On July 19, 2000, the Office of Personnel Management (OPM) published interim regulations (65 FR 44643) that allowed employees to pay their Federal Employees Health Benefits (FEHB) premiums through an allotment from the employee's pay to the employing agency. Use of this allotment mechanism allows FEHB premiums to be paid with pretax dollars, as permitted under section 125 of the Internal Revenue Code. The amendments to the allotment regulations were accompanied by a separate interim rule making necessary changes in the FEHB regulations (65 FR 44644) to allow this premium conversion.

OPM received comments from one agency representative and two individual employees on the changes in the allotment regulations.

The agency comment noted that a part of the allotment regulations not amended in the interim rule contained a reference to an obsolete Treasury regulation. It recommended that this be corrected in the final regulations.

Section 550.311(a)(5) of title 5, Code of Federal Regulations, specifies that agencies must allow employees to have “up to two allotments for savings under Department of the Treasury regulations as codified at part 209 of title 31, Code of Federal Regulations.” However, the Treasury Department removed part 209 from its title 31 regulations effective on January 27, 1997. (See 61 FR 68155, December 27, 1996.) Part 209 dealt with certain wage, salary, annuity, and allotment payments for credit to the accounts of Federal employees and beneficiaries generally made by paper check. These payments are now made by electronic funds transfer and are regulated by part 210. Part 210 does not impose a limit on the number of allotments for savings. Instead, it leaves the matter to the paying agency.

We are revising § 550.311(a)(5) to remove the obsolete reference to part 209 of title 31. The revised language provides that an agency must allow an employee to have “at least two allotments for savings.” Thus, the OPM regulations continue to require that agencies allow employees to have a minimum of two savings allotments, but there are no restrictions on the maximum number of savings allotment that may be permitted under an agency's discretionary authority in § 550.311(b).

An individual commenter questioned why only health insurance premium payments under the FEHB Program could be deducted on a pretax basis. The commenter is a civilian employee who is covered by certain health insurance programs established for retired military members. At the President's direction, the allotment regulations were amended to provide specifically that FEHB premiums may be deducted on a pretax basis. Section 550.311(b) provides that pretax allotments are permitted only when there is an authority (i.e., statute, Executive order, Presidential directive, or OPM regulations) specific to Federal employees. For example, certain transportation fringe benefit allotments may be made on a pretax basis as allowed by 5 U.S.C. 7905(b) and Executive Order 13150, April 21, 2000.

Another commenter expressed concern about whether Federal employees would be provided with information on the impact that pretax FEHB premium allotments would have on Social Security benefits, so that they could make an informed decision on whether to waive participation in premium conversion. In fact, prior to implementation of premium conversion, OPM provided agencies with extensive information about the premium conversion program to share with employees. That information included a sample employee handout with a section highlighting the Social Security benefit issue and a financial worksheet with a section on estimating the impact on a person's Social Security benefits. (See Benefits Administration Letter 00-215 issued by OPM's Retirement and Insurance Service on August 24, 2000.) This information also was made available on OPM's website.

These final regulations adopt the interim regulations without any changes to the amendments contained in the interim regulations. However, as described above, we are making a correction dealing with the obsolete reference to a withdrawn Treasury regulation.

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

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

Effective October 1, 2001, the National Defense Authorization Act for 2001 will reinstate TRICARE coverage for Medicare-eligible uniformed services retirees, their survivors and eligible dependents. TRICARE coverage will be advantageous to many Medicare-eligible military system beneficiaries who now are covered under the FEHB Program as Federal civilian retirees, family members, or former spouses.

Under current FEHB regulations, however, an annuitant or former spouse who cancels his or her FEHB coverage to use TRICARE coverage would not be allowed to return to FEHB coverage. Therefore, OPM is issuing these interim regulations, with a request for comments, to allow these FEHB participants to suspend, rather than cancel, their FEHB coverage when they begin TRICARE coverage. Under this rule, they would be allowed to return to FEHB coverage immediately if they involuntarily lose TRICARE coverage or, if not, during the next annual FEHB Open Season.

We are also amending our regulations to clarify a similar situation involving FEHB-covered annuitants and former spouses. The regulations allow an individual who drops FEHB coverage when he or she enrolls in a Medicare-sponsored plan, or in Medicaid or a similar State-sponsored program of medical assistance for the needy, to return to FEHB coverage during the annual Open Season or immediately upon being involuntarily disenrolled from the non-FEHB coverage.

Pursuant to section 553(b)(3)(B) of title 5 of the United States Code, I find that good cause exists for waiving the general notice of proposed rule making. The notice is being waived so that FEHB enrollees who are eligible for the new TRICARE benefits can suspend their FEHB coverage and use their new benefits at their first opportunity.

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation will only affect health insurance carriers under the Federal Employees Health Benefits Program.

This regulation has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

This rule is issued under Marketing Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR part 905), regulating the handling of oranges, grapefruit, tangerines, and tangelos grown in Florida, hereinafter referred to as the “order.” The marketing agreement and order are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

The order provides for the establishment of grade and size requirements for Florida citrus, with the concurrence of the Secretary. These requirements are designed to provide fresh markets with citrus of acceptable quality and size, to increase returns to Florida citrus growers. This helps create buyer confidence and contributes to stable marketing conditions and is in the interest of growers, handlers, and consumers. The current minimum grade standard for red seedless grapefruit is U.S. No. 1, and the minimum size requirement is size 56 (at least 35/16 inches in diameter).

This rule invites comments on limiting the volume of sizes 48 (at least 39/16 inches in diameter) and 56 (at least 35/16 inches in diameter) red seedless grapefruit shipped during the first 11 weeks of the 2001-2002 season beginning September 17, 2001. This rule establishes the weekly base percentages for these small sizes at 45 percent for the first two weeks, 35 percent for week 3, 30 percent for weeks 4 through 10, and 40 percent for week 11. This rule supplies enough small-sized red seedless grapefruit to meet market demand, without saturating all markets with these small sizes. This rule will help stabilize the market and improve grower returns.

Section 905.52 of the order provides authority to limit shipments of any grade or size, or both, of any variety of Florida citrus. Such limitations may restrict the shipment of a portion of a specified grade or size of a variety. Under such a limitation, the quantity of such grade or size that a handler may ship during a particular week is established as a percentage of the total shipments of such variety shipped by a handler in a prior period, established by the Committee and approved by the Secretary.

Section 905.153 of the regulations provides procedures for limiting the volume of small red seedless grapefruit entering the fresh market. The procedures specify that the Committee may recommend that only a certain percentage of sizes 48 and 56 red seedless grapefruit be made available for shipment into fresh market channels for any week or weeks during the regulatory period. The regulation period is 11 weeks long and begins the third Monday in September. Under such a limitation, the quantity of sizes 48 and 56 red seedless grapefruit that may be shipped by a handler during a regulated week is calculated using the recommended percentage. By taking the recommended weekly percentage times the average weekly volume of red seedless grapefruit handled by such handler in the previous five seasons, handlers can calculate the total volume of sizes 48 and 56 they may ship in a regulated week.

This rule limits the volume of sizes 48 and 56 red seedless grapefruit entering the fresh market by setting weekly percentages of 45 percent for the first two weeks, 35 percent for week 3, 30 percent for weeks 4 through 10, and 40 percent for week 11. This is a change from the percentages originally recommended by the Committee.

On May 22, 2001, the Committee unanimously voted to establish a weekly percentage of 45 percent for the first 2 weeks, 35 percent for week 3, and 25 percent for weeks 4 through 11. The Committee's initial recommendation was issued as a proposed rule published in the Federal Register on July 31, 2001 (66 FR 39459). No comments were received during the comment period, which expired August 10, 2001. The Committee subsequently met on August 29, 2001, and unanimously recommended adjusting the proposed percentages.

In the past four seasons, the initial recommendation from the Committee was to set the weekly percentages at 25 percent for each of the 11 weeks. Then, as more information on the crop became available, the Committee would meet and adjust its recommendations as needed. In each of the past seasons of regulation the Committee has recommended relaxing its initial recommendation of 25 percent for each week. Actual weekly percentages established for the 11-week period during the 2000-01 season were 45 percent for the first three weeks, 40 percent for the next four weeks, and 35 percent for the last four weeks.

Drawing on this experience, this season the Committee decided to make its initial recommendation for the first three weeks at levels higher than 25 percent. Based on shipments from the past four seasons, under a 25 percent restriction available allotment would have exceeded actual shipments of sizes 48 and 56 for each of the first three weeks regulated under this rule. The Committee believed that by setting weekly percentages at 45 percent for the first two weeks and 35 percent for the third week, handlers would have extra allotment available, providing individual handlers with greater flexibility and reducing the number of loans and transfers needed to use the available allotment.

For the remainder of the 11 weeks, the Committee believed that the weekly percentages needed to be set at 25 percent. The Committee thought it was best to recommend regulation at these levels, given the limited information available so early in the growing year, and then reexamine the percentages using information available closer to the start of the season.

The Committee met on August 29, 2001, and revisited the weekly percentage issue and reviewed information it had acquired since its May meeting. The Committee recognizes the need for and the benefits of the weekly percentage regulation. Members believe that the problems associated with an uncontrolled volume of small sizes entering the market early in the season will recur without such action. However, the Committee believes based on information now available that the initial recommendation was too restrictive, and recommended raising the established base percentages from 25 percent to 30 percent for weeks 4 through 10 and 40 percent for week 11 of the regulated period.

In its discussion, the Committee reviewed the initial weekly percentages recommended and the current state of the crop. The Committee also reexamined shipping information from past seasons, looking particularly at volume across the 11 weeks. At the time of the May meeting, grapefruit had not yet begun to size, giving little indication as to the distribution of sizes. Only the most preliminary of crop estimates was available, with the official estimate not to be issued until October.

The Committee considered the percentages set last year as a basis for discussing this year's percentages. Committee members believed relaxing last season's percentages from the initial 25 percent level had worked well, providing some restriction while affording volume for those markets that prefer small sizes.

Early indications were that conditions this year would be similar to those of last season with the production area dealing with the effects of a prolonged drought. The insufficient rainfall early this season could have affected the sizing of the crop, producing a larger volume of small red seedless grapefruit, further exacerbating the problem with small sizes. However, current information indicates that the 2001-2002 season crop seems to be sizing well. Due to increased rainfall in most growing areas the last two months, the industry may see a higher percentage of larger sizes than in the last four seasons. Hence, the Committee thought establishing the weekly percentages at 25 percent for weeks 4 through 11 may be too restrictive.

Ongoing problems affecting the European and Asian markets also continue to be a factor. These markets have historically shown a strong demand for small red seedless grapefruit. However, in the past few years there has been a reduction from the demand levels of previous seasons. This is expected to continue during the upcoming season. This could result in a greater amount of small sizes for remaining markets to absorb, further supporting the need for some restrictions to prevent the volume of small sizes from disrupting all markets.

The Committee also considered the reduction in the overall available weekly industry base due to industry consolidation, reduced shipments, and packinghouse closings. The available weekly industry base is the sum of each individual handler's weekly base. The overall available industry base per week was 875,688 cartons last season. For the 2001-2002 season, the base calculates to 813,191 cartons.

Considering the actual percentages established during past seasons, the available sizing information, and the reduction in total industry base the Committee recommended establishing the weekly percentages at levels higher than 25 percent for the last 8 weeks of the regulated period. The Committee agreed that the percentage recommended for the first two weeks of 45 percent was still appropriate, as was 35 percent for week three. However, the Committee recommended that weeks 4 through 10 should be established at 30 percent, and that week 11 should be established at 40 percent. The Committee recommended setting the percentage for week 11 at a higher level because that week marks the start of the holiday season and a large volume of small sizes are used for gift fruit shipments and fundraisers. These percentages when compared to last season's percentages represent a 10 percent decrease for weeks three through seven, a 5 percent decrease for weeks eight through ten, and a 5 percent increase for week 11.

The Committee could meet again during the regulation period, as needed, when additional information is available, and determine whether the set percentage levels are appropriate. Changing the weekly percentages established by this rule would require additional rulemaking and the approval of the Secretary.

For the seasons 1994-95, 1995-96, and 1996-97, returns for red seedless grapefruit had been declining, often not returning the cost of production. On-tree prices for red seedless grapefruit had fallen steadily from $9.60 per carton (4/5 bushel) during the 1989-90 season, to $3.45 per carton during the 1994-95 season, to $1.41 per carton during the 1996-97 season.

The Committee determined that one problem contributing to the market's condition was the excessive number of small-sized grapefruit shipped early in the marketing season. In the 1994-95, 1995-96, and 1996-97 seasons, sizes 48 and 56 accounted for 34 percent of total shipments during the 11-week regulatory period, with the average weekly percentage exceeding 40 percent of shipments. This contrasted with sizes 48 and 56 representing only 26 percent of total shipments for the remainder of the season.

While there is a market for early grapefruit, shipping large quantities of small red seedless grapefruit in a short period oversupplies the fresh market for these sizes and negatively impacts the market for all sizes. For the majority of the season, larger sizes return higher prices than smaller sizes. However, there is a push to get fruit into the market early to take advantage of high prices available at the beginning of the season. The early season crop tends to have a greater percentage of small sizes. This creates a glut of smaller, lower-priced fruit on the market, driving down the price for all sizes.

At the start of the season, larger-sized fruit command a premium price. In some cases, the f.o.b. price is $4 to $10 more a carton than for the smaller sizes. In October, the f.o.b. price for a size 27 averages around $14.00 per carton. This compares to an average f.o.b. price of $6.00 per carton for size 56. In the three years before the issuance of a percentage size regulation, the f.o.b. price for large sizes dropped to within $1 or $2 of the f.o.b. price for small sizes by the end of the 11-week period covered in this rule.

In the three seasons prior to 1997-98, prices of red seedless grapefruit fell from a weighted average f.o.b. price of $7.80 per carton to an average f.o.b. price of $5.50 per carton during the period covered by this rule. Later in the season the crop sized to naturally limit the amount of smaller sizes available for shipment. However, the price structure in the market had already been negatively affected. The market never recovered, and the f.o.b. price for all sizes fell to around $5.00 to $6.00 per carton for most of the rest of the season.

An economic study done by the University of Florida—Institute of Food and Agricultural Sciences (UF-IFAS) in May 1997, found that on-tree prices had fallen from a high near $7.00 per carton in 1991-92 to around $1.50 per carton for the 1996-97 season. The study projected that if the industry elected to make no changes, the on-tree price would remain around $1.50 per carton. The study also indicated that increasing minimum size restrictions could help raise returns.

The Committee believes the over shipment of smaller sized red seedless grapefruit contributes to poor returns for growers and lower on-tree values. To address this issue, the Committee successfully used the provisions of § 905.153, and recommended weekly percentage of size regulation during the first 11 weeks of the 1997-98, 1998-99, 1999-2000, and 2000-01 seasons. Under regulation, f.o.b. and on-tree prices have increased and movement has stabilized.

Average f.o.b. prices have been higher during regulation than for the three years prior to regulation. The average price for red seedless grapefruit in late October was $8.46 for the last four years compared to $7.22 for the same period for the three years prior to regulation. Prices also remained at a higher level, with a weighted average price of $7.29 in mid-December during regulation compared to $6.02 for the three years prior to regulation. The average season price was also higher, with the past four seasons averaging $7.15 compared to $5.83 for the three prior years.

The on-tree prices per box for red seedless grapefruit for the fresh market have also improved during the past three years of regulation, providing better returns to growers. The on-tree price increased from $3.26 in 1996-97 to $3.42 in 1997-98, to $5.04 in 1998-99, to $5.62 for the 1999-2000 season.

Another benefit of regulation has been in maintaining higher prices for the larger-sized fruit. Larger fruit commands a premium price early in the season. However, the glut of smaller, lower-priced fruit on the early market was driving down the prices for all sizes. During the three years before regulation, the average differential between the f.o.b. carton price for a size 27 and a size 56 was $3.47 at the end of October. However, by mid-December the price for the larger size had dropped to within $1.68 of the price for the smaller-size fruit.

In the four years of regulation, the average differential between the f.o.b. carton price for a size 27 and a size 56 was $5.38 at the end of October and remained at $3.42 in mid-December. In fact, the average f.o.b. prices for each size were higher during the four years with regulation than for the three years prior to regulation. The average prices for size 27, size 32, size 36, and size 40 during the 11-week period for the last four years were $9.41, $8.12, $7.26, and $6.68, respectively. This compares to the average prices for the same sizes during the same period for the three years prior to regulation of $6.48, $5.63, $5.59, and $5.34, respectively.

The percentage size regulation has also helped stabilize the volume of small sizes entering the fresh market early in the season. During the three years prior to regulation, small sizes accounted for over 34 percent of the total shipments of red seedless grapefruit during the 11-week period covered in the rule. This compares to 31 percent for the same period for the last four years of regulation. There has also been a 43 percent reduction in the volume of small sizes entering the fresh market during the 11-week regulatory period from 1995-96 to 2000-01.

An economic study done by Florida Citrus Mutual (Lakeland, Florida) in April 1998, found that the weekly percentage regulation had been effective. The study stated that part of the strength in early season pricing appeared to be due to the use of the weekly percentage rule to limit the volume of sizes 48 and 56. It said that prices were generally higher across the size spectrum with sizes 48 and 56 having the largest gains, and larger-sized grapefruit registering modest improvements. The rule shifted the size distribution toward the higher-priced, larger-sized grapefruit, which helped raise weekly average f.o.b. prices. It further stated that sizes 48 and 56 grapefruit accounted for around 27 percent of domestic shipments during the same 11 weeks during the 1996-97 season. Comparatively, sizes 48 and 56 accounted for only 17 percent of domestic shipments during the same period in 1997-98, as small sizes were used to supply export customers with preferences for small-sized grapefruit.

During deliberations in past seasons, the Committee considered how shipments had affected the market. Based on available statistical information, the Committee members concluded that once shipments of sizes 48 and 56 reached levels above 250,000 cartons a week, prices declined on those and most other sizes of red seedless grapefruit. The Committee believed that if shipments of small sizes could be maintained at around or below 250,000 cartons a week, prices should stabilize and demand for larger, more profitable sizes should increase.

Last season, the weekly shipments of sizes 48 and 56 red seedless grapefruit remained below 250,000 cartons for 10 of the 11 regulated weeks. This may have contributed to the success of the regulation.

In setting the weekly percentages at 45 percent for the first two weeks and 35 percent for week 3, the total available allotment would be slightly more than 250,000 cartons in the first three weeks. However, in the last four seasons, shipments of sizes 48 and 56 have never exceeded 250,000 cartons during the first three weeks. Also, setting the weekly percentages at 25 percent for the 2001-2002 season would have provided a total available allotment of approximated 203,300 cartons (25 percent of the total industry base of 813,191 cartons). Consequently, there is room to increase the percentages while holding weekly shipments of sizes 48 and 56 close to the 250,000-carton mark, as was done last season.

Therefore, this rule establishes the weekly percentages at 45 percent for the first two weeks, 35 percent for week 3, 30 percent for weeks 4 through 10, and 40 percent for week 11 for this season. The Committee plans to meet as needed during the 11-week period to ensure the weekly percentages are at the appropriate levels.

Under § 905.153, the quantity of sizes 48 and 56 red seedless grapefruit a handler may ship during a regulated week is calculated using the recommended percentage. By taking the weekly percentage times the average weekly volume of red seedless grapefruit handled by such handler in the previous five seasons, handlers can calculate the total volume of sizes 48 and 56 they may ship in a regulated week.

The Committee calculates an average week for each handler. To calculate an average week, the total red seedless grapefruit shipments by a handler during the 33 week period beginning the third Monday in September and ending the first Sunday in May from the previous five seasons are added together, then divided by five to establish an average season. This average season is divided by the 33 weeks to derive the average week. This average week is the base for each handler for each of the 11 weeks of the regulatory period.

The weekly percentage is multiplied by a handler's average week. The product is that handler's total allotment of sizes 48 and 56 red seedless grapefruit for the given week. Handlers can fill their allotment with size 56, size 48, or a combination of the two sizes such that the total of these shipments is within the established limits. The Committee staff performs the specified calculations and provides them to each handler.

The average week for handlers with less than five previous seasons of shipments is calculated by averaging the total shipments for the seasons they did ship red seedless grapefruit during the previous five years and dividing that average by 33. New handlers with no record of shipments have no prior period on which to base their average week. Therefore, a new handler can ship small sizes equal to 45 percent of their total volume of shipments during their first shipping week. Once a new handler has established shipments, their average week is calculated as an average of the weeks they have shipped during the current season.

The regulatory period begins the third Monday in September, September 17, 2001. Each regulation week begins Monday at 12 a.m. and ends at 11:59 p.m. the following Sunday, since most handlers keep records based on Monday as the beginning of the workweek.

The rules and regulations governing percentage size regulation contain a variety of provisions designed to provide handlers with some marketing flexibility. Section 905.153(d) provides allowances for overshipments, loans, and transfers of allotment. These provisions should allow handlers the opportunity to supply their markets while limiting the impact of small sizes.

The Committee can also act on behalf of handlers wanting to arrange allotment loans or participate in the transfer of allotment. Repayment of an allotment loan is at the discretion of the handlers party to the loan. The Committee informs each handler of the quantity of sizes 48 and 56 red seedless grapefruit they can handle during a particular week, making the necessary adjustments for overshipments and loan repayments.

This rule does not affect the provision that handlers may ship up to 15 standard packed cartons (12 bushels) of fruit per day exempt from regulatory requirements. Fruit shipped in gift packages that are individually addressed and not for resale, and fruit shipped for animal feed are also exempt from handling requirements under specific conditions. Also, fruit shipped to commercial processors for conversion into canned or frozen products or into a beverage base are not subject to the handling requirements under the order.

At its May 22 meeting, the Committee also recommended changing the percentage size procedures in § 905.153 to authorize percentage size regulation for an additional 11 weeks, or the first 22 weeks of the season. A proposed rule to revise § 905.153 to implement this recommendation will be published in a separate issue of the Federal Register. If the authority to establish percentages for the additional 11 weeks is implemented, the Committee would be able to implement, with Department approval, marketing percentages to limit the shipment of small-sized red seedless grapefruit for that additional time period, if warranted.

