The Energy Employees Occupational Illness Compensation Program Act of 2000 (“Act”) (Pub. L. No. 106-398, 42 U.S.C. 7384, et seq) establishes a program for compensating covered workers made ill during nuclear weapons production for DOE. Covered workers with certain illnesses, including chronic beryllium disease, radiation-induced cancers, and silicosis, may be eligible for specified benefits under the program. Executive Order 13179 (65 FR 77487, December 7, 2000) assigns the Department of Labor primary responsibility for this program.

While not eligible for Federal compensation under EEOICPA, workers with other illnesses that may be related to workplace toxic exposures may qualify and apply for compensation through their respective State workers' compensation systems. Subtitle D of the Act authorizes the Secretary of Energy to enter into an agreement with each State to provide assistance to a DOE contractor employee in filing a claim under that State's workers' compensation system. After DOE enters into such an agreement with a State, an applicant can submit an application to the Program Office in DOE for assistance in filing a claim with that State's workers' compensation system. If the application comes within the terms and conditions of the relevant State Agreement and contains reasonable evidence that the illness or death of a covered employee may be related to employment at a DOE facility, then DOE must submit the application to a physicians panel established under the Act to determine the validity of the applicant's claim. Under the Act, DOE specifies the number of physicians panels required, the number of physicians per panel, and each panel's jurisdiction, while the Secretary of Health and Human Services appoints the members of the physicians panels. Section 3661(d) of Subtitle D of the Act provides that a physicians panel must make its determination “under guidelines established by the Secretary [of Energy], by regulation.” If a physicians panel makes a positive determination and the Program Office accepts it, then the Program Office must assist the applicant in filing a claim with the relevant State's workers' compensation system. In addition, DOE may not contest the claim or any award made regarding the claim and, to the extent permitted by law, may direct a DOE contractor not to contest the claim or award. Furthermore, any costs of contesting the claim or award is not an allowable cost under a DOE contract.

The proposed procedures are consistent with existing DOE Notice 350.6 that sets forth Departmental policy to pay all valid State workers' compensation claims. DOE Notice 350.6 provides for the expeditious validation of claims that meet the criteria for compensation under a State workers' compensation system. The proposed procedures would achieve the same result.

The linkage to the criteria for compensation under a State workers' compensation system is consistent with the structure of the Act. Specifically, Subtitle D of the Act authorizes DOE to assist a worker in filing a claim under the appropriate State workers' compensation system. DOE does not interpret Subtitle D as calling for federalizing the operation of State workers compensation standards. Rather, Subtitle D is intended to ensure that DOE will assist and not hinder the processing of valid claims under a State workers' compensation system.

The proposed rule establishes procedures for implementing Subtitle D of the Act. Proposed section 852.1(a) provides that these regulations address how (1) an individual may submit an application to the Program Office for review and assistance, (2) the Program Office determines whether to submit an application to a physician panel, (3) physicians panels determine whether the illness or death of a DOE contract employee arose out of and in the course of employment by a DOE contractor and through exposure to a toxic substance at a DOE facility, (4) the Program Office accepts or rejects a determination by a physicians panel, and (5) appeals may be undertaken.

Proposed section 852.1(b) makes clear that the procedures only cover applications that meet three conditions. First, the application must be based on the illness or death of a DOE contractor employee. Second, the illness or death must be caused by exposure to a toxic substance. And third, the exposure must have occurred during the course of employment at a DOE facility.

Consistent with the statutory emphasis on State Agreements as a precondition for action under Subtitle D of the Act, proposed section 852.1(c) provides that all actions under the procedures must be pursuant to a relevant State Agreement and consistent with its terms and conditions.

This proposed rule contains definitions of “Act”, “Applicant”, “DOE”, “DOE Contractor Employee”, “DOE Facility”, “Program Office”, “Physicians Panel”, “State Agreement”, and “Toxic Substance”.

The Act is the Energy Employees Occupational Illness Compensation Program Act of 2000, 42 U.S.C. 7384 et seq.

An applicant is a DOE contractor employee or the employee's estate seeking assistance from the Program Office in filing a claim with the relevant State workers' compensation system.

Proposed section 852.2 defines a DOE contractor employee to be a “Department of Energy contractor employee” as defined by section 3621(11) of the Act. The statutory definition focuses on employment by a DOE contractor at a DOE facility and establishes one of the subsets of employees eligible for the DOL program. Thus, the term “DOE contractor employee” does not include all those employees eligible for the DOL program. For example, it does not include atomic weapon employees who were not employed by a DOE contractor at a DOE facility. In addition, it does not include Federal employees.

Proposed section 852.2 defines “DOE facility” to be a “Department of Energy facility” as defined by section 3621(12) of the Act. DOE has published a list of facilities it considers to be Department of Energy facilities for purposes of the Act. (66 FR 4003, January 17, 2001; revised 66 FR 31218, June 11, 2001). DOE took a broad view of what constitutes a Department of Energy facility in compiling this list and solicits comments as to whether this broad view is appropriate for implementing Subtitle D of the Act.

The Program Office is the DOE Office of Worker Advocacy or any other DOE office subsequently designated by the Secretary of Energy. The Program Office exercises most of the functions of the Secretary of Energy under Subtitle D of the Act.

Physicians panels are appointed by the Secretary of Health and Human Services in response to requests by DOE pursuant to Subtitle D of the Act. Physicians panels provide DOE with impartial and independent determinations as to whether the illness or death of a DOE contractor worker arose out of and in the course of employment by a DOE contractor and exposure to a toxic substance at a DOE facility. Physicians panels may be asked to review new applications that have not undergone prior physicians panel review, or to re-examine applications that have already undergone physicians panel review.

Proposed section 852.2 defines “State Agreement” as an agreement negotiated between DOE and a State that sets forth the terms and conditions for dealing with an application for assistance under Subtitle D of the Act in filing a claim with the State's workers' compensation system. The existence of a State Agreement with a particular State is a condition precedent for any action by the Program Office on an application for assistance in filing a claim with that State's workers compensation system. Once in effect, a State Agreement sets the parameters within which the Program Office can take action with respect to an application.

Proposed section 852.6 provides for three standard provisions in State Agreements which are subject to negotiation. First, a State will identify the applicable criteria used to determine the validity of a workers' compensation claim under State law and describe how those criteria are applied in a State worker's compensation proceeding. Second, only those applications that satisfy the identified applicable criteria law will be submitted to a physicians panel. And third, the Program Office will provide assistance to only those applications that meet the identified applicable criteria.

The standard provisions indicate that DOE will rely on State standards for screening applications prior to submission to physicians panels for a causation determination. DOE has considered prescribing Federal standards without regard to State law, and proposes not to do so for a variety of reasons. First, the text of the Act does not require DOE to prescribe such standards. Second, in the absence of statutory text and legislative history to the contrary, DOE construes the purpose of the Act to be provision of DOE assistance to contractor employees or their estates to enable them to qualify for compensation under State law. Third, there is nothing in the text of the Act or its legislative history indicating that Congress intended to bypass State law or to provide for affirmative physician panel determinations that may not have any operative impact because of State law. Although the Act provides for DOE to deny reimbursement of contractor litigation expenses in defense of claims for which there are affirmative physician panel determinations, that provision would have no impact in circumstances where the contractor's defense is in the hands of an insurance company. DOE invites comments on its proposal to rely on State standards to screen applications for assistance. DOE also solicits comments as to what other provisions should be included in State Agreements. For example, should a State Agreement contain a provision under which the State would consider the opinion of a physicians panel on medical issues and, if appropriate, delay State proceedings in order to obtain such an opinion?

Proposed section 852.2 defines “toxic substance” as any material that has the potential to cause illness or death because of its radioactive, chemical, or biological nature. This is a relatively broad definition of the term, which could be interpreted to encompass not only toxic chemicals, but also infectious agents and external radiation sources. However, this definition does not include all workplace conditions that might cause illness or death. For example, workplace noise is not considered a toxic substance and thus hearing loss resulting from exposure to workplace noise could not provide a basis for an application for assistance under Subtitle D of the Act. An example of a narrower definition of “toxic substance” would be, “any chemical or compound capable of causing illness as a result of exposure.” DOE solicits comments on its definition, including whether “toxic substance” should be defined more precisely.

Proposed section 852.3 defines how an individual obtains and submits an application for review and assistance. An application can be obtained in person from the Program Office, from any Resource Center, and from any DOE-sponsored Former Worker Program. There are currently approximately one dozen Former Worker Programs throughout the U.S. The Former Worker Programs currently offer screening examinations for the detection of occupational illnesses for individuals formerly employed at some but not all DOE facilities. An application can also be obtained by mail or telephone request to the Program Office, or, in a printable format, from the Program Office's web site.

Proposed section 852.3 also describes how an application is submitted. An application can be submitted in person to the Program Office, to any Resource Center, or to any DOE-sponsored Former Worker Program, where staff will be available to answer questions and assist the individual in filling out the application. An application can also be submitted by mail to the Program Office.

Proposed section 852.4 describes the information and materials that the individual must submit as a part of the application for physicians panel review. First, the individual must sign a request for review by a physicians panel of the individual's application for assistance. Additional information requirements flow out of Subtitle D of the Act, which requires that, in order to qualify for physicians panel review, the applicant must submit reasonable evidence that (a) the application was filed by or on behalf of a DOE contractor employee or employees estate; and (b) the illness or death of the employee may have been related to employment at a DOE facility. In order to assure that the Program Office has sufficient information to determine whether an individual meets these eligibility criteria, and in order to provide a physicians panel with sufficient information to make a causation determination on an application, the applicant is also required in proposed section 852.4, to provide (a) a signed medical release, authorizing non-DOE sources of medical information to provide the Program Office with medical records documenting the individual's diagnosis or providing an opinion as to the relationship between the applicant's medical condition and exposure to a toxic substance while employed at a DOE facility; (b) a signed release permitting the Program Office to obtain any records under the control of DOE and relevant to the individual's eligibility for the program or relevant to the physicians panel's adjudication of the application, including employment, exposure and medical records; (c) an employment history, filled out by the individual; and (d) any other information or materials deemed by the Program Office to be relevant to a determination of the individual's eligibility for the review and assistance program, or relevant to adjudication of the application by a physicians panel. As the program is implemented, the Program Office may find that it needs additional information or materials for the processing of an application for review and assistance.

