The Federal financial supervisory agencies are jointly undertaking a review of our CRA regulations, in fulfillment of our commitment to do so when we adopted the current regulations in 1995. See 60 FR 22156, 22177 (May 4, 1995). This ANPR marks the beginning of our assessment of the effectiveness of the regulations in achieving their original goals of (1) emphasizing in examinations an institution's actual performance in, rather than its process for, addressing CRA responsibilities; (2) promoting consistency in evaluations; and (3) eliminating unnecessary burden. Any regulatory changes that we determine to be necessary to improve the regulations' effectiveness will be made in a rulemaking after completion of this review.

With our initiation of this comprehensive review of the regulations, we seek to determine whether, and if so, how, the regulations should be amended to better evaluate financial institutions' performance under the CRA, consistent with the authority, mandate, and intent of the statute. We encourage comments from the industry and the public on all aspects of this ANPR, as well as other concerns regarding the regulations that may not be represented, in order to ensure a full discussion of the issues.

In 1977, Congress enacted the CRA to encourage federally insured banks and thrifts to help meet the credit needs of their entire communities, including low-and moderate-income neighborhoods, consistent with safe and sound banking practices. 12 U.S.C. 2901 et seq. In the CRA, Congress determined that:

(1) Regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;

(2) The convenience and needs of communities include the need for credit services as well as deposit services; and

(3) Regulated financial institutions have continuing and affirmative obligation[s] to help meet the credit needs of the local communities in which they are chartered. (12 U.S.C. 2901(a).) Further, Congress directed the agencies to assess an institution's record of meeting the credit needs of its entire community, and to consider that record when acting on an application for a deposit facility.

In 1993, we initiated a reform of our CRA regulations. The goal of the reform was to develop revised rules that would clarify how we would evaluate the performance of the institutions we supervise. It also was our goal to develop a new system of evaluating financial institutions' records with respect to CRA that would focus primarily on objective, performance-based assessment standards that minimize compliance burden while stimulating improved performance.

After holding seven public hearings and publishing two proposed rules, we jointly issued final rules (the “regulations”) on May 4, 1995 (60 FR 22156). See 12 CFR 25, 228, 345, and 563e, implementing 12 U.S.C. 2901 et seq. We published related clarifying documents on December 20, 1995 (60 FR 66048) and May 10, 1996 (61 FR 21362). To assist financial institutions and the public, we have also provided interpretive guidance about the regulations in the form of questions and answers published in the Federal Register . See 65 FR 25088 (April 28, 2000).

Under the regulations, the agencies evaluate a financial institution through a performance-based examination, the scope of which is determined by the institution's size and business strategy. Large, retail-oriented institutions are examined using the lending, investment, and service tests. Small institutions are examined using a streamlined small institution test. Wholesale and limited purpose institutions are examined under a community development test. And, finally, all institutions have the option of being evaluated under a strategic plan. No matter which evaluation method is used, each institution's performance is evaluated in a “performance context” that examiners factor into their CRA evaluations. The performance context includes consideration of factors such as each institution's business strategy and constraints, as well as the needs of, and opportunities afforded by, the communities served.

As stated, our goal was to make CRA examinations more objective and performance-based. To this end, the regulations require large institutions to collect, report, and disclose data on small business, small farm and community development loans, as well as limited data about home mortgage lending outside metropolitan statistical areas (MSAs), if the institution is subject to the Home Mortgage Disclosure Act (HMDA).

A fundamental issue for consideration is whether any change to the regulations would be beneficial or is warranted. Industry representatives, community and consumer organization representatives, members of Congress, and the public have discussed the regulations with the agencies over the years, e.g., during examinations, in the application process, at conferences, and at other meetings. Some suggest that the regulations work reasonably well and that little or no change is necessary. Others suggest that more extensive changes may be needed to reflect the significant changes in the delivery of services and expansion of products offered by financial institutions as a result of new technologies and financial modernization legislation. Still others advise that regulatory changes are inherently burdensome, so the benefit of any change should be weighed against the cost of effecting the change.

The following discussion identifies some of the issues that may warrant our review. The discussion is by no means exhaustive of all the issues that could be raised or the viewpoints that could be expressed. Commenters are invited to respond to the questions presented and to offer comments or suggestions on any other issues related to the CRA regulations, including developments in the industry that may impact how we evaluate CRA performance in the future. The agencies also welcome suggestions on what, if any, other steps we might undertake instead of, or in addition to, revising the regulations.

Large retail institutions are subject to the lending, investment, and service tests. These tests primarily consider such things as the number and dollar amount of loans, qualified investments, and services, and the location and recipients of these activities. The tests also call for qualitative consideration of an institution's activities, including whether, and to what extent, loans, investments, and services are responsive to community credit needs; whether and to what extent they are innovative, flexible, or complex activities; and, in the case of investments, the degree to which the investments are not routinely provided by private investors. Thus, the regulations attempt to temper their reliance on quantitative factors by requiring examiners to evaluate qualitative factors, because not all activities of the same numerical magnitude have equal impact or entail the same relative importance when undertaken by different institutions in different communities.

Nonetheless, because the tests first consider the number and dollar amount of loans, investments, or services, some are of the opinion that CRA evaluations have become simply a “numbers game.” They question whether the regulations strike the right balance between evaluation of the quantity and quality of CRA activities. They suggest, for example, that the regulations provide too little consideration for an institution's focus on smaller projects “ whether or not “innovative” “ that are particularly difficult to carry out, but are especially meaningful and responsive to the institution's community.

Institutions' CRA ratings reflect the principle that lending is the primary vehicle for meeting a community's credit needs. In the 1995 preamble to the regulations, the agencies published a ratings matrix for examiners to use when evaluating large retail institutions under the lending, investment, and service tests. Under this matrix, it is impossible for an institution to achieve a “satisfactory” rating overall unless it receives at least a “low satisfactory” rating on the lending test. The agencies continue to use this ratings matrix.

With respect to the emphasis placed on each category of an institution's activities, some question whether lending should be emphasized more than investments and services. They assert that a CRA evaluation should allow for adjustment of this emphasis in a manner that more nearly corresponds with the activities of the institution and the particular needs of its community. For example, they assert, if an institution does not significantly engage in retail lending and, therefore, makes few loans, the lending test should not receive more emphasis than the investment and service tests for that institution's CRA evaluation.

Others contend, however, that lending should always be stressed, because they believe that deposits derived from communities should be reinvested in those communities through loans. Still others assert that lending should be the only basis upon which institutions are evaluated.

Finally, with respect to the three tests, some have argued that an institution's record of providing services should be given more emphasis than it currently is given. Others assert that providing services is not relevant to assessing whether an institution is meeting the credit needs of its community.

• Do the regulations strike the appropriate balance between quantitative and qualitative measures, and among lending, investments, and services? If so, why? If not, how should the regulations be revised?

A. Lending test. The agencies evaluate an institution's lending performance by considering the number and amount of loans originated or purchased by the institution in its assessment area; the geographic distribution of its lending; characteristics, such as income level, of its borrowers; its community development lending; and its use of innovative or flexible lending practices to address the credit needs of low- or moderate-income individuals or geographies in a safe and sound manner.

One aspect of the lending test that some have raised with the agencies is that the regulations allow equal consideration for loan originations and purchases. Some assert that only loan originations should be considered in an institution's evaluation. Supporters of this position maintain that consideration of loan purchases does not encourage institutions to increase capital in their communities. Rather, they believe equal consideration may prompt institutions to buy and sell the same loans repeatedly to influence their CRA ratings. On the other hand, some contend that loan purchases free up capital to the selling institution, thus enabling it to make additional loans. Still others argue that both purchases and originations should be considered, but originations should be weighted more heavily because they require more involvement by the institution with the borrower.

A related issue focuses on how the agencies should treat secondary market activity. The regulations currently capture purchased loans under the lending test and purchased asset-backed securities under the investment test. Some find this distinction to be artificial, and propose that purchased loans and purchased asset-backed securities should be captured under the same test, although they differ on which test should be used.

In addition, some are concerned that the regulations generally seem to provide consideration of loans without regard to whether the lending activities are appropriate. They recommend that a CRA examination also should include consideration of whether certain loans contain harmful or abusive terms and, therefore, do not help to meet community credit needs.

• Does the lending test effectively assess an institution's record of helping to meet the credit needs of its entire community? If so, why? If not, how should the regulations be revised?

B. Investment test. The agencies evaluate large retail institutions' performance under the investment test based on the dollar amount of qualified investments, their innovativeness or complexity, their responsiveness to credit and community development needs, and the degree to which they are not routinely provided by private investors. The agencies included the investment test in CRA evaluations in recognition that investments, as well as loans, can help meet credit needs.

With respect to whether it is appropriate to evaluate institutions' investment activities, some suggest that investments by financial institutions are invaluable in helping to meet the credit needs of the institutions' communities, particularly in low- and moderate-income areas. Still others assert that the agencies should only consider investment activities to augment institutions' CRA ratings. In their view, although investments may help an institution to meet the credit needs of its community, particularly in low- and moderate-income areas, CRA ratings should be based primarily on lending activity. Others state, however, that it is inappropriate for the agencies to evaluate investments under the CRA as a means of meeting credit needs.

The availability of qualified investments has also been an issue of concern to some. Although some have observed that since the regulations went into effect, the market of available CRA-related investments has grown and continues to grow, others assert that appropriate investment opportunities may not be available in their communities. Further, some of the retail institutions subject to the investment test have indicated that, in some cases, it has been difficult to compete for investment opportunities, particularly against much larger institutions.

In addition, some have raised concerns that the innovative and complex elements of the investment test lead to a constant demand to change programs, even where existing programs are successful, just to maximize CRA consideration. Others have asked the agencies to reduce the uncertainty of how investments will be evaluated in an examination.

• Does the investment test effectively assess an institution's record of helping to meet the credit needs of its entire community? If so, why? If not, how should the regulations be revised?

C. Service test. Under the service test, the agencies consider an institution's branch distribution among geographies of different income levels, its record of opening and closing branches, particularly in low- and moderate-income geographies, the availability and effectiveness of alternative systems for delivering retail banking services in low- and moderate-income geographies and to low- and moderate-income individuals, and the range of services provided in geographies of all income levels, as well as the extent to which those services are tailored to meet the needs of those geographies. The agencies also consider the extent to which the institution provides community development services and the innovativeness and responsiveness of those community development services.

The criteria for evaluating retail services have led to discussion on the test's effectiveness. Some argue that the service test depends too heavily on the provision of brick and mortar banking services, particularly when one considers that many services are now provided by telephone, mail or electronically. Others assert that brick and mortar banking facilities should be weighted heavily because they are necessary, especially in low- and moderate-income neighborhoods where consumers may not have access to electronic banking services. These issues have led some to propose that the evaluation should consider not only the delivery method and type of service, but also the effectiveness of the delivery method, i.e., the extent to which low- and moderate-income persons actually use the services offered. In addition, some have suggested that the test should provide more consideration for flexible and innovative deposit accounts.

As for community development services, such as providing technical assistance on financial matters to nonprofit organizations serving low- and moderate-income housing needs, some suggest that these services are not given adequate consideration. In particular, they state that community development services are often a critical component of delivering or supporting activities considered under the lending test. Some also argue, however, that there is no incentive for an institution to engage in what might be labor intensive endeavors because community development services are only a small component of its overall evaluation. Others suggest that community development services should be evaluated within the context of other community development activities, such as lending and investments, because evaluating them separately could result in artificial designations and may not give adequate consideration to the integral relationship among the activities. Still others suggest that the community development and retail services components should be combined. See related discussion in 1.D.

• Does the service test effectively assess an institution's record of helping to meet the credit needs of its entire community? If so, why? If not, how should the regulations be revised?

D. Community development activities of large retail institutions. Under the regulations, “community development” means affordable housing (including multifamily rental housing) for low- or moderate-income individuals; community services targeted to low- or moderate-income individuals; activities that promote economic development by financing small businesses and farms; and activities that revitalize or stabilize low- or moderate-income geographies.

The definition of “community development” has spurred discussion since the regulations were published. Some assert that the definition of “community development” is not broad enough to cover the full range of activities that should receive favorable consideration. For example, some indicate that many projects intended to revitalize or stabilize rural communities do not qualify under the current regulatory definition of community development because they are not located in low- or moderate-income geographies, as defined in the regulations. Others assert that the definition does not adequately value activities benefiting communities or projects involving persons with a mix of incomes.

Issues also have arisen with respect to the geographic location of an institution's community development activities. For large retail institutions, the agencies consider community development activities in their assessment areas or a broader statewide or regional area that includes their assessment areas. Some suggest that large retail institutions should receive full consideration for community development activities anywhere they are conducted, as long as the institutions have adequately addressed the needs of their assessment areas. They contend that such consideration should be similar to the consideration of community development activities given wholesale and limited purpose institutions that are evaluated under the community development test. Others express concern, however, that if retail institutions are given the opportunity to receive consideration for community development activities outside their assessment areas and the broader statewide or regional areas that include their assessment areas, such an opportunity may be interpreted as a requirement to serve these areas. Still others argue that allowing activities further afield to receive consideration would diminish institutions' incentives to serve their own communities.

As discussed above, the community development loans, qualified investments, and community development services of large retail institutions are considered separately under the lending, investment, and service tests, respectively. Some suggest this evaluation method leads institutions to be overly concerned with whether they have “enough” of each activity. They argue that all community development activities, whether loans, investments or services, should be evaluated in one separate test, rather than in the existing three tests. Under such a test, an institution would receive consideration for community development loans, investments, and services needed in its community, based on the opportunities that exist and the ability of the institution to respond.

• Are the definitions of “community development” and related terms appropriate? If so, why? If not, how should the regulations be changed?

• Are the provisions relating to community development activities by institutions that are subject to the lending, investment, and service tests effective in assessing those institutions' performance in helping to meet the credit needs of their entire communities? If so, why? If not, how should the regulations be revised?

A “small institution” is defined as an institution with total assets of less than $250 million that is independent or is affiliated with a holding company with total bank and thrift assets of less than $1 billion as of the two preceding year ends. Some suggest that the asset thresholds for being considered a small institution are too low. Others assert that holding company assets are irrelevant—if a bank has less than $250 million in assets, it should be considered small even if it is affiliated with a large holding company. Still others suggest that holding company assets are relevant only if the holding company provides support for CRA activities or otherwise directs the CRA activities of an institution.

Small institutions are evaluated under a streamlined test that focuses primarily on lending. When evaluating a small institution, an agency considers its loan-to-deposit ratio; the percentage of loans in its assessment areas; its record of lending to borrowers of different income levels and businesses and farms of different sizes; the geographic distribution of its loans; and its record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s).

The small institution performance standards generally have been favorably received. Some, however, express concerns that the small institution assessment method does not provide for adequate consideration of non-lending-related investments, retail-related services, or community development services. Others assert that the small institution performance standards do not adequately consider the activities small institutions are performing in their communities, particularly in highly competitive markets. Others say that the standards do not create a sufficient incentive for small institutions to seek out and make investments, provide new services, or strive for higher ratings. Some also argue that institutions evaluated under the streamlined method should not be eligible for an “outstanding” rating based on their lending activities alone—that a small institution should be engaged in making investments and providing services in order to receive a rating higher than satisfactory.

• Do the provisions relating to asset size and holding company affiliation provide a reasonable and sufficient standard for defining “small institutions” that are eligible for the streamlined small institution evaluation test? If so, why? If not, how should the regulations be revised?

• Are the small institution performance standards effective in evaluating such institutions' CRA performance? If so, why? If not, how should the regulations be revised?