Section 8e of the Act requires that whenever grade, size, quality, or maturity requirements are in effect for certain commodities under a domestic marketing order, including grapefruit, imports of that commodity must meet the same or comparable requirements. This rule does not change the minimum grade and size requirements under the order, only the percentages of sizes 48 and 56 red grapefruit that may be handled. Therefore, no change is necessary in the grapefruit import regulations as a result of this action.

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

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

There are approximately 75 grapefruit handlers subject to regulation under the order and approximately 11,000 growers of citrus in the regulated area. Small agricultural service firms, which includes handlers, are defined by the Small Business Administration (SBA) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201).

Based on industry and Committee data, the average annual f.o.b. price for fresh Florida red seedless grapefruit during the 2000-01 season was approximately $7.20 per 4/5 bushel carton, and total fresh shipments for the 2000-01 season are estimated at 24.7 million cartons of red grapefruit. Approximately 25 percent of all handlers handled 70 percent of Florida grapefruit shipments. In addition, many of these handlers ship other citrus fruit and products which are not included in Committee data but would contribute further to handler receipts. Using the average f.o.b. price, about 69 percent of grapefruit handlers could be considered small businesses under SBA's definition. Therefore, the majority of Florida grapefruit handlers may be classified as small entities. The majority of Florida grapefruit producers may also be classified as small entities.

The over shipment of small-sized red seedless grapefruit early in the season has contributed to poor returns for growers and lower on tree values. This rule limits the volume of sizes 48 and 56 red seedless grapefruit entering the fresh market during the first 11 weeks of the 2001-02 season, beginning September 17, 2001, by setting weekly percentages governing the volume of small sizes that may be shipped. This rule sets the weekly percentages at 45 percent for the first two weeks, 35 percent for week 3, 30 percent for weeks 4 through 10, and 40 percent for week 11. This is a change from the Committee's original recommendation of 45 percent for the first two weeks, 35 percent for week 3, and 25 percent for the remaining 8 weeks. The quantity of sizes 48 and 56 red seedless grapefruit that may be shipped by a handler during a particular week is calculated using the recommended percentage for that week. This rule uses the provisions of § 905.153. Authority for this action is provided in § 905.52 of the order.

While this rule may necessitate spot picking, which could entail slightly higher harvesting costs, many in the industry are already using the practice. In addition, because this regulation is only in effect for part of the season, the overall effect on costs is minimal. This rule is not expected to appreciably increase costs to producers.

If a 25 percent restriction on small sizes had been applied during the 11-week period for the three seasons prior to the 1997-98 season, an average of 4.2 percent of overall shipments during that period would have been constrained by regulation. A large percentage of this volume most likely could have been replaced by larger sizes for which there are no volume restrictions. Under regulation, larger sizes have been substituted for smaller sizes with a nominal effect on overall shipments.

In addition, handlers can transfer, borrow or loan allotment based on their needs in a given week. Handlers also have the option of over shipping their allotment by 10 percent in a week, provided the overshipment is deducted from the following week's shipments. Approximately 120 loans and transfers were utilized last season. Statistics for 2000-01 show that in none of the regulated weeks was the total available allotment used. Therefore, the overall impact of this regulation on total shipments should be minimal.

Handlers and producers have received higher returns under percentage size regulation. In late October, during the four years with regulation, the average f.o.b. price for red seedless grapefruit was $7.99 compared to $7.22 for the three years prior to regulation. F.o.b. prices have also remained higher, with an average price of $7.29 in mid-December during regulation compared to $6.02 for the three years prior to regulation. The average season price has also been higher under regulation averaging $7.14 compared to $5.83 for the three years prior.

On-tree earnings per box of red seedless grapefruit for the fresh market improved under regulation, providing better returns to growers. The on-tree price increased from $3.26 in 1996-97, to $3.42 for 1997-98, to $5.04 for 1998-99, to $5.62 for the 1999-2000 season. These increased returns when coupled with the overall volume of red seedless grapefruit should offset any additional costs associated with this regulation.

The purpose of this rule is to help stabilize the market and improve grower returns by limiting the volume of small sizes marketed early in the season. This rule provides a supply of small-sized red seedless grapefruit sufficient to meet market demand, without saturating all markets with these small sizes. The benefits of this rule are expected to be available to all red seedless grapefruit handlers and growers regardless of their size of operation.

This action is expected to stabilize the supply of small sizes entering the marketplace. It also is expected to encourage growers to leave the grapefruit on the tree longer, which improves size and maturity. Improved size and maturity provides greater consumer satisfaction and promotes repeat purchases. In addition, this action is not expected to decrease the overall consumption of red seedless grapefruit.

The Committee considered alternatives to taking this action. One alternative was to leave the established weekly percentages at 25 percent for weeks 4 through 11. The Committee thought this was too restrictive and wanted to provide individual handlers more flexibility in weeks 4 through 11; therefore this option was rejected.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements that are contained in this rule have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0189. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sectors.

The Department has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. However, red seedless grapefruit must meet the requirements as specified in the U.S. Standards for Grades of Florida Grapefruit (7 CFR 51.760 through 51.784) issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 through 1627).

The Committee's meetings were widely publicized throughout the citrus industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the May 22, 2001, and the August 29, 2001, meetings were public meetings and all entities, both large and small, were able to express views on this issue. Interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

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

A proposed rule concerning this action was published in the Federal Register on July 31, 2001 (66 FR 39459). Copies of the rule were mailed or sent via facsimile to all Committee members and to grapefruit growers and handlers. The Office of the Federal Register, the Department, and the Committee also made this rule available through the Internet.

A 10-day comment period was provided to allow interested persons to respond to the proposal. The comment period ended August 10, 2001. No comments were received.

As previously stated, subsequent to the issuance of the proposed rule, the Committee met and recommended modifying its original recommendation. The Committee recommended that the weekly percentages remain at 45 percent for the first two weeks (September 17 through September 30) and 35 percent for week three (October 1 through October 7), and that the percentages be changed from 25 percent to 30 percent for weeks 4 through 10 (October 1 through November 25), and to 40 percent for week 11 (November 26 through December 2). Because of this recommendation, the Department has determined that interested parties should be provided the opportunity to comment on the changes to the original recommendation. However, the Department has further determined that extending the comment period with no percentages in effect limiting the shipment of small red seedless grapefruit when the period of regulation begins would be detrimental to the industry. Therefore, the Department is instituting the regulations on small red seedless grapefruit through this interim final rule that allows 10 additional days to comment.

Ten days is deemed appropriate because the regulation period begins September 17, 2001, and continues for 11 weeks. Adequate time will be necessary so that any changes made to the regulations based on comments filed could be made effective during the 11 week period. All comments received will be considered before a final determination is made on this matter.

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

Pursuant to 5 U.S.C. 553, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect and good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register. This rule needs to be in place when the regulatory period begins September 17, 2001, and handlers begin shipping grapefruit. This issue has been widely discussed at various industry and association meetings, and the Committee has kept the industry well informed. Interested persons have had time to determine and express their positions. Further, handlers are aware of this rule, which was recommended at public meetings. Also, a 10-day comment period was provided for in the proposed rule and a 10-day comment period is provided in this rule.

On December 5, 2000, the OCC published a notice of proposed rulemaking in the Federal Register (65 FR 75870) requesting comments on a proposal to clarify that a Federal branch or agency may establish and maintain an operating subsidiary in accordance with the procedures and requirements of 12 CFR 5.34.

12 CFR 5.34 sets forth application or notice procedures for national banks engaging in activities through an operating subsidiary. The procedures vary according to the condition of the bank and the character of the activities conducted through the operating subsidiary. Specifically, § 5.34(e)(5)(iv) provides that a national bank that is well capitalized and well managed may acquire or establish an operating subsidiary, or perform a new activity in an existing operating subsidiary, by filing a notice with the OCC within 10 days after acquiring or establishing the subsidiary, or commencing the activity, if the activities are listed in § 5.34(e)(5)(v). National banks that do not meet the well capitalized and well managed criteria also may acquire or establish an operating subsidiary by filing an application with, and receiving approval from, the OCC. 12 CFR 5.34(e)(5)(i). Finally, § 5.34(e)(5)(vi) provides that a national bank may acquire or establish an operating subsidiary without filing an application or providing notice to the OCC if certain conditions are satisfied. These conditions are that: (1) The bank must be at least adequately capitalized; (2) the activities of the new subsidiary must be limited to those previously reported by the bank in connection with a prior operating subsidiary; (3) the activities must continue to be legally permissible; and (4) the activities of the new subsidiary must be conducted in accordance with any conditions imposed by the OCC when it approved the activities for the prior subsidiary.

The proposal specifically provided that § 5.34 applies to a Federal branch or agency that seeks to establish or maintain any subsidiary that a national bank would be authorized to acquire or establish under § 5.34. However, the procedures of § 5.34 would apply to the Federal branch or agency with certain modifications to reflect the differences in the relationship between a Federal branch or agency and a subsidiary of the foreign bank as compared with a national bank and its operating subsidiary. Unlike a national bank, a Federal branch or agency is not a separate corporate entity but rather is an office of the parent foreign bank, separately recognized for regulatory purposes. Although a Federal branch or agency cannot directly own stock in the same manner as a national bank, the Federal branch or agency can book the stock as an asset and manage and operate the subsidiary.

However, as we noted in the proposal, the International Banking Act of 1978 (12 U.S.C. 3101 et seq.) (the IBA) applies the national treatment principle to the regulation of foreign bank activities in the United States. Under the national treatment principle, the operations of a foreign bank conducted through a Federal branch or agency generally are conducted with the same rights, privileges, conditions, and limitations that apply to a national bank operating at the same location, subject to the OCC's regulations or orders.1 12 U.S.C. 3102(b). Thus, the IBA currently provides authority for Federal branches and agencies to take advantage of powers authorized for national banks, including the power to establish an operating subsidiary.

A branch or agency may obtain various legal, business or tax advantages by conducting certain activities or holding investments through an operating subsidiary. For example, a special purpose vehicle may be useful to engage in some asset-securitization transactions. In addition, legal restrictions, including the “securities push-out” provisions of the Gramm-Leach-Bliley Act, may make conduct of certain activities through a subsidiary necessary or advantageous for a branch or agency of a foreign bank.2

The OCC received seven comments on the proposal. These comments include three from Federal branches or foreign banks with Federal branches; two from banking trade associations; one from a law firm; and one from the Board of Governors of the Federal Reserve System (Federal Reserve Board or Board). We are adopting the rule as proposed but with several clarifications to address differences in how the standards apply to Federal branches and agencies versus domestic banks.

A majority of the commenters strongly endorsed amending 12 CFR 5.34 to permit Federal branches and agencies to establish or maintain operating subsidiaries to the same extent as national banks. Most commenters also thought that amending the IBA is not necessary to accomplish this goal. A majority of commenters also stated that the establishment and maintenance of these operating subsidiaries should be subject only to regulation by the OCC, as are subsidiaries of national banks, unless they are subject to functional regulation by the Securities and Exchange Commission, Commodity Futures Trading Commission, or state insurance commissioners. See 12 U.S.C. 1831v.

The Federal Reserve Board stated that it strongly supports the principle of national treatment for both foreign and domestic banking organizations. The Board said, however, that, in its view, an investment by a Federal branch or agency in an operating subsidiary is a direct investment by the foreign bank itself and is, therefore, subject to the Bank Holding Company Act (BHC Act). The Board recommended clarifying that a foreign bank that is establishing a nonbanking subsidiary in the United States must comply with section 4 of the BHC Act, including any requirement to file a prior notice with the Board under section 4(c)(8) of the BHC Act.

The Federal Reserve Board is the agency charged with the administration and interpretation of the BHC Act. Our proposal does not relieve a foreign bank that operates a Federal branch or agency from complying with laws administered by any other regulators, including the Federal Reserve Board, that might be applicable to the establishment or operation of a nonbanking subsidiary in the United States.3

Pursuant to the authority of sections 10(b), 13, 14, 19, et al., of the Federal Reserve Act, the Board has amended its Regulation A (12 CFR part 201) to incorporate changes in discount rates on Federal Reserve Bank extensions of credit. The discount rates are the interest rates charged to depository institutions when they borrow from their district Reserve Banks.

The “basic discount rate” is a fixed rate charged by Reserve Banks for adjustment credit and, at the Reserve Banks' discretion, for extended credit for up to 30 days. In decreasing the basic discount rate from 3.00 percent to 2.5 percent, the Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Banks. The new rates were effective on the dates specified below. The 50-basis-point decrease in the discount rate was associated with a similar decrease in the federal funds rate approved by the Federal Open Market Committee (FOMC) and announced at the same time.

In a joint press release announcing these actions, the FOMC and the Board of Governors stated that the Federal Reserve will continue to supply unusually large volumes of liquidity to the financial markets, as needed, until more normal market functioning is restored. As a consequence, the FOMC recognizes that the actual federal funds rate may be below its target on occasion in these unusual circumstances.

Even before the tragic events of last week, employment, production, and business spending remained weak, and last week's events have the potential to damp spending further. Nonetheless, the long-term prospects for productivity growth and the economy remain favorable and should become evident once the unusual forces restraining demand abate. For the foreseeable future, the Board and the FOMC continue to believe that against the background of their long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the change in the basic discount rate will not have a significant adverse economic impact on a substantial number of small entities. The rule does not impose any additional requirements on entities affected by the regulation.

The provisions of 5 U.S.C. 553(b) relating to notice and public participation were not followed in connection with the adoption of the amendment because the Board for good cause finds that delaying the change in the basic discount rate in order to allow notice and public comment on the change is impracticable, unnecessary, and contrary to the public interest in fostering price stability and sustainable economic growth.

The provisions of 5 U.S.C. 553(d) that prescribe 30 days prior notice of the effective date of a rule have not been followed because section 553(d) provides that such prior notice is not necessary whenever there is good cause for finding that such notice is contrary to the public interest. As previously stated, the Board determined that delaying the changes in the basic discount rate is contrary to the public interest.

The Civil Aviation Authority (CAA), which is the airworthiness authority for the United Kingdom (UK), recently notified the FAA that an unsafe condition may exist on Rolls-Royce plc. models (RR) RB211-535C-37, RB211-535E4-37, RB211-535E4-B-37, and RB211-535E4-B-75 turbofan engines. The CAA advises that five reports of failure of the radial drive steady bearing have occurred, causing three in-flight shutdowns. Investigation has concluded that a number of radial drive steady bearings have been found with evidence of loose rivets after a short period in service and have a potential for low life failure as a result. This condition can lead to the eventual failure of the radial drive steady bearing and an in-flight shutdown.

Rolls-Royce plc has issued mandatory service bulletin (MSB) RB.211-72-D176, dated September 19, 2000, that specifies procedures for ensuring that all airplanes having engines with the affected bearing design installed, will meet the following criteria:

• Both radial drive steady bearings installed will have more than 600 flight hours accumulated on each engine, or

• At least one radial drive steady bearing installed will have more than 1,500 flight hours accumulated on one engine if the other engine has less than 600 accumulated flight hours, or

• One or both engines replace radial drive steady bearings of the affected design with new design bearings as specified in service bulletin (SB) RB.211-72-C925.

The CAA has classified this service bulletin as mandatory and issued AD 004-09-2000, dated September 19, 2000, in order to assure the airworthiness of these RR engines in the UK.

This engine model is manufactured in the UK, and is type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the CAA has kept the FAA informed of the situation described above. The FAA has examined the findings of the CAA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other Rolls-Royce plc. (RR) models RB211-535C-37, RB211-535E4-37, RB211-535E4-B-37, and RB211-535E4-B-75 turbofan engines of the same type design, this AD is being issued to reduce the risk of engine in-flight shutdown, due to failure at low life of radial drive steady bearings. This AD requires the replacement of certain radial drive steady bearings, based on their accumulated flight time.

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

Therefore, a situation exists that allows the immediate adoption of this regulation.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified under the caption “ADDRESSES.” All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2001-NE-22-AD.” The postcard will be date stamped and returned to the commenter.

This final rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this final rule.

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

This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points (COPs) for Federal airways, jet routes, or direct routes as prescribed in part 95.

The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM. Publishing an NPRM, which would incorporate a comment period before a final rule was issued, would be contrary to the public interest since immediate action is needed to protect the public, ports and waterways of the United States. For the same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. The Coast Guard will issue a broadcast notice to mariners and place Coast Guard vessels in the vicinity of these zones to advise mariners of the restriction.

Based on the September 11, 2001, terrorist attacks on the World Trade Center buildings in New York and the Pentagon in Arlington, Virginia, there is an increased risk that subversive activity could be launched by vessels or persons in close proximity to the Ports of Jacksonville or Canaveral, Florida, against tank vessels, cruise ships and military pre-positioned vessels entering, departing and moored within these ports. These temporary security zones are activated when the subject vessels pass the St. Johns River Sea Buoy, at approximate position 30°23′35″ N, 81°19′08″ W, when entering the Port of Jacksonville, or pass either Port Canaveral Channel Entrance Buoys #3 or #4, at respective approximate positions 28°22.7′ N, 80°31.8′ W, and 28°23.7 N, 80°29.2 W, when entering Port Canaveral. The zone for a vessel is deactivated when the vessel passes these buoys on its departure from port.

Military pre-positioned ships are U.S. commercial ships on long-term charter to the Military Sealift Command. They are utilized to transport military equipment and cargo. The Captain of the Port will notify the public via Marine Safety Radio Broadcast on VHF Marine Band Radio, Channel 22 (157.1 MHz) of all active security zones in port by identifying the names of the vessels around which they are centered. There will be Coast Guard and local police department patrol vessels on scene to monitor traffic through these areas. Entry into these security zones is prohibited, unless specifically authorized by the Captain of the Port, Jacksonville, Florida.

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

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities because small entities may be allowed to enter on a case by case basis with the authorization of the Captain of the Port.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. If the rule will affect your small business, organization, or government jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed under FOR FURTHER INFORMATION CONTACT for assistance in understanding this rule.

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

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

A rule has implication for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

The Coast Guard considered the environmental impact of this rule and concluded under Figure 2-1, paragraph 34(g) of Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation.

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

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

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

Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) was not published for this regulation. Good cause exists for not publishing a NPRM and for making this regulation effective in less than 30 days after publication in the Federal Register. Due to the catastrophic nature and extent of damage realized from the aircraft crashes into the World Trade Center towers, this rulemaking is urgently necessary to protect the national security interests of the United States against future potential terrorist strikes against governmental targets. A similar attack was conducted on the Pentagon on the same day. Any delay in the establishment and enforcement of this regulation's effective date would be unnecessary and contrary to public interest and national security since immediate action is needed to protect the Group Portland Base, South Portland Maine, Coast Guard Station Portsmouth Harbor, Portsmouth, New Hampshire, and Coast Guard Station Boothbay Harbor, Boothbay Harbor, Maine, facilities, vessels and personnel, as well as the public and maritime community, from potential terrorist attacks. The public will be kept appraised of the safety and security zones and respective changes via Broadcast Notice to Mariners.

On September 11, 2001, both towers of the World Trade Center, New York City, New York, were destroyed as a result of two commercial airliner crashes, an act that can only be explained as resulting from terrorist attacks. This regulation establishes three safety and security zones: (1) All waters of Portland Harbor, Maine in a 100-yard radius from the point at 43°38.742′ N, 70°14.865′ W; (2) All waters of Portsmouth Harbor, New Hampshire in a 50-yard radius from the point at 43°04.292′ N, 70°42.632′ W; and (3) All waters of Boothbay Harbor, Maine in a 50-yard radius from the point at 43°50.606′ N, 69°38.571′ W.

The safety and security zones have identical boundaries, and restrict entry into or movement within the waters of Portland Harbor, Portsmouth Harbor, and Boothbay Harbor. The safety and security zones are necessary to protect Coast Guard personnel, facilities, the public and the surrounding area from sabotage or other subversive acts, accidents, or events of a similar nature. All persons other than those approved by the Captain of the Port or his authorized patrol representative are prohibited from entering into or moving within the zones without the prior approval of the Captain of the Port. In addition to this publication in the Federal Register, the public will be made aware of the existence of these safety and security zones, their exact locations within these boundaries, and the restrictions involved, via Broadcast Notice to Mariners.

This temporary final rule is not a significant regulatory action under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary for the following reasons: these safety and security zones encompass only a portion of Portsmouth, Portland, and Boothbay Harbors, allowing vessels to safely navigate around the zones without delay and maritime advisories will be made to advise the maritime community of these safety and security zones.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Coast Guard must consider whether this proposal will have a significant economic impact on a substantial number of small entities. “Small entities” may include (1) small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields and (2) governmental jurisdictions with populations of less than 50,000.

For the reasons addressed under the Regulatory Evaluation above, the Coast Guard expects the impact of this regulation to be minimal and certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

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

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. A rule with tribal implications has 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.

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

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

On August 6, 2001 (66 FR 40947), EPA published a notice of proposed rulemaking (NPR) for the State of Maryland. The NPR proposed approval of the post 1996 ROP plans for milestone years 1999, 2002 and 2005 for the Baltimore ozone nonattainment area submitted by the State of Maryland on December 24, 1997, as revised on April 24 and August 18, 1998, December 21, 1999 and December 28, 2000. The NPR also proposed approval of the contingency plan for failure to meet ROP for the Baltimore nonattainment area. Other specific requirements of Maryland's SIP revisions for the ROP plans and contingency plans for Baltimore and the rationale for EPA's proposed action are explained in the NPR and will not be restated here. No public comments were received on the NPR.

Final Action: EPA is approving the post 1996 ROP plans for milestone years 1999, 2002 and 2005 for the Baltimore ozone nonattainment area submitted on December 24, 1997, as revised on April 24 and August 18, 1998, December 21, 1999 and December 28, 2000.