Proposed section 852.5 establishes a screening mechanism by which the Program Office determines whether to submit an application to a physicians panel. Specifically, an application must contain adequate information to permit the Program Office to make a reasonable initial determination that the following three conditions are met. First, the application was filed by or on behalf of a DOE contractor employee or employee's estate. Second, the illness or death of the DOE contractor employee may have been related to employment at a DOE facility. And third, the conditions in the relevant State Agreement are or can be satisfied. DOE solicits comment on whether the proposed conditions are appropriate and what, if any, additional conditions should be used.

Proposed section 852.5 provides that the Program Office will screen applications prior to sending them to a physicians panel for a causation determination. Among other things, under the proposed rule, the Program Office may decide not to forward an application to a physicians panel at this stage because the Program Office determines that the application would not satisfy the conditions in the relevant State Agreement, including the applicable criteria used to determine the validity of a workers' compensation claim under State law. Potential criteria would include: (1) Whether the disease or condition is covered under the State workers' compensation system, (2) whether there is a prescribed time period for bringing a claim, and (3) what level and type of evidence is required to support a claim. DOE solicits comment on whether the suggested criteria are appropriate and what, if any, alternative or additional criteria should be used. In addition, DOE specifically solicits comments on whether State claims' timeliness requirements should be excluded from the screening criteria developed under this part.

DOE also seeks comment on a more limited alternative screening mechanism. This alternative would provide for the negotiation of agreements with the States to identify particular criteria that are relevant to the question, under state law, whether a particular disease caused by a toxic substance arises out of employment at a DOE facility. Under this alternative screening mechanism, the Program Office would take into consideration the relevant State criteria in determining whether an application alleges an illness or death that may have been related to employment at a DOE facility and should be submitted to a physicians panel to determine whether the medical evidence supports the applicable criteria. The Program Office would refer to a physicians panel any application that alleges the appropriate criteria, along with specific questions that the panel should address, based on criteria identified in the relevant State Agreement, in order to determine whether the condition in question arises out of employment and exposure to toxic substances. DOE invites comments on this alternative screening mechanism that would limit the use of state criteria to those related to the question of whether a disease arose from exposure to a toxic substance during employment at a DOE facility and that would not use other State criteria related to the broader question of whether an application presents a valid claim for compensation under the State's workers' compensation system. In particular, comments should address what type of criteria might be identified in a State Agreement under this alternative screening mechanism. Potential criteria might include: (1) Whether the disease originated from a hazard to which workers would have been equally exposed outside of the employment, (2) whether there is a causal connection between the work conditions and the disease, (3) whether the disease is peculiar to the occupation in which the employee is or was engaged, (4) whether the disease was contracted after a period of exposure to the toxic substance specified under state law, or (5) the level of medical probability that the disease was the material and direct result of the conditions under which the work.

DOE is considering an additional alternative that would provide for this screening determination to be made by State officials on a reimbursable basis. This would take advantage of the in-house expertise of the State workers' compensation offices. DOE invites affected States and interested members of the public to comment on this alternative screening mechanism. Under this alternative, DOE would contract with States to do the initial screening prior to submission of applications to the physician panels. States most likely have an existing structure within their workers' compensation office that could make these determinations. The determinations would not be compensation determinations, but rather a basic threshold test for eligibility based on pre-established determination criteria. Such criteria could include eligibility under that State's workers compensation laws; evidence that the application was filed on behalf of a DOE contractor employee or employee's estate; and evidence that the illness or death of the DOE contractor employee may have been related to employment at a DOE facility. If the State determines that an individual meets that test, the Program Office would then submit the necessary information to a physicians panel. DOE solicits comment on this alternative. DOE is specifically interested in receiving comment regarding the burden this would place on States and whether utilizing State expertise to make these determinations (rather than the Program Office) would justify this burden.

As a general matter, DOE requests comments as to: (1) whether the use of a screening mechanism is consistent with the statutory framework; and (2) whether the use of applicable State criteria or uniform Federal criteria better achieves the statutory objectives.

Proposed section 852.7 provides that a physicians panel determines whether the illness or death arose out of and in the course of employment by a DOE contractor and exposure to a toxic substance at a DOE facility on the basis of whether there is sufficient information to support two findings. First, the physician panel must find there is an adequate factual basis for a prima facie case that exposure to a toxic substance at a DOE facility during the course of employment by a DOE contractor caused the illness or death. Second, taking into account all the information, the physicians panel must make a reasonable finding that it is more likely than not that exposure to a toxic substance at a DOE facility during the course of employment by a DOE contractor caused the illness or death. This two-pronged test focuses on both adequacy of information and likelihood of causation.

Proposed section 852.7 sets the burden of proof as “more likely than not.” DOE considered and decided not to propose the “as likely as not” standard used in subtitles of the Act other than Subtitle D. In DOE's view, the “more likely than not” standard better reflects the proof of causation required by the statute's physicians panel provisions. DOE solicits comments on what is the appropriate burden of proof for assistance under the DOE program.

DOE considered and rejected proposing guidelines under which a physicians panel must determine whether an illness arose out of and in the course of employment by a DOE contractor and exposure to a toxic substance at a DOE facility by using the applicable criteria under State law in the manner used to determine the validity of a workers' compensation claim under State law. DOE decided it is more appropriate to take State criteria into account during the initial screening process. DOE does believe it is appropriate to have a physicians panel examine one or more of the medical criteria identified in a State Agreement if it is not possible during the initial screening to determine whether a particular criterion is satisfied. DOE solicits comments on the extent, if any, to which physicians panels should be expected to examine criteria used in State workers' compensation proceedings.

Proposed section 852.8 provides that each physicians panel member will receive from the Program Office a complete set of materials related to the applicant's diagnosis, medical history, work history, and history of exposures so that the panel will have an adequate body of information for making a determination. The panel must review all materials it receives from the Program Office.

A physicians panel may, on occasion, need additional information or consultations to make its determination. For expediency, documentation of evidence, maintenance of confidentiality, and records control, proposed section 852.9 requires the panel to make all requests for additional information through the Program Office. The panel may request an interview with the applicant, if the panel believes that only the applicant can supply the necessary information. Based upon the experiences of similar physicians panels, including the Expert Panel of the Fernald II Settlement Fund, it is anticipated that such a request will be unusual, but may be necessary in rare cases in order to obtain essential information. The panel can also request that the applicant provide additional medical information. The physicians panel may request consultation with specialists in fields relevant to its deliberations, if needed, as provided for in section 3661(d)(4) of the Act, or refer to relevant medical and scientific literature. The Program Office will maintain a roster of available specialists for this purpose.

Subtitle D neither specifically authorizes nor specifically bars DOE from paying for the development of medical evidence (e.g. medical examinations) to support an individual's application for assistance under Subpart D. Although today's proposed regulations do not provide for DOE to pay for the development of the applicant's medical documentation, DOE considered proposing regulations to permit such activities. DOE elected not to make such a proposal because of doubts about statutory authorization and whether this approach is appropriate. DOE invites comment on this choice and the desirability of including regulations permitting such activities in the notice of final rulemaking.

After each member of a physicians panel reviews the information, the panel members discuss an application and arrive at a determination by unanimous agreement of its members. Because it is anticipated that physicians panels will be spread out geographically, proposed section 852.10 permits teleconferencing. This system has worked well for prior physicians panels, such as the Expert Panel of the Fernald II Settlement Fund.

In order to ensure that a physicians panel has made its determination based upon the relevant evidence and that it has provided the basis for its determination, proposed section 852.11 requires the panel to identify the materials it has reviewed in making its determination, and express the determination and its basis in a series of findings that logically links the evidence reviewed to the conclusions drawn. The panel must also cite, for the Program Office's consideration, any evidence to the contrary of the panel's determination, and explain why the panel finds this evidence to be not persuasive.

DOE anticipates that some covered workers who have applied for benefits under the DOL program will also apply for assistance from the Program Office in filing a claim with a State workers' compensation system. However, filing a claim under the DOL program is not a requirement for the DOE program. In addition, receiving benefits under the DOL program does not automatically entitle an applicant to receive assistance from the Program Office or a positive determination from a physicians panel. For example, under the DOL program a member of a Special Exposure Cohort who has a specified cancer could establish entitlement to benefits for a specified cancer in the absence of clear evidence that the disease is the result of exposure to a toxic substance. A physicians panel, however, can make a positive determination only if sufficient evidence is provided. Factual findings made by DOL, including findings based on dose reconstructions performed by HHS regarding the likelihood that cancer was caused by occupational exposure to radiation, while relevant to a panel's assessment, are not binding on a physicians panel. A physicians panel is free to make different causation determinations, or to base those determinations on different factual premises. A physicians panel would be expected to explain the extent to which it based its determination on the findings of any agency in its report to the Program Office.

Proposed section 852.12 requires a physicians panel to submit its determination within 30 working days of receiving the application materials, unless granted an extension by the Program Office.

Because records for review by the physicians panels and by medical specialists consulted at the request of these panels contain confidential, personal, and medical information, this section is included to provide safeguards that physicians panels and specialists must follow to preserve the confidentiality of this information. Physicians panel members and specialists are required to comply with all provisions of the Privacy Act of 1974 applicable to Worker Advocacy records. Safeguards specified include maintaining paper records in locked cabinets and desks, and not including personally identifiable information in published or unpublished reports, studies, or surveys.

In order to ensure objectivity and fairness, proposed section 852.14 requires each panel member to report any real or perceived conflict of interest with regard to a particular application to the Program Office, and to cease reviewing the application pending instruction by the Program Office. The Program Office will then take appropriate actions to remedy the situation, generally referring the application to a different physicians panel. At least two physicians panels are designated to review applications submitted by employees of each DOE facility. The Program Office may also employ other remedies, such as substituting an alternate panel member for the panel member with the conflict of interest. The Program Office has alternate panel members available for this purpose if needed.