The community development test is the evaluation method used for limited purpose and wholesale institutions. A limited purpose institution offers only a narrow product line (such as credit card or motor vehicle loans) to a regional or broader market and must request and receive designation as a limited purpose institution from its regulatory agency. A wholesale institution is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers, and similarly must obtain a designation as a wholesale institution.

Some question whether the definitions of limited purpose and wholesale institutions are appropriate. For example, they ask whether the definition of limited purpose should be expanded to a limited extent to capture retail institutions that offer more than a narrow product line on a regional or national basis.

Under the community development test, the agencies consider the number and amount of community development loans, qualified investments, or community development services; the use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and the institution's responsiveness to credit and community development needs. Wholesale and limited purpose institutions may receive consideration for community development activities outside of their assessment areas (or a broader statewide or regional area that includes their assessment areas) as long as they have adequately addressed the needs of their assessment areas.

Some question whether the community development test for wholesale and limited purpose institutions is as rigorous as the lending, investment, and service tests are for large retail institutions. Others suggest that the community development test may be an appropriate test not only for limited purpose and wholesale institutions, but also for other types of institutions, such as branchless institutions that provide a broad range of retail services nationwide by telephone, mail, or electronically. Still others assert that the community development test may be an appropriate test for any retail institution.

• Are the definitions of “wholesale institutions” and “limited purpose institution” appropriate? If so, why? If not, how should the regulations be revised?

• Does the community development test provide a reasonable and sufficient standard for assessing wholesale and limited purpose institutions? If so, why? If not, how should the regulations be revised?

• Would the community development test provide a reasonable and sufficient standard for assessing the CRA record of other insured depository institutions, including retail institutions? If so, why and which ones, and how should the regulations be revised? If not, why not?

The agencies developed the strategic plan option to provide institutions with more flexibility and certainty regarding what aspects of their performance will be evaluated and what quantitative and qualitative measures will be applied. To exercise this option, an institution must informally seek suggestions from the public while developing its plan, solicit formal public comment on its plan, and submit the plan to its regulatory agency (along with any written comments received from the public and an explanation of any changes made to the plan in response to those public comments).

To be approved by an agency, a CRA strategic plan must have measurable goals and address how the institution plans to meet the credit needs of its assessment area, in particular, low- and moderate-income geographies and individuals, through lending, investments, and services, as appropriate. Although strategic plans should generally emphasize lending goals, the rule allows institutions the flexibility to choose a different emphasis, as necessary, given their business strategy and the needs of their community.

Strategic plans must contain goals that, if met, would constitute “satisfactory” performance. An institution may also include goals that would constitute “outstanding” performance. Upon examination, an institution that substantially achieves its goals under its approved plan will receive the rating attributed to those goals in its plan.

Only a few institutions have used the strategic plan option. These institutions indicate that they prefer the certainty provided by having a strategic plan. On the other hand, others have said that they have chosen not to pursue this option because of concern about the public nature of the process and the plan itself, including concern that their competitors might obtain information about their business strategy. Some indicate that they have found it difficult to develop a strategic plan with measurable goals. These concerns have led some to suggest that the strategic plan option should be reformed, while others suggest that it should be eliminated.

Some suggest that a strategic plan allows non-traditional institutions, such as institutions that provide a wide range of products nationwide via the Internet or through other non-branch-based delivery systems, to set performance goals that better reflect the markets they serve. Some suggest that a strategic plan should be mandatory for certain non-traditional institutions, particularly an institution for which the vast majority of retail lending activity occurs outside of its assessment area as defined by the regulation. Others suggest that the strategic plan option could be used to blend existing assessment methods for different business lines within one institution, for example, in the context of a bank with a retail branch network in one part of the country and wholesale operations in another, or an Internet presence nationally.

• Does the strategic plan option provide an effective alternative method of evaluation for financial institutions? If so, why? If not, how should the regulations be revised?

The regulations provide that an institution's performance under the tests and standards is evaluated in the context of information about the institution, its community, its competitors, and its peers. Such information may include, among other things, demographic data about the institution's assessment areas; the institution's product offerings and business strategy; lending, investment, and service opportunities in its assessment areas; any institutional capacity and constraints; and information about the institution's past performance and the performance of similarly situated lenders.

Some assert that performance context provides a means to evaluate the qualitative impact of an institution's activities in a community, striking the right balance between the quantity and quality of an institution's activity. The appropriate information helps to assess the responsiveness of an institution's activities to community credit needs. Performance context may also provide insight into whether an activity involving a lower dollar amount could meet community needs to a greater extent than an activity with a higher dollar amount, but with less innovation, complexity, or impact on the community.

Others assert that consideration of a performance context may create uncertainty about what activities will be considered and how they will be weighted during a CRA examination. They contend that more specific and quantifiable measures are needed to understand CRA evaluations more fully, despite the quantitative and qualitative factors outlined in the regulations and interagency guidance.

On the other hand, others have raised concerns that prescribing performance ratios for institutions would result in rigid performance requirements, and thereby eliminate the advantages of a performance context analysis. They maintain that the performance context provides examiners with the latitude needed to conduct a meaningful evaluation. They contend this latitude is important given the different types of institutions and communities, and the wide variety of business, market, economic, and other factors that can affect an institution's ability to respond to community credit needs.

• Are the provisions on performance context effective in appropriately shaping the quantitative and qualitative evaluation of an institution's record of helping to meet the credit needs of its entire community? If so, why? If not, how should the regulations be revised?

The regulations contain guidelines for institutions to use in defining their assessment areas. The assessment area is the geographic area in which the agencies will evaluate an institution's record of meeting the credit needs of its community. The regulations provide that an institution's assessment area should consist generally of one or more metropolitan statistical areas or one or more contiguous political subdivisions, and include geographies where the institution has its main office, branches, and deposit-taking ATMs, as well as surrounding geographies where the institution has originated or purchased a substantial portion of its loans. An institution may adjust the boundaries of its assessment area to include only the portion of a political subdivision that it can reasonably expect to serve. However, an institution's assessment area may not reflect illegal discrimination and may not arbitrarily exclude low- or moderate-income geographies, taking into account the institution's size and financial condition.

Some indicate that the assessment area delineation in the regulations has proven appropriate for most institutions. They assert that assessment areas are appropriately limited to the geographic areas around an institution's main office, branches, and deposit-taking ATMs. They contend that this is an appropriate and practical way to give focus to an institution's responsibility to help meet the credit needs of its community. Further, they contend that an institution is most familiar with the areas in which it is physically located and is in the best position to help meet credit needs in those areas. Still others are concerned about setting expectations on where institutions should be conducting their business if assessment areas were to include areas in which the institutions are not physically located.

On the other hand, some assert that the regulations' designation of assessment areas “ based upon the location of the main office, branches, and deposit-taking ATMs of an institution—ignores a variety of deposit acquisition and credit distribution channels used by an increasing number of institutions to serve the retail public, often reaching widely dispersed markets. They argue that these channels should be considered part of an institution's “community.” Others suggest that the regulations' approach to assessment area may create a disincentive for institutions to engage in community development activities in low- and moderate-income communities and rural areas where they have no physical presence and which are not part of their assessment areas.

To address these and other concerns, some recommend that institutions be required to delineate geographically defined assessment areas wherever they deliver retail banking services, whether or not they have physical deposit-gathering branches or ATMs in each locale. Others suggest that the assessment area should not be limited to metropolitan statistical areas (MSAs), but that the regulations should allow statewide and even national assessment areas. Some others suggest that assessment areas without a geographical delimitation should be allowed, such as one based on a type of customer—similar to the way an institution that predominantly serves military personnel is permitted by the statute to delineate its entire deposit customer base as its assessment area. Finally, some propose that the agencies should create a distinct evaluation method with respect to the assessment area for institutions that gather deposits and deliver products and services without using deposit-taking branches or ATMs, for example, those institutions that use the Internet almost exclusively to gather deposits and deliver products.

• Do the provisions on assessment areas, which are tied to geographies surrounding physical deposit-gathering facilities, provide a reasonable and sufficient standard for designating the communities within which the institution's activities will be evaluated during an examination? If so, why? If not, how should the regulations be revised?

Under the lending, investment, and service tests and the community development test, an institution may elect to have activities of its affiliates considered as part of its own record of performance. An “affiliate” is defined as any company that controls, is controlled by, or is under common control with another company. Subsidiaries of financial institutions are considered affiliates under this definition.

Some assert that activities of affiliates, and in particular, subsidiaries of a financial institution, should always be considered in an institution's CRA evaluation. They contend that, because the regulations provide for consideration of affiliates' activities only at an institution's option, some institutions may book loans, make investments, and provide services for low- and moderate-income persons primarily in the institution, while offering other products and services more predominantly targeted to middle- and upper-income persons in their affiliates or by lending through consortia. Thus, they argue, institutions may be using their affiliates' activities to manipulate their CRA ratings. Others contend that if institutions can opt for consideration of affiliates' activities to enhance their CRA performance, their CRA performance should also be affected if their affiliates engage in abusive lending activities.

Others suggest that affiliate activities should be required to have a direct impact on an institution's assessment area. Still others assert that only the activities of an insured depository institution should be considered in its CRA evaluation. Affiliate activities should be irrelevant, they argue, when rating an institution's CRA performance and should not be considered, even at the option of the institution. On the other hand, others have indicated that the current treatment of affiliate activities is appropriate because the CRA applies only to insured depository institutions.

• Are the provisions on affiliate activities, which permit consideration of an institution's affiliates' activities at the option of the institution, effective in evaluating the performance of the institution in helping to meet the credit needs of its entire community, and consistent with the CRA statute? If so, why? If not, how should the regulations be revised?

The regulations require large institutions to collect and report data on small business, small farm and community development lending, as well as limited data about home mortgage lending outside MSAs, if the institutions are subject to HMDA. The data requirements were designed to avoid undue data collection, reporting, and disclosure burden by: (1) Conforming data requirements to the extent possible with data already collected under HMDA, call reports, and thrift financial reports; (2) limiting data reporting to large institutions; and (3) making reporting of certain types of data optional.

Some question the agencies' authority to require collection and reporting of data under the CRA regulations. Others express concerns about the limitations of the data collected and reported. For example, small business and small farm data are aggregated at the census tract level, while community development loans are aggregated at the institution level. Still others question whether the collected and reported data are sufficiently detailed to be of use. Some also suggest that investment data, as well as data on lending, are necessary to properly evaluate institutions' performance under CRA.

Some indicate that collection of the required data and maintenance of a public file is burdensome and that very few interested parties ask to see the public files. However, others assert that institutions' public files provide valuable information for the public to use to monitor the extent to which they serve their communities.

• Are the data collection and reporting and public file requirements effective and efficient approaches for assessing an institution's CRA performance while minimizing burden? If so, why? If not, how should the regulations be revised?

With this ANPR, we seek input to assist us in determining whether and, if so, how the CRA regulations should be revised. We welcome comments on all aspects of the CRA regulations and encourage all interested parties to provide their views. Hearing from parties with diverse viewpoints will help us to determine the most appropriate way to approach the review of the regulations.

OCC and OTS: The agencies do not know now whether they will propose changes to the CRA rules and, if so, whether these changes will constitute a significant regulatory action under the Executive Order. This ANPR neither establishes nor proposes any regulatory requirements. OCC and OTS have submitted a notice of planned regulatory action to OMB for review. Because this ANPR does not contain a specific proposal, information is not available with which to prepare an economic analysis. OCC and OTS will prepare a preliminary analysis if they proceed with a proposed rule that constitutes a significant regulatory action.

Accordingly, we solicit comment, information, and data on the potential effects on the economy of any changes to the CRA rule that the commenter may recommend. We will carefully consider the costs and benefits associated with this rulemaking.

Under the Federal Alcohol Administration Act (27 U.S.C. § 201 et seq. ) (FAA Act), wine labels must provide “the consumer with adequate information as to the identity and quality” of the product. The FAA Act also requires that the information appearing on wine labels not mislead the consumer.

To help carry out these statutory requirements, ATF has issued regulations, including those that designate grape varieties. Under 27 CFR § 4.23(b) and (c), a wine bottler may use a grape variety name as the designation of a wine if not less than 75 percent of the wine (51 percent in the case of wine made from Vitis labrusca grapes) is derived from that grape variety. Under § 4.23(d), a bottler may use two or more grape variety names as the designation of a wine if all of the grapes used to make the wine are of the labeled varieties, and if the percentage of the wine derived from each grape variety is shown on the label.

Treasury Decision ATF-370 (61 FR 522), January 8, 1996, adopted a list of grape variety names that ATF has determined to be appropriate for use in designating American wines. The list of prime grape names and their synonyms appears at § 4.91, while additional alternative grape names temporarily authorized for use are listed at § 4.92. ATF believes the listing of approved grape variety names for American wines will help standardize wine label terminology, provide important information about the wine, and prevent consumer confusion.

ATF has received petitions proposing that new grape variety names be listed in § 4.91. Under § 4.93 any interested person may petition ATF to include additional grape varieties in the list of prime grape names. Information with a petition should provide evidence of the following:

• Acceptance of the new grape variety;

• The validity of the name for identifying the grape variety;

• That the variety is used or will be used in winemaking; and

• That the variety is grown and used in the United States.

For the approval of names of new grape varieties, the petition may include:

• A reference to the publication of the name of the variety in a scientific or professional journal of horticulture or a published report by a professional, scientific or winegrowers' organization;

• A reference to a plant patent, if patented; and

• Information about the commercial potential of the variety, such as the acreage planted and its location or market studies.

Section 4.93 also places certain eligibility restrictions on the approval of grape variety names. A name will not be approved:

• If it has previously been used for a different grape variety;

• If it contains a term or name found to be misleading under § 4.39; or

• If a name of a new grape variety contains the term “Riesling.”

The Director reserves the authority to disapprove the name of a new grape variety developed in the United States if the name contains words of geographical significance, place names, or foreign words which are misleading under § 4.39.

Havens Wine Cellars in Napa, California, has petitioned ATF proposing the addition of the name “Albarin o” to the list of prime grape names approved for the designation of American wines. Albarin o, a white Vitis vinifera grape, has been grown for centuries in Spain and Portugal, but is relatively new to the United States. In Portugal, the grape is known by the name “Alvarinho.”

The petitioners state that Albarin o has long been recognized in Europe and in academic communities. As evidence of this, the petitioners submitted the following supporting documents provided by Professor Carole Meredith of the Viticulture and Enology Department at the University of California at Davis (UC Davis):

• European Union Regulation 3201/90: This regulation permits the use of the name “Albarin o” on labels of Spanish wines, and the name “Alvarinho” on labels of Portuguese wines.

• Two scientific papers from the American Journal of Enology and Viticulture: “Effects of Grapevine Leafroll-Associated Virus 3 on the Physiology and Must of Vitis vinifera L. cv. Albarin o Following Contamination in the Field,” published in Volume 50, 1999, discusses a study conducted on Albarin o grape vines, and “Contribution of Saccharomyces and Non-Saccharomyces Populations to the Production of Some Components of Albarin o Wine Aroma,” published in Volume 47, 1996, describes a study conducted on Albarin o musts.

• “The Genetic Resources of Vitis”: This listing of international grape variety names and synonyms, published in 1988 by the German Federal Grape Breeding Institute, lists Alvarinho as the prime name for the grape varietal with Albarin o as a synonym.

• An abstract for an article from the Journal of the American Society for Horticultural Science: “Molecular marker analysis of Vitis vinifera 'Albarin o' and some similar grapevine cultivars,” published September 1998, describes a DNA analysis conducted on Albarin o grapevines.

The petitioner also submitted several wine literature articles, from sources such as Wine Spectator and Wine Today, which mention Albarin o/Alvarinho wine.