Final Action: EPA is approving the contingency plans for failure to meet ROP for the Baltimore ozone nonattainment area submitted on December 24, 1997, as revised on April 24 and August 18, 1998, December 21, 1999 and December 28, 2000.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. 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 approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will 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). This action also does not have Federalism implications because it does 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). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (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. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action to approve the post 1996 ROP plans and contingency plans for the Baltimore ozone nonattainment area must be filed in the United States Court of Appeals for the appropriate circuit by November 26, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

You may be affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.

1. Electronically.You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “Federal Register—Environmental Documents.” You can also go directly to theFederal Register listings at http://www.epa.gov/fedrgstr/. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm.

2. In person. The Agency has established an official record for this action under docket control number OPP-301176. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of August 24, 2000, 65 FR 51612 (FRL-6739-1), EPA issued a notice pursuant to section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104--170) announcing the filing of a pesticide petition (PP 9F5058) for tolerance by Rohm and Haas Company, 100 Independence Mall West, Philadelphia, PA 19108-2399. This notice included a summary of the petition prepared by Rohm and Haas, the registrant. There were no comments received in response to the notice of filing. A correction to the notice of filing was published in the Federal Register on December 15, 2000, 65 FR 78490 (FRL-6756-3).

The petition requested that 40 CFR part 180 be amended by establishing a tolerance for combined residues of the fungicide zoxamide 3,5-dichloro-N-(3-chloro-1-ethyl-1-methyl-2-oxopropyl)-4-methylbenzamide, and its metabolites, in or on tomatoes and cucurbit vegetables group at 2.0 part per million (ppm).

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that“ there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a tolerance for combined residues of zoxamide and its metabolites 2,4-dichloro-1,4-benzenedicarboxylic acid (RH-1455 and RH-141455) and 3,5-dichloro-4-hydroxymethylbenzoic acid (RH-1452 and RH-141452) on tomatoes at 2.0 ppm and cucurbit vegetables group at 1.0 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by zoxamide are discussed in the following Table 1 as well as the no observed adverse effect level (NOAEL) and the lowest observed adverse effect level (LOAEL) from the toxicity studies reviewed.

The primary target organ for oral exposure is the liver. In chronic and subchronic dog studies, liver and thyroid weights were increased along with liver histopathological changes and increases in alkaline phosphatase in the chronic study. There was no evidence of developmental or reproductive toxicity. The data demonstrate no increase sensitivity of rats or rabbits to in utero or early postnatal exposure to zoxamide. Carcinogenicity studies in rats and mice did not show increased incidence of spontaneous tumor formation. Zoxamide is classified as “not likely” human carcinogen. There was no evidence of neurotoxicity in the acute or subchronic neurotoxicity studies or in any other study in the data base. The toxicity data base for zoxamide is complete. See the following Table 2 for a discussion EPA's findings.

The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10x to account for interspecies differences and 10x for intra species differences. The Agency evaluated the available hazard and exposure data for zoxamide and made the recommendation for the FQPA safety factor to be used in human health risk assessments (as required by the FQPA of August 3, 1996). The Agency concluded that the FQPA safety factor could be removed (i.e., reduced to 1x) in assessing the risk posed by this chemical because: (1) There is no indication of quantitative or qualitative increased susceptibility of rats or rabbits to in utero and/or postnatal exposure; (2) A development neurotoxicity study conducted with zoxamide is not required; and (3) The dietary (food and drinking water) exposure assessments will not underestimate the potential exposures for infants and children. Additionally, there are currently no residential uses.

For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (acute RfD or chronic RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA Safety Factor.

For non-dietary risk assessments (other than cancer) the UF is used to determine the LOC. For example, when 100 is the appropriate UF (10x to account for interspecies differences and 10x for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 x 10− 6 or one in a million). Under certain specific circumstances, MOE calculations will be used for the carcinogenic risk assessment. In this non-linear approach, a “point of departure” is identified below which carcinogenic effects are not expected. The point of departure is typically a NOAEL based on an endpoint related to cancer effects though it may be a different value derived from the dose response curve. To estimate risk, a ratio of the point of departure to exposure (MOEcancer = point of departure/exposures) is calculated. A summary of the toxicological endpoints for zoxamide used for human risk assessment is shown in the following Table 3:

1. Dietary exposure from food and feed uses. Tolerances have been established (40 CFR part 180) for the combined residues of zoxamide and its metabolites 3,5-dichloro-1,4-benzenedicarboxylic acid (RH-1455 and RH141455) and (3,5-(dichloro-1,4-hydromethylbenzoic acid (RH-1452 and RH-141452, in or on potatoes and Zoxamide on grapes. Risk assessments were conducted by EPA to assess dietary exposures from zoxamide in food as follows:

i. Acute exposure. Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a one day or single exposure. Based on available data, a suitable endpoint for acute dietary risk assessment was not identified since no effects were observed in oral toxicity studies (including developmental studies) which could be attributed to a single-dose exposure. Therefore, an acute dietary risk assessment was not performed.

ii. Chronic exposure. In conducting this chronic dietary risk assessment the Dietary Exposure Evaluation Model (DEEM) analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-1992 nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. Chronic assessments use an average of the reported consumption values for each food form of a commodity multiplied by the residue concentration value, in this case a tolerance value, to estimate chronic dietary exposure.

The Tier I chronic analysis for zoxamide is a conservative estimate of the dietary exposure using tolerance-level residues of 100% crop-treated for all commodities. The chronic analysis was performed assuming tolerance level residues for tomatoes and curcurbit vegetables at 2.0 and 1.0 ppm, respectively and 100% crop treated was assumed for all other commodites. The tolerance level residues for processed commodities were based on the actual processing data, the DEEM default concentration factors for tomato paste and puree were set to 1x. Residues did not concentrate in tomato processed fractions in this study. The highest resulting dietary estimate was 1.7% of the cPAD for children. 1-6 years old. For chronic dietary risk estimates the level of concern is >100% CPAD. Even without refinements, the estimated risk from chronic dietary exposure to zoxamide, as represented by the % cPAD, is below the level of concern for the population and all population subgroups.

iii. Cancer. Zoxamide is not mutagenic in Ames assays, in CHO cells assay at the Hypoxonthine guanine phosphoribosyle transferase (HGPRT) locus, and in the mouse bone marrow micronucleus assay. Zoxamide did not induce structural chromosome aberrations in cultured CHO cells treated up to the limit of toxicity, but did induce increased levels of numerical aberrations. Carcinogenicity studies in rat and mice did not show increased incidence of spontaneous tumor formation. The Agency classified zoxamide as not likely to be a human carcinogen. Thus a cancer risk assessment is not required for zoxamide.

2. Dietary exposure from drinking water. The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for zoxamide in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of zoxamide.

The Agency uses the Generic Estimated Environmental Concentration (GENEEC) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS) to estimate pesticide concentrations in surface water and SCI-GROW, which predicts pesticide concentrations in groundwater. In general, EPA will use GENEEC (a tier 1 model) before using PRZM/EXAMS (a tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

The SCI-GROW model is used to predict pesticide concentrations in shallow groundwater. For a screening-level assessment for surface water EPA will use FIRST (a tier 1 model) before using PRZM/EXAMS (a tier 2 model). The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. While both FIRST and PRZM/EXAMS incorporate an index reservoir environment, the PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.

Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to zoxamide they are further discussed in the aggregate risk sections below.

Based on the GENEEC, and PRZM/EXAMS and SCI-GROW models the estimated environmental concentrations (EECs) of zoxamide for acute and chronic exposures are as follows:

A drinking water risk assessment was not performed as the proposed use rates do not exceed those already assessed. Therefore new dietary risk estimates from drinking water sources were not performed. Drinking water monitoring data are not available for zoxamide. No new EECs were provided for cucurbits and tomatoes because the application rates for these new uses approaches the maximum rate for grapes.

Tier I (GENEEC) modeling estimates that zoxamide residues (zoxamide + degradation products) in surface water, from aerial and ground application, are not likely to exceed 48.3 and 45.1 μg/L for the 56 day average concentration (chronic) for grape and potato uses, respectively. However, it is the Agency's policy to divide chronic Tier 1 GENEEC EECs by a factor of 3 for comparison to DWLOCs. Therefore, the chronic surface water EECs based on GENEEC are 16.1 and 15 μg/L for grape and potato uses, respectively.

Tier II (PRZM/EXAMS) surface water modeling for zoxamide residues (zoxamide + degradation products), using the index reservoir with the percent cropped area, predicts the 1 in 10 year annual average (non-cancer chronic) concentration of zoxamide residues from grapes is not likely to exceed 21.8 μg/L and from potatoes is not likely to exceed 6.2 μg/L.

The SCI-GROW predicted concentration of zoxamide residues (zoxamide + degradation products) in shallow ground water is not expected to exceed 2.07 μg/L.]

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Zoxamide is not registered for use on any sites that would result in residential exposure.

4. Cumulative exposure to substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA does not have, at this time, available data to determine whether zoxamide has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, zoxamide does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that zoxamide 3,5-dichloro-N-(3-chloro-1-ethyl-1-methyl-2-oxopropyl)-4-methylbenzamide has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).

1. In general. FFDCA section 408 provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a margin of exposure (MOE) analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans.

2. Conclusion. There is a complete toxicity data base for zoxamide and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. EPA determined that the 10x safety factor to protect infants and children should be removed. The FQPA factor is removed because:

i. There is no indication of quantitative or qualitative increased susceptibility of rats or rabbits to in utero and/or postnatal exposure;

ii. A developmental neurotoxicity study conducted with zoxamide is not required; and

iii. The dietary (food and drinking water) exposure assessments will not underestimate the potential exposures for infants and children. Additionally, there are currently no residential uses.

1. Acute risk. Based on the data, EPA concluded that zoxamide does not pose an acute risk.

2. Chronic risk. The resulting dietary food exposures, from cucurbits and tomatoes, occupy <1% of the Chronic PAD for all population subgroups included in the analysis, except for children (1 to 6 years old) which is the highest exposed subgroup. The exposure for children (1 to 6 years old) utilizes 1.7% of the cPAD. The results of this dietary exposure analysis should be viewed as very conservative (health protective). Refinements such as use of percent crop-treated information and/or anticipated residue values would yield even lower estimates of chronic dietary exposure.

The EECs provided by the Agency for assessing chronic aggregate dietary risk are 2.07 μg/L (for ground water, based on SCI-GROW) and 21.8 μg/Lin surface water, based on PRZM/EXAMS modeling, 1 in 10 year annual average). The back-calculated DWLOCs for cucurbits and tomatoes (Table 5) for assessing chronic aggregate dietary risk range from 4800 μg/L for the population subgroup with the highest food exposure (Children, 1 to 6 years old) to 16,800 μg/L for the U.S. population (total) and Males 13-19 years.

The SCI-GROW and PRZM/EXAMS chronic EECs are less than the Agency's level of comparison (the DWLOC value for each population subgroup) for zoxamide residues in drinking water as a contribution to chronic aggregate exposure. Thus, the Agency concludes with reasonable certainty that residues of zoxamide in drinking water will not contribute significantly to the aggregate chronic human health risk and that the chronic aggregate exposure from zoxamide residues in food and drinking water will not exceed the Agency's level of concern (100% of the Chronic PAD) for chronic dietary aggregate exposure by any population subgroup. EPA generally has no concern for exposures below 100% of the Chronic PAD, because it is a level at or below which daily aggregate dietary exposure over a lifetime will not pose appreciable risks to the health and safety of any population subgroup. This risk assessment is considered high confidence, very conservative, and very protective of human health. There are no residential uses for zoxamide that result in chronic residential exposure to zoxamide.

3. Short-term risk. The Agency did not identify a short-term dermal endpoint for zoxamide. There are no residential uses proposed for this fungicide, short term aggregate risk assessments based on exposure from oral, inhalation, and dermal routes. For these reasons, no short term risk is expected.

4. Intermediate-term risk. The Agency did not identify an intermediate -term dermal endpoint for zoxamide. There are no residential uses proposed for this fungicide, intermediate-term aggregate risk assessments based on exposure from oral, inhalation and dermal routes. For these reasons, no intermediate-term risk is expected.

5. Aggregate cancer risk for U.S. population. The Agency classified zoxamide as not likely to be a human carcinogen. Therefore, no cancer risk is expected.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to zoxamide residues.

The petitioner proposes a GC/ECD method, with LOD and validated LOQ of 0.003 and 0.01 ppm respectively, for the enforcement of tolerances on cucurbits and tomatoes. A GC/MSD method is proposed as a confirmatory method. Method validation recoveries indicate that the GC/ECD method adequately recovers residues of zoxamide from cucurbits, tomatoes, and tomato processed commodities. Adequate confirmatory method validation, radiovalidation, and independent method validation have been submitted for this method. The submitted GC/ECD method is similar to the enforcement method proposed for grapes and potatoes under PP 9F05058 which has been forwarded to ACB/BEAD for a petition method validation . A petition method validation was also requested for the GC/ECD enforcement method proposed for tomatoes and cucurbits (PP 0F06093).

The methods were successfully validated for tomatoes and cucurbits in one trial by the independent laboratory. A slight modification was made but only with the instrumental parameters. For tomatoes, the head pressure in the oven ramp was lowered from 13 to 7.5 psi because hydrogen was substituted as the carrier gas and the total detector flow was set at 15 mL/min of N2 instead of 60 mL/min. For cucumber, the detection temperature was set at 315°C instead of 300 °C and the total detector flow was set at 12 mL/min instead of 60mL/min.). The changes were found necessary to optimize sensitivity of the Varian 3500 ECD and allow detection of zoxamide at the LOQ of 0.01 ppm. Apparent residues of zoxamide were nondetectable (<0.01 ppm) in/on two control samples each of cucumbers and tomatoes. The recoveries were between 70 - 120% with an RSD below 15% which were within the acceptable limits. Extraction of 6 samples took about 6-8 hours and analysis of samples and standards took about 5-6 hours.

Plant commodity samples collected from the field, processing, and storage stability studies were analyzed for residues of zoxamide using either the GC/ECD or GC/MSD method. The concurrent method recoveries indicate that both methods are adequate for data collection for cucurbits and tomatoes.

The methods are adequate for a conditional registration pending successful validation results and comments from ACB/BEAD.

The Residue Analytical Method - Plant Commodities are adequate for a conditional registration pending successful validation results and comments from The Analytical Chemistry Branch Laboratories, BEAD (7503C), Office of Pesticides Programs. Upon successful completion of the EPA validation and the granting of this registration, the method will be forwarded to FDA for publication in a future revision of the Pesticide Analytical Manual, Vol. II (PAM-II). Prior to publication and upon request , the validation will be available the Analytical Chemistry Branch (ACB), BEAD (7503C) Environmental Science Center, 701 Mapes Road, Ft. George C. Meade, MD 29755-5350. Contact Francis D. Griffith, Jr., telephone (410) 305-2905, e-mail: griffith.francis@epa.gov. The analytical standards are also available from the EPA National Pesticide Standard Repository at the same location.

The MRMs are adequate for enforcement of the proposed tolerances for zoxamide in/on cucurbits and tomatoes. The submission has been forwarded to FDA for complete evaluation in conjunction with the earlier petition.

There are currently no established Codex, Canadian, or Mexican maximum residue limits (MRLs) or tolerances for residues of zoxamide in/on tomatoes and cucurbits. Therefore, no compatibility issues exist with regard to the proposed U.S. tolerances discussed in this petition review.

Additional storage stability data are required for residues of zoxamide in/on cucurbit vegetables stored 15.6 months, tomato fruit stored 15.2 months and tomato paste and puree stored 11.5 months. The additional storage stability data for tomatoes, tomato paste and puree and cucumber is a condition for the registration of zoxamide for use on tomatoes and cucurbits.

Therefore, the tolerance is established for combined residues of zoxamide and its metabolites 3,5-dichloro-1,4-benzenedicarboxylic acid (RH-1455 and RH-141455) and 3,5-dichloro-4-hydroxymethlbenzoic acid (RH-1452 and RH-141452), in or on tomatoes at 2.0 ppm and cucurbit vegetable group at 1.0 ppm.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301176 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before November 26, 2001.

1. Filing the request. Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.

2. Tolerance fee payment. If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

3. Copies for the Docket. In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-301176, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled Federalism(64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

States which have received final authorization from EPA under RCRA Section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, states must change their programs and ask EPA to authorize the changes. Changes to state programs may be necessary when Federal or state statutory or regulatory authority is modified or when certain other changes occur. Most commonly, states must change their programs because of changes to EPA's regulations in 40 Code of Federal Regulations (CFR) parts 124, 260 through 266, 268, 270, 273 and 279.

California initially received final authorization on July 23, 1992, effective August 1, 1992 (57 FR 32726), to implement the RCRA hazardous waste management program. This “base program authorization” authorized California's RCRA program based on California statutory and regulatory provisions enacted and adopted prior to December 20, 1991, the date of California's authorization application. On January 31, 2000, California submitted a final complete program revision application, seeking authorization of their changes in accordance with 40 CFR 271.21.

On June 20, 2001, EPA published a tentative determination announcing its intent to grant California final authorization for the revisions to its base program. Further background on the tentative decision to grant authorization appears at Vol. 66, No. 119, June 20, 2001 at pages 33037-33046.

Along with the tentative determination, EPA announced the availability of the application for public comment. EPA received four sets of written comments during the public comment period. One of the four commenters submitted relatively lengthy comments regarding EPA's tentative determination (22 pages total). The other three commenters submitted relatively brief comments (1-2 pages total, each), which generally endorsed the comments submitted by the first commenter. The first commenter also submitted an 8 page supplement to its comments well after the close of the public comment period. These comments were received by EPA on September 4, 2001, although the public comment period closed on July 20, 2001. The significant issues raised by the commenters and EPA's responses are summarized below. EPA has included a response to the supplemental comments as well, (see Response to Comment #3, below).

Comment #1: The commenters asserted that California's exclusion of secondary lead smelter furnaces from the boilers and industrial furnaces (BIFs) conditional exemption found in the Federal regulation at 40 CFR 266.100(d) (formerly 266.100(c)) is neither consistent with nor equivalent to the provisions of the Federal program. They further stated that excluding industrial furnaces from the conditional exemption afforded under the Federal BIF program and regulating such units as miscellaneous units under California's program is inconsistent with RCRA's goals. The commenters maintained that California failed to provide a rational basis for departing from the Federal-regulatory scheme in which air emissions from certain industrial furnaces are regulated under the Clean Air Act in lieu of RCRA and that California's exclusion of secondary lead smelters from the conditional exemption of Title 22 California Code of Regulations 66266.100(c) may lead to duplicative and inconsistent regulation of secondary lead smelters.

Response to Comment #1: States may be authorized to administer a hazardous waste program unless EPA determines that: (1) The state program is not equivalent to the Federal RCRA program; (2) the state program is not consistent with the Federal or state programs applicable in other states; or (3) the state program does not provide adequate enforcement of compliance with RCRA. RCRA Section 3006(b), 42 U.S.C. 6926(b).

EPA's regulations provide specific factors to consider in determining whether a state program is consistent with the Federal program and other authorized state programs. 40 CFR 271.4. In general, a state program may be deemed inconsistent if it unreasonably restricts the free movement of hazardous waste across state borders, if it has no basis in human health or environmental protection and acts as a prohibition on the treatment, storage or disposal of hazardous waste, or if the state's manifest system does not meet the requirements of 40 CFR Part 271. 40 CFR 271.4(a)-(c).

Although state programs must be consistent with the Federal program and other authorized state programs, RCRA expressly allows state and local governments to adopt requirements that are more stringent than the Federal RCRA requirements. RCRA Section 3009, 42 U.S.C. 6929. EPA has also indicated that states are free to operate programs “with a greater scope of coverage” than the Federal program but that “the additional coverage is not part of the Federally approved program.” 40 CFR 271.1(i)(2). In determining whether a state program that differs from the Federal program is broader in scope than the Federal program, as opposed to being more stringent, EPA will generally consider: (1) whether the imposition of the state requirement increases the size of the regulated community beyond that of the Federal program; and (2) whether the state's requirement has a direct counterpart in the Federal regulatory program. See, e.g., OSWER Directive No. 9541.1984(04), Determining Whether State Hazardous Waste Management Requirements are Broader in Scope or More Stringent than the Federal RCRA Program, May 21, 1984.

In June of 1997, California submitted its application for authorization of changes to its program relating to the burning of hazardous waste in BIFs. Title 22 of the California Code of Regulations (C.C.R.) at Sections 66266.100(c) and (f) tracked the Federal analogous provisions at 40 CFR 266.100(d) and (g), respectively. The Federal provisions conditionally exclude certain BIFs from regulation under RCRA. However, the State also added the following language to both 22 C.C.R. Sections 66266.100(c) and (f): “Additionally, industrial furnaces exempted by this subsection are subject to regulation as miscellaneous units.” California also amended its definition of the term “miscellaneous unit” at 22 C.C.R. Section 66260.10 to conform that definition to the language it had added to 22 C.C.R. Sections 66266.100(c) and (f).

In June of 1997, the language in 22 C.C.R. Sections 66260.10, 66266.100(c) and 66266.100(f) that differs from the Federal regulatory language was included in California's regulations on an emergency basis only. These provisions were not finally adopted on a permanent basis by the State until May of 1998. Neither the checklists nor the Attorney General's statement, which were submitted with California's application for authorization of revisions to its BIF program, identified the differences between the State and Federal regulatory language. EPA has now confirmed with the State that the inclusion of the different language in the regulations submitted with California's BIF revisions application was an unintentional oversight.

However, even if California had sought authorization of the language in the provisions at 22 C.C.R. Sections 66260.10, 66266.100(c) and 66266.100(f) that differs from the Federal language, EPA has determined that the State's language increases the size of the universe of units which are required to have permits as miscellaneous units. Thus, these provisions make the State's permit program broader in scope than the Federal program in this respect. Since EPA does not authorize state requirements which are broader in scope than the Federal RCRA program, the language in these provisions that is different from the Federal program is not and will not be included in California's authorized hazardous waste program.