Proposed section 852.15 provides that the Program Office may refer a case back to the original panel or to a different panel, after the original panel has made a determination, in the following circumstances: if the Program Office obtains additional information whose consideration could result in a different determination, including information provided by the applicant, for quality assurance purposes, or if an additional review is otherwise necessary for the fair determination of the application. The Program Office may refer an application to a different panel, but not the original panel, if the office has concerns that the available evidence does not support the original panel's determination, as one possible remedy for a conflict of interest involving a panel member, as described in section 852.14, or to ensure consistency between panels in their decision making.

Proposed section 852.16 requires the Program Office, except as provided in section 852.15, to accept the determination by a physicians panel unless there is significant evidence to the contrary.

Proposed section 852.17 provides that an applicant may request the Office of Hearings and Appeals to review: (1) A decision by the Program Office not to submit an application to a physicians panel, (2) a negative determination by a physicians panel that is accepted by the Program Office, or (3) a decision by the Program Office not to accept a positive determination by a physicians panel if the Program Office does not return the application to a physicians panel for further consideration. Proposed section 852.17 is clear that an applicant must request review by the Office of Hearings and Appeals in order to exhaust administrative remedies. An applicant must file a notice of appeal with the Office of Hearings and Appeals on or before 60 days from the date of a letter from the Program Office notifying the applicant of a determination appealable under this section. The Office of Hearings and Appeals will consider appeals in accordance with its procedures set forth in 10 CFR part 1003. A decision by the Office of Hearings and Appeals shall constitute final agency action.

In the event the Program Office accepts a positive determination by a physicians panel, the Program Office must assist the applicant in filing a claim with the relevant State's workers' compensation system and cannot contest the claim or any award made regarding the claim. In addition, the Program Office may, to the extent permitted by law, direct a DOE contractor not to contest the claim or award. Furthermore, any costs of contesting the claim or award is not an allowable cost under a DOE contract.

DOE estimates that the worker assistance program will result in costs of $127,122,251 over the next ten years. This total cost estimate includes benefit costs for State workers' benefits paid to ill workers or their families, and operational costs for the operation of the Advocacy Office, Resource Centers, physicians panels and advisory committee. Of this total, $92,645,500 is attributed to administering the program. The administrative cost estimates are distributed among DOE Resource Center costs of $16,500,000, records search costs estimated at $45,895,500, physicians panel costs of $19,500,000, casework and hotline costs of $9,950,000 and Federal Advisory Committee costs of $800,000. DOE estimates that more than $45,000,000 of the $45,895,000 estimated costs for records searches will be in support of the DOL portion of the program, based on DOL estimates of the number of claimants. The highest annual administrative costs are anticipated in fiscal year 2003, and are estimated to be approximately $19,000,000.

DOE estimates the total benefit costs over the next ten years to be $34,476,751. The highest anticipated annual costs would be in fiscal year 2003, and are estimated at $29,695,098. Costs are expected to decrease each year thereafter throughout the estimation period. The total benefit costs will be distributed across a number of claimant and benefit types, including medical care, wage replacement, and permanent partial disability (PPD). The highest total costs for benefits are anticipated in fiscal year 2003, and are estimated to be just above $10,000,000. Medical cost estimates are based on Workers Compensation for Radiation Induced Illness: A Re-Examination of Past Practices and Options for Change by N. A. Ashford et al, January 1996, with costs escalated to1999 dollars. These cost estimates, as well as estimates of the number of claimants, are taken from DOE and DOL estimates for a prior legislative proposal covering some of the same workers and conditions covered by the Subtitle D worker assistance program. PPD benefits vary by State, worker attributes like age and employability, and worker wage. These estimates reflect a range of costs for disability payments.

DOE contractors will see increased costs in the form of insurance payments or premiums and increased contributions to State workers' compensation funds in some cases. Ultimately, DOE bears the cost of the additional workers' compensation claims, as DOE contractors pass on these costs.

Today's regulatory action has been determined to be “a significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action was subject to review under that Executive Order by the Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. This proposed rule would provide guidelines for the operation and determinations of physicians panels established to provide expert opinion to DOE on the cause of a worker's illness or death. It would not impose costs or burdens on any small business or other small entity. DOE, therefore, certifies that this proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities.

The proposed rule provides that an individual may submit an application for review and assistance to the Program Office that contains information relating to the individual's employment by a DOE contractor, the nature of the illness or death, and the relationship between the illness or death and the individual's employment at a DOE facility. The application is required for DOE to determine whether reasonable evidence exists for submitting the individual's application to a physician panel.

DOE is submitting to the Office of Management and Budget (OMB), simultaneously with the publication of this proposed rule, this collection of information for review and approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection has been reviewed and assigned a control number by OMB. Interested persons may obtain a copy of the Paperwork Reduction Act Submission from the contact person named in this notice.

Interested persons are invited to submit comments to OMB addressed to: Department of Energy Desk Officer, Office of Information and Regulatory Affairs, OMB, 725 17th Street, NW., Washington, DC 20503. Persons submitting comments to OMB also are requested to send a copy to the DOE contact person at the address given in the ADDRESSES section of this notice. OMB is particularly interested in comments on: (1) The necessity for the proposed collection of information, including whether the information will have practical utility; (2) the accuracy of DOE's estimates of the burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology.

DOE assumes that most applications for assistance under this part will be made in the first and second years after the worker assistance process is established. It is not possible to give precise estimates of the number of applications that will be filed. However, DOE previously has estimated the number of workers potentially eligible for State compensation at 1,200. For purposes of the Paperwork Reduction Act Submission, DOE is multiplying 1,200 by 5 to reach an estimate of the total number of applications that may be filed. DOE further assumes that one hour will be required to complete an application. Using these assumptions, DOE estimates the total annual paperwork burden to be approximately 6,000 hours.

DOE has concluded that promulgation of this rule falls into a class of actions that would not individually or cumulatively have a significant impact on the human environment, as determined by DOE's regulations implementing the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Specifically, this proposed rule deals only with physicians panel procedures, and, therefore, is covered under the Categorical Exclusion for rulemakings that are strictly procedural in paragraph A6 of Appendix A to subpart D, 10 CFR part 1021. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), imposes certain requirements on Agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required 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 are 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.” On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations (65 FR 13735). DOE has examined today's proposed rule and has determined that it does not have a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. The scope of this proposed rule is limited to defining how a physicians panel established under the Act will determine whether the illness or death that is the subject of an application for assistance in filing a claim under a State's workers' compensation system arose out of and in the course of employment by the Department of Energy and exposure to a toxic substance at a Department of Energy Facility. Referral of an application to a physicians panel can occur only by agreement with the applicable State, and the proposed rule would require the application of that State's statutory workers' compensation criteria, if provided for in the agreement. Thus, this proposed rule would not preempt State workers' compensation law. No further action is required by Executive Order 13132.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal Agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear, legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear, legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal Agency to prepare a written assessment of the effects of any Federal mandate in a proposed or final rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in any 1 year. The Act also requires a Federal Agency to develop an effective process to permit timely input by elected officers of State, local, and tribal governments on a proposed “significant intergovernmental mandate,” and it requires an Agency to develop a plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirement that might significantly or uniquely affect small governments. The proposed rule published today does not contain any Federal mandate, so these requirements do not apply.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal Agencies to issue a Family Policymaking Assessment for any proposed rule or policy that may affect family well-being. This rulemaking would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has not prepared a Family Policymaking Assessment.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to the promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA, as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits energy supply, distribution, and use.

Today's proposed rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

Interested persons are invited to participate in this proceeding by submitting data, views, or comments with respect to this proposed rule. To help the Department review the submitted comments, commenters are requested to reference the paragraph(s) (e.g., 852.2(a)) to which they refer when possible.

Three copies of written comments should be submitted to the address indicated in the ADDRESSES section of this notice. All comments received will be available for public inspection as part of the administrative record on file for this rulemaking in the Department of Energy Freedom of Information Reading Room, Room 1E-190, Forrestal Building, 1000 Independence Avenue, SW, Washington, DC 20585, (202) 586-3142, between the hours of 9 a.m.and 4 p.m., Monday through Friday, except Federal holidays. All written comments received by the date indicated in the DATES section of this notice of proposed rulemaking and all other relevant information in the record will be carefully assessed and fully considered prior to the publication of the final rule. Pursuant to the provisions of 10 CFR 1004.11, anyone submitting information or data that he or she considers to be confidential and exempt from public disclosure by law should submit one complete copy of the document, as well as two copies, if possible, from which the information has been deleted. The Department will make its own determination as to the confidentiality of the information and treat it accordingly.

You will find the time and place of the public hearing listed at the beginning of this notice. We invite any person who has an interest in today's notice, or who is a representative of a group or class of persons that has an interest in these issues, to request an opportunity to make an oral presentation. If you would like to speak at this hearing, contact Ms. Loretta Young, telephone: 202-586-2819; fax: 202-586-6010; e-mail: loretta.young@eh.doe.gov; address: Office of Advocacy, EH-8, U.S. Department of Energy, 1000 Independence Avenue, Washington, DC 20585, no later than 10 days in advance of the hearing.

The person making the request should briefly describe the nature of the interest in the rulemaking, and provide a telephone number for contact. We request each person selected to be heard to submit an advance copy of his or her statement at least 10 days prior to the date of this hearing. Also, each presenter is to bring three copies of the prepared oral statement to the hearing. At our discretion, we may permit any person who cannot do this to participate if that person has made alternative arrangements with Ms. Young in advance.

DOE will designate a DOE official to preside at the public hearing. The public hearing will not be a judicial or evidentiary-type hearing, but DOE will conduct it in accordance with 5 U.S.C. 553 and section 501 of the Department of Energy Organization Act (42 U.S.C. 7191). Each oral presentation is limited to 10 minutes. At the conclusion of all initial oral statements, each person who has made an oral statement will be given the opportunity, if he or she so desires, to make a rebuttal or clarifying statement. The statements will be given in the order in which the initial statements were made and will be subject to time limitations. Only those conducting the hearing may ask questions. The hearing will last as long as there are persons who have requested an opportunity to speak.

DOE will prepare a transcript of the hearing. DOE will retain the transcript and other records of this rulemaking and make them available for inspection in DOE's Freedom of Information Reading Room, as provided at the beginning of this notice. Any person may purchase a copy of the transcript from the transcribing reporter.