ATF contacted Professor Meredith and asked her if the name “Alvarinho” should be added to the list as a synonym of Albarin o. She replied that both names are well established in Europe and are equally valid names for the grape. She stated that because the grape is relatively new to the U.S., she didn't know which name is most commonly used by U.S. winemakers. She noted that UC Davis has an example of the grapevine in its collection and uses the name “Alvarinho”, most likely because the plant originally came from Portugal.

Havens Wine Cellar reports that it has 2 1/2 acres of Albarin o in production, with the first crop picked in 1999. They also presented evidence that at least two other California wineries are also growing Albarin o. ATF knows of a Virginia winery that is also growing the grape. The petitioner comments that American consumers are looking for new and exciting varietals and Albarin o fills this niche.

Based on the evidence presented by the petitioner, ATF proposes the addition of this grape to the list of American grape variety names. Since the evidence indicates that both names are equally valid, ATF proposes to add the names “Albarin o” and “Alvarinho” to § 4.91 as prime names and as synonyms.

Hallcrest Vineyards in Felton, California, has petitioned ATF to include the grape variety Black Corinth on the list of prime grape names approved for the designation of American wines. Black Corinth grapes are widely grown in California, where the vast majority of them are dried into raisins and marketed under the name “Zante Currant.”

As evidence of the grape's acceptance and use in California, Hallcrest Vineyards submitted the following statistical reports issued by the State of California:

• Final Grape Crush Report for the 1999 crop, issued by the California Department of Food and Agriculture.

• California Grape Acreage report for 1999, issued by the California Agricultural Statistics Service, in cooperation with the U.S. Department of Agriculture.

Both reports include statistical tables with the data broken down by grape varietal, including Black Corinth. According to Table 2 of the Grape Acreage report, there were 2,384 standing acres of Black Corinth planted in California in 1999. The petitioner states these tables are clear evidence that the grape is grown in California and is recognized by the California Department of Food and Agriculture.

Other documentation of the grape includes The Oxford Companion to Wine (Jancis Robinson, Oxford University Press, 1999), which states that Black Corinth is one of the most commonly used grape varieties in the world raisin industry, and has on occasion been used in winemaking. The Office International de la Vigne et du Vin, an international association for wine, officially recognizes the names “Black Corinth” and “Zante Currant” for the grape.

Hallcrest Vineyards states it has made a fruity, blush dessert wine from the Black Corinth grape. ATF is aware of at least one other winery using the grape to produce a table wine. Because the evidence satisfies the requirements of § 4.93, ATF proposes to add Black Corinth to the list of prime grape names in § 4.91. Because ATF feels that the name “Zante Currant” may mislead the consumer into thinking the wine is made from currants and not grapes, it is not proposing the name as a synonym. ATF, however, welcomes comments on this issue.

United Distillers and Vintners North America, Inc. (UDV) has petitioned ATF for the addition of the name “Fiano” to the list of prime grape names approved for the designation of American wines. UDV owns three wineries in California—Beaulieu Vineyards, Glenn Ellen Carneros Winery, and Blossom Hill.

Fiano is a white varietal, long grown in the Campania region of Italy where it is used to produce the Denominazione di Origine Controllata wine Fiano di Avellino. According to information submitted by the petitioner, Fiano is an old grape with a history that can be traced back to the ancient Romans. An order for Fiano wine was placed in the register of the Holy Roman Emperor Frederick II (1215-1250), and Charles d'Anjou (1227-1285) was known to have planted 16,000 Fiano vines. Reference sources referring to the Fiano grape include The New Sotheby's Wine Encyclopedia (Tom Stevenson, DK Publishing, Inc., 1997) and The Oxford Companion to Wine (Jancis Robinson, Oxford University Press, 1999).

As evidence of the grape's use in the U.S., UDV has submitted a price list from Herrick Grapevines in St. Helena, California, listing Fiano in the grapevine inventory. According to this inventory, the Fiano was planted in 1997 and was obtained from Duarte Nursery in Modesto, California. UDV further states that Beaulieu Vineyard has produced two vintages of Fiano wine, and it has submitted evidence that at least three other California vineyards and one New York vineyard are also growing Fiano. The petitioner submitted a letter from Monterey Pacific, one of the California growers, stating that they've had five years of experience with Fiano, and find it to be a grape with distinctive varietal character.

Based on the evidence presented in the petition, ATF is proposing the Fiano grape for inclusion in § 4.91.

ATF requests comments from all interested parties. We will carefully consider all comments we receive on or before the closing date. We will also carefully consider comments we receive after that date if it is practical to do so, but we cannot assure consideration for late comments. ATF specifically requests comments on the clarity of this proposed rule and how it may be made easier to understand.

Copies of the petitions and written comments in response to this notice of proposed rulemaking will be available for public inspection during normal business hours at: ATF Reference Library, Office of Liaison and Public Information, Room 6480, 650 Massachusetts Avenue, NW., Washington, DC 20226.

ATF cannot recognize any material in comments as confidential. All comments and materials may be disclosed to the public. If you consider your material to be confidential or inappropriate for disclosure to the public, you should not include it in the comments. We may also disclose the name of any person who submits a comment. A copy of this notice and all comments will be available for public inspection during normal business hours at: ATF Reference Library, Office of Liaison and Public Information, Room 6300, 650 Massachusetts Avenue, NW., Washington, DC 20226.

You may submit comments of not more than three pages by facsimile transmission to (202) 927-8525. Facsimile comments must:

• Be legible.

• Reference this notice number.

• Be 8 1/2 ″ × 11″ in size.

• Contain a legible written signature.

• Be not more than three pages.

We will not acknowledge receipt of facsimile transmissions. We will treat facsimile transmissions as originals.

You may submit comments by e-mail by sending the comments to nprm@atfhq.atf.treas.gov. You must follow these instructions. E-mail comments must:

• Contain your name, mailing address, and e-mail address.

• Reference this notice number.

• Be legible when printed on not more than three pages size.

We will not acknowledge receipt of e-mail. We will treat e-mail as originals.

You may also submit comments using the comment form provided with the online copy of the proposed rule on the ATF Internet web site at http://www.atf.treas.gov/alcohol/rules/index.htm.

The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this notice because no requirement to collect information is proposed.

It is hereby certified that this proposed regulation will not have a significant economic impact on a substantial number of small entities. This regulation will permit the use of new grape varietal names. No negative impact on small entities is expected. No new requirements are proposed. Accordingly, a regulatory flexibility analysis is not required.

This is not a significant regulatory action as defined by Executive Order 12866. Therefore, a regulatory assessment is not required.

The principal author of this document is Jennifer Berry, Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

Accordingly, 27 CFR part 4, Labeling and Advertising of Wine, is amended as follows:

We use standards, specifications, and recommended practices developed by standard-setting organizations and the oil and gas industry as a means of establishing requirements for activities on the OCS. This practice, known as incorporation by reference, allows us to incorporate the provisions of technical standards into the regulations. The legal effect of incorporation by reference is that the material is treated as if it were published in the Federal Register . This material, like any other properly issued regulation, then has the force and effect of law. We hold operators/lessees accountable for complying with the documents incorporated by reference in our regulations. We currently incorporate by reference 85 private sector consensus standards into the offshore operating regulations.

The regulations at 1 CFR part 51 govern how we and other Federal agencies incorporate various documents by reference. Agencies may only incorporate by reference through publication in the Federal Register . Agencies must also gain approval from the Director of the Federal Register for each publication incorporated by reference. Incorporation by reference of a document or publication is limited to the specific edition, supplement, or addendum cited in the regulations.

The primary reason MMS is proposing to incorporate by reference API Spec 2C into its regulations is to establish detailed requirements for the design and construction of pedestal-mounted cranes for new and existing OCS fixed platforms.

API Spec 2C will:

a. Provide a uniform method of establishing rated loads for cranes.

b. Require lessees to equip all new and existing cranes installed on OCS fixed platforms with anti-two block safety devices.

c. Ensure that OCS lessees use the best available and safest technologies for design and construction of cranes for installation in the OCS.

We believe API Spec 2C will be an excellent companion document to API Recommended Practice 2D, a document incorporated into MMS regulations, which deals with the operation and maintenance of offshore cranes. API Spec 2C includes minimum requirements for equipment, materials, manufacturing procedures, and testing (both design and operational) that are not covered in API RP 2D. Incorporating API Spec 2C into the regulations would address a safety gap in our regulations and improve crane safety on the OCS.

The anti-two block safety device is installed on a crane to protect hoist ropes, structural components, and machinery from damage, that might occur when two sheave groups (e.g., load block and boom head) come into contact as the hoist cable is drawn in. This situation is dangerous because: (1) The load block can detach from the load line, falling and causing serious injury or possible loss of life or considerable property damage, or (2) the load block can be pulled through the boom head, putting the crane operator at risk. There are several forms of anti-two block protection that are available to the oil and gas industry. One such form of protection is the control override device used to stall the hoist drums where damage or loss of control would be the result. Other forms of protection are audible or visual proximity warning devices. These anti-two block safety devices may be used in addition to the control override device, or used independently of the control override device.

In the past, MMS has encouraged industry to equip all cranes operating on OCS fixed platforms with an anti-two block safety device regardless of age or specific use of the crane. MMS now believes that anti-two block safety devices must be used on all cranes installed on OCS fixed platforms. We are convinced that retrofitting existing cranes with the anti-two block safety devices will benefit the industry by increasing safety and reducing or eliminating crane incidents on the OCS. Industry shares our concern as evidenced by a recent safety alert issued by the International Association of Drilling Contractors, stating that anti-two block safety devices should be installed on all cranes because “Having a safety device like this ensures that everything is in place to prevent a problem. The anti-two block safety devices for the crane boom is a protection device as is the crown protection device on the rig's drawworks. Both are very important to working safely.”

It should be noted that the proposed regulation requiring the retrofitting of existing cranes would provide a 1-year transition period. This would allow the industry adequate time to implement this change without causing undue hardships.

With the incorporation of API Spec 2C, we would include additional recordkeeping requirements in § 250.108, consistent with the specification. Current regulations require you to keep at the OCS facility for at least 2 years the inspection, testing, and maintenance records of cranes and other material-handling equipment. The proposed regulations expand this to include maintaining records on the design and construction of cranes, including installation records for any anti-two block safety devices. We are also requiring that all records on cranes be retained for the life of the crane at the fixed offshore platform, rather than a minimum of 2 years.

This proposed rule also updates § 250.108 to specifically include retaining training records on rigger personnel, as well as those for crane operators. This is consistent with the API Recommended Practice 2D, Fourth Edition, which is already incorporated by reference in our regulations under § 250.198.

We specifically solicit comments on the following questions:

(a) Will the addition of API Spec 2C to MMS's documents incorporated by reference increase safety and safe operations on the OCS?

(b) Are there other standards for offshore cranes that may be appropriate for MMS to incorporate as part of MMS's regulations?

(c) When should MMS require all cranes on OCS fixed platforms to be fully compliant with API Spec 2C?

(d) Is a 1-year transition period enough time for industry to comply with the change proposed in § 250.108(c)?

(e) Should MMS establish a requirement similar to the U.S. Coast Guard (USCG), which requires cranes to be installed according to an approved crane plan and inspected and load tested by an Agency-approved third party when the crane is installed?

(f) Should MMS require all new cranes for installation on OCS fixed platforms to have an API monogram on the nameplate of the crane as evidence of certification of the anti-two block safety device?

(g) Should a rental crane that is installed on OCS fixed platforms be considered a new crane and, therefore, be required to be fully compliant with API Spec 2C?

(h) Should MMS limit the type of anti-two block devices that are acceptable? What are the known failure rates of the different types?

(i) Should MMS consider an additional cost factor for retrofitting existing cranes with the anti-two block safety device (e.g., an associated cost for the amount of time a crane is expected to be out-of-service while it is being retrofitted)?

The specifications in the API Spec 2C document we propose to incorporate by reference are currently widely accepted industry standards. The USCG has already incorporated API Spec 2C into its regulations. All cranes manufactured after 1983 came equipped with the anti-two block safety devices, and most earlier model cranes have been retrofitted with the anti-two block safety devices. Therefore, this regulation's impact on the entire oil and gas offshore industry is minor.

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

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

(1) This rule will not have an annual economic effect of $100 million or adversely affect an economic sector, productivity, jobs, the environment, or other units of government. A cost-benefit and economic analysis is not required. The major purpose for this proposed rule is to establish a minimum design standard for new cranes installed on fixed platforms on the OCS, and to address an increase in accidents for those cranes that are not equipped with anti-two block safety devices. This rule also proposes to require lessees to equip all existing cranes installed on OCS fixed platforms with anti-two block safety devices. Since API Spec 2C has already been accepted as an industry standard in most of the offshore community, including the USCG, the impact of this regulation on the entire industry is minor. Therefore, the associated costs to equip the remaining cranes, not previously retrofitted, with anti-two block safety devices will be minor. Based on our experience and information in MMS's Technical Information Management System, we estimate that about 5 percent (or a total of not more than 200) of the 4,000 cranes located on the OCS will need to be retrofitted with the anti-two block safety device. We estimate that this will cost approximately $4,000 per retrofit, for a total cost of $800,000.

(2) This proposed rule will not create inconsistencies with other agencies' actions. This rule will not affect how lessees or operators interact with other agencies.

(3) This proposed rule will not affect entitlements, grants, user fees, loan programs, or their recipients. The rule only deals with the proposed action to incorporate by reference the API Spec 2C into our regulations.

(4) This proposed rule will not raise novel legal or policy issues. The proposed rule does involve a new policy issue, to require the lessees to equip all new and existing cranes installed on fixed platforms with anti-two block safety devices, but this new policy decision is not “novel.” The proposed rule simply addresses recognized gaps in our safety regulations. These minimum requirements are generally accepted practices that are included in API documents.

The Department certifies that this rule will not have a significant economic effect on a substantial number of small entities as defined under the RF Act (5 U.S.C. 601 et seq. ). An RF Analysis is not required. Accordingly, a Small Entity Compliance Guide is not required.

The provisions of this rule will not have a significant economic effect on lessees and operators, including those that are classified as small businesses. The Small Business Administration (SBA) defines a small business as having:

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

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

Offshore lessees/operators are classified under SBA's North American Industry Classification System (NAICS) code 211111 (Crude Petroleum and Natural Gas Extraction) and NAICS 213111 code (Drilling Oil and Gas Wells). We estimate approximately 130 companies will be affected by this rulemaking. According to SBA criteria, 39 companies are large firms, leaving up to 91 companies (70 percent) that may qualify as small firms with fewer than 500 employees.

We estimate that about 5 percent of the 4,000 cranes (200) located on the OCS need to be retrofitted with anti-two block safety devices. Retrofitting an existing crane with an anti-two block system would cost approximately $4,000. As 70 percent of the businesses operating on the OCS are small business firms, a corresponding 70 percent of the 200 cranes to be retrofitted would most likely impact small entities. The cost to small entities to retrofit these 140 cranes with anti-two block safety devices to comply with this standard is estimated to be $560,000 (140 x $4,000 = $560,000.) This does not constitute a significant impact upon a substantial number of small entities, and the safety benefits should far outweigh the cost of retrofitting. It should be noted that this would be a one-time cost during the initial period of implementation and will not be a recurring expense.

This proposed rule applies to all lessees and operating companies that operate cranes on OCS fixed platforms. Incorporation of this new document into MMS regulations will:

(1) Increase safety.

(2) Provide the oil and gas industry with uniform guidelines and detailed requirements for design and construction of pedestal-mounted cranes for OCS fixed platforms.

(3) Provide for consistency with other regulatory agencies such as the USCG.

