This rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with state and local offices. See the final rule related notice entitled “Department Programs and Activities Excluded from Executive Order 12372,” (50 FR 47034).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. RUS has determined that this rule meets the applicable standards provided in section 3 of the Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be preempted; no retroactive effect will be given to this rule; and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)) administrative appeal procedures, if any are required, must be exhausted before an action against the Department or its agencies.

The Administrator of RUS has determined that this rule will not have significant impact on a substantial number of small entities defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The RUS loan programs provide borrowers with loans at interest rates and terms that are more favorable than those generally available from the private sector. Borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct cost associated with RUS regulations and requirements.

The Administrator of RUS has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ). Therefore, this action does not require an environmental impact statement or assessment.

The program described by this rule is listed in the Catalog of Federal Domestic Assistance programs under Nos. 10.850, Rural Electrification Loans and Loan Guarantees, 10.851, Rural Telephone Loans and Loan Guarantees, and 10.852, Rural Telephone Bank Loans. This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402-9325, telephone number (202) 512-1800.

The reporting and recordkeeping requirements contained in this rule have been approved by the Office of Management and Budget (OMB) under OMB Control Number 0572-0095, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

Send questions or comments regarding this burden or any other aspect of these collections of information, including suggestions for reducing the burden, to F. Lamont Heppe, Jr., Director, Program Development and Regulatory Analysis, Rural Utilities Service, USDA, 1400 Independence Ave., SW., Stop 1522, Washington, DC 20250-1522.

This rule contains no Federal mandates (under the regulatory provision of title II of the Unfunded Mandates Reform Act) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act.

Title 7 part 1773 implements the standard RUS security instrument provision requiring RUS electric and telecommunications borrowers to prepare and furnish to RUS, at least once during each 12-month period, a full and complete report of its financial condition, operations, and cash flows, in form and substance satisfactory to RUS; audited and certified by an independent Certified Public Accountant (CPA), satisfactory to RUS, and accompanied by a report of such audit, in form and substance satisfactory to RUS.

This rule revises requirements for the management letter. Section 1773.33(c) is revised to address continuing property records (CPRs) rather than the term plant records. In addition, the requirement that the CPA state whether the CPRs have been established, is expanded wherein the CPA must state that the CPRs are established, maintained on a current basis, and are reconciled to the general ledger plant accounts. The requirements for the CPA to determine that the borrower secured RUS approval for the sale of plant in § 1773(c)(5) is expanded to include the sale, lease, or transfer of assets secured under the mortgage and to state whether the proceeds were handled in conformance with RUS requirements.

The following requirements under § 1773.33 are eliminated: (1) The requirement for the CPA to determine that loan funds were deposited in banks designated in the loan documents; (2) a corresponding requirement in the telecommunications management letter; (3) the requirement for the CPA to determine that the borrower has complied with the RUS requirement for approval of any lease of a building or land, standard traffic settlement agreement, billing and collecting agreements, toll pooling arrangements, directory service agreements, and joint-use agreement; and (4) the requirement for the CPA to determine borrower compliance with the requirement to maintain a net plant to secured debt ratio or a funded reserve for certain loans wherein the maturity period exceeds the economic life of the plant facilities being financed.

Section 1773.33, Management Letter, specifies the minimum requirements for the CPA's management letter. RUS borrowers have increasingly diversified into other utility and nonutility related activities through the formation of subsidiary and affiliated companies. RUS has need of information on investments in these subsidiary and affiliated companies to assist in its efforts to monitor loan security issues and respond to claims of cross subsidization. A new requirement for the CPA to provide a detailed analysis of borrowers' investments is therefore being added to the management letter requirements. The CPA is required to disclose certain general and financial information regarding each of a borrower's investments in subsidiary and affiliated companies accounted for on the cost or equity basis. This information is readily available in the investment subsidiary records.

In previous versions of part 1773 the sample reports, financial statements, and management letters were contained in four appendices, two for electric borrowers and two for telecommunications borrowers. Beginning with this revision of part 1773, the appendices will no longer be codified in the Code of Federal Regulations. The appendices will be available in new RUS Bulletin 1773-1, which will contain all of 7 CFR part 1773 and the appendices. Appendix A will contain the sample reports, financial statements and management letter for electric borrowers while Appendix B will contain similar sample for telecommunications borrowers. The exhibits of the management letters, which are included in the appendices, are attached to this notice for information only. Publishing part 1773 in bulletin form will provide the RUS audit policy in a user-friendly format. A single copy of this publication will be provided to all RUS borrowers and certified public accounts approved to perform audits of RUS borrowers and will be available at http://www.usda.gov/rus/ruswide.htm.

This rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with state and local offices. See the final rule related notice entitled “Department Programs and Activities Excluded from Executive Order 12372,” (50 FR 47034).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. RUS has determined that this rule meets the applicable standards provided in section 3 of the Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be preempted; no retroactive effect will be given to this rule; and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)) administrative appeal procedures, if any are required, must be exhausted before an action against the Department or its agencies.

The Administrator of RUS has determined that this rule will not have significant impact on a substantial number of small entities defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The RUS loan programs provide borrowers with loans at interest rates and terms that are more favorable than those generally available from the private sector. Borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct cost associated with RUS regulations and requirements.

The Administrator of RUS has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ). Therefore, this action does not require an environmental impact statement or assessment.

The program described by this rule is listed in the Catalog of Federal Domestic Assistance programs under Nos. 10.850, Rural Electrification Loans and Loan Guarantees, 10.851, Rural Telephone Loans and Loan Guarantees, and 10.852, Rural Telephone Bank Loans. This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402-9325, telephone number (202) 512-1800.

The reporting and recordkeeping requirements contained in this rule has been approved by the Office of Management and Budget (OMB) under OMB Control Number 0572-0095, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C chapter 35).

Send questions or comments regarding this burden or any other aspect of these collections of information, including suggestions for reducing the burden, to F. Lamont Heppe, Jr., Director, Program Development and Regulatory Analysis, Rural Utilities Service, USDA, 1400 Independence Ave., SW, Stop 1522, Washington, DC 20250-1522.

This rule contains no Federal mandates (under the regulatory provision of title II of the Unfunded Mandates Reform Act) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act.

Title 7 part 1773 implements the standard RUS security instrument provision requiring RUS electric and telecommunications borrowers to prepare and furnish to RUS, at least once during each 12-month period, a full and complete report of their financial condition, operations, and cash flows, in form and substance satisfactory to RUS; audited and certified by an independent Certified Public Accountant (CPA), satisfactory to RUS, and accompanied by a report of such audit, in form and substance satisfactory to RUS.

This rule amends part 1773 to reflect two amendments to Generally Accepted Government Auditing Standards (GAGAS) adopted in 1999 by the General Accounting Office (GAO): Amendment No. 1 to GAGAS, dated May 13, 1999, and Amendment No. 2 to GAGAS, dated July 30, 1999.

Amendment No. 1 to GAGAS established a new field work standard that requires auditors to document in the working papers the basis for assessing control risk at the maximum level for assertions related to material accounts balances, transaction classes, and disclosure components of financial statements when such assertions are significantly dependent on computerized information systems. The new standard also requires the auditors to document their consideration that the planned audit procedures are designed to achieve audit objectives and to reduce audit risk to an acceptable level. These new requirements are achieved through compliance with §§ 1773.7(a) and 1773.7(b).

Amendment No. 2 to GAGAS created a new fieldwork standard for planning titled “Auditor Communication” by moving and expanding an existing standard from the reporting standards. This rule revises § 1773.6 to comply with this new standard. Amendment No. 2 also changed the term “irregularities” to “fraud” in regards to the requirements for reporting on compliance with laws and regulations and internal control over financial reporting. This rule revises § 1773.9 to incorporate this change in terminology. Finally, GAGAS requires the auditor to emphasize in the auditor's report the importance of the report on compliance and on internal control over financial reporting when this report is issued separately from the report on the financial statements. This rule revises § 1773.31, to incorporate this requirement into the auditor's report.

On July 17, 1998, RUS issued, as a final rule, 7 CFR part 1773 (63 FR 38720) which incorporated the 1994 revisions of GAGAS. Those 1994 GAGAS revisions, as well as the 1999 amendments noted above, revised and updated some of the standard terminology used to describe the requirements for performing audits in conformance with GAGAS. This rule updates the appropriate sections of this part to conform to the GAGAS requirements.

The 1998 revisions to part 1773 combined the separate report on compliance and report on internal control into a single report titled “Reports on Compliance and on Internal Control Over Financial Reporting”. In making the changes to substitute the combined report in the appropriate sections of part 1773, the references to the separate report on compliance were not removed thus leading the reader to conclude that the separate report on compliance was still required. This rule eliminates all the references to the report on compliance. In addition, the 1998 revision references to the telephone program were changed to telecommunications program. Not all of the references were changed and this rule will serve to make those additional corrections. The 1998 revision also reduced, from 42 months to 36 months, the period of time required in which the CPA must undergo the issuance of a new peer review. Two references to the 42-month requirement in § 1773.5(c) that were missed in the 1998 final rule are revised with this rule.

This rule adds, changes, and deletes definitions to reflect the GAGAS amendments noted above as well as the changing structure of the RUS organization and its policies and procedures. A definition is added for Assistant Administrator, Program Accounting and Regulatory Analysis, to replace the Director, Program Accounting Services Division. The name of the Borrower Accounting Division was changed to Program Accounting Services Division in the 1998 rule, but the definition was not removed from § 1773.2, Definitions. The definition of “irregularity” is replaced with the definition of “fraud” to conform to the changes made in Amendment No. 2 to GAGAS. The definition of the Private Companies Practice Section (PCPS) is removed. The peer review program conducted by this group was combined with the American Institute of Certified Public Accountants' (AICPA) quality review program in 1995, thus the reference to the PCPS is removed. The definition of REA is eliminated, as it is no longer necessary. The definition of Uniform System of Accounts for Electric Borrowers is revised to include the complete citation of the requirement to maintain a uniform system of accounts prescribed by RUS (7 CFR Part 1767, Accounting Requirements for RUS Electric Borrowers, Subpart B, Uniform System of Accounts). This rule amends § 1773.2, to reflect these changes.

Section 1773.1(d)(6) provides that a report described in the Statement on Auditing Standards (SAS) No. 35 does not meet the audit requirement of RUS. This SAS was superseded and retitled with the issuance of SAS No. 75.

In previous versions of part 1773 the sample reports, financial statements, and management letters were contained in four appendices, two for electric borrowers and two for telecommunications borrowers. Beginning with this revision of part 1773, the appendices will no longer be codified in the Code of Federal Regulations. The appendices are attached to this notice for information only. The appendices are sample formats to be used as a reference guide to assist CPAs in completing their reports. The appendices will be available in new RUS Bulletin 1773-1, which will contain all of 7 CFR part 1773 and the appendices. Appendix A will contain the sample reports, financial statements and management letter for electric borrowers while Appendix B will contain similar samples for telecommunications borrowers. Publishing part 1773 in bulletin form will provide the RUS audit policy in a user-friendly format. A single copy of this publication will be provided to all RUS borrowers and certified public accountants approved to perform audits of RUS borrowers and will be available at http://www.usda.gov/rus/ruswide.htm.

What events have caused this AD? The Luftfahrt-Bundesamt (LBA), which is the airworthiness authority for Germany, notified FAA that an unsafe condition may exist on all Rolladen Schneider Models LS 3, LS 4, and LS 6c sailplanes. The LBA reports one occurrence of corroded bearings on the lower ends of airbrake levers found on the above-referenced sailplanes. The damage was possibly the result of improper postflight checks. It has been reported that in some cases, the corrosion, occurring over a long time, could cause bearing failure and consequent locking of airbrakes in the extended position.

What are the consequences if the condition is not corrected? If the airbrakes lock in the extended position, inadvertent off-field or short landing conditions might occur.

Has FAA taken any action to this point? We issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to all Rolladen Schneider Models LS 3, LS 4, and LS 6c sailplanes. This proposal was published in the Federal Register as a notice of proposed rulemaking (NPRM) on February 14, 2001 (66 FR 10230). The NPRM proposed to require you to inspect the airbrake levers in the wing for lower end corrosion and for play in flight direction when fully extended; inspect for retraction under load; replace the bearings if there is jamming under load or if corrosion is found; and adjust the lower lever member (only for the Model LS 3).

Was the public invited to comment? Interested persons were afforded an opportunity to participate in the making of this amendment. No comments were received on the proposed rule or the FAA's determination of the cost to the public.

What is FAA's final determination on this issue? After careful review of all available information related to the subject presented above, we have determined that air safety and the public interest require the adoption of the rule as proposed except for minor editorial corrections. We determined that these minor corrections:

How many sailplanes does this AD impact? We estimate that this AD affects 175 sailplanes in the U.S. registry.

What is the cost impact of this AD on owners/operators of the affected sailplanes? We estimate the following costs to do the inspection:

What is the compliance time of this AD? The compliance time of this AD is within the next 30 calendar days after the effective date of this AD.

Why is the compliance time presented in calendar time instead of hours time-in-service (TIS)? Because of the typical use of sailplanes, calendar days compliance time is deemed more suitable than hours time-in-service. For example, one sailplane operator may use the sailplane 50 hours in a month while another may only accumulate 50 hours in a year.

Why is the compliance time of this AD different from the German AD and the service information? The service information specifies the actions required in this AD

“before next flight” and the German AD mandates these actions “before next take-off, when play at levers is existent” for sailplanes registered for operation in Germany. The FAA does not have justification for requiring the action before further flight. Compliance times such as these are used for urgent safety of flight conditions. Instead, FAA has determined that 30 calendar days is a reasonable time period for doing the inspection in this AD.

Does this AD impact various entities? 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.

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

On November 19, 1979, the Commission issued a final rule in response to a directive in section 324 of the Energy Policy and Conservation Act (“EPCA”), 42 U.S.C. 6201. 1 The Rule requires the disclosure of energy efficiency, consumption, or cost information on labels and in retail sales catalogs for eight categories of appliances, and mandates that the energy costs, consumption, or efficiency ratings be based on standardized test procedures developed by DOE. The cost information obtained by following the test procedures is derived by using the representative average unit energy costs provided by DOE. Table 1 in section 305.9(a) of the Rule sets forth the representative average unit energy costs to be used for all cost-related requirements of the Rule. As stated in section 305.9(b), the Table is to be revised periodically on the basis of updated information provided by DOE.

On March 8, 2001, DOE published the most recent figures for representative average unit energy costs (66 FR 13917). These energy cost figures are for manufacturers to use, in accordance with the guidelines that appear below, to calculate the required secondary annual operating cost figures at the bottom of required EnergyGuides for refrigerators, refrigerator-freezers, freezers, dishwashers, clothes washers, water heaters, and room air conditioners. The energy cost figures also are for manufacturers of central air conditions and heat pumps to use, also in accordance with the below guidelines, to calculate annual operating cost for required fact sheets and in approved industry directories listing these products.

The DOE cost figures are not necessary for making data submissions to the Commission. The required energy use information that manufacturers of refrigerators, refrigerator-freezers, freezers, clothes washers, dishwashers, and water heaters must submit under section 305.8 of the Rule is no longer operating cost; it is now energy consumption (kilo Watt-hour use per year for electricity, therms per year for natural gas, or gallons per year for propane and oil).

Accordingly, Table 1 is revised to reflect these latest cost figures, as set forth below. The current and future obligations of manufacturers with respect to the use of DOE's cost figures are as follows:

Manufacturers of refrigerators, refrigerator-freezers, freezers, clothes washers, dishwashers, water heaters, and room air conditioners must use the National Average Representative Unit Costs published today on labels for their products only after the Commission publishes new ranges of comparability for those products that are based on today's cost figures. In the meantime, they must continue to use past DOE cost figures as follows:

Manufacturers of refrigerators, refrigerator-freezers, and freezers covered by Appendices A1, A2, A3, A4, A5, A6, B1, B2, and B3 of 16 CFR part 305 must continue to derive the operating cost disclosures on labels by using the 1998 National Average Representative Unit Costs (8.42 cents per kiloWatt-hour for electricity) published by DOE on December 8, 1997 (62 FR 64574), and by the Commission on December 29, 1997 (62 FR 67560), and that were in effect when the current (1998) ranges of comparability for these products were published. 3 Manufacturers of refrigerator-freezers covered by Appendix A7 of 16 CFR Part 305 must continue to derive the operating cost disclosures on labels by using the 2000 National Average Representative Unit Costs (8.03 cents per kiloWatt-hour for electricity) that were published by DOE on February 7, 2000 (65 FR 5860), and by the Commission on April 17, 2000 (65 FR 20352), and that were in effect when the current (2000) ranges of comparability for these products were published. 4 Manufacturers must continue to use the foregoing DOE cost figures until the Commission publishes new ranges of comparability. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figure for electricity in effect at that time.

Manufacturers of room air conditioners must continue to derive the operating cost disclosures on labels by using the 1995 National Average Representative Unit Costs for electricity (8.67 cents per kiloWatt-hour) that were published by DOE on January 5, 1995 (60 FR 1773), and by the Commission on February 17, 1995 (60 FR 9296), and that were in effect when the current (1995) ranges of comparability for these products were published. 5 Manufacturers of room air conditioners must continue to use the 1995 DOE cost figures to calculate the operating cost disclosure disclosed on labels until the Commission publishes new ranges of comparability for room air conditioners based on future annual submissions of data. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figure for electricity in effect at that time.

Manufacturers of storage-type water heaters must continue to use the 1994 DOE cost figures (8.41 cents per kiloWatt-hour for electricity, 60.4 cents per therm for natural gas, $1.05 per gallon for No. 2 heating oil, and 98.3 cents per gallon for propane) in determining the operating cost disclosures on the labels on their products. This is because the 1994 DOE cost figures were in effect when the 1994 ranges of comparability for storage-type water heaters were published, and those 1994 ranges are still in effect for those products. 6 Manufacturers of storage-type water heaters must continue to use the 1994 cost figures to calculate the estimated annual operating cost figures on their labels until the Commission publishes new ranges of comparability for storage-type water heaters. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figures for relevant energy types in effect at that time.

Manufacturers of heat pump water heaters must continue to derive the operating cost disclosures on labels by using the 2000 National Average Representative Unit Costs for electricity (8.03 cents per kiloWatt-hour) that were published by DOE on February 7, 2000 (65 FR 5860), and by the Commission on April 17, 2000 (65 FR 20352), and that were in effect when the current (2000) ranges of comparability for these products were published. 7 Manufacturers of heat pump water heaters must continue to use the 2000 DOE cost figures to calculate the operating cost disclosure on labels until the Commission publishes new ranges of comparability for heat pump water heaters based on future annual submissions of data. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figures for electricity in effect at that time.

Manufacturers of gas-fired instantaneous water heaters must continue to base the required secondary operating cost disclosures on labels on the 1999 National Average Representative Unit Cost for natural gas (68.8 cents per therm) and propane (77 cents per therm) that were published by DOE on January 5, 1999 (64 FR 487), and by the Commission on February 17, 1999 (64 FR 7783), and that were in effect when the 1999 ranges of comparability for these products were published. 8 Manufacturers must continue to use the 1999 DOE cost figures to calculate the operating cost disclosure on labels until the Commission publishes new ranges of comparability for gas-fired instantaneous water heaters. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figures for the relevant energy types in effect at that time.

Manufacturers of standard-size dishwashers must continue to base the required secondary operating cost disclosures on labels on the 1997 National Average Representative Unit Costs for electricity (8.31 cents per kiloWatt-hour) and natural gas (61.2 cents per therm) that were published by DOE on November 18, 1996 (61 FR 58679), and by the Commission on February 5, 1997 (62 FR 5316), and that were in effect when the 1997 ranges of comparability for these products were published. 9 Manufacturers of standard-size dishwashers must continue to use the 1997 DOE cost figures to calculate the operating cost disclosures on labels until the Commission publishes new ranges of comparability for standard-size dishwashers based on future annual submissions of data. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figure for the relevant energy types in effect at that time.

