those that currently exist in areas of proposed critical habitat.

(c) This designation will not significantly impact entitlements, grants, user fees, loan programs, or the rights and obligations of their recipients. Federal agencies are currently required to ensure that their activities do not jeopardize the continued existence of the species, and, as discussed above, we anticipate that the adverse modification prohibition (resulting from critical habitat designation) will have little, if any, incremental effects in areas of critical habitat.

(d) This rule will not raise novel legal or policy issues. The designation follows the requirements for determining critical habitat contained in the Endangered Species Act.

In the economic analysis, we determined that designation of critical habitat will not have a significant effect on a substantial number of small entities. As discussed under Regulatory Planning and Review above, this designation is not expected to result in any restrictions in addition to those currently in existence.

Our economic analysis demonstrated that designation of critical habitat will not cause (a) an annual effect on the economy of $100 million or more, (b) any increases in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions, or (c) any significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

In accordance with the Unfunded Mandates Reform Act:

a. This rule will not “significantly or uniquely” affect small governments. A Small Government Agency Plan is not required. Small governments will be affected only to the extent that any programs involving Federal funds, permits, or other authorized activities must ensure that their actions will not destroy or adversely modify critical habitat. However, as discussed above in the Regulatory Planning and Review section, these actions are currently subject to equivalent restrictions through the listing protections of the species, and no further restrictions are anticipated in areas of proposed critical habitat.

b. This rule will not produce a Federal mandate on State, local, or tribal governments or the private sector of more than $100 million or greater in any year, i.e., it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. The designation of critical habitat imposes no obligations on State or local governments.

In accordance with Executive Order 12630, this designation does not have significant takings implications, and a takings implication assessment is not required. This designation will not “take” private property. In this designation, State and private lands were excluded by definition.

In accordance with Executive Order 13132, this designation will not affect the structure or role of States, and will not have direct, substantial, or significant effects on States. A Federalism assessment is not required. As previously stated, critical habitat is applicable only to Federal lands or to non-Federal lands when a Federal nexus exists.

In keeping with Department of the Interior and Department of Commerce policy, we requested information from and coordinated development of this critical habitat designation with appropriate State resource agencies in Arizona, New Mexico, Colorado, and Utah. In addition, Arizona and Utah have representatives on the recovery team for this species.

In accordance with Executive Order 12988, the Department of the Interior's Office of the Solicitor determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. The Office of the Solicitor reviewed this final determination. We made every effort to ensure that this final determination contained no drafting errors, provides clear standards, simplifies procedures, reduces burden, and is clearly written such that litigation risk is minimized.

This rule does not contain any information collection requirements for which Office of Management and Budget approval under the Paperwork Reduction Act is required.

Our position is that, outside the Tenth Circuit, we do not need to prepare environmental analyses as defined by the NEPA in connection with designating critical habitat under the Endangered Species Act of 1973, as amended. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244). This assertion was upheld in the courts of the Ninth Circuit (Douglas County v. Babbitt, 48 F.3d 1495 (9th Cir. Ore. 1995), cert. denied 116 S. Ct. 698 (1996). However, when the range of the species includes States within the Tenth Circuit, such as that of the Mexican spotted owl, pursuant to the Tenth Circuit ruling in Catron County Board of Commissioners v. U.S. Fish and Wildlife Service, 75 F.3d 1429 (10th Cir. 1996), we undertake a NEPA analysis for critical habitat designation. We completed an environmental assessment and finding of no significant impact on the designation of critical habitat for the Mexican spotted owl.

A complete list of all references cited in this proposed rule is available upon request from the New Mexico Ecological Services Field Office (see ADDRESSES section).

The primary authors of this notice are the New Mexico Ecological Services Field Office staff (see ADDRESSES section).