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

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

(a) Does not have an annual effect on the economy of $100 million or more. The proposed rule will not cause any significant costs to lessees or operators. The only costs will be the purchase of the API Spec 2C document, minor revisions to company operating procedures, and the installation of an anti-two block device on cranes installed on OCS fixed platforms that do not already have this safety device. These costs should be approximately $800,000 for the entire industry.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

(c) Will not have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This rule applies to lessees and contractors operating cranes on OCS fixed platforms.

The proposed rule requires information collection, and an information collection request (form OMB 83-I) has been submitted to OMB for review and approval under section 3507(d) of the PRA.

The title of the collection of information for this proposed rule is “Proposed Rulemaking, 30 CFR 250, Subpart A—Crane Requirements.” Potential respondents are approximately 130 Federal OCS lessees and operators. Responses to this collection of information are mandatory. The frequency of response is on occasion. This collection does not include proprietary information or questions of a sensitive nature.

Current regulations at § 250.108 include recordkeeping requirements for the testing, inspection, and maintenance of cranes installed on fixed platforms on the OCS. They also include recordkeeping requirements to document training of crane operators. The proposed rule expands the current recordkeeping requirements to include records on crane design, construction, and retrofitting. Records on training of rigger personnel, as well as crane operators, will also be required. The type of recordkeeping addressed in the proposed rule is most likely a usual and customary business practice, and the burden to make the records available for MMS review would be minimal. We estimate an additional 2 hours per respondent each year for the expanded recordkeeping requirements, for a total of 260 annual burden hours. MMS uses the information to determine that crane operations are safe and that crane operators and rigger personnel meet the physical qualifications and have completed appropriate training.

As part of our continuing effort to reduce paperwork and respondent burdens, MMS invites the public and other Federal agencies to comment on any aspect of the reporting burden in the proposed rule. You may submit your comments directly to the Office of Information and Regulatory Affairs, OMB. Send a copy of your comments to MMS. Refer to the Addresses section for mailing instructions. MMS will summarize written comments and address them in the final rule preamble. The PRA provides that 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. OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 to 60 days after publication of this document in the Federal Register . Therefore, a comment to OMB is best assured of having its full effect if OMB receives it by August 20, 2001. This does not affect the deadline for the public to comment to MMS on the proposed regulations.

a. We specifically solicit comments on the following questions:

(1) Is the proposed collection of information necessary for MMS to properly perform its functions, and will it be useful?

(2) Are the estimates of the burden hours of the proposed collection reasonable?

(3) Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected?

(4) Is there a way to minimize the information collection burden on those who are to respond, including the use of appropriate automated electronic, mechanical, or other forms of information technology?

b. In addition, the PRA requires agencies to estimate the total annual reporting and recordkeeping non-hour cost burden resulting from the collection of information. We have not identified any and solicit your comments on this item. For reporting and recordkeeping only, your response should split the cost estimate into two components: (1) The total capital and startup cost component, and (2) annual operation, maintenance, and purchase of services component. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and startup costs include, among other items, computers and software you purchase to prepare for collecting information; well control simulators, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: before October 1, 1995; to comply with requirements not associated with the information collection; for reasons other than to provide information or keep records for the Government; or as part of customary and usual business or private practice.

According to Executive Order 13132, this rule does not have Federalism implications. This rule does not substantially and directly affect the relationship between the Federal and State governments because it concerns the manufacturing requirements for specific equipment used in offshore oil and gas activities. The rule only affects manufacturers and users of such equipment. This rule does not impose costs on State or localities, as it only affects manufacturers and users of specific equipment used in offshore oil and gas activities.

According to Executive Order 12630, this rule does not have significant Takings implications. A Takings Implication Assessment is not required.

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

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

This rule does not impose an unfunded mandate on State, local, and tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the UMRA (2 U.S.C. 1531 et seq. ) is not required.

According to the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951) and 512 DM 2, we have determined that there are no effects from this action on federally recognized Indian tribes.

For the reasons stated in the preamble, the Minerals Mangement Service proposes to amend 30 CFR Part 250 as follows:

We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking [CGD07-01-056], indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Bridge Branch, Seventh Coast Guard District, 909 SE 1st Ave, Room 406, Miami, FL 33131, explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

The Snake Creek bascule bridge is a two lane narrow undivided arterial roadway, which is the only roadway into and out of the Florida Keys and is already severely congested due to insufficient capacity. Existing operating schedule is on demand and can be found at 33 CFR 117.5. The proposed rule will allow the bridge owner to open the bridge on the hour and half hour during the heavy vehicle traffic period from 7 a.m. until 6 p.m.

The proposed rule allows the bridge to open on signal except that from 7 a.m. until 6 p.m. the bridge can open on the hour and half-hour. This should aid in the movement of traffic across the bridge, while not unreasonably interfering with the movement of vessel traffic through the draw.

This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, l979).

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

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

This proposed rule would affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit under the Snake Creek bridge during the hours of 7 a.m. to 6 p.m. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities because the number of openings that occur during the proposed period of additional regulations is less than twice per hour and the maximum waiting time will be 30 minutes.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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 proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. 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 the person listed under FOR FURTHER INFORMATION CONTACT.

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

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

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

This proposed rule would 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 proposed 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 proposed 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.

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

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.

We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:

A public water system (PWS), as defined in 40 CFR 141.2, provides water to the public for human consumption through pipes or other constructed conveyances, if such system has “at least fifteen service connections or regularly serves an average of at least twenty-five individuals daily at least 60 days out of the year.” A public water system is either a community water system (CWS) or a non-community water system (NCWS). A community water system, as defined in § 141.2, is “a public water system which serves at least fifteen service connections used by year-round residents or regularly serves at least twenty-five year-round residents.” The definition in § 141.2 for a non-transient non-community water system (NTNCWS) is “a public water system that is not a [CWS] and that regularly serves at least 25 of the same persons over 6 months per year.” EPA has an inventory totaling over 54,000 CWSs and approximately 20,000 NTNCWSs nationwide. Entities potentially regulated by this action are CWSs and NTNCWSs. The following table provides examples of the regulated entities under this rule.

The table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in this table could also be regulated. To determine whether your facility is regulated by this action, you should carefully examine the applicability criteria in §§ 141.11 and 141.62 as revised by the January 22, 2001 (66 FR 6976) arsenic rule.

No facsimiles (faxes), compressed or zipped files will be accepted, and comments must be submitted in writing. In providing comment on these issues, commenters should focus on the preamble, technical support documents, and record associated with the January 2001 arsenic in drinking water regulation (not the June 2000 proposal (65 FR 38888)). EPA addressed comments prepared for the June 2000 proposed rule in the response-to-comments document in the docket for W-99-16-III and summarized responses to the major comments in the preamble of the January 2001 regulation. Please submit an original and three copies of your comments and enclosures (including references) and identify your submission by the docket number W-99-16-VI. To ensure that EPA can read, understand, and therefore properly respond to comments, the Agency would prefer that comments cite, where possible, the question(s) or sections and page numbers in the document or supporting documents to which each comment refers. Commenters should use a separate paragraph for each issue discussed. Commenters who want EPA to acknowledge receipt of their comments should include a self-addressed, stamped envelope.

EPA uses WordPerfect as its standard software, so electronic submissions (including 3.5 inch floppy disks) must be submitted in WordPerfect 8 (or older version) or ASCII file format (unless four hard copies are also submitted). Comments submitted in other electronic formats ( e.g., Word, pdf, Excel, and compressed or zipped files) must also be submitted as hard copies. For purposes of dating dual hard copy/electronic copy submissions, the date of the electronic copy will be recorded as the date submitted. Please indicate that you are sending hard copies so the Docket can link your two submissions rather than log in two sets of your comments. Electronic comments on this document may be filed online at many Federal Depository Libraries.

The Agency's response-to-comments document for W-99-16-VI will address the comments received for this proposal, and this document will be made available in the docket. Since the comment period ends October 31, 2001, the response-to-comment document will not be completed until sometime later in the fall of 2001. To facilitate development of a response-to-comments document, EPA appreciates receiving an electronic version in addition to the original and three copies for large submissions ( e.g., over 10 pages). The Agency does not send out individual replies to respond to those who submit comments.

For an appointment to review the docket for this rulemaking, call (202) 260-3027 between 9 a.m. and 3:30 p.m. Eastern Time, Monday through Friday and refer to Docket W-99-16-VI. Every user is entitled to 100 free pages, and after that the Docket charges 15 cents a page. Users are invoiced after they copy $25, which is 267 photocopied pages. The Safe Drinking Water Hotline can provide some hard copies of some of the supporting documentation and some electronically, phone: (800) 426-4791 or (703) 285-1093, e-mail: hotline-sdwa@epa.gov. EPA's arsenic-in-drinking-water web page contains links to the arsenic Federal Register notices and other supporting material at www.epa.gov/safewater/arsenic.html.

In the Monday, January 22, 2001, Federal Register (EPA 2001a), EPA issued regulations revising the arsenic drinking water standard and clarifying compliance and new-source contaminants monitoring provisions (66 FR 6976). The Agency established a health-based, non-enforceable Maximum Contaminant Level Goal (MCLG) for arsenic of zero milligrams per liter (mg/L) in § 141.15(b) and an enforceable Maximum Contaminant Level (MCL) for arsenic of 0.01 mg/L ( i.e., 10 micrograms per liter (μg/L)) for both community water systems (CWSs) and non-transient non-community water systems (NTNCWSs) in § 141.62(b)(16). (Although EPA lists drinking water standards in Title 40 of the Code of Federal Regulations (40 CFR) in units of mg/L, except where noted, the Agency will refer to arsenic concentrations in μg/L in this preamble.) As part of the arsenic regulation, EPA also listed the approved analytical methods to measure compliance (§ 141.23(k)(1)), as well as the best available technologies (BAT) (§ 141.62(b)), small system technologies that could achieve compliance with the MCL (§ 141.62(d)), consumer confidence report requirements for CWSs, and public notification requirements for PWSs for the new MCL. Because the Agency identified affordable technologies for small systems, the rule did not list any small system variance technologies under § 1412(b)(15)(A) of the Safe Drinking Water Act (SDWA).

All but one of the five existing arsenic analytical technologies can be used for compliance determinations. As noted in the June 2000 proposal (65 FR 38888 at 38913) and January 2001 rule (66 FR 6976 at 6988), inductively coupled plasma (ICP)—atomic emission spectroscopy (AES) methods in EPA Method 200.7 and Standard Methods 3120 B have unacceptably high detection limits (see footnote 15 to table in § 141.23(k)(1); 66 FR 6976 at 7062).

EPA established an effective date of March 23, 2001, and a compliance date (§ 141.6(j)) for the arsenic regulation of January 23, 2006, five years after issuance for all systems. However, the consumer confidence reporting requirements for arsenic listed in § 141.6(j) had a March 23, 2001 compliance date.

EPA intended to issue a small entity implementation or compliance guide shortly after issuing the rule (66 FR 6976 at 7033). However, because of the on-going reviews, the Agency believes that it is premature to distribute small entity guidance at this time.

On August 19, 1998, EPA issued part 141 subpart O, the final rule requiring community water systems to provide annual water quality report to their customers (63 FR 44512; EPA, 1998a). Reports are now due by July 1 for the preceding calendar year (§ 141.152(a)). Any time arsenic is detected, the report must list the MCL (50 μg/L), the MCLG (none), and the highest level used to determine compliance and the range of detected levels, according to §§ 141.153(d)(4)(i), (ii), and (iv), respectively. Section 141.153(d)(6) requires the CCR to identify MCL violations, steps taken to address violations, and potential health effects using the language in appendix A of subpart O. In addition, using the authority of section 1414(c)(4)(B)(vi) of SDWA (63 FR 44512 at 44514), systems that detect arsenic between 25 μg/L and 50 μg/L are also required to provide an informational statement (§ 141.154(b)).

As published, the arsenic rule would make two reporting changes for systems detecting arsenic below 50 μg/L that would affect the CCR due by July 1, 2002, for calendar year 2001 (66 FR 6976 at 6991). First, CWSs would be required to include a revised informational statement (§ 141.154(b)) about arsenic when detected from 5 μg/L to 10 μg/L. In the arsenic rule, the Agency retained § 141.154(b) reporting requirements because the MCL is higher than the technologically feasible MCL (66 FR 6976 at 6991). Second, as proposed in § 141.154(b) and finalized in § 141.154(f), systems detecting from 10 μg/L to 50 μg/L would also provide the arsenic health language in appendix A to subpart O (§ 141.154(f)), even though systems are in compliance with the 50 μg/L MCL through January 22, 2006. (January 23, 2006, is the effective date for the MCL of 10 μg/L (§ 141.60(b)(4)).) As explained in section I.C.4, the current 9-month extension of the effective date until February 22, 2002, affects the CCR requirements of the January 2001 rule for calendar year 2001 reports.

On May 4, 2000, EPA issued the final Public Notification Rule (PNR) to revise the minimum requirements that public water systems must meet for public notification of violations of EPA's drinking water standards (65 FR 25982; EPA, 2000b). Systems must begin to comply with the revised PNR regulations on October 31, 2000 (if they are in jurisdictions where the program is directly implemented by EPA, such as Wyoming and many Tribes), or on the date that a primacy State/Tribe adopts the new requirements (no later than May 6, 2002).

The January 2001 arsenic rule would require CWSs and NTNCWSs to provide a Tier 2 public notice for arsenic MCL violations (> 10 μg/L) and to provide a Tier 3 public notice for violations of the monitoring and testing procedure requirements. In addition, public water systems must give notice for all violations when operating under a variance or exemption and for violating conditions of the variance or exemption. The arsenic regulation (66 FR 6976) amended the PNR, subpart Q of part 141, for purposes of compliance starting January 23, 2006 (§ 141.6(j); 66 FR 6976 at 7061).

States must submit applications for revised primacy no later than 2 years after promulgation of a new standard unless the State requests and is granted an additional 2-year extension. Interim primacy enforcement authority (§ 142.12(e)) allows States to implement and enforce drinking water regulations once State regulations are effective and the State has submitted a complete and final primacy revision application.

In the arsenic rule, EPA reduced requirements for submitting revisions for existing regulated contaminants (§§ 142.16(e) and (j)), so that information required in § 142.16(e) is not required for States revising the MCL for arsenic. In addition, revisions to § 142.16(j) clarified that States may inform the Agency in their applications of any changes to their existing monitoring plans and waiver procedures. These regulations are effective for purpose of compliance on January 22, 2004 (§ 141.6(k); 66 FR 6976 at 7061).

Currently, the Navajo Nation is the only federally recognized Indian Tribe with primacy to enforce drinking water regulations. EPA Regions implement the rules for all other Tribes under section 1451(a)(1) of SDWA. Tribes must submit a primacy application (§ 142.76) to have oversight for the inorganic contaminants ( i.e., the Phase II/V rule) to obtain the authority for the revised arsenic MCL. Tribes with primacy for drinking water programs are eligible for grants and contract assistance (section1451(a)(3) of SDWA). Tribes are also eligible for grants under the Drinking Water State Revolving Fund Tribal set-aside grant program authorized by section 1452(i) of SDWA for public water system expenditures.

EPA is aware of the practical implications of the ongoing reviews and delayed effective date on States and Tribes in terms of primacy and other requirements. EPA will consult with States and interested Tribes before addressing the effects on State primacy in future Federal Register notices.