For the purposes of today's rule, it is not necessary for EPA to opine on whether or not the subject State provisions are preempted by RCRA. Since EPA has determined that these provisions are broader in scope than the Federal program, EPA is not authorizing these provisions. Thus, the question of whether or not the State's regulation of the Federally conditionally exempt units is or is not consistent with RCRA or its policies is not relevant in the context of this decision to authorize certain other revisions to California's RCRA program. However, EPA does not regard California's statutory requirements that resource recovery facilities obtain hazardous waste facilities permits as fundamentally inconsistent with RCRA or its policies (see California Health and Safety Code Sections 25200 and 25201). Regulation of emissions (or other releases) from hazardous waste recycling units is not inherently inconsistent with RCRA provisions or purposes. See, e.g., RCRA Section 3004 (q), commanding regulation of air emissions from some classes of hazardous waste recyclers. This lends further support to EPA's determination that the regulation by the State of conditionally exempt BIFs as miscellaneous units—albeit broader in scope than the Federal program—does not warrant a decision not to authorize the other California provisions which are being authorized today.

Comment #2: The commenters asked EPA to ensure that it is reviewing the most recent version of the California BIF and miscellaneous unit regulations in assessing whether authorization should be granted to the State.

Response to Comment #2: In reviewing California's application regarding revisions to its BIF program, EPA did not look to the most recent State provisions in effect at the time EPA promulgated its tentative decision to authorize those revisions. Rather, EPA looked to the requirements in effect on a non-emergency basis in the State as of the date that portion of California's application was submitted. In this case, EPA looked to the non-emergency regulations in effect as of June of 1997.

In reviewing these requirements, EPA ensured that the State's requirements continued to be in effect, but EPA is not authorizing any revisions or amendments to California's BIF requirements which may have gone into effect after the date of the submittal of the BIF portion of the application for authorization. Nor is EPA authorizing any BIF requirements which existed on an emergency basis only in June of 1997, even if such requirements were adopted at a later date on a permanent basis.

Comment #3: One of the commenters asserted that California's regulations at 22 C.C.R. Sections 66261.24(a)(2)(A)(i) and (B)(i), which regulate as characteristic, toxic wastes certain inorganic and organic substances as persistent, bioaccumulative and toxic, are neither consistent with nor equivalent to the Federal program. The commenter argued that these provisions should not be authorized.

Response to Comment #3: The regulations to which these comments are aimed were submitted as part of California's base program authorization application in December of 1991. As explained above, states are free to operate programs “with a greater scope of coverage” than the Federal program but “the additional coverage is not part of the Federally approved program.” 40 CFR 271.1(i)(2). Additionally, in determining whether a state program that differs from the Federal program is broader in scope than the Federal program, EPA will consider: (1) Whether the imposition of the state requirement increases the size of the regulated community beyond that of the Federal program; and (2) whether the state's requirement has a direct counterpart in the Federal regulatory program. See, e.g., OSWER Directive No. 9541.1984(04), Determining Whether State Hazardous Waste Management Requirements are Broader in Scope or More Stringent than the Federal RCRA Program, May 21, 1984.

Since 22 C.C.R. Sections 66261.24(a)(2)(A)(i) and (B)(i) do not have any direct Federal counterparts, and increase the size of the universe of regulated hazardous wastes, EPA, in making its base program authorization decision for the State of California's hazardous waste program, determined that these provisions were broader in scope than the Federal program. Thus, these provisions were not included in the scope of the authorized base program. The revisions to the base program, which are the subject of today's rule, do not affect that determination.

Since EPA has not authorized the provisions which are the subject of this comment, the question of whether or not the State's regulation of such wastes is or is not consistent with RCRA or its policies is not relevant in the context of this decision to authorize certain other revisions to California's RCRA program. Even so, EPA does not regard California's regulation of these wastes as non-RCRA hazardous waste as fundamentally inconsistent with RCRA or its policies.

EPA has made the final determination that California's application for authorization of the subject revisions meets all of the statutory and regulatory requirements established by RCRA. Therefore, with respect to the revisions, we are granting California final authorization to operate its hazardous waste program as described in the revisions authorization application. California will continue to have responsibility for permitting Treatment, Storage, and Disposal Facilities (TSDFs) within its borders and for carrying out the aspects of the RCRA program described in its revised program application, subject to the limitations of the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA take effect in authorized states before such states are authorized for the requirements. Thus, for revisions to the Federal program for which California has not yet sought authorization, EPA will continue to implement those HSWA requirements and prohibitions in California, including issuing permits, until the State is granted authorization to do so.

A facility in California subject to RCRA must comply with the authorized State requirements in lieu of the corresponding Federal requirements in order to comply with RCRA. Additionally, such persons must comply with any applicable Federally-issued requirements, such as, for example, HSWA regulations issued by EPA for which the State has not received authorization, and RCRA requirements that are not supplanted by authorized state-issued requirements. California continues to have enforcement responsibilities under its State law to pursue violations of its hazardous waste management program. EPA continues to have independent authority under RCRA Sections 3007, 3008, 3013, and 7003, which include, among others, the authority to:

• Do inspections, and require monitoring, tests, analyses or reports,

• Enforce RCRA requirements (including State-issued statutes and regulations that are authorized by EPA and any applicable Federally-issued statutes and regulations) and suspend or revoke permits, and

• Take enforcement actions regardless of whether the State has taken its own actions.

This action approving the subject revisions does not impose additional requirements on the regulated community because the regulations for which California is being authorized are already effective under State law and are not changed by the act of authorization.

EPA cannot delegate the Federal requirements at 40 CFR part 262, subparts E and H. Although California has adopted these requirements verbatim from the Federal regulations in Title 22 of the California Code of Regulations, Sections 66260-66262, EPA will continue to implement those requirements.

California initially received final authorization on July 23, 1992, effective August 1, 1992 (57 FR 32726), to implement the RCRA hazardous waste management program. This “base program authorization” authorized California's RCRA program based on California statutory and regulatory provisions in effect as of December of 1990. On January 31, 2000, California submitted a final complete program revision application, seeking authorization of their changes in accordance with 40 CFR 271.21.

California has applied for many of the Federal changes to the RCRA program since it was authorized for the base program. The earliest of these Federal changes goes back to 1989. However, there are several changes to the Federal program which have been made since California's base program was authorized for which California has not yet applied for authorization. The major areas of changes for which California has not yet applied for authorization are: the used oil regulations; consolidated liability requirements; military munitions; phases three and four of the land disposal restrictions; and universal waste.

Since authorization of California's base program in 1992, California has submitted numerous packages to EPA relating to its efforts to seek authorization for updates to its program based on revisions to the Federal program. EPA has published a series of checklists to aid California and the other states in such efforts, (see EPA's RCRA State Authorization web page at www.epa.gov/epaoswer/hazwaste/state/index.htm). Each checklist generally reflects changes made to the Federal regulations pursuant to a particular Federal Register notice. California's submittals have been grouped into general categories (e.g., Air Emissions Standards, Boilers and Industrial Furnaces, etc.). Each submittal may have reflected changes based on one or more Federal Register notices and would have thus referenced one or more corresponding checklists.

What follows is a summary, for each general category identified by California in its submittals, of the specific subjects of changes to the Federal program for that category. Although the changes to the Federal program are identified in the summary, California did not necessarily make revisions to its program as a result of each Federal revision noted. For example, certain revisions to the Federal program may have resulted in less stringent regulation than that which previously existed. Since states may maintain programs which are more stringent than the Federal program, states have the option whether or not to adopt such revisions.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: Organic air emission standards for process vents and equipment leaks; and organic air emissions standards for tanks, surface impoundments and containers.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: Interim status standards for down-gradient ground-water monitoring well locations; hydrocarbon recovery operations; chlorofluorocarbon refrigerants; the mining waste exclusion; the recycled coke by-product exclusion; the toxicity characteristic leaching procedure; the mixture and derived-from rules; the removal of strontium sulfide from the list of hazardous wastes; the adoption of an administrative stay for K069 listing (emission control dust/sludge from secondary lead smelting); the adoption of certain technical corrections to the 1990 toxicity characteristic rule; the listing of chlorinated toluene production waste (K149, K150, K151); the standards for treating liquids in landfills; the references which specify testing requirements and monitoring activities; the listing of hazardous constituents from the use of chlorophenolic formulations in wood surface protection; the reference relating to wood surface protection; the listing of beryllium powder (P015); and provisions to be met for excluding as a hazardous waste certain wastewaters from the production of carbamates and carbamoyl oximes (K157).

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: Corrective action management units and temporary units.

These changes include final authorization of California for the February 16, 1993 Corrective Action Management Unit (CAMU) rule. Since California is now authorized for the rule, the State will be eligible for interim authorization-by-rule for the proposed amendments to the CAMU rule, which also proposed the interim authorization-by-rule process (see August 22, 2000, 65 FR 51080, 51115). California will also be eligible for conditional authorization if that alternative is chosen by EPA in the final CAMU amendments rule.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: Burning of hazardous waste in boilers and industrial furnaces; an administrative stay for coke ovens; the recycled coke by-products exclusion; certain coke by-products listings; guidelines for air quality modeling and screening for boilers and industrial furnaces burning hazardous waste; the adoption of an administrative stay and interim standards for Bevill residues; and certain technical amendments to record keeping instructions.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: Wood preserving listings; and petroleum refinery primary and secondary oil/water/solids separation sludge listings.

We also find that California did not need to adopt a Federal administrative stay for the requirement that existing drip pads be impermeable because the stay expired on October 30, 1992.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: Liners and leak detection systems for hazardous waste land disposal units.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: The removal of the conditional exemption for certain slag residues.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: The recovered oil exclusion.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: The delay of closure period for hazardous waste management facilities.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: Expanded public participation.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: The used oil filter exclusion.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following areas: LDR third scheduled wastes; electric arc furnace dust (K061); LDRs for newly listed wastes and hazardous debris; LDRs for ignitable and corrosive characteristic wastes whose treatment standards were vacated; case-by-case capacity variances for hazardous debris; case-by-case capacity variances for lead-bearing hazardous materials; case-by-case capacity variances for hazardous soil; and universal treatment standards and treatment standards for organic characteristic wastes and newly listed wastes.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program in the following area: The identification of the U.S. EPA office to which the notification of export activities and annual export reports must be sent. California has also adopted the Federal regulations implementing a graduated system of procedural and substantive controls for hazardous wastes as they move across national borders within the Organization for Economic Cooperation and Development (OECD) for recovery. The requirements for regulating exports, Subparts E and H of 40 CFR Part 262, will be administered by the U.S. EPA instead of California because the exercise of foreign relations and international commerce powers is delegated to the Federal government under the Constitution. California has adopted these export rules into Title 22 California Code of Regulations for the convenience of the regulated community.

We are granting California final authorization for all revisions that it has made to its program due to certain changes to the Federal program which removed certain legally obsolete rules.

EPA published a table in its notice of its tentative decision to authorize the foregoing revisions to California's hazardous waste management program, which shows the Federal and analogous State provisions involved in this decision and the relevant corresponding checklists. See 66 FR 33037, at pages 33039-33044 (June 20, 2001).

State requirements that go beyond the scope of the Federal program are not part of the authorized program and EPA cannot enforce them. Although persons must comply with these requirements in accordance with California law, they are not RCRA requirements. EPA considers that the following State requirements, which pertain to the revisions involved in this decision, go beyond the scope of the Federal program.

The following analysis differs in some ways from the areas which California identified as being broader in scope than the Federal program in its application.

1. The definition of “remediation waste” at 22 C.C.R. Section 66260.10 is broader in scope than the Federal definition at 40 CFR 260.10 only to the extent California's definition includes hazardous substances which are neither “hazardous wastes” nor “solid wastes.”

2. 22 C.C.R. Section 66264.552(e)(4)(A)(2) is broader in scope than 40 CFR 264.552(e)(4)(i)(B) only to the extent the California provision controls the escape of “hazardous substances” which are not “hazardous waste,” “hazardous constituents,” “leachate,” “contaminated runoff” or “hazardous waste decomposition products.”

3. California's program is broader in scope than the Federal program to the extent it regulates spent wood preserving solutions that have been used and are reclaimed and reused for their original intended purpose and wastewaters from the wood preserving process that have been reclaimed and are reused to treat wood. These materials are excluded from the Federal definition of solid waste by virtue of 40 CFR 261.4(a)(9)(i) and (ii), respectively.

4. HSC Section 25144(c) is broader in scope than 40 CFR 261.4(a)(12) since the California provision exempts oil recovery process units and associated storage units from regulation, rather than exempting recovered oil from the definition of solid waste, which is what the Federal provision does. Thus, the State program is broader in scope than the Federal program to the extent California regulates recovered oil not contained in such recovery process units or associated storage units.

5. HSC Section 25143.2(c)(1) was broader in scope than was former section 40 CFR 261.6(a)(3)(vi) (renumbered as 261.6(a)(3)(v) in 1995 [60 FR 25492] 1 ), which exempted from regulation petroleum coke produced from petroleum refinery hazardous waste containing oil produced by the same person who generated the waste unless the resulting coke product was characteristically hazardous. HSC Section 25143.2(c)(1), which was part of the authorized program, was not amended to conform to the changes made to 40 CFR 261.6(a)(3)(vi) in 1994. At that time, the Federal exemption was expanded to include petroleum coke produced by the same person who generated the petroleum hazardous waste containing oil, rather than being limited to petroleum coke produced at the same facility at which such wastes were generated. The State's exemption retains the “at the same facility” language and, to this extent, is broader than the Federal requirement.2

6. California does not have the Federal exclusion found at 40 CFR 261.4(b)(13), which excludes from the definition of hazardous waste non-terne plated used oil filters that are not mixed with hazardous wastes if those filters are gravity hot drained in accordance with specified procedures. To the extent California regulates such oil filters, its program is broader in scope than the Federal program.

7. California has not adopted the Federal exclusion found at 40 CFR 261.4(a)(10). This provision excludes from the definition of solid waste K060, K070, K087, K141, K142, K143, K145, K147, K148, and those coke by-product residues that are hazardous only because they exhibit the toxicity characteristic when, subsequent to generation, these wastes are recycled by being returned to coke ovens, to the tar recovery process as a feedstock to produce coal tar or mixed with coal tar. The Federal exclusion is conditioned on there being no land disposal of the waste from the point of generation to the point of recycling. Thus, the absence of this exemption makes the California program broader than the Federal program in this respect.

8. California has not adopted the Federal provision at 40 CFR 266.100(b)(3), which exempts from regulation the burning of wastes produced by conditionally exempt small quantity generators (see also 40 CFR 261.5). Thus, California's program is broader in scope than the Federal program in this respect.

9. California has not adopted the Federal provision at 40 CFR 266.100(b)(4), which excludes from regulation coke ovens if the only hazardous waste burned is K087, decanter tank tar sludge from coking operations. The Federal provision was a necessary corollary to EPA's removal of the coke and coal tar exemption (formerly 40 CFR 261.6(a)(3)(vii)) due to the reclassification of coke and coal tar as products under 40 CFR 261.4(a)(10) in 1991. California had not adopted the exemption as part of the base program, nor did it adopt the 1991 exemption at 40 CFR 261.4(a)(10). Thus, the California program is broader in scope than the Federal program to the extent California regulates coke ovens that solely burn K087.

10. The California provision at 22 C.C.R. Section 66266.100(b)(3) excludes from regulation in BIFs those materials which are exempted from regulation at 22 C.C.R. Section 66261.4. This provision tracks the Federal provision at 40 CFR 266.100(b)(3), which excludes from regulation in BIFs those materials which are exempted from regulation at 40 CFR 261.4. The Federal provision at 40 CFR 261.4 includes more exemptions than the State provision at 22 C.C.R. Section 66266.4 and, therefore, California's BIF program is broader in scope than the Federal program in this respect.

11. 40 CFR 261.4(a)(11) excludes from the definition of solid waste, non-wastewater splash condenser dross residue from the treatment of K061 in high temperature metals recovery units provided it is shipped in drums (if shipped) and is not land disposed before recovery. California has not adopted this exclusion and its program is thus broader in scope than the Federal program in this respect.

12. California's program is broader in scope than the Federal program with respect to the regulation of secondary materials that are recycled back into secondary production processes from which they were generated. 40 CFR 261.2(e)(1)(iii) exempts such materials, so long as the materials are managed such that there is no placement on the land. HSC 25143.2(b)(3), as restricted by HSC Sections 25143.2(e) and 25143.9, which is the State's analogue to 40 CFR 261.2(e)(1)(iii), excludes only recyclable materials that are returned to a primary process.

13. The language contained in the provisions of 22 C.C.R. Sections 66260.10, 66266.100(c) and 66266.100(f), which is discussed in the response to comments in Section B of this preamble, above, make certain units that are conditionally exempt from the Federal and State BIF regulations regulated as miscellaneous units under California regulations. To this extent, 22 C.C.R. Sections 66260.10, 66266.100(c) and 66266.100(f) are broader in scope than the Federal program and the corresponding Federal regulations at 40 CFR Sections 260.10, 266.100(d) 3 and 266.100(g).4

California will issue permits for all the provisions for which it is authorized and will administer the permits it issues. All permits issued by EPA prior to California being authorized for these revisions will continue in force until the effective date of the State's issuance or denial of a State RCRA permit, or the permit otherwise expires or is revoked. California will administer any RCRA hazardous waste permits or portions of permits which EPA issued prior to the effective date of this authorization until such time as California has issued a corresponding State permit. EPA will not issue any more new permits or new portions of permits for provisions for which California is authorized after the effective date of this authorization. EPA will retain responsibility to issue permits for HSWA requirements for which California is not yet authorized.

California is not authorized to carry out its hazardous waste program in Indian country within the State. A map of Indian Country in California can be found on the world wide web at www.epa.gov/region09/cross_pr/indian/maps.html. A list of Indian Tribes in California can be found on the web at www.doi.gov/bureau-indian-affairs; it is complete except for two newly listed tribes, Graton and Lower Lake Rancherias. Therefore, this action has no effect on the Indian country so described, including Graton and Lower Lake Rancherias. EPA will continue to implement and administer the RCRA program in Indian country within the State.

Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste program into the Code of Federal Regulations. EPA does this by referencing the authorized State rules in 40 CFR part 272. EPA is reserving the amendment of 40 CFR part 272, subpart F for codification of California's program at a later date.

The Office of Management and Budget has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore this action is not subject to review by OMB. Furthermore, this rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. This action authorizes State requirements for the purpose of RCRA 3006 and imposes no additional requirements beyond those imposed by State law. Accordingly, I certify that this action 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 action authorizes 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 (Pub. L. 104-4). For the same reason, this action does not have tribal implications within the meaning of Executive Order 13175 (65 FR 67249, November 6, 2000). It does not have substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This action 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 authorizes State requirements as part of the State RCRA hazardous waste program without altering the relationship or the distribution of power and responsibilities established by RCRA. This action also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant and it does not make decisions based on environmental health or safety risks. This action does not include environmental justice related issues that require consideration under Executive Order 12898 (59 FR 7629, February 16, 1994).

Under RCRA 3006(b), EPA grants a state's application for authorization as long as the state meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a state authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of this action 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 action will not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this document and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a major rule as defined by 5 U.S.C. 804(2). This action will be effective September 26, 2001.

This is a summary of the Federal Communications Commission's Order on Reconsideration, FCC 01-249, in CS Docket No. 00-96, adopted on September 4, 2001, and released on September 5, 2001. The full text of this Order on Reconsideration is available for public inspection and copying during normal business hours at the FCC Reference Information Center, Portals II, Room CY-A257, 445 12th Street, SW., Washington, DC, 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail at qualexint@aol.com. The full text may also be reviewed and downloaded from the FCC Cable Services Bureau's website at http://www.fcc.gov/csb/. Alternative formats are available to persons with disabilities by contacting Martha Contee at (202) 418-0260 or TTY (202) 418-2555.

1. The Order on Reconsideration addresses eight distinct issues raised in two petitions for reconsideration of the Commission's Report and Order in Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadcast Signal Carriage Issues; Retransmission Consent Issues, which implements section 338 of the Communications Act of 1934 (the “Act”), as amended by the Satellite Home Viewer Improvement Act of 1999 (“SHVIA”). The Report and Order adopted broadcast signal carriage requirements for satellite carriers in order to implement section 338 of the Act. Section 338 requires satellite carriers, by January 1, 2002, to carry upon request all local television broadcast stations' signals in local markets in which the satellite carriers carry at least one television broadcast station signal pursuant to the statutory copyright license, subject to the other carriage provisions contained in the Act. As noted in the Report and Order, this transition period is intended to provide the satellite industry with time to begin providing local television signals into local markets, otherwise known as “local-into-local” satellite service. The Commission's carriage rules in many respects mirror the broadcast signal carriage rules applicable to cable operators, but with key distinctions made in recognition of the statutory and practical constraints that result from differences in satellite and cable technologies.

2. DIRECTV, Inc. (“DIRECTV”) and the Association of Local Television Stations, Inc. (“ALTV”) separately filed petitions for reconsideration of the Report and Order, raising different issues. Several parties separately filed oppositions or comments in response to DIRECTV's petition: ALTV; National Association of Broadcasters (“NAB”); Network Affiliated Stations Alliance (“NASA”); Paxson Communications Corporation (“Paxson”); and a joint opposition by the Association of America's Public Television Stations, the Public Broadcasting Service, and the Corporation for Public Broadcasting (collectively “Public Television Stations”). DIRECTV, in turn, filed a reply. In response to ALTV's petition, DIRECTV filed an opposition and NAB submitted comments in support. Both ALTV and NAB filed separate replies to DIRECTV's opposition.

3. Our response to the petitions are governed by the Communications Act and our own rules. Reconsideration of a Commission decision is warranted only if the petitioner cites a material error of fact or law, or presents additional facts and circumstances which raise substantial or material questions of fact that were not considered and that otherwise warrant Commission review of its prior action. The Commission will not reconsider arguments that have already been considered. For the reasons stated herein, we affirm our decisions in the Report and Order and deny both DIRECTV's and ALTV's petition. We also take this opportunity to clarify and, where necessary, amend some of the requirements set forth in the Report and Order and the rule.