The presiding official will announce any further procedural rules needed for the proper conduct of the hearing.

For the reasons stated in the preamble, DOE hereby proposes to amend chapter III of title 10 of the Code of Federal Regulations by adding part 852 to read as follows:

Before September 30, 2001, NARA will have installed personal computer workstations with Internet access in research and/or consultation rooms in all NARA archival facilities, including regional archives and Presidential libraries, for the exclusive use of researchers. There will be at least one workstation at each facility. Space constraints in many of the facilities limit the number of workstations that can be provided.

These computers will provide Internet access for research purposes, such as access to NARA's Archival Information Locator (NAIL), and NAIL's successor, the Archival Research Catalog (ARC). Computers designated for public use provide Internet access only. At least one of the public Internet access workstations in each facility complies with the Workforce Investment Act of 1998, ensuring comparable accessibility to individuals with disabilities.

Use of the workstations will be on a first-come, first-served basis. A 30-minute time limit may be imposed on the use of the equipment when others are waiting to use a workstation. This policy is compatible with our policy for limiting the length of time microform readers and self-service copiers may be used when others are waiting.

Because of the possibility of introducing a virus to NARA's computer network, researchers may not load files or software on these computers. For the same reason, researchers may not use personally owned diskettes to download information. Researchers may download information to diskettes furnished by NARA and print information to an on-site printer. Based on the experience of several NARA facilities that already have Internet capability in the research room, we expect low to moderate use of the NARA-provided diskettes and printers. Therefore, we do not intend to charge for these services.

Currently NARA researcher identification cards issued at one NARA facility are valid at all NARA facilities. At our College Park facility, a plastic researcher identification card that works with our security system is issued. We intend to expand use of the plastic card to the National Archives Building in downtown Washington, DC, and possibly to other NARA facilities in the future. We are modifying the existing rule to provide that NARA will issue a plastic identification card (at no charge) to replace a previously-issued paper one when a researcher goes for the first time to a facility that use the plastic cards.

This proposed rule is not a significant regulatory action for the purposes of Executive Order 12866 and has not been reviewed by the Office of Management and Budget. As required by the Regulatory Flexibility Act, I certify that this rule will not have a significant impact on a substantial number of small entities because it applies only to individuals conducting research on NARA premises. This regulation does not have any federalism or tribal implications.

For the reasons set forth in the preamble, NARA proposes to amend part 1254 of title 36, Code of Federal Regulations, as follows:

For further information, please see the information provided in the direct final action, with the same title, that is located in the “Rules and Regulations” section of this Federal Register publication.

Throughout this document “we,” “us,” and “our” refers to EPA.

The LED fuel program was initially submitted as part of the DFW attainment demonstration. This LED rule was codified in Chapter 114 of the Texas Administrative Code (TAC) (Sections 114.6, 114.312-114.317 and 114.319, December 6, 2000).

Numerous changes to State air pollution control laws occurred during Texas' 77th legislative session. One of these changes relates to the LED program. House Bill 2912, which became law on June 17, 2001, limits the State's authority to regulate fuel content. The law bans the establishment of fuel control measures more stringent than EPA's between September 1, 2000 and January 1, 2004. The law specifically authorizes TNRCC's adoption of the LED fuel program, but mandates that implementation be delayed until February 1, 2005. Finally, this law allows TNRCC to consider other fuels to achieve equivalent emissions reductions as an alternative method of compliance, which is intended to allow refiners flexibility in complying with the LED requirements.

In anticipation of this legislation, the TNRCC proposed amendments to the LED rule on May 10, 2001. The proposed amendments modify the LED rules to delay the implementation date from May 1, 2002, to April 1, 2005, and provide additional flexibility to allow for alternative emission reduction plans.

In a letter to EPA dated June 15, 2001, the Governor requested “parallel processing” of the LED rule with the proposed amendments. See 30 TAC 114.314, 114.318, 114.319 (May 10, 2001).

We consider the implementation date change to have no significant impact on the DFW attainment demonstration. The alternative method of compliance which is intended to provide additional flexibility for refiners to comply with LED requirements is acceptable, although we have requested clarification of certain aspects of this provision.

Because of the urgency associated with the October 15, 2001, approval deadline imposed by a consent decree order affecting, among others, the Houston Attainment SIP (Natural Resources Defense Council v. Browner, Civ No. 99-2976, November 30, 1999), Texas requested that EPA proceed with expedited review and approval of these revisions to the LED program, which is relied upon in the Houston (HGA) attainment demonstration SIP as well as the DFW attainment demonstration SIP. Therefore, because these revisions affect both the HGA and DFW attainment demonstrations and because the HGA attainment SIP is subject to a consent decree deadline, we have agreed to expedited review of these revisions for both the DFW and HGA SIP revisions.

In order to expedite review, approval of this revision is being proposed under a procedure called “parallel processing” whereby EPA proposes rulemaking action concurrently with the State's procedures for amending its regulations (40 CFR part 51, Appendix V, section 2.3). If the State's proposed revision is substantially changed in areas other than those identified in this document, EPA will evaluate those subsequent changes and may publish another notice of proposed rulemaking. If no substantial changes are made, EPA will publish a final rulemaking on the revisions after responding to any submitted comments. Final rulemaking action by EPA will occur only after the SIP revision has been fully adopted by Texas and submitted formally to EPA for incorporation into the SIP. In addition, any action by the State resulting in undue delay in the adoption of the rules may result in a re-proposal, altering the approvability of the SIP.

In today's action, we are proposing approval of the LED rule with the proposed amendments as they apply to the DFW nonattainment area counties plus five adjacent counties within the CMSA.

Nothing in this action should be construed as permitting or allowing or establishing a precedent for any future implementation plan. Each request for revision to the State Implementation Plan shall be considered separately in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). For the same reason, this proposed rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This proposed rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The proposed rule does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings.” This proposed rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

On August 3, 2001, the State of Delaware (Delaware) submitted the RACM analysis for the Philadelphia area as a SIP revision.

Section 172(c)(1) of the Act requires SIPs to contain reasonably available control measures (RACM) as necessary to provide for attainment. EPA has previously provided guidance interpreting the RACM requirements of section 172(c)(1). (See 57 FR 13498, 13560, April 16, 1992.) In that guidance, EPA indicates that potentially available control measures, which would not advance the attainment date for an area, would not be considered RACM under the Act. EPA concludes that a measure would not be reasonably available if it would not advance attainment. EPA's guidance also indicates that states should consider all potentially available measures to determine whether they are reasonably available for implementation in the area, including whether or not they would advance the attainment date. Further, the guidance calls for states to indicate in their SIP submittals whether measures considered are reasonably available or not, and if so the measures must be adopted as RACM. Finally, EPA indicated that states could reject potential RACM measures either because they would not advance the attainment date, would cause substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. The EPA also issued a recent memorandum on this topic, “Guidance on the Reasonably Available Control Measures (RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.” John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.

The analysis submitted by the Delaware on August 3, 2001, as a supplement to its attainment demonstration SIP for the Philadelphia area, addresses the RACM requirement. Delaware has examined a wide variety of potential stationary source and mobile source controls. The stationary/area source controls that were considered were limits on area source categories not covered by a control technique guideline (CTG) (e.g., motor vehicle refinishing, and surface/cleaning degreasing); rule effectiveness improvements; expanding the applicability of CTG limits to sources smaller than those mandated under the CTG); “beyond RACT” controls on major stationary sources of nitrogen oxides ( NOX); and other potential measures. The mobile source control measures considered included measures such as the national low emission vehicle program, high occupancy vehicle (HOV) lanes; employer based programs; trip reduction ordinances; bicycle and pedestrian improvements; programs to restrict extended idling of vehicle; early retirement of older motor vehicles; traffic flow improvements; and alternative fuel vehicles. Delaware considered an extensive list of potential control measures and chose measures for implementation which went beyond the Federally mandated controls, which were found to be cost effective and technologically feasible. From the list of measures considered, the rules and measures adopted and submitted by Delaware includes the following:

(1) Delaware has adopted, and EPA has SIP-approved, a rule for vehicle refinishing. The rule includes VOC content limits for motor vehicle refinishing coatings at least equivalent to the Federal requirements and required compliance with this rule in 1996 versus in 1998 as required under the Federal rule.

(2) Delaware has adopted, and EPA has SIP approved, a rule for control of VOC emissions from offset lithographic printing operations.

(3) Delaware has adopted, and EPA has SIP approved, a rule for control of VOC emissions from aerospace coating operations with an applicability threshold well below that required by the applicable CTG.

(4) Delaware has adopted, and EPA has SIP approved, a rule for control of VOC emissions from graphic arts operations (packaging rotogravure, publication rotogravure, or flexographic printing press) with an applicability threshold well below that required by the applicable CTG.

(5) Delaware has adopted, and EPA has SIP approved, a rule for control of VOC emissions from use of organic cleaning solvents that includes requirements that go beyond the applicable CTG for surface cleaning and degreasing.

(6) Delaware has adopted, and EPA has SIP approved, a rule requiring the sale of vehicles under the national low-emission vehicle program.

(7) Delaware has adopted, and EPA has SIP approved, a rule to implement Phase II NOX controls under the Ozone Transport Commission's (OTC) Memorandum of Understanding (MOU). This rule established a fixed cap on ozone-season NOX emissions from major point sources of NOX. The rule grants each source a fixed number of NOX allowances, applies state-wide, and requires compliance during the ozone season. The implementation of this rule commenced May 1, 1999 in Delaware and reduces NOX emissions both inside and outside the Philadelphia area.

(8) Delaware has adopted, and EPA has SIP approved, a rule to implement the NOX SIP call. Delaware's rule requires compliance commencing with the start of the 2003 ozone season.

Other potential measures are not considered to be cost effective or have implementation difficulties due to the intensive and costly effort that would be involved in regulating numerous, small area source categories. These explanations are provided in further detail in the docket for this rulemaking. Delaware concluded that a number of potential transportation control measures were considered feasible, but would not, in aggregate, advance the attainment date.