On March 20, 2001, the Administrator announced in a press release that EPA would delay the effective date for the arsenic rule 60 days. That extension was in accordance with the White House (WH) memorandum of January 20, 2001, entitled “Regulatory Review Plan,” which was published in the Federal Register (WH 2001) on January 24, 2001 (66 FR 7702). The January 20, 2001, memorandum from Andrew Card, Assistant to the President and Chief of Staff, communicated the President's plan to ensure that his appointees had the opportunity to review new regulations “at the outset of his Administration” in order to avoid “costly, burdensome, or unnecessary regulation * * *.” For regulations that had been published in the Federal Register , but were not yet in effect, the memorandum requested departments and agencies to postpone their effective dates for 60 days. In order to provide safe and affordable drinking water, the Administrator announced plans to seek independent reviews of the science behind the arsenic standard and the cost estimates used to develop the rule.

On March 23, 2001 (EPA 2001b), the Federal Register published EPA's 60-day delay of the effective date for the arsenic regulation (66 FR 16134), in accordance with the White House memorandum, “Regulatory Review Plan” (66 FR 7702). The delay changed the effective date for the arsenic regulation from March 23, 2001, to May 22, 2001, including the dates for compliance with the consumer confidence reporting requirements for § 141.154(b) and (f) that were specifically linked to the new arsenic regulation.

On April 23, 2001 (EPA 2001c), EPA proposed (66 FR 20580) to extend the effective date for the arsenic rule from May 22, 2001, to February 22, 2002, in order to obtain independent reviews of the science, cost, and benefit analyses used to support the arsenic in drinking water regulation. The notice outlined the process for the science and cost reviews.

After reviewing the comments received on the 9-month proposed delay of the effective date, the Agency issued a final rule (EPA 2001f) on May 22, 2001 (66 FR 28342), delaying the final effective date until February 22, 2001, so the Agency could proceed as planned with the proposed reviews and opportunities for additional public comment. EPA identified mechanisms for reviewing the science and cost estimates in the notice and provided responses to comments in the preamble (66 FR 28342 at 28345) that are in the response-to-comment document for docket W-99-16-IV (EPA 2001).

The final rule for the 9-month delay (66 FR 28342 at 28350) also changed the § 141.6(j) compliance date to February 22, 2002, for the new arsenic consumer confidence reporting requirements in §§ 141.165(b) and (f). The delay will affect some systems that send out calendar year 2001 reports. CWSs that send out calendar year 2001 reports prior to February 22, 2002 must comply with the old arsenic CCR requirements (those in effect prior to the January 2001 rule). CWSs that send their reports after February 22, 2002, will have to comply with the new arsenic CCR requirements. In light of the current analyses being conducted on aspects of the arsenic rule, the Agency plans to address CCR reporting issues and options in the fall 2001 notice.

In the process of extending the effective date for the arsenic rule, EPA has not changed the compliance date for the MCL issued in the January 2001 rule. Until January 23, 2006, the MCL for arsenic is 50 μg/L, which only applies to CWSs (§§ 141.11(a) and (b)), and there is no MCLG for arsenic (§ 141.51(b)).

The January 22, 2001, rule established an MCLG of 0 μg/L and an MCL of 10 μg/L for arsenic and explained in detail the rationale for this decision. However, because of concerns raised by some stakeholders concerning the arsenic in drinking water regulation, especially small community systems that may bear a high cost burden to comply with the new standard, EPA has decided to request further comment on the arsenic standard set in the January 22, 2001, drinking water rule.

As a result, today EPA proposes and requests stakeholder input on a range of MCL options for arsenic from 3 μg/L to 20 μg/L. In developing comments, commenters should refer to the information provided in the January 22, 2001, arsenic rule, the background documents supporting that rule, the notice and request for comment on the scientific, technical, and benefits reviews that EPA plans to publish in the fall of 2001, and any new (post-January 2001) information commenters wish to provide. EPA is accepting comments until October 31, 2001, on today's notice to facilitate commenters' ability to examine the most current information. The Agency also anticipates that the comment period for the notice summarizing the fall 2001 reviews will overlap with today's comment period, thereby allowing commenters to provide a single set of comments covering both today's notice and the expected fall 2001 notice, if they wish.

EPA is also undertaking additional analyses on science, cost, and benefits issues, as explained in section II.B., and expects these analyses to be completed in August 2001. Once the analyses are completed, EPA will consider this new information and provide for an additional opportunity for public comment on the new analyses along with EPA's preliminary conclusion about whether the January 2001 arsenic rule should be revised, and if so, what the revised standard should be. EPA will consider the public comments, as well as the record for the arsenic rule for this reconsideration, and issue a final decision on whether to revise the January 2001 rule. In particular, EPA is considering whether to retain the revised MCL of 10 μg/L or replace it with another standard—specifically, 3 μg/L (the feasible level), 5 μg/L (the level proposed in June 2000) or 20 μg/L (another alternative considered in the June 2000 proposal). If EPA does decide to revise the January 2001 rule, EPA will issue a new revised rule.

EPA understands and appreciates that the question of setting a final arsenic in drinking water standard is a controversial one for several reasons. From an economic standpoint, the new regulation can be expected to have significant impacts on a number of drinking water utilities, especially those serving less than 10,000 people in areas of high naturally occurring arsenic. Stakeholders have an understandable desire to ensure that any new regulation be based on accurate and reliable compliance cost estimates. Stakeholders also want to be confident that the health risks associated with a new standard have been appropriately evaluated and are based on the best available science.

The Agency is committed to safe and affordable drinking water for all Americans. At the same time, we want to be sure that the conclusions about arsenic in the rule are supported by the best available science and policy decisions based on thorough cost-benefit considerations. The Agency is therefore moving rapidly to review arsenic research and national cost and benefit estimates related to the arsenic standard so that communities that need to reduce arsenic in drinking water can proceed with confidence that the new standard is based on sound science and accurate cost-benefit estimates. Independent review of the science, cost, and benefits analysis behind the arsenic in drinking water standard will help resolve questions that have arisen about the health basis and costs and benefits of reducing arsenic in drinking water.

EPA's criteria for conducting the reviews will be to ensure that reviewers are recognized experts in their fields and are as impartial and objective as possible; that the reviews can be completed in August 2001; and that the results of the reviews are made available for public comment. EPA plans to utilize the mechanisms for the reviews described in the following section.

EPA does not plan to seek outside, expert review of its approaches for estimating occurrence or determining the availability of analytical methods and their capabilities but is requesting further public comment on these aspects of the January 2001 rule.

Under a cooperative agreement with EPA, on May 21 the National Academy of Sciences (NAS) convened a subcommittee of the National Research Council's (NRC) Committee on Toxicology to prepare a report updating the scientific analyses, uncertainties, findings and recommendations of the report “Arsenic in Drinking Water (NRC 1999).” NAS posts information about the arsenic study, including project scope, the subcommittee membership and biographies, meetings, and meeting summaries of the closed sessions (NRC 2001a and NRC 2001b) in the website www.nationalacademies.org under Current Projects (the short cut to the direct NRC arsenic project address, www4.nas.edu/cp.nsf/ af89ea56d4264b948525639b0043e7c7/ 7ae42f9d0397214b85256a3100711f15? OpenDocument, is available from www.epa.gov/safewater/ arsenic.html ). Information on NRC's committee process is also available on the NAS website under Frequently Asked Questions at www.nationalacademies.org/ about/faq4.html. Specifically, the subcommittee is reviewing relevant toxicological and health-effects studies published and data developed since the 1999 NRC report, including the toxicological risk-related analyses performed by EPA in support of its regulatory decision-making for arsenic in drinking water and the health effects discussion in EPA's SAB December 2000 report entitled, “Arsenic Proposed Drinking Water Regulation: A Science Advisory Board Review of Certain Elements of the Proposal (EPA 2000f).” The subcommittee is addressing only scientific topics relevant to toxicological risk and health effects of arsenic.

The subcommittee will meet approximately three times to discuss and evaluate issues and will produce a consensus report in August 2001. On May 21, the NRC subcommittee heard presentations from EPA, the Small Business Administration, a consultant for Albuquerque, researchers, industry, environmental and other interested or affected parties. At the open session meeting on June 20, the committee heard from EPA's Administrator. The draft consensus report will undergo the established NRC peer review process before NRC issues the final report that is available to the public. In addition, EPA will make the NRC's report available to the general public and request comment on its recommendations as part of a notice this fall.

The National Drinking Water Advisory Council (NDWAC) is chartered under the Federal Advisory Committee Act (FACA) to advise, consult with, and make recommendations to EPA. The Agency asked the NDWAC, and the Council agreed to convene a panel of nationally recognized technical experts to review the cost of compliance estimates associated with the regulatory options that were considered in the proposed rule and discussed in the January 2001 rule. On May 4, 2001 (EPA 2001d), EPA requested nominations for the working group (66 FR 22551). In particular, the working group is reviewing the costing methodologies, assumptions, and information underlying the system-size as well as the aggregated national estimate of system costs underlying the January 2001 arsenic in drinking water rule. As a part of this review, the group is evaluating significant alternative costing approaches or critiques where there is adequate information upon which to evaluate the basis for such alternate estimates or approaches.

The working group first met May 29-30, 2001, as announced in the May 22, 2001, Federal Register (EPA 2001f). Working group members have been asked to attend a series of meetings (June 28-29 in Denver, Colorado; July 9-10 in Phoenix, Arizona; and July 19-20 in Washington, DC) over the summer of 2001 (June 15, 2001 Federal Register , EPA 2001h), participate in discussion of key issues and assumptions at these meetings, and review work products of the working group. The working group will make a recommendation to the full NDWAC based on its review of the national cost estimates. The NDWAC, will in turn, make a recommendation to EPA. All NDWAC working group meetings and full NDWAC meetings are open to the public, and meeting information is posted on the calendar accessible from www.epa.gov/safewater. EPA posts the working group member list and meeting summaries at http://www.epa.gov/safewater/ndwac/council.html. The report of the working group and the final recommendations of the NDWAC will be made available for public review and comment.

The EPA Science Advisory Board (SAB), which also is chartered under the FACA, was established in 1978 by the Environmental Research, Development, and Demonstration Authorization Act (ERDDAA) (42 U.S.C. 4365), to provide such scientific advice as may be requested by the Administrator. At the request of the Agency the SAB has convened a panel, the Arsenic Rule Benefits Review Panel (ARBRP), to review the Agency's analysis of quantified and unquantified benefits associated with the arsenic drinking water rule. The Agency has asked this panel of nationally recognized technical experts to review the Agency's analysis of quantified and unquantified arsenic benefits analysis as required by SDWA, and evaluate whether the components, methodology, criteria and estimates reflected in EPA's benefits analysis are reasonable and appropriate in light of: (1) The SAB's benefits transfer report (EPA 2000d; available on the SAB Website at www.epa.gov/sab/eeacf013.pdf ); (2) EPA's Guidelines for Preparing Economic Analyses (EPA 20001; www.epa.gov/economics ); (3) relevant requirements of the Safe Drinking Water Act (SDWA; www.epa.gov/safewater/sdwa/sdwa.html ); (4) NDWAC recommendations to EPA on benefits (unpublished October 29, 1998, Benefits Working Group Report to the National Drinking Water Advisory Council; EPA 1998b); and (5) recent literature.

Panel members have been asked to attend one or more meetings over the summer of 2001, participate in discussion of key issues and assumptions at these meetings, and review the previously described documents and literature. The first meeting of the ARBRP will be on July 19-20, in Washington, D.C. (EPA 2001i). To ensure that the SAB's recommendations are fully considered in decision making, the Agency has asked for a report to be made available to the Administrator in August 2001 to coincide with the findings and recommendations from independent reviews of the health effects by NRC and costs by NDWAC. All ARBRP meetings are open to the public and time will be allotted for presentations by the public. Meeting information is posted on the calendar accessible from www.epa.gov/safewater. The report of the ARBRP and the final recommendations of the SAB will be made available for public review and comment.

EPA's occurrence estimates were a fundamental building block in cost of compliance estimates as well as its benefits estimates. To develop this occurrence estimate, EPA used arsenic compliance monitoring data consisting of almost 77,000 observations from 25 States to estimate the distribution of arsenic in finished drinking water in public water systems (PWS) in the U.S. These States voluntarily submitted the data from public water systems. Figure V-1 in the June 2000 proposed rule (65 FR 38888 at 38906) is a map of the 25 States from which EPA used data to estimate occurrence. These States are distributed throughout the U.S., with at least one located in each of the seven geographic regions that the Agency used in its analysis (EPA 2000h). Ten other States (Florida, Idaho, Iowa, Louisiana, Pennsylvania, South Dakota, Maryland, Nebraska, Vermont, and West Virginia) submitted compliance monitoring data, but those data were not complete enough to estimate State occurrence (66 FR 6976 at 7029). EPA lists the database parameters used to derive its national occurrence estimate in Appendix D-2 of the occurrence document (EPA 2000h).

In order to estimate a national occurrence distribution of arsenic, EPA began with individual water systems and built up estimates for States, regions, and the nation. For each PWS in its database, the Agency estimated the mean arsenic concentration over time in finished water. (Although MCL compliance is determined by computing a running annual average of quarterly samples, EPA elected to characterize arsenic occurrence in each system in terms of the mean arsenic concentration over time, rather than by a set of running averages; for the benefits estimates, the long-term mean is preferable, because health risks are determined by mean exposure to arsenic over time; for the cost estimates, the approach used may not accurately predict costs in all cases, since some systems with a long-term average below the standard might still exceed it during some compliance cycles.) Next, the Agency collected the system mean estimates into State distributions, then merged the State distributions into regional and finally, national distributions. The regions used in the analysis are shown in Figure V-1 in the June 2000 proposed rule (65 FR 38888 at 38906). In combining the regional distributions into a national distribution, the Agency weighted each region by the total number of systems in the region, not just the number of systems in the States in its database. This procedure has the same effect as assigning the regional distributions to the 25 States for which there are no observations in the database.

EPA estimated separate arsenic occurrence distributions for community water systems (CWS) and non-transient, non-community water systems (NTNCWS), and for systems with ground water (GW) and surface water (SW) sources. Systems identified as having ground water under the influence of surface water were treated as surface water systems. Table III.C-1 (66 FR 6976 at 6996) shows the Agency had data from 17 States for ground water NTNCWS, compared to 25 States for CWS, so there are, on average, fewer States with NTNCWS data in each region. Moreover there is no data about NTNCWS from any States in the Southeast region (Alabama, Florida, Georgia, Mississippi, and Tennessee). EPA therefore used the occurrence distribution for ground water CWS as a surrogate for ground water NTNCWS in the Southeast. For surface water NTNCWS, EPA used the occurrence estimates from surface water CWS, because the characteristics of source water for NTNCWS are expected to be similar to source water for CWS, and there is a larger CWS data set to draw from.

Table III.C-5 of the January 2001 rule (66 FR 6976 at 6998) shows EPA's estimated arsenic occurrence distributions for the U.S. The results are comparable to those of two other arsenic occurrence studies: the National Arsenic Occurrence Survey (Frey and Edwards, 1997) and USGS (2000).

In addition to the distributions of system means, EPA estimated nationwide intra-system coefficients of variation (ISCV). For a given water system, the ISCV quantifies the variation of mean arsenic levels at the system's entry points to the distribution system (i.e., sampling points of individual wells and treatment points) around the overall system mean. EPA estimated separate ISCVs for ground water CWS, surface water CWS, and ground water NTNCWS. Each of these ISCVs was assumed to be constant throughout the U.S. EPA used the estimated ISCVs as part of its cost simulation model summarized today in section II.E.

Since the completion of its occurrence analysis for the arsenic rule (EPA 2000h), EPA has received additional occurrence data from one State, North Carolina. More occurrence data from other States may become available in the future.