4. As explained below, after careful consideration of all the arguments and facts presented, we decline to revise the satellite broadcast signal carriage requirements adopted in the Report and Order, except to provide additional clarification to some of those rules. Consistent with the requirements of the SHVIA, the Commission's satellite broadcast signal carriage rules generally attempt to place satellite carriers on an equal footing with cable operators regarding the provision of local broadcast programming, in order to give consumers more competitive options in selecting a multichannel video program distributor (“MVPD”). In the legislative history to section 338, Congress made clear that “[t]he procedural provisions applicable to section 338 (concerning costs, avoidance of duplication, channel positioning, compensation for carriage, and complaints by broadcast stations) are generally parallel to those applicable to cable systems.” As the legislative history of the SHVIA indicates, Congress was concerned that, “without must carry obligations, satellite carriers would simply choose to carry only certain stations which would effectively prevent many other local broadcasters from reaching potential viewers in their service areas.” Our satellite carriage rules also reflect Congress's desire to provide satellite subscribers with local television service in as many markets as possible, but also take into account, to the extent possible, the inherent nature of satellite technology and constraints on the use of satellite spectrum in the delivery of must carry signals. Against this backdrop, we address the six issues raised by DIRECTV in its petition, then the two issues raised by ALTV in its petition, and, on our own motion, provide clarification and amendment to several of the rules governing procedures consistent with the legislative intent of section 338(g).

5. The Commission denies DIRECTV's request that the Commission modify its noncommercial educational (“NCE”) carriage rule by limiting a satellite carrier's carriage obligation to only one qualified NCE station per designated market area (“DMA”), with additional NCE stations carried on a voluntary basis. We affirm the current rule requiring satellite carriers to carry all non-duplicative NCE stations in markets where they provide local-into-local service. Contrary to DIRECTV's contention, the Commission's rule is consistent with the plain language of section 338(c)(2) as it requires, “[t]o the extent possible, * * * the same degree of carriage by satellite carriers * * * as is provided by cable systems.” It also promotes parity between DBS and cable by assuring that consumers receive via satellite essentially the same local channels they would receive if they subscribed to cable.

6. Contrary to DIRECTV's assertion, the standard we developed for the NCE carriage obligation also took into consideration the technical limitations, as well as the national character, of satellite systems, in addition to other factors that differentiate the satellite industry from the cable industry. Under our rules, a cable system with more than 36 channels must carry all of the first three local NCEs in its market, even when the stations transmit substantially the same programming at the same time. The limitation on mandatory carriage of NCEs that duplicate only applies to additional NCEs when there are more than three local NCEs in the cable system's market. Satellite carriers, on the other hand, need not carry any simultaneously duplicative signals. Satellite carriers are required to carry up to three local NCEs that do not duplicate programming—with duplication defined as more than 50 percent of prime time programming and more than 50 percent of programming outside of prime time broadcast on a simultaneous basis. Once the carrier provides three local noncommercial stations, the duplication test becomes the same as for cable—whether more than 50 percent of prime time programming and more than 50 percent of programming outside of prime time is duplicative on a simultaneous or non-simultaneous basis. Given this standard, our rule does address the capacity concerns that DIRECTV raises because the foregoing standard prevents satellite capacity from being wasted on repetitive programming while ensuring carriage of nonduplicating, diverse public stations that respond to the different audiences and distinct needs of each community. In this regard, we agree with Public Television Stations and Paxson that the NCE carriage formulation proposed by DIRECTV (i.e., that we require satellite carriers to carry only one qualified NCE station per DMA, with additional NCE stations carried on a voluntary basis) would deprive satellite subscribers of access to local noncommercial television stations in those markets where local-into-local is offered.

7. In 1998, the Commission, in Implementation of Section 25 of the Cable Television Consumer Protection and Competition Act of 1992, Direct Broadcast Satellite Public Interest Obligations (“DBS Public Interest Report and Order”), adopted rules implementing section 335 of the Act, as amended by the Cable Television Consumer Protection Act of 1992 (“1992 Cable Act”). The rules require DBS providers to reserve four percent (4%) of their channel capacity exclusively for use by qualified programmers for noncommercial programming of an educational or informational nature. DIRECTV, in its petition, asks the Commission to permit satellite carriers to include NCE stations in the calculation of public interest programming required to be set aside by satellite carriers under section 335 of the Act. DIRECTV argues that Congress knew of the existence of section 335 in crafting the satellite must carry regime of section 338, and that “nothing in the text of this latter provision suggests that NCE stations should not be counted towards the 4% set-aside.”

8. The Commission denies DIRECTV's request for reconsideration of this issue. We find that DIRECTV's request that we permit satellite carriers to include local NCE stations, carried pursuant to section 338, in the calculation of public interest programming required to be set aside under section 335 would not result in compliance with section 335 because carriage of certain stations in a limited number of markets does not provide the national scope intended by section 335. Section 338 is not a national but rather a market-by-market requirement. Significantly, the public interest set-aside requirement under the 1992 Cable Act focuses on educational or informational public interest programming available to all subscribers nationally. SHVIA, in contrast, is intended to provide satellite subscribers with their local noncommercial educational stations. Allowing satellite carriers to count towards the national set aside individual local NCE stations provided only in their respective local markets would violate section 335's requirement that a direct broadcast satellite service meet the set aside requirement “by making channel capacity available to national educational programming suppliers.” (emphasis added). In applying this requirement, we have made it clear that eligible public interest programming must therefore be available to all subscribers. We also note that DIRECTV is seeking reconsideration of an issue that has already been addressed in the Report and Order, and that DIRECTV has not presented any new arguments that would warrant reconsideration of this issue.

9. Alternatively, DIRECTV, in its petition, states that, “[a]t a minimum, the Commission should clarify that NCE stations that are distributed on a national basis should be included in the 4% DBS public interest set-aside calculation.” We note that the Commission has generally addressed DIRECTV's alternative request for clarification (on the issue of whether, in the abstract, a local NCE station can be counted as a programmer for section 335 purposes) in the DBS Public Interest Report and Order (concluding “that we should interpret the term ‘national’ broadly so as to include local, regional, or national domestic nonprofit entities that qualify under the definitions listed above and produce noncommercial programming designed for a national audience”)), but we decline at this point to go beyond what we said in the DBS Public Interest Report and Order about this matter without having a concrete set of facts before us.

10. In its petition, DIRECTV contends that carriage of “additional” VBI material is not “technically feasible” for existing, deployed satellite systems. It states that, “[a]part from primary video and audio signals and Line 21 closed caption transmissions, it is not technically feasible for DIRECTV's DBS system to reliably pass through additional material in a usable form from other portions of the VBI.” It asserts that the Commission's requirement on this issue “could require the replacement of DIRECTV equipment for as many as ten million households, resulting in a cost of more than 2.8 billion dollars.” DIRECTV asks the Commission to reconsider its findings with respect to the ability of existing satellite carriers to carry additional VBI material, “at least insofar as it applies to satellite systems that are already in operation.” The broadcast interests generally agree that DIRECTV should not have to replace all the set-top boxes currently being used by subscribers if it is technically infeasible or prohibitively expensive for DIRECTV to do so, but they maintain that DIRECTV should be required to comply with the VBI carriage requirement on a going-forward basis.

11. Section 338(g) of the Act states that, “[t]he regulations prescribed [under section 338] shall include requirements on satellite carriers that are comparable to the requirements on cable operators under [s]ections 614(b)(3) * * * and 615(g)(1).” Section 614(b)(3) states that, “[a] cable operator shall carry in its entirety * * * the primary video, accompanying audio, and line 21 closed caption transmission of each of the local commercial television stations carried on the cable system and, to the extent technically feasible, program-related material carried in the vertical blanking interval or on subcarriers.” Section 615(g)(1) applies a similar requirement to the contents of noncommercial educational stations. In the cable context, with regard to the “technical feasibility” of the carriage of program-related material in the VBI or on subcarriers, the Commission stated in Implementation of the Cable Television Consumer Protection and Competition Act of 1992: Broadcast Signal Carriage Issues (“Cable Must Carry Report and Order”) that such carriage should be considered “technically feasible” if only nominal costs, additions or changes of equipment are necessary in order to carry such material. In the Report and Order the Commission expressed its view that, based on the record presented, it was technically feasible for satellite carriers to carry the program-related material currently carried in a television station's VBI. The Report and Order declined to rule on new kinds of program-related data in the VBI or on subcarriers indicating that these issues would be addressed in the future on a case-by-case basis. DIRECTV's petition addresses the carriage of such additional VBI material and does not dispute the feasibility of carrying the data in line 21. We conclude, for the reasons set forth, that it is unnecessary to revise the rule requiring satellite carriers to carry in its entirety the primary video, accompanying audio, and closed-caption data contained in line 21 of the VBI and, to the extent technically feasible, program-related material carried in the VBI or on subcarriers.

12. We find no reason to reconsider these decisions since it was not the Commission's intention to require satellite carriers to carry program-related material in the VBI if it is not “technically feasible” for satellite carriers to do so. DIRECTV indicates that its system is able to carry line 21 closed captioning, closed text, XDS, V-chip information, “TSID” data and extended service packets on line 21. Neither DIRECTV nor the broadcast parties commenting on this issue have been specific as to what additional information that, if made the subject of a carriage request, would be jeopardized by the current system limitations described by DIRECTV. In these circumstances, we believe it is generally appropriate to apply the “technically feasible” standard as previously articulated in the cable context, but that it is not appropriate to attempt to rule on any additional or future VBI service without more specific information. We note, however, that most of the costs that DIRECTV claims it would have to bear as the consequence of any additional carriage obligation, totaling some $2.8 billion, relate to replacing the integrated receiver/decoders that are currently used to receive DIRECTV service. In the future, any claim of technical infeasibility should address separately the technical issues involved with the transmission of the material in question as opposed to its reception and management in the receiver/decoder and the extent to which each set of issues is under the control of the satellite provider.

13. On a different, but related point, DIRECTV argues that satellite carriers should not be required to carry programming material of a “must carry” station if inclusion of such type of material is not covered by the retransmission consent agreements reached by that carrier with other stations in the local market in question. We find no authority in section 338, and DIRECTV has not presented any, to support DIRECTV's request. The terms negotiated by retransmission consent stations for the carriage of program-related material cannot be used to undermine Congress's directive that the Commission adopt satellite carriage requirements that are comparable to the cable carriage requirements, which explicitly mandate the carriage of program-related material. We therefore reject DIRECTV's request that we establish separate VBI requirements for must carry and retransmission consent stations.

14. Section 338(b)(1) of the Act requires a television broadcast station asserting its right to carriage to bear the costs associated with delivering a “good quality signal” to the satellite carrier's receive facility. In the cable context, Congress defined a signal strength standard that would equate to a good quality signal. In the satellite context, however, Congress did not define specific signal levels that local stations must deliver to satellite carriers, and apparently left that determination to the Commission. In determining what constitutes a “good quality signal,” as that term is used in section 338, the Commission, in the Report and Order, found that the signal quality parameters under section 614 of the Act and section 76.55 of the Commission's cable regulations were appropriate in the satellite carriage context. The Commission noted that, under the current cable carriage regime, television broadcast stations must deliver either a signal level of −45dBm for UHF signals or −49dBm for VHF signals at the input terminals of the signal processing equipment, to be considered eligible for carriage. The Commission determined that application of the same standard to the satellite carriage context was appropriate, given that the standards that have been applied to cable operators “have functioned well since the inception of the statutory carriage requirements seven years ago.” Additionally, the Commission did not find evidence in the record to suggest that the cable signal quality standard will not prove equally satisfactory in the satellite context. In providing a good quality signal, the Commission concluded that television stations may use any delivery method (e.g., microwave transmission, fiber optic cable, or telephone lines) to improve the quality of their signals to the satellite carrier as long as they pay for the costs of such delivery mechanisms.

15. In its petition for reconsideration, DIRECTV asks the Commission to change its signal quality standard and “compel any station seeking carriage to provide a signal that meets the requirements of GR-388 CORE, TV1 for <20 route miles.” DIRECTV asserts that the cable standard the Commission adopted will not allow satellite carriers to make efficient use of their allocated bandwidth and that it will increase the likelihood of signal degradation. It argues that the adoption of the cable signal quality standard in the satellite context is based on “unsupported speculation that a higher standard may prove “prohibitively expensive” for small television stations to meet.” DIRECTV also argues that there are no statutory limits on broadcasters' costs for providing a good quality signal. Furthermore, DIRECTV insists that the record contained “ample evidence” that satellite carriers must receive a TV-1 quality signal. According to DIRECTV, requiring a TV-1 quality signal is “critical” to differentiating DBS from cable television. DIRECTV maintains that it markets its services on the basis of providing a higher quality signal than cable, and that, without having a higher standard for what constitutes a good quality signal in the satellite context, its marketing advantage will be severely undercut. DIRECTV asserts that the use of compression systems based on the Moving Pictures Experts Group (“MPEG-2”) standard requires signals that meet the requirements of GR-338 CORE, TV1 for <20 route miles. It further asserts that all of the local stations that are currently carried by DIRECTV meet the TV-1 quality standard and are delivered to DIRECTV's local receive facilities using a dedicated fiber circuit. DIRECTV insists that any station seeking carriage should be required to meet the same standard, thus ensuring a “good quality” satellite signal.

16. The Commission declines to revise the “good quality signal” standard adopted in the Report in the Order, as urged by DIRECTV. As noted by ALTV and Paxson, DIRECTV made the same request in its initial comments in the proceeding which the Commission reviewed and rejected. As reflected in the Report and Order, the Commission has already considered DIRECTV's request that the Commission define “good quality signal” as one that will facilitate efficient MPEG compression of all channels, and that the signal must meet the requirements of GR-388 CORE, TV1 for <20 route miles. The Commission, however, declined to adopt DIRECTV's good quality signal proposals for the following reasons:

17. In reviewing DIRECTV's petition, we find that DIRECTV has not presented new evidence that warrants changing the good quality signal standard already adopted to a TV-1 quality signal, which NAB and ALTV refer to as an “essentially perfect signal.” DIRECTV, in an ex parte letter, suggests that “a number of” TV stations “can come close” to achieving a 67 dB S/N ratio. By “coming close,” DIRECTV means a S/N ratio of “approximately 60 dB,” and says that even achieving that S/N ratio with an over-the-air signal will, in many cases, require the purchase of additional noise reduction equipment. While lower than the 67 dB S/N ratio that DIRECTV initially requested, we agree with NAB and ALTV that “a 60 dB signal-to-noise [ratio] would still force stations to deliver to DBS firms a virtually perfect signal, rather than the good quality signal that the SHVIA requires stations to provide to satellite carriers and that the Cable Act requires stations to provide to cable systems (including cable systems that provide digital service).” Moreover, we note that DIRECTV proposes requiring a S/N ratio of 60 dB but does not clarify what signal strength level would satisfy the “strong, high quality broadcast signal” or whether the intention is to combine the −49dBm for VHF signals and −45dBm for UHF signals with a 60 dB S/N ratio. Additionally, DIRECTV does not define the “as-received” S/N ratio that a broadcast station must deliver, but rather proposes that stations must achieve the desired 60 dB S/N through use of noise reduction equipment. Furthermore, DIRECTV acknowledges that stations with “weaker off-air signals at the local receive facility may not be able to meet the TV-1 (or 60 dB ) standard via off-air transmission” and recommends that broadcasters can pay $14,000 per year to lease a TV-1 line to accommodate the standard proposed. As the Commission previously stated, however, “[i]t is not our intention to impose inordinate costs on small television stations that would prevent them from being carried by a satellite carrier.”

18. With respect to DIRECTV's claims about the potential for diminished capacity under the current good quality signal standard, we are unable to make a meaningful evaluation of this claim based on the record. DIRECTV, in its June 25, 2001 Ex Parte Letter, explains that if each video frame is similar to the next, then only “a small amount of “difference” information is required for the second frame” and states that “noise is the enemy of compression.” DIRECTV further explains that, in a compression system, it is difficult to differentiate between intended activity and undesirable background noise. It states that such excessive background noise will “consume valuable transmission capacity thus causing the desired picture to be degraded.” On this point, we note that DIRECTV, however, did not establish the amount of picture degradation that could result. DIRECTV asserts that tests conducted in its lab “show that one channel with a 50 dB weighted signal-to-noise ratio will consume 25% more bandwidth than the same program with a 67 dB signal-to-noise ratio.” DIRECTV, however, did not submit information as to how these tests were conducted and how capacity would be affected if we retain the signal strength standard established in the Report and Order versus adopting its proposed 60 dB S/N standard. Further, we see merit in NAB's and ALTV's response on this issue that a “DBS firm can set a cap on the number of bits that will be allocated to any one channel, thus ensuring that there will be no effect on any other channel through the statistical multiplexing process.”

19. Although DIRECTV clarifies, in its reply, that microwave transmissions may be used in lieu of fiber optic cable to achieve a TV-1 quality signal, it appears to expect that microwave spectrum is available everywhere. Moreover, DIRECTV provided no standard or cost analysis for such an alternative.

20. DIRECTV has not provided sufficient evidence to demonstrate that the good quality signal standard used in the cable context is inadequate or inappropriate in the satellite context. As NAB and ALTV point out, “many cable systems (like DBS firms) now provide digital service, but that has not resulted in any change in the quality of the signal that stations are required to provide to cable headends. As before, stations are still required to provide cable systems with a “good quality,” but not a flawless, signal to cable systems.” The good quality signal standard—in either the cable or satellite context—ensures that a signal available to over-the-air viewers will receive carriage. We continue to believe that the standard used for cable is appropriate in the satellite context as well. The signal standard must be one that can be measured and can be satisfied by over-the-air delivery. We believe that the goal of preserving over-the-air local television, which underlies the carriage requirements in the Communications Act, would be disserved by a signal quality standard that cannot be satisfied by over-the-air delivery. Furthermore, as indicated in the Report and Order, the Commission was compelled to reject the TV-1 standard because, among other reasons, many television broadcast stations would have difficulty implementing the standard. We believe that imposing an exacting standard that exceeds the level necessary would inhibit many local stations' ability to qualify for carriage with a satellite carrier, when the same stations can qualify for carriage with a cable operator. If we adopted DIRECTV's proposal to require broadcasters to meet a 60 dB signal-to-noise ratio, we would be creating disparate schemes for satellite and cable. Moreover, to the extent that cable operators have upgraded their systems and equipment since the 1992 Cable Act, they have been bearing the costs of improving some broadcasters' signal quality to meet the cable system's higher standards and subscribers' higher expectations. Because the good quality signal standard is statutory for cable systems, we cannot revise it. Creating such a disparity for cable versus satellite subscribers, as well as for broadcast stations, is not what Congress contemplated in section 338.

21. In the Report and Order, the Commission concluded that, as a general matter, a satellite carrier may relocate the designated local receive facility at the beginning of an election cycle (i.e., at the time broadcast stations must elect either must carry or retransmission consent). The Commission stated that satellite carriers should have the flexibility to change their designated local receive facility or alternative facility, and required satellite carriers to provide 60 days advance notice to all local stations of such a change. In affording satellite carriers this flexibility, however, the Commission was concerned that the relocation of a local receive facility, if done mid-cycle, may make it more difficult for some television stations to pay the unanticipated costs of delivering a good quality signal. Accordingly, the Commission determined that if a satellite carrier decides to relocate its local receive facility in the middle of an election cycle (i.e., after the time for electing must carry or retransmission consent during an election cycle has expired), it should pay the television stations' costs to deliver a good quality signal to the new location. In its petition, DIRECTV seeks reconsideration of this issue, contending that the costs of delivering a good quality signal in the context of the relocation of local receive facilities mid-cycle by satellite carriers should be borne by broadcasters, not satellite carriers.

22. The Commission denies DIRECTV's request for reconsideration of this issue. The Commission's prior interpretation of the statute is reasonable and consistent with the purpose of the SHVIA. It is within the Commission's discretion to interpret “designated” facility, as that term appears in section 338(b), as the facility for which the carrier gives a station notice before the station makes its carriage election. The carrier thus cannot change the “designated” facility to which the broadcaster can be held responsible for delivering its good quality signal until it comes time to make a carriage election for the next election cycle. If the satellite carrier, however, does make such a change mid-cycle, even as a result of unforeseen events, it is only reasonable to require it to bear any new capital costs and incremental ongoing expenses required for the delivery of a good quality broadcast signal, because the new receive facility was not the one initially “designated” and anticipated by local stations. We agree with Public Television Stations that this limited burden on carriers protects a broadcast station's reasonable expectations of the signal delivery costs it will incur if it elects satellite carriage.

23. In the Report and Order, the Commission interpreted the nondiscrimination provision of section 338(d) of the Act to prohibit satellite carriers from requiring subscribers to purchase additional equipment (e.g., a satellite dish) to gain access only to some, but not all of the local signals in a market. This determination was made in response to concerns over the possible discriminatory treatment that television stations electing mandatory carriage might receive; that is, a concern that a satellite carrier may place mandatory carriage stations on a satellite that would require a subscriber to purchase another dish and/or other equipment to receive such signals, which would effectively inhibit the ability of local stations to reach potential viewers. In addressing this issue, the Commission found that “the language of [s]ection 338(d) covers the additional equipment concerns raised by the parties and bars satellite carriers from requiring subscribers to purchase additional equipment when television stations from one market are segregated and carried on separate satellites.” As the Commission explained, this interpretation does not prohibit a satellite carrier from requiring a subscriber to pay for additional equipment in order to receive all television stations from a single market. To illustrate the application of the rule, the Commission noted: “For example, DIRECTV may require an additional dish to receive all television stations from the Baltimore market, but it may not require subscribers to purchase the same to receive some Baltimore stations where the others are available using existing equipment.”