The attainment demonstration for the Philadelphia area contains modeling using the urban airshed model (UAM) which demonstrates that the Philadelphia area cannot attain solely through reductions in the Philadelphia nonattainment area. The Philadelphia area relies on background reductions of transported ozone to attain the one hour ozone standard. EPA established in the NOX SIP Call, promulgated on October 27, l998 (63 FR 57356), the appropriate division of control responsibilities between the upwind and downwind States under the Act. In Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), the court upheld the NOX SIP Call on most issues, although a subsequent order of the court delays the implementation date to no later than May 31, 2004. EPA is moving forward to implement those portions of the rule that have been upheld, ensuring that most—if not all—of the emission reductions from the NOX SIP Call assumed in the one hour ozone NAAQS attainment demonstration for the Philadelphia area will occur. EPA's modeling to determine the region-wide impacts of the NOX SIP Call clearly shows that regional transport of ozone and its precursors is impacting nonattainment areas several states away, and this analysis was upheld by the court. Also, on January 18, 2000 (65 FR 2674), EPA promulgated a final rule on petitions filed pursuant to section 126 of the Act by eight Northeastern States, that sought to mitigate interstate transport of NOX emissions from a number of large electric generating units (EGUs) and large industrial boilers and turbines. Because the allocation of responsibility for transport was not made until late 1998 and early 2000, the prohibitions on upwind contributions under section 110(a)(2)(D) and section 126 could not be enforced prior to 2003 or 2004. The implementation of the control measures in states upwind of the Philadelphia area that are needed to eliminate the significant contribution of sources in those states—will not ripen until 2003 or 2004 under the NOX SIP call or the section 126 petitions.

To demonstrate attainment of the one hour ozone standard, the UAM modeling required the Delaware portion of the Philadelphia area to achieve emissions levels on the order of 104 tons per day of VOC emissions and 138 tons per day of NOX. The ROP plan for 2005 is projected to get emissions levels down to 96.5 tons per day of VOC emissions and 138 tons per day of NOX excluding the benefits of the Federal Tier 2/Sulfur rule.1 This Tier 2/Sulfur program will further reduce emissions in the area staring with the 2004 model year vehicles.2 Any potential reductions from the remaining potential RACM measures in aggregate are relatively small (as documented in the docket for this rulemaking) compared to the ROP reductions that will be achieved by the 2005 attainment date.

Thus, EPA concludes that no additional measures could advance the attainment date for the Philadelphia area prior to full implementation of all upwind and local controls scheduled for implementation by 2005.

The EPA is opening a comment period for 30 days to take comment on Delaware's August 3, 2001 RACM submittal discussed above. EPA is proposing to approve Delaware's SIP revision for RACM, which was submitted on August 3, 2001, as a supplement to its one hour attainment demonstration for the Philadelphia area. EPA is soliciting public comments on the issues discussed in this document or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to the EPA Regional office listed in the ADDRESSES section of this document.

EPA is proposing to approve the RACM analysis submitted by the State of Delaware on August 3, 2001 as a supplement to its one hour attainment demonstration for the Philadelphia area. This revision is being proposed under a procedure called parallel processing, whereby EPA proposes rulemaking action concurrently with the state's procedures for amending its regulations. If the proposed revision is substantially changed in areas other than those identified in this action, EPA will evaluate those changes and may publish another supplemental notice of proposed rulemaking. If no substantial changes are made other than those areas cited in this notice, EPA will publish a Final Rulemaking Notice on the revisions. The final rulemaking action by EPA will occur only after the SIP revision has been adopted by Delaware and submitted formally to EPA for incorporation into the SIP.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely proposes to approve a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This proposed rule regarding Delaware's RACM analysis for the Philadelphia area does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

On December 16, 1999, we proposed approval of the attainment demonstration for the Philadelphia area, which was submitted on April 29, 1998 (64 FR 70412). We supplemented our December 16, 1999 proposed action on July 28, 2000 (65 FR 46383) and July 16, 2001 (66 FR 36964).

On August 20, 2001, the State of Maryland (Maryland) submitted the RACM analysis (Maryland SIP Revision Number 01-09) for the Philadelphia area as a SIP revision.

Section 172(c)(1) of the Act requires SIPs to contain reasonably available control measures (RACM) as necessary to provide for attainment. EPA has previously provided guidance interpreting the RACM requirements of section 172(c)(1). (See 57 FR 13498, 13560, April 16, 1992.) In that guidance, EPA indicates that potentially available control measures, which would not advance the attainment date for an area, would not be considered RACM under the Act. EPA concludes that a measure would not be reasonably available if it would not advance attainment. EPA's guidance also indicates that states should consider all potentially available measures to determine whether they are reasonably available for implementation in the area, including whether or not they would advance the attainment date. Further, the guidance calls for states to indicate in their SIP submittals whether measures considered are reasonably available or not, and if so the measures must be adopted as RACM. Finally, EPA indicated that states could reject potential RACM measures either because they would not advance the attainment date, would cause substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. The EPA also issued a recent memorandum on this topic, “Guidance on the Reasonably Available Control Measures (RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.” John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.

The analysis submitted by Maryland on August 20, 2001, as a supplement to its attainment demonstration SIP for the Philadelphia area, addresses the RACM requirement. Maryland has considered a variety of potential stationary/area source controls such as limits on area source categories not covered by a control technique guideline (CTG) (e.g., motor vehicle refinishing, and surface/cleaning degreasing); rule effectiveness improvements; controls on major stationary sources of nitrogen oxides (NOX) beyond that required under reasonably available control technology (RACT); and other potential measures. Maryland considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based program; low emission vehicle standards; and other measures such as trip reduction ordinances, value pricing and highway ramp metering.

The State has implemented measures which went beyond the Federally mandated controls, which were found to be cost effective and technologically feasible. Maryland has adopted and submitted rules for the following categories of area sources which go beyond the Federally mandated controls. The following are examples and not an exhaustive list:

(1) Maryland has adopted, and EPA has SIP approved, a rule for motor vehicle refinishing. The rule includes volatile organic compound (VOC) content limits for motor vehicle refinishing coatings, application standards and storage and house keeping work practices. This rule goes beyond the Federal rule in content limits, and sets application and work practices standards.

(2) Maryland has adopted, and EPA has approved, a rule for control of VOC emissions from screen printing on plywood used for signs, and untreated sign paper.

(3) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from screen printing, lithographic printing, drying ovens, adhesive application, and laminating equipment used to produce a credit card or similar plastic card product.

(4) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from “digital imaging”—printers that use a computer driven machine to transfer an electronically stored image onto the substrate through the use of inks, toners, or other similar color graphic materials via ink jet, electrostatic, and spray jet technologies.

(5) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from cold and vapor degreasing that includes requirements that go beyond the applicable CTG. Maryland restricts the vapor pressure of solvents used to 1 mm Hg at 20° C (0.019 psia) or less for and cold degreasing, including cold or vapor degreasing at: service stations; motor vehicle repair shops; automobile dealerships; machine shops; and any other metal refinishing, cleaning, repair, or fabrication facility.

(6) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC and NOX emissions by banning open burning activities from June 1 through August 31 of each year.

(7) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from lithographic printing.

Maryland has adopted and submitted rules for additional “beyond RACT” reductions in NOX emissions as follows:

(1) Maryland has adopted, and EPA has SIP approved, a rule to implement Phase II NOX controls under the Ozone Transport Commission's (OTC) Memorandum of Understanding (MOU). This rule established a fixed cap on ozone-season NOX emissions from specified major point sources of NOX. The rule grants each source a fixed number of NOX allowances, applies state-wide, and required compliance starting during the 2000 ozone season. It reduces NOX emissions both inside and outside the Philadelphia area.

(2) Maryland has adopted, and EPA has SIP approved, a rule to implement the NOX SIP call. The Maryland rule requires compliance commencing with the start of the 2003 ozone season. (This measure is identified as Phase II/III control under the OTC MOU on NOX control in the attainment demonstration).

Maryland has also adopted, and EPA has SIP approved, a rule requiring the sale of vehicles under the national low-emission vehicle program (NLEV).

Maryland has considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based program; and other measures such as trip reduction ordinances, value pricing and highway ramp metering.

The Maryland portion (Cecil County) of the Philadelphia area has unique local characteristics that affect the effectiveness of many mobile source measures. The first is that the majority of the vehicle travel occurs on the Interstate 95 highway; much of this traffic is through traffic that would not be affected by locally adopted transportation control measures. Cecil County is a rural area without much of the mass transit infrastructure found in State's other major nonattainment areas (Baltimore, Metropolitan Washington, DC). The area has few point sources of VOC emissions and no major sources of NOX. Most of the area source VOC emissions are already subject to regulation. Maryland determined that many of the considered measures were not to be RACM due to the potential for substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. A large number of the considered measures were rejected on these grounds or on the grounds that they could not be implemented by 2005 much less any earlier. Some were rejected because they would not advance attainment because the measure had benefits outside the ozone season or would be sporadically implemented (not episodically) such as the “try transit week” items. These explanations are provided in further detail in the docket for this rulemaking.

The attainment demonstration for the Philadelphia area contains modeling using the urban airshed model (UAM) which demonstrates that the Philadelphia area cannot attain solely through reductions in the Philadelphia nonattainment area. The Philadelphia area relies on background reductions of transported ozone to attain the one hour ozone standard. EPA established in the NOX SIP Call, promulgated on October 27, 1998 (63 FR 57356), the appropriate division of control responsibilities between the upwind and downwind States under the Act. In Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), the court upheld the NOX SIP Call on most issues, although a subsequent order of the court delays the implementation date to no later than May 31, 2004. EPA is moving forward to implement those portions of the rule that have been upheld, ensuring that most—if not all—of the emission reductions from the NOX SIP Call assumed in the 1-hour ozone attainment demonstration for the Philadelphia area will occur. EPA's modeling to determine the region-wide impacts of the NOX SIP Call clearly shows that regional transport of ozone and its precursors is impacting nonattainment areas several states away, and this analysis was upheld by the court. Also, on January 18, 2000 (65 FR 2674), EPA promulgated a final rule on petitions filed pursuant to section 126 of the Act by eight Northeastern States, that sought to mitigate interstate transport of NOX emissions from a number of large electric generating units (EGUs) and large industrial boilers and turbines. Because the allocation of responsibility for transport was not made until late 1998 and early 2000, the prohibitions on upwind contributions under section 110(a)(2)(D) and section 126 could not be enforced prior to 2003 or 2004. The implementation of the control measures in states upwind of the Philadelphia area that are needed to eliminate the significant contribution of sources in those states—will not ripen until 2003 or 2004 under the NOX SIP call or section 126 petitions.