Manufacturers of compact-size dishwashers and clothes washers must continue to derive the operating cost disclosures on labels by using the 2000 National Average Representative Unit Costs for electricity (8.03 cents per kilo Watt-hour) and natural gas (68.8 cents per therm) that were published by DOE on February 7, 2000 (65 FR 5860), and by the Commission on April 17, 2000 (65 FR 20352), and that were in effect when the current (2000) ranges of comparability for these products were published. 10 Manufacturers of compact dishwashers and clothes washers must continue to use the 2000 DOE cost figures to calculate the operating cost disclosures on labels until the Commission publishes new ranges of comparability for compact-size dishwashers and clothes washers based on future annual submissions of data. In the notice announcing the new ranges, the Commission also will announce that operating cost disclosures must be based on the DOE cost figures for the relevant energy types in effect at that time.

In the 2001 notice announcing whether there will be new ranges of comparability for central air conditioners and heat pumps, the Commission also will announce that operating cost disclosures for these products on fact sheets and in industry directories must be based on the 2001 DOE cost figure for electricity beginning on the effective date of that notice.

Manufacturers of products covered by section 323(c) of EPCA, 42 U.S.C. 6293(c), but not by the Appliance Labeling Rule (clothes dryers, television sets, kitchen ranges and ovens, and space heaters) must use the 2001 DOE energy costs in all operating cost representations beginning August 20, 2001.

The Commission is amending two sections of the Rule that contain obsolete references to DOE's appliance testing requirements found in 10 CFR Part 430 (“DOE's Rule”). The current Commission Rule identifies 10 CFR 430.22 as the citation for DOE's test procedures covering a variety of appliances (see 16 CFR 305.5(a)). The correct reference is to section 430.23 of DOE's Rule. Similarly, the current Commission Rule identifies 10 CFR 430.23 as the citation for DOE's sampling procedures (see 16 CFR 305.6(a)). The correct reference is to section 430.24 of DOE's Rule.

The provisions of the Regulatory Flexibility Act relating to a Regulatory Flexibility Act analysis (5 U.S.C. 603-604) are not applicable to this proceeding because the amendments do not impose any new obligations on entities regulated by the Appliance Labeling Rule. Thus, the amendments will not have a “significant economic impact on a substantial number of small entities” (5 U.S.C. 605). The Commission has concluded, therefore, that a regulatory flexibility analysis is not necessary, and certifies, under Section 605 of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that the amendments announced today will not have a significant economic impact on a substantial number of small entities.

The Commission has issued the following Order:

Commission rules governing the offer and sale of commodity futures and option contracts traded on or subject to the rules of a foreign board of trade to customers located in the U.S. are contained in Part 30 of the Commission's rules. 1 These rules include requirements for intermediaries with respect to registration, disclosure, capital adequacy, protection of customer funds, recordkeeping and reporting, and sales practice and compliance procedures, that are generally comparable to those applicable to transactions on U.S. markets.

In formulating a regulatory program to govern the offer and sale of foreign futures and option products to customers located in the U.S., the Commission, among other things, considered the desirability of ameliorating the potential extraterritorial impact of such a program and avoiding duplicative regulation of firms engaged in international business. Based upon these considerations, the Commission determined to permit persons located outside the U.S. and subject to a comparable regulatory structure in the jurisdiction in which they were located to seek an exemption from certain of the requirements under Part 30 of the Commission's rules based upon substituted compliance with the comparable regulatory requirements of the foreign jurisdiction.

Appendix A to Part 30, “Interpretative Statement With Respect to the Commission's Exemptive Authority Under 30.10 of Its Rules' (“Appendix A”), generally sets forth the elements the Commission will evaluate in determining whether a particular regulatory program may be found to be comparable for purposes of exemptive relief pursuant to Rule 30.10. 2 These elements include: (1) Registration, authorization or other form of licensing, fitness review or qualification of persons through whom customer orders are solicited and accepted; (2) minimum financial requirements for those persons who accept customer funds; (3) protection of customer funds from misapplication; (4) recordkeeping and reporting requirements; (5) sales practice standards; (6) procedures to audit for compliance with, and to take action against those persons who violate, the requirements of the program; and (7) information sharing arrangements between the Commission and the appropriate governmental and/or self-regulatory organization to ensure Commission access on an “as needed” basis to information essential to maintaining standards of customer and market protection within the U.S.

Moreover, the Commission specifically stated in adopting Rule 30.10 that no exemption of a general nature would be granted unless the persons to whom the exemption is to be applied: (1) consensually submit to jurisdiction in the U.S. by designating an agent for service of process in the U.S. with respect to transactions subject to Part 30 and filing a copy of the agency agreement with the National Futures Association (“NFA”); (2) agree to provide access to their books and records in the U.S. to Commission and Department of Justice representatives; and (3) notify NFA of the commencement of business in the U.S. 3

By letter dated June 29, 2000 and subsequent correspondence through September 26, 2000, the WCE petitioned the Commission on behalf of certain firms located and doing business in Manitoba for an exemption from the application of the Commission's Part 30 rules to those firms. In support of its petition, the WCE states that granting such an exemption with respect to firms that it has authorized to conduct foreign futures and options transactions on behalf of customers located in the U.S. would not be contrary to the public interest or to the purposes of the provisions from which the exemption is sought because such firms are subject to a regulatory framework comparable to that imposed by the Commodity Exchange Act (“Act”) and the rules thereunder.

Based upon a review of the petition, supporting materials filed by the WCE and the recommendation of the Commission's staff, the Commission has concluded that the standards for relief set forth in Rule 30.10 and, in particular, Appendix A thereof, have generally been satisfied and that compliance with applicable Manitoba and Canadian law and WCE rules may be substituted for compliance with those sections of the Act and rules thereunder more particularly set forth herein.

By this Order, the Commission hereby exempts, subject to specified conditions, those firms identified to the Commission by the WCE as eligible for the relief granted herein from:

This determination to permit substituted compliance is based on, among other things, the Commission's finding that the regulatory scheme governing persons in Manitoba who would be exempted hereunder provides:

This Order does not provide an exemption from any provision of the Act or rules thereunder not specified herein, for example, without limitation, the antifraud provision in Rule 30.9. Moreover, the relief granted is limited to brokerage activities undertaken on behalf of customers located in the U.S. with respect to transactions on or subject to the rules of the WCE for products that customers located in the U.S. may trade. 4 The relief does not extend to rules relating to trading, directly or indirectly, on U.S. exchanges. For example, a firm trading in U.S. markets for its own account would be subject to the Commission's large trader reporting requirements. 5 Similarly, if such a firm were carrying a position on a U.S. exchange on behalf of foreign clients, it would be subject to the reporting requirements applicable to foreign brokers. 6 The relief herein is inapplicable where the firm solicits or accepts orders from customers located in the U.S. for transactions on U.S. markets. In that case, the firm must comply with all applicable U.S. laws and regulations, including the requirement to register in the appropriate capacity.

The relief also does not extend to trading, directly or indirectly, on any other non-U.S. exchanges. Should the WCE seek to extend the Rule 30.10 relief set forth herein to permit designated members to solicit and accept orders from customers located in the U.S. for otherwise permitted transactions on any other non-U.S. exchange, it must apply for and receive prior approval from the Commission. In a petition to extend the relief set forth herein to other non-U.S. exchanges, the WCE must: (1) Represent that local law prohibits its members from intermediating otherwise permitted transactions for customers located in the U.S. on unapproved foreign exchanges as set forth therein, and must specify which exchanges are authorized by local law; (2) represent that member firms with customers located in the U.S. will comply with all the terms and conditions of this Order with respect to transactions entered into on or subject to the rules of a foreign exchange located outside its jurisdiction; and (3) confirm that it has the authority and the ability to enforce its laws, rules and/or regulations with respect to those transactions to the same extent that it conducts such activities on an exchange located within its jurisdiction. 7

The National Crime Prevention and Privacy Compact, 42 U.S.C. 14611-16, establishes uniform standards and processes for the interstate and federal-state exchange of criminal history records for noncriminal justice purposes. The Compact was signed into law on October 9, 1998, (Pub. L. 105-251) and became effective on April 28, 1999 when ratified by the second State.

The Compact requires that subject's fingerprints or other approved forms of positive identification “shall be submitted with all requests for criminal history record checks for noncriminal justice purposes.” See 42 U.S.C. 14616, Article V (a). The Compact Council recognizes the extreme reliability of fingerprint-based identifications and believes that the above quoted provision requires that, whenever feasible, fingerprints should be submitted contemporaneously with search requests. However, the Council acknowledges that there are exigent circumstances in which time is a critical factor in decision making and in which the immediate fingerprinting of the subject is not feasible. In such emergency circumstances, the Council believes that the Compact permits preliminary name searches of the III System to be conducted for noncriminal justice purposes, provided that subject's fingerprints are obtained and submitted at the earliest time feasible. This procedure allows access to criminal history record information in a timely manner in exigent circumstances with follow-up positive identification assured by fingerprint submissions.

The rule published herein authorizes state criminal history record repositories and the FBI, upon approval by the Compact Council, to grant access to the III System in emergency situations on a delayed fingerprint submission basis, predicated upon a statute approved by the U.S. Attorney General pursuant to Pub. L. 92-544 and Article III (c) of the Compact. Access authorized by the rule shall adhere to both the Criminal Justice Information Services Security Policy and applicable state security policies. A noncriminal justice agency granted access to the III must adhere to applicable federal and state audit protocols. Violation and/or misuse of the authorized access granted may result in sanctions from the Compact Council, which may include the discontinuance of services.

Proposals to the Compact Council for granting of delayed fingerprint submission under the rule should be sent to the Compact Council Chairman at the address set out above. Such proposals should include information sufficient to fully describe the emergency nature of the situation in which delayed submission authority is being sought, the risk to the health or safety of the individuals involved, and the reasons why the submission of fingerprints contemporaneously with the search request is not feasible.

The rule (Sec. 901.3) provides that once a proposal from any state has been approved by the Compact Council, other states may apply for delayed submission authority consistent with that approved proposal through application to the FBI's Compact Officer. For example, applications for such authority dealing with the emergency placement of children, a proposal for which has been approved by the Council in a notice published separately in today's Federal Register , may be filed with the FBI's Compact Officer rather than with the Council Chairman.

This rule is published by the Compact Council as authorized by the National Crime Prevention and Privacy Compact (Compact), an interstate/federal compact which was approved and enacted into law by Congress pursuant to Pub. L. 105-251. The Compact Council is composed of 15 members (with 11 state and local governmental representatives), and is authorized by the Compact to promulgate rules and procedures for the effective and proper use of the Interstate Identification Index (III) System for noncriminal justice purposes. The Compact specifically provides that the Council shall prescribe rules and procedures for the effective and proper use of the III System for noncriminal justice purposes, and mandates that such rules, procedures, or standards established by the Council shall be published in the Federal Register . See 42 U.S.C. 14616, Articles II(4) and VI(a)(1), (e). This publication complies with those requirements.

The Compact Council is not an executive department or independent regulatory agency as defined in 44 U.S.C. 3502; accordingly, Executive Order 12866 is not applicable.

The Compact Council is not an executive department or independent regulatory agency as defined in 44 U.S.C. 3502; accordingly, Executive Order 13132 is not applicable. Nonetheless, this Rule fully complies with the intent that the national government should be deferential to the States when taking action that affects the policymaking discretion of the States.

The Compact Council is not an executive agency or independent establishment as defined in 5 U.S.C. 105; accordingly, Executive Order 12988 is not applicable.

Approximately 75 percent of the Compact Council members are representatives of state and local governments; accordingly, rules prescribed by the Compact Council are not Federal mandates. Accordingly, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

The Small Business Regulatory Enforcement Fairness Act (Title 5, U.S.C. 801-804) is not applicable to the Council's rule because the Compact Council is not a “Federal agency” as defined by 5 U.S.C. 804(1). Likewise, the reporting requirement of the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act) does not apply. See 5 U.S.C. 804.

On January 19, 2001, MSHA published a final rule addressing the exposure of underground metal and nonmetal miners to diesel particulate matter (dpm). The final rule establishes new health standards for underground metal and nonmetal mines that use equipment powered by diesel engines and requires operators of these underground mines to train miners about the hazards of being exposed to diesel particulate matter. In accordance with the January 20, 2001, memorandum from Andrew H. Card, MSHA announced a 60-day delay of the effective date of certain provisions of the final regulations to permit the Secretary of Labor to further consider the provisions of the rule. An additional delay of 45 days to July 5, 2001 is necessary to give the parties an opportunity to continue negotiations to settle the legal challenge to the rule described below.

On January 29, 2001, Anglogold (Jerritt Canyon) Corp. and Kennecott Greens Creek Mining Company filed a petition for review of the rule in the District of Columbia Circuit. On February 7, 2001, the Georgia Mining Association, the National Mining Association, the Salt Institute, and MARG Diesel Coalition filed a similar petition in the Eleventh Circuit. On March 14, 2001, Getchell Gold Corporation petitioned for review of the rule in the District of Columbia Circuit. The three petitions have been consolidated and are pending in the District of Columbia Circuit. The United Steelworkers of America (USWA) has intervened in the Anglogold case. The parties to the litigation have begun settlement negotiations, and the Department is hopeful that, within the next 45 days, agreement will be reached on many of the issues in dispute.

To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A). The delay of the effective date of the rule is effective immediately upon publication of this notice in the Federal Register . Publication of this notice without the opportunity for public comment is based on the good cause exceptions in 5 U.S.C. 553(b)(B) and 553(d)(3), in that seeking public comment is impracticable, unnecessary and contrary to the public interest. The 45-day delay of the effective dates is necessary to give the parties an opportunity to engage in negotiations to settle the legal challenges to the rule. Given the imminence of the effective date, seeking prior public comment on this delay is impractical, as well as contrary to the public interest in the orderly promulgation and implementation of regulations. See also, 5 U.S.C. 705 (“When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review”).

On January 19, 2001, MSHA published a final rule that addresses the exposure of underground coal miners to diesel particulate matter (dpm) (66 FR 5526). The rule establishes new health standards for underground coal mines that use equipment powered by diesel engines and, among other things, requires operators of these underground mines to train miners about the hazards of exposure to dpm.

As discussed in the preamble to the final rule (66 FR 5669), § 72.500(a) requires that all permissible diesel-powered equipment introduced into an underground area of an underground coal mine emit no more than of 2.5 grams of dpm per hour as of the effective date of the final rule. Paragraph (b) requires all existing equipment to meet this limit as of July 19, 2002.

For non-permissible, heavy-duty diesel-powered equipment, generators and compressors introduced into an underground area of a coal mine, the final rule's preamble to § 72.501(a) specifies an interim emissions limit; that is, that this equipment must not emit more than 5.0 grams of dpm per hour on the effective date of the final rule. Paragraph (b) requires existing diesel equipment not to exceed this limit as of July 21, 2003. Paragraph (c) prohibits non-permissible, heavy-duty diesel-powered equipment from exceeding 2.5 grams per hour of dpm emissions as of January 19, 2005.

Similarly, the preamble discussion to § 72.502 specifies that nonpermissible light-duty diesel-powered equipment, other than generators and compressors, introduced into an underground area of a coal mine after the effective date of the final rule must not emit more than 5.0 grams of dpm per hour.

The regulatory text to each of the above provisions contains grammatical errors that may be confusing to the mining community. These errors were inadvertently included at the time of publication. This document corrects these errors, as well as others made in the preamble at the time of publication. These corrections are effective on May 21, 2001, the effective date of the final rule.

MSHA believes that correcting these inadvertent errors in the final rule is not a rule to which the procedural requirements of 5 U.S.C. 553, or the various statutes and executive orders relating to rules, apply. However, if these corrections were deemed a rule, the notice and comment provisions of the Administrative Procedure Act do not apply based on the good cause exceptions in 5 U.S.C. 553(b)(B) and 553(d)(3). MSHA finds good cause not to provide further notice and comment in that additional notice and comment would be unnecessary and contrary to the public interest because the public was advised in the preamble to the final rule of MSHA's intention regarding each of the above regulatory provisions. Consequently, unnecessary confusion would result if these corrections are not made immediately.

The final rule published on January 19, 2001, contained information collection provisions that require an OMB Control Number. OMB has approved the information collection requirements and assigned OMB Control Number 1219-0124 to the information collection requirements of the final rule.

These corrections contain no additional information collection requirements. In addition, this action is not a “significant regulatory action” within the meaning of Executive Order 12866. Furthermore, this action is not a “major rule” within the meaning of the Small Business Regulatory Enforcement Act, or an “unfunded mandate” within the meaning of Title II of the Unfunded Mandates Reform Act of 1995. Finally, the action will not have Federalism implications within the meaning of Executive Order 13132, and a regulatory flexibility analysis is not required by the Regulatory Flexibility Act.

Accordingly, MSHA makes the following corrections to the final rule published on January 19, 2001.

In the Federal Register issue of January 19, 2001 (66 FR 5526), make the following corrections to the preamble:

1. On page 5526, column 1, fourth paragraph of the Summary, line 3, change “coal” to “metal and nonmetal”.

2. On page 5672, column 2, first paragraph, line 8, after the word “determining” delete “the permissible fleet.” and insert the following:

Why MSHA concluded that the emission limit for permissible equipment should be 2.5 grams per hour. The emission limit was determined with reference to technological and economic feasibility. While mine operators can use a variety of controls to reduce the emissions from a piece of permissible equipment, the two controls that can produce the significant reductions for permissible equipment are cleaner engines and filters. None of the cleaner engines produced in recent years has been approved for permissible applications. Accordingly, MSHA determined it should set the limit at what can be achieved technologically with filtration and the currently approved permissible engines.

As a reference point, MSHA calculated the emission limit that could be achieved if a high-efficiency filter were applied to the engine that produced the most dpm emission in the permissible fleet.”

3. On page 5678, column 1, the second paragraph is the heading of a section and should be italicized and read as follows: “ Why the final rule uses a machine-based emission limit instead of requiring a high-efficiency filtration system. ”

4. On page 5681, column 2, the first sentence of the second paragraph is a section heading and should be italicized and read as follows: “ How did MSHA determine the emissions limit for newly introduced light-duty equipment? ”

In the final regulations published on January 19, 2001 (66 FR 5526), make the following additional corrections to the preamble:

1. On page 5547, column 1, third paragraph, line 7, change “Commerica” to “commercial”.

2. On page 5563, change title of the figure from “Figure 5” to “Figure III-1”.

3. On page 5565, change title of the figure from “Figure 6” to “Figure III-2”.

4. On page 5568, change title of the figure from “Figure 7” to “Figure III-3”.

5. On page 5598, column 1, third paragraph, line 5, change “Footnote 42” to “Footnote 44”.

6. On page 5639, column 3, first paragraph, lines 5 and 6, change “Figures III-9 and III-10” to “Figures III-5 and Figure III-6”.

7. On page 5640, the title of the figure should read Figure III-5” and at the end of the caption insert “(Cohen and Higgins, 1995)”.

8. On page 5641, the title of the figure should read “Figure III-6” and at the end of the caption insert “(Cohen and Higgins, 1995)”.

9. On page 5655, column 3, fourth paragraph, line 19, change “Figure III-11” to “Figure III-7”.

10. On page 5656, column 2, first paragraph, line 1, change “Figure III-11” to “Figure III-7”.

11. On page 5656, change the title of the figure from Figure III-11” to “Figure III-7”.

12. On page 5683, Table 72.502-1, column 2, after the last line, insert the following:

13. On page 5685, column 1, fourth paragraph, line 15, insert “other” after the word “from”.

14. On page 5685, column 1, fifth paragraph, line 10, change “by the filter” to “by one minus the filter”.

15. On page 5687, column 3, first paragraph, line 24, change “within 6 months.” to “within 7 calendar days.”

16. On page 5687, column 3, first paragraph, line 31, at the end of the sentence insert “of the request.”

17. On page 5688, Table I-1, after the last row in the table insert:

18. On page 5689, column 1, third paragraph, line 15, insert “Light-duty” at the beginning of the sentence.

19. On page 5689, column 1, third paragraph, at the end of the paragraph, insert the following:

“Section 72.510 of the final rule addresses Miners Health Training. It was unchanged from the proposed rule. Miners will be required to be trained on: (1) The health risk associated with exposure to diesel particulate matter; (2) the methods used in the mine to control diesel particulate matter concentrations; (3) identification of the person responsible for maintaining those controls; and (4) actions miners must take to ensure the controls operate as intended. The final rule is the same as that proposed. Additionally, a record of that training must be maintained and made available to MSHA and the representatives of the miners. This section will take effect 60 days after the effective date of the regulation. The initial miners health training will have to be completed within that time frame and then annually thereafter. MSHA believes that 60 days is ample time to comply with this provision.