24. In its petition, DIRECTV asks the Commission to reconsider its interpretation of the nondiscrimination provision of section 338(d) of the Act, contending that section 338(d) does not unduly restrict satellite carriers from offering local-into-local service through the use of different orbital positions, with multiple dishes if necessary. DIRECTV further asserts that Congress considered this precise question and decided to delete draft statutory language that would have imposed the very restriction that the Commission found in the statute.

25. The Commission declines to reconsider this issue. DIRECTV's arguments were squarely before us when we made our determination that section 338(d)'s nondiscrimination provision bars satellite carriers from discriminating against some broadcast stations by requiring subscribers to purchase additional receiving equipment in order to access some, but not all, local signals. DIRECTV has not presented any new facts or arguments to convince us to change our interpretation of section 338(d) as it concerns this issue. Indeed, as reflected in the Report and Order, the Commission considered the very same line of legislative argument that DIRECTV now makes, which EchoStar previously made:

26. We agree with Public Television Stations that DIRECTV, in any event, misinterprets the legislative history of SHVIA in arguing that it should be permitted to require subscribers to use two separate dishes to receive the full package of local channels. When Congress adopted the SHVIA, it rejected language that said subscribers could not be required to install an additional dish to receive any local signals. The legislative drafting change cited by DIRECTV involved a deletion of a much broader limitation on satellite carriers than what the Commission adopted under the general anti-discrimination language that survived. The legislative drafting change, at most, indicated that Congress did not want to prohibit satellite carriers from requiring additional dishes generally, but the change does not imply that Congress wanted to allow satellite carriers to require additional dishes if such a requirement created discriminatory effects. We believe that a limited prohibition on requiring subscribers to obtain a separate dish to receive some local signals when other local signals are available without the separate dish is necessary to give full effect to local station carriage requirements. Otherwise, as Public Television Stations argue, satellite carriers could structure local station packages and separate dish requirements to discourage consumers from subscribing to certain local stations, including local noncommercial stations. For the foregoing reasons, we affirm our rule prohibiting satellite carriers from requiring subscribers to purchase additional equipment to gain access only to some, but not all of the local signals in a market.

27. In the Report and Order, the Commission held that section 338 does not require satellite carriers to sell all local television stations as one package to subscribers, as broadcast interests had urged in their comments. The Commission found that Congress did not intend to establish a basic service tier-type requirement for satellite carriers when it implemented section 338, and that Congress did not explicitly prohibit the sale of local television station signals on an a la carte basis. The Commission determined that, instead, section 338's anti-discrimination language prohibits satellite carriers from implementing pricing schemes that effectively deter subscribers from purchasing some, but not all, local television station signals. Thus, the Commission stated, “a satellite carrier must offer local television signals, as a package or a la carte, at comparable rates.”

28. ALTV seeks reconsideration of this issue. NAB, NASA, Paxson, and Public Television Stations submitted arguments, similar to those that ALTV makes, in support of reconsideration. ALTV and other parties contend that the Commission's decision to allow a la carte pricing of local stations could result in discrimination against local stations and run counter to the SHVIA's anti-discrimination requirements. They ask the Commission to require all local signals to be included in a single package in order to ensure that consumers have access to all local stations. ALTV insists that this change to the Commission's rule is needed because of its concern that a satellite carrier, through its packaging and pricing decision, could influence the availability of, and access to, local channels. NAB states that “allowing satellite carriers to adopt differential pricing policies for ‘favored’ and ‘disfavored’ local channels directly contravenes the statutory prohibition on discriminatory pricing.” Further, NAB asserts that authorizing a la carte pricing for local stations “would allow satellite carriers to demote some local stations to second-class status in a manner that cable systems could never dream of—namely, selling a handful of stations in a market as a package, while offering the smaller stations in the market only on an a la carte basis, which predictably will be purchased by far fewer subscribers.”

29. The Commission denies ALTV's request for reconsideration of this issue. As reflected in the Report and Order, the Commission considered and rejected the precise argument that ALTV is asking us to reconsider. Neither ALTV nor the parties that support ALTV on this issue has submitted new arguments or facts to warrant reconsideration of our decision that satellite carriers should not be required to offer local stations only as a single package. We find nothing in the statute that prohibits satellite carriers from offering local stations on an individual a la carte basis to the extent the carrier is not using this method of packaging to discriminate against local stations. As DIRECTV points out, and we agree, Congress could have created a requirement that satellite carriers must sell local stations to its subscribers as a single package, but it did not do so. The relevant part of section 338 requires only that a satellite carrier provide access to a local television station's signal “at a nondiscriminatory price” and access “in a nondiscriminatory manner on any navigational device, on-screen program guide, or menu.” Neither of these requirements prohibits satellite carriers from offering local television signals to consumers on an a la carte basis, and we believe that allowing a satellite carrier the flexibility to offer local television station signals to its subscribers on an a la carte basis promotes consumer choice.

30. ALTV faults our decision to implement the statutory prohibition on discriminatory pricing by requiring that satellite carriers offer broadcast stations at “comparable rates.” ALTV argues that the discriminatory pricing prohibition must translate to a prohibition of a la carte offerings and a requirement for a single package of local signals. We used the term “comparable” in the Report and Order to explain that “non-discriminatory” need not mean identical. That is, although the charges need not be the same, they should be within a nondiscriminatory range. The pricing should be based on relevant economic factors applied in a nondiscriminatory fashion that does not result in discriminatory treatment of any station or stations, such as pricing so as to effectively deter subscribers from purchasing some, but not all, local television station signals. We recognize that comparable pricing may require further clarification on a case-by-case basis, and that in most cases local stations should be offered to subscribers at the same or nearly identical prices. We are, however, unwilling at this time to require identical pricing for each local station carried and will evaluate on a case-by-case basis any complaints alleging discrimination prohibited by section 338.

31. We clarify here that although the statute does not prohibit satellite carriers from offering stations on an a la carte basis at comparable rates, we believe that a prohibited discriminatory effect would result if carriers created a mix of one or more packages for some stations while offering other stations only individually (e.g., creating a package of six local stations and offering other local stations only on an individual a la carte basis, or creating two separate packages of different local stations). Allowing satellite carriers to offer some stations as a package and others on an a la carte basis could operate as a deterrent to the purchase of certain local stations without furthering consumer choice. We believe that this is one of the very discriminatory results that section 338 sought to prohibit. In contrast, we do not believe it would be discriminatory for a satellite carrier to offer either each local station individually or a package containing all local stations for a price less than or equal to the sum of subscribing to each station individually (e.g., each of twelve local stations for $1 or all twelve stations for $10). Thus, if subscribers choose to forego a package of local stations that a satellite carrier is offering and instead subscribe, for example, to only three of the twelve stations that may be offered on an a la carte basis, that is an exercise of consumer choice. At the same time, other subscribers may choose to select a package that may be cheaper than the sum of individual stations.

32. Section 338(b)(1) of the Act requires a television station asserting its “right to carriage” under section 338(a) to bear the costs associated with the delivery of a good quality signal to the satellite carrier's designated local receive facility or to “another facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market.” In the Report and Order, the Commission interpreted the phrase “that is acceptable to at least one-half the stations asserting the right to carriage in the local market” to mean that a satellite carrier may establish an alternative receive facility if “50% or more” of those stations in a particular market consent to such a site. The Commission determined that calculation of the “50% or more” stations should be based on the majority of stations entitled to carriage in each affected market. The Commission reasoned: “Since the ‘right to carriage’ under [s]ection 338 extends, at least initially, to all local television broadcasters, the calculation includes all stations, whether they elect mandatory carriage or retransmission consent.”

33. ALTV asks the Commission to revise its rule concerning this issue. ALTV contends that the calculation of the 50% threshold should be based on the number of local stations actually electing mandatory carriage, and that it should not include those stations that elect to proceed via retransmission consent. ALTV asserts that, if stations that elect retransmission consent are allowed to approve an alternative receive facility, “stations ‘asserting their right’ to be carried under the signal carriage rules will be harmed,” because of the costs associated with having to transport their signals to a distant location.

34. We decline to revise our rule on this issue. As an initial observation, we note that the Commission already has considered and rejected similar arguments voiced in the initial rulemaking. In the Report and Order, the Commission stated:

35. We recognize that ALTV wishes to ensure that stations electing retransmission consent are not permitted to vote in an election process that ALTV views as a protection only for must carry stations. We disagree, however, that this is the only or the best reading of the statute. The relevant language in section 338(b)(1) (“asserting the right to carriage”) is not the same as the language in section 338(a)(1), which requires carriage of those local stations that “request” carriage. Nothing in this language suggests that a station seeking to participate in the selection of an alternative reception site in order to determine its rights under the law could not assert that it has a right to carriage in a market but thereafter opt to be carried pursuant to retransmission consent. In this, as in many other areas, asserting the existence of a right need not be the same as proceeding to exercise that right. As the process contemplated by the statue commences (and as it plays out in subsequent years) there is a set of stations that can assert a right to carriage consisting basically of all stations in the market. As the process proceeds, this group of stations is divided through the carriage election process into stations that request carriage and those that proceed under the retransmission consent provisions of the law. The assertion of the right and the request for carriage pursuant to that right are separate acts. Moreover, since the location of the receive facility may inform the station's decision to elect must carry or retransmission consent (e.g., if the receive site is in a location to which the station is confident of delivering a good quality signal, it may encourage a mandatory carriage election), a logical reading of the phrase in section 338(b)(1) of “asserting the right to carriage” would permit a vote by all must carry eligibles (including those ultimately choosing retransmission consent at the election for the upcoming cycle) prior to the election. In addition, since a station's status as a “must carry” or “retransmission consent” station may change from election cycle to election cycle, and since there may be only one opportunity to vote on the alternative receive facility, the best reading of the phrase “asserting the right to carriage” would cover those stations asserting that they have such a right at the vote, which they may then exercise at the upcoming election cycle, or in future election cycles.

36. We note also that there are practical problems associated with the ALTV suggested rule. It is not known at the inception of the satellite broadcast carriage requirements, when or even if satellite carriers will attempt to use alternative receive facilities. If a satellite carrier proposes an alternative receive facility after the local stations in the affected market have submitted their carriage elections but before the carriage cycle commences (e.g., between July 1 and December 31, 2001), it could be possible to identify stations that have elected mandatory carriage and that satellite carriers have agreed to carry. However, if the alternative receive facility is proposed at any other time, it is not possible to identify which stations have requested mandatory carriage for the relevant cycle. We believe the statute neither contemplates nor dictates station eligibility requirements that vary according to the timing of the satellite carrier's proposal of an alternative receive facility. We believe the statute provides us with the flexibility to adopt rules that will best address the factual circumstances we anticipate and, if warranted, to amend these rules if actions and events in practice prove otherwise.

37. Below, we clarify and modify several requirements adopted in the Report and Order. We take these actions partly sua sponte and partly in response to informal telephonic requests for clarification of our rules from the public.

38. The Report and Order implemented the terms of section 338 with respect to bases for refusing a local broadcast station's request for mandatory carriage. To the extent the statutory language in section 338 is similar to the language of section 614, we patterned the rules for satellite carriers on the cable must carry rules. Where possible, we endeavored to leave the details of compliance to the affected parties and the marketplace. We expected that the parties would act reasonably and not refuse carriage without a good-faith basis for doing so. As the parties have commenced acting on the carriage procedures set forth in the rules, however, we have seen indications that more specific instruction and parameters may be necessary. We take the opportunity afforded by this Order on Reconsideration to clarify our intent and expectations more fully. We continue to hope that specific rule amendments will not be necessary.

39. The rules we adopted to implement section 338 govern carriage elections and describe the information a station must include in its carriage request “to ensure that a satellite carrier has the base information it needs to commence the carriage of local television stations.” The rules also require satellite carriers to respond to must carry elections by accepting or denying carriage and providing reasons for denial. We noted, by way of example, that a valid reason for not commencing carriage is “poor quality television signal.” In addition, with respect to substantial duplication, we noted that a satellite carrier is not required to carry stations that broadcast programming that duplicates another station carried in the market. However, a broadcast station requesting mandatory carriage is not required to provide evidence with its request to prove that it does not duplicate. Indeed, it would be difficult or impossible for a station to do so because it does not know which other stations in the market have requested carriage. Rather, if the satellite carrier has a reasonable basis for asserting that the station substantially duplicates another station carried in the market, the carrier should describe its basis in sufficient detail to afford the station an opportunity to respond.

40. In the context of carriage elections, we did not require broadcast stations to provide information about signal quality nor did we require each station electing must carry to first prove to the satellite carrier that its signal is of good quality. Rather, we left it to the satellite carrier, in its response to a request for mandatory carriage, to notify the station if the request is rejected and the reason for refusal is a poor quality signal. If a satellite carrier has a reasonable, good-faith basis for believing that a station is not delivering a good quality signal to the designated receive facility, then it may describe its basis for this belief in its response to the station's request for mandatory carriage. We do not require in the satellite context, as we did in the cable context, that satellite carriers must conduct tests or present specific measurements to broadcasters in response to requests for mandatory carriage. However, the absence of this express requirement should not be taken to imply that the satellite carrier is not required to have a reasonable basis for a denial of carriage and to convey that information to the broadcast station affected. With respect to the issue of signal quality, a station should not be rejected for carriage unless, based on a knowledge of the facts and circumstances involved, there are engineering reasons for doubting that a good quality signal is likely to be available. Our expectation was that carriers would generally be able to readily determine whether the signal of a station requesting carriage is being received by the facility's reception equipment. It is implicit in the notification requirement, and indeed it is explicit in the statute itself, that stations are entitled to carriage if they qualify based on the applicable statutory and regulatory provisions. Carriage is not to be avoided by denials where there is no legitimate controversy as to the station's qualifications.

41. In discussing “disputed” signal quality, the Report and Order concluded that a satellite carrier is not required to carry a station “until” the station provides or pays the costs for a good quality signal. We required that “the signal testing practices in the cable carriage context should be generally applied in the satellite carriage context.” In the event of a dispute over signal quality, we advised parties to look to cable precedent for guidance, and we concluded that the broadcast station should pay the cost of signal tests if necessary to prove that the signal is of good quality. If, however, the satellite carrier has no reasonable basis for contending that the broadcast station does not provide a good quality signal, then no test is required. When a carrier has a reasonable basis for asserting that the station is not providing a good quality signal, the station has the opportunity to improve its over-the-air signal or arrange alternative means of delivery. In that case, or if the station responds with a promise to provide or pay to provide a good quality signal in the future, we encourage the parties to arrange a reasonable time frame within which the good quality signal will be provided to avoid long-term uncertainty that ties up the carrier's capacity.

42. We further clarify that rejection of a request for carriage based on a broadcast station's “failure” to prove in its initial request for carriage that it delivers a good quality signal to the receive facility is not a valid ground for refusing carriage. Specifically, it has been reported to us that at least one satellite carrier has utilized a form letter that rejected carriage requests solely on the basis of “failure to prove signal meets legal standard of quality necessary for mandatory carriage.” This is not a valid reason for rejecting a request for mandatory carriage. Additionally, we are informed that the same carrier's form letter also attempts to shift the burden to the station requesting carriage to prove that it does not substantially duplicate another station that has requested carriage. Such attempts to shift the burden to the station requesting carriage do not comply with the rule or the Report and Order. We believe that stations that have received such form letters may appropriately respond by notifying the satellite carrier pursuant to section 76.66(m)(1) that it has failed to meet its obligations under the rules. Such notification by the broadcast station should specify how the satellite carrier's response failed to comply. For example, in response to a carrier's assertion that the station has failed to prove its signal quality, a station could provide information that the receive facility is within the station's Grade A service contours or that the Individual Location Longley-Rice computer model predicts that the station delivers a good quality signal to the receive facility. The satellite carrier would have 30 days to respond, pursuant to section 76.66(m)(2). The carrier could use the response to rescind its initial rejection and agree to carry the station or to provide specific information as to its basis for asserting that the station is not entitled to carriage. This response must state either that the station will be carried (e.g., as of January 1, 2002 for the first election cycle), or provide reasons, including the reasonable basis therefor, for not carrying the station as requested.

43. We also clarify that the 60 days within which a complaint must be filed with the Commission pursuant to section 76.66(m)(6) will commence after the satellite carrier submits a final rejection of a broadcast station's carriage request, as clarified in this Order on Reconsideration. If a satellite carrier provides no response to a must carry election, the 60 days commences after the time for responding as required by the rule has elapsed. Or, in the case of a carrier's failure to provide the second response, as described above, the 60 days commences after the 30 days for response pursuant to section 76.66(m)(2) has elapsed. As in the cable context, if the parties are negotiating to resolve carriage disputes (e.g., a station and carrier are planning to conduct a signal quality test or to determine alternative means for signal delivery), the 60 days does not begin to run until resolution efforts have failed, and the satellite carrier has notified the station in writing that it will not be carried. We continue to hope that parties will work together to resolve disputes or to determine that disputes cannot be resolved by negotiation and that Commission action is required. We note, however, that a station that has received an initial rejection letter may file a complaint with the Commission within 60 days of receipt if it believes that the carrier's apparent resolution efforts are not in good faith and are intended primarily to delay or derail legitimate carriage.

44. To summarize, as a general and guiding principle, we take this opportunity to note that the Act requires satellite carriers to carry stations upon request in those markets in which the carrier uses the statutory copyright license to retransmit one or more local stations. If the satellite carrier has a good faith, reasonable basis for refusing carriage, the carrier has the initial responsibility to specify that basis and to provide the station with adequate information and justification for its refusal. This principle applies to any refusal to carry, not only to refusals based upon signal quality. It is not consistent with the SHVIA or our rules to attempt to place the burden on the broadcast station to prove why it is entitled to carriage in the absence of a legitimate reason for questioning its eligibility. It is also inconsistent with the Act and rules to refuse to provide broadcast stations with reasonable and readily available access to the local receive facility to conduct signal strength tests as necessary. As in the cable context, a satellite carrier that fails to comply with the Act and rules, for example by using the notification procedures to frustrate the process or delay carriage without justification is not acting in the public interest and may be subject to further actions. In addition, in the satellite context, a local broadcast station may file a civil action under section 501(f) of the copyright provisions in title 17 to the extent the satellite carrier's actions result in a failure to carry a station entitled to carriage.

45. As indicated in the Report and Order, television broadcast stations are not required to have the same election requirement—i.e., of either retransmission consent or must carry—between a satellite carrier and a cable operator. This decision was based in part on the lack of statutory language requiring television stations to make consistent retransmission consent/must carry elections for the two types of MVPDs, but also on the service area differences between satellite carriers and cable operators. In this Order on Reconsideration, we further clarify that where there is more than one satellite carrier in a local market area, a television station can elect retransmission consent for one satellite carrier and elect must carry for another satellite carrier. We believe that allowing broadcast stations to elect independently is consistent with our goal of promoting competition in the MVPD market.

46. Under our rules, a television station must, during the first election cycle, notify a satellite carrier by July 1, 2001 of its carriage intention if it is located in a market where local-into-local service is provided. Beyond the first election cycle, our rules require television stations to make their retransmission consent-mandatory carriage election by October 1st of the year preceding the new cycle for all election cycles after the first election cycle. Commercial television stations are required to choose between retransmission consent and mandatory carriage by the prescribed date; NCE stations, on the other hand, must simply request carriage. A satellite carrier, in turn, must respond to a television station's carriage request within 30 days of receiving notice (e.g., for the first election cycle, by August 1, 2001), and state whether it accepts or denies the carriage request. If the satellite carrier denies the request, it must state the reasons why. We clarify that, absent an agreement by the parties to the contrary, if a broadcast station has a retransmission agreement that extends into and terminates during an election cycle, the station—at the end of its contract term with the carrier—will not be entitled to demand must carry if it has not elected must carry by the required date (i.e., by July 1, 2001 for the first election cycle, by October 1, 2005 for the next election cycle, etc.). We believe that this clarification is consistent with the requirements of the statute that, in the absence of a specific request for carriage by the relevant election deadline, a broadcaster is deemed to have elected retransmission consent and cannot assert a demand for carriage until the next election cycle.

47. On our own motion, we take this opportunity to clarify and amend the rule provisions concerning carriage election provisions that apply to satellite carriers. As described in the Report and Order, under section 338, satellite carriers are required to carry broadcast stations only “upon request.” The Report and Order further explains that if an existing station fails to request carriage by the election deadline, it is not entitled to demand carriage for the duration of that cycle. The request for carriage is manifested by the station's election of must carry by the specified deadline. Section 76.66(d)(1)(i) provides that “a retransmission consent-mandatory carriage election made by a television broadcast station shall be treated as a request for carriage for purposes of this section.” We are concerned that, as written, this provision could be misconstrued to mean that an election for retransmission consent constitutes a request for carriage that necessitates mandatory carriage under the statute. To avoid confusion or misinterpretation of this language, we revise section 76.66(d)(1)(i), as follows: “An election for mandatory carriage made by a television broadcast station shall be treated as a request for carriage. For purposes of this subsection concerning carriage procedures, the term “election request” includes an election of retransmission consent or mandatory carriage.” We will also change the reference from “carriage request” to “election request” in section 76.66(d)(1)(ii) to conform to the revision in section 76.66(d)(1)(i).

48. In addition, on our own motion, we clarify and amend section 76.66(d)(2)(ii), which provides for carriage elections by television broadcast stations in new local-into-local markets. This provision requires local stations to make elections and requests for carriage “in writing, no more than 30 days after receipt of the satellite carrier's notice.” We note that this provision does not contain the same requirements that apply to carriage elections for existing local-into-local markets. We believe that certified mail, return receipt requested is the preferred method to ensure that broadcast stations are able to demonstrate that they submitted their elections by the required deadline, and that they were received by the satellite carrier. Therefore, we will amend section 76.66(d)(2)(ii) as follows: “A local television station shall make its election request, in writing, sent to the satellite carrier's principal place of business by certified mail, return receipt requested, no more than 30 days after the station's receipt of the satellite carrier's notice of intent to provide local-into-local service in a new television market. This written notification shall include the information required by Section 76.66(d)(1)(iii).”