As previously stated, the Philadelphia attainment demonstration contains UAM modeling which demonstrates that the Philadelphia area cannot attain solely through reductions in the Philadelphia nonattainment area. The Philadelphia area relies on background reductions of transported ozone to attain the one hour ozone standard. To demonstrate attainment of the one hour ozone standard, the modeling required the Maryland portion of the Philadelphia area to achieve emissions levels on the order of 8.2 tons per day of VOC emissions and 10.5 tons per day of NOX. To reach these emissions levels, emission reductions (relative to the 1990 base year) of 3.2 tons per day of NOX and 10.3 tons per day of VOC are necessary in the Maryland portion of the Philadelphia area. Any potential reductions from the remaining potential RACM measures in aggregate are small compared to the 2005 attainment demonstration reductions (plus the addition of the Tier 2/Sulfur benefits) that will be reached by the 2005 attainment date. Thus, EPA concludes that no additional measures could advance the attainment date for the Philadelphia area prior to full implementation of all upwind and local controls scheduled for implementation by 2005.

The EPA is opening a comment period for 30 days to take comment on Maryland's August 20, 2001 RACM submittal. EPA is proposing to approve Maryland's SIP revision for RACM, which was submitted on August 20, 2001, as a supplement to its one hour attainment demonstration for the Philadelphia area. EPA is soliciting public comments on the issues discussed in this document or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to the EPA Regional office listed in the ADDRESSES section of this document.

EPA is proposing to approve the RACM analysis submitted by the State of Maryland on August 20, 2001 as a supplement to its one hour attainment demonstration for the Philadelphia area. This revision is being proposed under a procedure called parallel processing, whereby EPA proposes rulemaking action concurrently with the state's procedures for amending its regulations. If the proposed revision is substantially changed in areas other than those identified in this action, EPA will evaluate those changes and may publish another supplemental notice of proposed rulemaking. If no substantial changes are made other than those areas cited in this action, EPA will publish a Final Rulemaking Notice on the revisions. The final rulemaking action by EPA will occur only after the SIP revision has been adopted by Maryland and submitted formally to EPA for incorporation into the SIP.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely proposes to approve a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This proposed rule regarding Maryland's RACM analysis for the Philadelphia area does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

On December 16, 1999, we proposed approval of the attainment demonstration for the Baltimore area, which was submitted on April 29, 1998 (64 FR 70397). We supplemented our December 16, 1999 proposed action on July 28, 2000 (65 FR 46383) and July 16, 2001 (66 FR 36964).

On August 20, 2001, the State of Maryland (Maryland) submitted the RACM analysis (Maryland SIP Revision Number 01-08) for the Baltimore area as a SIP revision.

Section 172(c)(1) of the Act requires SIPs to contain reasonably available control measures (RACM) as necessary to provide for attainment. EPA has previously provided guidance interpreting the RACM requirements of section 172(c)(1). ( See 57 FR 13498, 13560, April 16, 1992.) In that guidance, EPA indicates that potentially available control measures, which would not advance the attainment date for an area, would not be considered RACM under the Act. EPA concludes that a measure would not be reasonably available if it would not advance attainment. EPA's guidance also indicates that states should consider all potentially available measures to determine whether they are reasonably available for implementation in the area, including whether or not they would advance the attainment date. Further, the guidance calls for states to indicate in their SIP submittals whether measures considered are reasonably available or not, and if so the measures must be adopted as RACM. Finally, EPA indicated that states could reject potential RACM measures either because they would not advance the attainment date, would cause substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. The EPA also issued a recent memorandum on this topic, “'Guidance on the Reasonably Available Control Measures (RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.” John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.

The analysis submitted by Maryland on August 20, 2001, as a supplement to its attainment demonstration SIP for the Baltimore area, addresses the RACM requirement. Maryland has considered a variety of potential stationary/area source controls such as limits on area source categories not covered by a control technique guideline (CTG) (e.g., motor vehicle refinishing, and surface/cleaning degreasing); rule effectiveness improvements; controls on major stationary sources of nitrogen oxides (NOX) beyond that required under reasonably available control technology (RACT); and other potential measures. Maryland considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based program; low emission vehicle standards; and other measures such as trip reduction ordinances, value pricing and highway ramp metering.

The State has implemented measures which went beyond the Federally mandated controls, which were found to be cost effective and technologically feasible. Maryland has adopted and submitted rules for the following categories of area sources which go beyond the federally mandated controls. The following are examples and not an exhaustive list:

(1) Maryland has adopted, and EPA has SIP approved, a rule for motor vehicle refinishing. The rule includes volatile organic compound (VOC) content limits for motor vehicle refinishing coatings, application standards and storage and house keeping work practices. This rule goes beyond the Federal rule in content limits, and sets application and work practices standards.

(2) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from screen printing on plywood used for signs, and untreated sign paper.

(3) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from screen printing, lithographic printing, drying ovens, adhesive application, and laminating equipment used to produce a credit card or similar plastic card product.

(4) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from “digital imaging”—printers that use a computer driven machine to transfer an electronically stored image onto the substrate through the use of inks, toners, or other similar color graphic materials via ink jet, electrostatic, and spray jet technologies.

(5) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from cold and vapor degreasing that includes requirements that go beyond the applicable CTG. Maryland restricts the vapor pressure of solvents used to 1 mm Hg at 20 C (0.019 psia) or less for and cold degreasing, including cold or vapor degreasing at: service stations; motor vehicle repair shops; automobile dealerships; machine shops; and any other metal refinishing, cleaning, repair, or fabrication facility.

(6) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC and NOX emissions by banning open burning activities from June 1 through August 31 of each year.

(7) Maryland has adopted, and EPA has approved Maryland's rule for control of VOC emissions from lithographic printing.

Maryland has also adopted and submitted rules for additional “beyond RACT” reductions in NOX emissions as follows:

(1) Maryland has adopted, and EPA has SIP approved, a rule to implement Phase II NOX controls under the Ozone Transport Commission's (OTC) Memorandum of Understanding (MOU). This rule established a fixed cap on ozone-season NOX emissions from specified major point sources of NOX. The rule grants each source a fixed number of NOX allowances, applies state-wide, and required compliance starting during the 2000 ozone season. It reduces NOX emissions both inside and outside the Baltimore area.

(2) Maryland has adopted, and EPA has SIP approved, a rule to implement the NOX SIP call. The Maryland rule requires compliance commencing with the start of the 2003 ozone season. (This measure is identified as Phase II/III control under the OTC MOU on NOX control in the attainment demonstration).

Maryland has also adopted, and EPA has SIP approved, a rule requiring the sale of vehicles under the national low-emission vehicle program (NLEV).

Maryland has adopted into its post-1996 rate-of-progress plans through the attainment year of 2005 rule effectiveness improvements.

Maryland has considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based programs; and other measures such as trip reduction ordinances, value pricing and highway ramp metering. Maryland determined that many of the considered measures were not to be RACM due to the potential for substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. A large number of the considered measures were rejected on these grounds or on the grounds that they could not be implemented by 2005 much less any earlier. Some measures were rejected because they would not advance attainment because they had benefits outside the ozone season or would be sporadically implemented (not episodically) such as the “try transit week” items. A number of the potential RACM candidates are already programmed into the area's transportation plan as mitigation measures. As such, these measures pass the feasibility test. Maryland concluded these would not advance the attainment date because their emission benefits, even when aggregated with other potentially feasible measures, are small relative to the amount needed to attain the standard. These explanations are provided in further detail in the docket for this rulemaking.

The attainment demonstration for the Baltimore area contains modeling using the urban airshed model (UAM) which demonstrates that the Baltimore area cannot attain solely through reductions in the Baltimore nonattainment area. The Baltimore area relies on background reductions of transported ozone to attain the 1-hour ozone standard. EPA established in the NOX SIP Call, promulgated on October 27, 1998 (63 FR 57356), the appropriate division of control responsibilities between the upwind and downwind States under the Act. In Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), the court upheld the NOX SIP Call on most issues, although a subsequent order of the court delays the implementation date to no later than May 31, 2004. EPA is moving forward to implement those portions of the rule that have been upheld, ensuring that most—if not all—of the emission reductions from the NOX SIP Call assumed in the 1-hour ozone attainment demonstration for the Baltimore area will occur. EPA's modeling to determine the region-wide impacts of the NOX SIP Call clearly shows that regional transport of ozone and its precursors is impacting nonattainment areas several states away, and this analysis was upheld by the court. Also, on January 18, 2000 (65 FR 2674), EPA promulgated a final rule on petitions filed pursuant to section 126 of the Act by eight Northeastern States, that sought to mitigate interstate transport of NOX emissions from a number of large electric generating units (EGUs) and large industrial boilers and turbines. Because the allocation of responsibility for transport was not made until late 1998 and early 2000, the prohibitions on upwind contributions under section 110(a)(2)(D) and section 126 could not be enforced prior to 2003 or 2004. The implementation of the control measures in states upwind of the Baltimore area that are needed to eliminate the significant contribution of sources in those states—will not ripen until 2003 or 2004 under the NOX SIP call or the section 126 petitions.

As previously stated, the Baltimore attainment demonstration contains UAM modeling which demonstrates that the Baltimore area cannot attain solely through reductions in the Baltimore nonattainment area. The Baltimore area relies on background reductions of transported ozone to attain the 1-hour ozone standard. To demonstrate attainment of the 1-hour ozone standard, the modeling required the Baltimore area to achieve emissions levels on the order of 224 tons per day of VOC emissions and 323 tons per day of NOX. To reach these emissions levels, emission reductions (relative to the 1990 base year) of 152 tons per day of NOX and 120 tons per day of VOC are necessary in the Baltimore area. Any potential reductions from the remaining potential RACM measures in aggregate are small compared to the 2005 attainment demonstration reductions (plus the addition of the Tier 2/Sulfur benefits) that will be reached by the 2005 attainment date. Thus, EPA concludes that no additional measures could advance the attainment date for the Baltimore area prior to full implementation of all upwind and local controls scheduled for implementation by 2005.