Some stakeholders expressed concern that EPA estimated nationwide occurrence using data from only 25 States, and that the national occurrence estimate was therefore not as reliable as it should have been. Many commenters provided occurrence data about their individual system, which could not be used in the statistical approach. Some commenters suggested that EPA should either request data from all States, or else augment its data set with data from other sources. As noted in EPA's Response-to-Comments document for the January 2001 rule, EPA's occurrence estimates are based on finished water data from States for which data of adequate quality in the range of interest (3-20 μg/L) were available. EPA requests comment on the assumptions, data, methodologies, and results of its occurrence analysis, as well as any new occurrence data that commenters believe EPA should consider in its occurrence assessment. EPA also requests comment on whether it is appropriate to use long-term averages as a proxy for compliance in computing costs for various levels of the standard.

Arsenic ingestion at various levels has been linked to a variety of health effects, both cancerous and non-cancerous. These health effects include cancer of the bladder, lungs, skin, kidney, nasal passages, liver, and prostate. Arsenic ingestion has also been associated with cardiovascular, pulmonary, immunological, neurological, endocrine, and reproductive and developmental effects. In almost all cases, the drinking water levels at which these associations have been found are higher than the current 50 μg/L standard and the levels typically found in U.S. drinking water. Extrapolating these associations down to levels of regulatory interest (i.e., less than 50 μg/L) entails uncertainty and there has been debate among stakeholders over the appropriate methodology for doing so. Of all the studies noted in the report issued by the National Research Council (NRC 1999) and literature reviewed by EPA, the Agency believes that those studies focusing on bladder and lung cancer provide the best basis to quantify dose response relationships and extrapolate these relationships down to the levels of regulatory interest. Therefore, the Agency based its assessment of the quantifiable health risk reduction benefits on the risks of arsenic-induced bladder and lung cancers.

The Agency's approach for the health risk quantitative analysis includes five components. First, EPA developed relative exposure factor (REF) distributions, where the life-long REFs indicate the sensitivity of exposure of an individual relative to the sensitivity of exposure of an “average” person weighing 70 kilograms and consuming approximately 2 liters of water per day. These REFs incorporate data from the recent EPA water consumption study (EPA 2000a) with age, sex, and weight data. Second, EPA calculated arsenic occurrence distributions for the population exposed to arsenic levels above 3 μg/L. Third, EPA chose risk distributions for bladder and lung cancer for the analysis from Morales et al. (2000), a peer-reviewed article published in July 2000, which presented additional analyses of bladder cancer risks as well as estimates of lung and liver cancer risks for the same Taiwanese population analyzed in the NRC report. EPA summarized and analyzed the new information from the Morales et al. (2000) article in a Notice of Data Availability (NODA) (EPA 2000e) published on October 20, 2000 (65 FR 63027). Although the data used were the same as used by the NRC to analyze bladder cancer risk in their 1999 publication, Morales et al. (2000) considered more dose-response models and evaluated how well they fit the Taiwanese data, for both bladder cancer risk and lung cancer risk. Fourth, EPA developed estimates of the projected bladder and lung cancer risks faced by exposed populations using Monte-Carlo simulations, bringing together the relative exposure factor, occurrence, and risk distributions. These simulations resulted in upper-bound estimates of the actual risks faced by U.S. populations exposed to arsenic concentrations at or above 3 μg/L in their drinking water. Finally, EPA identified three significant sources of uncertainty and made adjustments to address one of these to derive alternate, lower risk estimates that reflect exposure to arsenic in cooking water and in food in Taiwan. EPA also recognized and considered qualitatively two other sources of uncertainty (e.g., the shape of the dose response curve at low exposure levels and the different health and nutritional status of the Taiwanese study population relative to the typical U.S. population) that it was not able to quantify (see page 7021 of the January 22, 2001 rule) that might also lead to lower risk estimates if it were possible to account for them quantitatively. EPA also indicated, in the preamble to the January 2001 rule, that it believed that its health risk analysis comprised a plausible range of likely risk associated with various concentrations of arsenic in drinking water. This analysis is described in more detail at pages 7001-7009 and 7020-7021 of the January 22, 2001, rule. Finally, EPA considered the non-monetizable benefits associated with avoiding certain adverse health impacts known to be caused by arsenic at higher concentrations, which also may be associated with low level concentrations, which included other nonquantified cancer endpoints and adverse cardiovascular, pulmonary, immunological, neurological, endocrine, reproductive, and developmental effects. EPA listed reductions in these health effects as unquantified benefits in Tables III.E-3 and III.E-7 that listed the monetizable benefits. In moving off the feasible MCL of 3 μg/L, EPA considered the costs and benefits, including the unquantified benefits (66 FR 6976 at 7022 and 7023).

EPA has asked the National Academy of Sciences (NAS) to update the findings and recommendations of the NRC report, Arsenic in Drinking Water (NRC 1999), based on new studies and analyses, including EPA's risk analyses. EPA recognizes that there are a number of uncertainties inherent in its risk analysis that reflect the state of existing science, available research, and the difficulties associated with applying epidemiological data from one population to another. The NAS, in its 1999 NRC report, and the Science Advisory Board, in its 2000 report (EPA 2000f), highlighted a number of key issues, as have stakeholders who have participated in the arsenic rule development process. EPA requests comment and any additional data that may be available in the following areas:

(1) Are the data from the southwestern Taiwanese studies presented in the NRC report still the most appropriate data set for the dose-response assessment and risk estimation? What are the uncertainties in the data on which the risk estimates are based, and what is the likely effect of these uncertainties on the quantitative risk estimates?

(2) Did EPA's analyses of U.S. risk provide appropriate adjustments for population differences, including factors such as diet, health status, life style ( e.g., smoking, cooking water use), when extrapolating from the Taiwanese study population to the U.S. population? Is it possible and appropriate for EPA to make additional quantitative adjustments to account for such differences using existing data?

(3) Part of EPA's analysis requires the determination of an arsenic level that is projected to cause an adverse effect in one per cent of the population (ED 01 ). Is the dose-response analysis conducted by EPA, as well as any available more recent data, adequate for estimating an ED 01 ?

(4) Did EPA's analysis appropriately consider and characterize the available data on mode of action of arsenic, the dose-response information, and the information on uncertainties, when assessing the public health impacts?

(5) Are EPA's risk estimates at 3, 5, 10, and 20 μg/L consistent with available scientific information, including information from new studies?

(6) What is known or can be inferred about the latency period between exposure to arsenic in drinking water and increased incidence of cancer based on existing research?

EPA listed the national cost estimate for the January 22, 2001, rule in Table III.E.1 (66 FR 6976 at 7010). (This information is discussed at greater length in the Technology and Cost document (EPA 2000i) in the record for the January 22, 2001, rule.) The table presented national cost estimates for the MCL of 10 μg/L and the other three options considered in the proposed rule published on June 22, 2000. Treatment costs represent the vast majority of the total national costs for all four MCL options. For the MCL of 10 μg/L, the treatment costs are estimated to be $169.6 million per year using a 3% discount rate and $193 million per year using a 7% discount rate.

In summary, EPA developed the cost of compliance estimate for the arsenic in drinking water rule as follows. The treatment costs were derived using occurrence data, treatment train unit costs, and decision trees. The occurrence data provide the number of systems that would need to install treatment in each size category. The treatment train unit cost estimates provide a measure of how much a technology will cost to install. Decision trees vary by system size and are used as a prediction of the treatment technology trains that facilities would likely install to comply with the options considered for the revised arsenic standard. An analysis of the available treatment trains for arsenic removal and the unit costs for the 13 treatment trains (listed in Exhibits A-7 through A-22 in EPA 2000g) used in the national cost estimate are described in the December 2000 document entitled “Technologies and Cost for the Removal of Arsenic in Drinking Water” (EPA 2000i). The decision tree and a description of the model used to calculate the national cost estimate are described in the December 2000 document entitled Arsenic in Drinking Water Rule Economic Analysis (EPA 2000g).

Many of the comments EPA received on the June 2000 proposed rule were on the national cost estimate and the available treatment technologies. EPA reviewed these comments and comments from the Drinking Water Committee of EPA's Science Advisory Board. The January 2001 rule incorporates a number of changes based on these comments, which are discussed in detail in sections V.F and V.G of the preamble (66 FR 6976 at 7034) and are discussed more extensively, in the Technology and Cost document (EPA 2000i). The major changes are summarized in today's document.

EPA received many comments on the proposed rule stating that the Agency did not adequately consider problems with waste generation and disposal when evaluating which technologies would be most appropriately used for achieving compliance. Prior to issuing the arsenic rule, EPA re-examined the 25 treatment trains considered for the proposed rule. The Agency eliminated five treatment trains due to concerns about hazardous waste. The ability to discharge brine streams to publicly owned treatment works (POTWs) was another issue related to waste generation and disposal. Comments indicated that potential increases in total dissolved solids and technically based local limits at the POTW would limit the discharge of brines to POTWs. EPA eliminated brine discharge to POTWs from activated alumina processes as a Best Available Technology due to the arsenic concentration in the brine. EPA also significantly reduced the use of anion exchange with POTW discharge in the decision tree for the January 2001 rule. These issues are discussed in greater detail on pages 7036-7038 of the January 2001 preamble.

The national cost estimate generated a large number of stakeholder comments. Many of these comments stated that EPA underestimated the costs for implementing the proposed rule. Many of these comments referred to the report “Cost Implications of a Lower Arsenic MCL” as the basis for their comments. This report (Frey et al. 2000a) was published by the American Water Works Association Research Foundation (AWWARF) in May 2000. The national cost estimates in the AWWARF report were updated in October 2000 (Frey et al. 2000b). For the MCL of 10 μg/L, the October 2000 Update lists a national compliance cost estimate of $345 million per year with no sensitivity considerations (lower bound) and $585 million per year with sensitivity considerations (upper bound). (These upper and lower bound estimates result from different assumptions about cost model input variables.) EPA reviewed the May 2000 AWWARF report and the October 2000 update and summarized factors in the report in detail on pages 7040-7041 of the January 2001 preamble that EPA identified as being key reasons for the differences in cost estimates. These factors include differences in flow rate assumptions, unit costs, and national estimates for arsenic occurrence. The Arsenic Response-to-Comments Document (EPA 2000j) also includes more detail on EPA's review of the national cost estimates in “Cost Implications of a Lower Arsenic MCL.”

In commenting on the proposed rule, the SAB also expressed concern that the Agency's cost estimates appeared low. The SAB identified two concerns in particular: (1) The assumptions regarding disposal options for brine and other residuals (see discussion in section II. E. 1. of the revision EPA made to address these concerns); and (2) whether the technologies identified as BAT have been implemented or optimized for arsenic removal at the treatment plant scale, and whether doing so would reduce their effectiveness for the other purpose for which they have been designed, in which case compliance costs could be underestimated.

A Working Group of the National Drinking Water Advisory Council (NDWAC) is reviewing the costing methodologies, assumptions, and information underlying the system-size as well as the aggregated national estimate of system costs of the arsenic rule. As a part of this review, the Working Group is also evaluating significant alternative costing approaches where there is adequate information upon which to evaluate the basis for the alternate estimates or approaches, including the AWWARF cost reports. The group may identify and comment on additional factors affecting these cost estimates ( e.g., number of entry points to the distribution system) in addition to those discussed in the January 2001 rule. The NDWAC Working Group will make a recommendation to the full NDWAC based on their review of the national cost estimates.

Specific questions related to the cost of compliance analysis for the arsenic rule on which EPA is interested in receiving public comment include the following:

(1) Did EPA use appropriate “baseline” assumptions ( e.g., occurrence, co-occurring contaminants, affected systems, entry points, design and average flows, availability of land, in-place treatment)? If not, how could these assumptions be improved and what data would support such revised assumptions?

(2) Did EPA identify an appropriate set of treatment “trains” and make appropriate assumptions about the costs of technologies included in those treatment trains as a part of the process of developing national cost estimates? Has EPA identified restrictions that may limit or eliminate treatment technology and residuals management combinations, including the application of treatment technologies to arsenic on a large scale, and integration of arsenic removal with other treatment plant objectives? If not, how could these assumptions and inputs be improved?

(3) Did EPA use an appropriate “decision tree” for the final rule? If not, how can that decision tree be improved?

Of the various health effects linked to arsenic ingestion, in the January 2001 rule EPA prepared a quantitative assessment of lung and bladder cancer. Other health effects and possible non-health benefits that EPA was unable to quantify were considered qualitatively as required by SDWA, and as discussed in the January 2001 rule.

The process by which EPA analyzed the benefits of reduced bladder and lung cancer cases for the arsenic rule involved several steps. These steps included the calculation of risk reductions, calculation of the number of cancer cases avoided, monetization of avoided bladder and lung cancer cases, qualitative analysis of non-quantifiable benefits, and a sensitivity analysis of benefits estimates to examine the impacts of discounting over a latency period and accounting for other adjustments such as voluntariness and controllability.

Using the risk estimate calculations described in section II.C. of today's notice, EPA calculated the number of bladder and lung cancer cases avoided for CWSs and NTNCWSs (see Table III.D-3, 66 FR 6976 at 7009). Note that EPA derived separate cancer risks for NTNCWSs, as summarized in the preamble to the June 2000 proposal (pages 38952-38956) and described in section 5.3.3 of the Economic Analysis (EPA 2000g). The lower- and upper-bound risk estimates were applied to the exposed population to generate cases avoided for Community Water Systems (CWS) serving fewer than 1 million customers. Since the Agency had arsenic occurrence information for very large systems (those serving greater than one million customers), their system-specific arsenic distributions could be directly computed and cases avoided calculated from these distributions (appendix b.2 in EPA 2000g). In the proposal and January 2001 rule, EPA adjusted the number of bladder cancer cases avoided to reflect a possible lower mortality rate in Taiwan (a lower death rate would increase the number of estimated Taiwanese cases to include more non-fatal cancers) than was assumed in the risk assessment process, which is described in section 5.4.1 of the Arsenic Economic Analysis (EPA 2000g). The Agency adjusted the upper-bound U.S. cancer cases avoided to assume an 80% mortality rate for bladder cancer and 100% fatality for lung cancer in Taiwan. The Agency then divided the U.S. cases avoided into morbidity (non-fatal) and premature fatality cases based on U.S. mortality rates of 26% for bladder cancer and 88% for lung cancer.

In order to monetize the benefits from bladder and lung cancer cases avoided, the Agency used two different values. First, a Value of Statistical Life (VSL) estimate was applied to those cancer cases that result in a mortality. As noted, EPA assumed a 26% mortality rate for bladder cancer and an 88% mortality rate for lung cancer. The current VSL value used by the Agency is $6.1 million, in 1999 dollars (66 FR 6976 at 7012). VSL does not refer to the value of an identifiable life, but rather to the value of small reductions in mortality risks in a population. A “statistical” life is thus the sum of small individual risk reductions across an entire exposed population and is not the value for saving a particular individual's life.

Second, EPA used a Willingness to Pay (WTP) value (66 FR 6976 at 7012) to monetize the cancer cases that do not result in a mortality. A WTP value for avoiding a non-fatal cancer is currently not available; therefore the Agency used a WTP estimate to reduce a case of chronic bronchitis as a proxy. The mean value of this WTP estimate is $607,000 in 1999 dollars. A complete discussion of the VSL and WTP values and how they are calculated can be found in Chapter 5 of the Arsenic Economic Analysis (EPA 2000g).