49. We will also amend section 76.66(d)(3)(ii), which provides for elections and carriage requests for new television stations to be consistent with sections 76.66(d)(1) and (2), as amended. The amended language is as follows: “A new television station shall make its election request, in writing, sent to the satellite carrier's principal place of business by certified mail, return receipt requested, between 60 days prior to commencing broadcasting and 30 days after commencing broadcasting. This written notification shall include the information required by Section 76.66(d)(1)(iii).”

50. For similar reasons of consistency, we amend sections 76.66(d)(2)(iv) and (3)(iv), that set forth the procedures for new local-into-local service and new television stations, respectively. These amendments clarify the requirement that satellite carriers respond to elections for mandatory carriage within 30 days with notification of either agreement to carry or not to carry, along with reasons for the latter decision. These amendments track the requirement in section 76.66(d)(1)(iv). Accordingly, section 76.66(d)(2)(iv) is amended as follows: “Within 30 days of receiving a local television station's election of mandatory carriage in a new television market, a satellite carrier shall notify in writing: (1) those local television stations it will not carry, along with the reasons for such decision; and (2) those local television stations it intends to carry.” Also, section 76.66(d)(3)(iv) is amended as follows: “Within 30 days of receiving a new television station's election of mandatory carriage, a satellite carrier shall notify the station in writing that it will not carry the station, along with the reasons for such decision, or that it intends to carry the station.”

51. In this respect we also note that if a satellite carrier provides notification of intent to provide local-into-local service in a new market, pursuant to section 76.66(d)(2)(i), the satellite carrier must respond to an election of mandatory carriage, requested pursuant to section 76.66(d)(2)(ii), as required by section 76.66(d)(2)(iv), notwithstanding that it has not yet commenced local-into-local service in that market. We clarify that the satellite carrier is not required to carry a local television station that elects mandatory carriage in the new local-into-local market until the satellite carrier has commenced such service. We amend section 76.66(d)(2)(iii) accordingly, as follows: “A satellite carrier shall commence carriage of a local station by the later of 90 days from receipt of an election of mandatory carriage or upon commencing local-into-local service in the new television market.”

52. We further clarify that, with respect to determining the satellite carrier's principal place of business for purposes of submitting an election or carriage request, we believe it would be appropriate for a local television station to use a satellite carrier's letterhead address or other readily available principal address. If the satellite carrier wishes to designate a particular name or address for purposes of receipt of election notices, the carrier bears the obligation of providing that information to the local television stations no later than 30 days prior to the deadline for election and carriage requests. In addition, as in the cable context, the local television station's election or request for carriage may be signed by any person authorized to make and submit such election on behalf of the station.

53. In response to numerous telephone inquiries, we clarify that election requests must be sent by the relevant election deadline. In the cable context, section 76.64(h) provides that “on or before each must carry/retransmission consent deadline, each television broadcast station shall * * * send via certified mail to each cable system in the station's defined market a copy of the station's election statement with respect to that operator.” The rules implementing satellite carriage requirements do not contain the same language, and we received no comments on this specific question during the rulemaking proceeding. In light of our general goal of making the satellite carriage rules comparable and parallel to the cable carriage rules, and in the absence of arguments demonstrating why the procedures for election notifications should differ, we clarify our intent that the election request should be sent by certified mail, return receipt by the election date to be effective. We hereby amend section 76.66(d) of our rules to clarify this intent, as follows: “(4) Television broadcast stations must send election requests as provided in Sections 76.66(d)(1), (2), and (3) on or before the relevant deadline.”

54. DIRECTV in an ex parte meeting and submission requested a clarification that it would be permissible for a satellite carrier to “pass through to broadcasters the costs incurred on the broadcaster side of the demarcation point at the local receive facility.” DIRECTV asserts that section 76.66(g)(2) requires the broadcaster to provide a good quality signal “at the input terminals of the signal processing equipment.” DIRECTV contends that, in the satellite context, “this would mean the input to any signal preamplifiers in the antenna downlead. Thus, the demarcation point for a station to hand off a ‘good quality signal’ must be at the preamplifier input, which in [DIRECTV's] case is a junction box at the point where the downleads enter the building.” DIRECTV wants to pass through to broadcasters on a pro rata basis the costs of providing the rooftop equipment and other costs related to signal reception up to the junction box, which DIRECTV refers to as the “demarcation point.” DIRECTV further explains that the “non-recurring costs” for negotiating roof rights, obtaining local permits, mounting antenna masts and installing conduit range from $1,000 to $45,000 and average $15,000. DIRECTV estimates average monthly costs for maintaining roof rights would be $2,500. DIRECTV proposes to pass these costs on to the broadcasters in the market, both those carried pursuant to retransmission consent and mandatory carriage. In the average case, and assuming ten stations in the market, DIRECTV estimates charging each station “a one-time, non-recurring charge of $1,500, and a recurring charge of $250 per month.”

55. In response to DIRECTV's views on this issue, NAB and ALTV, in a joint ex parte letter, contend that a station's obligation under the Act is only to deliver a good quality signal, “and not to build (or rent) a local receive facility for a DBS operator.” NAB and ALTV assert that “the roof space on which DIRECTV has erected (or plans to erect) antennas is the relevant part of its local receive facility; and all that a station is required to do is deliver a good quality signal to that location.” Thus, they argue, DIRECTV's demand that stations pay for DIRECTV's own real estate costs for creation of a local receive facility is “inconsistent with the division of responsibility established by Congress in the SHVIA.”

56. DIRECTV's proposal and request for clarification raise an issue not mentioned in the original proceeding nor in the Petitions for Reconsideration. We do not have in the record information that would warrant a decision that could potentially impose unexpected expense on broadcast stations. We note that, in the cable context, upon which the satellite carriage rules generally are based, the cable system headends typically include antennas and other receiving and processing equipment necessary to receive a broadcaster's good quality signal. We have required cable operators to employ good engineering practices with respect to receiving and processing the broadcast station's signal. In the Cable Must Carry Report and Order, we noted that the television station has the obligation to bear the costs associated with delivering a good quality signal to the system's principal headend. In this context we offered by way of example, “improved antennas, increased tower height, microwave relay equipment, amplification equipment and tests that may be needed to determine whether the station's signal complies with the signal strength requirements, especially if the cable system's over-the-air reception equipment is already in place and operating properly.” Cable operators are not, however, required to bear the burden of improving a broadcast station's signal.

57. In the Order clarifying the Cable Must Carry Report and Order, the Commission was asked to address whether the broadcaster or the cable system should pay for the purchase, installation, and maintenance of a special antenna if necessary to receive adequate signal strength. The Commission concluded that the statute specifies that a broadcast station must deliver a good quality signal to the principal headend of the cable system in order to be entitled to mandatory carriage, and, for broadcast stations received at the principal headend and carried on the system, the signal quality measurements should be made using the existing equipment at the headend. For stations that were not carried by the cable system prior to the implementation of the carriage rules, the Commission concluded that cable operators should measure the signal quality using “generally accepted equipment that is currently used to receive signals of similar frequency range, type or distance from the principal headend” but need not “employ extraordinary measures or specialized equipment” for stations not currently carried. The Commission also reiterated what was said in the Cable Must Carry Report and Order that broadcasters may provide “improved antennas” to deliver a good quality signal, that the cable operator may not refuse to allow the broadcaster to provide such types of equipment, either for measurements or delivery of signals, and that broadcasters “shall be responsible for the cost of such specialized antennas or equipment. However, cable operators may not shift the costs of routine reception of broadcast signals to those stations seeking must-carry status.” (emphasis added). The Commission concluded: “Accordingly, we believe that it is appropriate to require a broadcast station to pay only for antennas, equipment and other needed improvements that are directly related to the delivery of its signal and not to contribute to the general maintenance of the cable system's facilities.”

58. We believe that for satellite carriers, like cable operators, it is reasonable to require that the local receive facility include, for example, the roof rights, antennas, towers, and processing equipment necessary to receive and process over-the-air good quality signals from local broadcasters. We do not believe, therefore, that it is consistent with our rules or with the statute to require broadcasters to pay for the basic equipment and property negotiations necessary to operate a receive facility. However, as in the cable context, if a broadcaster would require special or additional equipment so that its signal can be received at the established level of good quality at the receive facility, then the broadcaster is responsible for these additional costs.

59. This Order on Reconsideration has been analyzed with respect to the Paperwork Reduction Act of 1995 and has been found to contain no new or modified information collection requirements on the public. The rule revisions we adopt on our own motion are included in the approval we obtained from the Office of Management and Budget (“OMB”). See OMB Notice of Action (OMB No. 3060-0980) (June 7, 2001). No further OMB approval is required.

60. It is ordered, pursuant to section 405(a) of the Communications Act of 1934, 47 U.S.C. 405(a), and section 1.429 of the Commission's rules, 47 CFR 1.429, that DIRECTV's Petition for Reconsideration and the Association of Local Television Stations' Petition for Reconsideration are denied.

61. It is further ordered, pursuant to sections 4(i), 4(j), and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), and 303, that the amendments to rule 47 CFR 76.66 discussed in this Order on Reconsideration and set forth in Appendix A, and the clarifications of that rule discussed in this Order on Reconsideration, are adopted, and shall become effective October 26, 2001.

A Notice of Availability (NOA) of the FMP was published in the Federal Register on February 12, 2001 (66 FR 9814), with a comment period ending April 13, 2001. A proposed rule to implement the FMP was published in the Federal Register on April 3, 2001 (66 FR 17673), with a comment period ending May 18, 2001. The FMP was approved by NMFS on behalf of the Secretary of Commerce (Secretary) on May 10, 2001.

This final rule is designed to eliminate overfishing as defined in the FMP and to rebuild the tilefish stock in the Northwest Atlantic Ocean by implementing: (1) A stock rebuilding strategy; (2) a limited entry program; (3) tiered commercial quota allocations or total allowable landings (TAL) for limited access and open access permit categories; (4) a prohibition on the use of gear other than longline gear for limited access tilefish vessels; (5) permit and reporting requirements for commercial vessels, operators, and dealers; and (6) an annual specification and framework adjustment process. These items form the basis for management of the stock. Discussions and details pertaining to these items and the justification for the development of the FMP are found in the preamble to the proposed rule and the NOA and are not repeated here.

The annual quota setting process implemented by this final rule differs from that set forth in the FMP in order to incorporate the provisions of the Council’s omnibus framework, Framework 1 (covering most of the Council’s FMPs), which allow the Council to set aside up to 3 percent of a species’ TAL to be used to compensate for research. Framework 1 established the ability to modify quotas through the annual specification process. The background of the framework and the quota modification process are discussed in the preamble to the final rule implementing Framework 1, published August 10, 2001 (66 FR 42156), for other Mid-Atlantic fisheries.

This final rule differs from the proposed rule by providing for an up to 3-percent research set-aside for tilefish and by revising the vessel reporting requirements for the tilefish Interactive Voice Response System (IVR) by requiring that vessel owners/operators report on a trip-by-trip basis, rather than on a weekly basis. Since the average tilefish trip is 10 days, this change from weekly to per trip reporting better reflects fishing practices. Paperwork Reduction Act (PRA) burden estimates for individual vessel reporting through the IVR over the entire fishing year decrease due to this change.

NMFS received 306 written comments on the FMP and the proposed rule. Five commenters favored the approval of the FMP and the implementing measures. The remaining commenters were opposed to one or more portions of the FMP and/or its implementing regulations. Comments focused on the gear impacts portion of the Essential Fish Habitat (EFH) description, the stock rebuilding strategy, the limited access program and related ancillary economic impacts, implementation of the conservation recommendations described in the FEIS, and endangered species interactions.

Comment 1. Numerous commenters stated that the gear impacts portion of the EFH designation should be disapproved since it does not list bottom-tending mobile gear (trawls and dredges) as gear capable of destroying tilefish burrows. One commenter indicated that a conservative approach would have listed bottom-tending gear as having an adverse impact on EFH and supported a prohibition of bottom-tending gear in the Habitat Area of Particular Concern (HAPC).

Response. While bottom-tending mobile gear could potentially impact tilefish habitat by causing, for example, the filling or closing off of tilefish burrow openings, there is no scientific evidence showing that bottom-tending mobile gear adversely affects tilefish habitat. Tilefish burrows are subterranean and, as such, may not be susceptible to impacts from mobile gear as epibenthic (i.e., above the bottom) structures. Based on the adverse economic effects that a prohibition on the use of bottom-tending mobile gear in tilefish HAPC would have upon several other fisheries and on the lack of scientific evidence showing identifiable adverse effects caused by such gear on tilefish EFH and HAPC, the Council did not propose gear prohibitions in the HAPC on other than limited access tilefish vessels. The Council's discussion and rationale supporting its actions satisfy the requirements of 50 CFR 600.815(a)(3) to minimize, to the extent practicable, the adverse effects of fishing on EFH.

Tilefish are harvested primarily (approximately 97 percent) by longline gear; impacts on habitat from this type of gear are not detectable and, if they occur, are probably minimal and temporary. This final rule prohibits limited access tilefish vessels from using gear other than longline gear.

Comment 2. One commenter stated that the issues surrounding the effects of bottom trawling (long and short-term) on tilefish EFH should be resolved, and that the Council and NMFS have an obligation to prevent, mitigate, or minimize adverse effects of fishing on tilefish EFH to the extent practicable, if there is evidence that a fishing practice is having an identifiable adverse effect on EFH.

Response. Initially, the Council determined that bottom trawls adversely impacted EFH by destroying tilefish burrows. The determination was made by inference, using scientific reports on habitat damage caused by trawling. The adverse impact determination was included in the Council’s draft Draft Environmental Impact Statement (DEIS) on which the Council held public hearings. A large number of commenters (vessel owners, fish buyers and processors) disagreed with this determination because of the lack of specific scientific evidence to support it. The Council, in response, convened a workshop comprised of tilefish experts to determine whether there was adequate information to make a determination of adverse impacts. Participants in the workshop concluded that nothing is definitively known about tilefish habitat and mobile fishing gear interactions. Based on this, the Council changed its determination in the FEIS/FMP for bottom trawls to “bottom trawl gear is not adequately identified as having an adverse effect on tilefish EFH.” NMFS agrees with this determination. NMFS supports mitigative measures to prevent adverse impacts to tilefish EFH to the extent that they are practicable. NMFS and the Council support a cooperative research program to further investigate this issue. In the meantime, in the absence of any specific evidence showing there is an adverse impact on tilefish EFH from trawling, the Council chose not to propose any management measures to address the effects of trawl fishing on tilefish EFH. This final rule implements a framework mechanism to allow for the development and implementation of management measures to minimize impacts from gear on tilefish EFH should they be shown to exist.

Comment 3. One commenter stated that the Council’s proposed rebuilding strategy, which has a 50-percent probability of rebuilding the stock within 10 years, should be replaced with a rebuilding program where stocks would have 75-percent probability of being rebuilt in 8 years.

Response. Section 304(e)(4)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires, for a fishery that is overfished, that an FMP specify a time period for ending overfishing and rebuilding the fishery that is as short as possible, taking into account the status and biology of any overfished stocks of fish, the needs of fishing communities, recommendations by international organizations in which the United States participates, and the interaction of the overfished stock of fish with the marine ecosystem, and does not exceed 10 years except in cases where the biology of the stock of fish, or other environmental conditions, or management measures under an international agreement in which the United States participates, dictate otherwise. Based on the factors required by the Magnuson-Stevens Act to be considered and upon the record before the Council, NMFS agrees with the Council that, for the tilefish fishery, a stock rebuilding plan with a 50-percent probability of rebuilding the stock within 10 years is appropriate.

Comment 4. One commenter alleged that a constant-harvest strategy allows overfishing to occur in the near term, which is inconsistent with the requirements of the Sustainable Fisheries Act (SFA) amendments to the Magnuson-Stevens Act.

Response. Although a constant-harvest strategy would allow overfishing to continue in the start-up years of the FMP, this is permissible under the SFA. Section 304(e) of the Magnuson-Stevens Act contemplates Regional Fishery Management Councils to take action to end overfishing. Such action initiates rebuilding of an overfished stock. Section 304(e)(4)(A)(i) of the Magnuson-Stevens Act requires that a Council consider, among other factors, the needs of fishing communities, in specifying a time period for ending overfishing and rebuilding the fishery. Ending overfishing in a fishery that is severely overfished cannot be accomplished in the first few years without severe economic and social impacts on the participants and fishing communities. Such drastic action is not required in this instance. Furthermore, the Council projected potential economic benefits of a constant-harvest strategy, such as ease in quota management and a constant long-term economic planning horizon for industry participants.

Comment 5. One commenter stated that there should be a precautionary backstop in the event that stock recovery does not progress according to the rebuilding schedule, such that NMFS could adopt a reference point at 1/4 Bmsy that, if reached, would trigger the closure of the fishery.

Response. The regulations provide a backstop mechanism. The FMP Monitoring Committee, which is required to meet after the completion of each stock assessment, or at the request of the Council Chairman, reviews landings information and any other relevant available data to determine whether the annual quota requires modification to respond to any changes to the stock’s biological reference points or to insure that the rebuilding schedule is maintained.

Comment 6. Numerous commenters alleged that limited entry Option 2 should not be approved since it is not fair and equitable to all participants in the fishery.

Response. Limited entry Option 2 was not the option adopted by the Council and approved in the FMP. The Council adopted limited entry Option 6, which was approved by NMFS. Option 6 was recommended to the Council by present and historical industry participants in the tilefish fishery. It incorporates Option 2 for full-time vessels and allows for an expansion of the qualifying time frame for part-time vessels. Option 6 also contemplates an amendment to the limited entry program in the FMP at the end of the 10-year rebuilding period, or when the fishery is rebuilt, whichever comes first, to formalize the qualifying period for entry into the tilefish fishery from 1984 though 1998.

Comment 7. Several commenters stated that the tilefish limited access program does not meet the objectives of the FMP.

Response. The objectives of the FMP are to be accomplished through the suite of measures contained therein. It is not necessary that each management measure in an FMP accomplishes every one of the FMP’s objectives. In the case of the tilefish limited access program, it will not only reduce overcapitalization, consistent with Objective 2 of the FMP, but it also will prevent overfishing and contribute to the rebuilding of the stock by limiting fishing effort and maintaining the integrity of the annual quota, which meets Objective 1. Further, the data collected through the reporting requirements applied to vessels in the limited access program fulfills the requirements of Objective 4. The identification and description of EFH in Objective 3 are accomplished through other components of the FMP.

Comment 8. Several commenters alleged that the FMP is devoid of discussion on how allocation alternatives further the goals of the FMP.

Response. NMFS disagrees. The overall goal of the FMP is to rebuild tilefish so that Optimum Yield can be obtained. To help achieve this, this rule implements a limited access system with specified amounts of TAL allocated to the various permit categories. Once the allocation or quota for a given limited access permit category is harvested, the Administrator, Northeast Region, NMFS (Regional Administrator) will close the EEZ to fishing for tilefish for that permit category for the remainder of the year. The limitation of fishing effort represented by the limited access categories and these closures will ensure the integrity of the annual quota and facilitate rebuilding of the stock. Specific discussions of the environmental and economic impacts of these alternatives can be found in sections 3.1 and 4.7 of the FMP.

Comment 9. One commenter alleged that Option 6 was brokered between two factions of the industry without regard to Constitutional due process and was not considered by the Tilefish Committee. The commenter asserted that two industry groups, competitors of a current participant in the fishery, came to a compromise that was then adopted by the Council as Option 6, without analysis. The commenter believed the Council’s Option 3 was reasonable and would have qualified the present participant concerned into the limited access program.

Response. Option 6 incorporates the same requirements as Option 2 for full-time vessels. In addition, Option 6 expands the time frame for qualifying for the part-time category by allowing for consideration of landings of at least 28,000 lb (12,701 kg) of tilefish in any 1 year from 1984 to 1993, at least one pound of which was landed prior to June 15, 1993, as a qualifying criterion. This alternative was supported by the differing factions in the tilefish fishery. The industry made a presentation to the Council regarding this alternative. After due deliberation, the Council adopted this alternative as Option 6. This alternative was thoroughly analyzed by the Tilefish Technical Committee prior to the Council adoption of the final version of the FMP. The inclusion in Option 6 of historical participants who fished as far back as 1984 was reasonable in the view of the Council, given the factors it has to consider under section 303(b)(6) of the Magnuson-Stevens Act. Option 6 was adopted during a full and open Council process; all interested parties had the opportunity to provide input and comments prior to its adoption. NMFS published a NOA and a proposed rule for further public comment. This is all part of the process of preparation, approval, and implementation of the FMP. NMFS agrees that limited access Option 3, the preferred option in the DEIS, is reasonable. However, no commenters, including the participant that the commenter is referring to, favored Option 3. The Council believed that a rejection of its preferred option of that magnitude by the industry required it to choose an alternative limited access option that would achieve the same conservation goals.

Comment 10. One commenter alleged that the justification for adopting Option 6 was that the Council did not have to conduct any analysis; the Council could simply adopt the agreement reached by the select group who participated in a closed meeting. The commenter also stated that a present participant’s landings were not considered in the decision to adopt Option 6 and that the vessel in question will likely be unable to qualify for a full-time tier 1 category permit.

Response. The Council’s Tilefish Technical Committee conducted an analysis of Option 6, as summarized in Table 79 in the FMP. Further, the Council’s decision to adopt Option 6 was detailed in an open public forum, in which the industry participated. All data considered in analyzing the various options were contained in NMFS’ official database. In addition, the Council considered additional data from vessels, which it solicited from the states (only landings from the State of New York were submitted), for the period 1988 through 1998.

Since the limited access tilefish fishery has not yet been implemented, there is no basis to determine specifically which vessels would qualify for the different limited access permit categories. Once these final regulations become effective, vessel owners will have an opportunity to apply for a particular limited access permit category and produce supporting landings information. The Council used a blind analysis, in which vessels were identified only by a random number, to ascertain the number of vessels that would qualify for the different permit categories under the different options. The Council had no information to conclude whether a specific named vessel would qualify for a particular limited access permit category.

Comment 11. One commenter stated that Option 6 was created for the sole purpose of restructuring the top tier of eligible fishers and that there was no biological or ecological basis to exclude a current participant from the fishery. The commenter believed Option 6 was chosen based on economic allocation as its sole purpose, which would be a violation of national standard 5.

Response. Option 6 did not change the tier 1 qualification criteria. It incorporated the criteria from Option 2, without modification, thereby leaving the qualifying criteria for full-time tier 1 category as follows: 250,000 lb (113,398 kg) per year for 3 years between 1993 and 1998. All the management measures are designed to work in concert to meet the overall FMP goals and objectives. It is up to the Council to exercise discretion in arriving at options to address stock rebuilding and to minimize adverse economic impacts. The Council did not consider economic impacts on individually named vessels in its deliberations; all of the analyses it conducted were done on a blind basis. The tilefish fishery is a very small fishery. The tilefish resource is sensitive to additional fishing effort that could slow or even prevent its rebuilding, depending on the level of effort involved. The annual quota under the constant harvest strategy is 1.995 million lb (904.9 mt). The four vessels that qualify for the tier 1 permit category have the capacity to harvest in excess of this amount. These vessels harvested 2.635 million lb (1195 mt) in 1997. Limiting the number of vessels participating in this fishery will help to decrease fishing mortality and to maintain the integrity of the annual quota. Since there is a biological basis limit entry into the tilefish fishery, the commenter’s allegation that such limitation violates national standard 5 is without merit.

Comment 12. One commenter stated that Options 5 and 6 violate national standard 4.

Response. Option 5 was not adopted by the Council or approved by NMFS. Thus, whether it satisfies national standard 4 is irrelevant. The FMP is designed to prevent further overcapitalization by establishing a limited entry scheme. The allegations relating to national standard 4 are that the industry groups set the qualifying criteria for the full-time tier 1 to exclude a current participant from the fishery. However, the industry compromise did not propose to modify the qualifying criteria for tier 1. Indeed, those criteria were adopted by the Council prior to its consideration of Option 6 after much discussion, much of which involved industry input. The category qualifying criteria are simply performance criteria relating to levels of landings during a certain time period to differentiate between vessels that are heavily involved in the fishery (those that landed at least 250,000 lb (113,398 kg) per year for 3 years between 1993-1998) and those that are not (those vessels that landed 90,000 lb (408,233 kg) or less during the same or earlier expanded time frame). These criteria apply evenly across the fishery to all participants and represent a reasonable means to distinguish varying levels of participation in the tilefish fishery.

Comment 13. One commenter alleged that the FMP fails to consider the best data available in establishing the limited access system for tilefish and, therefore, violates national standard 2.

Response. NMFS disagrees. Limited access programs are designed to consider past and present participation and relative degrees of dependence on a fishery. All data used in developing the limited access permit and TAL allocations were based on the best and most recent information contained in the NMFS data base. These data constitute the best scientific information available.

Comment 14. One commenter stated that the tier 1 full-time qualified vessels catch small fish of which a significant majority are juveniles and sexually immature. Because of this, the commenter alleges it will be impossible for the tilefish stock to rebuild without a minimum fish size provision.

Response. It is possible that present participants are currently landing large numbers of small fish. However, there is evidence that, as the stock biomass decreases, a disproportionate number of smaller fish occur in the population. As the stock rebuilds and the age structure of the stock expands, the tendency to harvest small fish will decrease. A minimum fish size and gear restrictions are listed in the FMP as measures the Council could implement in the future through framework adjustment provisions, should data become available demonstrating such measures to be necessary and appropriate.

Comment 15. Several commenters indicated that the regulations and the FMP are not consistent with national standard 1.

Response. The FMP implements a rebuilding program that will prevent overfishing and attain Maximum Sustainable Yield (MSY) through a constant harvest strategy (within a reasonable time). The rebuilding strategy chosen is based on analyses conducted by the NMFS Northeast Fisheries Science Center (NEFSC) and has a 50-percent probability of rebuilding tilefish to the biomass that will support the MSY level within 10 years. The Council considered 13 rebuilding schedules that were either based on constant harvest levels or fishing mortality reduction levels, all of which were designed to rebuild to the biomass that will support MSY. The critical choices that the Council made were the selection of the time frame of 10 years for rebuilding and of the probability of rebuilding within that time frame of 50-percent. In addition, a benchmark stock assessment will be conducted every 3 years through the NEFSC Stock Assessment Review Committee (SARC)/Stock Assessment Workshop (SAW) process, the results of which will be evaluated by the Tilefish FMP Monitoring Committee. The Council will consider any recommendations of the Monitoring Committee and can adjust the annual harvest level in order to assure that the tilefish stock will be rebuilt within 10 years. This management strategy is consistent with national standard 1.

Comment 16. One commenter alleged that the preamble of the proposed regulations is inaccurate with respect to the discussion of the economic impacts of the FMP. The commenter stated that numbers clearly qualify a current vessel participant for a full-time tier 2 permit, yet the vessel is not included in the analysis.

Response. All of the analyses performed by the Council were blind. No individual vessels were identified in these analyses. The analyses employed the best and most recent data available in the NMFS database. The FMP has yet to be implemented. Once these regulations become effective, the participant concerned can apply for the full-time tier 2 category permit by submitting supporting landings information. If the participant’s application is denied, the participant has the right to appeal the denial. The FMP and its implementing regulations include a provision for appeal, and individuals will be given an opportunity to document any landings they believe are inaccurate after the FMP is implemented.

Comment 17. One commenter believed that the FMP does not comply with national standard 1, and, notwithstanding data before the Secretary, the Secretary, in violation of national standard 2, failed to consider all the relevant economic impacts, and to use the best scientific and commercial information in approving the FMP.

Response. See the response to Comment 4 related to national standard 1. All data used in developing the FMP and its management measures were based on the best and most recent information contained in the NMFS database. These data constitute the best scientific information available. Thus, the FMP does not violate national standard 2.

Comment 18. One commenter stated that the Magnuson-Stevens Act requires that all the fishery management plans be consistent with other applicable laws. The commenter believes other applicable laws include the antitrust laws, which the commenter believes were violated during the FMP development process.

Response. Under the Noerr-Pennington doctrine, antitrust law does not prohibit two or more persons from associating together to petition a government body to take a particular action with respect to a law that would produce a restraint of trade or monopoly. Thus, the industry’s presentation to the Council of a further option it favored to manage the tilefish fishery did not violate antitrust law.

Comment 19. One commenter suggested that workable, protective measures to protect endangered species are preferable to cooperation between enforcement agencies and tilefish fishermen, as advocated in the FMP, to ensure compliance with the Endangered Species Act (ESA).

Response. NMFS conducted a formal section 7 consultation for the FMP, consistent with ESA guidelines. The biological opinion accompanying the consultation concluded that the tilefish fishery may take a small number of loggerhead and leatherback sea turtles. This small take is not expected to result in jeopardy to either sea turtle species or to other endangered and/or threatened species under NMFS’ jurisdiction, including right whales and their critical habitat. Thus, protection measures for these species are not necessary at this time.

Comment 20. Several commenters, including a bait dealer, three crew members, a wharf owner, and a tackle dealer, claimed that the implementation of a limited access program and the commensurate reduction in potential harvest for a particular vessel would have significant negative economic impacts on their businesses and livelihoods.

Response. NMFS recognizes that there may be ancillary economic impacts on small entities, other than dealers and vessels, from actions that reduce fishing activity. Since the number of present participants in the fishery is small (from a total of 215 vessels that landed any tilefish in 1998, the FMP identified 4 full-time tier 1; 4 full-time tier 2; and 42 part-time vessels), it would seem unlikely that they would provide a major share of revenues to dockside businesses. Crew members are not considered to be small businesses under the Regulatory Flexibility Act. Because the limited entry scheme is based in large part on recent participation in the fishery, it is highly likely that tilefish vessels currently patronizing these businesses will continue to do so, possibly in conjunction with participation in other fisheries. Further, the constant harvest strategy adopted in the FMP should provide for a steadier fishery and income for all concerned. However, NMFS recognizes that limited access could yield negative economic impacts for all entities affected by the final rule. Economic impacts on communities affected by the tilefish fishery were considered by the Council and are addressed in the FMP.

In § 648.2, a definition of the tilefish management unit is added to distinguish management of the northern portion of the tilefish stock under the FMP, from management of the southern portion of the tilefish stock under the NMFS Southeast Region Snapper/Grouper fisheries.

In § 648.4, paragraph (a)(12) is revised to clarify that tilefish fished for, possessed, or landed in or from the EEZ means tilefish in or from the tilefish management unit.

In § 648.4, paragraph (a)(12)(i) is revised to clarify that the vessel must have landed the specified amounts of tilefish under paragraph (a)(12)(i)(A) within the tilefish management unit to qualify for a limited access tilefish permit.

In § 648.4, paragraph (a)(12)(ii), the title and paragraph (a)(12)(ii)(A) are removed, the subsequent paragraphs (a)(12)(ii)(B) through (M) are redesignated as paragraphs (a)(12)(i)(B) through (M),and the removed title and paragraph language are added to the newly redesignated paragraph (a)(12)(i)(I) (previously reserved).

In § 648.4, the newly redesignated paragraph (a)(12)(i)(M)(3)(ii) is redesignated paragraph (a)(12)(ii) and revised to clarify the description of eligibility and conditions for issuance of tilefish incidental catch permits and to indicate that vessels with tilefish incidental catch permits may only possess or land tilefish in or from the tilefish management unit.

In § 648.4, the newly redesignated paragraph (a)(12)(i)(M)(3)(i) is redesignated as the text of paragraph (a)(12)(i)(M)(3).

In § 648.4, paragraph (b) is revised to clarify that any vessel owner whose vessel is permitted to fish in the tilefish management unit for the species managed under the FMP must comply with the more restrictive of either state, local or Federal regulations.

In § 648.5, paragraph (a) is revised to clarify that any vessel operators who are fishing for or possessing tilefish taken from the tilefish management unit must have a valid operator permit.

In § 648.7, paragraph (a)(2)(i) is corrected to include tilefish as a species of fish that is not required to be reported by federally permitted dealers through the IVR system.

In § 648.7, paragraph (b)(1)(iv) is corrected by removing paragraphs (b)(1)(iv)(A) and (B), and by revising paragraph (b)(1)(iv) to state that IVR reports must be submitted on a per- trip basis, rather than on a weekly basis.

In § 648.12, the introductory text is corrected to show that tilefish has been redesignated from subpart M to subpart N of 50 CFR part 648. Subpart M has been assigned to the Atlantic Deep-Sea Red Crab Fishery; therefore “Management Measures for the Tilefish Fishery” will appear as subpart N.

In § 648.14, paragraphs (x)(11) and (cc)(1), (2), (3), (8), and (9) are modified to clarify that the prohibitions apply to activities dealing with tilefish harvested in or from the tilefish management unit.

In § 648.14, the introductory text of paragraph (cc) is modified to exempt vessels participating in a research activity, as described in § 648.290 (previously § 648.250), from the general prohibitions specified at § 600.725.

In § 648.14, paragraph (cc)(4) is removed because there is no processor permit. Subsequent paragraphs in paragraph (cc) have been renumbered and the comments that follow refer to the renumbered paragraphs.

In § 648.14, paragraph (cc)(6) is revised to include the gear restriction related to other than longline gear.

In § 648.14, paragraphs (cc)(7) and (8) are revised to update the reference.

In § 648.14, paragraph (cc)(9) is added to specify that the landing of tilefish harvested by vessels fishing in U.S. waters in excess of the incidental catch limit is prohibited in the tilefish management unit, unless the vessel holds a limited access tilefish permit.

In subpart N, §§ 648.250 through 648.254 have been redesignated as §§ 648.290 through 648.294, respectively, for consecutive numbering.

In § 648.290 (previously § 648.250), paragraphs (b) and (d) are revised and paragraph (e) is added to allow for the set-aside of up to 3-percent of the tilefish TAL for purposes of compensation for research, consistent with Framework 1.

Section 648.294 (previously § 648.254) has been revised to specify the gear stowage requirements for gear other than longline gear.

NMFS has determined that the FMP that this rule implements is necessary for the conservation and management of the tilefish fishery and is consistent with the Magnuson-Stevens Act and other applicable laws.

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

The Council prepared a FEIS for this FMP; a notice of availability was published on February 12, 2001 (66 FR 9814). NMFS determined, upon review of the FMP/FEIS and public comments, that approval and implementation of the FMP is preferable to the status quo and other considered alternatives. The FMP contains management measures capable of preventing overfishing; providing economic and social benefits to the fishing industry in the long term; and contributing to enhancement of the ecosystem through a rebuilt tilefish resource.

NMFS prepared a final regulatory flexibility analysis (FRFA) for this action, which complies with Section 604 of the Regulatory Flexibility Act. The FRFA includes the IRFA, comments on the IRFA, responses to those comments as contained in this preamble, and a summary of the analyses done in support of this final rule. The preamble to the proposed rule included a detailed summary of the analyses contained in the IRFA, and that discussion is not repeated in its entirety here. A summary of the FRFA follows:

A description of the reasons why action by the agency is being considered and the objectives of the action are explained in the preamble to the proposed rule and are not repeated here. This action contains reporting and recordkeeping requirements that were analyzed in the IRFA. It will not duplicate, overlap, or conflict with any other Federal rules. This action is taken under authority of the Magnuson-Stevens Act and regulations at 50 CFR part 648.

Three hundred and six comments were submitted during the comment periods on the FMP and proposed rule. The majority of comments were not specifically on the IRFA, but several were related to economic impacts on small entities. The comments and responses are contained in the Comments and Responses section of the preamble of this final rule and are not repeated here. Comments 6, 9, 10, 11, 12, 13, 16, and 17 were specifically directed at the economic consequences of the FMP and, particularly, at the limited entry program and its potential impacts on individual vessels, all of which are small entities.

All of the businesses (fishing vessels, dealers and processors) affected by this final rule are considered small entities. In 1998, 215 different vessels landed tilefish along the Atlantic coast. In 1998, 83 federally permitted seafood dealers handled tilefish. Fewer than three permitted processors reported processing tilefish in 1998 for the Northeast and Southeast Regions combined. Tilefish constituted a very small percentage of their total volume and value of processed products.

It is estimated that, in 1998, 215 different vessels landed tilefish along the Atlantic coast. Under this final rule, any vessel fishing commercially for tilefish must obtain a Federal vessel tilefish permit in order to fish for tilefish in the EEZ. From January 1, 1988, to June 15, 1993, 312 vessels landed at least 1 lb (0.45 kg) of tilefish. Assuming that all these vessels would be eligible for a tilefish permit and that they would all apply, there would be 312 permit applications as a result of this final rule. Overhead costs herein are based on an estimated $15.00 per hour. Annual initial costs for vessel permits are estimated to be $106 ($0.34 per vessel x 312 vessels) for postage and $2,340 ($7.50 per vessel x 312 vessels) for clerical costs. Annual initial costs for dealer permits are estimated to be $3.40 ($0.34 x 10 dealers) for postage and $12.50 ($1.25 per dealer x 10 dealers) for clerical costs. It is estimated that 85 of the vessels expected to apply for an initial vessel permit do not presently possess a Northeast fisheries permit; therefore, for operator permits, an annual cost of $29 ($0.34 per operator x 85 vessels) for postage is expected and an annual cost of $1750 ($15.00 per operator x 85 vessels)for clerical costs is expected. Also, a cost of $850 ($10 per vessel x 85 vessels) is expected for obtaining and displaying vessel identification numbers. About 5 percent of the vessels (5 vessels) applying for the initial vessel permit may also incur additional costs associated with Confirmation of permit history, replacement and upgrades, and permit vessel appeals as follows: $1.70 (0.34 per vessel x 5 vessels) for postage, and $225 ($45.00 x 5 vessels) for clerical costs. Eighty-five vessels currently do not report under the system in place for Northeast permit holders; therefore, annual costs of submitting vessel logbooks are expected to be $347 ($4.08 x 85 vessels) for postage and $1,275 ($15.00 per vessel x 85 vessels) for clerical costs. Annual costs of submitting dealer reports are expected to be $177 ($17.70 per dealer x 10 dealers) for postage and $260 ($26.0 x 10 dealers) for clerical costs.

The 10-year constant harvest rebuilding strategy using a 50-percent probability of meeting the rebuilding target of 10 years will allow greater landings during the initial years of the FMP implementation than any alternative strategy considered by the Council. For example, the highest constant F strategy (F=.168) would have allowed only 1.299 million lb (589.2 mt) to be landed in fishing year 2001, compared to 1.995 million lb (904.9 mt) resulting from the preferred strategy. Landing levels under status quo for 2001 were projected to be 2.3 million lb (1043 mt) for all permit categories, or 305,000 lb (138 mt) more than the quota under the preferred management option. However, the long-term benefits of the preferred management strategy will likely outweigh the short-term negative economic impacts to all vessels, dealers, and other segments of the industry. At an ex-vessel price of $2.00 per lb ($0.90 per kg) revenues of approximately $600,000 will be foregone in 2001 under the preferred management strategy, though the effects will be disproportionately distributed among the limited access permit categories, due to their different quota allocations. Vessels in the tier 1 full-time category (66 percent), assuming equal landings among vessels within the category, have the potential to be affected the most, followed by part-time vessels (19 percent), tier 2 full-time category vessels (15 percent), and vessels in the incidental catch category (5 percent).

Because tilefish are overfished, the Council determined that it was necessary to limit access into the fishery, not only due to the condition of the stock, but the rate at which the present fishery was harvesting tilefish. The Council further recognized that short-term economic losses for the aggregate of vessels and dealers would result from implementation of severe constraints on harvest. Unfortunately, there is no mechanism to mitigate entirely the aggregate negative short-term impacts of these measures on vessels participating in a limited access fishery.

The FMP maintains present participation in the tilefish fishery, while recognizing that not all vessels will qualify for limited access permits. The FMP allows vessel owners who apply for an individual permit category, to furnish proof of landings, and to appeal if a limited access permit application is denied by NMFS. This allows vessels that did not pre-qualify for permits to apply and qualify for a limited access permit category. Vessels that landed tilefish in the 1980s have an opportunity to participate in the fishery under the part-time permit category if they have the requisite level of landings, even though they did not appear in the NMFS database.

This final rule contains new collection-of-information requirements and also subjects persons to collection-of-information requirements not contained in the rule. For example, persons obtaining vessel permits under this rule automatically become subject to vessel trip reporting requirements, although the later are not mentioned in this rule. Both types of requirements are subject to the PRA and were approved by the Office of Management and Budget (OMB). The OMB control numbers and the estimated time for a response are as follows:

Tilefish vessel permits, OMB control number 0648-0202 (30 minutes/response).

Tilefish vessel permits renewal, OMB control number 0648-0202 (15 minutes/response).

Tilefish vessel permit appeals, OMB control number 0648-0202 (180 minutes/response).

Tilefish vessel confirmations of permit history, OMB control number 0648-0202 (30 minutes/response).

Tilefish vessel replacements or upgrades, OMB control number 0648-0202 (180 minutes/response).

Operator permits, OMB control number 0648-0202 (60 minutes/response).

Dealer permits, OMB control number 0648-0202 (5 minutes/response).

Annual processor reports, OMB control number 0648-0018 (30 minutes/response).

Vessel trip reports, OMB control number 0648-0212 (5 minutes/response).

IVR system vessel reports, OMB control number 0648-0212 (4 minutes/response).

IVR system dealer reports, OMB control number 0648-0229 (4 minutes/response).

Dealer logbook reports, OMB control number 0648-0229 (2 minutes/response).

Vessel Identification, OMB control number 0648-0350 (45 minutes/response).

The aforementioned response estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding these burden estimates, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS and OMB (see ADDRESSES).

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

NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. -

In accordance with § 679.20(a)(5)(i)(C)(1) and the American Fisheries Act (AFA) (Public Law 105-277, Division C, Title II), NMFS specified a pollock incidental catch allowance equal to 4 percent of the pollock TAC after subtraction of the 10 percent Community Development Quota reserve in the Final 2001 Harvest Specifications and Associated Management Measures for the Groundfish Fisheries Off Alaska (66 FR 7276, January 22, 2001,and 66 FR 37167, July 17, 2001). -

As of August 25, 2001, the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that approximately 24,910 metric tons (mt) of pollock remain in the incidental catch account. Based on projected harvest rates of other groundfish species and the expected bycatch of pollock in those fisheries, the Regional Administrator has determined that 12,000 mt of pollock specified in the incidental catch account will not be necessary as incidental catch. Therefore, NMFS is apportioning the projected unused amount, 12,000 mt, of pollock from the incidental catch account to the directed fishing allowances established at § 679.20(a)(5)(i)(C)(2). This transfer will increase the allocation to catcher vessels harvesting pollock for processing by the inshore component by 6,000 mt, to catcher/processors and catcher vessels harvesting pollock for processing by catcher processors in the offshore component by 4,800 mt and to catcher vessels harvesting pollock for processing by motherships in the offshore component by 1,200 mt. Pursuant to § 679.20(a)(5)(i)(C)(2)(ii), no less than 8.5 percent of the 4,800 mt allocated to catcher processors in the offshore component, 408 mt, will be available for harvest only by eligible catcher vessels delivering to listed catcher processors. -

Pursuant to § 679.20(a)(5)(i)(C)(3), Table 1 revises the final 2001 BS subarea allocations to include the seven inshore catcher vessel pollock cooperatives that have been approved and permitted by NMFS for the 2001 fishing year consistent with this reallocation.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, finds that the need to immediately implement this action in order to allow full utilization of the pollock TAC constitutes good cause to waive the requirement to provide prior notice opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(3)(B) and 50 CFR 679.20(b)(3)(iii)(A), as such procedures would be unnecessary and contrary to the public interest. Similarly, the need to implement these measures in a timely fashion in order to allow full utilization of the pollock TAC constitutes good cause to find that the effective date of this action cannot be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived. -

This action is taken under 50 CFR 679.20, and is exempt from review under Executive Order 12866.