The EPA is opening a comment period for 30 days to take comment on Maryland's August 20, 2001 RACM submittal. EPA is proposing to approve Maryland's SIP revision for RACM, which was submitted on August 20, 2001, as a supplement to its one-hour attainment demonstration for the Baltimore area. EPA is soliciting public comments on the issues discussed in this document or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to the EPA Regional office listed in the ADDRESSES section of this document.

EPA is proposing to approve the RACM analysis submitted by the State of Maryland on August 20, 2001 as a supplement to its one-hour ozone attainment demonstration for the Baltimore area.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This proposed rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely proposes to approve a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This proposed rule regarding Maryland's RACM analysis for the Baltimore area does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Inspection of Public Comments: Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone (410) 786-0626 or (410) 786-7195.

Title XIX of the Social Security Act (the Act), “provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.” Harris v. McRae, 448 U.S. 297, 301 (1980). Under section 1902(a)(17) of the Act, each participating State must develop a plan containing “reasonable standards * * * for determining eligibility for and the extent of medical assistance.” Schweiker v. Gray Panthers, 453 U.S. 34, 36 (1981). Section 1902(a)(17)(B) of the Act states that those State standards must “provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient.”

Section 1924 of the Act requires a State with a Medicaid program to use special rules for the treatment of income and resources of married institutionalized individuals who have spouses who are not institutionalized. (Throughout this preamble, we use the term “institutionalized spouses” to mean married institutionalized individuals and the term “community spouses” to mean spouses who are not institutionalized.) These provisions are referred to as the “spousal impoverishment” provisions. The spousal impoverishment provisions govern the allocation of income and resources between the spouses for determining Medicaid eligibility of the institutionalized spouse as well as allowing the States to determine how much income of the institutionalized spouse is available to be applied toward the cost of his or her institutional care (“post-eligibility determinations”).

Income and resource calculations for married persons have proved to be a matter of great complexity, particularly when one of the spouses is cared for in an institutional setting, such as a nursing home, but the other spouse is not institutionalized. Before 1989, the provisions governing the Medicaid eligibility of institutionalized spouses sometimes left the community spouse with income below the poverty level and with minimal resources as well. At that time, after the month of institutionalization, the income of the two spouses was considered separately in most States for purposes of determining an institutionalized spouse's eligibility. However, very little of the institutionalized spouse's income could be protected for use by the spouse in the community. This often left the community spouse with little income to live on. After the month of institutionalization, most States would consider the joint resources of the community spouse and the institutionalized spouse (subject to a limited exclusion), and any property owned solely by the institutionalized spouse to be available for the care of the institutionalized spouse. (Property owned solely by the community spouse was not considered.) Thus, depending on how resources were owned, many married couples would have to deplete almost all of their resources before the institutionalized spouse would qualify for Medicaid. The net effect of those requirements in some cases was the “pauperization” of the community spouse. H.R. Rep. No. 105, 100th Cong., 1st Sess. Pt. 2, at 65 (1987).

The Congress attempted to alleviate that spousal impoverishment hardship in the Medicare Catastrophic Coverage Act (MCCA) of 1988, (Public Law 100-360, enacted on December 22, 1988.) The MCCA requires a State to use a complex set of requirements and exclusions when allocating income and resources between community and institutionalized spouses, both when the State makes the initial eligibility determination, and later in post-eligibility determinations.

In section 1924(a)(1) of the Act, it provides that the spousal impoverishment provisions “supersede any other provision” of the Medicaid statute that “is inconsistent with them.” However, the MCCA did not repeal the Secretary's authority to prescribe standards (under section 1902(a)(17)(B) of the Act) for determining what income is “available” to a spouse, and the requirement for States to set reasonable standards for determining eligibility and amount of assistance. That section 1902(a)(17) authority may now only be exercised in a manner that does not contravene the specific requirements of the spousal impoverishment provisions.

With respect to the allocation of income as part of an eligibility determination, the spousal impoverishment provisions impose only a single rule. Section 1924(b)(1) of the Act provides that during any month in which an institutionalized spouse is in the institution, no income of the community spouse shall be deemed available to the institutionalized spouse (subject to certain qualifications regarding income attribution). Thus, section 1924(b)(1) of the Act establishes a special rule that protects the income of the community spouse by excluding that income from consideration when determining whether the institutionalized spouse is eligible for Medicaid. Section 1924(b)(1) of the Act, however, does not address the extent to which the State may consider the institutionalized spouse's income available to meet the needs of the community spouse.

With respect to income attribution after the State makes the initial eligibility determination, the spousal impoverishment provisions provide more extensive guidance and requirements. Specifically, section 1924(b)(2) of the Act provides that, if payment of income is made solely in the name of one spouse, that income is generally treated as available only to that spouse. Section 1924(d) of the Act provides a number of exceptions to that rule, which are generally designed to ensure that the community spouse has sufficient income to meet his or her basic monthly needs. In particular, section 1924(d) of the Act provides for the establishment of a minimum monthly maintenance needs allowance for each community spouse. The community spouse's minimum monthly maintenance needs allowance is set at a level that is much higher than the official Federal poverty level. Once income is attributed to each of the spouses according to the general rules in section 1924(b) of the Act, the income attributed to the community spouse is compared to the community spouse's minimum monthly maintenance needs allowance. Section 1924(d)(2) of the Act provides that if the community spouse's income is less than the minimum monthly maintenance needs allowance, the amount of the shortfall can be deducted from the income of the institutionalized spouse that would otherwise be considered available for the care of the institutionalized spouse. The amount of that deduction is referred to as the community spouse monthly income allowance.

The deduction of the community spouse monthly income allowance, in effect, prevents income the community spouse needs to meet basic living expenses from being considered available for the care of the institutionalized spouse. The deduction thus causes Medicaid to assume a greater portion of the costs of institutionalized care. The greater Medicaid payments for care of the institutionalized spouse would free up income to meet the minimum needs of the community spouse. The community spouse monthly income allowance, therefore, ensures that the community spouse's basic monthly maintenance needs can be met before the institutionalized spouse's income is considered available to pay for the costs of his or her own institutional care.

With respect to the attribution of resources between the institutionalized spouse and community spouse, the statute provides extensive rules for both initial and post-eligibility decisions. For initial eligibility determinations, each spouse's share of resources is calculated as of the beginning of the institutionalized spouse's first period of institutionalization. At that time, all of the institutionalized spouse's and community spouse's resources are tallied together, and one half of the total value is allocated to each spouse (the “spousal share”). Often, most of the resources allocated to the institutionalized spouse must be exhausted before the institutionalized spouse is eligible for Medicaid. In contrast, the community spouse's share is protected from complete exhaustion. In particular, the community spouse's resources are not considered available for the care of the institutionalized spouse (and the institutionalized spouse can become Medicaid eligible) so long as the community spouse's share does not exceed the community spouse resource allowance (CSRA). Thus, the CSRA limits the extent to which the spouses must exhaust resources before the institutionalized spouse becomes eligible for Medicaid. Section 1924(f)(2)(A) of the Act specifies that the CSRA is the greatest of (1) $12,000 or a State standard up to $60,000 (indexed for inflation; for 2001 the indexed amount is $87,000); (2) the lesser of the spousal share (approximately one-half of the spouses' pooled resources) or $60,000 (indexed for inflation); (3) the amount set at a fair hearing under section 1924(e)(2) of the Act; or (4) the amount transferred under a court order.

In allocating income and resources between spouses, States have employed two divergent methods. Under the method used by most States, known as the “income-first” method, the institutionalized spouse's income (above the allowances specified in section 1924(d) of the Act) is allocated to the community spouse for purposes of determining the extent to which the community spouse has sufficient income to meet minimum monthly maintenance needs. Under the income-first method, the CSRA is increased only if the community spouse's income will not reach his or her minimum monthly maintenance needs allowance after taking into account any income not protected under section 1924(d) that is available or potentially available from the institutionalized spouse. In contrast, under the other method, known as the “resources-first” method, the couple's resources can be protected for the benefit of the community spouse to the extent necessary to ensure that the community spouse's total income, including income generated by the CSRA, meets the community spouse's minimum monthly maintenance needs allowance. Additional income from the institutionalized spouse that may be, but has not been, made available for the community spouse is not considered.

Section 1924(e)(2)(C) of the Act provides that if either spouse establishes that the CSRA (in relation to the amount of income generated by that allowance) is inadequate to raise the community spouse's income to the minimum monthly maintenance needs allowance, there shall be substituted an amount adequate to provide a minimum monthly maintenance needs allowance.

We have previously issued policy memoranda and letters expressing our view that section 1924(e)(2)(C) of the Act authorizes a State to consider potential income transfers from an institutionalized spouse to a community spouse, so that a State may adopt the income-first method or apply some other reasonable methodology until we issue final regulations addressing the issue. Thus, under our present policy, States may clearly use the income-first method, and may be able to use other methods, such as resources-first. In other words, consistent with the statutory requirement that State's utilize “reasonable standards” for determining eligibility and the amount of benefits as described in Section 1902(a)(17), we have permitted States to employ income-first or other reasonable methodologies. In practice, no State has elected to use a method other than income-first or resources-first. The proposed regulation is therefore intended to codify and reflect long-standing State practices.

However, the issue of which criteria may be employed during the fair hearing under section 1924(e)(2)(C) of the Act to determine whether, and if so by how much, to raise the CSRA has been the subject of some dispute. Permitting the community spouse to obtain a larger CSRA can give the community spouse additional income-generating resources to meet minimum monthly needs. Without an increase in the CSRA, the resources would be considered available to the institutionalized spouse and might have to be exhausted before the institutionalized spouse would be Medicaid eligible. On the other hand, permitting the hearing officer to raise the CSRA when the institutionalized spouse has income which could be used to enable the community spouse to meet minimum monthly maintenance needs can, under some circumstances, have unintended consequences for a State's Medicaid program. This policy can create an avenue for a couple to shelter almost limitless amounts of resources, provided these resources currently have minimal incoming-producing value.