Section 72.520 of the final rule addresses the Diesel Equipment Inventory. This section will take effect 60 days after the effective date of the regulation. The initial Diesel Equipment Inventory containing a list of diesel equipment and exhaust emission controls must be completed and submitted within that time frame. Subsequent modifications to the inventory must be submitted within seven calendar days to the District Manager. MSHA believes that 60 days is ample time to comply with this provision. The inventory must be mailed or faxed to the MSHA District Office.”

20. On page 5695, column 3, sixth paragraph, line 4, change “number 7” to “number 8.”

On February 28, 2001, the Coast Guard published a notice of proposed rulemaking concerning these drawbridge regulations in the Federal Register (66 FR 12745). We received no comments concerning the proposed rule. No public hearing was requested and none was held.

The owner of the Franklin Street bridge, LaPorte County Highway Department, IN, requested the Coast Guard approve a modified schedule for the bridge to reduce vehicular traffic delays in the vicinity of the bridge during the peak tourist season and to establish a permanent winter operating schedule. The current regulation for the Amtrak bridge is obsolete and does not accurately reflect current train and vessel operations at that location.

The Amtrak bridge is currently required to open on signal between the hours of 6:30 a.m. and 2:30 p.m., except Sundays, from February 16 through December 14. The bridge is not required to be manned all other times and would be opened within 20 minutes following notification to the Amtrak dispatcher in Chicago. The Coast Guard determined that this schedule did not provide for the reasonable needs of navigation and places undue burden on vessel operators wishing to pass the draw. Amtrak representatives concurred with this finding. Also, the bridge was manned during periods of no vessel traffic on the waterway during winter months, placing an undue burden on the railroad. The revised regulation establishes the requirement for the bridge to open on signal for vessels between March 16 and November 30 each year. Vessel operators will be required to provide at least 12 hours advance notice for openings between December 1 and March 15 each year. This will allow the bridge to be unmanned during periods of no train traffic and during winter months when there is no navigation.

The Franklin Street bridge is located in a highly congested section of Michigan City, and adjacent to a park area that is visited by a large number of residents and tourists between April 1 and December 1 each year. LaPorte County Highway Dept., acting on behalf of the City of Michigan City, asked the Coast Guard to regulate bridge openings to coincide with the park hours to alleviate vehicular traffic congestion in the area, while still providing for the reasonable needs of navigation. This final rule will require the bridge to open on signal for vessels between March 16 and November 30, except between the hours of 6:15 a.m. and 11:15 p.m., Monday through Sunday, the bridge will only be required to open for vessels three minutes before to three minutes after the quarter-hour and three-quarter hour.

This schedule is believed to provide a reasonable balance between the needs of vessel traffic and vehicular traffic through the two drawbridges in Michigan City Harbor.

The Coast Guard received no comments to the notice of proposed rulemaking. No changes will be made to the final rule.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. This determination is based on the fact that this rule will not eliminate bridge openings for any vessels, but would only require vessels to pass Franklin Street bridge during scheduled periods throughout the peak navigation season (March 16 to November 30). The bridges will still open between December 1 and March 15 if 12-hour advance notice is provided.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), the Coast Guard must consider whether this rule will have a significant impact on a substantial number of small entities. “Small entities” may include small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 people.

The Coast Guard certifies under 5 U.S.C 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This conclusion is based on the low number of small entities identified in the preliminary stages of this rulemaking, and the relatively minor restrictions placed on vessels desiring openings of the bridges.

This rule calls for no new collection of information requirement under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

The Coast Guard has analyzed this rule under the principles and criteria contained in Executive Order 13132, and determined that this rule does not have federalism implications under that Order.

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

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

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

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

The Coast Guard considered the environmental impact of this rule and concluded that, under figure 2-1, paragraph 32(e) of Commandant Instruction M16475.lC, this rule is categorically excluded from further environmental documentation. This rule changes a drawbridge regulation which has been found not to have a significant effect on the environment. A “Categorical Exclusion Determination” is not required.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

On April 4, 2001, we published a notice of proposed rulemaking (NPRM) entitled “Safety Zone: Captain of the Port Detroit Zone”, in the Federal Register (66 FR 17829). We received no letters commenting on the proposed rule. No public hearing was requested and none was held.

Under 5 U.S.C 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The events listed in this rule have been regularly held on an annual basis with widespread public participation. The Coast Guard has not received any complaints or negative comments previously with regard to these events. Delaying the effective date would be contrary to public interest because events being held in early June would be without an enforceable zone, thus placing the safety and property of spectators at unnecessary risk.

The Coast Guard is establishing 23 permanent safety zones that will be activated for fireworks displays occurring annually at the same location. The 23 locations are New Baltimore City Park, Lake St. Clair—Anchor Bay; 1000 yards east of Jefferson Beach Marina, Lake St. Clair; Ford's Cove, Lake St. Clair; the Brownstown Wave Pool, Lake Erie; St. Clair City Park, St. Clair River; DNR Boat Launch at the mouth of the Ausable River; Port Austin Breakwall, Lake Huron; breakwall between Oak & Van Alstyne St., Detroit River; 300 yards east of Grosse Pointe Farms, Lake St. Clair; Caseville breakwall, Saginaw River; between Algonac and Russell Island, St. Clair River—North Channel; South Harbor Breakwall, Lake Huron; 1000 yards east of Veterans Memorial Park, St. Clair Shores, Lake St. Clair; anchored 300 yards east of 223 Huron Ave: Black River; anchored 400 yards east of the Grosse Pointe Yacht Club seawall, Lake St. Clair; 300 yards east of the breakwall at Lexington, Lake Huron; anchored at the northern end of Mud Island, Ecorse Channel; Grosse Ile Yacht Club deck, Detroit River; anchored 200 yards east of Trenton, Trenton Channel; anchored 400 yards east of Belle Maer Harbor, Lake St. Clair—Anchor Bay; Tawas City Pier, Lake Huron; anchored 500 yards east of Marine City, St. Clair River; 600 yards off Jefferson Beach Marina, Lake St. Clair.

Based on recent accidents that have occurred in other Captain of the Port zones, and the explosive hazard associated with these events, the Captain of the Port has determined that fireworks launches in close proximity to watercraft pose a significant risk to public safety and property. The likely combination of large numbers of inexperienced recreational boaters, congested waterways, darkness punctuated by bright flashes of light, alcohol use, and debris falling into the water could easily result in serious injuries or fatalities. Establishing a safety zone to control vessel movement within a 300 yard radius of the fireworks launch platforms will help ensure the safety of persons and property at these events and help minimize the associated risk.

MSO Detroit received no comments or related information pertaining to this rulemaking.

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

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

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

This rule will affect the following entities, some of which might be small entities: The owners or operators of commercial vessels intending to transit a portion of an activated safety zone.

These safety zones would not have a significant economic impact on these small entities for the following reasons: The safety zone is only in effect for a few hours on the day of the event. Because these are annual events, affected entities can plan for any disruptions well in advance of the day of the event. Additionally, vessel traffic can safely pass outside the safety zones during the events. In cases where traffic congestion is greater than expected and blocks shipping channels, traffic may be allowed to pass through the safety zone under Coast Guard escort with the permission of the Captain of the Port Detroit.

Before the effective period, the Coast Guard will issue maritime advisories widely available to users who might be in the affected area by publication in the Federal Register and the Ninth Coast Guard District Local Notice to Mariners Marine information broadcasts and facsimile broadcasts may also be made. Additionally, the Coast Guard has not received any negative reports from small entities affected during these displays in previous years.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects and participate in the rulemaking process. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact Marine Safety Office Detroit (see ADDRESSES. )

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

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (32)-(34) of Commandant Instruction M16475.l-C, this rule is categorically excluded from further environmental documentation.

A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

Throughout this document wherever “we,” “us,” or “our” are used, we mean EPA.

The Coconino County rules submitted for recision are listed in Table 1. These rules were previously approved for incorporation into the Arizona SIP on November 15, 1978 (43 FR 53031). The replacement ADEQ rules are listed where applicable. Other justifications for recision are noted.

On July 26, 2000, we found that these rule recision submittals meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.

There are no previous recision submittals on which we have not acted.

The Coconino County, Mohave County, and Yuma County originally adopted a set of air pollution control rules that we approved into the Arizona SIP. These counties later dissolved their air pollution control districts and elected to have the ADEQ administer Arizona state rules in their counties. The remaining SIP rules in the individual counties are defunct and not used to enforce air regulations in those counties. All remaining SIP rules in these counties are rescinded by this action.

Generally, the recision of SIP rules must not relax existing requirements of the SIP. Sections 110(l) and 193 of the CAA. If requirements are relaxed, the ADEQ must demonstrate that the modifications do not interfere with attainment of the NAAQS or otherwise violate sections 110(l) or 193.

We believe the recision submittals are consistent with the CAA and relevant policy and guidance regarding SIP relaxations. The TSD has more information on our evaluation.

As authorized in section 110(k)(3) and 110(k)(6) of the CAA, we are approving the recision submittals, because we believe they fulfill all relevant requirements. We do not think anyone will object to this, so we are finalizing the approval without proposing it in advance. However, in the Proposed Rules section of this Federal Register , we are simultaneously proposing approval of the same recision submittal. If we receive adverse comments by June 20, 2001, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final recision will be effective without further notice on July 20, 2001. This will remove the rules from the federally enforceable SIP.

The rules regulate some of the seven criteria pollutants, which harm human health and the environment, and regulate permitting procedures for control of these pollutants. Section 110(a) of the CAA required states to submit regulations that control the emission of these pollutants.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The information in this section is organized as follows:

EPA is approving revisions to the Commonwealth of Pennsylvania SIP which were submitted on March 6, 2000 by PADEP. These revisions amend the existing Stage II regulatory requirements of 25 PA Code, Chapter 129, Standards for Sources, section 129.82, Control of VOCs from gasoline dispensing facilities (Stage II), for the Pittsburgh-Beaver Valley ozone nonattainment area. Specifically, the revisions incorporate revised compliance dates for the Pittsburgh-Beaver Valley ozone nonattainment area, and make other technical amendments. The revised Stage II compliance dates are as follows: (1) For facilities for which construction was commenced after April 1, 1997, compliance shall be achieved at the time of the opening of the gasoline dispensing facility, (2) for facilities which dispense greater than or equal to 120,000 gallons of gasoline per month, based on average monthly sales during calendar years 1995 and 1996, compliance shall be achieved by July 1, 1999; and (3) for facilities which dispense greater than 90,000 gallons per month but less than 120,000 gallons per month based on average monthly sales during calendar years 1995 and 1996 compliance shall be achieved by December 31, 2000. Other revisions include subsection (d) which provides that if the onboard canister refueling emissions control program has been fully implemented by 2010, the Stage II systems will no longer be required in the area. Finally, subsection (e) establishes the functional testing and certification requirements consistent with EPA's regulations.

EPA is approving these SIP revisions to the Commonwealth of Pennsylvania SIP at the request of PADEP. The Commonwealth revised the Stage II VOC control requirements for Southwest Pennsylvania based upon the recommendations of the Southwest Pennsylvania Ozone Stakeholder Working Group as part of its ongoing efforts to address ozone air quality issues in the Pittsburgh-Beaver Valley ozone nonattainment area. EPA is approving these revisions as necessary for attainment and maintenance of the ozone standard in Southwest Pennsylvania.

The Commonwealth of Pennsylvania's SIP revisions were submitted by PADEP on March 6, 2000. EPA evaluated the Commonwealth's revised Stage II requirements for Southwest Pennsylvania to verify that the revisions were consistent with the previously approved Stage II regulations for the Commonwealth and met the requirements found in EPA's Stage II enforcement and technical documentation. The revisions were also reviewed for compliance with the CAA.

This request is approvable because it meets the requirements of EPA's applicable technical and enforcement guidance and the CAA.

EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in a separate document in this Federal Register publication, EPA is proposing to approve the SIP revision should adverse written comments be filed. This action will be effective on July 5, 2001 without further notice unless EPA receives adverse comment by June 20, 2001. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

EPA is approving revisions to the Commonwealth of Pennsylvania SIP, which were submitted on March 6, 2000 by PADEP. These revisions will revise 25 PA Code section 129.82, Control of VOCs from gasoline dispensing facilities (Stage II) for Southwest Pennsylvania.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule approving revisions to the Commonwealth's Stage II regulations for Southwest Pennsylvania does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Docket. The docket is an organized and complete file of all the information considered by EPA in the development of this rulemaking. The docket is a dynamic file because material is added throughout the rulemaking process. The docketing system is intended to allow members of the public and industries involved to readily identify and locate documents so that they can effectively participate in the rulemaking process. Along with the proposed and promulgated standards and their preambles, the contents of the docket will serve as the record in the case of judicial review. (See section 307(d)(7)(A) of the CAA.) The regulatory text and other materials related to this rulemaking are available for review in the docket or copies may be mailed on request from the Air Docket by calling (202) 260-7548. A reasonable fee may be charged for copying docket materials.

World Wide Web (WWW). In addition to being available in the docket, an electronic copy of today's final rule will also be available on the WWW through the EPA's Technology Transfer Network (TTN). Following signature, a copy of the rule will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules, http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 541-5384.

Regulated entities. Categories and entities potentially affected by this action include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your facility is regulated by this action, you should examine the applicability criteria in § 63.2131 of the final rule.

Judicial Review. Under section 307(b) of the CAA, judicial review of this final rule is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by July 20, 2001. Under section 307(d)(7)(B) of the CAA, only an objection to this rule which was raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by today's final action may not be challenged separately in any civil or criminal proceeding we bring to enforce these requirements.

Outline. The information presented in this preamble is organized as follows:

Section 112 of the CAA requires us to list categories and subcategories of major sources and area sources of HAP and to establish NESHAP for the listed source categories and subcategories. Major sources of HAP are those that have the potential to emit greater than 9 Megagrams per year (Mg/yr) (10 tons per year (tpy)) of any one HAP or 23 Mg/yr (25 tpy) of any combination of HAP. The “baker's yeast manufacturing” source category was listed as a major source of HAP on the initial source category list published in the Federal Register on July 16, 1992 (57 FR 31576). We changed the name of the source category to “manufacturing of nutritional yeast” in order to clarify the scope of the rule and distinguish it as not including the regulation of bakeries.

Section 112 of the CAA requires that we establish NESHAP for the control of HAP from both new and existing major sources. The CAA requires the NESHAP to reflect the maximum degree of reduction in emissions of HAP that is achievable. This level of control is commonly referred to as the MACT.

The MACT floor is the minimum control level allowed for NESHAP and is defined under section 112(d)(3) of the CAA. In essence, the MACT floor ensures that the standard is set at a level that assures that all major sources achieve the level of control at least as stringent as that already achieved by the better-controlled and lower-emitting sources in each source category or subcategory. For new sources, the MACT floor cannot be less stringent than the emission control that is achieved in practice by the best-controlled similar source.

In developing MACT, we also consider control options that are more stringent than the floor. We may establish standards more stringent than the floor based on the consideration of cost of achieving the emissions reductions, any non-air quality health and environmental impacts, and energy impacts.

The HAP emitted from the nutritional yeast manufacturing process is acetaldehyde. We have estimated the annual acetaldehyde emissions from the manufacture of nutritional yeast to be approximately 220 Mg/yr (240 tpy).

Acetaldehyde acute (short term) exposure is associated with irritation of the eyes, skin, and respiratory tract. Acute inhalation of high concentrations of acetaldehyde can cause respiratory paralysis and death. Animal acetaldehyde exposure studies indicate that acetaldehyde may also be a developmental toxin. Rats and hamsters with chronic (long-term) exposure to acetaldehyde have an increased incidence of nasal and laryngeal tumors. Based on animal studies, we have classified acetaldehyde as a probable human carcinogen of low carcinogenic hazard.

We have defined the nutritional yeast manufacturing source category to include facilities that manufacture varieties of Saccharomyces cerevisiae (also referred to as nutritional yeast, or baker's yeast) that are made for the purpose of becoming an ingredient in dough for bread or other yeast-raised baked products, or for becoming a nutritional food additive intended for consumption by humans. The nutritional yeast manufacturing source category does not include the production of yeast intended for consumption by animals (for example, as an additive for livestock feed).

We have defined the nutritional yeast manufacturing affected source as including the collection of equipment used in the manufacture of nutritional yeast species Saccharomyces cerevisiae. This collection of equipment includes, but is not limited to, fermentation vessels (fermenters). We have not included the collection of equipment used in the manufacture of nutritional yeast species Candida utilis (torula yeast) as part of the affected source.

For existing and new sources, we are requiring that you meet volatile organic compound (VOC) emission limits as a surrogate for acetaldehyde, which makes up a portion of the total VOC emitted. The emission limitations include both VOC concentration limits and a percent-of-batches requirement. The concentration limits apply to each batch; they are expressed as the VOC concentration averaged over the duration of a batch. The fermentation stage of each batch determines which one of three VOC concentration limits is applicable to that batch. To meet the percent-of-batches requirement, you must ensure that at least 98 percent of batches on a rolling 12-month average are within-concentration batches. (We define a “within-concentration batch” as a batch for which the average VOC concentration is not higher than the maximum concentration that is allowed as the 98 percent emission limitation.)

To demonstrate compliance with the VOC emission limits specified in the rule, we require that you monitor either the VOC concentration in the fermenter exhaust or the brew ethanol concentration in the fermenter. (We define “brew ethanol” as the ethanol in the fermenter liquid.)

If you monitor brew ethanol, you must conduct performance tests simultaneously with brew ethanol monitoring to establish a brew-to-exhaust correlation. (The “brew-to-exhaust correlation” is the correlation between the concentration of ethanol in the brew and the concentration of VOC in the fermenter exhaust.)

If you monitor fermenter exhaust, you must ensure that at least 98 percent of batches over the initial compliance period are within-concentration batches to demonstrate initial compliance with the emission limitations.

If you monitor brew ethanol, you must ensure that the VOC fermenter exhaust concentration over the period of your performance test does not exceed the applicable maximum concentration. You must also have a record of the brew-to-exhaust correlation during the performance test while the VOC fermenter exhaust concentration is at or below the applicable maximum concentration.

To demonstrate continuous compliance with the emission limitations, you must report the percentage of batches that are within-concentration batches, based on a 12-month rolling time period. Your continuous emission monitoring system (CEMS) must be operated at all times during a fermentation batch monitoring period. If you monitor brew ethanol, you must correlate the brew ethanol concentration measured by the CEMS, by testing, to the VOC concentration in the fermenter exhaust. The brew-to-exhaust correlation will determine the brew ethanol concentration CEMS compliance monitoring limit. You are required to determine this correlation at least once a year.

We require owners or operators of nutritional yeast manufacturing affected sources to which the final rule applies to submit the following: (1) Application for Approval of Construction or Reconstruction, (2) Notification of Compliance Status, (3) Compliance Reports, and (4) Immediate Malfunction Reports. Additionally, if an owner or operator intends to conduct a performance evaluation or performance test, we require notification of such intent. Records of reported information and other information necessary to document compliance ( e.g., records related to malfunction, records that show continuous compliance with emission limits) must be maintained for 5 years.

As soon as practicable before construction begins, you must submit an application for approval of construction of a new major affected source, reconstruction of a major affected source, or reconstruction of a major source such that the source becomes a major affected source subject to the rule. You must submit a separate application for each construction or reconstruction. You must submit at least your name and address, the details regarding your intent to construct or reconstruct, the address of the proposed construction or reconstruction, identification of the standard(s) that are the basis for the application, the expected commencement and completion of the construction or reconstruction, the anticipated date of startup of the source, and the type and quantity of HAP that are anticipated by the source.

You must provide us with a one-time notification of compliance with the final rule. It must describe how you are compliant with the rule, including results of initial compliance determination, identification of the method to be used to determine continuing compliance, and description of the air pollution control method employed.

You must report on your continued compliance status semiannually. This report must include your calculated percentage of within-concentration batches for 12-month calculation periods ending on each calendar month that falls within the reporting period. If you had a malfunction during the reporting period and you took actions as specified in your malfunction plan, you must include that information in the Compliance Report (CR).

If you have a malfunction during the reporting period that is not specified in your malfunction plan, you must submit an Immediate Malfunction Report. This report consists of a telephone call (or facsimile (FAX) transmission) to the Administrator within 2 working days after starting actions that are not included with your plan and shall describe the actions taken during the malfunction event, followed by a letter within 7 working days after the end of the event. If you intend to conduct a performance evaluation or performance test, you are required to submit a notification of such intent at least 60 days prior to the evaluation or test.

In response to comments received on the proposed standards, we made several changes to the final rule. While some of the changes we made were clarifications designed to make our intentions clearer, some of the changes are changes to the proposed standard requirements. The substantive comments and/or changes and responses made since the proposal are summarized in the following sections. Our complete responses to public comments are contained in a memorandum that can be obtained from the docket (see ADDRESSES section).

We have changed the regulatory format of the rule from what was proposed on October 19, 1998 (63 FR 55812) to improve implementation, permitting, and enforcement of the rule. The new format also improves the interface with the 40 CFR part 63 General Provisions which are cross-referenced in the proposed and final rule. Although the overall format of the final rule differs from the format of the proposal, unless noted in another paragraph of this section, the requirements are the same. We believe that the new format increases the clarity of the requirements and eases the implementation burden of the rule for both the regulated entity and enforcing agency.

We proposed two sets of emission limits and associated requirements for the nutritional yeast manufacturing source category. Both sets of emission limits potentially represented MACT. One set, which we referred to in the proposal preamble as the “Reasonably Available Control Technology (RACT) standard,” relies on the concentration-based limits used in Wisconsin's and Maryland's RACT rules. The second set, which we referred to in the proposal preamble as the “Presumptive MACT (PMACT) standard,” relies on a production-based format, which is the same format we considered in the 1994 PMACT.

Two commenters supported the use of the PMACT standard option, and two commenters supported the retention of both options in the final rule. Two of the commenters supported the PMACT standard option because they objected to the proposed RACT option's air flow measurement requirement and air flow cap. One of the commenters added that they would only support the PMACT option if the production-linked emission factor compliance requirement was to be kept confidential.

One of the commenters that recommended retaining both options in the final rule stated that they would prefer the RACT option over the PMACT option if the concentration limits were expressed in terms of propane and the air flow limitation was removed.

Based on comments received and further evaluation of these two options, we decided to adopt the RACT standard option, without the air flow cap, in the final rule because it offers a direct measure of compliance, does not require calculations based on confidential production data, and is simpler as well as easier to use and enforce than the PMACT standard option. Additionally, as noted at proposal, we have more data to support the RACT option. We have selected the RACT standard option because we also believe it better reflects existing control technology performance, operation, and batch emissions variability.

At proposal, we solicited comment on regulating wastewater and what would constitute MACT for nutritional yeast manufacturing facilities. We received three comment letters that argued against the regulation of wastewater emissions of acetaldehyde at nutritional yeast manufacturing facilities. Reasons given for not regulating wastewater emissions include that the cost of monitoring and control of emissions of acetaldehyde would be high, that emissions from wastewater of acetaldehyde are insignificant, and that treatment might increase emissions of other air pollutants.

Based on comments received and further analysis of wastewater acetaldehyde emissions from nutritional yeast manufacturing facilities, we concluded that the MACT floor for wastewater emissions is no control. We then considered going beyond the floor and determined that non-air quality health and environmental impacts, energy impacts, and costs to go beyond the floor are unreasonably high (Docket No. A-97-13).

The amount of acetaldehyde in the wastewater is a function of the acetaldehyde generated during the yeast fermentation process. Acetaldehyde is a by-product of the fermentation process. Emission limits on the fermentation process result in lower air emissions from the fermentation tanks. To achieve the emission limits, facilities must regulate the yeast growth by process control of sugar and oxygen to the yeast. This process control also results in lower concentrations of acetaldehyde in the wastewater and subsequently lower air emissions from wastewater. Thus, levels of acetaldehyde in wastewater are already reduced by process changes upstream of wastewater management operations (which process controls constitute MACT for those operations). Put another way, achieving the upstream standards also controls acetaldehyde in wastewater. The standard of “no control” in the final rule for wastewater operations thus means no additional control beyond that already afforded through the upstream standards.

Further control of wastewater emissions is achievable through use of add-on emission control technologies. No such controls are currently utilized, so that any such control would be a beyond-the-floor standard. Given the small concentrations of acetaldehyde remaining in wastewater, EPA believes any such controls would not be cost effective. In addition, there are no non-air quality impact or energy considerations that would suggest adopting such beyond-the-floor controls (which would require additional energy to operate and generate a waste stream for disposal). Therefore, we do not require control of emissions of acetaldehyde from wastewater in the final rule.

One commenter requested that the measurement of ethanol in fermenter liquid be allowed as an alternative to measurement of VOC in fermenter offgas. The commenter supplied information to us that indicated a strong correlation between the brew ethanol concentration in the fermenter liquid and the VOC concentration in the fermenter exhaust. Upon evaluation of the commenter's documentation and our own analysis, we agreed that the correlation between brew ethanol and VOC concentration from the fermenter exhaust is sufficiently strong to allow monitoring of brew ethanol as an alternative to monitoring VOC concentration. Therefore, the final rule explicitly allows for the measurement of brew ethanol as an alternative monitoring method.

Some commenters expressed that surrogate VOC concentration limits should be established based on what is achievable in practice. Nutritional yeast manufacturing facilities currently subject to RACT standards or RACT-like standards represent the best-controlled sources for the nutritional yeast manufacturing source category (Docket No. A-97-13). Some States with RACT or RACT-like standards apply discretion as to whether a concentration limit that is exceeded results in a violation of the standard (a VOC concentration limit is exceeded if the batch-average concentration exceeds the specified limit). For example, Maryland's continuous emissions monitoring policy allows for one VOC concentration limit exceedance, or occurrence, per facility per quarter.

We did not receive any comments that supported lowering MACT concentration limits from RACT concentration limits. One commenter stated that although most batches display batch-average VOC concentrations below the RACT limits due to the natural variability of the biological process of yeast-growing, batch-average VOC concentrations display a bell-curve distribution. The commenter added that because of the bell-curve distribution of VOC concentrations, a source needs to target VOC concentrations well below the RACT limit in order for the distribution of actual concentrations to remain below the RACT limit.

We analyzed available information for five yeast manufacturing facilities that are subject to Wisconsin or Maryland RACT standards or California Bay Area Air Quality Management District (BAAQMD) RACT-like concentration limits. Based on our analysis, we found that these facilities had concentration limits that were exceeded for 0 to 2.5 percent of their runs, with an average of 1.3 percent of the concentration limits being exceeded for the total number of runs in 1998. Only one facility had no concentration limits that were exceeded (Docket No. A-97-13).

There is no evidence that failure to meet the limit for every batch is a result of poor operation. We do not have sufficient data to indicate that the RACT limits can be achieved on every batch, so we have concluded that the MACT floor for the nutritional yeast manufacturing source category, for existing and new sources, is less stringent than meeting the RACT limits for every batch (Docket No. A-97-13). Therefore, we have concluded that MACT is the control of 98 percent of the batches to either at or below the VOC concentration limits specified in the rule.

Many comments were received regarding compliance requirements. Some commenters requested that the final rule clarify the compliance period over which the concentration limits are to be met. Other commenters stated that the proposed concentration limit for VOC (as ethanol) under the RACT standard option was based on an incorrect conversion of VOC to an ethanol basis from the propane basis that is used in the RACT rules.

We agree that the final rule should clarify the compliance period for which the concentration limits must be met. As explained above, the MACT level of control is that 98 percent of the nutritional yeast manufacturing batches be lower than or equal to concentration limits established in the rule. This level of control was determined to be achievable on a rolling 12-month average basis. Therefore, the final rule clarifies that the concentration limits are to be met on the basis of an average of concentrations measured over the duration of a batch, and not on an instantaneous basis. Ninety-eight percent of the nutritional yeast manufacturing batches are to be within concentration limits on a rolling 12-month average basis.

We proposed limits in terms of VOC as ethanol. From information and comments received after proposal, we learned that the use of propane-calibrated analyzers is widespread in the nutritional yeast manufacturing industry, and that their use is consistent with the RACT requirements which represent MACT. Therefore, the final rule expresses concentration limits based on VOC as propane rather than as ethanol.

We estimate that the 1998 nationwide emissions from nutritional yeast manufacturing facilities were approximately 820 Mg/yr (900 tpy) of VOC and 220 Mg/yr (240 tpy) of acetaldehyde. The final rule will reduce VOC emissions by an estimated 85 Mg/yr (93 tpy) and acetaldehyde emissions by an estimated 28 Mg/yr (31 tpy) from nutritional yeast manufacturing facilities.

We do not expect that there will be any significant adverse non-air health, environmental or energy impacts associated with the final standards for the nutritional yeast manufacturing source category. We determine impacts relative to the baseline that is set at the level of control in absence of the rule. The predominant control measure that will be adopted by nutritional yeast manufacturing facilities as a result of the final rule is process control, which will not result in any water pollution or solid waste impacts.

The total estimated capital cost of the final rule for the nutritional yeast manufacturing source category is approximately $270,000. The total estimated annual cost of the final rule is approximately $700,000 (Docket No. A-97-13). We do not expect any adverse economic impacts to result from the final rule.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), we must determine whether the regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB) and the requirements of the Executive Order. The Executive Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that this rule is not a “significant regulatory action” under the terms of Executive Order 12866. Consequently, this action was not submitted to OMB for review under Executive Order 12866.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” Policies that have federalism implications is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the EPA consults with State and local officials early in the process of developing the regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the regulation.

If the EPA complies by consulting, Executive Order 13132 requires the EPA to provide to OMB, in a separately identified section of the preamble to the rule, a federalism summary impact statement (FSIS). The FSIS must include a description of the extent of the EPA's prior consultation with State and local officials, a summary of the nature of their concerns and the Agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of State and local officials have been met. Also, when the EPA transmits a draft final rule with federalism implications to OMB for review pursuant to Executive Order 12866, the EPA must include a certification from the Agency's Federalism Official stating that the EPA has met the requirements of Executive Order 13132 in a meaningful and timely manner.

This final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This final rule is mandated by statute and does not impose requirements on States; however, States will be required to implement the rule by incorporating the rule into permits and enforcing the rule upon delegation. States will collect permit fees that will be used to offset the resource burden of implementing the rule. Thus, the requirements of section 6 of the Executive Order do not apply to this rule. Although section 6 of Executive Order 13132 does not apply to this rule, the EPA did consult with State and local officials in developing this rule.

On November 6, 2000, the President issued Executive Order 13175 (65 FR 67249) entitled, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 took effect on January 6, 2001, and revokes Executive Order 13084 (Tribal Consultation) as of that date. The EPA developed this final rule, however, during the period when Executive Order 13084 was in effect; thus, EPA addressed tribal considerations under Executive Order 13084.

Under Executive Order 13084, the EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or we consult with those governments. If the EPA complies by consulting, Executive Order 13084 requires the EPA to provide to OMB, in a separately identified section of the preamble to the rule, a description of the extent of the EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires the EPA to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

These final standards do not significantly or uniquely affect the communities of Indian tribal governments. No tribal governments own or operate nutritional yeast manufacturing facilities. Accordingly, the requirements of Executive Order 13084 do not apply to this action.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that (1) is determined to be “economically significant,” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned rule is preferable to other potentially effective and reasonable alternatives considered by the Agency.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. These final standards are not subject to Executive Order 13045 because they are based on technology performance and not on health or safety risks. No children's risk analysis was performed because no alternative technologies exist that would provide greater stringency at a reasonable cost. Furthermore, this rule has been determined not to be “economically significant” as defined under Executive Order 12866.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, and tribal governments, in aggregate, or by the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation as to why that alternative was not adopted. Before the EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

Today's final rule contains no Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. The maximum total annual cost of this rule for any year has been estimated to be less than $700,000. Thus, today's final rule is not subject to the requirements of sections 202 and 205 of the UMRA. In addition, the EPA has determined that this final rule contains no regulatory requirements that might significantly or uniquely affect small governments because it contains no regulatory requirements that apply to such governments or impose obligations upon them. Therefore, today's final rule is not subject to the requirements of section 203 of the UMRA.

Because this final rule does not include a Federal mandate and is estimated to result in expenditures less than $100 million in any 1 year by State, local, and tribal governments, the EPA has not prepared a budgetary impact statement or specifically addressed the selection of the least costly, most cost-effective, or least burdensome alternative. In addition, because small governments will not be significantly or uniquely affected by this rule, the EPA is not required to develop a plan with regard to small governments. Therefore, the requirements of the UMRA do not apply to this action.

The EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. The EPA has also determined that this rule will not have a significant economic impact on a substantial number of small entities. For purposes of assessing the impacts of today's rule on small entities, a small entity is defined as: (1) A small business that has fewer than 500 employees; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The small business size standards are based on industries as they are defined in NAICS and were published in a final rule by the Small Business Administration on September 5, 2000 (65 FR 53533).

After considering the economic impacts of today's final rule on small entities, EPA has concluded that this action will not have a significant impact on a substantial number of small entities. Although there appears to be one small business in the nutritional yeast manufacturing industry, the complex ownership issues involved with this firm makes the absolute determination uncertain. The EPA thus concludes that there is at the most one small business which may be affected by these standards. Individual company cost-to-sales ratio data is considered confidential business information (CBI) and may not be disclosed. The industry average cost-to-sales ratio for all affected companies is less than 0.3 percent. No individual company is anticipated to incur a cost-to-sales ratio exceeding 3 percent. Based on the foregoing, the EPA concludes that this rule will not have a significant impact on a substantial number of small businesses.

Although this final rule will not have a significant impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small entities by providing alternatives to compliance and monitoring requirements.

The information collection requirements for these final standards will be submitted for approval to the Office of Management and Budget under the requirements of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR) document has been prepared by EPA (ICR No. 1886.02) for the nutritional yeast manufacturing source category and copies may be obtained from Ms. Sandy Farmer by mail at the U.S. Environmental Protection Agency, Office of Environmental Information, Collection Strategies Division (2822), 1200 Pennsylvania Avenue, NW., Washington, DC 20460, by e-mail at farmer.sandy@epa.gov, or by calling (202) 260-2740. A copy may also be downloaded off the internet at http://www.epa.gov/icr . The information requirements are not effective until OMB approves them.

The information requirements are based on notification, recordkeeping, and reporting requirements in the NESHAP General Provisions (40 CFR part 63, subpart A), which are mandatory for all operators subject to national emission standards. These recordkeeping and reporting requirements are specifically authorized by section 114 of the CAA (42 U.S.C. 7414).

The final standards require owners or operators of affected sources to retain records for a period of 5 years. The 5-year retention period is consistent with the General Provisions of 40 CFR part 63 and with the 5-year record retention requirement in the operating permit program under title V of the CAA.

Total estimated annualized capital monitoring, inspection, reporting and recordkeeping (MIRR) costs for new and existing sources is $886,307 for the first years after promulgation of the NESHAP for this source category. Of the total estimated MIRR cost, $440,917 is labor dollars and $445,390 is capital and operation and maintenance.

The annual public reporting and recordkeeping burden for this collection of information (averaged over the first 3 years after the effective date of the promulgated rule) is estimated to total 3,459 labor hours per year at a total annual cost of $146,972. This estimate includes notifications, performance evaluations and tests, compliance reports, and records of CEMS measurements.

The total estimated annualized capital monitoring, inspection, reporting and recordkeeping (MIRR) costs for existing and new major sources to comply with the promulgated standards when an affected source opts to comply by using process add-on control equipment are determined based on the estimated capital costs of VOC monitoring equipment required for MIRR activities. For the yeast manufacturing industry, the total estimated installed capital costs of this equipment is $2,453,174 for existing major sources, and $0 for new major sources because we do not anticipate construction of any new major sources in the near future. Annualized capital MIRR costs for existing and new major sources to comply with the promulgated standard using process control were estimated to be $89,782 and $0, respectively, when averaged over the first 3 years after the effective date of the promulgated rule.

The total annual estimated operating and maintenance costs (O&M) were calculated based on (1) the estimated postage costs for the estimated total annual responses associated with the provisions of the yeast manufacturing NESHAP and (2) the estimated annual cost of contracting for performance testing required for compliance with this standard. Annual O&M costs for existing and new major sources were estimated to be $58,682 and $0, respectively, when averaged over the first 3 years after the effective date of the promulgated rule.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to (1) review instructions; (2) develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; (3) adjust the existing ways to comply with any previously applicable instructions and requirements; (4) train personnel to be able to respond to a collection of information; (5) search data sources; (6) complete and review the collection of information; and (7) transmit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for our regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. The OMB control number(s) for the information collection requirements in this rule will be listed in an amendment to 40 CFR part 9 or 48 CFR Chapter 15 in a subsequent Federal Register document after OMB approves the ICR.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995 (Public Law 104-113; 15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in their regulatory and procurement activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, business practices) developed or adopted by one or more voluntary consensus bodies. The NTTAA directs EPA to provide Congress, through annual reports to OMB, with explanations when an agency does not use available and applicable voluntary consensus standards.

This rulemaking involves the following technical standards: EPA Methods 25A, PS 8, PS 9, and a method for determining ethanol in liquids. Consistent with the NTTAA, the EPA conducted searches to identify voluntary consensus standards in addition to these EPA methods.

The search for emissions monitoring procedures identified two voluntary consensus standards, both for EPA Method 25A. The EPA determined that one of these two standards, (EN 12619:1999), identified for measuring emissions of HAP or surrogates subject to emission standards in this rule, would not be practical due to lack of equivalency, detail, and/or quality assurance and/or quality control requirements. Therefore, we did not use this voluntary consensus standard in this rulemaking.

The other consensus standard (ISO/FDIS 14965) identified for EPA Method 25A is under development. Therefore, we did not use this voluntary consensus standard in this rulemaking. No voluntary consensus standards were identified for PS 8, PS 9, or a procedure to determine ethanol in liquids. The search and review results have been documented and are placed in the Docket No. A-97-13 (see ADDRESSES section) for this rule.

Sections 63.2161 and 63.2163 of the standards list the EPA test methods and performance standards included in this rulemaking. Most of the standards have been used by States and industry for more than 10 years.

The Congressional Review Act, 5 U.S.C. 801, et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective May 21, 2001.

This is a summary of the Commission's Seventh Report and Order in CC Docket No. 96-262, released on April 27, 2001. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, D.C., 20554.

1. By this order, we seek to ensure, by the least intrusive means possible, that CLEC access charges are just and reasonable. Specifically, we limit the application of our tariff rules to CLEC access services in order to prevent use of the regulatory process to impose excessive access charges on IXCs and their customers. Previously, certain CLECs have used the tariff system to set access rates that were subject neither to negotiation nor to regulation designed to ensure their reasonableness. These CLECs have then relied on their tariff to demand payment from IXCs for access services that the long distance carriers likely would have declined to purchase at the tariffed rate.

2. Under the detariffing regime we adopt, CLEC access rates that are at or below the benchmark that we set will be presumed to be just and reasonable and CLECs may impose them by tariff. Above the benchmark, CLEC access services will be mandatorily detariffed, so CLECs must negotiate higher rates with the IXCs. During the pendency of negotiations, or if the parties cannot agree, the CLEC must charge the IXC the appropriate benchmark rate. We also adopt a rural exemption to our benchmark scheme, recognizing that a higher level of access charges is justified for certain CLECs serving truly rural areas. To avoid too great a disruption for competitive carriers, we implement the benchmark in a way that will cause CLEC rates to decrease over time until they reach the rate charged by the incumbent LEC.

3. We also make clear that an IXC's refusal to serve the customers of a CLEC that tariffs access rates within our safe harbor, when the IXC serves ILEC end users in the same area, generally constitutes a violation of the duty of all common carriers to provide service upon reasonable request.

4. We intend to allow CLECs a period of flexibility during which they can conform their business models to the market paradigm that we adopt herein. In addition, these rules should continue to ensure the ubiquity of a fully interconnected telecommunications network that consumers have come to expect. Finally, by ensuring that CLECs do not shift an unjust portion of their costs to interexchange carriers, our actions should help continue the downward trend in long-distance rates for end users.

5. We view the mechanism we adopt today as a means of moving the marketplace for access services closer to a competitive model. Because our tariff benchmark is tied to the incumbent LEC rate, we will re-examine these rates at the close of the period specified in the CALLS Order, 65 FR 38684, June 21, 2000. Through a separate further notice of proposed rulemaking, published elsewhere in this issue, we also evaluate the access charge scheme as part of a broader review of inter-carrier compensation.

6. It appears that certain CLECs have availed themselves of the tariff system and have refused to enter meaningful negotiations on access rates, choosing instead simply to file a tariff and bind IXCs receiving their access service to the rates therein. Providers of terminating access may be particularly insulated from the effects of competition in the market for access services. The party that actually chooses the terminating access provider does not also pay the provider's access charges and therefore has no incentive to select a provider with low rates. Indeed, end users may have the incentive to choose a CLEC with the highest access rates because greater access revenues likely permit CLECs to offer lower rates to their end users. The record also indicates that CLEC originating access service may also be subject to little competitive pressure, notwithstanding the fact that the IXCs typically have a relationship with the local exchange provider in order to be included on the LEC's list of presubscribed IXCs.

7. CLECs' ability to impose excessive access charges seems attributable to two separate factors. First, although the end user chooses her access provider, she does not pay that provider's access charges. Rather, the access charges are paid by the caller's IXC, which has little practical means of affecting the caller's choice of access provider. Second, the Commission has interpreted section 254(g) to require IXCs geographically to average their rates and thereby to spread the cost of both originating and terminating access over all their end users. Consequently, IXCs have little or no ability to create incentives for their customers to choose CLECs with low access charges. Since the IXCs are effectively unable either to pass through access charges to their end users or to create other incentives for end users to choose LECs with low access rates, the party causing the costs—the end user that chooses the high-priced LEC—has no incentive to minimize costs.

8. We are concerned that, in this environment, permitting CLECs to tariff any rate that they choose may allow some CLECs inappropriately to shift onto the long distance market in general a substantial portion of the CLECs' start-up and network build-out costs. Such cost shifting may promote economically inefficient entry into the local markets and may distort the long distance market.

9. We decline to conclude, in this order, that CLEC access rates, across the board, are unreasonable. Nevertheless, there is ample evidence that the combination of the market's failure to constrain CLEC access rates, our geographic rate averaging rules for IXCs, the absence of effective limits on CLEC rates and the tariff system create an arbitrage opportunity for CLECs to charge unreasonable access rates.

10. A substantial majority of commenters strongly oppose the mandatory detariffing of CLEC access services. Apart from their opposition to mandatory detariffing, however, the two sides of the debate have been largely unable to agree about how CLECs should set rates for their switched access services.

11. In their provision of access services, competitive carriers actually serve two distinct customer groups. The first is the IXCs, which purchase access service as an input for the long distance service that they provide to their end-user customers. An equally important group of customers for access services is the end users who benefit from the ability, provided by access service, to place and receive long distance calls. The noteworthy aspect of this second group of access consumers, or beneficiaries, is that, unlike IXCs, they have competitive alternatives in the market in which they purchase CLEC access service.

12. Under the regime we adopt in this order, CLECs will be restricted only in the manner that they recover their costs from those access-service consumers that have no competitive alternative. We implement this restriction on the CLECs' exercise of their monopoly power by establishing a benchmark level at which CLEC access rates will be conclusively presumed to be just and reasonable and at (or below) which they may therefore be tariffed. Above the benchmark, CLECs will be mandatorily detariffed. The benchmark approach has several virtues that recommend it.

13. First, a benchmark provides a bright line rule that permits a simple determination of whether a CLEC's access rates are just and reasonable. Such a bright line approach is particularly desirable given the current legal and practical difficulties involved with comparing CLEC rates to any objective standard of “reasonableness.” Second, by permitting CLECs to file access tariffs at or below a benchmark rate, our interim approach continues to allow the carriers on both sides of the access transaction to enjoy the convenience of a tariffed service. Third, adopting a benchmark for tariffed rates allows CLECs the flexibility to obtain additional revenues from alternative sources. They may obtain higher rates through negotiation.

14. In setting the level of our benchmark, we seek, to the extent possible, to mimic the actions of a competitive marketplace, in which new entrants typically price their product at or below the level of the incumbent provider. We conclude that the benchmark rate, above which a CLEC may not tariff, should eventually be equivalent to the switched access rate of the incumbent provider operating in the CLEC's service area. We do not, however, immediately set the benchmark rate at the competing ILEC rate because such a flash cut likely would be unduly detrimental to the competitive carriers that have not previously been held to the regulatory standards imposed on ILECs. Our benchmark mechanism, with certain exceptions, will permit CLECs initially to tariff rates for their switched access service of up to 2.5 cents per minute, or the rate charged by the competing incumbent LEC, whichever is higher. For those carriers competing with ILECs that have tariffed rates below the benchmark (generally, the Bell operating companies), the benchmark rate will decline over the course of three years until it reaches the competing ILEC's rate. For at least one additional year, CLECs will be permitted to continue to tariff this rate, even if we decide to move other access traffic to a bill-and-keep regime. We also adopt rules to ensure that no CLEC avails itself of our benchmark scheme to increase its access rates, and we adopt a separate benchmark for certain firms operating in rural areas.

15. In determining the initial level for the safe harbor rates which may be imposed by tariff, we use current CLEC rates as a starting point for analysis because, as noted, we lack an established framework for translating CLEC costs into access rates. By analyzing the IXC data on actual amounts billed and actual minutes of use, we can calculate composite access rates and largely avoid the problems that arise from the fact that CLEC rate structures vary widely and that many rely, in part, on flat-rated, or distance-sensitive, charges. Taken together, the IXC submissions show a range of 0.4 cents to 9.5 cents per minute for CLEC-provided switched access service. From the underlying, individual CLEC data, we have determined the average, weighted by minutes of use, for tariffed access rates.

16. It is important that the benchmark, though within this range, also move CLEC access charges appreciably closer to the competing ILEC rate. Accordingly, setting the initial benchmark toward the lower end of the range appears to be justified. Based on our review of the universe and concentration of tariffed access rates being charged to these three IXCs, we conclude that—again, subject to certain exceptions that we discuss—our safe harbor for CLEC tariffed access rates will begin at 2.5 cents. This rate is within the current range of rates, but represents an appreciable reduction in the tariffed rate for many CLECs.

17. We draw additional support for this initial benchmark level from a consensus solution submitted by parties on both sides of the present dispute. In comments to the Safe Harbor Public Notice, 65 FR 77545, December 12, 2000, the Association for Local Telecommunications Services (ALTS) filed a proposed resolution, negotiated with WorldCom, suggesting, in relevant part, that a benchmark of 2.5 cents per minute for CLEC tariffed access rates would be a reasonable one in at least some markets. It appears that this rate is acceptable to a substantial number of CLECs, although it represents a significant reduction in access rates.

18. On the effective date of the rules we promulgate today, CLECs will be permitted (subject to a rural exemption discussed) to tariff their access rates, for those areas where they have previously offered service, at either the benchmark of 2.5 cents per minute, or the rate of the corresponding incumbent carrier in the study area of the relevant end-user customer, whichever is higher. One year after the effective date of these rules, the benchmark rate will drop from 2.5 to 1.8 cents per minute, or the ILEC rate, whichever is higher. On the second anniversary of the rules' effective date, the rate will drop to 1.2 cents per minute, or the ILEC rate, whichever is higher. Finally, three years after the rules become effective, the benchmark figure will drop to the switched access rate of the competing ILEC. It will remain at that level through the rule's fourth year. We conclude that such a transition period is appropriate because, as discussed, we are concerned about the effects of a flash-cut to the ILEC rate.

19. By moving CLEC tariffs to the “rate of the competing ILEC” we do not intend to restrict CLECs to tariffing solely the per-minute rate that a particular ILEC charges for its switched, interstate access service. We intend to permit CLECs to receive revenues equivalent to those the ILECs receive from IXCs, whether they are expressed as per-minute or flat-rate charges. For example, CLECs shall be permitted to set their tariffed rates so that they receive revenues equivalent to those that the ILECs receive through the presubscribed interexchange carrier charge (PICC), to the extent that it survives in the wake of our CALLS Order. This does not entitle CLECs to build into their tariffed per-minute access rates a component representing the subscriber line charge (SLC) that ILECs impose on their end users, or any other charges that ILECs recover from parties other than the IXCs to which they provide access service.

20. A number of CLEC commenters urge the Commission not to set the benchmark at “the ILEC rate” because they claim that CLECs structure their service offerings differently than ILECs. We seek to preserve the flexibility which CLECs currently enjoy in setting their access rates. Thus, in contrast to our regulation of incumbent LECs, our benchmark rate for CLEC switched access does not require any particular rate elements or rate structure; for example, it does not dictate whether a CLEC must use flat-rate charges or per-minute charges, so long as the composite rate does not exceed the benchmark. Rather it is based on a per-minute cap for all interstate switched access service charges. In this regard, there are certain basic services that make up interstate switched access service offered by most carriers. Switched access service typically entails a connection between the caller and the local switch, a connection between the LEC switch and the serving wire center (often referred to as “interoffice transport”), and an entrance facility which connects the serving wire center and the long distance company's point of presence. Using traditional ILEC nomenclature, it appears that most CLECs seek compensation for the same basic elements, however precisely named common line charges; local switching; and transport. The only requirement is that the aggregate charge for these services, however described in their tariffs, cannot exceed our benchmark. In addition, by permitting CLECs to decide whether to tariff within the safe harbor or to negotiate terms for their services, we allow CLECs additional flexibility in setting their rates and the amount that they receive for their access services.

21. We will apply the benchmark for both originating and terminating access charges. That is, it will apply to tariffs for both categories of service, including to toll-free, 8YY traffic, and will decline toward the rate of the competing ILEC for each category of service. We note, however, that shortly before the issuance of this order, AT&T raised questions regarding the application of our benchmark to originating 8YY traffic generated by CLEC customers. Because these issues arose so late in the proceeding, and because of the sparse record on them, we decline to do as AT&T suggests and immediately detariff this category of CLEC services above the rate of the competing ILEC. Instead, in this order, we solicit comment on the issues AT&T has raised so that we may decide them on an adequately developed record.

22. Our benchmark mechanism may create the possibility for carriers with lower rates to raise their rates to the benchmark. We seek to avoid this result, which could have the consequence of increasing the amount that IXCs pay for some CLECs' access service. This, in turn, would again allow these CLECs to shift a portion of their costs onto the long distance market generally. Accordingly, we further restrict the tariff benchmark that may be charged to a particular IXC by tariff to the lower of: (1) The 2.5 figure, declining as discussed, or (2) the lowest rate that a CLEC has tariffed for access, during the 6 months immediately preceding the effective date of these rules. Any rate above this level (unless it is still below the competing ILEC's rate) will be conclusively deemed to be unreasonable in any proceeding challenging the rate. Additionally, we expect that our benchmark rule will have no effect on negotiated contracts, under which CLECs have chosen to charge even more favorable access rates to particular IXCs. Rather, these contracts will remain in place and the participating IXCs will continue to be entitled to any lower access rates for which they provide.

23. We also find that it is prudent to permit CLECs to tariff the benchmark rate for their access services only in the markets where they have operations that are actually serving end-user customers on the effective date of these rules. We intend the declining benchmark scheme to wean competitive carriers off of their dependence on tariffed, supra-ILEC access rates without the disruption of a flash-cut to the prevailing market rate. We therefore think it important to ensure that this transitional mechanism serves that purpose, rather than presenting CLECs with the opportunity to enter additional markets in a potentially inefficient manner through reliance on tariffed access rates above those of the competing ILEC. Accordingly, we restrict the availability of the transitional benchmark rate to those metropolitan statistical areas (MSAs) in which CLECs are actually serving end users on the effective date of these rules. In MSAs where they begin serving end users after the effective date of these rules, we permit CLECs to tariff rates only equivalent to those of the competing ILEC; they will have to achieve rates above this level by negotiation.

24. Limiting CLECs to the higher of the benchmark rate or the access rate of its ILEC competitor could prove rather harsh for some of the small number of CLECs that operate in rural areas. The difficulty would likely arise for those CLECs that operate in a rural area served by a price-cap incumbent with state-wide operations. Our rules require such ILECs to geographically average their access rates. During the course of this proceeding, we became concerned that tying the access rates of rural CLECs to those of such non-rural ILECs could unfairly disadvantage CLECs that lacked urban operations with which they could similarly subsidize their service to rural areas.

25. We conclude that the record supports the creation of a rural exemption to permit rural CLECs competing with non-rural ILECs to charge access rates above those charged by the competing ILEC. First, we note that such a device is consistent with the Commission's obligations, under section 254(d)(3) of the Act and section 706 of the 1996 Act, to encourage the deployment to rural areas of the infrastructure necessary to support advanced telecommunications services and of the services themselves. The record indicates that CLECs often are more likely to deploy in rural areas the new facilities capable of supporting advanced calling features and advanced telecommunications services than are non-rural ILECs, which are more likely first to deploy such facilities in their more concentrated, urban markets. Given the role that CLECs appear likely to play in bringing the benefits of new technologies to rural areas, we are reluctant to limit unnecessarily their spread by restricting them to the access rates of non-rural ILECs.

26. We are persuaded by the CLEC comments indicating that they experience much higher costs, particularly loop costs, when serving a rural area with a diffuse customer base than they do when serving a more concentrated urban or suburban area. The CLECs argue that, lacking the lower-cost urban operations that non-rural ILECs can use to subsidize their rural operations, the CLECs should be permitted to charge more for access service, as do the small rural incumbents that charge the National Exchange Carrier Association (NECA) schedule rates. We note in this regard that a rural exemption will also create parity between the rural CLECs competing with NECA carriers and those competing with non-rural ILECs.

27. In adopting the rural exemption, we reject the characterization of the exemption as an implicit subsidy of rural CLEC operations. It is true that an exemption scheme will permit rural CLECs to charge IXCs more for access to their end-user customers than was charged by the non-rural ILECs from whom the CLECs captured their customers. The exemption we adopt today merely deprives IXCs of the implicit subsidy for access to certain rural customers that has arisen from the fact that non-rural ILECs average their access rates across their state-wide study areas.

28. Our level of comfort in creating a rural exemption is markedly increased by the fact that the record indicates it likely will apply to a small number of carriers serving a tiny portion of the nation's access lines. The Rural Independent Competitive Alliance (RICA) asserts that, fewer than 100,000 access lines are served by carriers falling in the definition that it proffers for a rural CLEC.

29. We reject AT&T's argument that CLECs must rely solely on the CALLS Order's interstate access support when entering the territories of non-rural ILECs. This interstate access support mechanism is portable, but that does not necessarily indicate that it fully reflects the costs (above those recovered through ILEC access rates) that a rural CLEC would encounter in serving customers in the high-cost areas for which the subsidy is available.

30. We are also skeptical of AT&T's assertions about the incentives that would flow from a rural exemption. First, AT&T argues that the exemption would “create perverse incentives for uneconomic competitive entry by CLECs in any “rural” areas in which it might be applicable.” It appears from the record that both AT&T and Sprint have routinely been paying for CLEC access billed at the rate charged by the competing incumbent. If AT&T were accurate in its projection about higher access rates spurring a rash of uneconomic market entry in rural areas, such uneconomic entry should already have occurred in the territories of the rural incumbent carriers that charge the higher NECA rates. However, the record fails to indicate such a trend.

31. We thus conclude that the record supports the creation of a rural exemption to the benchmark scheme that we adopt for CLEC access charges. Under this exemption, a CLEC that is operating in a rural area, as defined, and that is competing against a non-rural ILEC may tariff access rates equivalent to those of NECA carriers.

32. Administrative simplicity is an important consideration in our choice of a way to define rural CLECs. Thus, we conclude that the availability of the exemption (and the higher access rates that come with it) should be determined based on the CLEC's entire service area, not on a subscriber-by-subscriber basis. Similarly, we are concerned that the definition rely on objectively available information that will not require extensive calculation or analysis by either carriers or this Commission.

33. We conclude that the rural exemption to our benchmark limitation on access charges will be available for a CLEC competing with a non-rural ILEC, where no portion of the CLEC's service area falls within any incorporated place of 50,000 inhabitants or more, based on the most recently available population statistics of the Census Bureau or an urbanized area, as defined by the Census Bureau. Thus, if any portion of a CLEC's access traffic originates from or terminates to end users located within either of these two types of areas, the carrier will be ineligible for the rural exemption to our benchmark rule. Relying on information that is readily and publicly available, this definition excludes from the exemption those CLECs operating within reasonably dense areas that are not typically considered to be rural. It does not, however, exclude from eligibility entire counties that border high population areas, as would a definition based on MSAs.

34. Sprint has raised the issue of how best to ensure that the rural exemption does not create the potential for abuse and that it is restricted to CLECs that are serving rural end users. Thus, Sprint is concerned about the potential for competitive carriers, with some qualifying end users, creating two separate operating entities so that the one serving rural end users could tariff the higher access rate permitted under the exemption. While we want to forestall that strategy for exploiting our rule, we also realize that certain incumbents with urban (or non-rural) operations may choose to enter adjacent rural markets as a competitive carrier. To the extent that such carriers provide the benefit of competition in rural markets, their non-qualifying incumbent operations should not operate entirely to deny them the benefit of the rural exemption. Accordingly, we decline Sprint's invitation to examine all of the subsidiary operations of a holding company in order to determine the applicability of the rural exemption. We expect that we will be able to address, on a case-by-case basis, the improper exploitation of our rule—such as a competitive carrier's splitting itself into two subsidiaries to qualify, in part, for the exemption rates where it would not otherwise do so.

35. Our definition for rural CLECs closely resembles the first major division of the Act's definition for rural telephone companies. It departs from the remaining three major divisions of the definition either because they would be administratively burdensome, or because they would be overly inclusive or irrational when applied solely to CLECs. Our definition adopts 50,000, rather than 10,000, as the population cut-off for incorporated places because we are concerned that, without the statute's remaining three portions of the definition as a way for a company to attain rural status, the 10,000-person threshold would be unduly restrictive and deny the exemption to companies operating in areas that would generally be viewed as rural.

36. This exemption will permit a CLEC to tariff access rates above the competing ILEC's only when the competing ILEC has broad-based operations that include concentrated, urban areas that allow it to subsidize its rural operations and therefore charge an artificially low rate for access to its rural customers. We conclude that the most effective and objective means of accomplishing this is to allow the rural exemption only to those CLECs that are competing with price-cap ILECs that do not qualify as “rural telephone companies” under the Act's definition. Those CLECs competing with carriers that qualify as rural under the Act's definition are excluded from the rural exemption and are therefore limited, under the rule we announced, to tariffing access rates equal only to those of the competing ILEC.

37. The final question with respect to the rural exemption is what the access service benchmark is for those carriers that qualify. We adopt the NECA tariff for switched access service as the standard that is the most appropriately reflective of the considerations that should go into pricing the access service of rural CLECs. Accordingly, qualifying rural CLECs may tariff rates at the level of those in the NECA access tariff, assuming the highest rate band for local switching and the transport interconnection charge, minus the tariff's carrier common line (CCL) charge if the competing ILEC is subject to our CALLS Order. Above this benchmark, rural CLECs will be mandatorily detariffed in their provision of access services.

38. We adopt the NECA access rate because it is tariffed on a regular basis and is routinely updated to reflect factors relevant to pricing rural carriers' access service. We choose the highest rate bands for the two variable rate elements because the opportunity to tariff those rates will most effectively spur the development of local-service competition in the nation's rural markets and because the burden created by choosing the highest rate will be relatively minor, owing to the small number of carriers involved. We deny rural CLECs the NECA tariff's CCL charge when they compete with a CALLS ILEC because the price-cap LECs' CCL charge has been largely eliminated through implementation of higher subscriber line charge (SLC) caps and the multi-line business PICC. CLECs competing with CALLS ILECs are free to build into their end-user rates a component approximately equivalent to (or slightly below) the ILEC's SLC, as well as assessing IXCs a multi-line business PICC. These potential revenue sources obviate the need for a CCL charge, which NECA carriers use to recover loop costs that cannot be recovered because of their lower SLC caps and the absence of PICCs.

39. Section 10 of the Act requires, inter alia, that the Commission forbear from applying any regulation or provision of the Act to telecommunications carriers or telecommunications services, or classes thereof, if the Commission determines that certain statutory conditions are satisfied. Because section 10 permits us to exercise our forbearance authority with respect to classes of services, we conduct a forbearance analysis only for those CLEC interstate access services for which the aggregate charges exceed our benchmark. For this class of services, we conclude that the section 10 forbearance criteria are satisfied; accordingly, we must take action pursuant to the terms of this statute.

40. Under the first criterion for forbearance, we examine whether our tariff filing requirements for CLEC interstate access services priced above the benchmark are necessary to ensure that rates for these services are just and reasonable and not unreasonably discriminatory. We conclude they are not. As noted, CLECs are positioned to wield market power with respect to access service. Requiring CLECs to negotiate with their IXC customers in order to obtain access rates above the benchmark will limit the CLECs' ability to exercise this market power and unilaterally impose rates above the level that we have found to be presumptively reasonable.

41. We are not persuaded by CLEC commenters that contend they will be unable to negotiate agreements with IXCs because IXCs wield significant market power in the purchase of access services. We find these claims of IXC monopsony power unsupported in the record. We note that three major IXCs are purchasers in the market for access services, and numerous smaller players also purchase LEC access services. Moreover, we note that our tariff rules were historically intended to protect purchasers of services from monopoly providers, not to protect sellers from monopsony purchasing power. We conclude that other remedies, like those under the antitrust laws, are available to protect CLECs from the exploitation of any monopsony power that IXCs may possess.

42. Under the second forbearance criterion, we must determine whether tariffing of CLEC access charges above the benchmark is necessary to protect consumers. Requiring negotiation of access rates above the benchmark will provide greater assurance that the rates are just and reasonable and will likely prevent CLECs from using long distance ratepayers to subsidize their operational and build-out expenses. It is possible that the reduction of CLEC access revenue caused by the benchmark scheme will increase the rates CLECs charge their end users. However, all CLEC end users have competitive alternative service providers, in the form of regulated incumbents. We are therefore not concerned that any increase in CLEC end-user rates will unduly harm consumers. To the extent that this provision requires us to examine the effect on the IXC consumers of CLEC access services, mandatory detariffing likely will protect that group by removing the CLEC's ability unilaterally to impose excessive rates through the tariff process.

43. The third forbearance criterion requires that we determine whether mandatory detariffing of CLEC access services priced above the benchmark is consistent with the public interest and, in particular, whether it will promote competitive market conditions. We conclude, as discussed, that adopting mandatory detariffing for access rates in excess of the safe harbor limit will subject to negotiation between two willing parties any access services offered at a rate above the benchmark. The negotiation-driven approach that we adopt will provide a better mechanism for IXCs to control costs, since they will not be subject to tariffs with unilaterally established rates at excessive levels. In addition, our benchmark system, with its presumption that qualifying rates are reasonable, will provide greater certainty for CLECs that they will receive full compensation for the access services that they provide. By limiting a CLEC's ability to shift its start-up costs onto the long-distance market, our benchmark approach will restrict market entry to the efficient providers. Accordingly, mandatory detariffing of CLEC access services above the benchmark fulfills all three of the criteria for forbearance.

44. Although we have created a safe harbor for CLEC access rates, within which they will be presumed to be just and reasonable, the question remains of whether and under what circumstances an IXC can decline to provide service to the end users of a CLEC.

45. Sections 201(a) and 251(a)(1) do not expressly require IXCs to accept traffic from, and terminate traffic to, all CLECs, regardless of their access rates. The Commission has previously found that a section 251(a)(1) duty to interconnect, directly or indirectly, is central to the Communications Act and achieves important policy objectives. However, the Commission construed the statute to require only the physical linking of networks, not to impose obligations relating to the transport and termination of traffic. Section 201 empowers the Commission, after a hearing and a determination of the public interest, to order the physical connection of networks and to establish routes and charges for certain communications. This also falls short of creating the blanket duty that the CLECs seek to impose on the IXCs to accept all access service, regardless of the rate at which it is offered. Certainly, we have made no finding that the public interest dictates such broad acceptance of access service, whatever its price. Nevertheless, we conclude that section 201(a) places certain limitations on an IXC's ability to refuse CLEC access service.

46. We agree that universal connectivity is an important policy goal that our rules should continue to promote. The public has come to value and expect the ubiquity of the nation's telecommunications network. Accordingly, any solution to the current problem that allows IXCs unilaterally and without restriction to refuse to terminate calls or indiscriminately to pick and choose which traffic they will deliver would result in substantial confusion for consumers, would fundamentally disrupt the workings of the public switched telephone network, and would harm universal service.

47. We therefore conclude that an IXC that refuses to provide service to an end user of a CLEC charging rates within the safe harbor, while serving the customers of other LECs within the same geographic area, would violate section 201(a). That section imposes on common carriers the obligation to furnish communication service “upon reasonable request therefor.” As set out above, we will conclusively presume that a CLEC's access rates are reasonable if they fall at or below the benchmark that we establish herein. When an IXC's end-user customer attempts to place a call either from or to a local access line, that customer makes a request for communication service—from the originating LEC, the IXC and the terminating LEC. When that customer attempts to call from and/or to an access line served by a CLEC with presumptively reasonable rates, that request for communications service is a reasonable one that the IXC may not refuse without running afoul of section 201(a). This obligation may be enforced through a section 208 complaint before the Commission.

48. Section 214 of the Communications Act and 63.71 of the Commission's rules govern an IXC's withdrawal of service. Section 214 of the Communications Act provides, in relevant part, that “[n]o carrier shall discontinue, reduce, or impair service to a community, or part of a community, unless and until there shall first have been obtained from the Commission a certificate that neither the present nor future public convenience and necessity will be adversely affected thereby.” In light of the solution we adopt herein, we need not address the application of either section 214 or our rule 63.17.

49. We conclude that it would be a violation of section 201(a) for an IXC to refuse CLEC access service, either terminating or originating, where the CLEC has tariffed access rates within our safe harbor and, in the case of originating access, where the IXC is already providing service to other members in the same geographical area. Since section 201(a) already prohibits such a withdrawal of service, we need not address the question of whether section 214 applies to an IXC that finds itself in that position.

50. The remaining possible scenario to which section 214 might apply is that in which a CLEC wishes to charge access rates above our benchmark and an IXC will not agree to pay them. Under the rules we adopt today, a CLEC must charge the benchmark rate during the pendency of negotiations or if the parties cannot agree to a rate in excess of the benchmark. In either case, since the benchmark rate is conclusively presumed reasonable, an IXC cannot refuse to provide service to an end user served by the CLEC without violating section 201. Here again, we need not address the applicability of section 214.

51. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 (PRA) and found to impose new or modified reporting and/or recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and/or recordkeeping requirements will be subject to approval by the Office of Management and Budget (OMB) as prescribed by the PRA, and will go into effect upon announcement in the Federal Register of OMB approval.

52. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Pricing Flexibility Order and Further Notice, 64 FR 51280, September 22, 1999. The Commission sought written comments on the proposals in the Pricing Flexibility Order and Further Notice, including the IRFA. The Commission's Final Regulatory Flexibility Analysis (FRFA) in this order conforms to the RFA, as amended.

53. With this order, we address a number of interrelated issues concerning charges for interstate switched access services provided by competitive local exchange carriers (CLECs) and the obligations of interexchange carriers (IXCs) to exchange access traffic with CLECs. In so doing, we seek to ensure, by the least intrusive means possible, that CLEC access charges are just and reasonable. We also seek to reduce regulatory arbitrage opportunities that previously have existed with respect to tariffed CLEC access services. This order is designed to spur more efficient local competition and to avoid disrupting the development of competition in the local telecommunications market.

54. We accomplish these goals by revising our tariff rules more closely to align tariffed CLEC access rates with those of the incumbent LECs. Under the detariffing regime we adopt, CLEC access rates that are at or below the benchmark that we set will be presumed to be just and reasonable and CLECs may impose them by tariff. Above the benchmark, CLEC access services will be mandatorily detariffed, so CLECs must negotiate higher rates with the IXCs. However, to avoid too great a disruption for competitive carriers (many of which may fall within the SBA's definition of a small entity), we implement this approach in a way that will cause CLEC tariffs to ramp down over time until they reach the level tariffed by the incumbent LEC. This mechanism will mimic the operation of the marketplace, as competitive LECs ultimately will have tariffed rates at or below the prevailing market price. At the same time, this approach maintains the ability of CLECs to negotiate access service arrangements with IXCs at any mutually agreed upon rate. In this order, we also make clear that an IXC's refusal to serve the customers of a CLEC that tariffs access rates within our safe harbor constitutes a violation of the duty of all common carriers to provide service upon reasonable request.

55. In the Pricing Flexibility Order and Further Notice, we sought comment on various, alternative proposals to prevent CLECs from charging unreasonable rates for their switched access services. In the IRFA, we tentatively concluded that the proposed rule changes would have no effect on the administrative burdens of competitive LECs because they would have no additional filing requirement. In response to the Further Notice, we received comments from more than 40 parties and held a series of ex parte meetings addressing these issues. Among those parties, only ALLTEL and the Rural Independent Competitive Alliance (RICA) commented specifically on the IRFA.

56. We disagree with ALLTEL's contention that the Commission's IRFA was incomplete. ALLTEL argues that the Commission, in the IRFA, did not adequately address proposals in the Further Notice that might affect originating access and “open-end” access services; the potential burden on CLECs to modify their tariffs or to eliminate those tariffs and negotiate individual contracts; and potential burdens on other carriers, such as ILECs (which, ALLTEL asserts, might have to modify their tariffs and perform cost studies). To the contrary, for several different reasons, we conclude that the IRFA gave adequate notice of our proposals to address CLEC access service. First, we chose to discuss, in the IRFA, the primary proposals set out in the Notice, though we sought comment in the Notice on a number of variations to those primary proposals. Thus, while the IRFA only expressly mentions proposals to address terminating access, it includes cross-references to the text of the Further Notice, which discusses all variations of the Commission's proposals. Moreover, we observe that the Further Notice and the IRFA were sufficient to generate a very sizable record, including comments from many competitive LECs that likely would be considered small businesses under the closest applicable SBA definition. The IRFA provided sufficient information so that the public could react to the Commission's proposals in an informed manner.

57. Second, with respect to the administrative burdens associated with our proposals in the Further Notice, we have reconsidered our tentative conclusion to adopt mandatory detariffing. We note that many commenters, large and small, oppose the Commission's proposal to adopt mandatory detariffing for all CLEC access services. These commenters, like ALLTEL, argue that while mandatory detariffing would reduce burdens associated with filing tariffs, it would increase administrative burdens overall by imposing greater transaction costs on CLECs and IXCs. Having received these almost unanimous comments, we conclude that we should not adopt our proposal to implement mandatory detariffing, at this time. Rather, we only adopt mandatory detariffing to the extent that a CLEC chooses to charge a rate that exceeds our defined benchmark. Under this approach, CLECs and IXCs—both large and small— will be able to continue to enjoy the benefits of a tariffed service.

58. Similarly, we take into account RICA's assertion that mandatory detariffing, as proposed, might cause particular hardship for CLECs operating in rural areas. Again, we have factored these comments into our decision to adopt a benchmark system, pursuant to which CLECs will continue to be permitted to file tariffs for their switched access services. Thus, we believe that our approach adequately addresses the concerns of these CLEC commenters. Moreover, we restate that our decision to detariff rates above the benchmark was motivated by our conclusion that rates above that level would be excessive (absent an agreement between the parties) and would place an inappropriate burden on IXCs and long distance customers. In this regard, we note that even the small CLECs covered by our RFA analysis are clearly prohibited by the Act and our rules from charging unjust or unreasonable rates. This order is designed to prevent such unjust or unreasonable rates.

59. Finally, we reject ALLTEL's assertion that the proposals in the Notice would place additional regulatory burden on ILECs. The proposals applied solely to CLECs and IXCs and we find ALLTEL's arguments to be unsupported in the record.

60. Although not responding specifically to the IRFA, many parties commented generally on the potential regulatory burdens associated with the Commission's various proposals. In brief, IXC commenters typically sought a mechanism to constrain CLEC access charges. In contrast, CLEC commenters typically sought to preserve their freedom to set access rates as they choose. We note that there are small entities on both sides of this debate. We encourage readers of this FRFA also to consult the complete text of this order, which describes in detail our analysis of the issues.

61. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. To estimate the number of small entities that may be affected by the proposed rules, we first consider the statutory definition of “small entity” under the RFA. The RFA generally defines “small entity” as having the same meaning as the term “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate to its activities. Under the Small Business Act, a “small business concern” is one that is independently owned and operated; is not dominant in its field of operation; and meets any additional criteria established by the SBA. The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have no more than 1,500 employees.

62. The rules adopted in this order apply to CLECs and IXCs. Neither the Commission nor the SBA has developed a definition of small CLECs or small IXCs. The closest applicable definition for these carrier-types under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of these carriers nationwide of which we are aware appears to be the data that telecommunications carriers file annually in connection with the Commission's universal services requirements. According to our most recent data, 349 companies reported that they were engaged in the provision of either competitive access services or competitive local exchange services (referred to collectively as CLECs) and 204 companies reported that they were engaged in the provision of interexchange services. Among these companies, we estimate that approximately 297 of the CLECs have 1500 or fewer employees and that approximately 163 of the IXCs have 1500 or fewer employees. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of these carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are 297 or fewer small CLECs, and 163 or fewer small IXCs that may be affected by the decisions and rules adopted in this order.

63. ALLTEL asserts that the Commission's proposals in the Further Notice “could require CLECs to modify their tariffs or to eliminate those tariffs and negotiate individual contracts.” This argument was echoed by other commenters who assert that the Commission's proposal to adopt mandatory detariffing would increase carriers' transaction costs, even though tariff filing requirements would be eliminated. We acknowledge these concerns and have decided not to adopt mandatory detariffing for all CLEC switched access services, at this time.

64. Thus, pursuant to this order, we allow competitive LECs to continue to file tariffs, as long as the rates for those services are within the defined safe harbor. We recognize that many CLECs—we estimate between 100-150 CLECs—may be required to re-file their tariffs in order to comply with this order. Given that ALTS, an organization which represents many CLECs, has supported this proposal, we believe that any increased burden will be outweighed by the benefits associated with resolving these issues. Further, we conclude that it is a burden that is justified by the Act's requirement that all rates be just and reasonable. We are optimistic that this approach will provide a bright line rule that permits a simple determination as to whether CLEC access charges are just and reasonable and, at the same time, will enable both sellers and purchasers of CLEC access services to avail themselves of the convenience of a tariffed service offering. Thus, we believe that this approach should minimize reporting and recordkeeping requirements on IXCs and CLECs, including any small entities, while also providing carriers with considerable flexibility.

65. Through this order, we seek to resolve contentious issues that have arisen with respect to CLEC switched access services. Because there are both small entity IXCs and small entity CLECs “ often with conflicting interests in this proceeding—we expect that small entities will be affected by any approach that we adopt. As discussed, we conclude that our approach best balances these goals by removing opportunities for regulatory arbitrage and minimizing the burdens placed on carriers.

66. In this order, we adopt a benchmark approach to CLEC access charges. We find that this approach will minimize the impact of the rules on small entities in several ways. First, it allows small business CLECs to continue to enjoy the convenience of offering a tariffed service, an advantage sought by CLECs, many of which may be relatively new and small businesses. Second, it will enable small IXCs to purchase most access services via tariff, rather than having to negotiate agreements with every CLEC. Finally, our approach ensures that IXCs will continue to accept and pay for CLEC switched access services, as long as the CLEC tariffs rates within the Commission's benchmarks. Many CLECs argued that such an outcome was essential for new, relatively small CLECs to continue to offer services.

67. In this order, we consider and reject several alternatives to the benchmark approach. In particular, we also considered continuing to rely on market forces to constrain CLEC switched access charges; adopting a mandatory detariffing policy, which would prohibit CLECs from filing any tariffs for their switched access services; and, subjecting CLECs to the panoply of regulation with which incumbents must comply.

68. Although many CLECs contend that the Commission need not take any particular action with respect to CLEC switched access charges, we disagree. We conclude that our action is compelled by several factors, including our desire to reduce regulatory arbitrage opportunities and to revise our rules to allow competitive market forces to constrain CLEC access charges; growing evidence that CLEC switched access charges do not appear to be constrained by market forces; significant concerns that allowing IXCs to refuse to exchange traffic without restriction may lead to a decline in the universal connectivity upon which telephone users have come to rely.

69. On the other hand, we do not impose mandatory detariffing for all CLEC switched access services because we believe that our benchmark approach will provide a less drastic alternative for carriers, including small entity CLECs and small entity IXCs. For example, by enabling CLECs to continue to file tariffs within a safe harbor range, we respond to concerns expressed by many CLECs that complete detariffing of CLEC services would cause significantly increased transaction costs. We note, as well, that many IXC commenters supported this solution.

70. We also conclude that our benchmark approach is more desirable than subjecting CLECs to the panoply of ILEC regulation. The Commission has long stated its desire to allow competitive forces to constrain access charges. By adopting a benchmark approach, we continue to allow CLECs to tariff their services, while ensuring IXCs and long distance customers, generally, that CLEC rates will be just and reasonable. We note that no commenter favors subjecting CLECs to dominant carrier regulation.

71. We also adopted a transition mechanism that should minimize the impact of the decision on all carriers, including small entities. While we considered adopting a benchmark that would immediately drop CLEC access rates to that level charged by the competing incumbent LEC, we instead implement the benchmark through a three-year transition. This will allow CLECs, including any small businesses, a period of flexibility during which they can conform their business models to the new market paradigm that we adopt, herein. At the same time, by effecting significant reductions in switched access charges immediately, we will minimize the impact that excessive access rates might have on IXCs, including any small businesses. We believe that this transition should significantly reduce the impact of this order on small businesses.

72. In addition, by clarifying rules for the transport and origination of traffic between CLECs and IXCs, this order should continue to ensure the ubiquity of a fully interconnected telecommunications network that consumers have come to expect. We considered counter-proposals from some carriers that there should be no obligation to exchange traffic; however, we believe that our approach will best satisfy the expectations of end users who have come to rely on a seamless, fully-interconnected telephone network. Further, these rules should provide considerable assurance to CLECs, many of which may be small businesses, that seek to offer their customers access to the broadest range of IXCs possible. Many of these CLECs asserted that, without such a rule, larger, more established IXCs likely would refuse to exchange traffic with them, essentially driving them out of business. Our rules should address this concern by requiring IXCs to exchange traffic with CLECs that tariff rates within the benchmark, where IXCs already exchange traffic with other carriers in the same geographic area.

73. Overall, we believe that this order best balances the competing goals that we have for our rules governing CLEC switched access charges. We have not identified any additional alternatives that would have further limited the impact on small entities across-the-board while remaining consistent with Congress' pro-competitive objectives set out in the 1996 Act.

74. Report to Congress: The Commission will send a copy of this CLEC Access Charge Reform Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of this CLEC Access Charge Reform Order, including FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the CLEC Access Charge Reform Order and FRFA (or summaries thereof) will also be published in the Federal Register . See 5 U.S.C. 604(b).

75. Pursuant to sections 1-5, 201-205, 303(r), 403, 502, and 503 of the Communications Act of 1934, as amended, this Report and Order, with all attachments, including revisions to part 61 of the Commission's rules, is hereby adopted.

76. The rule revisions adopted in this Order shall become effective thirty days after publication in the Federal Register .

77. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this CLEC Access Charge Order, including the Final and Initial Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 61 as follows:

Astragalus pycnostachyus var. lanosissimus (Ventura marsh milk-vetch) was first described by Per Axel Rydberg (1929) as Phaca lanosissima from an 1882 collection by S.B. and W.F. Parish made from “La Bolsa,” probably in what is now Orange County, California. The combination A. pycnostachyus var. lanosissimus was assigned to this taxon by Philip Munz and Jean McBurney in 1932 (Munz 1932).

Astragalus pycnostachyus var. lanosissimus is a herbaceous perennial in the pea family (Fabaceae). It has a thick taproot and multiple erect, reddish stems, 40 to 90 centimeters (cm) (16 to 36 inches (in)) tall, that emerge from the root crown. The pinnately compound leaves are densely covered with silvery white hairs. The 27-39 leaflets are 5 to 20 millimeters (mm) (0.2 to 0.8 in) long. The numerous greenish-white to cream colored flowers are in dense clusters and are 7 to 10 mm (0.3 to 0.4 in) long. The calyx teeth are 1.2 to 1.5 mm (0.04 in) long. The nearly sessile, single-celled pod is 8 to 11 mm (0.31 to 0.43 in) long (Barneby 1964). The blooming time has been recorded as July to October (Barneby 1964); however, the one extant population was observed in flower in June 1997. This variety is distinguished from A. pycnostachyus var. pycnostachyus by the length of calyx tube, calyx teeth, and peduncles. It is distinguished from other local Astragalus species by its size, perennial habit, size and shape of fruit, and flowering time.

The type locality is “La Bolsa,” where the plant was collected in 1882 by S.B. and W.F. Parish (Barneby 1964). Based on the labeling of other specimens collected by the Parishes in 1881 and 1882, Barneby (1964) suggested that this collection may have come from the Ballona marshes in Los Angeles County. However, Critchfield (1978) believed that “La Bolsa” could easily have referred to Bolsa Chica, a coastal marsh system located to the south in what is now Orange County. He noted that Orange County was not made a separate county from Los Angeles until 1889, 7 years after the Parish's collection was made. In the five decades following its discovery, Astragalus pycnostachyus var. lanosissimus was collected from about four locations in Los Angeles and Ventura counties, three of which are near one another. In Los Angeles County it was collected from near Santa Monica in 1882, the Ballona marshes just to the south in 1902, and “Cienega” in 1904, also likely near the Ballona wetlands. In Ventura County it was collected in 1901 and 1925 from Oxnard and in 1911 from Ventura, a city adjacent to Oxnard. By 1964, Barneby (1964) believed that it had certainly been extirpated from Santa Monica southward, noting that there was still the possibility it survived in Ventura County (although he knew of no locations at that time). The species was briefly rediscovered in 1967 by R. Chase, who collected a single specimen growing by a roadside between the cities of Ventura and Oxnard. Subsequent searches uncovered no other living plants at that location, although some mowed remains discovered on McGrath State Beach lands, across the road from the collection site, were believed to belong to this taxon (information on herbarium label from specimen collected by R.M. Chase, 1967). Floristic surveys and focused searches conducted in the 1970s and 1980s at historic locations failed to locate any A. pycnostachyus var. lanosissimus, and the plant was presumed extinct (Isley 1986; Spellenberg 1993; Skinner and Pavlik 1994) until June 12, 1997, when a population of the plant was rediscovered by U.S. Fish and Wildlife Service (Service) biologist Kate Symonds, in a degraded coastal dune system near Oxnard, California.

Almost nothing is known of the habitat requirements of Astragalus pycnostachyus var. lanosissimus. All but two of the known collections of this taxon were made prior to 1930. Specimen labels from these collections and original published descriptions contain virtually no habitat information. The related variety, Astragalus pycnostachyus var. pycnostachyus, is found in or at the high edge of coastal saltmarshes and seeps. The newly discovered population of A. pycnostachyus var. lanosissimus occurs in a sparsely vegetated low area, at an elevation of about 10 meters (30 feet), in a site previously used for disposal of petroleum waste products (Impact Sciences, Inc. 1997). Dominant shrub species at the site are Baccharis pilularis (coyote brush), Baccharis salicifolia (mule fat), Salix lasiolepis (arroyo willow), and the nonnative Myoporum laetum (myoporum) (Impact Sciences, Inc. 1997). The population itself occurs with sparse vegetative cover provided primarily by Baccharis pilularis, Baccharis salicifolia, a nonnative Carpobrotus sp. (seafig), and a nonnative annual grass, Bromus madritensis ssp. rubens (red brome). Soils are reported to be loam-silt loams (Impact Sciences, Inc. 1997). Soils were likely transported from other locations as a cap for the disposal site once it was closed. The Service is not aware of records on the origin of the soil used to cap the waste disposal site; however, because of the costs of transport, the soil source is likely of local origin.

The population of Astragalus pycnostachyus var. lanosissimus consisted of about 374 plants total in 1997, of which 260 were small plants, thought to have germinated in the last year. Fewer than 65 plants in the population produced fruit in 1997 (Impact Sciences, Inc. 1997). The plants are growing in an area of less than 1 acre, with one outlying plant located 10 to 20 meters (30-60 feet) from the main group in 1997 (D. Steeck, Service, pers. obs. 1997). In 1998, surveys revealed 192 plants. In 1999, Service efforts went into placing hardware cloth cages around a sample of plants. This experimental caging was initiated due to severe herbivory, apparently by small mammals. An estimate of between 30 and 40 plants produced flowers in 1999, believed to be fewer than half of those blooming in 1998 (D. Steeck in litt. 1999).

The land on which the only known population of Astragalus pycnostachyus var. lanosissimus grows is privately owned and a project to decontaminate the soils and construct a housing development on the site has been proposed (Impact Sciences, Inc. 1998). Limited efforts to assist with the conservation of the species have been initiated by the project proponent, the Service, the State, and other cooperators. The project proponent has successfully grown plants in a remote greenhouse facility. Several plants were excavated from the natural population and potted, and several plants were started from seed gathered from the natural population. In addition, we cooperated with the California Department of Fish and Game in making conservation seed collections from the site. This seed was divided into a seed storage collection and a seed bulking project at the Rancho Santa Ana Botanic Gardens.

Federal actions on this taxon began as a result of section 12 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), which directed the Secretary of the Smithsonian Institution to prepare a report on those plants considered to be endangered, threatened, or extinct in the United States. This report (House Document No. 94-51) was presented to Congress on January 9, 1975, and Astragalus pycnostachyus var. lanosissimus was included on List C, among those taxa believed possibly extinct in the wild. The Service published a notice in the July 1, 1975, Federal Register (40 FR 27823) of its acceptance of the report as a petition within the context of section 4(c)(2) (petition provisions are now found in section 4(b)(3)) of the Act and its intention to review the status of the plant taxa named therein.

On June 16, 1976, the Service published a proposed rule in the Federal Register (41 FR 24523) to determine approximately 1,700 vascular plant species to be endangered species pursuant to section 4 of the Act. This list, which included Astragalus pycnostachyus var. lanosissimus, was assembled on the basis of comments and data received by the Smithsonian Institution and the Service in response to House Document No. 94-51 and the July 1, 1975, Federal Register publication. General comments received in relation to the 1976 proposal were summarized in an April 26, 1978, Federal Register publication (43 FR 17909). In 1978, amendments to the Endangered Species Act required that all proposals more than 2 years old be withdrawn. A 1-year grace period was given to those proposals already more than 2 years old. In a December 10, 1979, notice (44 FR 70796), the Service withdrew the portion of the June 16, 1976, proposal that had not been made final, along with four other proposals that had expired. A. pycnostachyus var. lanosissimus was included in that withdrawal notice.

We published an updated candidate notice of review for plants on December 15, 1980 (45 FR 82480). This notice included Astragalus pycnostachyus var. lanosissimus in a list of category 1 candidate species that were possibly extinct in the wild. These category 1 candidates would have been given high priority for listing if extant populations were confirmed.

The Service maintained Astragalus pycnostachyus var. lanosissimus as a category 1 candidate in subsequent notices published on November 28, 1983 (48 FR 53640), September 27, 1985 (50 FR 39526), and February 21, 1990 (55 FR 6184). The Service published a notice (58 FR 51144) on September 30, 1993, in which taxa whose existence in the wild was in doubt, including A. pycnostachyus var. lanosissimus, were moved to Category 2. On February 28, 1996, we published a Notice of Review in the Federal Register (61 FR 7596) that discontinued the designation of category 2 species as candidates, including those taxa thought to be extinct. Thus, A. pycnostachyus var. lanosissimus was excluded from this and subsequent notices of review. In 1997, A. pycnostachyus var. lanosissimus was rediscovered and a review of the taxon's status indicated that a proposed rule was warranted.

We published a proposed rule to list Astragalus pycnostachyus var. lanosissimus as endangered in the Federal Register on May 25, 1999 (64 FR 28136). We have updated this rule to reflect any changes in information concerning distribution, status, and threats since the publication of the proposed rule.

In the May 25, 1999, proposed rule (64 FR 28136), we requested interested parties to submit factual reports or information that might contribute to development of a final rule. We contacted appropriate Federal agencies, State agencies, county and city governments, scientific organizations, and other interested parties and requested information and comments. We published a newspaper notice inviting public comment in the Los Angeles Times on June 3, 1999.

During the comment period we received comments from 4 individuals, agencies, or group representatives concerning the proposed rule. Two commenters supported the proposal, one was neutral, and one was opposed to the proposal. Comments provided additional information that, along with other clarifications, has been incorporated into the “Background” or “Summary of Factors” sections of this final rule. Opposing comments and our responses are summarized as follows:

Comment 1: The proposed rule failed to meet any listing criteria as defined by the Act.

Response 1: We disagree. The arguments presented in the Summary of Factors Affecting the Species section of the rule have been supported by the peer review process as well as our internal legal and biological reviews for compliance with the Act.

Comment 2: The proposed rule utilized outdated and incomplete data, and failed to include information about the horticultural experiments conducted in central California.

Response 2: The data used in determining the status of Astragalus pycnostachyus var. lanosissimus was current and complete at the time the proposed rule was written. Experimental horticultural activities involving the removal of some plants and seeds from the natural population and their propagation in a greenhouse facility have been initiated, and we believe that such activities may prove to be useful in conserving the plant species. However, these initial experiments have shown limited success, and the ability to maintain populations necessary for the recovery of A. pycnostachyus var. lanosissimus has not been demonstrated.

Comment 3: There are no additional benefits for the species by listing it.

Response 3: Federal listing will provide additional protection for the species through Federal regulations and recovery efforts. Additional protection will potentially be provided through the consultation process for projects which may affect the species that are funded, permitted, or carried out by a Federal agency as required by section 7 of the Act. In addition, Federal listing of a species generally provides for recognition and additional funding, by our agency as well as others, for the conservation and recovery of the species. Although our recovery planning process typically occurs after the species has been federally listed, the State listing of this species has served to advance the process of identifying appropriate recovery actions. We currently do not know what population size and habitat areas are needed to support the continued existence of this species. However, specific recovery objectives and criteria to delist the species in the future, including targets for population/habitat sizes, will be developed during the formal recovery planning process. This process will involve species experts, scientists, and interested members of the public, in accordance with the interagency policy on recovery plans under the Act, published on July 1, 1994 (59 FR 34272).

In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited the expert opinions of three peer reviewers regarding pertinent scientific or commercial data and assumptions relating to population status and biological and ecological information for Astragalus pycnostachyus var. lanosissimus. Only one reviewer responded. This reviewer provided supporting information for the listing of the species and described the information included in the rule as factually correct to the best of his knowledge.

Section 4 of the Endangered Species Act and regulations (50 CFR part 424) promulgated to implement the listing provisions of the Act set forth the procedures for adding species to the Federal lists. A species may be determined to be an endangered or threatened species due to one or more of the five factors described in section 4(a)(1). These factors and their application to Astragalus pycnostachyus var. lanosissimus are as follows:

Astragalus pycnostachyus var. lanosissimus is believed to have been extirpated from all but one of the general areas from which it has been collected. In Los Angeles County, this taxon was collected in the late 1800s and early 1900s from Santa Monica, Ballona Marsh, and “Cienega” (probably near Ballona Marsh). These coastal areas are now urbanized within the expansive Los Angeles metropolitan area. About 90 percent of the Ballona wetlands, once encompassing almost 2000 acres, have been drained, dredged, and developed into the urban areas of Marina del Rey and Venice (Critchfield 1978; Friends of Ballona Wetlands 1998). Ballona Creek, the primary freshwater source for the wetland, had been straightened, dredged, and channelized by 1940 (Friesen, et al. 1981). Despite periodic surveys of what remains at the Ballona wetlands, A. pycnostachyus var. lanosissimus has not been collected there since the early 1900s (Gustafson 1981; herbarium labels from collections by H. P. Chandler and by E. Braunton, 1902, housed at U.C. Berkeley Herbaria). Barneby (1964) believed that A. pycnostachyus var. lanosissimus was extirpated from all areas south of Santa Monica by the mid-1960s. In 1987, botanists searched for A. pycnostachyus var. lanosissimus at previous collection locations throughout its range in coastal habitats, including Bolsa Chica in Orange County and on public lands around Oxnard in Ventura County, without success (F. Roberts, Service, in. litt. 1987; R. Burgess, CNPS, in. litt. 1987; T. Thomas, Service, pers. comm. 1997). Point Mugu Naval Air Weapons Station, in southern Ventura County, may have potential habitat. Detailed surveys have not been conducted there; however, A. pycnostachyus var. lanosissimus was not found during cursory surveys of the base, and this taxon has never been collected there.

The single known population of Astragalus pycnostachyus var. lanosissimus occurs near the city of Oxnard, in a degraded backdune community. From 1955 to 1981 the land on which it occurs was used as a disposal site for oil field wastes (Impact Sciences, Inc. 1998). In 1998, the City of Oxnard published a Final Environmental Impact Report (FEIR) for development of this site (Impact Sciences, Inc. 1998). The proposal for the site includes remediation of soils contaminated with hydrocarbons, followed by construction of 364 homes and a 6-acre lake on a total of 91 acres, including the land on which A. pycnostachyus var. lanosissimus grows. The proposed soil remediation would involve excavation and stockpiling of the soils, followed by soil treatment and redistribution of the soils over the site (Impact Sciences, Inc. 1998), destroying the A. pycnostachyus var. lanosissimus population that was identified on the site late in the planning process. In order to mitigate for this loss, the project included provisions for seed collection and horticultural propagation, and transplantation of greenhouse seedlings and plants collected from the wild to off-site locations.

The proposed project, as described in the FEIR, would adversely affect the only known population of A. pycnostachyus var. lanosissimus , resulting in the likely extinction of this taxon in the wild. On July 27, 1999, the California Department of Fish and Game (CDFG) signed a Memorandum of Understanding (MOU) with the project proponent to establish a permanent rare plant preserve on site and provide for experimental off-site mitigation (see Appendix E, CDFG 2000). The intent of the MOU was to increase protections to the milk-vetch beyond that in the original project description. However, implementing the MOU would still result in intensive habitat disturbance during soil remediation, up to the edge of the extant stand of A. pycnostachyus var. lanosissimus . Under the MOU, when the project is complete there will be a 5-acre preserve surrounded by urban land use.

The small size of the preserve and its proximity to future urban and suburban uses makes it subject to the effects of nonnative, invasive plant and animal species, increased water supply due to suburban irrigation runoff, and chemicals such as herbicides, pesticides, and fertilizers (see Conservation Biology Institute 2000, CDFG 2000 and references therein). Independently or in combinations, these factors present difficult management challenges which, if not adequately addressed, could lead to the elimination of A. pycnostachyus var. lanosissimus from the site. Nonnative plant and animal species are competitors and predators, respectively, that can directly reduce survival of native plants, and they can also upset the invertebrate (pollinator) and vascular plant associations upon which native plants depend (Conservation Biology Institute 2000). The limited information available about possible specific effects of competition and predation on the Ventura marsh milk-vetch is described in CDFG (2000). While the life-history requirements of the Ventura marsh milk-vetch are not well understood, any factor that substantially alters the hydrology of the site, such as increases or decreases in urban/suburban runoff, is likely to make the site unsuitable for this wetland species (see the discussion of hydrology and small preserves in Conservation Biology Institute (2000)). Likewise, increased levels of chemicals arriving via runoff or drift can be expected in small preserves and can harm native species. Specific predictions about the effects of chemicals such as herbicides and pesticides on the proposed milk-vetch preserve would be speculative at this point, but given the proximity of the preserve to future suburban and urban uses, increases in pesticides or herbicides can be expected. These increases could harm the milk-vetch directly, or alter the pollinator or plant associations upon which it depends.

Fuel management is also a concern for small preserves in urban or suburban areas; the fire hazard at the wildland-urban interface is receiving national and local attention (Federal Fire Policy 2001, Ventura County 2001). In this part of California much of the native and some of the nonnative vegetation is flammable. Currently the local fire department requires 100 feet of vegetation modification for fire safety (Ventura County 2001). If the proposed development design required that 100 feet of fuel modification was necessary in the preserve, it would reduce the size of the core preserve to 1.9 acres. Finally, attempts to grow this species elsewhere in the wild have failed, or require constant intervention (Mary Meyer, March 2000 In litt. ; Wayne Ferren, August 2000 In litt. ). Thus, the preserve, as designed, does not adequately address the biological needs of the species, relies on unproven management measures, and will not insure protection of the site.

Overutilization is not known to be a problem for Astragalus pycnostachyus var. lanosissimus at present. Soon after this taxon was discovered, the project proponent installed a fence around the population, which appears to have been effective in minimizing unauthorized visitation.

A sooty fungus was found on the leaves of Astragalus pycnostachyus var. lanosissimus in late summer, 1997, as leaves began to senesce and the plants entered a period of dormancy (Impact Sciences, Inc. 1997; T. Yamashita, Sunburst Plant Disease Clinic, pers. comm. 1998). The effects of the fungus on the population are not known, but it is possible that the fungus attacks senescing leaves in great number only at the end of the growing season. The plants appeared robust when in flower in June 1997, matured seed by October 1997, and were regrowing in March 1998, after a period of dormancy, without obvious signs of the fungus (D. Steeck, Service, pers. obs. 1997, 1998, 1999).

The seeds of Astragalus pycnostachyus var. lanosissimus in 1997 were heavily infested with seed beetles (Bruchidae: Coleoptera). In a seed collection made for conservation purposes, the Service found that while most fruits in 1997 partially developed at least 4 seeds, seed predation reduced the average number of undamaged seeds to only 1.8 per fruit (D. Steeck, Service, and M. Meyer, CDFG, unpublished data). Apparently heavy seed predation by seed beetles and weevils has been reported among other members of the genus Astragalus (Platt et al. 1974; Lesica 1995). The effects of seed predation on the population and its variability from year to year are not known at this time.

The introduced nonnative milk snail ( Otala lactea ) was observed causing damage to the foliage of Astragalus pycnostachyus var. lanosissimus in 1998 and 1999 concurrent with a dramatic decline in seedling plants (D. Steeck, Service pers. comm. 1999).

Severely pruned plants were observed in 1999, which was attributed to small mammal herbivory (D. Steeck field notes 1999).

The California Fish and Game Commission listed Astragalus pycnostachyus var. lanosissimus as endangered under the Native Plant Protection Act (NPPA) (chapter 1.5 sec. 1900 et seq. of the California Fish and Game Code) and the California Endangered Species Act (CESA) (chapter 1.5 sec. 2050 et seq. ) on April 6, 2000. California Senate Bill 879, passed in 1997 and effective January 1, 1998, requires individuals to obtain a section 2081(b) permit from CDFG to take a listed species incidental to otherwise lawful activities, and requires that all impacts be fully mitigated and all measures be capable of successful implementation. However, past attempts to mitigate impacts to rare plant populations have often failed (Howald 1993), and it is unclear how well these requirements will provide for the long-term conservation of State-listed plants.

The California Environmental Quality Act (CEQA) requires a full public disclosure of the potential environmental impacts of proposed projects. The public agency with primary authority or jurisdiction over the project is designated as the lead agency, and is responsible for conducting a review of the project and consulting with the other agencies concerned with the resources affected by the project. Section 15065 of the CEQA Guidelines requires a finding of significance if a project has the potential to “reduce the number or restrict the range of a rare or endangered plant or animal.” Species that can be shown to meet the criteria for State listing, such as Astragalus pycnostachyus var. lanosissimus , are considered under CEQA (CEQA Section 15380). Once significant effects are identified, the lead agency must require mitigation for effects through changes in the project unless the agency decides that overriding social or economic considerations make mitigation infeasible. In the latter case, projects may be approved that cause significant environmental damage, such as destruction of endangered species. Protection of listed species through CEQA, therefore, is ultimately left to the discretion of the agency involved.

The Coastal Zone Management Act of 1972 is a Federal statute that allowed for the establishment of the California Coastal Act (CCA) of 1976. CCA established a coastal zone. In Ventura County, the site of the only known extant population of Astragalus pycnostachyus var. lanosissimus occurs in the California Coastal Zone (Impact Sciences, Inc. 1998). As required by CCA, Ventura County has developed a Coastal Land Use Plan. It currently designates the area occupied by A. pycnostachyus var. lanosissimus as Open Space, and amendments of the Coastal Land Use Plan will be required for approval of a residential development on this property. Land use decisions made by local agencies in the Coastal Zone are appealable to the California Coastal Commission. Although the Coastal Zone designation and CEQA require that unique biological resources, such as A. pycnostachyus var. lanosissimus , be considered in the planning process, any protection offered by these regulatory mechanisms is ultimately at the discretion of the local and State agencies involved and, therefore, does not assure protection for, or preclude the need to list, this taxon.

Astragalus pycnostachyus var. lanosissimus is threatened with extinction from unanticipated human activities and natural events by virtue of the very limited number of individuals in, and the small area occupied by, the only known extant population. A wildfire in the summer before seeds have matured, a plane crash (the taxon is under the extended center flight line of the Oxnard airport and a crash occurred on the site in 1995 (Murphy in litt. 1997), and other natural or unanticipated human-caused events could eliminate the existing population and result in the extinction of this taxon from the wild.

The single known population of this taxon is also threatened by competition with nonnative plant species. Cortaderia selloana (pampas grass), Carpobrotus sp., and Bromus madritensis ssp. rubens are invasive nonnative plant species that occur at the site (Impact Sciences, Inc. 1997). Carpobrotus sp. in particular, are competitive, succulent species with the potential to cover vast areas in dense clonal mats. Bromus madritensis ssp. rubens grew in high densities around some mature individuals of Astragalus pycnostachyus var. lanosissimus in 1998, and seedlings were germinating among patches of Carpobrotus and Bromus in 1998 (D. Steeck, pers. obs. 1998). Seedling survival rates in these areas have not yet been determined. As explained under factor A, managing nonnative plants and animals and other threats to native species is difficult in small preserves (Conservation Biology Institute 2000, CDFG 2000). Carpobrotus and Bromus can compete directly with the milk-vetch and may also alter the microenvironment so seriously that they alter the invertebrate (pollinator) and vascular plant associations upon which the milk-vetch depends (see discussion of nonnative predators and competitors on the site in CDFG (2000)). In addition, the life history and biology of Astragalus pycnostachyus var. lanosissimus is not well known, owing to its only recent rediscovery. It will be many years before we understand what factors influence seedling germination and the production of viable seeds in the wild.

Astragalus pycnostachyus var. lanosissimus is also threatened by activities in occupied habitat associated with planning for land use at the site. For example, the project proponents have conducted at least two excavations in the population to examine the soils in which the plants occur (D. Steeck, pers. obs. 1997) and to examine the root structure of an adult plant (R. Smith, R.A. Smith and Associates, pers. comm. 1998). In April 1998 the project proponents dug up and transported three plants out of Ventura County to a greenhouse in central California in a preliminary attempt at transplanting them. In addition to the direct removal of reproducing individuals from the population, exploratory excavations within the population can potentially alter the hydrology of the micro-site where the plants are found, reduce seedling establishment by burying or removing seeds and seedlings from the soil, and injure plant roots.

The Service has carefully assessed the best scientific and commercial information available regarding the past, present, and future threats faced by this taxon in determining this final rule. Residential and commercial development have resulted in the loss and alteration of this taxon's coastal habitat and are the most likely cause of population extirpation historically. Loss and alteration of habitat from soil remediation activities and proposed residential development threaten the only known extant population. Other threats include competition from nonnative plant species and unanticipated human activities and natural events which could diminish or destroy the very small extant population. Existing regulatory mechanisms are inadequate to protect this taxon. Because Astragalus pycnostachyus var. lanosissimus is in danger of extinction throughout all or a significant portion of its range, it fits the Act's definition of endangered.

Critical habitat is defined in section 3 of the Act as—(i) the specific areas within the geographical 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 consideration or protection; and (ii) specific areas outside the geographical 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. “Conservation” means the use of all methods and procedures needed to bring the species to the point at which listing under the Act is no longer necessary.

Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12) require that, to the maximum extent prudent and determinable, we designate critical habitat at the time the species is determined to be endangered or threatened. Our regulations (50 CFR 424.12(a)(1)) state that designation of critical habitat is not prudent when one or both of the following situations exist—(1) the species is threatened by taking or other activity and the identification of critical habitat can be expected to increase the degree of threat to the species or (2) such designation of critical habitat would not be beneficial to the species.

In the proposed rule, we indicated that designation of critical habitat for Astragalus pycnostachyus var. lanosissimus was not prudent because we believed that designation of critical habitat would not provide any additional benefit beyond that provided through listing as endangered. We came to that conclusion because the plant occurs only on private land with no known Federal nexus, because the designation of critical habitat would not invoke the protection afforded under section 9, and because, in this case, with no permit requirement, section 10 is not applicable. In addition, the private landowner and all appropriate non-Federal agencies were aware of the Federal status of this species and its location on private land.

After further consideration, and in light of recent court rulings regarding critical habitat designations, we believe that Astragalus pycnostachyus var. lanosissimus may benefit from critical habitat designation. For example, critical habitat designation may educate and inform the public and help focus conservation efforts through future Federal, State, and local planning efforts and the public, by identifying the habitat needs and crucial areas for Astragalus pycnostachyus var. lanosissimus. Therefore, we now believe that critical habitat designation may be prudent for Astragalus pycnostachyus var. lanosissimus.

Critical habitat is not determinable (50 CFR 424.12(a)(2)) when one or both of the following situations exist—(1) Information sufficient to perform required analyses of the impacts of the designation is lacking, or (2) the biological needs of the species are not sufficiently well known to permit identification of an area as critical habitat. Almost nothing is known of the habitat requirements of Astragalus pycnostachyus var. lanosissimus. All but two of the known collections of this taxon were made prior to 1930. Specimen labels from these collections and original published descriptions contain virtually no habitat information. The newly discovered population of A. pycnostachyus var. lanosissimus occurs at a site previously used for disposal of petroleum waste products (Impact Sciences, Inc. 1997), on soils that were likely transported from other locations as a cap for the disposal site once it was closed. The original source of these soils is not known. As a result of this lack of information about the habitat needs of the species, we believe that the biological needs of the species are not sufficiently well known to permit designation of an area as critical habitat, and find that critical habitat for A. pycnostachyus var. lanosissimus is not determinable at this time.

Our regulations (50 CFR 424.17(b)(2)) require that, when we make a “not determinable” finding, we designate critical habitat within two years of the publication date of the original proposed listing rule, unless the designation is found to be not prudent. However, our listing budget is currently insufficient to allow us to immediately complete all of the listing actions required by the Act. Listing the Ventura marsh milk-vetch without designation of critical habitat will allow us to concentrate our limited resources on higher-priority critical habitat and other listing actions, while allowing us to invoke protections needed for the conservation of this species without further delay. We will make a determination regarding critical habitat in the future at such time when our available resources and priorities allow.

Conservation measures provided to species listed as endangered or threatened under the Endangered Species Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain activities. Recognition through listing encourages public awareness and results in conservation actions by Federal, State, and local agencies, private organizations, and individuals. The Act provides for possible land acquisition from willing sellers and cooperation with the States and requires that recovery actions be carried out for all listed species. The protection required of Federal agencies and the prohibitions against certain activities involving listed plants are discussed, in part, below.

Section 7(a) of the Act, as amended, 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 being designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any action that is likely to jeopardize the continued existence of a species proposed for listing or result in destruction or adverse modification of proposed critical habitat. If a species is listed subsequently, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into formal consultation with the Service. The single known extant population of Astragalus pycnostachyus var. lanosissimus occurs on privately owned land. While currently there are no direct Federal authorizations needed for remediation of the contaminated soils of the site, Federal involvement could potentially arise from this situation in the future.

The listing of Astragalus pycnostachyus var. lanosissimus as endangered will provide for the development of a recovery plan for this taxon. Such a plan will bring together Federal, State, and local efforts for the conservation of this taxon. The plan will establish a framework for agencies to coordinate activities and to cooperate with each other in conservation efforts. The plan will set recovery priorities and describe site-specific management actions necessary to achieve the conservation of this taxon.

The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered plants. With respect to Astragalus pycnostachyus var. lanosissimus, all prohibitions of section 9(a)(2) of the Act, implemented by 50 CFR 17.1 for endangered plants, apply. These prohibitions, in part, make it illegal for any person subject to the jurisdiction of the United States to import or export, transport in interstate or foreign commerce in the course of a commercial activity, sell or offer for sale in interstate or foreign commerce, or remove and reduce the species to possession from areas under Federal jurisdiction. In addition, for plants listed as endangered, the Act prohibits the malicious damage or destruction on areas under Federal jurisdiction and the removal, cutting, digging up, or damaging or destroying of such endangered plants in knowing violation of any State law or regulation, including State criminal trespass law. Certain exceptions to the prohibitions apply to agents of the Service and State conservation agencies.

The Act and 50 CFR 17.62 and 17.63 also provide for the issuance of permits to carry out otherwise prohibited activities involving endangered plant taxa under certain circumstances. Such permits are available for scientific purposes and to enhance the propagation or survival of the species. Requests for copies of the regulations on listed species and inquiries about prohibitions and permits may be addressed to the U.S. Fish and Wildlife Service, Endangered Species Permits, 911 NE 11th Avenue, Portland, Oregon 97232-4181 (503/231-2063, facsimile 503/231-6243).

It is the policy of the Service, published in the Federal Register on July 1, 1994 (59 FR 34272), to identify to the maximum extent practicable at the time a species is listed those activities that would or would not be likely to constitute a violation of section 9 of the Act. The intent of this policy is to increase public awareness of the effect of the listing on proposed and ongoing activities within the taxon's range. Astragalus pycnostachyus var. lanosissimus is not located on areas currently under Federal jurisdiction. Collection, damage, or destruction of this species on Federal lands is prohibited (although in appropriate cases a Federal endangered species permit may be issued to allow collection for scientific or recovery purposes). Such activities on areas not under Federal jurisdiction constitutes a violation of section 9 if conducted in knowing violation of State law or regulations, or in violation of State criminal trespass law. Questions regarding whether specific activities would constitute a violation of section 9 should be directed to the Field Supervisor of the Service's Ventura Fish and Wildlife Office (see ADDRESSES section).

The Fish and Wildlife Service has determined that Environmental Assessments, as defined under the authority of the National Environmental Policy Act of 1969, need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Endangered Species Act of 1973, as amended. A notice outlining the Service's reasons for this determination was published in the Federal Register on October 25, 1983 (48 FR 49244).

This rule does not contain any new information collection requirements for which the Office of Management and Budget (OMB) approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. , is required. Any information collection related to the rule pertaining to permits for endangered and threatened species has OMB approval and is assigned clearance number 1018-0094. This rule does not alter that information collection requirement. For additional information concerning permits and associated requirements for threatened species, see 50 CFR 17.32.

A complete list of all references cited herein is available upon request from the Ventura Fish and Wildlife Office (see ADDRESSES section).

The primary authors of this notice are Diane Steeck and Tim Thomas, U.S. Fish and Wildlife Service, Ventura Fish and Wildlife Office (see ADDRESSES section).

Regulations codified at 50 CFR part 679 implement the IFQ Program, a limited access system for management of the Pacific halibut ( Hippoglossus stenolepis ) and sablefish ( Anoplopoma fimbria ) fixed gear fisheries in and off Alaska, under the authority of the Halibut Act with respect to halibut and the Magnuson-Stevens Act with respect to sablefish. Further information on the rationale for and implementation of the IFQ Program is codified in the final rule published in the Federal Register , November 9, 1993 (58 FR 59375).

NMFS’ continuing assessment of the IFQ Program’s responsiveness to conservation and management goals for Pacific halibut and sablefish fisheries has produced two “omnibus” packages of IFQ regulatory reforms since the inception of the program (60 FR 22307, May 5, 1995; 61 FR 41523, August 9, 1996). This final rule, the third such “omnibus” package of regulatory changes to the IFQ Program, amends various portions of the program’s implementing regulations. These changes are necessary to promote the ability of fishermen to conduct IFQ fishing operations more efficiently, to enhance NMFS' ability to administer the program, and to improve the clarity and consistency of IFQ Program regulations.

This final rule makes the following changes to the IFQ regulations: (1) In § 679.1 Purpose and scope , adds an explicit reference to the Halibut Act, under which regulations in this part regarding the Pacific halibut fishery were developed, and in § 679.1(d) revise “IFQ management plan” to read “IFQ management measures” to prevent any inference that the IFQ Program is itself a “fishery management plan” as that term is used in the Magnuson-Stevens Act; (2) amends the requirements for IFQ fishermen participating in open-access sablefish fisheries in Alaska State waters; (3) adds nomenclature to reflect organizational changes in NMFS’ Restricted Access Management (RAM) program; (4) amends the definition of an IFQ landing to include vessels that are removed from the water and put on trailers; (5) removes the reference to an “accompanying statement” establishing IFQ balances; (6) adds an exemption for lingcod fishermen using dinglebar gear from the IFQ 6-hour prior notice of landing and 12-hour landing window requirements; (7) adds gear type to the information required on a completed IFQ landing report; (8) amends the information required for a shipment report to clarify which registered buyer, in landings involving multiple registered buyers, is responsible for compliance with shipment report requirements; (9) makes minor corrections to errors arising from the consolidation of regulations; (10) amends the survivorship transfer provisions to allow the temporary transfer of a deceased QS holder’s QS and IFQ to a designated beneficiary and revise a paragraph on an IFQ leasing provision that expired in 1998; (11) amends the limitations on the use of QS and IFQ to require annual updates on the status of corporations, partnerships, and other collective entities holding QS; (12) amends the submission of appeals to allow appeals to initial administrative decisions to be submitted by facsimile machine; and (13) amends reporting requirements for consistency with the Paperwork Reduction Act (PRA).

A detailed discussion of each of these changes may be found in the preamble to the proposed rule published December 14, 2000, at 65 FR 78126.

NMFS invited public comment on the changes contained in this action through January 16, 2001. No comments were received, and NMFS publishes this rule unchanged from the proposed rule.

This rule revises regulations pertaining to certain IFQ forms and reports to clarify further the data required of the public in these collections of information. Two of the collections of information contained in this final rule have not yet been authorized by OMB pursuant to the PRA. The pertinent collections of information are the addition of “gear type” to information required in a completed IFQ Landing Report at § 679.5 (l)(2) and the addition of a requirement that a corporation, partnership, and other collective entity holding QS submit annual updates on the status of the collective entity as such at § 679.42 (j)(5).

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection displays a currently valid OMB control number.

This final rule contains collection-of-information requirements subject to the PRA and which have been approved by OMB under OMB control number 0648-0272. These requirements and their associated burden estimates per response are: Landing Report (12 minutes); request for QS Application (30 minutes for an individual, 1 hour for an existing corporation, 2 hours for a dissolved corporation, and 2 hours for a vessel); IFQ Vessel Clearance Report (12 minutes); IFQ Shipment Report (18 minutes): IFQ Transshipment Authorization Request (12 minutes); QS Designated Beneficiary Form (1 hour); QS/IFQ Transfer Application (2 hours); and Letter of Appeal (4 hours).

This rule also contains new collection-of-information requirements, which have been or will be submitted to OMB for approval, and which are not effective at this time (see the DATES section). These two requirements are the addition of a gear type data element to the landing report (not expected to alter the estimated 12 minutes response time for the report) and a new requirement for annual updates of identification of current shareholders or partners (30 minutes).

Comments are invited on (a) whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have a practical utility; (b) the accuracy of the agency’s estimate of the burden of the proposed collections of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collections of information on respondents, including through use of automated collection techniques or other forms of information technology. Send comments on these or other aspects of the information collections to NMFS (see ADDRESSES ) and to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 (Attn: NOAA Desk Officer).

Other collections of information in this rule have been approved by the OMB under OMB control number 0648-0272. These new information requirements comprise the following additions and revisions to the IFQ recordkeeping and reporting requirements: Request for QS Application; IFQ Vessel Clearance Report; IFQ Shipment Report; IFQ Transshipment Authorization Request; QS Designated Beneficiary Form; QS/IFQ Transfer Application; and the Letter of Appeal.

NMFS prepared a final regulatory flexibility analysis to describe this final rule’s potential economic effects on small entities. The reporting burden of this action is identified in this final rule. Seven changes were made to clarify the regulations and improve regulatory language to avoid potential confusion for the affected small entities. Allowing QS holders to designate a beneficiary to receive temporary transfer privileges provides a benefit to the families of QS holders with a minimal burden of filling out an application form. Allowing administrative appeals to be submitted by facsimile machine will reduce the burden of submitting an appeal on the affected families. Requiring an annual update on the status of corporations, partnerships, or other non-individual entities is necessary to ensure that QS are not erroneously issued because of changes in these non-individual entities, which requires an increase in the burden to such entities because of annual submissions. Requiring the addition of gear type to landing reports is necessary for the management of the IFQ program, which is limited to certain gear types, makes a negligible increase to the burden of QS holders. Extending the exemption to the 6-hour prior notice of landing report and the 12-hour landing requirements to lingcod dinglebar gear troll fishermen will make it easier for them to land small incidental catches of halibut. Prohibiting the removal from the water of a vessel containing IFQ harvests enhance NMFS’ monitoring IFQ landings to ensure accurate accounting of harvests against QS balances will cause inconvenience to some IFQ fishermen by requiring a 6-hour delay before offloading their harvest at the dock. The amendments to this final rule are expected to have minimal impact on the 1,677 unique persons holding halibut QS and the 897 unique persons holding sablefish QS, all of whom are assumed to be small entities.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

Fisheries, Reporting and recordkeeping requirements.