There are also a number of non-quantifiable benefits that EPA considered in its analysis of the benefits for the arsenic rule. Chief among these are certain health impacts identified in various studies involving arsenic levels greater than 50 μg/L. To date, the extent to which these impacts occur at levels below 50 μg/L has not been determined. These additional health effects include other cancers such as skin, kidney, nasal passage, liver, and prostate cancers and non-cancer endpoints such as cardiovascular, pulmonary, immunological, neurological, and endocrine impacts. These health effects and the relevant studies linking these health effects to arsenic in drinking water are discussed in section III.D of the preamble to the rule (66 FR 6976 at 7000). Table III.E-3 in the preamble to the rule (66 FR 6976 at 7012) shows the estimated benefits from reducing arsenic in drinking water for arsenic levels of 3, 5, 10, and 20 μg/L. This table also includes a listing of the potential non-quantifiable benefits associated with reducing arsenic in drinking water.

The Agency also provided a sensitivity analysis on benefits estimates in the rule to examine the impacts of discounting over a latency period and adjustments for income growth and the nature of the risk (the extent to which the risk is voluntary and controllable). In a July 2000 letter, the EEAC of the SAB recommended that benefits estimates for environmental regulations include adjustments for latency and for income growth in the primary analysis, while adjustments for other factors, such as the extent to which risk is voluntary or controllable, be addressed in a sensitivity analysis. For the arsenic rule, the Agency chose to address all of these factors in a sensitivity analysis because it lacked quantitative data on cancer latency periods associated with arsenic exposure in drinking water. The sensitivity analysis used a range of latencies from 5 to 20 years and discount rates of 3 and 7%. It also adjusted for income growth and included a 7% increase in valuation to account for the lack of voluntariness and controllability of risk. The sensitivity analysis showed that the adjustments to monetized benefits could range from a 10% increase (accounting for income growth only) to a 70% decrease (accounting for income growth, latency, and voluntariness/controllability). The sensitivity analysis did not provide estimates accounting only for latency and income growth. Tables III.E-5 and III.E-6 in the January 2001 preamble illustrate the sensitivity of monetized benefits estimates to different assumptions for latency period duration, discount rate, rate of income growth, and inclusion of a voluntariness and controllability factor. A more detailed description of this analysis is shown in section III.E.2.b of the preamble to the rule (66 FR 6976 at 7012) and Chapter 5 of the Arsenic Economic Analysis (EPA 2000g).

Significant issues associated with the benefits analysis for the arsenic in drinking water rule addressed topics such as the timing of health benefits accrual (latency) and the Agency's consideration of non-quantifiable benefits in its regulatory decision-making process. The Agency requests comments on these and related issues in the following summary.

Specific issues related to the benefits analysis for the arsenic rule include:

a. Discounting benefits over a cancer latency period. The SAB has recommended that EPA should discount its monetized benefits over a cancer latency period (EPA 2000d). A latency period is generally defined as the time between exposure to an environmental carcinogen and the resulting cancer fatality. Precise information on the latency period for most cancers is generally unavailable, but latency periods can be significant. The latency period may also be defined in several different ways. This period can be defined as the time between exposure and the resulting fatality or the time between exposure and onset or diagnosis of the cancer. This definition does not consider the time between exposure and early adverse changes at the cellular level in the body ( i.e., before clinical expression of cancer). Definition of the latency period can have a significant impact on the length of time over which benefits are discounted, especially for cancer illnesses where the period of morbidity ( e.g., non-fatal illness) is lengthy. EPA has specifically requested the National Academy of Sciences, in their review of the health risks of arsenic in drinking water, to examine this issue in more detail and discuss what is known or can be inferred about the latency period between exposure to arsenic in drinking water and increased incidence of cancer based on existing research.

b. Consideration of non-quantifiable benefits in the regulatory decision-making process. Some stakeholders have argued that EPA did not fully consider the non-quantifiable benefits in its decision-making process for the arsenic rule and that EPA should have performed sensitivity analyses to characterize the potential magnitude of these benefits. Other stakeholders have argued that EPA placed too much emphasis on non-quantifiable benefits in the choice of the arsenic MCL. EPA requests comment on how to handle non-quantifiable benefits in its selection of a final arsenic MCL.

(1) How should total benefits and costs and incremental benefits and costs be addressed in the rule in analyzing regulatory alternatives to ensure appropriate consideration by decision makers and the public?

(2) How should latency be addressed in the benefits estimates for the final rule when existing literature does not provide specific quantitative estimates of latency periods associated with exposure to arsenic in drinking water?

(3) Should reduction/elimination of exposure be evaluated as a separate benefits category, in addition to or in conjunction with mortality and morbidity reduction?

(4) How should health endpoints (other than bladder and lung cancer) be addressed in EPA's analysis, when existing literature does not provide specific quantification, to ensure appropriate consideration by decision makers and the public?

(5) How should uncertainties be addressed in EPA's analysis to ensure appropriate consideration by decision makers and the public?

As part of its overall review of the arsenic rule, EPA wishes to reassess the financial, technical, and planning tools available to help small systems achieve compliance. SDWA provides special consideration for small systems in a number of areas and also created the Drinking Water State Revolving Fund (DWSRF) to help systems, including small systems, comply with the provisions of the Act. The DWSRF provides low interest loans, and allows forgiveness of principal for communities identified by the States as disadvantaged. The Agency believes that State capacity development strategies offer a useful framework within which to address small system issues. The Agency seeks comment to help it reassess the financial, technical, and planning tools available to small systems and determine what, if any, additional steps the Agency should take to facilitate compliance with a revised arsenic standard.

a. Affordability, availability of financial assistance, and treatment technology. Extensive concerns have been raised regarding the ability of households served by small systems to afford compliance with a revised arsenic standard. In the January 2001 rule, the Agency attempted to address many of these concerns. The preamble of the January 2001 rule emphasized the framework established by SDWA to consider affordability and the tools available to help address affordability concerns. These tools include financial assistance; and extended compliance time frames through exemptions. SDWA also provides for small system variances, but EPA determined in the January 2001 rule that affordable small system compliance technologies are available for all categories of system size, so this option is not available for the new arsenic standard published in the January 2001 rule.

The January 2001 preamble points out that about $1 billion/year is being made available to large and small systems through the Drinking Water State Revolving Fund (DWSRF), and about $780 million/year is being made available through the water and waste disposal program of the Rural Utilities Service (RUS) of the Department of Agriculture. EPA also noted that almost one quarter of the DWSRF loans have been made to systems States classified as disadvantaged (66 FR 6796 at 7020).

Treatment technology is another issue around which small system concerns have clustered. The major concern voiced in this regard has been that small systems may not be able to apply the lower cost compliance technologies identified by EPA. The most significant issue relates to the application of Point-of-Use (POU) technology. Under the arsenic rule, EPA has designated POU technology as an affordable compliance technology. The Agency recognizes that application of POU technology for compliance is not presently a common practice and water systems would face a number of challenges in implementing such an approach. EPA's probability decision trees (Exhibits A-7 through A-22 in the Economic Analysis (EPA 2000g)) assigned POU technologies to approximately 5% of systems serving fewer than 500 in the decision tree. The Agency believes that customers may be quite supportive of a POU solution once they understand the cost-savings it offers based upon pilot studies and information that EPA has analyzed.

b. SDWA Capacity Development Framework. SDWA recognized that small systems would find it more challenging than large systems to achieve the public health protection goals of the Act. In amending SDWA in 1996, Congress found that effective protection of public health requires water systems with adequate managerial, technical, and financial capacity. Congress further found that compliance with the requirements of SDWA continues to be a concern at public water systems experiencing technical and financial limitations; and Federal, State, and local governments need more resources and more effective authority to attain the objectives of SDWA. In response to these findings, Congress included in the amendments a number of provisions designed to help EPA and the States address the needs of small systems, including, for the first time, the State Revolving Loan Fund for assisting drinking water systems in complying with standards.

These provisions included new flexibility for EPA in setting standards and compliance time frames; explicit authority to allow Point-of-Use technologies for compliance; broader and more flexible authority for issuing exemptions to provide systems with additional time to comply; small system variances in cases where EPA determines that affordable small system compliance technologies are not available; and financial assistance through a new drinking water State revolving fund. In order to help focus these and other tools on helping systems develop managerial, technical, and financial capacity, Congress created a strong incentive for States to develop a “capacity development strategy.” States were given broad flexibility in designing their strategy, but were required to consider a number of issues including how they would use the authority and resources of SDWA or other means to assist systems in complying with regulations and to encourage the development of partnerships between systems to enhance their capacity.

All States have developed strategies consistent with the SDWA framework. EPA believes that implementation of a revised arsenic standard will be the first major test of these strategies. SDWA clearly anticipated that systems would need to enhance their technical, financial, and managerial capacity in order to achieve the public health protection objectives of the law. The extensive concerns which have been voiced about systems ability to meet a revised arsenic standard serve to confirm the need for such enhancements.

Successful implementation of a revised standard will require that States focus on developing system capacity by fully utilizing the flexibilities available under SDWA. In particular, the Agency believes that appropriate use of these three provisions will be essential:

(1) DWSRF assistance, including principal forgiveness for disadvantaged communities and set-aside funds to assist systems through a State's capacity development strategy.

(2) Exemptions to allow additional time for systems that demonstrate the need for such time to achieve compliance. Such systems of any size can be granted an additional 3 years beyond the compliance date for the revised MCL to achieve compliance, while systems serving <3300 persons can be granted up to 6 additional years beyond that date. This extra time can be used to obtain financial assistance or undertake restructuring or other changes to achieve compliance.

(3) Application of Point-of-Use (POU) technology.

States may wish to utilize their capacity development strategy as a framework within which to plan the most effective utilization of all of the tools available. In addition to the SDWA provisions discussed previously, another important tool is financial assistance available through the United States Department of Agriculture's Rural Utilities Service.

EPA invites comments on all aspects of small system compliance with a revised arsenic standard. In particular, the Agency seeks comment on the following issues:

(1) What additional guidance, information, or other assistance, if any, do States need to help them develop and apply system-level affordability criteria (for prioritizing use of drinking water revolving funds in a State; and for determining whether or not to grant exemptions)?

(2) Will exemptions allowing needy systems additional time to achieve compliance be a useful tool? What guidance, information, or other assistance, if any, should EPA make available to States and or systems relative to exemptions?

(3) To what extent can systems lower their compliance costs or enhance their ability to comply by forming partnerships with other systems or otherwise restructuring their operations? What barriers (physical and/or institutional) exist to the formation of these partnerships? What guidance, information, or other assistance, if any, should EPA make available to States and or systems to assist in the formation of system-level partnerships?

(4) What challenges or barriers exist to adoption of POU technology? What do EPA and or the States need to do to facilitate application of POU technology?

(5) What additional guidance, information, or other assistance do States need to help them refine their capacity development strategies to facilitate compliance with a revised arsenic standard?

As previously noted, the findings of the expert review panels will be made publicly available. In addition, EPA will publish a notice with a summary of these findings for public comment. The purpose of the notice will be to provide EPA's perspective on the findings of the review of the costs, benefits, and science underlying the arsenic rule. In addition, the notice will summarize comments received on this proposal and EPA's perspective on those comments. Finally, the notice will provide an indication of how the Agency plans to synthesize this new information with respect to final decisions on the arsenic in drinking water rule. EPA expects that the notice will be published in the Fall of 2001.

The process of making final decisions on the arsenic in drinking water regulation will involve legal, regulatory, policy, and scientific considerations. The results of the expert panels' reviews and public comment will be significant and important sources of information that will be fully considered by the Agency as it makes a final decision. In making a final decision, EPA will also exercise judgment and discretion based on the record and all applicable legal, regulatory, and policy requirements. EPA expects to make a final decision on how to proceed with the arsenic rule by February 22, 2001, after considering the reviews and public comments.

Under Executive Order 12866, [58 Federal Register 51735 (October 4, 1993)] the Agency must determine whether the regulatory action is “significant” and therefore subject to OMB review and the requirements of the Executive Order. The 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 the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that the January 22, 2001, rule is a “significant regulatory action” because it will have annual costs of more than $100 million. Because this proposal is an extension of a rulemaking published on January 22, 2001 (66 FR 6976), and is based on the record for that rulemaking, EPA has complied with this Executive Order through the economic analyses prepared for the January 22, 2001, rulemaking. Those analyses were reviewed by OMB. In addition, this action was submitted to OMB for review. Changes made in response to OMB suggestions or recommendations are documented in the public record for W-99-16-VI.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

The RFA provides default definitions for each type of small entity. It also authorizes an agency to use alternative definitions for each category of small entity, “which are appropriate to the activities of the agency” after proposing the alternative definition(s) in the Federal Register and taking comment (5 U.S.C. 601(3)-(5)). In addition to the above, to establish an alternative small business definition, agencies must consult with the Small Business Administration's (SBA) Chief of Counsel for Advocacy.

For the purposes of assessing the impacts of today's rule on all three categories of small entities, EPA considered small entities to be systems serving 10,000 or fewer customers. In accordance with the RFA requirements, EPA proposed using this alternative definition for all three categories of small entities in the Federal Register (63 FR 7605 at 7620; February 13, 1998), requested public comment and consulted with SBA regarding the alternative definition as it relates to small businesses. In the preamble to the final Consumer Confidence Reports (CCR) regulation (63 FR 4511; August 19, 1998), EPA stated its intent to establish this alternative definition for regulatory flexibility assessments under the RFA for all drinking water regulations and has thus used it in this proposed rulemaking.

As noted in the previous section, this proposal is an extension of, and relies on the record of, a previous rulemaking concerning the same regulatory options. In accordance with section 603 of the RFA, EPA prepared an initial regulatory flexibility analysis (IRFA) for the original proposed rule, published in the Federal Register on June 22, 2000 (EPA 2000b), and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the regulated small entities in accordance with section 609(b) of the RFA. A detailed discussion of the Panel's advice and recommendations is found in the Panel Report (EPA 1999). The June 2000 proposed rule presented a summary of the Panel's recommendations (65 FR 38888 at 38963).

As required by section 604 of the RFA, EPA also prepared a final regulatory flexibility analysis (FRFA) for the January 2001 rule (EPA 2001a). The FRFA and the January 2001 arsenic rule's preamble (66 FR 6976 at 7047) addressed the issues raised by public comments on the IRFA, which was part of the regulatory impact analysis for the proposed rule (65 FR 38888 at 38962; EPA 2000b). The FRFA (EPA 2000j) is available for review in the docket. The previous analyses encompass all of the options proposed again today, and as a result, EPA is relying on those analyses for compliance with the RFA for this proposal.

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 UMRA, 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 to State, Tribal, and local governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of 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 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 why that alternative was not adopted.

Before 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.

EPA has determined that the January 22, 2001, rule contains a Federal mandate that may result in expenditures of $100 million or more for State, Tribal, and local governments, in the aggregate, or the private sector in any one year. Because today's proposal is an extension of the January 2001 arsenic rulemaking and discusses only those options which were fully analyzed in the previous rulemaking, EPA is relying on the record of the January, 2001 rule to provide the analyses required by UMRA. A detailed description of this analysis is presented in EPA's Economic Analysis of the arsenic rule (EPA 2000g) which is included in the Office of Water docket for the arsenic rule, and summarized in the January 2001 preamble (66 FR 6976 at 7049). Through targeting mailing of this notice to entities on the arsenic mailing list, we will continue to solicit State, local, and Tribal access and dialog on the arsenic rule. EPA will also develop a small government agency plan.

The information collection requirements in this proposed rule were previously submitted for approval to the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. As noted in previous sections, today's proposal is an extension of a previous rulemaking which analyzed the same options presented today. As a result, EPA is relying on the PRA analyses prepared for the January 2001 rulemaking and its proposal for compliance with the PRA for this rule. OMB has already reviewed and approved the information collection request (ICR) in the previous rulemaking and assigned OMB control number 2040-0231. This action does not impose any additional information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory 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, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

EPA's analysis of the NTTAA's application to this rulemaking is described in the June 22, 2000, proposal at 65 FR 38971-38972 and the January 22, 2001, preamble at 66 FR 7051. EPA requests comment on this analysis.

Executive Order 12898 establishes a Federal policy for incorporating environmental justice into Federal agencies' missions by directing agencies to identify and address disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority and low-income populations. The Agency has considered environmental justice related issues concerning the potential impacts of this action and consulted with minority and low-income stakeholders.

In the preamble to the June 2000 proposal (65 FR 38888 at 38972), EPA noted arsenic concerns raised during the March 12, 1998, environmental justice stakeholder meeting. The issues raised included confusion over units of measure of test results ( i.e., ppb and μg/L), effects on sensitive subpopulations ( e.g., incidence of diabetes in Tribal communities), infeasibility of regional consolidation, affordable treatments for small systems, increased access to funding, considering regional needs in standard setting, more training, and protection of low income communities. The Agency took these issues into consideration during the development of the January 2001 arsenic rule and the response-to-comments document. The public is invited to comment on EPA's analysis of environmental justice as it relates to today's proposal (which was discussed in the June 2000 proposal and January 2001 rule) and to recommend additional methods to address environmental justice concerns with the approach for treating arsenic in drinking water.

Executive Order 13045: “Protection of Children From Environmental Health Risks and Safety Risks” (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 regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. This proposed rule is not subject to Executive Order 13045 because the Agency does not have reason to believe that the environmental health risks or safety risks addressed by this action present a disproportionate risk to children. Nonetheless, EPA evaluated the environmental health and safety effects of arsenic in drinking water on children as part of the January 2001 rule and its proposal. The public is invited to submit or identify any new peer-reviewed studies and data that assess results of early life exposure to arsenic via ingestion.

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 section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, imposes substantial direct compliance costs, and 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 EPA consults with State and local officials early in the process of developing the proposed regulation). 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 proposed regulation. If EPA complies by consulting, Executive Order 13132 requires 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 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 EPA transmits a draft final rule with federalism implications to OMB for review pursuant to Executive Order 12866, EPA must include a certification from the agency's Federalism Official stating that EPA has met the requirements of Executive Order 13132 in a meaningful and timely manner.

EPA has concluded that this proposed rule will have federalism implications; these are the same federalism implications discussed and analyzed in the June 2000 and January 2001 arsenic rules. EPA provided the Office of Management and Budget (OMB) with a federalism summary impact statement (FSIS) in the preamble to the proposed and final rules. EPA provided the FSIS on page 7052 of the January 2001 rule (66 FR 6976).

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249; November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and the Indian tribes.”

This proposed rule may have tribal implications. It may have substantial direct compliance costs on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and the Indian tribes, as specified in Executive Order 13175. As a result of administrative review of the regulation published on January 22, 2001, the Environmental Protection Agency (EPA) is requesting additional comments on the regulatory options via this proposal. In developing the January 2001 rule, EPA consulted with Tribal governments to permit them to have meaningful and timely input into its development, as described in the preamble (66 FR 6976 at 7052). In the spirit of Executive Order 13175, and consistent with EPA policy to promote communications between EPA and tribal governments, EPA specifically solicits additional comment on this proposed rule from tribal officials.

In accordance with sections 1412 (d) and (e) of SDWA, the Agency discussed or submitted possible arsenic rule requirements to the Science Advisory Board, National Drinking Water Advisory Council (NDWAC), and to the Secretary of Health and Human Services and requested comment from the Science Advisory Board on the arsenic rule, as described in the January 2001 preamble (66 FR 6976 at 7053). In addition, the April 23, 2001 proposed rule (66 FR 20580) outlines the additional consultations planned with NDWAC. EPA will continue contacts with the Department of Health and Human Services during the arsenic rule review process.

Section 1420(d)(3) of SDWA as amended requires that, in promulgating a National Primary Drinking Water Regulation (NPDWR), the Administrator shall include an analysis of the likely effect of compliance with the regulation on the technical, financial, and managerial capacity of public water systems. EPA provided the analysis performed to fulfill this statutory obligation for the January 2001 rule (EPA 2000a). During this reconsideration process, EPA will review the capacity issues further.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355; May 22, 2001), provides that agencies shall prepare and submit to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, a Statement of Energy Effects for certain actions identified as “significant energy actions.” Section 4(b) of Executive Order 13211 defines “significant energy actions” as “any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action.”

We have not prepared a Statement of Energy Effects for this proposed rule because this rule is not a significant energy action, as defined in Executive Order 13211. While this rule is a significant regulatory action under Executive Order 12866, it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

The Bureau is issuing this document to seek comment on WorldCom's Petition and additional issues associated with IP Relay. Comments already submitted in response to WorldCom's petition will be considered in this docket. All comments shall reference the docket number of this proceeding. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. Comments filed through ECFS can be sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html . In completing the transmittal screen, commenters should include their full name, postal service mailing address, and the docket number of this proceeding. Parties who choose to file by paper must file an original and four copies of each filing with the Commission's Secretary (Magalie Roman Salas, Office of the Secretary, Federal Communications Commission, 445 12th Street, SW., Washington DC 20554) and a diskette copy to the Commission's copy contractor (International Transcription Service, Inc. (ITS), CY-B400, Federal Communications Commission, 445 12th Street, SW., Washington DC 20554). In addition, parties must submit a paper copy and diskette to Dana Jackson, Disabilities Rights Office, Consumer Information Bureau, Federal Communications Commission, Room 4-C746, 445 12th Street, SW., Washington DC 20554. Filings and comments are also available for inspection and copying during business hours in the Reference Information Center, Federal Communications Commission, Room CY-A257, 445 12th Street, SW., Washington DC or may be purchased from ITS. Pursuant to 47 CFR 1.1206, this proceeding will be conducted as a permit-but-disclose proceeding in which ex parte communications are permitted subject to disclosure.

In its First Report and Order on TRS, (56 FR 36729, August 1, 1991) the Commission established minimum operational, technical, and functional standards to fulfill this mandate. Last year, the Commission released additional minimal standards to supplement these earlier standards. Specifically, in its Improved TRS Order and FNPRM, (65 FR 38490, June 21, 2000) the Commission both expanded the scope of eligible services that would be classified to receive reimbursement as relay services, and established new criteria for relay providers to improve the quality of relay services. Among other things, the Improved TRS Order and FNPRM added speech-to-speech (STS) and interstate Spanish relay as required relay offerings, and permitted the recovery of video relay service (VRS) costs through the interstate TRS funding mechanism. The Order encouraged, but did not require the provision of VRS at the present time. On December 22, 2000, WorldCom filed a Petition for Clarification of the Improved TRS Order and FNPRM (Petition) seeking clarification that its connection to TRS via the Internet (IP Relay) is eligible for reimbursement from the Interstate TRS Fund. On May 8, 2001, representatives from WorldCom met with Commission staff to further discuss WorldCom's petition. See, Ex parte letter from Larry Fenster, WorldCom, to Magalie Salas, Secretary, Federal Communications Commission, dated May 9, 2001. Additionally, on May 18, 2000, representatives from Communications Services for the Deaf made a presentation to Commission staff on its for a similar IP-based relay service. See, Ex parte letter from Philip W. Bravin, Communications Services for the Deaf, to Magalie Salas, Secretary, Federal Communications Commission, dated May 23, 2001. Although the information gathered at these meetings, together with the formal comments submitted in response to both the Improved TRS Order and FNPRM and the informal comments submitted in response to the WorldCom petition have provided the Commission with basic information about IP Relay, it has become clear that additional information is needed before the Commission can issue a final order on this subject.

This is a summary of the Commission's Notice of Proposed Rule Making, MM Docket No. 01-144, adopted June 27, 2001, and released July 6, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Information Center, 445 Twelfth Street, SW., Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Services, Inc., 1231 20th Street, NW., Washington, DC. 20036, (202) 857-3800, facsimile (202) 857-3805.

Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contact.

For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rulemaking, MM Docket No. 01-147, adopted June 27, 2001, and released July 6, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center (Room CY-A257), 445 Twelfth Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.

Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.

For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 01-149, adopted June 27, 2001, and released July 6, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center (Room CY-A257), 445 Twelfth Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.

Provisions of the Regulatory Flexibility Act of l980 do not apply to this proceeding.

Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.

For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

MADMF submitted a proposal on May 18, 2001, for EFPs for up to 20 vessels to fish with a modified small-mesh otter trawl for silver hake ( Merluccius bilinearis ) in a portion of the Gulf of Maine/Georges Bank Regulated Mesh Area. The proposed experiment is a continuation of an experimental fishery conducted in 1999 and 2000 to gather information on bycatch retained by the modified otter trawl in the requested area. The experiment proposes to continue the collection of data to determine whether or not the fishery has a level of bycatch of regulated multispecies that would enable the fishery to be determined an exempted fishery under the criteria set forth in the FMP. Based on the outcome of this EFP, this action may lead to future rulemaking.

The study would occur from September 1 through December 30, 2001, and take place east of Cape Cod in an area defined by the following coordinates:

The maximum number of vessels participating in the experiment at a given time would be 20 with an estimated total number of trips at approximately 200. The gear to be used during the experiment is a modified small-mesh otter trawl called the “raised footrope trawl.” The gear uses modifications of the float configuration, headrope, footrope, and sweep to keep the mouth of the net from fishing on the bottom and retaining bottom-dwelling species such as flounders, monkfish, skates, lobster, and crabs. Participating vessels would also be subject to a minimum mesh size of 2.5 inches (6.35 cm) in the codend and would be allowed to retain a maximum of 7,500 lb (3,402 kg) of silver hake and offshore hake ( Merluccius albidus ) with nets of mesh size between 2.5 inches (6.35 cm) and 3 inches (7.62 cm), and a maximum of 30,000 lb (13,608 kg) of silver hake and offshore hake with nets of mesh size 3 inches (7.62 cm) and above. The possession limits are to ensure that the conservation goals for whiting are preserved. Vessels may be required to carry onboard observers as requested by MADMF and/or NMFS. Onboard observers will be trained in the protocols of the experiment by MADMF and/or NMFS.

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires each Regional Fishery Management Council to submit any fishery management plan (FMP) or amendment to NMFS for review and approval, disapproval, or partial approval. The Magnuson-Stevens Act also requires that NMFS, upon receiving an FMP or amendment, immediately publish a document in the Federal Register stating that the FMP or amendment is available for public review and comment.

The shrimp fishery is the largest fishery in terms of numbers of fishing vessels and participants in the Gulf of Mexico, but is one of the few federally managed fisheries with no fishing permit requirement. Currently, there are limited data available to estimate the number of shrimp fishing vessels and fishing effort expended by those vessels in the Gulf of Mexico EEZ. Amendment 11 would require all shrimp vessels harvesting shrimp in the Gulf of Mexico EEZ to obtain an annually renewable Federal shrimp vessel permit from NMFS. In proposing this action, the Council concluded that information collected via a Federal permit system would aid in the formulation of sound management measures for the shrimp fishery and for those finfish fisheries that are impacted because of the bycatch and bycatch mortality attributable to the shrimp fishery.

Royal red shrimp have been a small component of the Gulf of Mexico shrimp fishery since the early 1960s, traditionally being fished by vessels using modified shrimp trawls at depths exceeding 100 fathoms (183 meters). The Council concluded that allowing trap gear to be used in this fishery would likely lead to gear conflicts and could lead to overfishing. At the Council’s request, NMFS implemented an emergency interim rule prohibiting the use of trap gear in the royal red shrimp fishery within the EEZ of the Gulf of Mexico that was promulgated on September 19, 2000 (65 FR 56500), and was extended until September 14, 2001 (66 FR 14862, March 14, 2001).

A proposed rule that would implement measures contained in Amendment 11 has been received from the Council. In accordance with the Magnuson-Stevens Act, NMFS is evaluating the proposed rule to determine whether it is consistent with the FMP, the Magnuson-Stevens Act, and other applicable law. If that determination is affirmative, NMFS will publish the proposed rule in the Federal Register for public review and comment.

Comments received by September 17, 2001, whether specifically directed to the FMP or the proposed rule, will be considered by NMFS in its decision to approve, disapprove, or partially approve Amendment 11. Comments received after that date will not be considered by NMFS in this decision. All comments received by NMFS on Amendment 11 or its proposed rule during their respective comment periods will be addressed in the final rule.

The Gulf Council previously submitted its Generic Tortugas Amendment to NMFS for Secretarial review, approval, and implementation. A notice of its availability for public comment was published in the Federal Register on March 7, 2001 (66 FR 13692). On June 6, 2001, NMFS approved those management measures in the Generic Tortugas Amendment that amend the following FMPs: Fishery Management Plan for Coral and Coral Reefs of the Gulf of Mexico; Fishery Management Plan for the Red Drum Fishery of the Gulf of Mexico; Fishery Management Plan for the Stone Crab Fishery of the Gulf of Mexico; Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico; and Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico.

The amendment’s proposed management measures that would amend the two FMPs prepared jointly (joint FMPs) by the Gulf Council and the South Atlantic Fishery Management Council (South Atlantic Council), namely the Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic and the Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic, had yet to be adopted by the South Atlantic Council. Therefore, those amendment measures proposed for amending the two joint FMPs were not eligible for Secretarial review and approval under the Magnuson-Stevens Act at the time the Gulf Council first submitted the amendment to NMFS for Secretarial review.

At its meeting of June 18-23, 2001, the South Atlantic Council adopted the amendment’s proposed management measures that would amend the two joint FMPs. Based on this action by the South Atlantic Council, NMFS has determined that the amendment’s measures that would amend the two joint FMPs have been properly submitted for Secretarial review by the Gulf Council and can now be reviewed and, if approved, implemented. Accordingly, NMFS is publishing this notice of availability of these amendment measures for public comment.

To date, NMFS has not published a proposed rule for the Generic Tortugas Amendment. In accordance with the Magnuson-Stevens Act, NMFS is evaluating the proposed rule to determine whether it is consistent with the Generic Tortugas Amendment, the Magnuson-Stevens Act, and other applicable law. If that determination is affirmative, NMFS will publish the proposed rule in the Federal Register for public review and comment. The proposed rule will include amendment measures approved by NMFS on June 6, 2001, for the following FMPs: Fishery Management Plan for Coral and Coral Reefs of the Gulf of Mexico; Fishery Management Plan for the Red Drum Fishery of the Gulf of Mexico; Fishery Management Plan for the Stone Crab Fishery of the Gulf of Mexico; Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico; and Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico. The proposed rule will also include those proposed management measures for amending the two joint FMPs that are the subject of this notice. These latter measures would amend the Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic and the Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic.

Considerable background information on the Generic Tortugas Amendment is contained in the original notice of availability published March 7, 2001 (66 FR 13692) and is not repeated here. Under the Generic Tortugas Amendment, the Gulf Council proposes that the marine reserves be established for a period of at least 10 years, during which the ecological benefits of the reserves will be evaluated. The prohibition on fishing and anchoring of fishing vessels should minimize human disturbances in the Tortugas reserves and help to restore and maintain their ecological integrity, including a full assemblage of fish, coral, and other benthic invertebrates. The reserves will also create a reference or baseline area for studying human impacts on coral reef ecosystems.

Comments received by September 17, 2001, whether specifically directed to those management measures in the Generic Tortugas Amendment that would amend the joint FMPs or to the proposed rule, will be considered by NMFS in its decision to approve, disapprove, or partially approve those measures amending the joint FMPs. Comments received after that date will not be considered by NMFS in this decision. All comments received by NMFS on the Generic Tortugas Amendment (under both the current and previous Secretarial review periods) or the proposed rule during their respective comment periods will be addressed in the preamble of the final rule.