Indeed, the legality of the income first rule has been challenged in several courts. The United States Courts of Appeals for the Sixth and Third Circuits have upheld the income-first rule in Chambers v. Ohio Dep't of Human Servs., 145 F.3d 793, 802 (6th Cir. 1998) and Cleary v. Waldman, 167 F.3d 801, 811-812 (3d Cir. 1999), respectively. Nevertheless, the Wisconsin Court of Appeals invalidated a Wisconsin statute, which adopted the income-first rule, holding that the spousal impoverishment provisions of the Medicaid program unambiguously preclude the use of an “income-first” methodology. The United States Supreme Court has granted the State of Wisconsin's petition for review of this decision. See Wisconsin Department of Health and Family Services v. Blumer, No. 00-952.

Because this subject has been a source of some controversy, we believe it is appropriate to codify provisions regarding the community spouse resource allowance before adopting regulations governing all of the spousal impoverishment protection provisions of section 1924 of the Act.

We propose to allow States the threshold choice of using either the income-first or resources-first method when determining whether the community spouse has sufficient income to meet minimum monthly maintenance needs. Under our proposal, States would not be able to use different rules on a case-by-case basis, but must apply the same rule to all spouses. Under section 1902(a)(17)(B) of the Act, the Secretary has authority to prescribe appropriate standards for determining whether income is “available.” In the exercise of that authority, and in view of the cooperative federalism considerations embodied in the Medicaid program, we have concluded that States may be in the best position to determine the type of protection to afford community spouses and whether to require hearing officers to take into account any income of the institutionalized spouse before raising the CSRA.

We believe that section 1924 of the Act does not specifically address whether the income-first or resources-first method is appropriate in making the determination on raising the CSRA. Section 1924(e)(2)(C) of the Act directs the State to determine whether the community spouse's income meets his or her minimum monthly maintenance needs. It also provides that, if the community spouse's income falls short of meeting those needs, the CSRA should be increased by an amount that will generate sufficient income to bring the community spouse's income to the minimum monthly maintenance needs level. However, this statutory guidance does not address whether the community spouse's income may include the institutionalized spouse's income that could be made available to the community spouse.

In fact, while section 1924(b)(1) specifically prohibits the community spouse's income from being considered available for the care of the institutionalized spouse, the statute does not preclude the Secretary nor the State from considering the institutionalized spouse's income from being available to the community spouse for purposes of determining whether the community spouse's needs will be met absent an increase in the CSRA. That supports an inference that it is permissible to consider all or some portion of the institutionalized spouse's income to be available to the community spouse. In addition, the legislative history suggests that Congress contemplated the possibility that, in determining whether to raise the CSRA, States might take into account not only the community spouse's own income but “other income attributable to the community spouse” consistent with the Secretary's rules. H.R. Cong. Rep. No. 661, 100th Cong., 2d Sess 265 (1988). Accordingly, we believe that the statute permits an income-first rule and does not foreclose a resources-first rule.

Because an income-first rule would conserve scarce resources that States may allocate towards their Medicaid programs, avoid sheltering of high value low income-producing resources, and generally affords the community spouse a significant degree of protection from impoverishment, States may prefer to employ this approach. On the other hand, the resources-first rule may in certain cases afford greater protection to the community spouse, especially after the death of the institutionalized spouse. While in our view, the statute certainly does not compel States to adopt the resources-first method, we believe it would be appropriate to afford the option of selecting a resources-first rule.

Section 1924(a) of the Act provides that in determining the eligibility for medical assistance of an institutionalized spouse, its provisions supersede any other provision of title XIX of the Act, “which is inconsistent with them,” including section 1902(a)(17). Section 1902(a)(17)(B) of the Act provides that the State plan for medical assistance shall “provide for taking into account only the income and resources, as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient * * *.” (Emphasis supplied.) In Schweiker v. Gray Panthers, 453 U.S. 34, 44, 101 S.Ct 2633, 2640 (1981), the Supreme Court held that the underscored language constituted a delegation of substantive rulemaking authority to the Secretary. Therefore, section 1902(a)(17)(B) of the Act gives the Secretary the authority to promulgate regulations on the matter of how much income and resources are available to applicants for, or recipients of, Medicaid for determining their eligibility and the amount of assistance they may receive. Furthermore, because our proposal to permit States to use either the income-first or resources-first method does not conflict with section 1924 of the Act, we can issue a proposed rule on this matter.

As noted above, section 1924(e)(2)(C) of the Act authorizes either spouse to establish whether the community spouse resource allowance is inadequate to raise the community spouse's income to the minimum monthly maintenance needs allowance. However, it does not specify whether in the process of establishing the inadequacy of the community spouse resource allowance, all of the institutionalized spouse's income which could be made available to the community spouse must be taken into account before seeking this adjustment. Because section 1924(e)(2) of the Act is silent on this issue, it does not conflict with the Secretary's authority under section 1902(a)(17)(B) of the Act to prescribe standards for determining the amount of the institutionalized spouse's income that would be available to the community spouse in determining whether it is appropriate to raise the community spouse resource allowance. This determination would have a corresponding impact on the institutionalized spouse's Medicaid eligibility.

Since our decision, under section 1902(a)(17)(B) of the Act, to permit States to use either the income-first or resources-first rule does not conflict with section 1924 of the Act, we are able to issue proposed regulations on this matter. In other words, because the statute does not require nor foreclose States from using either the income-first or resources-first method, we can use the rulemaking authority under section 1902(a)(17) of the Act to leave the choice of method to the States. (This approach is consistent with the Supreme Court's decision in Batterton v. Francis, 432 U.S. 416 (1977), which upheld a regulation that permitted States to define “unemployed” either to include families participating in a labor strike or to exclude them.) In addition, Section 1902(a)(17) contemplates that States will establish plans containing “reasonable standards” for determining eligibility consistent with the Act and our regulations. The statute thus contemplates that different States may establish different standards for determining eligibility, so long as all are “reasonable” and all are consistent with the Act and our regulations. Accordingly, as an exercise of our discretion, we propose to leave to the States the option to either use the income-first or resources-first method for purposes of a fair hearing under section 1924(e)(2)(C) of the Act to determine whether, and if so by how much, to raise the CSRA.

As such, we propose to add a new § 431.260 to provide for fair hearings to raise the community spouse resource allowance. At § 431.260(a), we propose to define “institutionalized spouse” as an individual who is married to a person who is not in a medical institution or nursing facility and who is either likely to be in an institution or nursing facility or likely to be receiving services under a home and community-based waiver under section 1902(a)(10)(A)(ii)(VI) of the Act for at least 30 consecutive days. We propose to define the term “community spouse” as the spouse of an institutionalized individual. We would define the term “community spouse resource allowance” as the amount of a couple's combined resources (held jointly and separately), allocated to the community spouse and considered unavailable to the institutionalized spouse when determining his or her eligibility for Medicaid, as specified in section 1924(f)(2)(A) of the Act. Additionally, we would define “minimum monthly maintenance needs allowance” as the minimum amount of an institutionalized spouse's income that is protected for the community spouse.

At § 431.260(b), we would specify that either spouse may request a hearing to establish that the community spouse resource allowance (in relation to the amount of income generated by the allowance) is not adequate to raise the community spouse's income to the minimum monthly maintenance needs allowance. At § 431.260(c), we propose to provide that the State must choose to use either the income-first method or the resources-first method when determining whether to increase the community spouse resource allowance to ensure the community spouse has sufficient income to meet minimum monthly maintenance needs. We would provide that under the income-first method, the State require that all income of the institutionalized spouse that could be made available to the community spouse after subtracting the allowances specified in section 1924(d) be considered to be available before additional resources are allocated to raise the community spouse's income to meet the minimum monthly maintenance needs allowance. We propose that under the resources-first method, the State allocate additional resources to raise the community spouse's income to meet the minimum monthly maintenance needs allowance without regard to income of the institutionalized spouse that potentially could be made available to the community spouse, but has not been made available.

Under the Paper Work Reduction Act (PRA) of 1995, we are required to provide 60-day notice in the Federal Register and solicit public comment if Office of Management and Budget review and approval is needed because a proposed regulation imposes a collection of information requirement. However, this proposed regulation does not impose any new collection of information requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. The proposed regulation only codifies the existing State practice of choosing whether to use income-first or resources-first, a matter we have left entirely to each State. We do not currently require States to formally notify us about which approach they take, and the proposed regulation similarly does not require this notification. Thus, the proposed rule imposes no new or different processes or information requirements on States.

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, if we proceed with a subsequent document, we will respond to the major comments in the preamble to that document.

We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review) and the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). This proposed rule would give States an option to use either an income-first method or resources-first method when determining whether the community spouse has sufficient income to meet minimum monthly maintenance needs. This proposed rule is not a major rule because it would not impose new costs on State governments or other entities. The proposed rule only codifies existing State practices, and in no way requires States to take any action that would increase or even change their current program costs.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $25 million or less annually. Individuals and States are not included in the definition of a small entity.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. This proposed rule would have no impact on small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in an expenditure in any one year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. The proposed rule would have no impact on the private sector. The rule would impose no requirements on State, local or tribal governments. The rule only codifies existing State practices, and thus requires no new or additional expenditures of funds by any entity, government or private.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that would impose substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Because this proposed rule only codifies existing State practices, it would impose no requirements on governments, nor does it preempt State law or otherwise have Federalism implications.

Because the proposed rule only codifies existing State practices, it will have no new effect on State governments, providers, or the Medicaid and Medicare programs. Therefore, we are not providing an impact analyses.

We considered imposing a requirement on all States to use the income-first methodology, or a requirement that all States use the resources-first methodology when determining whether to raise the community spouse resource allowance. However, as explained in the preamble to this proposed rule, we do not believe the statute clearly requires the use of either of those alternatives to the exclusion of the other. Therefore, we believe, in the spirit of Federalism, that we should leave to States the decision as to which alternative to use.

For these reasons, we are not preparing analyses for either the RFA or section 1102(b) of the Act because we have determined, and we certify, that this rule will not have a significant economic impact on a substantial number of small entities or a significant impact on the operations of a substantial number of small rural hospitals.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services propose to amend 42 CFR part 431 as follows: